Birmingham age-herald., 1895-04-30
THE TRUST FUND THEORY.
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 of +be cases on the question decided by this court. viz: Corey vs. WadsWorth, cannot mon well settled and elementary general principles and definitions see my way to an acceptance or lnls eoc caiiIu N doctrine All trusts are ot two klhus' expressed and implied. It is' ol ~ coui se, norhere nretended the relations between an insolvent corporation and It's credl- tors constitute an express trust. All iIn- piled trusts are of two klnds' fesultllS and constructive. Resulting trusts, says MT. Pomeroy, arise where the iesal estate is disposed of or acquired, not fraudulently or in the violation or any fiduciary duty, but the intent in theory of equity appears, or IS fhleffea or assumed from the terms or the disnosition. or from the accompany beneficial interest is not to go with the legal title."- Pom. Ed. Jur, sec. l55
 ing facts and circumstances, that the
 And they are said to arise under the following several states Of facts: uD where the purchaser of an estate pays the purchase money and takes title in thesname of a third person; @ where a person standing in a. fiduciary relation uses fduciary funds to purchase prop erty, and takes the title in his own name; (3) where an estate is conveyed upon trusts which fail, either in whole or in part, or are not declared. or are illegal, and (4) where a conveyance is made with out consideration, and 1t appears from the circumstances that the grantee was not intended to take beneficially.-10 Am. X, Eng. Ency. of Law, D. D. 4, D. It re- quires no discussion to the demonstration of the impossibility of referring this American doctrine" of trusts for cor poration creditors to the head of result ing trusts.
 All constructive trusts are of three kinds, or arise from one or the other of three conditions of fact: First, trusts arising from actual fraud; second, trusts which arise from constructive fraud, and third, trusts that arise from some equi- table principle independent of the exist ence of fraud.-10 Am. & Eng. Ency. of Law, D. 60. As there is no fraud, actual or constructive, involved in the naked fact that corporation is insolvent-has creditors which it is without assets to pay in full-and this fact is the base for all the superstructuTe of this doctrine of trust for it's creditors. it cannot be con- ceiYed, and, l suppose, has never been contended that such trust is referable to either the first or second heads of con- structive trusts. And 1t is the conclusion of so high an authority as MT. Pomeroy that the third classification of construc- tive trusts stated above has no existence dissociated from actual and constructive fraud. It is his opinion that all in- stances of constructive trusts properly so called may be referred to what equity de- nomlnates fraud, either actual or con structive. as an esential element, and as their final. source. Even in that single class where equity proceeds upon the maxim that an intention to fulfill an obli- gation should be imputed, and assumes that the purchaser intended to act in pur- suance of his fiduciary duty, the notion Of fraud is not involved, simply because It IS not absolutely necessary under the cli i.cunislances; the existence of the trust might in all cases of this class be referred to constructive fraud This notion of