the fee is given to the trustee, the cestui qui trust will be entitled to the beneficial ownership in fee, without an express limitation. to his heirs; because it is supposed that the testator intended that the beneficial interest should exhaust the entire legal estate.1 But in a deed the rule is otherwise.2 Where technical words are used, however, they must be taken in their legal and technical sense ;3 except in certain cases of executory trusts, which have been already noticed. 66. It has been said that in order to create a valid trust there must not be merely an inchoate intention, but that the transactions must be complete. This rule, it must be remembered, applies more particularly to trusts which are created by voluntary dispositions, and which may be conveniently considered in this place. For a trust may arise either out of a contract or out of a gift; and the distinction which it is desirable to remember is this, viz., that in trusts which grow out of contracts, and which are, therefore, based upon a consideration, it is not necessary that the intention should have proceeded to the same extent as is required in trusts which are purely voluntary. And this is only an application of the rule which exists at common law in reference to the distinction between contracts and gifts, as the former rest in fieri, whereas a gift can only be effectual after the intention to make it has been followed by actual delivery of possession or some equivalent act. "A true and proper gift or grant is always、 accompanied with delivery of possession, and takes effect immediately. . . . But if a gift does not take effect by delivery of immediate possession, it is not then properly a gift but a contract." The common law rule, therefore, in reference to the transfer of legal titles, has been followed in equity as to the creation of equitable estates; and trusts which are purely voluntary—that is, those which do not depend upon or grow out of a 1 More v. Cleghorn, 10 Beav. 423; on appeal, 12 Jurist, 591; Knight v. Selby, 3 Man. & Gran. 92; Doe v. Cafe, 7 Exch. 675; Watkins v. Weston, 32 Beav. 238; Perry on Trusts, & 337. 2 Holliday v. Overton, 14 Beav. 467; 15 Beav. 480. 3 Wright v. Pearson, 1 Ed. 125; Glenorchy v. Bosville, Cas. t. Talb. 19. 4 See Ownes v. Ownes, 8 C. E. Green, 62; Perry on Trusts, & 95. 5 2 Black. Com. 441. consideration-must, to be effectually created, be accompanied by the delivery of the subject of trust, or by some act so strongly indicative of the donor's intention as to be tantamount to such delivery. The settlor must do all in his power that the nature of the property will admit of to carry out his intention. Lord Justice Turner, in Milroy v. Lord,2 said that a voluntary settlement could be made in one of three ways: first, by direct transfer or assignment to the donee; second, by assignment to a trustee accompanied by an actual transfer of the legal estate if that is in the settlor; and third, by a declaration that the settlor holds in trust for the donee. Ex parte Pye is an old and leading authority upon this branch of the law, and is an illustration of the last of the three classes of cases mentioned in Milroy v. Lord. In that case M. wrote a letter by which he requested his attorney in France to purchase an annuity for the benefit of a certain lady. The purchase was made, but the annuity was taken in the name of the writer of the letter, who afterwards sent a letter of attorney to transfer the same to the name of the intended donee. The donor died before the transfer was made," but the news of his death did not reach the attorney until after the transfer. The transfer being good according to the law of France, the court held that there had been a complete declaration of trust. Ellison v. Ellison" may also be referred to as a leading authority upon this subject. "I take the distinction to be that if you want the assistance of the court to constitute you cestui qui trust, and the instrument is voluntary, you shall not have that assistance for the purpose of constituting you cestui qui trust; as upon a covenant to transfer stock, etc., if it rests in covenant, and is purely voluntary, this court will not execute that voluntary covenant; but if the party has completely transferred stock, etc., though it is voluntary, yet the legal conveyance being effectually made, the equitable interest will be enforced by this court." See Cox v. Sprigg, 6 Maryl. 284; Taylor v. Staples, 8 R. Island, 170, 176; Otis v. Beckwith, 49 Illinois, 121, 128. 24 De G. F. & J: 264. 3 See also the opinion of Vice Chancellor Wood in Donaldson v. Donaldson, Kay, 711. 4 18 Vesey, 140. 5 6 Vesey, 656. 6 Per Lord Eldon in Ellison v. Ellison, 6 Vesey, 662. See also Stone v. Hackett, 12 Gray, 227; Souverbye v. Arden, 1 Johns. C. R. 240; Bunn v. Winthrop, Id. 337; Clarke v. Lott, 11 Ill. 105; Crompton v. Vasser, 19 Ala. 266; Vruland v. Van Horn, 2 C. E. Green, 139. Where, however, a consideration exists, the case is different. A contract then arises which will be enforced by the courts, and equitable interests flowing therefrom will, as between the immediate parties, be as much protected as legal rights. Where the legal or equitable rights of third parties intervene, the rule may be varied.1 67. The cases upon the subject of voluntary declarations of trusts have been quite numerous, and it is impossible in a treatise like the present to do more than indicate their general results, without discussing the distinctions established by particular authorities. When a settlor is possessed of the legal title to the subject matter of the settlement, he may create a valid trust thereof, either by a declaration that he holds the property in trust, or by a transfer of the legal title to the property to a third party upon. certain trusts. In other words, he