rule in Keech v Sandford

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The rule that a trustee is prevented from retaining the benefit of a lease that is renewed in his own name, the lease having previously been held on trust. If a trustee does renew for his own benefit a lease that was previously the subject matter of the trust, even in circumstances where there is no desire for or prospect of the lease being renewed for the benefit of the trust, the trustee will be irrebuttably presumed to be a constructive trustee for those who were beneficially interested in the original lease. This rule is derived from the case of Keech v Sandford (1726) Sel Cas Ch 61 in which a lease was renewed in the name of the trustee, for the trustee's own benefit, despite the fact that the lessor had refused to renew the lease in favour of the trust. It has been held that the rule applies to all persons acting in a fiduciary capacity and is not confined to trustees (Re Biss [1903] 2 Ch 40).

Subjects: Law.

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