Commentaries on American Law (1826-30)
Chancellor James Kent
Of Uses and Trusts
(1.) Of uses.
A use is where the legal estate of lands is in A., in trust, that B. shall take the profits, and that A. will make and execute estates according to the direction of B.1 Before the statute of uses, a use was a mere confidence in a friend, to whom the estate was conveyed by the owner without consideration, to dispose of it upon trusts designated at the time, or to be afterwards appointed by the real owner. But the trustee was, to all intents and purposes, the real owner of the estate at law, and the cestui que use had only a confidence or trust, for which he had no remedy at the common law.
Uses existed in the Roman law, under the name of fidei commissa, or trusts. They were introduced by testators to evade the municipal law, which disabled certain persons, as exiles and strangers, from being heirs or legatees. The inheritance or legacy was given to a person competent to take, in trust, for the real objects of the testator’s bounty. But such a confidence was precarious, and was called by the Roman lawyers jus precarium, for it rested entirely iii the good faith of the trustee, who was under no legal obligation to execute it. To invoke the patronage of the emperor in favor of these defenseless trusts, they were created under an appeal to him, as rogote per salutem, or per fortunam Augusti. Augustus was flattered by the appeal, and directed the praetor to afford a remedy to the cestui que trust, and these fiduciary interests increased so fast, that a special equity jurisdiction was created to enforce the performance of the trusts. This “particular chancellor for uses,” as Lord Bacon terms him, who was charged with the support of these trusts, was called praetor fidei commissaries.2 If the testator, in his will, appointed Titius to be his heir, and requested him, as soon as he should enter upon the inheritance, to restore it to Caius, he was bound to do it, in obedience to the trust reposed in him. The Emperor Justinian gave greater efficacy to the remedy against the trustee, by authorizing the praetor, in cases where the trust could not otherwise be proved, to make the heir, or any legatee, disclose or deny the trust upon oath, and when the trust appeared, to compel the performance of it.3
The English ecclesiastics borrowed uses from the Roman law, and introduced them into England in the reign of Edward III. or Richard II., to evade the statutes of mortmain, by granting lands to third persons to the use of religious houses, and which the clerical chancellors held to be fidei commissa, and binding in conscience.4 When this evasion of law was met and suppressed by the statute of 15 Rich. II., uses were applied to save lands from the effects of attainders; for the use, being a mere right in equity to the profits of land, was exempt from feudal responsibilities, and uses were afterwards applied to a variety of purposes in the business of civil life, and grew up into a refined and regular system. They were required by the advancing state of society, and the growth of commerce. The simplicity and strictness of the common law would not admit of secret transfers of property, or of dispositions of it by will, or of those family settlements which became convenient and desirable. A fee could not be mounted upon a fee, or an estate made to shift from one person to another by matter ex post facto; nor could a freehold be made to commence in future, or an estate spring up at a future period independently of any other, nor could a power be reserved to limit the estate, or create charges on it in derogation of the original feoffment. All such refinements were repugnant to the plain, direct mode of dealing, natural to simple manners and unlettered ages. The doctrine of livery of seizin rendered it impracticable to raise future uses upon feoffment, and if a person wished to create an estate for life, or in tail, in himself, he was obliged to convey the whole fee to a third person, and then take back the interest required. Conditions annexed to the feoffment would not answer the purpose, for none other than the grantor, or his heir, could enter for the breach of it; and the power of a freeholder to destroy all contingent estates by feoffment or fine, rendered all such future limitations at common law very precarious.
The facility with which estates might be modified, and future interests secured, facilitated the growth of uses, which were so entirely different in their character from the stern and unaccommodating genius of feudal tenure. Uses, said Lord Bacon, “stand upon their own reasons, utterly differing from cases of possession.”5 They were well adapted to answer the various purposes to which estates at common law could not be made subservient, by means of the relation of trustee and cestui que use, and by the power of disposing of uses by will, and by means of shifting, secondary, contingent, springing, and resulting uses, and by the reservation of a power to revoke the uses of the estate, and direct others. These were pliable qualities belonging to uses, and which were utterly unknown to the common law, and grew up under the more liberal, and more cultivated principles of equity jurisprudence.
