2.-For Individuals or Corporations a.-Safe deposit business. b.-Escrows (of a great variety). As bailee or depositary d.-Depositary under receiverships and assignments. As broker As attorney in fact Fiscal agencies. e. For trust funds (for individual or other trustees). f. For public funds. a.-Buying and selling of stocks and bonds on customer's order. b.-Buying and selling or renting real estate on customer's order, and maintaining or repairing same. c. Buying and selling real estate mortgages on customer's order. d.-Hotel and traveling reservations. a.-Acting for corporations where the state of incorporation requires a head office in the state and the actual business of the corporation is elsewhere. b.-Acting for an individual in personal business matters during his absence on extended trip. c.-Acting for individuals appointed as executors or trustees of estates. a.-Custodian account, clerical or secretarial services. b.-Investment advice or information. The auxiliary functions may be listed as follows: 1.-Fidelity insurance 2.-Title insurance This classification of services is used as a basis for the development of the chapters following-in fact it might well serve as an outline of the chapters. Fire insurance and life insurance have not been included because there are only a few isolated instances now where trust companies engage in this kind of business. CHAPTER III THE NATURE OF A TRUST Trust distinguished from contract. A trust has already been distinguished from an agency.1 It needs to be distinguished also from the contract, for clear understanding of its nature. In general, the contract is the creation of common law, while the trust is the creation of equity. The following specific differences may be noted: 3 2 1.-A trust, no matter how created, can be enforced against the trustee apart altogether from any consideration being given him, while a contract, except when under seal, cannot as a rule be enforced against the promisor unless such consideration be shown. 2.-In contract the parties assume by virtue of the contract no duties except those expressly stated, whereas the trust instrument gives rise to certain law-imposed duties as well as those expressly assumed. There are other minor points of difference between a trust and a contract. The trust may also be distinguished from other types of relationships in order to help to a better understanding of it, but for the purpose of the scheme of classification of services outlined in Chapter II, the two important distinctions are between trust and agency on the one hand and between trust and contract on the other. Two General Types of Trust. The legal and equitable development of the modern conception of the trust is extremely involved. In the course of its evolution, it has passed through several stages and even now the courts do not seem to have arrived at a final definition nor a well-defined distinction between trusts and certain other fiduciary relationships. Its history is interwoven with the legal evolution of the mortgage on the one hand, and with that concerning private contract and 1 In Chapter II, supra, pp. 37-9. * Hart, "What is a Trust?" Law Quarterly Review, Vol. 15 (1899), p. 299. 3 Ibid., p. 300. Cf. Bogart on Trusts, pp. 16–42. the devolution of real property on the other hand. In fact a history of the trust would very nearly include the entire history of equity jurisprudence. So far as it is possible to interpret the significance of the long series of court decisions on the subject, there are two general types of trusts at the present time which are recognized, at least by implication. These may be described or defined as follows: First general type of trust. A trust is a fiduciary relationship in which one person is the holder of the title to property, subject to an obligation imposed either expressly or by implication of law whereby the obligor is bound to deal with property over which he has control for the benefit of certain persons of whom he may himself be one, and any one of whom may enforce the obligation." Second general type of trust. A trust is a fiduciary relationship in which one person is the holder of the title to property, subject to an obligation imposed either expressly or by implication of law whereby the obligor is bound to guard the equitable interests of certain persons (of whom he himself should not be one) against the person or corporation which has under its control the property upon which the equities rest. 1 A brief summary of its history is given in Bogart on Trusts, pp. 6-15. Cf. Digby, The History of the Law of Real Property. Ames, "Origin of Uses and Trusts," Select Essays in Anglo-American Legal History, Vol. 2, p. 37. Maitland, "The Origin of Uses," Harvard Law Review, Vol. 8, p. 127. "A good discussion of the definition of a trust is contained in an article by Joseph R. Long, "Definition of a Trust," Virginia Law Review, Vol. 8 (1922), pp. 426–33. His thesis is that a trust should be defined from the standpoint of property since trusts belong under the law of property; but Bogart's view on this seems to be more reasonable. Bogart says: “The trust in the modern sense is conceived to be the relationship or status in which are concerned certain property and persons, and incidental to which are certain rights and duties. The whole bundle of property, persons, rights and duties makes up the trust." When defining trust, however, regard should be had for the etymology of the word and so it is defined above as a "fiduciary relationship," with the necessary qualifications to describe the particular kind of fiduciary relationship that it is. Cook on Corporations, 7th Ed. (1913), Vol. 4, p. 3038 and note. In Re York, etc., R. R., 50 Me. 552 (1861), the court held that whoever held the mortgage held it as trustee for all the bondholders though he was not expressly named as trustee. • Cook on Corporations, p. 3041. "... the office of trustee and beneficiary should not be united." Cf. Matter of Radam, etc., Co., 110 N. Y. App. Div. 329 (1905). 1 Trust distinguished from contract. A trust has already been distinguished from an agency. It needs to be distinguished also from the contract, for clear understanding of its nature. In general, the contract is the creation of common law, while the trust is the creation of equity. The following specific differences may be noted: 3 1.-A trust, no matter how created, can be enforced against the trustee apart altogether from any consideration being given him, while a contract, except when under seal, cannot as a rule be enforced against the promisor unless such consideration be shown. 2.-In contract the parties assume by virtue of the contract no duties except those expressly stated, whereas the trust instrument gives rise to certain law-imposed duties as well as those expressly assumed. There are other minor points of difference between a trust and a contract. The trust may also be distinguished from other types of relationships in order to help to a better understanding of it, but for the purpose of the scheme of classification of services outlined in Chapter II, the two important distinctions are between trust and agency on the one hand and between trust and contract on the other. |