Legal principles and points:
- In Fletcher v Fletcher , it was held that a covenant can be the subject of a trust, held for the benefit of a volunteer.
Facts of the case:
- F covenanted, which means to pay monies into a trust, with a number of trustees to pay £60,000, for which the trustees were to hold on trust for F’s child born outside of his marriage. Because this son was not within the marriage consideration, he was a volunteer).
- The trustees however, did not have knowledge of the deed which covenanted the £60,000.
- C, the illegitimate son, then sued the executor of the deed for breach of trust.
Issue in Fletcher v Fletcher  4 Hare 67
- The principal issue in this case was whether C was entitled to damages for breach of trust; and thereby, whether a breach of trust can take the form of a covenant, held for a volunteer.
Held by the High Court:
- C was indeed entitled to a claim for breach of trust. This was because a trust can take the form of a covenant, held for a volunteer. Therefore meaning it was immaterial that the C was a volunteer (illegitimate son).
Wigwam VC stated:
- “According to the authorities I cannot, I admit, do anything to perfect the liability of the author of the trust, if it is not already perfect. This covenant, however, is already perfect. The covenantor is liable at law, and the Court is not called upon to do any act to perfect it.”
- “One question made in argument has been whether there can be a trust of a covenant the benefit of which shall belong to a third party; but I cannot think there is any difficulty in that. Suppose, in the case of a personal covenant to pay a certain annual sum for the benefit of a third person, the trustee were to bring an action against the covenantor; would he be afterwards allowed to say he was not a trustee? If he cannot do so after once acknowledging the trust, then there is a case in which there is a trust of a covenant for another.”
- “where the instrument is free from all objection in that respect, the cases are clear that such instrument is binding at law, and, if binding, it ought to be produced. Unless, therefore, there is some reason for trying the case at law I think the decree must be for payment upon the admission of assets. Declare that the deed of the 1st September 1829 constitutes a debt at law, and decree payment of the principal and interest on the same to the Plaintiff out of the assets of the testator, deducting thereout as in part payment thereof any sums which have been applied for his maintenance during his minority.”