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Keech v Sandford

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174:. Mr Sandford was entrusted to look after this property until the child matured. But before then, the lease expired. The landlord had told Mr Sandford that he did not want the child to have the renewed lease. There was clear evidence of the refusal to renew for the benefit of the infant. Yet the landlord was happy (apparently) to give Mr Sandford the opportunity of the lease instead. Mr Sandford took it. When the child (now Mr Keech) grew up, he sued Mr Sandford for the profit that he had been making by getting the market's lease. 31: 2318: 2332: 201: 215:
not in the least relaxed; for it is very obvious what would be the consequence of letting trustees have the lease, on refusal to renew to cestui que use. So decreed, that the lease should be assigned to the infant, and that the trustee should be indemnified from any covenants comprised in the lease, and an account of the profits made since the renewal.
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has reached beyond the duties of trustees, into the fiduciary duties of company directors. The approach being taken in England (c.f. the position in Delaware corporate law) is that any possibility of a conflict of interest means a breach of trust - unless the beneficiary of the trust consented to the
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A person being possessed of a lease of … a market, devised his estate to trustee in trust for the infant; before the expiration of the term the trustee applied to the lessor for a renewal for the benefit of the infant, which he refused, … there was clear proof of the refusal to renew for the benefit
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use; though I do not say there is a fraud in this case, yet should rather have let it run out, than to have had the lease to himself. This may seem hard, that the trustee is the only person of all mankind who might not have the lease: but it is very proper that rule should be strictly pursued, and
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who was tried and found guilty in 1725 for accepting bribes and speculating with and losing client money in the South Sea crash. Lord Macclesfield had, probably not coincidentally, previously held that a fiduciary was entitled to take money from a trust, invest it on their own behalf, and keep the
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reversed this, and the law in England and the UK has maintained a strict opposition to any possibility of a conflict of interest ever since. The remedy of granting a constructive trust over property, and the strict approach that all possibility of a conflict of interest was to be avoided, derived
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AC 44 at 51–52, per Lord Herschell, the no possibility of conflict rule is "based upon the consideration that, human nature being what it is, there is danger of the person holding a fiduciary position being swayed by interest rather than
228:. Lord King LC was worried that trustees might exploit opportunities to use trust property for themselves instead of looking after it. Business speculators using trusts had just recently caused a 210:
I must consider this as a trust for the infant, for I very well see, if a trustee, on the refusal to renew, might have a lease to himself, few trust-estates would be renewed to the
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J Getzler, 'Rumford Market and the Genesis of Fiduciary Obligation' in A Burrows and A Rodger (eds),
649: 611: 130:. It holds that a trustee owes a strict duty of loyalty so that there can never be a possibility of 1809: 1791: 539: 2143: 2184: 1971: 1460: 1445: 991: 233: 2239: 2224: 916: 232:. Strict duties for trustees made their way into company law and were applied to directors and 934:(1874–75) LR 10 Ch App 96, per James LJ that the rule is necessary for "the safety of mankind" 2343: 1936: 1614: 1425: 623: 2064: 1410: 885: 225: 204: 134: 123: 8: 2219: 1359: 1276: 922: 823: 751: 700: 667: 639: 2034: 1693: 1547: 1532: 1510: 1254: 1234: 1187: 1177: 1034: 911: 775: 653: 431: 331: 111: 68: 58: 2019: 1941: 1779: 1522: 1517: 1470: 1395: 1389: 1229: 1147: 1039: 999: 963: 787: 663: 635: 503: 391: 379: 107: 2024: 1991: 1490: 1354: 1349: 1314: 930: 881: 681: 563: 415: 353: 229: 141: 2273: 2246: 2234: 2214: 2148: 2126: 2106: 2101: 2081: 1946: 1926: 1921: 1824: 1784: 1495: 1420: 1344: 1329: 1249: 403: 315: 189: 30: 2350: 2158: 2076: 1665: 1631: 1582: 1567: 1339: 1244: 1224: 1214: 984: 901: 691: 427: 167: 2366: 2204: 2163: 2049: 2029: 2001: 1951: 1916: 1890: 1885: 1878: 1829: 1769: 1609: 1599: 1557: 1480: 1475: 1405: 1364: 1288: 979: 896: 2336: 2086: 2054: 2009: 1747: 1742: 1713: 1626: 1604: 1572: 1505: 1485: 1379: 1319: 1309: 1261: 1219: 1197: 1140: 515: 144:. Lord King LC, who decided the case, replaced the former Lord Chancellor, 140:
The case's importance derives partly from its historical context, with the
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S Cretney, 'The Rationale of Keech v. Sandford' (1969) 33 Conveyancer 161
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Mr Sandford was meant to be trusted, but he put himself in a position of
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DR Paling, 'The Pleadings in Keech v Sandford' (1972) 36 Conveyancer 159
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The principle of strict and absolute duties of loyalty laid down in
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of the infant, on which the trustee sets a lease made to himself.
