NATURE AND HISTORY OF TRUSTS.

SECTION 1. DEFINITION.

Chief Justice defined a trust as "a confidence reposed in some other, not issuing out of the land, but as a thing collateral, annexed in privity to the estate of the land and to the person touching the land, for which the cestui que trust has no remedy but by subpoena in chancery."1

A later definition is as follows: "A trust may be defined as an obligation arising out of a confidence reposed in one who has the legal title conveyed to him, that he will faithfully apply and deal with such property according to the confidence reposed." 2

Story's definition is as follows: "A trust in the most enlarged sense in which that term is used in English jurisprudence may be defined to be an equitable right, title, or interest in property, real or personal, distinct from the legal ownership thereof."

The essential characteristic of a trust is the separation of the legal title and the beneficial use; in every trust the former must be in one person and the latter in another.

Trusts were originally known as uses, and this latter name is still sometimes used.

SECTION 2. HISTORY OF USES.

An account of the introduction of uses into England, and their development prior to the passage of

1 Coke on Littleton, 272 b.

• American & English Ency. of

Law, Vol. XXVIII, page 858;

1 Perry on Trusts, Sec. 2.

* 2 Story's Equity, Sec. 964.

the statute of uses has been treated in Section 78 of Legal History. This section should be re-read at this time.

SECTION 3. THE STATUTE OF USES.

The Statute of Uses was passed for the purpose of doing away with passive uses altogether. An indirect method of accomplishing this was adopted. Instead of prohibiting the creation of uses it was provided that where a use had been created that the legal title should be re-united in the person of the cestui que use or, in other words, that the legal title should pass from the trustee to the cestui que use. The text of the operative clause of the statute was as follows:

"That where any person or persons stand or be seized or at any time hereafter shall happen to be seized of, and in any honours, castles, manors, lands, tenements, rents, services, reversions, remainders, or other hereditaments, to the use, confidence or trust of any other person or persons, or of a body politick, by reason of any bargain, sale feoffment, fine, recovery, covenant, contract, agreement, will or otherwise, by any manner, means, whatsoever it be; that in every such case, all and every such person or persons and bodies politick, that have or shall hereafter have any such use, confidence or trust, in fee-simple, fee-tail, for terms of life or for years or otherwise, or any use, confidence or trust, in remainder or reverter, shall from henceforth stand and be seized, deemed and adjudged in lawful seisin estate and possession of and in the same honours, castles, manors, lands, tenements, rents, services, reversions, remainders, and hereditaments, with their appurtenances, to all intents, construction and purposes in the law of and in such

like estates as they had or shall have in use, trust, or confidence of, or in the same, and that the estate, title, right and possession that was in such person or persons that were or hereafter shall be seized of any lands, tenements or hereditaments, to the use, confidence or trust of any such person or persons, or of any body politick be from henceforth clearly deemed and adjudged to be in him or them that have or hereafter shall have such use, confidence or trust after such quality, manner, form and condition as they had before in or to the use, confidence or trust that was in them.'

SECTION 4. EFFECT OF THE STATUTE OF USES.

The Statute of Uses was not intended to apply to the following classes of uses: (a) Active uses;

(b) Contingent uses;

(c) Uses in personal property, including estates in real property less than freeholds;

(d) Uses for the use of married women.

Furthermore by a decision of the common law judges the purpose of the statute to abolish passive uses was entirely frustrated, and the final effect of the statute was to increase, rather than diminish the scope of the use. This decision of the common law judges was to the effect that a use could not be limited upon a use. This rule can be explained as follows:

If A grants land to B for the use of C, for the use of D, the statute operates and transfers the title from B to C; then under this decision, the statute has exhausted its force so far as this transaction is concerned, and cannot operate once more to transfer the legal title from C to D. Equity, however, steps in

and carries out the intention of the grantor by compelling C to hold the property for the use of D. The only result, therefore, accomplished by the Statute of Uses, in this respect, was the necessity for the addition of three words to the instrument creating the use.1

After the time of the Statute of Uses, uses came to be generally known as trusts.

4 Tyrrel's Case, 2 Dyer, 155 a; Hopkins vs. Hopkins, 1 Ark., 591; Croxall vs. Shererd, 5

Wall, 268; Hutchins vs. Heywood, 50 N. H., 491.

PARTIES AND SUBJECT-MATTER IN A TRUST.

SECTION 5. IN GENERAL.

There are three different parties in the case of every trust, the settlor, the trustee and the cestui que trust. The settlor creates the trust, the trustee holds the legal title and the cestui que trust holds the beneficial use.

SECTION 6. THE SETTLOR.

"As the creation of a trust is a modification of property in a particular form, it may be laid down as a general rule that whoever is competent to deal with the legal estate, may, if he be so disposed, vest it in a trustee for the purpose of executing the settlor's intention.'' 1

Probably nothing more needs to be said on this point; if a person has the capacity to transfer both the legal title and the beneficial use in certain property to the same party, it is evident that he should have the right to transfer the legal title to one party and the beneficial use to another.

SECTION 7. THE TRUSTEE.

The question as to who may be a trustee is thus discussed in the leading work on the subject of Trusts??

"The question who may be a trustee involves a variety of considerations. Thus, a person to be a trustee must be capable of taking and holding the property in which the trust is declared. Again, the Lewin on Trusts, Vol. I, Chapter Id., Vol. I, Chapter III, Section 2.

III, Section 1.

W.VII.-11

161