'Fraud, Trusts and Trusting: Enforcing Crown Forfeitures in Equity, c.1570–1620' by David Foster in (2023) The Journal of Legal History comments
Conveyances with informal agreements to hold for the benefit of the transferor initially proved efficacious in avoiding statutory forfeiture provisions. In the late sixteenth century, the equity side of the Exchequer developed a capacious doctrine of revenue fraud designed to capture such informal arrangements and to subject the transferor to liability for crown forfeitures. Initially drawing inspiration from the ‘badges of fraud’ in the Statute of Fraudulent Conveyances 1571, the Exchequer quickly lowered the evidentiary threshold required to prove a conveyance fraudulent. A key badge of fraud was an ‘entrusting’ of the transferee by the transferor. The presence of a conveyance ‘in trust’ eventually became the sole evidence required to hold certain conveyances fraudulent under the statute. In the longer term, these cases became the precedential basis for holding the beneficiary’s right under a trust liable to forfeiture as a matter of doctrine.
Those who expected to find themselves liable to crown forfeitures might take steps to conceal their property in the name of another. From the medieval period, statutory forfeiture provisions had been passed to capture property hidden by means of a use or trust, but these provisions proved difficult to enforce where property was conveyed subject to an informal agreement to reconvey or to hold ‘in trust’ for the transferor. Notwithstanding the succession of statutes designed to prevent the avoidance of legal rights by feoffments to uses, we find in the preamble to the Statute of Uses 1536 the continuing complaint that, by uses, ‘the king’s highness hath lost the profits and advantages of the lands of persons attainted’. From the late sixteenth century, the case law increasingly focused on so-called ‘fraudulent conveyances’ which had the effect of defeating the crown of its forfeitures. The expansive approach to fraud adopted on the equity side of the Exchequer proved effective in protecting crown revenues flowing from forfeitures. Litigation touching fraudulent conveyances made ‘in trust’ arose in the context of forfeitures for outlawry, recusancy, departure from the realm without licence, and treason. By the second decade of the seventeenth century, the case law had coalesced into a relatively stable body of rules governing crown rights in equity.
This article considers the case law in the period c.1570–1620 and the emergence of clear principles governing crown forfeitures on the equity side of the Exchequer. As we shall see, references in the cases to ‘conveyances in trust’ left ambiguous the technical form of the disputed conveyance; whether a mere informal ‘entrusting’ or a more formally drafted ‘trust’ in the form of an active use or use upon a use.The fluidity of the language of trusts and trusting would prove fertile ground for subsequent developments – particularly as later jurists came to regard these early cases as determining the incidents of the beneficiary’s right under a trust.
