Resulting trusts. 66 Having regard to the later decisions, we must not extend the old cases, in any way, or rely upon the mere use of any particular words, but, considering all the words which are used, we have to see what is their true effect, and what was the intention of the testator as expressed in his will. A reasonable construction is to be given to the will; and, in my opinion, upon the reasonable construction of this will the testatrix cannot be held to have intended to give a binding direction" (1). In all these cases the words of the will were regarded by the Court as mere expressions of the testators' hopes and wishes, but as creating no obligation whatever, and amounting to nothing more than absolute gifts of the properties in question. Under the head of implied trusts fall all those trusts which are called resulting trusts. A resulting trust may be defined as one returning by implication for the benefit of the settlor or his representatives, either from the want of consideration or failure of the objects of the trusts, or the indefinite nature of or the want of trusts. Resulting trusts are subdivided by Mr. Lewin into two classes. 1. Where an owner being legally and equitably entitled, conveys, devises, or bequeaths the legal estate, and there is no ground to infer that he meant to dispose of the equitable interest. 2. Where a purchaser of property takes a conveyance of a legal estate in the name of a third person, and there is nothing to indicate that he does not intend to appropriate to himself the beneficial interest (2). With regard to these cases the long established principle is that if there be a purchase of freehold, copyhold, or leasehold property, or of personal estate, whether taken in the names of the purchaser and others jointly, or in the names of others without that of the purchaser, whether in one name or several, whether jointly or successive, there is a resulting trust in favour of the man who advances the purchase money. It is, however, equally well established that in certain cases there is a presumption that the purchase was made by way of advancement or provision. The general principle on which the Court proceeds with regard to this subject was well summed up by Sir George Jessel, as follows:- (1) "The doctrine of equity as regards presumption of gifts is this, that where one person stands in such a relation to another that there is an obligation on that person to make a provision for the other, and we find either a purchase or investment in the name of the other or in the joint names of the person and the other of an amount which would constitute a provision for the other, the presumption arises of an intention on the part of the person to discharge the obligation to the other, and therefore, in the absence of evidence to the contrary, that purchase or investment is held to be in itself evidence of a gift, in other words, the presumption of gift arises from the moral obligation to give." ment. The presumption of advancement arises when the purchase is Advancemade in the name of a wife, or of a child, or of a person to whom the purchaser stands in loco parentis. Thus it was held to arise where the purchase was made in the name of an illegitimate grandchild, the father being dead, so too in the case of the nephew of a wife who had been adopted, but not in the case of an illegitimate grandson whose father was alive, nor of a deceased wife's sister who was living with the purchaser as his reputed wife, but not legally married. Evidence antecedent to or contemporaneous with or immediately after the purchase of matters forming part of the same transaction is admissible to show the purchaser's intention that the other party should only take the property as a trustee, and thus to rebut the presumption of advancement, but subsequent declarations are only admissible so far as they prove intention at the time of the purchase (2). The law with regard to the question whether resulting trusts arise, or do not arise, is well illustrated by a case decided by the Court of Appeal in 1885. In this case the plaintiff, a (1) Bennet v. Bennet, 10 Ch. D. 471. (2) See on this subject, Ebrand v. Dancer, 2 Ch. Cus. 26: Beckford v. Beckford, Lofft. 490; Drew v. Martin, 2 H. & M. 130: Currant v. Jago, 1 Coll. 261; Tucker v. Barrow, 2 H. & M. 515; Soar v. Foster, 4 K. & J. Advancement. widow, in the year 1880 caused £6,000 Consols to be transferred into the joint names of herself and the defendant, who was her godson. She did so with the express intention that the defendant, in the event of his surviving her, should have the Consols for his own benefit, but that she should have the dividends during her life, and she had been previously warned that if she made the transfer she could not revoke it. The first notice the defendant had of the transaction was a letter from the plaintiff's solicitor, about the end of 1882, claiming to have the fund retransferred to the plaintiff. The Court of Appeal decided that the legal title of the defendant as a joint tenant of the stock was complete, although he had not assented to the transfer until he was requested to join in retransferring the stock. Cotton, L.J., in delivering judgment said: "Though the defendant was the nephew of the first husband of the plaintiff, she was not in loco parentis to him, and the rule is well settled that where there is a transfer by a person into his own name jointly with that of a person who is not his child, or his adopted child, then there is prima facie a resulting trust for the transferor. But that is a presumption capable of being rebutted by showing that at the time the transferor intended a benefit to the transferee, and in the present case there is ample evidence that at the time of the transfer, and for some time previously, the plaintiff intended to confer a benefit by this transfer on her late husband's godson. In fact, when she desired to get the stock back again, what she said showed that she had originally intended to confer a benefit on the defendant Bowring, but that in consequence of something he had done which had displeased her she