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Trusts Without Equity

Published online by Cambridge University Press:  17 January 2008

George L. Gretton
George L. Gretton
Affiliation:
University of Edinburgh. I would like to thank Lionel Smith for his comments.
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Extract

“Perhaps the greatest difficulty the civilians have in accepting the trust is caused by what I have come to regard as an English peculiarity logically detachable from the trust, namely, the distinction between the legal and the equitable estate. In Scots law, which, even if it did not invent and develop the trust for itself but took it over from England—the point is doubtful—has accepted it without inhibitions or reservations, no such distinction has ever been known. There the trustee becomes owner and the beneficiary acquires a contractual right against him.”1

Type
Articles
Information
International & Comparative Law Quarterly , Volume 49 , Issue 3 , July 2000 , pp. 599 - 620
Copyright
Copyright © British Institute of International and Comparative Law 2000

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References

1. Lawson, F. H., A Common Lawyer Looks at the Civil Law (1953) p.201.Google Scholar

2. Despite this, valuable attempts to identify “trust-like” devices in non-trust legal systems have been made: see for instance Kötz, Hein, Trust und Treuhand (1963)Google Scholar; Wulf, Christian de, The Trust and Corresponding Institutions in the Civil Law (1965)Google Scholar; Wilson, W. A. (ed.), Trusts and Trust-Like Devices (1981).Google Scholar

3. Both non-profit quasi-corporations, such as the Inns of Court, and quasi-companies, with the shareholders being the beneficiaries and the directors the trustees. For a classic study see Sears, John H., Trust Estates as Business Companies (2nd edn, 1921).Google Scholar

4. Quasi-mortgages, quasi-pledges, quasi-hypothecs etc. This may be done in three ways. (1) The debtor transfers assets to a neutral third party to hold as trustee for the lender and for the debtor. (2) The debtor may transfer to the creditor to hold as trustee for both parties, (Compare the Roman fiducia cum creditore and its modern versions.) (3) The debtor may declare a trust over his own assets with himself as trustee, holding for himself and the lender. All three of these patterns can be found in one jurisdiction or another.

5. The unit trust. Paradoxically, investment trusts, which are also collective investment schemes, are not trusts.

6. Debenture trusts.

7. “Si l'on demande à quoi sert le trust, on peut presque répondre. ‘à tout.’” (“What is the trust used for? Almost everything.” Pierre, Lepaulle, Traité Theorique et Pratique des Trusts (1932) p.12)Google Scholar

8. They are not even confined to national laws: they extend to public international law. See for instance Catherine, Redgwell, Intergenerational Trusts and Environmental Protection (1999).Google Scholar

9. “Though the English do not lay exclusive claim to having discovered God, they do claim to have invented the trust with two natures in one.” (Smith, T. B.), International Encyclopaedia of Comparative Law Vol.VI, chap.2, para.262.Google Scholar

10. (Preamble.) As one usually finds in texts where two or more languages are authentic, there are significant differences between the authentic versions. The French text reads: “Le trust est une institution caractéristique crée par les jurisdictions de l'equitté dans les pays de common law.”

11. Abdul Hameed Sitti Kadija v. De Saram [1946] 208 (Ceylon) at 217. (Privy Council, quoting with approval Lee, R. W., Introduction to Roman-Dutch Law (3rd edn, 1931), p.372.)Google Scholar

12. This passage is from Vol.VI, chap.11 at the beginning of para.1. The following passage is from the same chapter at the end of para.3 and the beginning of para.4.

13. One may remark that since a ins in re aliena is itself a ius in rem this inference is hard to follow. The father of modern Dutch law, Meijers, E. M., wrote that “het Engelsche zakenrecht is en zijn constucties en ook in vele zijner regenlinen, eenige eeuewn bij die van het Europeesche yasteland ten achter.” (Quoted H. F. W. D. Fischer at 1957, Tydskrif vir hedendaagse Romeins-Hollandse Reg.25 at 35/36.) This remark is so undiplomatic that it is better left untranslated. It is also less than fair, but passages such as that quoted in the text enable one to understand why Meijers descended to invective.Google Scholar

14. (1936/1937) 50 Harvard Law Review 1249, at 1264.Google Scholar

15. See for instance the quotation at the beginning of this article.

16. “Things as Things and Things as Wealth” (1994) 14 Oxford Journal of Legal Studies 806Google Scholar, at 89. And cf. the same author's remark that “while the separation [between law and equity] may be the historical reason for the invention of the trust concept, it does not seem an adequate analytical reason, for it fails to explain the Scottish trust.” (“Equity as Alibi” in Goldstein, Stephen (ed.), Equity and Contemporary Legal Developments (1992), at p.36.Google Scholar

17. This article has the ambitious aim of trying to catch the essence of the trust, whether used for private or for commercial purposes. Inevitably, however, it cannot investigate all the manifold uses to which trusts are put.

