Page:The New International Encyclopædia 1st ed. v. 19.djvu/576

* TRUST. 498 TRUST. enforce such obligations upon equitable grounds in the reign of Richard II., and the jurisdiction became well established during the reigns of Henry VI. and Edward IV. By virtue of the Chancellor's power to command things to be done, he could compel the feoffee to uses to carry out fully the equitable obligation imposed upon him by the grantor, and in the reign of Edward IV. we find the Chancellor imposing the same obliga- tions upon those who acquired the legal title from the feoffee by inheritance or by pur- chase, if the purchaser had notice of the claim of the cestui que use. Equity also came to recog- nize the right or interest of the cestui as analo- gous to a legal interest in the land which might be freely conveyed or assigned and which might be inherited. Thus, in addition to the power of the legal owner of land to divest himself of the burdens of legal ownership by the conveyance to uses, he was also enabled to grant the use in ways not permitted at common law, as, for ex- ample, the grant of the use of property by the husband to his wife. At this period (Edward IV.) there were three recognized methods of creating a use or trust in lands: (1) By feoffment ox transmutation of pos- session, as already mentioned. Analogous to this was the practice of enfeoffing another to the uses to be declared in the feoffor's will. Equity in such cases compelled the feoffor or trustee to hold the property for the benefit of those named in the feoffor's will. (2) By bargain and sale. When the legal owner entered into a legal contract for the sale of land in which the buyer paid, or agreed to pay, the vendee for the land, a court of equity treated the vendor as a trustee and compelled him to hold the land for the use or benefit of the buyer. (.3) By covenant to stand ■seized. This was a covenant by which the legal owner of land covenanted to stand seized or possessed of the land to the use or for the benefit of a blood relative. Courts of equity treated such an instrument as a valid declaration of trust, enforceable against the covenantor for the benefit of the relative named in the covenant. The use of the trust as a means of evading the obligation of legal ownership led to the enact- ment of the Statute of Uses, 27 Henry VIII., cap. 10. Its purpose was to abolish the practice of creating uses or trusts of land, and its effect was to declare that, by operation of law, the legal title should be deemed vested in the benefi- ciary or cestui que use. Upon its face the statute was effectual to serve this purpose, and its im- mediate effect was to permit the creation and transfer of legal estates in the same manner as uses or equitable estates had been created and transferred before the statute, and incidentally to permit the conveyance of a legal interest in land by mere deed of bargain and sale without feoffment as at common law. (See Convey- ance; Uses.) Intluenced, however, by the same powerful motives which were responsible for the development of the system of uses, the early lawyers, by a method of reasoning now dif- ficult to understand, ultimately gave to the stat- ute a meaning and effect the exact opposite of that intended. It was held that when land was granted to A for the vise of B, the efliciency of the statute to vest the grantee to uses with the legal title was exhausted, so that if the grant was made to A for the use of B for the use of C, then n, who acquired the legal title by operation of the statute, would hold it for the benefit of C. It was also held that when an active duty was imposed upon the grantee to uses or trustee, as by a grant of real estate to A to collect and pay over the rents to B, the use was not executed by the statute by making B the legal owner, but was enforceable by Chancery as before the statute. The result, therefore, was that the system of trusts was preserved and its development stimulated rather than hindered by the .statute. In both England and the United States there is a com- plete system of trusts of both real and personal property, either as developed by courts of equity or modified by statutes. In order to create a trust all that is now neces- sary is that one should convey or grant, either by will or by grant inter vivos, specific property' to one in trust for another, or that one having the legal title to such property should declare that he holds it in trust for another. No consideration is necessary to create a trust, and no writing or other formal document is required, except that trusts of real estate are required by the Statutes of Frauds to be evidenced by writing. No par- ticular words are necessary, but the intention of the person creating the trust must be clear. Any legal person or a corporation if within its cor- porate powers may become a trustee. Formerly the le<'al title held by the trustee, according as it was i"al or personal property, passed upon his death to his heirs or next of kin, whom equity would compel to hold the property for the bene- fit of the beneficiaries wider the trust, but gen- erally by modern statutes provision is made in case of the death or misconduct of a trustee for the appointment by the court of a new trustee, who acquires the title of the first trustee. Any legal person may be a cestui que trust, but it has been held upon somewhat unsatisfactory reason- ing that trusts for the benefit of unascertained beneficiaries or for the benefit of inanimate objects were invalid, even though the trustee was able and willing to carry out the trust. In general, also, all the rules governing and determining the illegality of agreements are applied by courts of equity in determining the validity of trusts. Trusts have been classified with reference to the manner of their creation as Express, Implied, Resulting, and Constructive. (1) The express trust is one created by the intent of the person creating or declaring the trust, expressed in written or spoken language, such as the trust created by express clauses in a will or by a for- mal declaration of trust. (2) The term 'implied trusts,' which has been sometimes applied (o constructive trusts, denotes trusts created by the intent of the person creating or declaring it, when his conduct or language, either written or spoken, is such that the court infers or implies the in- tention to create the trust. (3) Resulting trusts are trusts which are not created as a consequence of actual intention, but which courts of equity in certain instances treat as trusts intended to be created. As it is said, under certain circum- stances, the intention to create a trust is pre- sumed. Thus, if the purchaser of real estate pays the purchase price, but takes the title in the name of a third person, the courts of equity hold that a resulting trust is created in favor of the purchaser, or when one conveys property to a trustee upon a trust which fails or is illegal.