trust

the law has seen fit to deal with this abstraction for income tax purposes as a separate existence, making its own return under the hand of the fiduciary and claiming and receiving its own appropriate deductions.

+ 1 more definition — see all 9 over time

A right of property, real or personal, held by one party for the benefit of another. The party holding is called the "trustee," and the party for whose benefit the right is held is called the cestui que trust, or, using a better term, the "beneficiary." Sometimes the equitable title of the beneficiary, sometimes the obligation of the trustee, and, again, the right held, is called the "trust." But the right of the beneficiary is in the trust, the obligation of the trustee results from the trust, and the right held is the subject matter of the trust. Neither of them is the trust itself. All together they constitute the trust. An equitable right, title, or interest in property, real or personal, distinct from its legal ownership. A personal obligation for paying, delivering, or performing anything where the person trusting has no real right or security, for by that act he confides altogether to the faithfulness of those intrusted. An obligation upon a person, arising out of a confidence reposed in him, to apply property faithfully and according to such confidence. Willis, Trust, 1; 4 Kent, Comm. 295; 2 Fonbl. Eq. 1; 1 Saunders, Uses, 6; Cooper, Eq. Pl. Introd. 27; 3 Bl. Comm. 431. The Roman fidei commissa were, under the name of "uses," first introduced by the clergy into England in the reign of Richard II. or Edward III., and, while perseveringly prohibited by the clergy, and wholly discountenanced by the courts of common law, they grew into public favor, and gradually developed into something like a regular branch of law, as the court of chancery, that, was without adequate protection; but the statute of uses, passed in 27 Henry VIII., gave great impetus to the system.

I. An equitable or beneficial right or title to land or other property, held for the beneficiary by another person, In whom resides the legal title or ownership, recognised and enforced by courts of chancery. See Goodwin v. McMinn, 193 Pa. 646, 44 Atl. 1094, 74 Am. St. Rep. 703; Beers v. Lyon, 21 Conn. 613; Seymour v. Freer, 8 Wall. 202, 19 L. Ed. 306. An obligation arising out of a confidence reposed In the trustee or representative, who has the'legal title to property cenveyed to him, that he will faithfully apply the property according to the confidence reposed, or, in other words, acoording to the wishes of the grantor of the trust. 4 Kent, Comin. 304; Wlllis, Trustees, 2; Beers v. Lyon, 21 Conn. 613; Thornburg v. Buck, 13 Ind. App. 446, 41 N. E. 85. An equitable obligation, either express or implied, resting upon a person by reason of a eonfidenco reposed in him, to apply or deal with the property for the benefit of some other person, or for the benefit of himself and another or others, according to such confidence. McCreary v. Gewlnner, 103 Ga. 528, 29 S. E. 960. A holding of property subject to a duty of employing it or applying its proceeds according to directions given by the person from whom it was derived. Munroe v. Crouse, 59 Hun, 248, 12 N. Y. Supp. 815.

— Accessory trust. In Scotch law, this is the term equivalent to "active" or "special" trust. See infra.

— Active trust. One which imposes upon the trustee the duty of taking active measures in the execution of the trust, as, where property is conveyed to trustees with directions to sell and distribute the proceeds among creditors of the grantor; distinguished from a "passive" or "dry" trust.

— Cestui que trust. The person for whose benefit a trust is created or who is to enjoy the income or the avails of it

— Constructive trust. A (rust raised by construction of law, or arising by operation of law, as distinguished from an express trust. Wherever the circumstances of a transaction are such that the person who takes the legal estate in property cannot also enjoy the beneficial interest without necessarily violating some established principle of equity, the court will immediately raise a constructive trust, and fasten it upon the conscience of the legal owner, so as to convert him into a trustee for the parties who in equity are entitled to the beneficial enjoyment. Hill, Trustees, 116; 1 Spence, Eq. Jur. 511. Nester v. Gross, 66 Minn 371, 69 N. W. 39; Jewelry Co. v. Volfer, 106 Ala. 205, 17 South. 525, 28 In RA. 707, 54 Am. St. Rep. 31.

— Contingent trust. An express trust may depend for its operation upon a future event, and is then a "contingent" trust. Civ. Co.de Ga. 1895, § 3154.

— Direct trust. A direct trust is an express trust, as distinguished from a constructive or implied trust. Carrence v. Ward, 43 W. Va. 307, 27 S. E. 329.

— Directory trust. One which is subject to be moulded or applied according to subsequent directions of the grantor; one which is not completely and finally settled by the instrument creating it, but only defined in its general purpose and to be carried into detail according to later specific directions.

