Leaseholds and the Rule in Howe v. The Earl of Dartmouth

Abstract

THE decision in Howe v. The Earl of Dartmouth, as developed and explained by subsequent cases, has long been recognized as authority for the rule that a residuary bequest of personalty to, or upon trust for, persons by way of succession, casts upon the personal representatives or trustees two duties. Of these the first is that such of this personalty as is of a wasting or hazardous nature must be sold, and the proceeds invested in authorized investments; while the second compels them, for so long as the property remains unsold, to pay to the person who is beneficially entitled to the income for the time being, only so much of the actual income as would be payable had the sale and investment already occurred. In short, the wasting or hazardous part of the personalty is held upon an implied trust for sale, and the beneficiaries are to be treated from the outset as though the conversion has already taken place.