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CHAPTER4: CONSTITUTIONOFATRUSTIntro:A settlor may give a gift by three methods: (1) an outright transfer;(2) a transfer on trust to a trustee; or (3) a self-declaration of trust. Animperfect gift can only arise in the first two cases, and a gift would beimperfect if the transfer of title of the subject matter of the gift does nottakes place from the settlor's name to the trustees. There can be nopossibility of an imperfect gift in the third case because no formalities oftransfer of rights are necessary.What is the importance of constitutive requirements?In aperfect gift, beneficiaries can enforce the trust obligations against thetrustee and the settlor cannot revoke a perfectly constituted trust,irrespective of the facts that beneficiaries are still volunteers.The exact constitutive requirements of a trust depend upon thenature of the property forming the subject-matter. In case of unregisteredland, execution of a deed is necessary, whereas, in registered land, thetrustee will need to be registered as proprietor on the register of title. Incase of chattels (including cash), it has to be conveyed by either deed ordelivery. In case of chose in action, this depends upon the different typesof chose in action. In case of shares, for example, they can only betransferred by the recording of the transfer in the company’s books by thecompany secretary.I.) Equity Will Not Assist a Volunteer:The general attitude of the courts is reflected by Turner LJ’sstatement in “Milroy v. Lord”: “…For there is no equity in this court toperfect an imperfect gift”. In that case, a settlor passed his share to hisattorney to hold them on trust for the plaintiff. But the only valid transferof the shares, registering M as owner of the shares, was never carried out.It was held that no valid trust had been created. According to Turner LJ, inorder to create a valid and effectual settlement, the settlor must havedone everything which, according to the natureof the property assubject-matter of the settlement, was necessary to be done in order totransfer the property. If the settlor's chosen mode of donation fails, thecourt will not perfect the gift by allowing it to take effect by other modes.This case goes further to state that the beneficiary cannot allege inan imperfect gift that the settlor constituted to declare himself a trustee.In “Richard v. Delbridge”, D decided to gift his lease of premises andbusiness to his grandson R, who was an infant. He signed a memorandumand gave it to R’s mother, but before making a reference to the gift in hiswill he died. It was held that no self-declaratory trust was created: “It isnecessary to show, not only an intention to benefit someone; but an
Constitution of a Trust2intention to be trustee for that person”. According to “Choitram v.