Learoyd v Whiteley [1887] UKHL 1 is an English trusts law case, concerning the duty of care owed by a trustee when exercising the power of investment.

£3000 was invested in a mortgage at 5% return in the freehold of a ten-acre brick field near Pontefract, “with the engine-house, sheds, brick and pipe kilns, and buildings thereon, and all fixtures and fittings thereon.” £2000 was invested on mortgages at 5% in four small freehold houses, including a shop, in Salford, Lancashire.

Bacon VC held in the Chancery Court that the brickfield investment was unauthorised, and the trustees were responsible for its failure.

The Court of Appeal upheld Bacon VC's decision, that the trustees were liable for repayment of the £3000 invested in the brickfield.

They held that a trustee must exercise the standard of care of an ordinary prudent businessman, applying any special knowledge he may have.

But I cannot accede to the view which Mr. Hemming pressed upon us so very much, that you must consider whether the trustee is or is not possessed of special skill and ability.

The principle applicable to cases of this description was stated by the late Master of the Rolls in Speight v Gaunt[1] to be that a trustee ought to conduct the business of the trust in the same manner that an ordinary prudent man of business would conduct his own, and that beyond that there is no liability or obligation on the trustee.

If it were to prevail the Court would in effect decide that trustees could delegate their trust to any competent persons, and so terminate their own responsibility.

As an abstract proposition I am not prepared to say that a freehold brick-field cannot be a real security within the meaning of the power.

An ordinary prudent man having no special knowledge of the value of house property, might well act on this advice, and see no reason for distrusting it.

The tenant for life cannot be made to refund the interest paid to her, or to recoup the trustees the difference between 5 per cent.

Lord Watson held that in administering and managing trust property (distinguished from the investment sphere), As a general rule, the law requires of a trustee no higher degree of diligence than a man of ordinary prudence would exercise in the management of his own private affairs.Lord Fitzgerald concurred.