it as owner.1 In still other cases, where the life estate came within the statute, it was united with the legal remainder.2 If a conveyance is necessary, how could the life estate unite with the remainder until a conveyance had been made? If necessary in one case, it must be necessary in another. It is perhaps the tendency to require a conveyance when the controversy is between the cestui que use and trustee, but when between the cestui que use and third persons, to consider the title as having passed.3

Probable Cause of Confusion in the Law

137. Further confusion has existed on this point because of the failure to bear in mind the distinction between a trust which is executed by the statute, and a trust which can be terminated by the cestui que trust. In the former case, the interest becomes legal at once; in the latter, it does not become legal until the cestui que trust has proceeded in a court of equity for transfer of the title or the trustee has made a conveyance. It is probable that some of the peculiar principles of Pennsylvania law relating to the validity of the sole and separate use, and the application thereto of the statute of uses, have arisen because of this misunderstanding of the operation of the statute of uses. As long as the court failed to distinguish between the case where the trust fell of itself because of the operation of the statute of uses, and the case where it was terminable only by a conveyance from the trustee, it was easy to slip into the position that a sole and separate use fell of itself when the circumstances requisite to its validity had ceased to exist."

5

Fallacious Notion as to the Test of an Active Trust

138. It is sometimes said that where a court of equity would decree a conveyance of the legal title to the cestui que trust, the trust would be considered as executed without a

1 Smith v. Starr, 3 Whart. 62 (1838); McKee v. McKinley, 33 Pa. 92 (1859); Cable v. Cable 146 Pa. 451 (1892); Chamberlain v. Maynes, 180 Pa. 39 (1897), semble.

2 Steacy v. Rice, 27 Pa. 75 (1856); Nice's App., 50 Pa. 143 (1865).

3 Eckels v. Stewart, 53 Pa. 460 (1866); List v. Rodney, 83 Pa. 483 (1877); Kinsel v. Ramey, 87 Pa. 248 (1878). 4 See $570, post.

5 See $129, ante.

6

For a further discussion of this point see §129, ante.

formal conveyance by the trustee.' This is the same thing as saying that no conveyance is necessary where a court of equity would direct a conveyance. Now, the only case where a court of equity will direct a conveyance is where there is an active trust which has terminated or where the trust can be terminated by the cestui que trust under some rule of law. The very case, therefore, in which a court of equity will decree a conveyance, is the case where a conveyance is necessary, and when the title has passed by the force of the statute, the court will not decree a conveyance. The statement, therefore, is clearly fallacious and should be disregarded.

Conclusion as to Pennsylvania Law

139. No statement of the law as to the necessity of a conveyance can be made in this condition of the authorities. It will undoubtedly be safer to always take a conveyance, and that, probably, is the universal practice, which of course practically repeals the statute of uses. The statute is of no vital importance in modern times except in so far as conveyancing is concerned. It will be easy to confine the operation of the statute to those cases and deny its effect in all other cases. The line of distinction is so clear between the case of a simple use and all other equitable limitations, that no difficulty can arise. If the statute applies and no conveyance is necessary there will often be a practical difficulty in deciding whether, in a given case, there is a use or a trust.

7 This notion apparently has its origin in the 4th paragraph of the syllabus of the case of Rife v. Geyer, 59 Pa. 393 (1868), which is as follows: "The true test as to a trust being dry or active is, whether equity in Pennsylvania would decree a conveyance of the legal title." Mr. Justice Sharswood, on p. 396, made use of the above language, leaving out that part of the sentence in quotation "as to a trust being dry or active." It is believed, however, that the court did not mean to announce any such statement of law, for the connection in which Mr. Justice Sharswood uses the language above mentioned is to elaborate that part of the opinion which follows the sentence, to wit, as to how such a trust

8

is to be treated in a common law proceeding, and has no reference to the previous paragraph where he is discussing the distinction between an active and a passive trust. Cited and followed by Mehard, P. J., in the court below in Carmichael v. Thompson, 8 Sad. Cases, 120 at 125 (1886); Mitchell, J., in Chamberlain v. Maynes, 180 Pa. 39 (1897). 8 It is to be observed, however, that under the Act of June 14, 1836, P. L. 628, §30, the court has power to compel the conveyance by trustees of the legal estate when the trust has become executed or has expired. While this act is not altogether clear, it may be that under its provisions a conveyance is necessary in every case where the statute of uses applies.

