is, enforced by one not a party to its creation. It has more resemblance to fideicommissum. But the latter could only be created by a testamentary instrument, whilst a trust can be created either by will or inter vivos; nor was there any trace in Roman law of that permanent legal relation which is suggested by the position of trustee and cestui que trust. The heir, too, in Roman law was entitled, from A.D. 70 to the reign of Justinian, to one-fourth of a hereditas fideicommissaria as against the beneficiary, while the very essence of the trust is its gratuitous character. Trusts may be divided in more than one way, according to the ground taken as the basis of division. One division, and perhaps the oldest, as it rests on the authority of Bacon, is into simple and special, the first being where the trust is simply vested in a trustee and the nature of the trust left to construction of law, the second where there is an act to be performed by the trustee. Another division is into lawful and unlawful, and corresponds to Bacon’s division into intents or confidences and frauds, covins, or collusions. A third division is into public and private. A division often adopted in modern textbooks and recognized by parliament in the Trustee Act 1850, is into express, implied and constructive. An express trust is determined by the person creating it. It may be either executed or executory, the former where the limitations of the equitable interest are complete and final, the latter where such limitations are intended to serve merely as minutes for perfecting the settlement at some future period, as in the case of marriage articles drawn up as a basis of a marriage settlement to be in conformity with them. An implied trust is founded upon the intention of the person creating it; examples of it are a resulting trust, a precatory trust, and the trust held by the vendor on behalf of the purchaser of an estate after contract and before conveyance. In this case the vendor is sometimes called a trustee sub modo and the purchaser a cestui que trust sub modo. A constructive trust is judicially created from a consideration of a person’s conduct in order to satisfy the demands of justice, without reference to intention. The distinction between an implied and a constructive trust is not always very consistently maintained. Thus the position of a vendor towards a purchaser after contract is sometimes called a constructive trust. The present law governing trusts rests upon the doctrines of equity as altered by legislation. The law was consolidated by the Trustee Act 1893 and some subsequent amending statutes. Its great importance has led to its becoming one of the most highly developed departments of equity.
Who may be a Trustee or Cestui que Trust.—The modern trust is considerably more extensive in its operation than the ancient use. Thus the Crown and corporations aggregate can be trustees, and personalty can be held in trust. Provision is made by the Municipal Corporations Act 1882, for the administration of charitable and special trusts by municipal corporations. There are certain persons who for obvious reasons, even if not legally disqualified, ought not to be appointed trustees. Such are infants, lunatics, persons domiciled abroad, felons, bankrupts and cestuis que trustent. The appointment of any such person, or the falling of any existing trustee into such a position, is generally ground for application to the court for appointment of a new trustee in his place. Any one may be a cestui que trust except a corporation aggregate, which cannot be a cestui que trust of real estate without a licence from the Crown. For the Public Trustee, see below.
Creation and Extinction of the Trust.—A trust may be created either by act of a party or by operation of law. Where a trust is created by act of a party, the creation at common law need not be in writing. The Statute of Frauds altered the common law by enacting that all declarations or creations of trusts or confidences of any lands, tenements or hereditaments shall be manifested and proved by some writing, signed by the party who is by law enabled to declare such trust, or by his last will in writing, or else they shall be utterly void and of none effect. Trusts arising or resulting by implication or construction of law are excepted, and it has been held that the statute applies only to real estate and chattels real, so that a trust of personal chattels may still be declared by parol. The declaration of a trust by the Crown must be by letters patent. Trusts created by will must conform to the requirements of the Will Act (see Will). Except in the case of charitable trusts, the cestui que trust must be a definite person. A trust, for instance, merely for keeping up family tombs is void. Alteration of the trust estate by appointment of a new trustee could up to 1860 only be made where the instrument creating the trust gave a power to so appoint, or by order of the court of chancery. But now by s. 10 of the Trustee Act 1893 (superseding Lord St Leonards’s Act of 1860 and the Conveyancing Act 1881), the surviving or continuing trustee or trustees, or the personal representative of the last surviving or continuing trustee, may nominate in writing a new trustee or new trustees. On such appointment the number of trustees may be increased. Existing trustees may by deed consent to the discharge of a trustee wishing