Fletcher v Fletcher (1844) 4 Hare 67

A father executed a deed covenanting with trustees to provide money for children born outside his marriage. The obligation was to become payable from his estate on the stated terms. The intended beneficiary had supplied no consideration and was therefore a volunteer in the equitable sense. The covenanted money had not been transferred into a fund during the father's lifetime, and questions arose about the trustees' knowledge and enforcement of the deed. After the father's death, the beneficiary sought payment from the estate, relying on the covenant itself as property held for his benefit.

Can the benefit of an enforceable covenant itself be held on trust for a volunteer, although the promised money has not yet been transferred?

Wigram VC recognised the beneficiary's claim under a trust of the covenant. The court distinguished an imperfect promise to create trust property from an already enforceable legal obligation. The deed created a debt enforceable at law; the benefit of that obligation could itself be the subject matter of a trust. Giving effect to that trust did not require equity to perfect the covenantor's incomplete gift of the promised money. The beneficiary's lack of consideration therefore did not defeat enforcement of the constituted trust of the chose in action. The decision does not mean that every voluntary promise to settle money can be enforced: an existing covenant and a trust of its benefit were essential to the reasoning.

An enforceable covenant is a chose in action which can itself be trust property. A volunteer beneficiary may enforce a fully constituted trust of that covenant, although equity would not simply complete an imperfect gift of the money promised.

Fletcher is valuable because it requires precise identification of the trust asset. The property held on trust was the enforceable covenant, not an imaginary fund already containing the promised money. It therefore qualifies simplistic statements that equity never assists volunteers without abolishing the distinction between constituted and imperfect trusts. Compare Zeital v Kaye, where the donor had not completed the relevant transfer or established the alternative trust required to perfect the intended gift.