18. Cf. Langbein, J. H., “The Contractarian Basis of the Law of Trusts” [1995] 105 Yale L.J. 625.CrossRefGoogle Scholar

19. In the normal case. There can also be cases of trusteeship by force of law, without contract. But it is, after all, a general truth that obligations may arise ex lege as well as exvoluntate.

20. The Verwaltungstreuhand of German law corresponds to this form of fiducia. For fiducia in general in Roman law see Inst Gaii 2,60.

21. England has recently made further inroads into privity by the Contracts (Rights of Third Parties) Act 1999. For privity and trusts see Jones, N. G., “Uses Trusts and the Paths to Privity” (1997) 56 C.L.J. 175.CrossRefGoogle Scholar

22. Tony Honoré has written that “the conclusion must be that civil law systems are capable of protecting the trust beneficiary by the doctrine of notice to the same extent as does English law by its recourse to equitable interests in property.” (“Obstacles to the Reception of the Trust? The Examples of South Africa and Scotland” in Rabello, A. M. (ed.), Aequitas and Equity (1997).)Google Scholar

23. A point well made within the Anglo-American tradition by Stone, Harlan: “The Rights of the Cestui Que Trust” (1917) 17 Columbia Law Review 467.CrossRefGoogle Scholar

24. That is to say, the set of rules whereby donations, and other juridical acts, by an insolvent debtor, which have the effect of diminishing the value of the debtor's estate, may be voidable at the instance of the unpaid creditors. The detailed rules vary from one legal system to another but (at least in the civil law world) all derive from the actio pauliana.

25. Tutor rem pupilli emere non potest. idemque porrigendum at ad similia; id at ad curatores procurators et qui negotia aliens gerunt. (Dig.18, 1, 34, 7. “A tutor cannot buy a thing belonging to his ward; this rule extends to other persons with similar responsibilities, that is curators, procurators and those who conduct another's affairs.” (Translation per Alan Watson's edition.)

26. This is so even though most reported trust cases do not turn on this issue. As a comparison, the central doctrine of company law is the separate personality of the company, even if most reported company law cases do not turn on this point.

27. This conceptualisation of the trust was common in Scots law in the 17th and 18th centuries. Trust was often described as a combination of deposition and mandatum, with the depositum being a deposit of ownership rather than possession. See further James Dalrymple (Lord Stair), Institution of the Law of Scotland (1681) 1,13,7 and 4,6,3; McDouall, Andrew (Lord Bankton), Institute of the Laws of Scotland (1751) 1,18,12Google Scholar; Erskine, John, Institute of the Law of Scotland (1773) 3,1,32.Google Scholar

28. However, it does not seem to be used much in practice, either in the Netherlands or in Southern Africa. In Heritable Reversionary Co. v. Millar (1892) 19 R.(H.L.)43 Lord Watson opined that in the Scottish trust the beneficiaries are the owners and the trustee has no real right—in the effect the bewind concept. But this was a maverick view, shared by no one before or since. Something like the bewind exists in the Ermächtigungslreuhand in Austrian law. (See generally Peter Apathy (Ed.), Die Treuhandschaft (1995).)

29. Interestingly, South African legislation classifies the bewind as a sort of trust: see the Trust Property Control Act 1988. The South African view is that what is important is not so much ownership as control. (See also Hahlo, H. R. at (1961) 78 South African Law Journal 195.)Google Scholar As against this, one may argue that if control, rather than ownership, is the test, then company directors would be “trustees.” But company directors, though occasionally called trustees, are fiduciaries but not trustees.

