Page:Harvard Law Review Volume 1.djvu/146

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with his inalienable right of doing what he will with his own, such a trust may justify itself to his judgment. It may probably be said that such a trust is generally most beneficial to those who have made a failure in their individual business; and, therefore, those who have a concern already profitable should scrutinize it with great care. And in connection with this point there should certainly be, in all these trusts, a provision to enable the individual to withdraw his property from the trust upon giving reasonable notice, if he does not like the way things are going; nor should any such trust be created, save for a definite term of years,—ten years at the most. No argument, however specious, should lead the individual to dispense with this provision in the deed of trust, in the first kind, or management trust, at least; for, if at the end of the term of years the trust has proved a success, a majority can be relied on to continue it; if not, it is best for all but the weakest that it should be dissolved. In the property trust, however, it is more difficult to make this provision; for in this case the individuals have finally parted with their individual property; in many trusts, particularly those of stock-in-trade, or other personal property, their individual shares cannot be traced, or, if traced, they have been modified, increased, improved, or altered; the individual has only a certificate entitling him to a certain aliquot part of the general trust property.

Next, let us consider the legal effect of the trust as among the members, and between the members and the trustees. Will the courts rule that such trusts create a partnership, as between the individual members and the trustees, or even as between the members and each other who are not trustees? The trustees, in effect, enter into the liabilities of partners as among themselves. Particularly would this be the case when the trust-deed is not duly recorded; and it is to be remembered that the individual members have formally appointed the trustees their agents; they have put their property and business into a common pool, made it liable for each other’s debts, in the general business,—a business which, moreover, they are probably still superintending, at least in detail, themselves; and, moreover, the managers, or so-called trustees, have probably put similar property and businesses of their own in, and are acting thus in the double capacity of member and manager. If not partners, what are they? They have put capital into a business which is certainly not a corporation, nor yet a joint-