Trust Is A Combination Of Firms Formed By A Legal Agreement
If you set up a trust to protect your assets from creditors, you must be careful or you may find yourself in contact with a creditor who accuses you of avoiding. If you set up a position of trust for your business at the same time as starting the business, it does not appear that you are setting up this position of trust just to avoid a lender. The value and strength of the trust`s asset-sharing powers are manifested in the early use of the trust in the granting of secure loans and the resolution of bankruptcies. In 1518, Christopher St. German noted that the Trust had become ubiquitous as a safety instrument „for the safety of divers alliances in the thoughts of marriage and other bargains.“ 172 172 St. German, supra note 163, at 184-85. … The close records of the Court of Chancery also show evidence of secured loans from the early 16th century to the 18th century. 173 173 See 1 Selden Soc`y, supra note 41, at 229 (describes case 1600 Lady Burrough v.
Powell – Serjeant Williams); See also Chetwynd v. Fleetwood (1742) 1 Eng. Rep. 580 (HL) 581; 1 bro. Parl. Case. 300, 300; Tasburgh v. Echlin (1733) 1 Eng. Rep. 934 (HL) 938; 2 bro.
Parl. Case. 265, 265–66; Paget v. Bridgewater (1724) 1 Eng. Rep. 1190 (HL) 1190; 3 bro. Parl. Case. 79, 79–80; Allibon v.
A-G (1707) 1 Eng. Rep. 341 (HL) 341; Colles 393, 393-95; Kingsland v. Barnewall (1706) 2 Eng. Rep. 105 (HL) 105; 4 bro. Parl. Case. 154, 154; Vernon v. Jones (1691) 24 Eng. Rep.
17 (HL) 17; Fine Pr. 32, 32; Seymour v. Fotherby (1691) 24 Eng. Rep. 23 (Ch) 23; Pr. 44, 44. … Close In order to arrange a secured loan, a borrower transferred his property to an agent and then instructed the agent to return the property only if the borrower returned the entire loan to the creditor. 174 174 Examples of this type of arrangement are found under Jones v. Prior (1674) 23 Eng. Rep. 96 (Ch) 96; End.
175, 175; Foley v. Lingen (1674) 23 Eng. Rep. 91 (Ch) 91-92; End. 166, 166-67; Vaughan v. Morgan (1674) 23 Eng. Rep. 75 (Ch) 75; End.
138, 138. … Close If the borrower does not pay the loan in full, the agent has been ordered to transfer the property instead of the creditor. This agreement gave the secured creditor a right of priority, by analogy with the protection of the unit: as soon as the borrower transferred his assets to the agent and designated a lender as the beneficiary of the eventuality, the borrower`s other lenders could no longer seize the property. If we compare trust to a business, it was as if the borrower had given his money to a capital company, thus preventing the borrower`s personal creditors from reaching the property.