— Dry trust. One which merely vests the legal title in the trustee, and does not require the performance of any active duty on his part to carry out the trust.

— Executed trust. A trust of which the scheme has in the outset been completely declared. Adams, Eq. 151. A trust in which the estates and interest in the subject-matter of the trust are completely limited and defined by the instrument creating the trust, aud require no further instruments to complete them. Bisp. Eq. 20; Pillot v. Landon, 46 N. J. Eq. 310, 19 Atl. 25 ; Dennison v. Goehring, 7 Pa. 177, 47 Am. Dec. 505; In re Fair's Estate, 132 Cal. 523, 60 Pac. 442, 84 Am. St. Rep. 70; Cushing v. Blake, 29 N. J. Eq. 403; Egerton v. Brownlow, 4 H. L. Cas. 210. As all trusts are executory in this sense, that the trustee is bound to dispose of the estate according to the tenure of his trust, whether active or passive, it would be more accurate and precise to substitute the terms, "perfect" and "imperfect" for "executed" and "executory" trusts. 1 Hayes, Couv. 85.

— Executory trust. One which requires the execution of some further instrument, or the doing of some further act, on the part of the creator of the trust or of the trustee, towards its complete creation or full effect. An executed trust is one fully created and of immediate effect. These terms do not relate to the execution of the trust as regards the beneficiary. Martling v. Martling, 55 N. J. Eq. 771, 39 Atl. 203 ; Oar-radine v. Carradine, 33 Miss. 729; Cornwell v. Wulff, 148 Mo. 542, 50 S. W. 489, 45 In R. A. 53; In re Fair's Estate, 132 Cal. 523, 60 Pac. 442, 84 Am. St. Rep. 70; Pillot v. Lan-don, 46 N. J. Eq. 310, 19 Atl. 25.

— Express trust. A trust created or declared in express terms, and usually in writing, as distinguished from one inferred by the law from the conduct or dealings of the parties. State v. Campbell, 59 Kan. 246, 52 Pan 454; Kaphan v. Toney (Tenn. Oh.) 58 S. W. 913; McMonagle v. McGlinn (C. C.) 85 Fed. 91; Ransdel v. Moore, 153 Ind. 393, 53 N. E. 767, 53 In R. A. 753. Express trusts are those which are created in express terms in the deed, writing, or will, while implied trusts are those which, without being expressed, are deducible from the nature of the transaction, as matters of intent, or which are superinduced upon the transactions by operation of law, as matters of equity, independently of the particular intention of the parties. Brown v. Cherry, 56 Barb. (N. Y.) 635.

— Imperfect trust. An executory trust, (which see;) and see Executed Trust.

— Implied trust. A trust raised or created by implication of law; a trust implied or presumed from circumstances. Wilson v. Welles, 79 Minn. 53, 81 N. W. 549; In re Morgan, 84 Hun (N. Y.) 220; Kaphan v. Toney (Tenn. Ch.) 58 S. W. 913; Cone v. Dunham, 59 Conn. 145, 20 All. 311, 8 L. R. A. 647; Russell v. Peyton, 4 111. App. 478.

— Involuntary trust. "Involuntary" or "Constructive" trusts embrace all those instances in which a trust is raised by the doctrines of equity, for the purpose of working out justice in the most efficient manner, when there is no intention of the parties to create a trust relation and contrary to the intention of the one holding the legal title. This class of trusis may usually be referred to fraud, either actual or constructive, as an essential element. Bank v. Kimball Mining Co.., 1 S. D. 388, 47 N. W. 402, 36 Am. St. Rep. 739.

— Ministerial trusts. (Also called "instrumental trusts.") Those which demand no further exercise of reason or understanding than every intelligent agent must necessarily employ; as to convey an estate. They are a species of special trusts, distinguished from discretionary trusts, which necessarily require much exercise of the understanding. 2 Bouv. Inst. no. 1896.

— Naked trust. A dry or passive trust; one which requires no action on the part of the trustee, beyond turning over monev or property to the cestui que trust

— Passive trust. A trust as to which the trustee has no active duty to perform. Goodrich v. Milwaukee. 24 Wis. 429 ; Perkins v. Brink-lev. 133 N. C. 154. 45 S. E. 542; Holmes v. Walter, 118 Wis. 409. 95 N. W. 380, 62 L. R. A. 986,

— Precatory trust. Where words employed in a will or other instrument do not amount to a positive command or to a distinct testamentary disposition, but are terms of entreaty, request, recommendation, or expectation, they are termed "precatory words," and from such words the law will raise a trust, called a "precatory trust," to carry out the wishes of the testator or grantor. See Bohon v. Barrett, 79 Ky. 378; Hunt v. Hunt, 18 Wash. 14. 50 Pac. 578; Aldrich v. Aldrich, 172 Mass. 101, 51 N. E. 449.

