Learoyd v Whiteley
1887 · (1887) 12 App Cas 727
Posted By lanbuk.com
- Facts
- Trustees lent money on a mortgage of a brickworks on the strength of a poor valuation. The security proved inadequate.
- Issue
- Were they liable?
- Held
- Yes. The House of Lords held that in investing, trustees must avoid hazardous investments that a prudent man would avoid when investing for those he must provide for.
- Principle
- Trustees must take the care of a prudent man investing for others, avoiding speculation.
- Why it matters
- It refines the standard of care for investment.
Words and Latin in this note
- Trust
- An arrangement in which a trustee holds property at law but must use it for beneficiaries, or for a charitable purpose. The beneficiaries have the equitable interest. Open the note.
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