30. International Encyclopaedia of Comparative Law Vol. VI, chap.11, para.l.

31. Abdul Hameed Sitti Kadija v. De Saram [1946] 208 (Ceylon) at 217. (Privy Council, quoting with approval Lee, R. W., Introduction to Roman-Dutch Law (3rd edn, 1931), p.372.)Google Scholar

32. (1936/1937) 50 Harvard Law Review 1249, at 1264.Google Scholar

33. Garrigues, J., “Law of Trusts” (1953) 2 American Journal of Comparative Law 25, at 33.CrossRefGoogle Scholar

34. Bolgar, V., “Why no Trusts in the Civil Law?” (1953) 2 American Journal of Comparative Law 204, at 210.CrossRefGoogle Scholar

35. Beneficial rights are personal rights in English law, it is true, but the key point is that they are also proprietary. Some scholars have agonised over this. Maitland: “If a foreign friend asked me to tell him in one word whether the right of the English Destinär (the person for whom property is held in trust) is dinglich or obligatorisch, I should be inclined to say: ‘No, I cannot do that. If I said dinglich, that would be untrue. If I said obligatorisch, I should suggest what is false. In the ultimate analysis the right may be obligatorisch, but for many practical purposes of great importance it has been treated as though it were dinglich, and indeed people habitually speak and think of it as a kind of Eigenthum.” (Fisher, H. A. L. (ed.), Collected Papers of Frederick William Maitland (1911) Vol.111, at p.326Google Scholar. For Maitland's thoughts on how, historically, the beneficial interest evolved from a personal right into a quasi-real right, sec his Equity chap.9 (pp.112–114 of the 1949 edition). But Maitland's views remain (that beneficial rights are not truly real) a minority one.

36. The standard text is Reid, K. G. C., Law of Properly in Scotland (1996).Google Scholar

37. In the following I do not mention the well-known argument that a beneficial right in a trust cannot be a real right because of the numerus clausus of real rights. This argument is valid in the context of international private law, when the courts of Utopia (where the trust is now known) have to decide what effect to give, in Utopia, to a foreign trust. If Utopia has a numerus clausus of real rights, the right of a beneficiary cannot be real to the extent that it is subject to the internal law of Utopia. That is certainly a cogent position. But the numerus clausus argument is no answer to the argument that the beneficial right is indeed real in the jurisdictions which admit it. The nature and number of real rights was not fixed for all time by Ulpian or Tribonian or Accursius or Voet or Windscheid. It is a conception capable of change and development. If, say, French law wishes to adopt the trust, Vie doctrine of numerus clausus is no obstacle.

38. The fact that a purchaser in bad faith may be liable to the beneficiary has nothing very special about it: most legal systems have some such rule, whereby X, buying from an owner Y, in knowledge of Z's personal rights against Y, may be liable to Z. (Details of the rule naturally vary from one jurisdiction to another.)

39. Obviously there is considerable variation between different systems, but this principle will be generally found to be reliable.

40. The fact that, even within the conceptual structure of the common law, beneficiaries may have not rights in rem, is a point stressed by Maurizio Lupoi: sec his Introduzione al Trust (1994) and Trusts (1997).

41. It must, however, be conceded that the civilian tradition has sometimes been rather wobbly on this point. Take Ari.629 of the Austrian Civil Code (ABGB): “Das Eigentum des Fideicommiss-Vermögens ist zwischen alien Anwärtem und dem jedesmaligen Fideicommiss-lnhaber geteilt. Jenen kommt das Obereigentum allein; diesem aber auch das Nutzungseigentum zu.” (The ownership of entailed property is split between the heirs in expectancy and the heir in possession. To the former belongs the dominium directum; to the latter the dominium utile.) This was, understandably, disapproved of by the pandectists as being uncivilian. It was repealed immediately after the Anschluss in 1938, and was not revived with the restoration of Austrian independence. Thus the Nazis spread that Pandectism of which they disapproved. This one codal provision deserves an article to itself.

42. For discussion see e.g. Pearce, R. A. & Stevens, J., Law of Trusts and Equitable Obligations (1998) pp.418–420.Google Scholar

43. A connected point is that the trusts assets themselves may be partially or wholly personal rights (even “equitable” rights), and it could hardly be that the rights of the beneficiaries are real while those of the trustee are personal.

44. Robinson Crusoe had no law. When an island has two people, there must be law—ubi societal ibi ius—but only personal rights are needed, not real rights. Real rights will arrive with the third castaway.

45. A similar muddle occurs in the Sale of Goods Act 1979. The heading above s.16 reads: “Transfer of property as between seller and buyer.”