may constitute either himself or another person the trustee. If he makes himself the trustee, no transfer of the subject matter is necessary. If he makes a third party trustee, he must transfer to him the subject of the trust in such a mode as will be effectual to pass the legal title. But if there is a mere intention to convey the property upon trusts, this will not be sufficient if the proper steps are not taken for the purpose of making a valid transfer of the legal title to the intended trustee. Such was the case of Milroy v. Lord, where a deed of assignment of stock, unaccompanied, however, by a transfer of the stock, was held ineffectual to create a trust. The case of Donaldson v. Donaldson* may be referred to as an authority upon the creation of voluntary trusts by a declaration that the settlor thereby constitutes himself the trustee, in which case no assignment of the legal title is required.5 1 See post, Part II., chapter on Notice. 2 Lloyd v. Brooks, 34 Maryl. 33; Swan v. Frick, Id. 143. 34 De G. F. & J. 264. See also Jones v. Lock, 35 L. J. Ch. 117; 11 Jur. N. S. 913; Forrest v. Forrest, 34 L. J. Ch. 428; Scales v. Maude, 6 D. M. & G. 43; Henderson v. Henderson, 21 Missouri, 379; Gilchrist v. Stevenson, 9 Barb. 9; and Cressman's App., 6 Wright (Pa.), 147. Kay, 711. See also Vandenberg v. Palmer, 4 K. & J. 204; Lane v. Ewing, 31 Missouri, 75. 5 If a settlor designs to effect a valid settlement in a certain mode, but the settlement fails to take effect by reason !! It must, however, be observed, that, according to the most recent English authorities, an assignment which is ineffectual to pass the legal title may yet take effect as a declaration of trust; so that the result of the abortive attempt on the part of the assignor to convey the legal title, will be (under the view taken in these cases) to constitute him a trustee of that title for the party designed to be benefited. The remarks of Lord Justice Turner, therefore, in Milroy v. Lord, must be taken with the qualification introduced by the authorities just cited.2 Where a settlor is not possessed of the legal present title, but has only an equitable or reversionary interest in the subject, a trust may be created either by a declaration that the settlor holds. in trust, or by an assignment upon trusts. The first of these methods stands upon the same grounds as declarations of trust of property of which the legal title is in the settlor. An assignment, however, of an equitable interest upon a voluntary trust differs from a like assignment of a purely legal interest, in that no further formalities are necessary in order to complete the transaction, as, the legal title not being in the assignor, he can, of course, take no steps to complete its transfer. A valid voluntary trust of an equitable or reversionary interest may, therefore, be created by a simple assignment.3 It was at one time supposed that in the assignment of equitable interests, notice to the trustees was necessary. But this does not now seem to be requisite." 68. Voluntary assignments to trustees for the benefit of creditors have been held to constitute an exception to the general rules by which the creation of voluntary trusts is governed; of an incomplete disposition, it cannot Richardson v. Richardson, L. R. 3 2 See note to Ellison v. Ellison, 1 Lead. inasmuch as, after such an assignment, but before it is communicated to the creditors, it is considered revocable at the option of the grantor. It was, indeed, said by Sir L. Shadwell, V. C., in Garrard v. Lord Lauderdale,2 that such a trust was revocable by the assignor even after it had been communicated to the creditors; but this doctrine has not met the approval of subsequent decisions, and cannot be considered sound. The doctrine in Walwyn v. Coutts, when properly considered, appears to be based upon the ground that in such cases the assignee for the benefit of creditors is not strictly a trustee, but a mere agent of the debtor; and that if the true relation of the parties is that of principal and agent, the ordinary rule in such cases, viz., that the authority of the agent is revocable until acted upon, must apply. In America, the rule in Walwyn v. Coutts, and particularly the dictum in Garrard v. Lord Lauderdale, have not been approved. The assent of the debtor is presumed to be given to a trust created for his benefit, and after such assent the trust is irrevocable by the grantor.5 Even in England, if a creditor is created a trustee, and the fact of the execution of the deed is communicated to him, the trust will thenceforward be irrevocable." If the trust for payment of debts is to take effect after the death of the assignor, an element of bounty is introduced which will take the case out of the ruling in Walwyn v. Coutts." 69. Before leaving the subject of the creation of trusts by a voluntary disposition, it will be desirable to say a few words upon the question as to whether the meritorious consideration of blood is to be placed upon the same footing as one which is purely voluntary, so far as regards the disposition of courts of equity to enforce any right or supposed right founded thereon. 1 Walwyn v. Coutts, 3 Mer. 707; 3 England v. Reynolds, 38 Ala. 370; 1 Sim. 14. Lead. Cas. Eq. 327; Perry on Trusts, ¿ 593. But the presumption of the credit 2 3 Sim. 1. 3 Acton v. Woodgate, 2 M. & K. 495; or's assent may be rebutted by conduct. Harland v. Binks, 15 Q. B. 713. 4 See Bill v. Cureton, 2 M. & K. 511; 1 Lead. Cas. Eq. 256 (4th Eng. ed); and Lord Cranworth in Synnot v. Simpson, 5 H L. Cas. 133, 134. Gibson v. Rees, 50 Ill. 383. 6 Siggers v. Evans, 32 Eng. L. & Eq. 139. 1 Synnot v. Simpson, 5 H. L. Cas. 141; though see the remarks of Lord St. 5 Tennant v. Stoney, 1 Rich. Eq. 223; Leonards in his dissenting opinion, p. 152. |