Re McArdle
Court of Appeal
Citations: [1951] Ch 669; [1951] 1 All ER 905; (1951) 95 SJ 284; [1947-51] CLY 4321.
Facts
A testator’s residual estate was held on trust for his five children in equal shares subject to his widow’s life interest. In 1943, one of the beneficiaries and his wife began renovating one of the trust properties. The wife paid for the improvements. Afterwards, the five children signed a document addressed to the wife stating:
‘In consideration of your carrying out certain alterations and improvements to the property…at present occupied by you, We…hereby agree that the executors…shall repay to you from the said estate when so distributed the sum of £488 in settlement of the amount spent on such improvements.’
The widow later died, but the children refused to pay the wife in accordance with the agreement. They argued that the agreement was not enforceable because the wife provided no consideration.
Issue(s)
- Had the wife given good consideration for the promise to pay?
- Did the document constitute a valid equitable assignment of part of the trust fund?
Decision
The Court held in favour of the children. The wife’s payment for the renovations happened before the promise was made. It was therefore past consideration. This past consideration was not good consideration. The document was clearly intended to be a contract for the payment of money. The beneficiaries therefore did not intend it to be an equitable assignment and the Court could not construe it as one.
This Case is Authority For…
Past consideration is some act which has already been completed by the time the other party’s promise is made. Past consideration is not good consideration for a future promise.
Other
Evershed MR noted that it is possible to make a valid equitable assignment without consideration.
