Morice v Bishop of Durham (1804) 9 Ves 399

Facts

• The testatrix bequeathed her estate to the Bishop of Durham, instructing him to distribute the funds to “such objects of benevolence and liberality as the Bishop of Durham in his own discretion shall most approve of.”
• The description of potential beneficiaries was highly ambiguous, raising questions about whether a trust with such indeterminate terms could be valid and enforceable by a court.
• At first instance in the Court of Chancery, Sir William Grant MR ruled the trust invalid due to lack of definite, ascertainable objects, reasoning that courts require clear beneficiaries to exert control and ensure proper administration.
• Grant MR determined that a power of disposition in the absence of clear trust objects amounted to ownership, not a trust, and that, failing definite objects, the property would result back to the settlor under a resulting trust.
• On appeal, Lord Eldon LC in the High Court of Chancery affirmed the initial decision, holding that a valid trust must allow for judicial oversight, requiring ascertainable subject and objects.

Issues

1. Whether a trust can be valid if its beneficiaries are described only in general or ambiguous terms, such as “objects of benevolence and liberality.”
2. Whether courts can exercise control and enforce the administration of a trust without clear, definite beneficiaries.
3. What the outcome should be if a non-charitable trust fails for uncertainty of beneficiaries.

Decision

• The court held that, outside of charitable trusts, a trust requires definite and ascertainable beneficiaries who can enforce its terms.
• Both the court at first instance and on appeal ruled the trust invalid because the intended beneficiaries were not defined with sufficient certainty.
• The property was found to be held on resulting trust for the settlor, as the trust failed to satisfy the requirement of definite beneficiaries.
• The court affirmed that vague terms such as “objects of benevolence and liberality” could not create an enforceable trust.

Legal Principles

• The beneficiary principle: all non-charitable trusts must have ascertained or ascertainable beneficiaries.
• For a trust to be valid, the court must be able to exercise judicial control by identifying beneficiaries able to enforce the trust.
• Charitable trusts are exempt from the requirement of definite beneficiaries, but private trusts are not.
• If the trust objects are uncertain, the trust fails and the property results to the settlor.
• The “complete list test,” as further expounded in IRC v Broadway Cottages, required that all beneficiaries could be identified for discretionary trusts, although this was later relaxed in McPhail v Doulton (Re Baden (No. 1)) to an “is or is not” test.

Conclusion

Morice v Bishop of Durham established the fundamental requirement that non-charitable trusts must have ascertainable beneficiaries for validity; without them, the trust fails and the property results to the settlor, a rule at the core of the beneficiary principle in English trust law.