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ordered Mr Sandford should disgorge his profits. He wrote,
983:(1978) 68 Cr App R 183, information is not property under 1163: 730: 1132: 95:
Strict liability, fiduciary duty, conflict of interest
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reconsidered' (2010) 69(2) Cambridge Law Journal 287
243:was a decisive break with prior case law, seen in 57:(1726) Sel Cas Ch 61, 25 ER 223, All ER Rep 230 2364: 1114:Mapping the Law: Essays in Memory of Peter Birks 1148: 716: 456: 292: 149:profit, if they restored money to the trust. 972:Industrial Development Consultants v Cooley 1155: 1141: 723: 709: 463: 449: 367:Bristol and West Building Society v Mothew 299: 285: 29: 678:Eclairs Group Ltd v JKX Oil & Gas plc 306: 122:and has affected much of the thinking on 2300:History of the American legal profession 199: 118:duty of loyalty. It concerns the law of 846:In re Walt Disney Derivative Litigation 470: 146:Thomas Parker, 1st Earl of Macclesfield 2365: 576:Howard Smith Ltd v Ampol Petroleum Ltd 492:Aberdeen Railway Co v Blaikie Brothers 154:from the general outrage at the time. 110:is a foundational case, deriving from 1136: 1119:AD Hicks, 'The remedial principle of 858:In re Citigroup Derivative Litigation 704: 444: 280: 800:Broz v. Cellular Information Systems 600:Re Sevenoaks Stationers (Retail) Ltd 528:Re City Equitable Fire Insurance Co 480:The Charitable Corporation v Sutton 13: 14: 2409: 1284:Restitution and unjust enrichment 2331: 2330: 2316: 835:Delaware General Corporation Law 740:AP Smith Manufacturing v. Barlow 2373:United Kingdom company case law 2295:History of the legal profession 956:Regal (Hastings) Ltd v Gulliver 552:Regal (Hastings) Ltd v Gulliver 219: 69:Full text of judgment on Bailii 1088: 1079: 1070: 1058: 1046: 1027: 1013: 588:Re Lo-Line Electric Motors Ltd 1: 1127:Queensland Mines Ltd v Hudson 1100: 1067:(1726) Sel Cas. Ch.61, at 175 926:(1747) 1 Ves Sen 9; 27 ER 856 812:The Charitable Corp v Sutton 731:Sources on directors' duties 7: 907:United States corporate law 272: 183: 10: 2414: 1962:International legal theory 1441:International slavery laws 1436:International human rights 1431:International criminal law 162:A child had inherited the 2310: 2287: 2177: 2015:Administration of justice 2000: 1909: 1800: 1679: 1581: 1302: 1170: 878: 866: 854: 842: 832: 820: 808: 796: 784: 772: 760: 748: 736: 688: 674: 660: 650:CMS Dolphin Ltd v Simonet 646: 632: 620: 608: 596: 584: 572: 560: 548: 536: 524: 512: 500: 488: 476: 424: 412: 400: 388: 376: 362: 350: 338: 324: 312: 94: 89: 79: 74: 64: 53: 45: 37: 28: 23: 2398:Exchequer of Pleas cases 1792:Basic structure doctrine 1642:Natural and legal rights 1523:Public international law 1007: 1003:EWCA Civ 424; 2 BCLC 241 540:Re Smith and Fawcett Ltd 234:chief executive officers 157: 2388:English trusts case