Operation and effect of power of sale in a trustee

$156

146. Most settlements in modern times are made by way of trust. The reason is apparent. More flexibility of disposition can be attained by the creation of the trust than by a

settlement at law, and the presence of the trustee furnishes greater security to the ultimate interests, particularly when the subject matter of the trust is personal property. Consequently, equitable limitations will comprise the larger number of the instances involving the application of the restraining rules,1 which will be the chief topic of the discussion which is to follow. Some observations on the nature and incidents of the trust, the title and power of the trustee, and the interest of the cestui que trust will be appropriate. Limitations in trust are comparatively modern, and as respects the application of these rules, the law is, in the State of Pennsylvania, in a condition of uncertainty and development. The conflict between family pride and dishonesty, on the one hand, and morality and democracy, on the other, has been centered in the past over limitations at law. The smoke of the battle has almost cleared so far as legal limitations are concerned, and the law is fairly well settled. The conflict is still going on in Pennsylvania over limitations in trust, and the authorities on many points are in a distressing state of uncertainty. The generally confused condition of equity in Pennsylvania has probably contributed largely to this result.3 It is important to ascertain exactly what these equitable limitations are, so that we may know how to apply the restraining rules of law. The origin of the trust has already been sufficiently noticed. The nature of a trust will now be discussed.

1 The rule against perpetuities, the rule forbidding restraints against alienation, and the rule forbidding restraints on enjoyment.

2 The law relating to trusts in Pennsylvania is extremely confused. The cases are in great conflict, and the remarks of the judges so obscure that they offer little assistance. But a small part of that unfortunate condition of affairs can be touched on in this book.

3 "It is not the least among the evils of our mixed system that it breeds a confusion of ideas, and consequent uncertainty, as to the rules of equity, and the nature and extent of the relief to be claimed, which would never occur if the suit were viewed as divested of

the dress of an action at common law. Without keeping law and equity as distinct in the mind as they are in practice, where they are administered separately by different tribunals, the principles of the latter can never be fixed or certain. For want of this, an equitable defence is often, with us, an undefinable something, which depends on a confused feeling of equity, but which is referable to no settled rule of a court of chancery." These remarks of Tilghman, C. J., in Gochenauer v. Cooper, 8 S. & R. 187 at 191 (1822), are as pertinent today as they were when he wrote them.

*See Chap. 5, on the Ancient Use.

Early Conception of the Nature of a Trust

147. When the use was first introduced, there was no jurisdiction in equity to compel the feoffee to observe the use. The trust or confidence existed between the feoffor and the feoffee, and the confidence was that the feoffee would observe the terms of the trust. The matter rested, as it was said, entirely in the feoffee's conscience. There was the idea of a duty owing from the feoffee to uses to the cestui que use. When equity took jurisdiction the chancellor simply compelled the feoffee to perform this duty. The idea that the use was an estate in land worked itself into the law at an early date, and has remained down to the present time. According to this conception, the title was split up into the use or beneficial interest, which was in the cestui que use, and the legal title, which was in the feoffee to uses. This rather fanciful idea was probably some conceit of the scholastic logic which was rife at that time, and was perhaps a fiction invented in order to lay the ground for the interference of the chancellor.5 This notion has persisted until modern times and must be taken account of at several points in our discussion. The theory, however, is inadequate in the case of a trust and breaks down at several points which will be noticed in the next section.

Objections to the Early Notion of the Nature of a Trust

148. When a trustee conveys to a purchaser for value without notice, the latter takes discharged of the estate of the cestui que trust. How is it possible, however, for the trustee to transfer to the purchaser the beneficial interest, which, if the cestui que trust has an estate, is then outstanding in the latter? The cestui que trust loses that beneficial interest immediately upon the transfer. How it is transferred from him to the purchaser has never been explained. Where a trustee by dealing with the trust property increases it or enriches himself, he is, as to such increase or enrichment, a trustee likewise for the cestui que trust. If, however, the theory of the relation is that the equitable estate is in the cestui que trust, then he must likewise have such an estate in this increase. But how does he acquire that estate? Where

5 See §107, ante.