The Restatement of the Law of Trusts

Comment: The reason for this is that no trust can be discussed in the abstract without considering its purpose. An attempt to do so leads us into elaborate distinctions between trusts and bailments, debts, equitable charges, business trusts, mortgages, contracts to convey, assignments, etc., which in turn must be discussed without regard to how the question arises. The result is that the decision whether a trust or something else has been created depends on the found intention of the parties, which is determined by the court's appraisal of their conduct; hence, the court can, by assigning such weight as it wishes to this criterion, erect any of these various kinds of trusts. If the American Law Institute is really serious in its desire to relieve courts and attorneys from what Mr. Root calls "the vast multitude of decisions which our practitioners are obliged to consult," statements of this kind will accomplish more than hundreds of pages attempting to determine the exact difference between an active and passive trust in the abstract, or the fundamental distinctions between a debt, a trust, and a resulting trust, without regard to their purpose. or the fundamental distinctions between a debt, a trust, and a resulting trust, without regard to their purpose. The topics set out above might form part of the initial discussion of the history of the trust device, sufficiently detailed to show that the conventional definitions of a trust are not convenient guides to groups of cases involving a single principle or policy. This task accomplished, the restatement should proceed to a classification of the cases using the term in the light of the purpose for which it was invoked. The following general classifications are ventured. I. The use of the trust device in cases where the owner of property desires to give one person the benefit and another the control of that property.5' These are, for the most part. intentional uses of the trust device. They include the family settlement cases and the rapidly growing busi" Professor Richard Powell of Columbia, in his course in Trusts and Estates, classifies these cases with cases in Future Interests and Wills. He divides his HeinOnline -31 Colum. L. Rev. 816 1931 THE RESTATEMENT OF THE LAW OF TRUSTS 817 ness done by great trust companies. They are entirely different in purpose from cases where the device is used by the court after the transaction is completed, to avoid some rule of law or give some special remedy. Under this group we could consider: 1. Limitations on the character of the property to which the device inay be applied. We would not try to do this by defining property, but by showing that courts had commenced by applying this broad concept to things like horses and land, and ended by including things like information and trade secrets. We could not say, as the restatement does, that "an interesf which has not come into existence or which has ceased to exist cannot be held in trust" or that "an expectation or hope of receiving property in the future cannot be held in trust."52 We would explain that such definitions were historical rationlizations of the fact that things not ordinarily bought and sold are not permitted to be complicated in this way, at least until some necessity arises. When courts want to permit the transfer of such things, they are lumped under the concept of "good will,"'5 3 and immediately we find that expectations can be held in trust. For example the difference between the expectation of selling goods to future customers and getting a legacy from a future dead man, only the first of which is supposed to be capable of being held in trust, is simply confused by saying that one is property in existence and the other is property which has not come into existence. Our conclusions would be that there are very few limitations on the kind of property which can be intentionally disposed of by the trust device, and that there is some recognized rule of policy other than definition of property which makes most of these limitations understandable. Other possible steps in the discussion of intentional trusts might be: 2. Limitations on the intentional use of the trust device imposed by (a) the statute of frauds (b) the statute of wills. materials generally into: I. Historical Introduction; II. Problems in Wealth Disposition; III. Social Limitations on Wealth Disposition; IV. Problems in Administration of Trusts and Other Interests Validly Created. Thus the trust cases are considered in their proper setting. The RESTATEMENT, since it confines itself to the trust device, cannot make a reorganization such as Professor Powell's. It can, howev&, by describing the trust device, instead of defining it, pave the way for some such reclassification of the cases in the future. Such a classification is made difficult if we are to accept a set of principles governing trusts in all situations. RESTATEMENT, at 138, § 74. RESTATEMENT, at 148, § 80, illustration 2. HeinOnline -31 Colum. L. Rev. 817 1931