The contrast between uses and estates at law was extremely striking. When uses were created before the statute of uses, there was a confidence that the feoffee would suffer the feoffor to take the profits, and that the feoffee, upon the request of the feoffor, or notice of his will, would execute the estate to the feoffor and his heirs, or according to his directions.6 When the direction was complied with, it was essentially a conveyance by the feoffor, through his agent the feoffee, who, though even an infant or feme covert, was deemed in equity competent to execute a power, and appoint a use. The existing law of the land was equally eluded in the selection of the appointee, who might be a corporation, or alien, or traitor, and in the mode of the direction, which might be by parol.
As the feoffee to uses was the legal owner of the estate, he was exposed, in his estate, to the ordinary legal claims, debts, and forfeitures; but, to avoid this inconvenience, the feoffees were numerous, and when the number became reduced, a new feoffment was made to other feoffees to the subsisting uses. When uses were raised by conveyances at common law operating by transmutation of possession; the uses declared in such conveyances did not require a consideration. The real owner had divested himself of the legal estate, and the person in whom it was vested, being a mere naked trustee, equity held him bound in conscience to execute the directions of the donor. If, however, no uses were declared, then the feoffee, or releasee, took, to the use of the feoffor or releasor, to whom the use resulted; for if there was no consideration, and no declaration of uses, the law would not presume that the feoffor or releasor intended to part with the use. But in the case of covenants to stand seized, and of a bargain and sale, which did not transfer the possession to the covenantee, or bargainee, the inheritance remained in the contracting party; and it was a mere contract, which a court of equity would not enforce, when it was a mere nudum pactum, without consideration. The same principle applied to the case of a release, which was a conveyance operating at common law.7 Uses were alienable without any words of limitation requisite to carry the absolute interest; for, not being held by tenure, they did not come within the technical rules of the common law.8 A use might be raised after a limitation in fee, or it might be created in futuro, without any preceding limitation; or the order of priority might be changed by shifting uses, or by powers; or a power of revocation might be reserved to the grantor, or to a stranger, to recall and change the uses.9 Uses were also devisable, as they were only declarations of trust binding in conscience; and Lord Bacon, in opposition to Lord Coke, who, in Chudleigh’s case, had put the origin of uses entirely upon the ground of frauds invented to elude the statutes of mortmain, maintained that uses were introduced to get rid of the inability at common law to devise lands.10 It is probable that both these causes had their operation, though the doctrine of uses existed in the civil law, and would naturally be suggested in every community by the wants and policy of civilized life. Uses were certainly perverted to mischievous purposes, and the complaint is constant and vehement in the old books, and particularly in Chudleigh’s case, and in the preamble to the statute of uses, against the abuses and frauds which were practiced by uses prior to the statute of uses. It was the intention of the statute to extirpate such grievances, by destroying the estate of the feoffee to uses, and reducing the estate in the use to an estate in the land. There was a continual struggle maintained for upwards of a century, between the patrons of uses and the English Parliament, the one constantly masking property, and separating the open legal title from the secret equitable ownership, and the other, by a succession of statutes, endeavoring to fix the duties and obligations of ownership upon the cestui que use. At last the statute of 27 Hen. VIII., commonly called the statute of uses, transferred the uses into possession by turning the interest of the cestui que use into a legal estate, and annihilating the intermediate estate of the feoffee, so that if a feoffment was made to A. and his heirs, to the use of B. and his heirs, B., the cestui que use, became seized of the legal estate by force of the statute. The legal estate, as soon as it passed to A., was immediately drawn out of him and transferred to B., and the use, and the land, became convertible terms.