46. Transposed into UK law by the Civil Jurisdiction and Judgments Act 1982.

47. Other European languages use the local vernacular term too, not the Latin. It is curious that it should be English law that uses the Latin phrase. Presumably this is because the traditional meaning of “real” in English law is “immovable.”

48. [1994] E.C.R. 1–1717 (Court of Justice Case No.C–294/92).

49. “It is almost impossible to convey to continental lawyers the exact sense in which an English lawyer uses the terms in rem and in personam.” Gutteridge, H. C., Comparative Law (1946) p. 123Google Scholar. That is perceptive. One might add that it is almost impossible to convey to Anglo-American lawyers the exact sense in which a civilian lawyer uses the terms “real” and “personal.”

50. The word “proprietary” is not normally used in Scots law, being a word heavily laden with the doctrines of English equity.

51. Dig.31.77.19.

52. Dig.10.2.38.

53. Dig.46.6.9. This passage, however, excludes claims (nomina) from the concept. That is different from the modem concept. The fact that Roman law at that time had not fully developed the institution of cessio (assignment) is a partial explanation.

54. Dig.12.6.61.

55. Dig.5.3.25. These citations are illustrative, not exhaustive.

56. “It has often been considered in civil law countries that ‘each person has a patrimony, each person has only one patrimony.’ This construction is essentially due to the reading by some French authors of some provisions of the French Civil Code.” Grimaldi, Michel and Barrière, Francois in Hartkamp, Arthur (ed.), Towards a European Civil Code (2nd edn, 1998), at p.578.Google Scholar

57. Herbots has written that “English law has … no theory either of estate or of personality.” (“Het Engels recht kent … geen theorie van het vermogen, noch een theorie van de rechtspersoon”) Herbots, J. H. (ed.), Le Trust el la Fiducie (1997), at p.7Google Scholar. That goes too far, though one can see why, from a continental standpoint, Herbots was tempted to say it.

58. There is not much discussion of the concepts of patrimony and special patrimony in the English language. On this lack see Ansay, “Third Way?” in Basedow, J., Hopt, K. J. & Kötz, H. (Eds), Festschrift für Ulrich Drobnig (1998).Google Scholar

59. In which case it should perhaps have been called a matrimony.

60. For the history, sec Welle, ArnoIn universalibus pretium succedit in locum rei, res in locum pretii: eine Untersuchung zur Entwicklungsgeschichte der dinglichen Surrogation bei Sondervermögen (1987).Google Scholar

61. The point was developed by the French comparatist Pierre Lepaulle in his Traité Théorique et Practique des Trusts (1932). This is one of the seminal treatments of the subject. One area where Lepaulle's thought was influential is Latin America. (It was eventually published in a Spanish version in Mexico: Tratado teorico y pratico de los trusts (1975).) For Lepaulle's thoughts near the end of his life sec “The Strange Destiny of Trusts” in Pound, Roscoe (ed.), Perspectives of Law: Essays for Austin Wakeman Scott (1964).Google Scholar

62. To what extent the civilian concepts go back to Roman law itself, and to what extent they are post-Roman developments, is open to debate. H. Patrick Glenn concludes that “the trust … is part of a pan-European tradition and was developed in opposition to another pan-European tradition, that of Roman law.” (“The Historical Origins of the Trust” in Rabello, A. M. (ed.), Aequitas and Equity (1997).)Google Scholar Glenn's essay is of value but the second part of the sentence quoted goes too far.

63. Joint ownership may be compared with the Gesamthandeigentum as opposed to the Miteigentum of German law.

64. Are they founded on promise or on contract? Or perhaps they are another form of voluntary obligation? I would analyse the trust obligation as a special form of promise. But the question is probably of limited importance. A more interesting question is whether beneficiaries need to have any rights at all. It may be that benefit can be separated from enforceabilily, and in fact this is one of the current issues in international trust law. For perceptive discussion sec Matthews, Paul, “The New Trust: Obligations without Rights?” in Oakley, A. J. (ed.), Trends in Contemporary Trust Law (1996)Google Scholar. See also Baxendale-Walker, PaulPurpose Trusts (1999)Google Scholar. A trust of this sort is especially problematic in legal systems which recognise the division of ownership, for it means that the trustees have legal ownership (and nothing more) but the equitable ownership is in a void. Actually this is yet another argument to show that beneficial rights cannot be real.

