THE LAW OF TRUST 363
(iv) The ownership must be for the benefit of another (i.e., a person other than the owner) or of another and the owner.
Explanation of Terms
I. T HERE MUST BE OBLIGATION .
II. O BLIGATION MUST BE ANNEXED TO OWNERSHIP PROPERTY .
- There may be an obligation to which a person is subject although there is no property to which it is annexed.
E.g. Torts assault—
- There may be property without there being any obligation attached to it.
E.g. Full and complete ownership—sale of property.
III. T HE OWNERSHIP OF PROPERTY MAY BE FOUNDED IN CONFIDENCE OR IT MAY NOT .
Illus.
A person may transfer ownership to another with the intention of conferring upon him the right to enjoy the property.
A person may transfer ownership to another without the intention of conferring upon him the right to enjoy the property.
The difference between ownership founded in confidence and ownership not founded in confidence consists in this—
(i) In the latter there is a jus in re (a complete and full right to a thing) or jus ad rem (an inchoate and imperfect right).
(ii) In the former there is not
E.g. Bailment.
- The nature of a trust can be better understood by contracting it with other transactions resembling a trust.
Trust distinguished from agency
- Where there is a trust, the ownership of the trust property is in the trustee. The trustee is personally liable on all contracts entered into by him in reference to the trust, although he may have a right of recourse against the trust funds or against the beneficiary.