The equitable doctrine of uses was, by the statute, turned into the courts of law, and became an additional branch of the law of real property. Uses had new and peculiar qualities and capacities. They had none of the lineaments of the feudal system, which had been deeply impressed upon estates at common law. Their influence was sufficient to abate the rigor, and, in many respects, to destroy the simplicity of the ancient doctrine. When the use was changed from an equitable to a legal interest, the same qualities which were proper to it in its fiduciary state, followed it when it became a legal estate. The estate in the use, when it became an interest in the land, under the statute, became liable to all those rules to which common law estates were liable, but the qualities which had attended uses in equity, were not separated from them when they changed their nature, and became an estate in the land itself. If they were contingent in their fiduciary state, they became contingent interests in the land. They were still liable to be overreached by the exercise of powers, and to be shifted, and to cease, by clauses of cesser inserted in the deeds of settlement. The statute transferred the use, with its accompanying conditions and limitations, into the land.11 Contingent, shifting, and springing uses, presented a method of creating a future interest in land, and executory devises owed their origin to the doctrine of,shifting or springing uses. But uses differ from executory devises in this respect; that there must be a person seized to the uses when the contingency happens, or they cannot be executed by the statute. If the estate of the feoffee to such uses be destroyed by alienation or otherwise before the contingency arises, the use is destroyed for ever, whereas, by an executory devise, the freehold is transferred to the future devisee.12 Contingent uses are so far similar to contingent remainders, that they also require a preceding estate to support them, and take effect, if at all, when the preceding estate determines. The statute of uses meant to exclude all possibility of future uses,13 but the necessity of the allowance of free modifications of property, introduced the doctrine, that the use need not be executed the instant the conveyance is made, and that the operation of the statute might be suspended until the use should arise, provided the suspension was confined within reasonable limits as to time.14 In the Duke of Norfolk’s case, Lord Nottingham was of opinion, (as we have already seen,) that there was no inconvenience, nor any of the mischiefs of a perpetuity, in permitting future uses, under the various names of springing, shifting, contingent, or secondary uses, to be limited to the same period, to which the law permits the vesting of an executory devise to be postponed. Uses and devises became parallel doctrines, and what, in the one case, was a future use, was, in the other, an executory devise.
The statute having turned uses into legal estates, they were thereafter conveyed as legal estates, in the same manner, and by the same words.15 The statute intended to have destroyed uses in their distinct state, but it was not the object of it to interfere with the new modes of conveyance to uses, and the manner of raising uses out of the seizin created by a lawful transfer, stood as it had existed before. If it was really the object of the statute of uses to abolish uses and trusts, and have none other than legal estates, the wants and convenience of mankind have triumphed over that intention, and the beneficial and ostensible ownerships of estates were kept as distinct as ever. The cestui que use takes the legal estate according to such quality, manner and form, as he had in the use. The complex and modified interests annexed to uses were engrafted upon the legal estate, and upon that principle it was held to be competent in conveyances to uses, to revoke a former limitation of a use, and to substitute others. The classification of uses into shifting, or secondary, springing, and future, or contingent, and resulting uses, seems to be necessary to distinguish with precision their nice and varying characters, and they all may be included under the general denomination of future uses.