65. Lepaulle did not agree. For him the rights of the beneficiaries, though personal, were enforceable against the trust rather than against the trustee. Likewise, the duties of the trustees were owed, not to the beneficiaries, but to the trust itself. (Traité Theorique el Pratique des Trusts (1932), pp.42–44.) This view of matters virtually turns the trust into a juristic person. Thus shareholders have rights against the company, not against the directors, and directors owe their duties to the company, not to the shareholders.Google Scholar

66. These personal rights form, of course, part of the beneficiary's patrimony.

67. The German Unmittelbarkeitsprinzip, according to which assets held in Treuhand are protected from creditors of the Treuhänder only if they are the original “trust” assets—i.e. the exclusion of real subrogation—strikes me as lacking a stateable basis in legal doctrine. If there is a special patrimony then there must be real subrogation. If there is no special patrimony, the immunity to creditors is inexplicable (unless the right of the beneficiary is real). Kötz admits that the insolvency effect of the Treuhand is “incompatible with the theory that the beneficiaries' interest in the Treuhand res is a mere right in penonam.” (Hein Kötz, “National Report for Germany” in Hayton, D. J., Kortmann, S. C. J. J. & VerhagcnH. L, E. H. L, E., Principles of European Trust Law (1999) 85, at 94.)Google Scholar The term “quasidinglich” which is sometimes encountered in the German literature merely masks the problem. The current German law lacks conceptual coherence. It may be added that Kötz has taken the view that the refusal of the German courts to allow real subrogation in Treuhand does not reflect any basic principle of German law. (See Kötz, H., “Die 15 Haager Konferenz und das Kollisionsrecht des Trust” (1986) 50 Rabels Zeitschrift 562, at 579/580.)Google Scholar

68. A point which Lepaulle considered to be of the highest significance.

69. Bain (1901) 9 S.L.T. 14; Bankruptcy (Scotland) Act, s.6(1)(a).

70. Magnum Financial Holdings (Pty) Ltd v. Summerly 1984 I S.A. 160.

71. This is their home, but like most items in any taxonomy there are cross-overs, and it cannot be denied that trusts must be mentioned under the heads of obligations and property. Those who are sceptical of this whole approach will say that this is tantamount to admitting the trust as an autonomous conception that cannot be located in the taxonomy. I would not agree. After all, the entirety of the law of persons, natural and juristic, is permeated by the law of obligations and the law of property.

72. D. J. Hayton, S. C. J. J. Kortmann and H. L. E. Verhagen (Eds) (1999).

73. “Das Treuhandvermögen [ist] als Fremdvermögen zu betrachten und es haben daher die Gläubigcr des Treuhänders hierauf keinen Anspruch.” Personen- und Gesellschaftrecht Art.915. (Text from Lupoi, M., Trust Laws of the World (2000) Vol.11 p.1159.)Google Scholar

74. “Obstacles to the Reception of Trust Law? The Examples of South Africa and Scotland” in Rabello, A. M., Aequitas and Equity: Equity in Civil Law and Mixed Jurisdictions (1997) 793, at 812.Google Scholar

75. International Encyclopaedia of Comparative Law Vol. VI, chap.2, para.42.Google Scholar

76. Sonneveldt, Frans and Mens, Harrie van, The Trust: Bridge or Abyss between Common and Civil Law Jurisdictions? (1992) p.5.Google Scholar

77. Implemented in the UK by the Recognition of Trusts Act 1987.

78. The Convention is authentic in English and French. The French text reads: “Aux fins de la présente convention, le terme ‘trust’ vise les relations juridiques créées par une personne, le constituant—par acte entre vifs ou à cause de mort—lorsque des biens ont étés placés sous le controle du trustee dans l'intéret d'un bénéficiare ou dans un but déterminé. Le trust présente les caractéristiques suivantes: (a) Les biens du trust constituent une masse distinct et ne font pas partie du patrimoine du trustee, (b) Le titre relatifaux biens du trust est établi au nom du trustee ou d'une autre personne pourle compte de trustee.” Masse can mean general or special patrimony, but tends to be used only in certain contexts, such as bankruptcy.

