History Of Uses And Trusts Notes
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History Of Uses And Trusts Revision
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Legal History Revision Notes
The History of Uses and Trusts Importance: + Maitland: "Of all the exploits of Equity the largest and the most important is the invention and development of the Trust. It is an "institute" of great elasticity and generality; as elastic, as general as contract. This perhaps forms the most distinctive achievement of English lawyers. It seems to us almost essential to civilisation, and yet there is nothing quite like it in foreign law".
+ Milsom: The importance of trusts should not mislead: in thinking of uses as the ancestor of trusts we are in danger of looking for something too big. Do not look for the later, fully formed, institution of the trust in the history. 'Use': Concerned with feoffments to uses of land, not chattels. In such a transaction lands are conveyed to a person/persons (called feoffee/feoffees to uses) along with a provision that they hold for the benefit of (ad opus) a beneficiary. Beneficial enjoyment of land is thereby separated from the legal title for the feoffee is a mere passive recipient of legal title (and so has seisin), often with no active duties to perform, who is not intended to benefit from the transaction in any way. His basic duty is the passive one of allowing the cestui que use to take the profits of the land. Sometimes the feoffee might have active duties imposed upon him (i.e. to reconvey the land to another). Such direction would create an active use. Passive uses more important in development of law of uses. Evidence of uses found in the Domesday book and they were used commonly in the 13th c. A use is like bailment of a chattel. Same motives: my friend can keep it safe, or going abroad and cannot take it with me, or to keep a valuable thing out of hand of my creditors. I can give friend instructions to do positive things with it. Key uses of the use: Primarily used for making family provisions - control 'intergenerational uses' (+ Biancalana). E.g. Lord has a property which he grants out some of to T, in return for services. When T dies the feudal incidents will be due. T wants to make his death legally irrelevant, so on his death bed T coveys the land by substitution to X, instructing X to convey the land to T's son. Hence the lord gets no incidents when T dies. However, there is the danger for T that X might die. So when T is healthy he conveys to a group of people. He may even create a mortmain conveyance, which is not caught by legislation. Feoffees would hold the land according to T's instructions. It can be used as a way of defrauding the lord of out his feudal incidents. Why was there a prevalence of feoffments to uses in the Middle Ages? + Simpson:
The Crusades encouraged the practice by taking landowners out of the country and making it imperative that they left somebody at home in control of their lands. The friars of the Order of St. Francis found it convenient that property should be held by others to their use. They used, but did not own, the buildings they occupied. Dishonesty played some part - One who was proposing to indulge in treasonable enterprises could seek to avoid the chance of his lands being forfeit to the Crown for treason by conveying them to a blameless confederate, to be held to his use. Like modern tax evasion. By 15th c. clear that most uses were created for one of four main reasons: (i) Could be employed to assist in simple fraud; (ii) Could be used to avoid feudal duties; (iii) Could be used to gain a power of devise over land; (iv) Could be used to facilitate the creation of settlements of land.
Common law did not recognise uses. So if the group of feoffees acted against T's wishes, the agreement was enforceable at common law. Could not use covenant after 14 th c.
Chancellor incapable of devising suitable remedies when same sort of transaction was carried out with land.
Legislature found it difficult to prevent such transactions being used for fraudulent purposes.
Legal History Revision Notes
Other situations where uses were used: (i) friars; and (ii) monks. (i) Friars (followers of St. Francis) - Charitable provision: We find the phrase ad opus famously in the 13th c. in the case of the Franciscan friars, living 'in obedience, without property and in chastity'. Rule (1223) that friars would acquire nothing of their own, but they needed somewhere to live. Solution: Make a conveyance of freehold land to a feoffee for uses to hold for the Franciscans so they can enjoy it. As early as 1225 in Oxford and London land was held 'ad opus' for friars. In 1308 it has been found that an action was brought at common law for widow's dower in relation to land in the parish of St. Ebbes in Oxford. The friars had only the 'use and easement' of land so could not be sued. (ii) Monks - Monks formed corporations (i.e. abbeys) so they could own benedicitim houses, without individual monks owning it. Issue: The effect on feudal incidents of making subinfeudations to monasteries in return for spiritual services.
Statute of Mortmain/Statute De Viris Religiosis (1279): If the friars employed uses, so did the monks in the aftermath of the statute - said land should not be subinfeudated to the church. From 1280 you could obtain a royal licence for a fee to convey land by subinfeudation to a monastery. Fee must be raised, which takes time. In the interval T would convey land to feoffees to hold for use of the monks of the monastery. Feoffers would not pay money over if monks stopped praying for me. This arrangement with monasteries was intended to be lasting - it is a relationship, rather than simply a transaction. When T received title the feoffees could convey back. But later I think, maybe I should not bother with paying for the licence. I should simply convey ad opus to the use of monastic houses. Continues until 1391.
