Re Ellenborough [1903]

Re Ellenborough [1903] 1 Ch 697 deals with the question of whether a mere expectancy can be the subject of a trust. In this case, the claimant (the settlor) made a voluntary settlement by deed, granting the trustees the property she might become entitled to under the wills of her brother and sister in the event of their death.

The key legal principle derived from the case is that a mere expectancy, on its own, cannot form the subject of a trust. However, if the expectancy is a contractual right, it can be the subject of a trust. In other words, a trust can be established over an expectancy if there is a contractual obligation or consideration involved.

In the specific context of this case, the claimant sought a summons to determine whether she could refuse to hand over her share of her brother's estate to the trustees. The High Court held that the claimant could indeed refuse to transfer her share of her brother's estate. The reasoning behind this decision, as expressed by Buckley J, was that a volunteer (in this case, the trustees) cannot enforce a deed to dispose of an expectancy.

Buckley J further explained that if there was consideration (something of value exchanged), the deed could be enforced. In equity, future property, possibilities, and expectancies are generally assignable for value. However, when the assurance (in this case, the deed) is not supported by value or consideration, it will not be enforced.

Therefore, the case sets a precedent that for a trust to be enforceable over an expectancy, there must be some form of consideration or contractual right involved in the creation of the trust. A mere gratuitous promise or settlement without consideration may not be sufficient to establish a trust over an expectancy.
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