79. All the more curious that the Convention's preamble (see earlier) is so unsatisfactory.

80. “Universitas alia rerum est, ut grex, peculium, hereditas; alia hominum, veluti collegium licitum, munidpium, civitas, vicus, pagus.” Johannes Voet, Commentarius ad Pandectas. (Liber III, Titulus IV, I. One kind of universitas is of things, such as a herd or a peculium or a hereditas. The other kind is of persons, such as an authorised guild, a municipality, a city, a village or a canton.)

81. In German a Sachgesamtheit.

82. In German a Personengesamtheit.

83. Roman law did not have a developed theory of juristic personality, but the statement in the text can be defended from the charge of being anachronistic.

84. In Latin, French and German: fundatio, fondation, Stiftung. To what extent this conceptualisation was due to Savigny, and to what extent it is medieval, I am unqualified to discuss. On this see the work of , Feenstra, such as “L'Histoire des Fondations” (1956) 24 Tijdschrift voor Rechtsgeschiedenis 381CrossRefGoogle Scholar, and “Foundations in Continental law since the 12th century” in Helmholz, Richard & Zimmermann, Reinhard (Eds), Itinera Fiduciae (1998).Google Scholar

85. Both traditions have their conceptual problems: consider the corporation sole in English law and the Einmanngesellschaft in German law. (For the latter's triumphant march across Europe see Council Directive 89/667.)

86. Als subject von Rechlen und Verbindlichkeiten wird das Vermögen selbst gedacht, zu welchem sic gehören. (The patrimony itself is considered the subject of the rights and obligations which pertain to it.) Windscheid, B.Lehrbuch des Pandektenrechts. (Vol.1, p.223 of 8th edn.)Google Scholar

87. The English text (which is also authentic) reads: “The trust property, consisting of the property transferred, constitutes a patrimony by appropriation, autonomous and distinct from that of the settlor, trustee or beneficiary, and in which none of them has any real right.” For discussion of this provision see Brierley, J. E. C., 1995 Revue Internationale de Droit Comparé 33Google Scholar. For an attempt (before the new code) to come to terms with the trust see Faribault, Marcel, De la Fiducie dans la Province de Québec (1936).Google Scholar

88. “ll est … impossible de traduire les droits du trustee comme étant ceux d'un ‘proprietaire’ dans notre conception de la propriété. Le trustee n 'a ni l'usus …ni le fructus… ni l'abusus.” (1955) 7 Revue Internationale de Droit Comparé 318, at 319Google Scholar. Usus, fruatis and abusus were in the ius commune taken as the essence of ownership.

89. Ryan, K. W. (at (1961) 10 I.C.L.Q. 265)CrossRefGoogle Scholar criticises Lepaulle for failing to distinguish between Zweckvermögen and Sondervermögen (special patrimony). But Lepaulle's point is precisely that a trust is both a Sondervermögen and a Zweckvermögen. At n.21 Ryan writes that “the concept of Sondervermögen has … nothing to do with legal personality.” This is too strong. It is literally tine that in the Gemeines Recht a Sondervermögen was not a person, and that remains true in, for instance, modern German law. But this literal truth misses the substantive truth.

90. For instance: “La solution la plus efficace el la plus simple est de doter le trust de la personne morale.” (“The most effective solution is to endow the trust with juristic personality.” (1952) 4 Revue Internationale de Droit Comparé 377Google Scholar. Ansay's approach is comparable: see his valuable “Third Way?” in Basedow, J., Hopt, K. J. & Kötz, H. (Eds), Festschrift für Ulrich Drobnig (1998)Google Scholar. Swiss international private law seems to treat foreign companies as persons: see Poncet, N., “Trusts and Switzerland” (1998) 26 International Business Lawyer 114.Google Scholar

91. See cases cited in Honoré, A. M. & Cameron, E., Honoré's South African Law of Trusts (4th edn, 1992), p.53Google Scholar. South Africa is an interesting source of ideas as to how the trust should be integrated into a basically civilian system. The inter vivos trust tends to be explained on the basis of the stipulatio alteri. And until Braun v. Blann & Botha NNO 1984 2 S.A. 850 the trust was often classified as a form of fideicommissum. The relationship between the fideicommissum and the trust is a subject which cannot be entered into here. (See further Johnston, David, The Roman Law of Trusts (1988).)Google Scholar Fideicommissary substitution is a long way from the trust, but the fideicommissum purum is certainly trust-like. Fideicommissum was one of the sources of the Scottish trust.