to retire. Trust property may be vested in new or continuing trustees by a simple declaration to that effect. Also a separate set of trustees may be appointed for any part of the property held on distinct trusts. Trusts created by operation of law are those which are the effect of the application of rules of equity. They include resulting and constructive trusts. A resulting trust is a species of implied trust, and consists of so much of the equitable interest as is undisposed of by the instrument creating the trust, which is said to result to the creator and his representatives. An example is the purchase of an estate in the name of the purchaser and others, or of others only. Here the beneficial interest is the purchaser’s. An example of a constructive trust is a renewal of a lease by a trustee in his own name, where the trustee is held to be constructively a trustee for those interested in the beneficial term. Besides being duly created, it is necessary for the validity of the trust that it should be a lawful one. An unlawful trust is one which contravenes the policy of the law in any respect. Examples of such trusts are trusts for a corporation without licence, for a perpetuity, and for purposes subversive of morality, such as trusts for illegitimate children to be hereafter born. Superstitious uses also fall under this head. There are also certain trusts which are avoided by statute under particular circumstances, such as settlements in fraud of creditors (see Bankruptcy). The law cannot be evaded by attempting to constitute a secret trust for an unlawful purpose. If an estate be devised by words prima facie carrying the beneficial interest, with an understanding that the devisee will hold the estate in trust for such a purpose, he may be compelled to answer as to the secret trust, and on acknowledgment or proof of it there will be a resulting trust to the heir-at-law. In the case of an advowson suspected to be held for the benefit of a Roman Catholic patron, there is a special enactment to the same effect (see Quare Impedit). The rules of equity in charitable trusts are less strict than those adopted in private trusts. Charitable trusts must be lawful, e.g. they must not contravene the Statutes of Mortmain; but a wider latitude of construction is allowed in order to carry out the intentions of the founder, and they will not be allowed to fail for want or uncertainty of objects to be benefited. The court, applying the doctrine of cy près (q.v.), will, on failure of the original ground of the charity, apply the funds as nearly as possible in the same manner. On this principle gifts originally made for purely charitable purposes have been extended to educational purposes. Further, trustees of a charity may act by a majority, but ordinary trustees cannot by the act of a majority (unless specially empowered so to do) bind a dissenting minority or the trust property. A trust estate is subject as far as possible to the rules of law applicable to a legal estate of a corresponding nature, in pursuance of the maxim, “Equity follows the law.” Thus trust property is assets for payment of debts, may be taken in execution, passes to creditors in bankruptcy, and is subject to dower and curtesy, to the rules against perpetuities, and to the Statutes of Limitation. This assimilation of the legal and equitable estates has been produced partly by judicial decisions, partly by legislation. A trust is extinguished, as it is created, either by act of a party or by operation of law. An example of the former mode of extinction is a release by deed, the general means of discharge of a trustee when the purposes of the trust have been accomplished. Extinction by operation of law takes place when there is a failure of the objects of the trust: e.g. if the cestui que trust die intestate without heirs or next of kin, the property, by the Intestates Estates Act 1884, escheats in the same manner as if it were a legal estate in corporeal hereditaments. Equitable interests in real estate abroad are as a rule subject to the lex loci rei sitae, and an English court has no jurisdiction to enforce a trust or settle a scheme foV the administration of a charity in a foreign country. An English court has, however, jurisdiction to administer the trusts of a will as to the whole real and personal estate of a testator, even though only a very small part of the estate, and that wholly personal, is in England. This was decided by the House of Lords in a well-known case in 1883 (Ewing v. Orr-Ewing, L.R. 9, A.C. 34).
Rights and Duties of the Trustee.—The principal general properties of the office of trustee are these: (1) A trustee having once accepted the trust cannot afterwards renounce. (2) He cannot delegate it, but an inconvenience which formerly attached to dealings with trustees and trust property, in consequence partly of this rule, and partly of the liability of persons dealing with trustees to see that money paid to them was properly applied, was largely obviated by s. 17 of the Trustee Act 1893 (replacing s. 2 of the Trustee Act 1888), which in effect provides that a trustee may appoint a solicitor to be his agent to receive and give a discharge for any money or valuable consideration or property receivable by the trustee under the trust, by permitting the solicitor to have the custody of and
to produce a deed having in the body thereof or endorsed thereon a