Trust property

“ And property thus held, acquired from him by third parties with knowledge of his trust and his disregard of its obligations, can be followed and recovered. The law exacts the most perfect good faith from all parties dealing with a trustee respecting trust property. Whoever takes it for an object other than the general purposes of the trust, or such as may reasonably be supposed to be within its scope, must look to the authority of the trustee, or he will act at his peril. ”

“ When a trustee, dealing with the trust property, together with property of his own, as one mass, conveys part of the whole to a purchaser who takes it for value, in good faith, without notice of the fraud or of the trust, and who therefore acquires a good title, the question how far the rest of the property shall be charged with the trust so as fully to indemnify the person defrauded can only be determined in a court of equity. ”

“ In making investments of the property which came into our hands, we had reference, of course, to its security and productiveness; at the same time looking to a period, still some years in advance, when our trust would cease, and the property pass in due course to the heir-at-law. To realize on these investments now, would be to damage the interests of others; and I cannot feel that it would be right for you to urge this. The discovery of a new will, bearing a later date, is a thing wholly unexpected. ”

“ This doctrine of equity is modern only in the sense of its being a consistent and logical extension of a principle originating in the very idea of trusts, for they can only be preserved by a strict enforcement of the rule that forbids one holding a trust relation from making private use of trust property. ”

“ When property is consigned to a factor, and before sale, who doubts the continuing title of the principal, or his power to restrain unauthorized disposition of such property, or to compel observance by the factor of all the conditions of the trust reposed in him? ”

“ A security is an encumbrance vested in a creditor over the property of his debtor, for the purpose of securing the recovery of the debt; a right, for example, to retain possession of a chattel until the debt is paid.
4. A trust is an encumbrance in which the ownership of property is limited by an equitable obligation to deal with it for the benefit of someone else. The owner of the encumbered property is the trustee; the owner of the encumbrance is the beneficiary. ”

“ For, in the first place, no such perpetuity could be created where, as is usually the case, the trustees or managers of the trust have full power to convey all or any part of the property put in the trust; and, in the second place, the better opinion is that no perpetuity is created except as to a future limitation. The mere tying up of property, for however long or indefinite a period, is no perpetuity in itself, whatever may be the result as to subsequent limitations. ”

“ Equity impresses the trust upon the property in the hands of the transferee or purchaser, compels him to perform the trust if it be active, and to hold the property subject to the trust, and renders him liable to all the remedies which may be proper for enforcing the rights of the beneficiary. ”

“ In what are called 'business trusts' the object is not to hold and conserve particular property, with incidental powers, as in the traditional type of trusts, but to provide a medium for the conduct of a business and sharing its gains. Thus a trust may be created as a convenient method by which persons become associated for dealings in real estate, the development of tracts of land, the construction of improvements, and the purchase, management, and sale of properties ”

“ Such being, in my opinion, the condition here, the trust property must go, as I have said, either to the surviving members as joint tenants, with right of survivorship, or by way of tontine; or to the owners or donors living, and to the heirs and legal representatives of those who are dead, by way of resulting trust.
Appellees contend for the first of these propositions. Their counsel says in his brief: 'It is the society, as a society, which owns this property. It is the entire body as one whole. ”

“ Now, it is a rule of equity jurisprudence, perfectly well settled and of universal application, that where property held upon any trust to keep, or use, or invest it in a particular way, is misapplied by the trustee and converted into different property, or is sold and the proceeds are thus invested, the property may be followed wherever it can be traced through its transformations, and will be subject, when found in its new form, to the rights of the original owner or cestui que trust. ”

“ Where the author of a trust is possessed of the legal interest in the property, a clear declaration of trust contained in or accompanying a deed or act which passes the legal estate will create a perfect executed trust, and will be established against its author and all subsequent volunteers claiming under him. ”

“ The analogy of this principle to the devise of the income from real and personal property for life seems perfect. In this country, all wills or other instruments creating such trust-estates are recorded in public offices, where they may be inspected by every one ”

“ What the cestui que trust really owns is the obligation of the trustee; for an obligation is as truly the subject-matter of property as any physical res. The most striking difference between property in a thing and property in an obligation is in the mode of enjoyment. The owner of a house or a horse enjoys the fruits of ownership without the aid of any other person. The only way in which the owner of an obligation can realize his ownership is by compelling its performance by the obligor. ”

“ When a person is charged by a trust to transfer a thing belonging to some one else, he must either purchase and deliver it, or pay its value.
2 Liberty can be left to a slave by a trust charging an heir, legatee, or other person already benefited by a trust of the testator's, with his manumission, and it makes no difference whether the slave is the property of the testator, of the heir, of the legatee or of a stranger: for a stranger's slave must be purchased and manumitted ”

“ When confronted with the question as to tangible personal property, we did not hesitate to limit the application of the fiction, and it is regrettable that we can not deal with the fiction in a similar fashion in such a case as this, where we have an effective localization of securities through a trust created in a State other than that of the settlor's domicile at the time of death, and where in that other State the trustee holds title and possession and has been and is administering the trust subject to its laws. ”

“ If the settlor propose to convert himself into a trustee, then the trust is perfectly created, and will be enforced so soon as the settlor has executed an express declaration of trust, intended to be final and binding upon him, and in this case it is immaterial whether the nature of the property by legal or equitable. ”

