Business trusts as substitutes for business corporations; a paper read before the Kansas City Bar association, April 10, 1920

Front matter

Cornell University Library KF 736.E8T47

Business trusts as substitutes for busin

3 1924 018 633 648

Preface

Something more than a year ago it became necessary for me, in the discharge of my professional duties, to consider the proposed employment of the express trust as a vehicle of trade. Interest thus aroused has since led me to read as widely on the subject as opportunity permitted. I learned that the attention of lawyers generally was being directed to this subject. Accordingly when, recently, I accepted an invitation to address the Bar Association of Kansas City, no subject seemed to be more opportune for discussion — certainly none, appropriate for such an occasion, in which I personally felt a keener interest. The subjoined production was the result. There was no thought of publication in its preparation, but merely, within the necessarily restricted limits of such a paper, to select for discussion those phases of the subject which seemed both interesting and fundamental. Since its delivery, members of the Bar, whose judgment I value, have advised that it be published, and so numerous are the requests received for copies that I have consented to its publication. I have done this with some hesitation, for it is not, and in the nature of things could not have been, a comprehensive treatise. On the contrary, many of the important aspects of the subject were of necessity eliminated from consideration. Such, for example, as the duties of the trustees, their right of indemnity, their liability to the cestuis, action by and against the trustees, theory and extent of creditors' rights against the trustees and against the trust estate, inviolability of the trust fund, seeking direction of the Chancellor, etc. "With this foreword of explanation I submit the pages that follow in the hope that they may be of interest and possibly of service to my brethren of the Bar.

Guy a. Thompson.

St. Louis, Mo., May 1, 1920.

ANALYTICAL INDEX

The Business Cobpobation

I 1. Its Rapid Growth.

2. Reasons for Delay in Development.

3. Its Accomplishments.

4. Reasons Therefor.

5. Growing Dissatisfaction With the Corporation as Business

Agency.

6. Its Disadvantages.

7. Is There a Satisfactory Substitute.

The BusiiTESS Tetjst

8. Origin and Development of the Express Trust.

9. The Proposed Business Trust.

10. Its Legality.

11. May the State Forbid It.

12. Will Quo Warranto Lie Against It?

a. For Usurping the Privileges of a Corporation.

b. For Usurping the Franchise of a Corporation.

c. For Violating Constitution.

13. Does It Afford Limited Liability.

a. As to the Cestuis Que Trust, or Shareholders.

b. As to the Trustees.

14. Advantages Over the Corporation.

a. Prejudice.

b. Migratory Rights.

c. Inquisitorial Legislation.

d. Taxation.

15. Its Disadvantages Considered.

a. Its Novelty and Consequent Uncertainty of Its Status.

b. Possible Legislation.

c. Nature of Cestuis' Interest and Extent of Rights They May

Have.

d. Perpetuities.

16. Conclusions.