II. Equitable Estates-Trusts.

LEAKE, LAND LAW, 243. Equitable estates and interests either correspond with legal estates or are of kinds peculiar to equity, having no analogy in law.

Equitable estates which correspond with legal estates comprise estates in fee simple and fee tail, estates for terms of life and for terms of years, in strict analogy to the legal estates already described. They are created either by express limitation or by construction of equity-either by declared or by constructive trust. In the express limitation of equitable estates corresponding with legal estates, as regards the quantity of estate, equity, in general, follows the law; the same terms of limitation are used, and receive the same construction as in limiting estates at law.

ID., 469-473. In the limitation of equitable estates, corresponding with legal estates, future estates and interests are, in general, limited in the same manner, and the same language is used and receives the same construction, as in limiting future legal estates: according to the principle that equity follows the law. Accordingly, the equitable estate may be limited for a particular estate with remainder, or with successive remainders, or leaving a reversion, as at law. But the limitation of the trust or equitable estate is free from the restrictive rules peculiar to the quality of freehold tenure; for these rules are satisfied in their application to the legal estate of the trustee and have no ulterior effect on the beneficial interest. The rule of common law that the freehold cannot be in abeyance, with all its consequences in legal limitations, has no application in equity. Therefore, an equitable estate, freehold in quantity, may be limited to commence at a future time, or upon the happening of a fu

ture event, without any preceding freehold estate to support it as a remainder. So an equitable estate may be limited to take effect in defeasance or substitution of a preceding estate without awaiting its determination, in the same manner as a shifting use or executory devise. The trust or equitable interest in leaseholds or terms of years may be limited with all the freedom of an executory bequest of personal

Future limitations of the trust or equitable estate are subject to the same rule against perpetuities as future legal limitations by way of springing use and executory devise, and the rule is applied according to the same principles. "It may be laid down without any qualification that no nearer approach to a perpetuity can be made through the medium of a trust, or will be supported by a court of equity, than can be made by legal conveyances of legal estates or interests or will be admitted in a court of law.1

By means of a trust or direction for that purpose the rents and profits of land may be withdrawn from present ownership and accumulated for the benefit of a future and uncertain owner. Such dispositions were impossible at the common law on account of the rule that the freehold could never be in suspense. Trusts and directions to accumulate rents and profits for future disposition are subject to the rule against perpetuities.

The rules restrictive of contingent remainders at the common law have no application in equity. A contingent limitation of the equitable estate, though in the form of a contingent remainder at law, may take effect as and when it is limited to arise, subject only to the rule against perpetuities. It is not affected by the determination of the preceding estate before the happening of the contingency upon which it depends. Thus under a trust for A. for life and after his death for the children of A. who should attain twenty-one, the trust for the children will not fail by reason of A. dying before any child has attained that age, as would be the case 1 Butler's Note to Co. Lit., 290, b, sec. 14.

with a contingent remainder at law in the same terms. So under a trust for 4. for life and after his death to the children of B., the trust for the children of B. does not fail upon the death of A. before children of B. exist.

If a contingent limitation be made without any preceding estate, or if a contingent limitation do not vest until after the determination of the preceding estate, the intermediate interest, unless otherwise disposed of, results to the settlor or his heir, or falls into the residue of his estate.

The rule in Shelley's Case, by which limitations in the form of remainders to the heirs or to the heirs of the body, after an estate of freehold in the ancestor, are referred to the estate of the ancestor, is applied by analogy in construing the like limitations of equitable estates, and upon the same principles upon which it is applied to legal limitations. But it can be applied only where the limitations to the ancestor and to the heirs are homogeneous, either both legal or both equitable; if the estate limited to the ancestor is equitable and the remainder to the heirs is legal, or conversely, the rule is not applicable. Where both the limitations are legal, a trust imposed upon one of them does not prevent the application of the rule to the legal limitations; for a court of law, in construing legal limitations, takes no notice of trusts.

ID., 244. But the rules of limitation apply only to express declarations of trust, and have no application to those equitable estates, which, though corresponding with legal estates, arise by construction of equity. Such are the constructive trusts or equitable estates and interests based upon the payment of the consideration of a purchase—or which arise from a mere contract to purchase-or resulting trusts which arise upon a legal conveyance not disposing of the whole equitable interest, or failing in effect to dispose of it. Trusts and equitable estates thus arising are, for the most part, measured and limited by the legal estates and interests on which they are imposed. Thus, the equitable estate attributed to the payment of a consideration is co-exten

sive with the legal estate to which it is referred; so a resulting trust includes the whole undisposed of estate to which it applies; so by a contract of sale which equity would specifically enforce the purchaser may acquire an equitable estate in fee or other the whole interest which the vendor contracts to sell without any technical limitation.

ID., 473. Trusts for conversion, charges of money for portions, legacies, debts, etc., constituting equitable interests in land of a kind peculiar to equity, and having no correspondence with legal estates, may also be limited to take effect at a future time or upon the happening of some event or contingency, subject only to the rule against perpetuities.

WILLIAMS, REAL PROP. (17th ed.), 430. Contingent remainders may also be limited of trust estates. But between such contingent remainders, and contingent remainders of estates at law, there was also this difference, that whilst the latter were destructible, the former were not. The destruction of a contingent remainder of an estate at law depended, as we have seen, on the ancient feudal rule, which required a continuous and ascertained possession of every piece of land to be vested in some freeholder. But in the case of trust estates, the feudal possession remains with the trustee. And, as the destruction of contingent remainders at law defeated, when it happened, the intention of those who created them, equity did not so far follow the law as to introduce into its system a similar destruction of contingent remainders of trust estates. It rather compelled the trustees continually to observe the intention of those whose wishes they had undertaken to execute.

BOOK IV.

RIGHTS LESS THAN OWNERSHIP.

Many of these rights have been more conveniently discussed in other connections. Easements, profits a prendre and other incorporeal hereditaments have been treated at length, pp. 22-37, supra; equitable interests generally, under the description of Trusts, pp. 165-178 and 397-400; contingent future interests, pp. 333-357; powers of appointment, pp. 383-390; rights of entry, pp. 300-315, 358-363 and 457469; escheat and possibilities of reverter, pp. 363-369, and creditors' rights, pp. 525-531. As the law of mortgages is a composite of legal and equitable relations, it has seemed best to deal with it separately in this place.