(1.) Shifting or secondary uses, take effect in derogation of some other estate, and are either limited by the deed creating them, or authorized to be created by some person named in it. Thus, if an estate be limited to A. and his heirs, with a proviso, that if B. pay to A. 100 dollars, by a given time, the use to A. shall cease, and the estate go to B. in fee, the estate is vested in A., subject to a shifting or secondary use in fee in B. So, if the proviso be, that C. may revoke the use to A., and limit it to B., then A. is seized in fee with a power in C. of revocation and limitation of a new use.16 These shifting uses are common in all settlements, and in marriage settlements the first use is always to the owner in fee till the marriage, and then to other uses. The fee remains with the owner until the marriage, and then it shifts as uses arise. These shifting uses, whether created by the original deed, or by the exercise of a power, must be confined within proper limits, so as not to lead a perpetuity, and which is neatly defined by Sir Edward Sugden,17 to be such a limitation of property as renders it unalienable beyond the period allowed by law. If, therefore, the object of the power be to create a perpetuity, it is void. And yet, in England, it is well settled, that a shifting use may be created after an estate tail, and the reason given is, that such a limitation, to take effect at any remote period, has no tendency to a perpetuity, as the tenant in tail may, when he pleases, by a recovery, defeat the shifting use; for the recovery bars and destroys every species of interest ulterior to the tenant’s estate. It is on this principle that a power of sale or exchange, in cases of strict settlement, are valid, though not confined to the period allowed for suspending alienation, provided the estate be regularly limited in tail.18 Shifting and secondary uses may be created by the execution of a power; as if an estate be limited to A. in fee, with a power to B. to revoke and limit new uses, and B. exercises the power, the uses created by him will be shifting or secondary in reference to A.’s estate, but they must receive the same construction as if they had been created by the original deed. (2.) Springing uses are limited to arise on a future event, where no preceding estate is limited, and they do not take effect in derogation of any preceding interest. If a grant be to A. in fee, to the use of B. in fee, after the first day of January next, this is an instance of a springing use, and no use arises until the limited period. The use, in the mean time, results to the grantor, who has a determinable fee.19 A springing use may be limited to arise within the period allowed by law in the case of an executory devise. A person may covenant to stand seized, or bargain and sell, to the use of another at a future day.20 These springing uses may be raised by any form of conveyance, but in conveyances which operate by way of transmutation of possession, as a feoffment, fine, or deed of lease and release, the estate must be conveyed, and the use be raised out of the seizin created in the grantee by the conveyance. A feoffment to A. in fee, to the use of B. in fee, at the death of C., is good, and the use would result to the feoffor until the springing use took effect by the death of C.21 A good springing use must be limited at once, independently of any preceding estate, and not by way of remainder, for it then becomes a contingent, and not a springing use, and contingent uses, as we have already seen, are subject to the same rules precisely as contingent remainders. The other mode of conveyance by which uses may be raised, operates, not by transmutation of the estate of the grantor, but the use is severed out of the grantor’s seizin, and executed by the statute. This is the case in covenants to stand seized, and in conveyances by bargain and sale. (3.) Future, or contingent uses, are limited to take effect as remainders. If lands be granted to A. in fee, to the use of B., on his return from Rome, it is a future contingent use, because it is uncertain whether B. will ever return.22 (4.) If the use limited by deed expired, or could not vest, or was not to vest but upon a contingency, the use resulted back to the grantor who created it. The rule is the same when no uses are declared by the conveyance. So much of the use as the owner of the land does not dispose of, remains with him. If he conveys without any declaration of uses, or to such uses as he shall thereafter appoint, or to the use of a third person on the occurrence of a specified event, in all such cases there is a use resulting back to the grantor.23
In the remarks which accompanied the bill for the revision of the New York statutes, relative to uses and trusts, the following objections were made to uses as they now exist. (i.) They render conveyances more complex, verbose, and expressive, than is requisite, and perpetuate in deeds the use of a technical language, unintelligible as a “mysterious jargon,” to all but the members of one learned profession. (2) Limitations intended to take effect at a future day, may be defeated by a disturbance of the seisin, arising from a forfeiture or change of the estate of the person seized to the use. (3.) The difficulty of determining whether a particular limitation is to take effect as an executed use, as an estate at common law, or as a trust. These objections were deemed so strong and unanswerable as to induce the revisers to recommend the entire abolition of uses. They considered, that by making a grant, without the actual delivery of possession, or livery of seizin, effectual to pass every estate and interest in land, the utility of conveyances deriving their effect from the statute of uses would be superseded; and that the new modifications of property which uses have sanctioned, would be preserved by repealing the rules of the common law, by which they were prohibited, and permitting every estate to be created by grant, which can be created by devise. The New York Revised Statutes24 have, accordingly, declared, that uses and trusts, except as authorized and modified in the article, were abolished; and every estate and interest in land is declared to be a legal right, cognizable in the courts of law, except where it is otherwise provided in the chapter. The conveyance by grant is a substitute for the conveyance to uses, and the future interests in land may be conveyed by grant, as well as by devise.25 The statute gives the legal estate, by virtue of a grant, assignment, or devise, and the word assignment was introduced to make the assignment of terms, and other chattel interests, pass the legal interest in them, as well as in freehold estates, though, under the English law, the use in chattel interests was not executed by the statute of uses.