law 1972:Principle of typicality 1446:International trade law 1162: 992:Guinness plc v Saunders 108:[1726] EWHC J76 16:English trusts law case 917:Business judgment rule 791:, 5 A2d 503 (Del 1939) 779:, 164 NE 545 (NY 1928) 755:, 237 NE 2d 776 (1968) 612:Re D’Jan of London Ltd 383:, 164 NE 545 (NY 1928) 217: 207: 181: 2393:1726 in Great Britain 1967:Principle of legality 1726:Delegated legislation 1426:Intellectual property 1076:(1670) 1 Ch. Cas. 190 1021:Bromfield v Wytherley 743:39 ALR 2d 1179 (1953) 624:Re Barings plc (No 5) 307:Duty of loyalty cases 203: 198: 176: 2185:Barristers' chambers 2127:Legal representation 2065:Justice of the peace 1411:Financial regulation 849:, 825 A2d 275 (2003) 803:, 637 A2d 148 (1996) 495:(1854) 1 Macq HL 461 226:conflict of interest 205:Lord Chancellor King 135:conflict of interest 2383:1726 in British law 2220:Election commission 1932:Expressive function 1461:Landlord–tenant law 1360:Consumer protection 923:Whelpdale v Cookson 824:Smith v. Van Gorkom 752:Shlensky v. Wrigley 471:Director duty cases 419:(1874) 10 Ch App 96 2178:Legal institutions 2045:Lawsuit/Litigation 2035:Dispute resolution 1840:Catholic canon law 1548:State of emergency 1511:Will and testament 1235:Law of obligations 1188:Constitutional law 1178:Administrative law 1085:(1676) 2 Freem. 13 1035:Companies Act 2006 1024:(1718) Prec Ch 505 942:(1886) 33 Ch D 347 912:English trusts law 861:964 A2d 106 (2009) 827:488 A2d 858 (1985) 776:Meinhard v. Salmon 432:English trusts law 230:stock market crash 208: 112:English trusts law 2360: 2359: 2020:Constitutionalism 1942:Law and economics 1780:Act of parliament 1518:Product liability 1471:Legal archaeology 1396:Environmental law 1390:Entertainment law 1230:International law 1121:Keech v. Sandford 1116:(Oxford 2006) 577 1094:(1687) 1 Vern 484 1053:Keech v. Sandford 1040:Boardman v Phipps 1000:Bhullar v Bhullar 964:Boardman v Phipps 892: 891: 886:directors' duties 873:308 US 295 (1939) 788:Guth v. Loft Inc. 698: 697: 664:Bhullar v Bhullar 636:Peskin v Anderson 504:Percival v Wright 438: 437: 392:Boardman v Phipps 380:Meinhard v Salmon 264:The influence of 124:directors' duties 99: 98: 2405: 2378:1726 in case law 2335: 2334: 2333: 2321: 2320: 2144:Question of fact 2025:Criminal justice 1355:Construction law 1350:Conflict of laws 1315:Agricultural law 1157: 1150: 1143: 1134: 1133: 1095: 1092: 1086: 1083: 1077: 1074: 1068: 1065:Keech v Sandford 1062: 1056: 1050: 1044: 1037:section 175 and 1031: 1025: 1017: 931:Parker v McKenna 882:US corporate law 815:(1742) 26 ER 642 764:Keech v Sandford 725: 718: 711: 702: 701: 564:IDC Ltd v Cooley 483:(1742) 26 ER 642 465: 458: 451: 442: 441: 416:Parker v McKenna 368: 354:Armitage v Nurse 328:Keech v Sandford 319:(1678) 22 ER 817 301: 294: 287: 278: 277: 252:Rushworth's Case 142:South Sea Bubble 103:Keech v Sandford 75:Court membership 