Second Statute of Mortmain, 15 Ric. II, c. 5 (1391): Passed due to the loss of royal revenue/incidents due to uses. Provided that land held to the use of religious houses was within the scope of the mortmain legislation. Brought feoffments directly to monasteries within the scope of transactions requiring a licence.
---------------------------------------------------------------------------------------------------------------------------------------------The Development of Uses - 'Grant and Re-grant' Typical situation: 14th c: Tenant in fee simple of greenacre wants to change his estate. Maybe he wants to be a T for life jointly with his wife, with a remainder in tail to a younger son (older son takes land). He cannot achieve that on his own. He must convey his fee simple to someone else on the basis it will then be re-conveyed on the term of the settlement (known as 'grant and re-grant'). That was not intended to last, it was a transaction, not a relationship - reconveyance will be made soon after the original conveyance. Problem: If the tenant in fee simple has conveyed the land to his friend for him to re-grant, what if his friend does not re-grant? How could he enforce this and avoid the risk?
Solutions: 1) Strict common law condition - E.g. I convey land to friend, on the condition that he re-convey. Effect is to reserve for myself a proprietary right in the land (right of re-entry) with the result that if the condition is broken I may simply enter the land and take it back. So the friend has a conditional fee simple - if you breach then I re-enter. Will work, but issues: a) Must declare terms of the condition when I make the original grant. Cannot change my mind later. b) The right of re-entry is a proprietary interest, so if I die before re-grant the right descends to my heir. The point of the settlement may have been to take the right away from the heir and transfer the remainder to my younger son after myself and my wife die. c) This is not a mechanism to make you re-convey, it is just a mechanism for me to get land back in fee simple if you do not re-convey.
Legal History Revision Notes
2) Trust the friend, so no need for an enforcement mechanism - Has benefit of making it plain that my direct heir will not get the land.
Changes in medieval thinking: If the 3rd party is trusted in the short term, why not trust him for the longer term?
Opened up lots of possibilities. One of the most frequent occasions for the creation of a use in 14 th c. was a trip overseas (war or pilgrimage), so if I return alive then you re-convey, but if I don't then follow my instructions. And if trusting was to be extended over this period, why not extend it still further and enable the making, in effect, of a will of freehold land? Became common in 14th c.
+ Biancalana: Such an extension produced what may be called an intergenerational use, a use which operated to transmit land within the family from one generation to the next. Meant I could control the devolution of the land in the family after my death in order to provide for my widow, younger sons etc. Uses of this type were more numerous and more important legally and socially than uses which were confined to one generation. It was a flexible family provision and the feoffees were functionally acting as executors (following my instructions after my death).
= True (although forbidden) rule of personalty. Safeguards - Also, normally there will be more than one feoffee to the conveyance by last will. Safer as they keep an eye on each other. Avoids problem of sole feoffee dying and the land descending to his heir, so I would have to bring enforcement action against the heir. How could the obligation to re-grant be enforced?
Issue: Is there a jurisdiction that will intervene if feoffees misbehave, and clarify the meaning of T's instructions?
1. Chancery: The primary jurisdiction dealing with uses. In the eyes of the common law cestui que use (the beneficiary of the use) had, as Serjeant Frowyk put it, 'no more to do with the land than the greatest stranger in the world' (Anon (1502)) = only interested in the legal title. So the chancery intervened.
2. Ecclesiastical courts: + Helmholz: Showed that, in diocese of Rochester and Canterbury, there was a church court jurisdiction over uses of land from 1370s - mid 15th c. There is only fragmentary evidence that there was enforcement of uses of land anywhere else. Usually the litigation occurred after the death of the feoffer in Church courts, so this suggests the jurisdiction is linked to the church's jurisdiction over wills of personal property. Ceases to be dealt with in church courts in the mid 15th c. Maybe due to rise of jurisdiction in the chancery.
Legal History Revision Notes
Development of the Chancery jurisdiction Issue: The use could not simply be fitted into the common-law legal scheme because the doctrine of estates and the doctrine of seisin left no place for the separation of beneficial enjoyment from legal title. Root of the common law's difficulty lay in the fact that the landowner's beneficial interest was protected by protecting seisin; the person who had seisin could recover that seisin specifically in the real actions if he were disseised. The cestui que use did not have seisin, and thus he could not use the actions which gave specific recovery, nor were there forms of action capable of protecting a beneficial interest divorced from seisin. If the B was never let into possession by a dishonest feoffee, he could never have used trespass, which only protected one who had possession and the employment of assumpsit would have required much modification. Common lawyers were helpless as they were bound to work within the confines of the scheme of actions provided by the Register of Writs.