The operation of the statute of New York, in respect to the doctrine of uses, will have some slight effect upon the forms of conveyance, and it may give them more brevity and simplicity. But it would be quite visionary to suppose that the science of law, even in the department of conveyancing, will not continue to have its technical language, and its various, subtle, and profound learning, in common with every other branch of human science. The transfer of property assumes so many modifications to meet the varying exigencies of speculation, wealth, and refinement, and to supply family wants and wishes, that the doctrine of conveyancing must continue essentially technical, under the incessant operation of skill and invention. The abolition of uses does not appear to be of much moment, but the changes which the law of trusts has been made to undergo, becomes extremely important.26
(2.) Of trusts.
The object of the statute of uses, so far as it was intended to destroy uses, was, as we have already seen, subverted by the courts of law and equity.
It was held, that the statute executed only the first use, and that a use upon a use was void. In a feoffment to A., to the use of B., to the use of C., the statute was held to execute only the use to B., and the use to C. did not take effect.27 In a bargain and sale to A. in fee, to the use of B. in fee, the statute passes the estate to A., by executing the use raised by the bargain and sale; but the use to B. being a use in the second degree, is not executed by the statute, and it becomes a mere trust.28 Shifting, or substituted uses, do not fall within this technical rule at law, for they are merely alternate uses. Thus, a deed to A. in fee, to the use of B. in fee, and if C. should pay a given sum in a given time, then to C. in fee, the statute executes the use to B. subject to the shifting use declared in favor of C.29 Chattel interests were also held not to be within the statute, because it referred only to persons who were seized, and a termor was held not to be technically seized; and so the statute did not apply to a term for years. An assignment of a lease to A., to the use of B., was held to be void as to the use, and the estate was vested wholly in A. This strict construction at law, of the statute, gave a pretext to equity to interfere, and it was held in chancery, that the uses in those cases, though void at law, were good in equity, and thus uses were revived under the name of trusts. A regular and enlightened system of trusts was gradually formed and established. The ancient use was abolished, with its manifold inconveniences, and a secondary use or trust introduced. Trusts have been modeled and placed on true foundations since Lord Nottingham succeeded to the great seal; and we have the authority of Lord Mansfield for the assertion, that a rational and uniform system has been raised, and one proper to answer the exigencies of families, and other civil purposes, without any of the mischiefs whit h the statute of uses meant to avoid.30
Trusts have been made subject to the common law’ canons of descent. They are deemed capable of the same limitations as legal estates, and curtesy was let in by analogy to legal estates, though, by a strange anomaly, dower has been excluded. Executed trusts are enjoyed in the same condition, and entitled to the same benefits of ownership, and are, consequently, disposable and devisable exactly as if they were legal estates; and these rights the cestui que trust possesses without the intervention of the trustee. Any disposition of the land by the cestui que trust, by conveyance or devise, is binding upon the trustee.31 In limitations of trusts, either of real or personal estates, the construction, generally speaking, is the same as in the like limitations of legal estates, though with a much greater deference to the testator’s manifest intent.32 And if the statute of uses had only the direct effect of introducing a change in the form of conveyance, it has, nevertheless, gradually given occasion to such modifications of property as were well suited to the varying wants and wishes of mankind, and afforded an opportunity to the courts of equity of establishing a code of very refined and rational jurisprudence.33