— Private trust. One established or created for the banefit of a certain designated individual or individuals, or a known person or class of persons, clearly identified or capable of identification by the terms of the instrument creating the trust, as distinguished from trusis for public instifutions or charitable uses. See Pennoyer v. Wadhams, 20 Or. 274, 25 Pac. 720, 11 In It. A. 210; Doyle v. Whalen, 87 Me. 414, 32 Atl. 1022, 31 In R. A. 118; Brooks v. Belfast, 90 Me. 318, 38 Atl. 222.

— Proprietary trust. In Scotch law, a naked, dry, or passive trust. See supra.

— Publio trust. One constituted for the benefit either of the public at large or of some considerable portion of it answering a particular description ; to this class belong all trusts for charitable purposes, and indeed public trusts and charitable trusts may be considered in general as synonymous expressions. Lewin, Trusts, 20

— Resulting trust. One that arises by implication of law, or by the operation and construction of equity, and which is established as consonant to the presumed intention of the parties as gathered from the nature of the transaction; as, for example, where one person becomes invested with the title to reni property under circumstances which in .equity obligate him to hold the title and exercise his ownership for the benefit of another, a familiar instance being the case where a man buys land with his own money but has the title put in the name of another. See Sanders v. Steele, 124 Ala. 415. 26 South. 882 ; Dorman v. Dorman, 187 111. 154, 58 N. E. 235, 79 Am. St. Rep. 210; Aborn v. Searles, 18 R.I. 357, 27 Atl. 796; Fulton v. Jansen. 99 Cni. 587. 34 Pac. 331; Western Union Tel. Co., v. Shepard, 169 N. Y. 170, 62 N. E. 154, 58 L. R A. Il5

— Secret trusts. Where a testator gives property to a person, on a verbal promise by the legatee or devisee that he will hold it in trust for another person, this is called a "secret trust." Sweet.

— Shifting trust. An express trust which ls so settled that it may operate in favor of beneficiaries additional to, or substituted for, those first named upon specified contingencies. Civ. Code Ga. 1895, § 3154.

— Simple trust. A simple trust corresponds with the ancient use, and is where property is simply vested in one person for the use of another, and the nature of the trust, not being qualified by the settler, is left to the construction of law. It differs from a special trust. Perkins v. Brinkley, 133 N. C. 154. 45 S. E. 541; Cone v. Dunham, 59 Co.nn. 145. 20 Atl. 311, 8 L. R. A. 647; Dodson v. Bali, 60 Pa. 500. 100 Am. Dec. 586

— Special trust. Where the machinery of a trust is introduced for the execution of some purpose particularly pointed out, and the trustee is not a mere passive depositary of the estate, but is called upon to exert himself actively in the execution of the settlor's intention ; as, where a conveyance is to trustees upon trust to sell for payment of dehts. Special trusts have been divided into (1) ministerial (or instrumental) and (2) discretionary. The former, such as demand no further exercise of reason or understanding than every intelligent agent must necessarily employ ; the latter, such as cannot be duly administered without the application of a certain degree of prudence and judgment. 2 Bouv. Inst no. 1896; Perkins v. Brinkley, 133 N. G. i54, 45 S. E. 541; Flagg v. Ely, 1 Edm. Sel. Cas. (N. Y.) 209; Freer v. Lake, 115 111. 662, 4 N. E. 512 ; Dodson v. Bali. 60 Pa. 496, 100 Am. Dec. 586.

— Spendthrift trust. See Spendthrift.

— Transgressive trust. A name sometimes applied to a trust which transgresses or violates the rule against perpetuities. See Pulitzer v. Livingston, 89 Me. 359, 36 Atl. 635.

— Trust company. A corporation formed for the purpose of taking, accepting, and executing all such trusis as may be lawfully committed to it, and acting as testamentary trustee, trustee under deeds of settlement or for married women, executor, guardian, etc. To these functions are sometimes (but not necessarily) added the business of acting as fiscal agent for corporations attending to the registration and transfer of their stock and bonds, serving as trustee for their bond or mortgage creditors, and transacting a genera] banking and loan business. See Venner v. Farmers' L. & T. Co.., 54 App. Div. 271, 66 N. Y. Supp. 773; Jenkins v. Neff, 163 N. Y. 320, 57 N. E. 408; Mercantile Nat. Bank v. New York, 121 U. S. 138, 7 Sup. Ct. 826, 30 L. Ed. 895.