92. If one thinks of a trust as a person, then trustees transmogrify themselves into representatives of that person, as directors are the representatives of a company. In this connection I cannot forbear to mention s.323 of the US Federal Bankruptcy Code which describes the trustee as being the “representative of the estate.” However, there can be little doubt that this personalisation of the estate was unintended.

93. “Obstacles to the Reception of the Trust? The Examples of South Africa and Scotland” in Rabello, A. M. (ed.), Aequitas and Equity (1997).Google Scholar

94. There may be scope for debate as to whether the element of office is truly essential to the trust. (In South African law the answer is affirmative.)

95. “La fiducie est un contrat par lequel un constituant transf`re tout ou parlie de ses biens et droits à une fiduciare qui, tenant ces biens et droits séparés de son patrimoine personnel, agit dans un but déterminé ail profit d'unou plusieurs bénéficiarcs conformément awe stipulations du contrat.” {Fiducie is a contractual arrangement whereby a settlor transfers all or part of his assets and rights to a fiduciary, who holds such assets and rights separately from his personal patrimony, and acts according to a determinate objective for the benefit of one or more beneficiaries in accordance with the terms of the contract.) French text from Sonneveldt, F. (ed.), Trust: Bridge or Abyss between Common and Civil Jurisdictions? (1992) p.68Google Scholar. For discussion see Rémy, P., “National Report for France” in Hayton, D. J., Kortmann, S. C. J. J. and Verhagen, H. L. E. (Eds). Principles of European Trust Law (1999).Google Scholar

96. See Storme, Matthias in Herbots, J. H. (ed.), Le Trust et la Fiducie (1997).Google Scholar

97. For the origins of the trust in Scotland see , Gretton, “Scotland: The Evolution of the Trust in a Semi-Civilian System” In Helmholz, Richard & Zimmermann, Reinhard (Eds), Itinera Fiduciae: Trust and Treuhand in Historical Perspective (1998).Google Scholar

98. See Honoré, Tony, “Trust” in Reinhard Zimmermann & Daniel Visser, Southern Cross: Civil Law and Common Law in South Africa (1996).Google Scholar

99. See above.

100. See Cooray, L. J. M., The Reception in Ceylon of the English Trust (1971).Google Scholar

101. See Oppenheim, L., “The Drafting of a Trust Code in a Civil Law Jurisdiction” in Wilson, W. A. (ed.), Trusts and Trust-like Devices (1981).Google Scholar

102. See further Pasquel, R. M., “The Mexican Fideicomiso: The Reception Evolution and Present Status of the Common Law Trust in a Civil Law Country” (1969) 8 Columbia Journal of Transnational Law 54Google Scholar. This contains an account of the influence of Lepaulle's thought on Mexican law.

103. But one must not exaggerate the clarity of Scots law in this area. The idea that the right of a beneficiary might be real was often toyed with, even in our own times. A leading scholar, Wilson, W. A., wrote in 1981 that the insistence of the Scottish courts that “the beneficiary has merely a personal right” was “regrettable.” (Wilson, W. A. (ed.), Trusts and Trust-like Devices (1981), at 239.Google Scholar

104. Already in 1681 Lord Stair laid it down that whilst “the property of the thing intrusted, be it land or moveables, is in the person of the intrusted, else it is not a proper trust.” (Institutions of the Law of Scotland 1,13,7.)

105. Nor quite as frightening for the civilian?

106. Scottish universities should teach trusts as part of the law of persons, but, following English practice, they usually teach the subject as part of property law. And the Scotland Act 1998, in defining “private law” includes trusts under property, not persons. (See s.126. The definition is, incidentally, of the greatest interest to comparatisls. It defines private law as (1) general part, (2) persons, (3) obligations, (4) property, (5) actions. This is the classical Roman taxonomy of penonae, res et acliones (with “things” divided into obligations and property) plus the pandectisl general part.

107. It is encouraging to see that the Scottish experience may prove influential if the Netherlands adopts the trust: see Kortmann, S. C. J. J. and Verhagen, H. L. E., “National Report for the Netherlands” in Hayton, D. J., Kortmann, S. C J. J. and Verhagen, H. L. E. (Eds), Principles of European Trust Law (1999)Google Scholar. The “National Report for Scotland” (by K. G. C. Reid) in this volume is of value.