33: 24:Keech v Sandford 21: 20: 2413: 2412: 2408: 2407: 2406: 2404: 2403: 2402: 2363: 2362: 2361: 2356: 2329: 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1260: 1256: 1253: 1251: 1248: 1247: 1246: 1243: 1241: 1238: 1236: 1233: 1231: 1228: 1226: 1223: 1221: 1218: 1216: 1213: 1211: 1208: 1204: 1201: 1200: 1199: 1196: 1194: 1191: 1189: 1186: 1184: 1181: 1179: 1176: 1175: 1173: 1171:Core subjects 1169: 1165: 1158: 1153: 1151: 1146: 1144: 1139: 1138: 1135: 1128: 1125: 1122: 1118: 1115: 1111: 1108: 1105: 1104: 1091: 1082: 1073: 1066: 1061: 1054: 1049: 1042: 1041: 1036: 1030: 1023: 1022: 1016: 1012: 1002: 1001: 997: 994: 993: 989: 986: 982: 981: 980:Oxford v Moss 977: 974: 973: 969: 966: 965: 961: 958: 957: 953: 949: 948: 944: 941: 940: 936: 933: 932: 928: 925: 924: 920: 918: 915: 913: 910: 908: 905: 903: 900: 898: 897:Corporate law 895: 894: 887: 883: 877: 872: 871: 865: 860: 859: 853: 848: 847: 841: 836: 831: 826: 825: 819: 814: 813: 807: 802: 801: 795: 790: 789: 783: 778: 777: 771: 766: 765: 759: 754: 753: 747: 742: 741: 735: 726: 721: 719: 714: 712: 707: 706: 703: 693: 687: 683: 680: 679: 673: 669: 666: 665: 659: 655: 652: 651: 645: 641: 638: 637: 631: 626: 625: 619: 614: 613: 607: 602: 601: 595: 590: 589: 583: 578: 577: 571: 566: 565: 559: 554: 553: 547: 542: 541: 535: 530: 529: 523: 518: 517: 511: 506: 505: 499: 494: 493: 487: 482: 481: 475: 466: 461: 459: 454: 452: 447: 446: 443: 433: 429: 423: 418: 417: 411: 406: 405: 399: 394: 393: 387: 382: 381: 375: 370: 369: 361: 356: 355: 349: 344: 343: 337: 333: 330: 329: 323: 318: 317: 311: 302: 297: 295: 290: 288: 283: 282: 279: 270: 267: 262: 260: 259: 254: 253: 248: 247: 242: 237: 235: 231: 227: 216: 213: 206: 202: 197: 195: 191: 180: 175: 173: 169: 165: 155: 152: 147: 143: 138: 136: 133: 129: 125: 121: 117: 113: 109: 105: 104: 93: 88: 85: 82: 80:Judge sitting 78: 73: 70: 67: 63: 60: 56: 52: 48: 44: 40: 36: 32: 27: 22: 19: 2349: 2342: 2328: 2314: 2087:Jurisdiction 2055:Legal remedy 2010:Adjudication 1910:Legal theory 1748:Ratification 1743:Promulgation 1714:Proclamation 1694:Codification 1627:Human rights 1615:Divine right 1605:Constitution 1573:Women in law 1491:Military law 1486:Marriage law 1481:Maritime law 1380:Election law 1320:Aviation law 1310:Abortion law 1262:Property law 1198:Criminal law 1126: 1120: 1113: 1090: 1081: 1072: 1064: 1060: 1052: 1048: 1038: 1029: 1019: 1015: 998: 990: 978: 970: 962: 959:1 ALL ER 378 954: 945: 937: 929: 921: 868: 856: 844: 822: 810: 798: 786: 774: 763: 762: 750: 738: 676: 668:EWCA Civ 424 662: 648: 640:EWCA Civ 326 634: 622: 610: 598: 586: 574: 562: 555:1 All ER 378 550: 538: 526: 516:Cook v Deeks 514: 502: 490: 478: 414: 402: 390: 378: 364: 352: 340: 327: 326: 314: 265: 263: 256: 250: 244: 240: 238: 223: 220:Significance 209: 187: 177: 161: 150: 139: 131: 102: 101: 100: 84:Lord King LC 18: 2259:Legislature 2190:Bureaucracy 