“ That a trustee, by whose negligence of a plain duty the property in his hands is wasted or injured, is chargeable with the loss, is a doctrine which pervades the whole law of trusts. And it is the only doctrine which will insure fidelity in trustees and protection to the interests of cestuis que trust. ”

“ Certain friends are appointed executors of the will.
He directs his executors to set aside certain securities of great value, which he gives to a trustee, and directs the income therefrom to be paid to his wife during her life, and upon her death, the principal becomes a part of the residuary estate. A similar provision is made for his daughters. Upon the death of the daughters, however, leaving issue, the property held in trust shall become absolutely the property of such issue in equal shares. ”

“ It is, however, to be carefully considered, that a deed of property to certain persons in trust for a period beyond twenty-one years, or for an indefinite period, with limitation thereafter to the original owners, may possibly be attended with the danger of putting the absolute property in these managers, so that the subsequent limitation would be void, and the original owners or other persons could never recover it back. ”

“ It makes no difference, that the estate is holden for certain trusts; the legal estate is still theirs. They have a right in the property, and they have a right of visiting and superintending the trust ”

“ Thus the direct owner of property may declare himself a trustee for some one else, who thereupon becomes the beneficial owner; or the direct owner may transfer the property to some one else, to hold it in trust for a third. Conversely, a trust is destroyed by any act or event which reunites in the same hands the two forms of ownership which have become thus separated. The trustee, for example, may transfer the property to the beneficiary, who then becomes the direct owner ”

“ In fact, the purpose of this settlor as expressed in his trust papers was to make 'provision for any lawful issue' he might 'leave at the time of his death as well as provide an income for himself for life.' This paper, labeled a trust, but providing for all the substantial purposes of a will, was intended to and did postpone until the settlor's death the right of his relatives to possess and enjoy his property. There may be trust instruments that fall more clearly within the class intended to be treated as substitutes for wills by the 'possession or enjoyment' clause, but we doubt it. ”

“ To charge a person with a voluntary trust, it must be shown that he has declared himself trustee of specific property in favor of the alleged cestui que trust. The property must be specific, for one of the essential elements of a trust is a res, to which the trust can attach. If the property is realty, the declaration of trust must be proved by a writing signed by the trustee ”

“ The subject-matter of the trust in this case is the whole estate in its entirety (1) for the common benefit of all the creditors; and (2) for the common benefit of all the heirs or devisees. Respecting these creditors or devisees in their separate and individual capacity, he is not the representative or guardian of their person or property, and can exercise no legal control over either. ”

“ No argument, however specious, should lead the individual to dispense with this provision in the deed of trust, in the first kind, or management trust, at least; for, if at the end of the term of years the trust has proved a success, a majority can be relied on to continue it; if not, it is best for all but the weakest that it should be dissolved. In the property trust, however, it is more difficult to make this provision; for in this case the individuals have finally parted with their individual property ”

“ While no express trust is affirmed as to the lands, yet it is familiar doctrine that a party who acquires title to property wrongfully may be adjudged a trustee ex maleficio in respect to that property. ”

“ In regard to deeding over your property, no one compels you to do it. I do not compel you to do it, the Trustee in Trust does not, God does not; but He says that if you will do this, that and the other thing which He has counselled for our good, do so, and prove Him. He goes to work and proves us, as we go to work and prove one another under various circumstances. ”

“ It is worth while to notice, by some familiar examples, what the motive of a trust is; it will be found a far more everyday matter than most people suppose. A man who owns a house and lot buys the vacant lot adjacent in order to control it. He and his neighbors buy up all the vacant lots on the street in order to prevent undesirable contact with anything which would deteriorate their property. ”

“ I am not greatly concerned about the particular formula through which justice was attained. Consistency was preserved, logic received its tribute, by holding that the legal title passed, but that it was subjected to a constructive trust. [39] A constructive trust is nothing but the formula through which the conscience of equity finds expression." [40] Property is acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest. Equity, to express its disapproval of his conduct, converts him into a trustee. ”

“ Whenever the beneficial ownership has been encumbered, either by the creator of the trust or by the beneficial owner himself, the trustee holds the property not only on behalf of the beneficial owner but also on behalf of the beneficial encumbrancers. That is to say, the relation of trusteeship exists between the trustee and all persons beneficially interested in the property, either as owners or encumbrancers. ”

“ It would be a strong thing to say that we gather from this will an intent that, if the trust so far as it concerns the testatator's descendants should fail because they prefer to take the property by intestacy free from the limitations of the will, therefore the one gift outside his family should be defeated also. The trust is not a metaphysical entity or a Prince Rupert's drop which flies to pieces if broken in any part. ”

“ It is a clearly established principle in that jurisprudence, that whenever the trustee has been guilty of a breach of the trust, and has transferred the property, by sale or otherwise, to any third person, the cestui que trust has a full right to follow such property into the hands of such third person, unless he stands in the predicament of a bona fide purchaser, for a valuable consideration, without notice. ”

“ The conveyance in this case was, however, a trust deed, and not a mortgage, and by section 676 of the law of the territory, also approved March 16, 1855 (Laws Neb. 1855, pp. 55, 119) , it was provided: 'Deeds of trust of real or personal property may be executed as securities for the performance of contracts, and sales made in accordance with their terms are valid. ”