— Trust-deed. (1) A species of mortgage given to a trustee for the purpose of securing a numerous class of creditors, as the bondholders of a railroad corporation, with power to foreclose and sell on fnilure of the payment of their bonds, notes, or other claims. (2) In some of the states, and in the District of Columbia, a trust-deed is a security resembling a mortgage, being a conveyance of lands to trustees to secure the payment of a debt, with a power of sale upon default, and upon a trust to apply the net proceeds to paying the debt and to turn over the surplus to the grantor.

— Trust estate. This term may mean either the estate of the trustee,
—that is, the legal title,
—or the estate of the beneficiary, or the corpus of the property which is the subject of the trust. See Cooper v. Cooper, 5 N. J. Eq. 9; Farmers' L. &T. Oo. v. Carroll, 5 Barb. (N. Y.) 643

— Trust ex maleficio. A species of constructive trust arising out ot some tiaud, misconduct, or breach of faith on the part of the person to be charged as trustee, which renders it an equitable necessity that a trust should be implied. See Rogers v. Richards, 67 Kan. 706, 74 Pac. 255 ; Kent v. Dean, 128 Ala. 600, 30 South. 548 ; Barry v. Hill, 166 Pa. 344, 31 Atl. 126.

— Trust fund. A fund held by a trustee for the specific purposes of the trust; in a more general sense, a fund which, legally or equitably, is subject to be devoted to a particular purpose and cannot or should not be diverted therefrom. In this sense it is often said that the capital and other property of a corporation is a "trust fund" for the payment of its' debts. See Henderson v. Indiana Trust Co., 143 Ind. 561, 40 N. E. 516; In re Beard's Estate, 7 Wyo. 104, 50 Pac. 226, 38 In R. A. 860, 75 Am. St. Rep. 882.

— Trnst in invitum. A constructive trust imposed by equity, contrary to the trustee's intention and will, upon property in his hands. Sanford v. Hamner, 115 Ala. 406, 22 South. 117,

— Voluntary trust. An obligation arising out of a personal confidence reposed in, and voluntarily accepted by, one for the benefit of another, as distinguished from an "involuntary" trust, which is created by operation of law. Civ. Code Cal. §§ 2216, 2217. According to another use of the term, "voluntary" trusts are such as are made in favor of a volunteer, that is, a person who gives nothing in exchange for the trust, but receives it as a pure gift; and in this use the term is distinguished from "trusts for value," the latter being such as are in favor of purchasers, mortgagees, etc. 2. In constitutional and statutory law. An association or organization of persons or corporations having the intention and power, or the tendency, to create a monopoly, control production, interfere with the free course of trade or transportation, or to fix and regulate the supply and the price of commodities. In the history of economic development, the "trust" was originally a device by which several corporations engaged in the same general line of business might combine for their mutual advantage, in the direction of eliminating destructive competition, controlling the output of their commodity, and regulating and maintaining its price, but at the same time preserving their separate individual existence, and without any consolidation or merger. This device was the erection of a central committee or board, composed, perhaps, of the pres-dents or general managers of the different corporations, and the transfer to them of a majority of the stock in cach of the corporations, to be held "in trust" for the several stockholders se assigning their holdings. These stockholders received in return "trust certificates" showing that they were entitled to receive the dividends on their assigned stock, though the voting power of it had passed to the trustees. This last feature enabled the trustees or cemmittee to elect all the directors of all the corporations, and through them the officers, and thereby to exercise an absolutely controlling influence over the policy and operations of each constituent company, to the ends and with the purposes above mentioned. Though the "trust," in this sense, is now seldom lf ever resorted to as a form of corporate organization, having given place to the "holding corporation" and other devices, the word has become current in statute laws as well as popular speech, to designate almost any form of combination of a monopolistic character or tendency See Black, Const. Law (3d Ed.) p. 428; Northern Securities Co. v. U. S., 193 U. S. 107, 24 Sup. Ct. 436, 48 In Ed. 679; MacGinniss v. Mining Co., 29 Mont. 428, 75 Pac. 89; State v. Continental Tobacco Co., 177 Mo. 1, 75 S. W. 737; Queen Ins. Co. v. State, 86 Tex. 250, 24 S. W. 397, 22 L. R. A. 483 ; State v. Insurance Ch, 152 Mo. 1, 52 S. W. 595, 45 In -R. A. 363; Gen. St Kan. 1901, § 7864; Code Miss. 1892, § 4437; Cob-bey's Ann. St. Neb. 1903, § 11500; Bates' Ann. St. Ohio, 1904, § 4427; Co.de Tex. 1895, art. 976.

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