land, &c., of and in the like estates as they have in the use, trust, or confidence; and that the estate of the person so seised to uses shall be deemed to be in him or them that have the use, in such quality, manner, form, and condition, as they had before in the use." The statute thus executes the use; that is, it conveys the possession to the use, and transfers the use into possession, thereby making the cestui que use complete owner of the lands and tenements, as well at law as in equity." The statute, as may be inferred from its provisions, applies only to trusts in real property, and not to trusts in personal property." THE MODERN TRUST 4. Out of this statute, in which trusts, uses, and confidences were classed in one category, was evolved the modern trust. The statute undertakes "to apply the same remedy to all by uniting the legal and equitable interest into a new legal estate. But it became apparent, upon applying the statute, that there were cases where this could not be done without defeating the obvious provisions of the trust, or extending the language of the statute beyond its necessary meaning. Where the use could not be thus executed, the legal estate was necessarily left as at common law. But equity, perceiving that to allow the holder of the legal estate to have the beneficial use of it was contrary to the intention of the parties, interposed to hold the tenant of the legal estate a trustee for him who was entitled to the beneficial use of it; and the consequence was that, while one party had a right to the seisin and possession of land as at common law, equity regarded him for whose use the land was designed as the rightful owner thereof, and in this way there early grew up a double ownership of lands thus situated, the legal and the equitable one. 9) 13 The courts of equity consider a trust estate, either when expressly declared or resulting by implication of law, as 112 Black. Comm. 332, 333, citing Stat. 27 Hen. VIII, c. 10. 12 17 Md. 403 (1861); 35 Am. Dec. 641 (1840). 13 Washb. R. P. (6th Ed.), Vol. 2, Sec. 1,403. equivalent to the legal ownership, governed by the same rules of property and liable to every charge in equity which the other is subject to in law. The trustee is considered as merely the instrument of conveyance, and can in no shape affect the estate, unless by alienation for a valuable consideration to a purchaser without notice, which, as the cestui que use is generally in possession of the land, is a thing that can rarely happen. The trust will descend, may be aliened, is liable for debts, to execution on judgments, statutes, and recognizances (by the express provision of the statute of frauds), to forfeiture, to leases, and other encumbrances, even to the curtesy of the husband, as if it were an estate in law." But, under the early law, a trust estate was not subject to dower, more from a cautious adherence to some hasty precedents than from any well-grounded precedents." In England, this restriction was removed by the Dower Act;" and in the United States, the rule generally adopted is that the wife is dowable of any trust estate." The common-law rule that a widow could only have dower in the legal estates has been either expressly or impliedly changed by statute in the majority of the states, and she now has the right of dower in his equitable estates as well, but, in some jurisdictions, the right exists only when the husband is possessed of such estate at the time of his death, and if, during the marriage, he part with such estate, though without the concurrence of his wife, she will be deprived of her claim to dower, though she survive him.1 5. Parties to Trusts. - Three parties are necessary to a trust: (1) A creator or settlor; (2) a trustee to take and manage the trust property; (3) a beneficiary or cestui que trust, to receive the benefit or profits of the property. 142 Black. Comm. 337. 15 Ibid. 16 Stat. 3 & 4 Wm. IV, c. 105; 1 Spence Eq. Jur. 501. 172 Sharsw. Black. Comm. 132, note, citing 2 S. & R. (Pa.) 554 (1814); 15 Johns. (N. Y.) 319 (1818); 1 Conn. 559 (1816); see The Law of Husband and Wife: Dower; Appendix: Dower. 18 Am. & Eng. Encyc. Law (2d Ed.). Vol. 10, p. 163, citing 17 Fed. Rep. 331 (1883); 6 Dana (Ky.) 472 (1838); 18 B. Monr. (Ky.) 107 (1857); 2 Ohio 506 (1826); 36 Ohio St. 605 (1881). Generally, every one competent to enter into a contract, or to make a will, or to deal with the legal title to property, may make such disposition of it as he pleases; and he may annex such conditions and limitations to the enjoyment of it as he sees fit; and he may vest it in trustees for the purpose of carrying out his intention. All persons, sui juris, have the same power to create trusts that they have to make a disposition of their property." The general rules as to the capability of trustees and cestuis que trust are stated hereinafter. 