1987:Rule of man 1982:Rule of law 1957:Libertarian 1820:Chinese law 1721:Legislation 1671:Regulations 1659:Law reports 1637:Natural law 1533:Reparations 1528:Refugee law 1451:Jurimetrics 1392:(Media law) 1330:Banking law 1325:Amnesty law 1303:Disciplines 1240:Private law 947:Bray v Ford 939:Re Whiteley 767:EWHC Ch J76 342:Bray v Ford 332:EWHC Ch J76 246:Holt v Holt 128:company law 59:EWHC Ch J76 2367:Categories 2252:Law school 2132:Prosecutor 2070:Magistrate 1857:Jewish law 1815:Common law 1736:Rulemaking 1731:Regulation 1681:Law making 1620:Divine law 1596:Legal code 1543:Sports law 1466:Law of war 1416:Health law 1401:Family law 1385:Energy law 1335:Bankruptcy 1272:Punishment 1267:Public law 1101:References 837:§102(b)(7) 627:1 BCLC 433 615:1 BCLC 561 269:conflict. 212:cestui que 65:Transcript 2230:Judiciary 2225:Executive 2200:The bench 2137:Solicitor 2112:Barrister 1992:Sociology 1977:Pseudolaw 1917:Anarchist 1874:Roman law 1862:Parsi law 1847:Hindu law 1835:Canon law 1810:Civil law 1763:Concordat 1654:Precedent 1563:Trust law 1538:Space law 1375:Drugs law 1245:Procedure 1183:Civil law 975:1 WLR 443 567:1 WLR 443 194:Lord King 116:fiduciary 114:, on the 2337:Category 2279:Tribunal 2264:Military 2107:Attorney 2077:Judgment 1937:Feminist 1852:Jain law 1649:Case law 1370:Cyberlaw 1277:Corporal 1255:Criminal 1225:Evidence 1215:Doctrine 1193:Contract 995:2 AC 663 543:1 Ch 304 519:1 AC 554 507:2 Ch 421 273:See also 184:Judgment 90:Keywords 54:Citation 2351:Outline 2288:History 2195:The bar 2169:Verdict 2117:Counsel 2097:Justice 1952:History 1775:Statute 1591:Charter 1553:Tax law 1501:Probate 967:2 AC 46 951:duty…." 682:UKSC 71 395:2 AC 46 46:Decided 2269:Police 2240:Agency 2122:Lawyer 1867:Sharia 1758:Treaty 1753:Repeal 1699:Decree 1610:Custom 1506:Estate 1456:Labour 1220:Equity 1043:UKHL 2 603:Ch 164 591:Ch 477 579:AC 821 531:Ch 407 407:Ch 353 371:1 Ch 1 357:Ch 241 255:, and 172:London 120:trusts 2344:Index 2210:Court 2154:Trial 2060:Judge 1901:Yassa 1704:Edict 1250:Civil 1203:Crime 1033:e.g. 1008:Notes 345:AC 44 266:Keech 241:Keech 170:near 164:lease 158:Facts 151:Keech 106: 38:Court 2092:Jury 2040:Fiqh 1896:Xeer 1294:Tort 1210:Deed 884:and 880:See 690:see 430:and 426:see 188:The 1164:Law 987:s 4 166:on 132:any 126:in 2369:: 1598:/ 261:. 249:, 236:. 192:, 137:. 1156:e 1149:t 1142:v 724:e 717:t 710:v 464:e 457:t 450:v 300:e 293:t 286:v

Index


EWHC Ch J76
Full text of judgment on Bailii
Lord King LC
[1726] EWHC J76
English trusts law
fiduciary
trusts
directors' duties
company law
conflict of interest
South Sea Bubble
Thomas Parker, 1st Earl of Macclesfield
lease
Romford Market
London
Lord Chancellor
Lord King

Lord Chancellor King
cestui que
conflict of interest
stock market crash
chief executive officers
Holt v Holt
Rushworth's Case
Walley v Walley
v
t
e

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