Trusts are now what uses were before the statute, so far as they are mere fiduciary interests distinct from the legal estate, and to be enforced only in equity. Lord Keeper Henley, in Burgess v. Wheate,34 observed, that there was no difference in the principles between the modern trust and the ancient use, though there was a wide difference in the application of those principles. The difference consists in a more liberal construction of them, and, at the same time, a more guarded care against abuse. The cestui que trust is seized of the freehold in the contemplation of equity. The trust is regarded as the land, and the declaration of trust is the disposition of the land. But though equity follows the law, and applies the doctrines appertaining to legal estates to trusts, yet, in the exercise of chancery jurisdiction over executory trusts, the court does not hold itself strictly bound by the technical rules of law, but takes a wider range, and more liberal view, in favor of the intention of the parties. An assignment, or conveyance of an interest in trust, will carry a fee, without words of limitation, when the intent is manifest. The cestui que trust may convey his interest at his pleasure, as if he were the legal owner, without the technical forms essential to pass the legal estate. There is no particular set of words, or mode of expression requisite, for the purpose of raising trusts.35 The advantages of trusts in the management, enjoyment, and security of property, for the multiplied purposes arising in the complicated concerns of life; and principally as it respects the separate estate of the wife, and the settlement of portions upon children, and the security of creditors, are constantly felt, and they keep increasing in importance as society enlarges and refines. The decisions of the courts of justice bear uniform testimony to this conclusion.36
A trust, in the general and enlarged sense, is a right on the part of the cestui que trust to receive the profits, and to dispose of the lands in equity. But there are special trusts for the accumulation of profits, the sale of estates, and other dispositions of trust funds, which preclude all power of interference on the part of the cestui que trust, until the purposes of the trust are satisfied.37 Trusts are of two kinds, executory and executed. A trust is executory when it is to be perfected at a future period by a conveyance or settlement, as in the case of a conveyance to B. in trust to convey to C. It is executed, either when the legal estate passes, as in a conveyance to B. in trust, or for the use of C., or when only the equitable title passes, as in the case of a conveyance to B., to the use of C., in trust for D. The trust in this last case is executed in D., though he has not the legal estate.38
Though there be no particular form of words requisite to create a trust if the intention be clear, yet the English statute of frauds, which is generally the adopted law throughout this country, requires the declaration, or creation of the trust, to be manifested and proved by some writing signed by the party creating the trust; and if the terms of it can be duly ascertained by the writing, it is sufficient. A letter acknowledging the trust will be sufficient to establish the existence of it. A trust need not be created by writing, but it must be evidenced by writing.39
In addition to the various direct modes of creating trust estates, there are resulting trusts implied by law from the manifest intention of the parties, and the nature and justice of the case, and such trusts are expressly excepted from the operation of the statute of frauds. Where an estate is purchased in the name of A., and the consideration money is actually paid at the time by B., there is a resulting trust in favor of B., provided the payment of the money be clearly proved. The payment, at the time, is indispensable to the creation of the trust, and this fact may be established, or the resulting trust rebutted, by parol proof.40 Lord Hardwicke said, that a resulting trust, arising by operation of law, existed, (1.) When the estate was purchased in the name of one person, and the consideration came from another. (2.) When a trust was declared only as to part, and nothing was said as to the residue, that residue remaining undisposed of, remained to the heir at law. He observed, that he did not know of any other instances of a resulting trust unless in cases of fraud.41 The mere want of a valuable consideration will not, of itself, and without any auxiliary circumstance, create a resulting trust, and convert a grantee into a trustee; for this, as Mr. Sanders has truly observed,42 would destroy the effect of every voluntary conveyance, There must be the absence of both a consideration, and a declaration of the use. If only part of the purchase money be paid by the third party, there will be a resulting trust in his favor pro tanto, and the doctrine applies to a joint purchase.43 So, if a purchase be made by a trustee, with trust moneys, a trust will result to the owner of the money.44 If a trustee renews a lease, the new lease will be subject to the trust affecting the old one; and it is a general and well settled principle, that whenever a trustee or agent deals on his own account, and for his own benefit, with the subject entrusted to his charge, he becomes chargeable with the purchase as a trustee.45 There will be equally a resulting trust when the purposes for which an estate has been conveyed fail, by accident or otherwise, either in whole, or in part, or if a surplus remains after the purposes of the trust are satisfied.46