6. Property That May Be Held in Trust.-Generally, all property, real or personal, legal or equitable, in possession or action, in remainder, reversion, or expectancy, may be taken and held in trust, unless the policy of the law or some statutory provision prohibit the settlor from parting with the beneficial interest therein, or, in case of real estate, unless the tenure under which it is held be inconsistent with the trust sought to be created." 19 Per. T. & T. (5th Ed.), Vol. 1, Sec. 28; see subtitles Trustees, Cestuis Que Trust, infra. 20 Am. & Eng. Encyc. Law (1st Ed.). Vol. 27, p. 24, citing Lew. Tr.* 47. CREATION OF TRUSTS 7. Three things must concur to raise a trust: (1) Sufficient words to create it; (2) a definite subject; (3) a certain or ascertained object. These essential elements must exist or no trust will be created. The subject of the trust is a definite subject when the words used are sufficient to identify, or point out clearly, what property is to be held in trust. So long as the property is described with certainty, lack of formality will not defeat the trust, or rather, prevent it from arising. Vagueness in describing the object of the trust may defeat the settlor's intentions and vest an estate intended to be held in trust absolutely in him who was to have been merely a trustee. Such indefiniteness is taken to be designed, and to manifest an intention to leave the donee the distribution or non-distribution of the property according to the trust. There should be no doubt concerning the object to which the property is to be applied, but no particular form of expression need be followed in designating it. REQUIREMENTS OF STATUTE OF FRAUDS NECESSITY OF A WRITING 8. Prior to the Statute of Uses, a use in land could be raised by parol; this continued to be the law as to trusts, when they had taken the place of ancient uses, until the enactment of the Statute of Frauds, and such is still the law in North Carolina and Texas, which have never adopted the statute. By the seventh section of the statute, which, by the way, is not contained in the statutes of Tennessee, Virginia, or West Virginia, all declarations or creations of trusts of any lands, tenements, or hereditaments, must be manifested or proved by some writing, signed by the party creating the trust, or by his last will in writing. The eighth section excepts from the effect of that statute trusts which arise or result by the implication or construction of law, while the ninth section requires all grants or assignments of any trusts to be in writing, signed by the party creating the trust, or by his last will in writing." The statute is construed as referring merely to the evidence and not to the creation or declaration of the trust itself. It is a principle, well settled in equity, that a trust need not be created in writing. It is sufficient if it be proved in writing under the hand of the party to be charged; it cannot be established by parol evidence." This written evidence may be a separate instrument either simultaneous with, or subsequent to, the deed of conveyance, and may be very informal.” The object of a writing is not to declare and create a trust, but to furnish the requisite and only competent evidence of an existing fact, which is that there is a trust and confidence in the trustee in respect to the estate, in favor of another, and which, but for the statute, might be otherwise proved; the evidence, however, should show, not only that there is this trust, but what the trust is. No particular form of words is required to create it, provided the language used clearly indicates, on the part of the trustee, that the land is held by him in trust, or if the papers by which he holds it indicate the same. Hence, it is not necessary that what is written should be intended as a declaration or evidence of trust; nor is it even necessary that the declaration should be made to the cestui que trust; for, if made in his favor, though unknown to him, he may claim and enforce it, if he do so within a reasonable time." In England, by the Statute of Wills, and in most of the 21 Washb. R. P. (6th Ed.), Vol. 2, Secs. 1,460, 1,461. 22 Am. & Eng. Encyc. Law (1st Ed.), Vol. 27, pp. 46, 47, citing 14 Me. 281 (1837); 9 Am. Dec. 256 (1820). 23 Pom. Eq. Jur., Vol. 2, Sec. 1,006; 16 Vt. 508 (1844). 24 Washb. R. P. (6th Ed.). Vol 2, Sec. 1.463: 14 Me. 281 (1887); 16 Pick. (Mass.) 222 (1834); 19 Wis. 480, 485 (1865). |