desired, if possible, to take back that which she had intended to be a benefit to him. That being so, the presumption that there would be a resulting trust for her is entirely rebutted" (1). "No trust will suffice short of an absolute trust for herself. But it is impossible to impose such a trust on the defendant, when the evidence conclusively shows that she never intended to create any trust of the kind. Trusts are neither created nor implied by law to defeat the intention of donors or settlors: they are created or implied or held to result in favour of donors or settlors in order to carry out and give effect to their true intentions, expressed or implied " (2). The law with regard to devises and bequests on trusts not * ́(1) Standing v. Bowring, 31 Ch. D. (2) Per Lindley, LJ., Standing v. Bowring, 31 Ch. D. 289. Devises and bequests on then declared was carefully considered in a case decided in 1884. In that case (1) a testator instructed his solicitor to prepare him a will leaving all his property to the solicitor himself absolutely, trusts. but to be held and disposed of by him according to written directions to be subsequently given. A will was accordingly prepared and executed, under which the solicitor was made universal legatee and sole executor. No directions were ever given to the solicitor by the testator in his lifetime, but after his death an unattested paper was found by which the testator stated his wish that a certain beneficiary should have all his property, except a small sum of money which he gave to the solicitor. The solicitor claimed no beneficial interest in the testator's property, except to the extent of his legacy, and claimed to hold the rest of the property as trustee for the beneficiary named in the paper. The Court decided that as the testator had not in his own lifetime communicated to the solicitor the object of the trust, no valid trust in favour of the person mentioned had been constituted, and, accordingly, that the solicitor held the property as trustee for the next of kin of the testator. In this case the law on this important subject was summed up as follows: If it had been expressed on the face of the will that the defendant was a trustee, but the trusts were not thereby declared, it is quite clear that no trust afterwards declared by a paper not executed as a will could be binding. In such a case the legatee would be trustee for the next of kin. There is another well-known class of cases where no trust appears on the face of the will, but the testator has been induced to make the will, or, having made it, has been induced not to revoke it by a promise on the part of the devisee or legatee to deal with the property, or some part of it, in a specified manner. In these cases the Court has compelled discovery and performance of the promise, treating it as a trust binding the conscience of the donee, on the ground that otherwise a fraud would be committed, because it is to be presumed that if it had not been for such promise the testator would not have made or would have revoked the gift. The essence of all these decisions is that the devisee or legatee accepts a particular trust which thereupon becomes binding upon him, and which it would be a fraud in him not to carry into effect. If the trust was not declared when the will was made, it is essential, in order to make it binding, that it should (') In re Boyes. Boyes v. Carritt, 26 Ch. D. 531. Construc be communicated to the devisee or legatee in the testator's lifetime, and that he should accept that particular trust (1). Constructive trusts arise in a great variety of instance. tive trusts. Thus, if a person who is only joint owner makes permanent improvements, a lien or trust may arise in his favour. Again, a constructive trust may arise under such circumstances as those considered in the celebrated case of Ramsden v. Dyson decided by the House of Lords. If a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation created or encouraged by the landlord that he shall have a certain interest, takes possession of such land with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord and without objection by him, lays out money upon the land, a Court of Equity will compel the landlord to give effect to such promise or expectation either in the form of a specific interest in the land, or in the shape of compensation for the expenditure, and will protect in the meantime the possession of the tenant (2). Again, when a valid contract for sale of real estate has been entered into the vendor becomes a constructive trustee of the property for the purchaser (3), subject, however, to his paramount right to protect his own interest as vendor of the property (*). The most important class of cases, however, to which the doctrine of constructive trusts is applied, is that which concerns dealings by trustees or other persons in fiduciary relations with property which they hold in a fiduciary capacity. "The principle," as it was said in a case in the House of Lords, "which forbids a trustee to traffic in his trust,' belongs to the jurisprudence of all nations. Indeed, it would (1) In re Boyes. Boyes v. Carritt, 26 Ch. D. 531. In this case the judge remarks: It may possibly be that he would be bound if the trust had been put in writing and placed in his hands in a sealed envelope, and he had engaged that he would hold the property given to him by the will upon the trust so declared, although he did not know the actual terms of the trust. () Ramsden v. Dyson, L. R. 1 H. L. 129; approved 9 App. Cas. 699. It must be borne in mind, however, as was said in this case, that if, on the other hand, a tenant being in possession of land, and knowing the nature and extent of his interest, lays out money upon it in the hope or expectation of an extended term or an allowance for expenditure, then, if such hope or expectation has not been created or encouraged by the landlord, the tenant has no claim which any Court of Law or Equity can enforce. (3) Lysaght v. Edwards, 2 Ch. D. 507. (4) Shaw v. Foster, L. R. 5 H. L. 321, 338; Beddington v. Atlee, 35 Ch. D. 317, 324. |