A court of equity will regard and enforce trusts in a variety of other cases, when substantial justice, and the rights of third persons, are essentially concerned. If a trust be created for the benefit of a third person without his knowledge, he may, when he has notice of it, affirm the trust, and call upon the court to enforce the performance of it.47 Collateral securities given by a debtor to his surety, are considered as trusts for the better security of the creditors’ debt; and chancery will see that their intention be fulfilled.48 So, a purchaser of land, with notice of a trust, becomes himself chargeable as a trustee, if it be in a case in which the trustee was not authorized to sell.49 And if a weak man sells his estate for a very inadequate consideration, equity will raise a trust in favor of him, or his family.50 But it would lead me too far from my purpose to attempt to specify all the cases in which trusts are construed to exist, under the enlarged and comprehensive view of equitable rights and titles, which come within the protection of a court of equity. Mr. Humphrey, in his Observations on Real Property,51 has divided trusts into active and passive. In the former, confidence is placed, and duty imposed, demanding activity and integrity. The latter he considers as a mere technical phantom, and he mentions the instances of trustees introduced into assignments of terms for protecting the inheritance, and into marriage settlements for preserving contingent remainders, and raising portions for younger children. All these passive, or formal trusts, he proposes, in his Outlines of a Code, to abolish, as useless or mischievous, and to prescribe regulations to active trusts, with a reservation of the existing cases of a resulting trust.
The New York Revised Statutes,52 in relation to trusts, seem to have adopted these, or similar suggestions, and they have abolished passive trusts where the trustee has only a naked and formal title, and the whole beneficial interest, or right in equity, to the possession and profits of land, is vested in the person for whose benefit the trust was created. The statute declares, that the person so entitled in interest shall be deemed to have a legal estate therein, of the same quality and duration, and subject to the same conditions, as his beneficial interest. If any such passive trust be created by any disposition of lands by deed or devise, no estate or interest whatever vests in the trustee. This provision is founded in sound policy. The revisers have justly observed, that the separation of the legal and equitable estates in every such case, appears to answer no good purpose, and it tends to mislead the public, and obscure titles, and facilitate fraud. The New York statute has confined trusts to two classes: (1.) Trusts arising or resulting by implication of law. The existence of these trusts is necessary to prevent fraud, but they are laid u der certain restrictions calculated to prevent the revival of passive, in the shape of resulting trusts. It is, accordingly, provided,53 that where a grant for a valuable consideration shall be made to one person, and the consideration paid by another, no trust shall result in favor of the person paying the money, but the title shall vest in the alienee, subject to the claims of the existing creditors of the person paying the money.54 The resulting trust will still be valid, however, if the alienee took the deed in his own name, without the knowledge or consent of the person paying the money, or in violation of some trust. Nor can a resulting trust be set up to affect the title of a purchaser for a valuable consideration, without notice of the trust. (2.) Active trusts are, where the trustee is clothed with some actual power of disposition or management, which cannot be properly exercised without giving him the legal estate and actual possession. This is the only efficient class of trusts, and they are indispensable to the pro. per enjoyment and management of property. All the provisions in the statute on the subject of trusts, are intended to limit their continuance, and define their purposes; and express trusts are allowed in those cases only in which the purposes of the trust require that the legal estate should pass to the trustees.