Chancery: Petitions for the protection of uses were directed to the Chancery (Helmholtz). Since it was settled in the 15th c. that common-law courts would not uphold uses as such, the person who made a feoffment to uses was clearly reposing a trust or confidence in the feoffee, which it was unconscionable, although not illegal for him, to break. It was the very impotence of the common law which provided the basis upon which the Chancellor could intervene in the name of good conscience, and later, equity, and require the feoffee to hold the land for the benefit of the cestui que use and allow him to take the profits. Could enforce his decrees by threat of imprisonment.
Origins: No record of Chancery's role in the enforcement of uses until 1530s, but its intervention can be deduced from pleadings. Origins of the Chancellor's jurisdiction over uses are unclear.
+ Palmer and Barton: Views consistent at late 14th c. May have existed from 1370s/80s. Well established by 1420s. Clear people were creating feoffments to uses before then without any remedy - referred to by Palmer as the 'social use' as it was made on trust alone.
1402: A petition in Parliament complaining of the lack of remedy against dishonest feoffees.
+ Palmer: Suggests chancery intervention was occurring on an ad hoc basis, not that it was not happening. There was an expectation that the remedy should be provided regularly to all.
Myrfyn v. Fallan (1446); Chancellor intervened to protect a cestui que use. Frequency of petitions before this date suggests he intervened earlier.
15th c: Substantive principles concerning uses were developed by the Chancery: 1) If my last surviving feoffee to uses dies and the land descends to his heir, the heir is bound by the use (would not usually arise as I would have multiple feoffees); and 2) Second half of 15th c. (clearly by 1460s) rule that, if the feoffees convey land to a 3 rd party, the party (purchaser or donee) is bound by use, except if he took for value without notice (equity's darling). 3) Doctrine of implied uses evolved, which arose through the operation of law. Two examples: a) Bargain and sale cases: Where I contract to sell you my land, and you pay me the price, or we agree a day on which you will pay me the price - that is the bargain of sale. Effect is that I hold the legal title, which I have not yet conveyed, to the use of you. There is an implied use. b) Resulting uses: Common practice in 15th c. for a landowner to convey his land to one or more feoffees, and to remain in occupation of the lands for the time being, subsequently declaring the uses upon which the lands were to be held (e.g. where T conveys the land for no consideration without initially expressing a use for anyone). Out of this practice grew the equitable presumption that, where the feoffees gave no value to the feoffor, that the feoffees should hold to the use of the feoffor, unless they could show contrary intention. Generated a 'resulting use' back to T.
= Became clear that the cestui que trust had come to obtain a species of protected interest, which could be defended consistently and predictably. He had acquired a species of property. 1) and 2) begin to give a kind of ownership to B because the use is enforceable against others, not just the original feoffees. By end of 15th c. one can see lawyers speaking of the B of the use as the owner of the land.
Legal History Revision Notes
!! But at the same time there is a strong emphasis on the idea that the use turns upon the conscience of the feoffee. B's interest turns upon burdening the conscience of the feoffee tension between obligation and property. Was said in 15th - 17th c. that a corporation could not be a trustee or feoffee to uses because it has no soul to trust.
= Secondly, if feoffee dies with no heirs there is an escheat and land falls into hands of feudal lord. Lord is not bound by the use, even if he has notice, because he came into the land not through the feoffee, but as lord. His title is not derived through the feofee as the heir's or purchaser's would be. So feudal lord's conscience is not burdened so use cannot be enforced against him.
= Suggest importance of personal question of feoffee's conscience. But protection of B's interest begins a movement towards seeing him as having a proprietary interest. Uncertainty of title Issue: Practice of making feoffments to uses meant that a large proportion of land in England was commonly occupied by persons who were not legal owners, but by beneficiaries of the use. Caused difficulty for purchasers who could not necessarily discover the existence of the use. Solution: Statute Concerning Grants by Cestui que use; Statute 1 Ric. III, c. 1 (1484): Aim was protection of those who purchased land from 'secret and unknown feoffments'. Gave power to a B of a use to convey legal title. Declared that transference of title to be good against the legal title in the feoffees - so legal title remains in the Fs, but B can convey a legal title of his own, which is better in the case of protecting purchasers. Purchaser can then assert title against the feoffees. Statutory magic. Difficulties: Did not remove legal title from feoffees so there could be competing legal titles. Brought uses into common law courts because a legal title could be derived. So judges had to consider uses. From this statute stemmed the theory that uses were a common law institution, and did not just exist in conscience or equity. ______________________________________________________________________________________________
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