Express trusts are allowed, (1.) To sell lands for the benefit of creditors; (2.) To sell, mortgage, or lease lands, for the benefit of legatees, or for the purpose of satisfying any charge thereon; (3.) To receive the rents and profits of lands, and apply them to the education or support of any person; or to accumulate the same for the purposes, and within the limits, already mentioned. In all these cases, the whole estate, in law and equity, is vested in the trustee, subject only to the execution of the trusts; and if an express trust be created for any other purpose, no estate vests in the trustee, though, it’ the trust authorizes the performance of any act lawful under a power, it becomes valid as a power in trust. Every estate and interest not embraced in an express trust, and not otherwise disposed of, remain in, or revert to the person who created the trust, and he may dispose of the lands subject to the trust, or in the event of the failure or termination of the trust; and the grantee, or devisee, will have a legal estate, as against all persons but the trustee.55 The declaration of the trust must be contained in the conveyance to the trustee, or the conveyance will be deemed absolute as against the subsequent creditors of the trustee, without notice of the trust, or as against purchasers for a valuable consideration, and without notice;56 and when the trust is expressed in the instrument creating the estate, every act of the trustee in contravention of the trust, is void.57 The statute further provides for the case of the death of all the trustees, by declaring that the trust shall not descend to the real or personal representatives of the surviving trustee, but shall be vested in the court of chancery, to be executed under its direction. The court may also accept the resignation of a trustee, and discharge him, or remove him for just cause, and supply the vacancy, or any want of trustees, in its discretion.58
These powers conferred upon the court of chancery, are essentially declaratory of the jurisdiction which equity already possessed and exercised, and it was also well settled, that a trustee who had accepted a trust could not afterwards divest himself of it without performance, unless with the assent of the cestui que trust, or under the direction of chancery.59 But the provision that trusts shall not descend to the representatives of the trustee, is very valuable, for the trust, in such a case, might be deposited very insecurely for the cestui que trust, and in the case of chattels there is doubt and difficulty as to the transmission.60 The object of the New York Revised Statutes was to abolish all trusts except the express trusts which are enumerated, and resulting trusts. The provisions as to uses and trusts were earnestly recommended by the revisers, under the conviction that they would “sweep away an immense mass of useless refinements and distinctions, relieve the law of real property, to a great extent, from its abstruseness and uncertainty, and render it, as a system, intelligible and consistent; that the security of creditors and purchasers will be increased, the investigation of titles much facilitated, the means of alienation be rendered far more simple, and less expensive, and, finally, that numerous sources of vexatious litigation will be perpetually closed.”
I am very doubtful whether the abolition of uses, and the reduction of all authorized trusts to those specially mentioned, will ever be productive of such marvelous results. The apprehension is, that the boundaries prescribed will prove too restricted for the future exigencies of society, and bar the jurisdiction of equity over many cases of trusts which ought to be protected’ and enforced, but which do not come within the enumerated list, nor belong strictly to the class of resulting trusts. The attempt to bring all trusts within the narrowest compass, strikes me as one of the most questionable undertakings in the whole business of the revision. It must be extremely difficult to define with precision, and with a few brief lines and limits, the broad field of trusts of which equity ought to have cognizance. The English system of trusts is a rational and just code, adapted to the improvements, and wealth, and wants of the nation, and it has been gradually reared and perfected by the sage reflections of a succession of eminent men. Nor can the law be effectually relieved from its 4 abstruseness and uncertainty,” so long as it leaves undefined and untouched, that mysterious class of trusts “arising or resulting by implication of law.” Those trusts depend entirely on judicial construction, and the law on this branch of trusts is left as uncertain, and as debateable as ever. Implied trusts are liable to be extended, and pressed indefinitely, in cases where there may be no other way to recognize and enforce the obligations which justice imperiously demands. The statute further provides, that if an express trust shall be created for a purpose not enumerated, and it shall authorize the performance of any act lawful under a power, the trust shall be valid “as a power in trust.” This provision reanimates a class of trusts under a new name with which the profession is not familiar, and it opens a wide door for future forensic discussion. It is in vain to think that an end can be put to the interminable nature of trusts arising in a great community, busy in the pursuit, anxious for the security, and blessed with the enjoyment of property in all its ideal and ‘tangible modifications. The usages of a civilized people are the gradual result of their wants and wishes. They form the best portion of their laws; opinion and habits coincide; they are accommodated to circumstances, and mold themselves to the complicated demands of wealth and refinement. We cannot hope to check the enterprising spirit of gain, the pride of families, the anxieties of parents, the importunities of luxury, the fixedness of habits, the subtleties of intellect. They are incessantly active in engendering distinctions calculated to elude, impair, or undermine, the fairest and proudest models of legislation that can be matured in the closet, and ushered into the world, under the imposing forms of legislative sanction.