Common law
The common lawso named because it was "common" to all the king's courts across Englandoriginated in the practices of the courts of the English kings in the centuries following the Norman Conquest in 1066. Prior to the Norman Conquest, much of England's legal business took place in the local folk courts of its various shires and hundreds. A variety of other individual courts also existed across the land: urban boroughs and merchant fairs held their own courts, as did the universities of Oxford and Cambridge, and large landholders also held their own manorial and seigniorial courts as needed. Additionally, the Catholic Church operated its own court system that adjudicated issues of canon law.
English trust law
Statements of equitable principle stretch back to the Ancient Greeks in the work of Aristotle, while examples of rules analogous to trusts were found in the Roman law testamentary institution of the "fideicommissum", and the Islamic proprietary institution of the "Waqf". However, English trusts law is a largely indigenous development that began in the Middle Ages, from the time of the 11th and 12th century crusades. After William the Conqueror became King in 1066, one "common law" of England was created. Common law courts regarded property as an indivisible entity, as it had been under Roman law and continental versions of civil law. During the crusades, landowners who went to fight would transfer title to their land to a person they trusted so that feudal services could be performed and received. But many who returned found that the people they entrusted refused to transfer their title deed back. Sometimes, common law courts would not acknowledge that anybody had rights in the property except the holder of the legal title deeds. So claimants petitioned the King to sidestep the common law courts. The King delegated hearing of petitions to his Lord Chancellor, who established the Court of Chancery as more cases were heard. Where it appeared "inequitable" (i.e. unfair) to let someone with legal title hold onto land, the Lord Chancellor could declare that the real owner "in equity" (i.e. in all fairness) was another person, if this is what good conscience dictated. The Court of Chancery determined that the true "use" or "benefit" of property did not belong to the person on the title (or the feoffee who held seisin). The "cestui que use", the owner in equity, could be a different person. So English law recognised a split between legal and equitable owner, between someone who controlled title and another for whose benefit the land would be used. It was the beginning of trust law. The same logic was useful for Franciscan friars, who would transfer title of land to others as they were precluded from holding property by their vows of poverty. When the courts said that one person's legal title to property was subject to an obligation to use that property for another person, there was a trust.
During the 15th century and 16th century, "uses" or "trusts" were also employed to avoid the payment of feudal taxation. If a person died, the law stated a landlord was entitled to money before the land passed to an heir, and the landlord got all of the property under the doctrine of escheat if there were no heirs. Transferring title to a group of people for common use could ensure this never happened, because if one person died he could be replaced, and it was unlikely for all to die at the same time. King Henry VIII saw that this deprived the Crown of revenue, and so in the Statute of Uses 1535 he attempted to prohibit uses, stipulating all land belonged in fact to the "cestui que use". Henry VIII also increased the role of the Court of Star Chamber, a court with criminal jurisdiction that invented new rules as it thought fit, and often this was employed against political dissidents. However, when Henry VIII was gone, the Court of Chancery held that the Statute of Uses 1535 had no application where land was leased. People started entrusting property again for family legacies. Moreover, the primacy of equity over the common law soon was reasserted, and this time supported by King James I in 1615, in the "Earl of Oxford's case". Due to its deep unpopularity the "criminal equity" jurisdiction was abolished by the Habeas Corpus Act 1640. Trusts grew more popular, and were tolerated by the Crown, as new sources of revenue from the mercantile exploits in the New World decreased the Crown's reliance on feudal dues. By the early 18th century, the use had formalised into a trust: where land was settled to be held by a trustee, for the benefit of another, the Courts of Chancery recognised the beneficiary as the true owner in equity.
By the late 17th century, it had become an ever more widely held view that equitable rules and the law of trusts varied unpredictably, as the jurist John Selden remarked, according to the size of the "Chancellor's foot". Over the 18th century English property law, and trusts with it, mostly came to a standstill in legislation, but the Court of Chancery continued to develop equitable principles notably under Lord Nottingham (from 1673–1682), Lord King (1725–1733), Lord Hardwicke (1737–1756), and Lord Henley (1757–1766). In 1765, the first Professor of English law, William Blackstone wrote in his "Commentaries on the Laws of England" that equity should not be seen as a distinct body of rules, separate from the other laws of England. For example, although it was "said that a court of equity determines according to the spirit of the rule and not according to the strictness of the letter," wrote Blackstone, "so also does a court of law" and the result was that each system of courts was attempting to reach "the same principles of justice and positive law". Blackstone's influence reached far. Chancellors became more concerned to standardise and harmonise equitable principles. At the start of the 19th century in "Gee v Pritchard", referring to John Selden's quip, Lord Eldon (1801–1827) said 'Nothing would inflict upon me greater pain in quitting this place than the recollection that I had done anything to justify the reproach that the equity of this court varies like the Chancellor's foot.' The Court of Chancery was meant to have mitigated the petty strictnesses of the common law of property. But instead, came to be seen as cumbersome and arcane. This was partly because until 1813, there was only the Lord Chancellor and the Master of the Rolls working as judges. Work was slow. In 1813, a Vice-Chancellor was appointed, in 1841 two more, and in 1851 two Lord Justices of Appeal in Chancery (making seven). But this did not save it from ridicule. In particular, Charles Dickens (1812–1870), who himself worked as a clerk near Chancery Lane, wrote "Bleak House" in 1853, depicting a fictional case of "Jarndyce v Jarndyce", a Chancery matter about wills that nobody understood and dragged on for years and years. Within twenty years, separate courts of equity were abolished. Parliament merged the common law and equity courts into one system with the Supreme Court of Judicature Act 1873. Equitable principles would prevail over common law rules in case of conflict, but the separate identity of equity had ended. The separate identity of the trust, however, continued as strongly as before. In other parts of the Commonwealth (or the British Empire at the time) trust law principles, as then understood, were codified for the purpose of easy administration. The best example is the Indian Trusts Act 1882, which described a trust as meaning "an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the bearer".
Over the 20th century, trusts came to be used for multiple purposes beyond the classical role of parcelling out wealthy families' estates, wills, or charities. First, as more working-class people became more affluent, they began to be able to save for retirement through occupational pensions. After the Old Age Pensions Act 1908, everyone who worked and paid National Insurance would probably have access to the minimal state pension, but if people wanted to maintain their living standards, they would need more. Occupational pensions would typically be constituted through a trust deed, after being bargained for by a trade union under a collective agreement. After World War Two, the number of people with occupational pensions rose further, and gradually regulation was introduced to ensure that people's "pension promise" was protected. The settlor would usually be the employer and employee jointly, and the savings would be transferred to a trustee for the benefit of the employee. Most regulation, especially after the Robert Maxwell scandals and the Goode Report, was directed at ensuring that the employer cannot dominate, or abuse its position through undue influence over the trustee or the trust fund. The second main use of the trust came to be in other financial investments, though not necessarily for retirement. The unit trust, since their launch in 1931, became a popular vehicle for holding "units" in a fund that would invest in various assets, such as company shares, gilts or government bonds or corporate bonds. One person investing alone might not have much money to spread the risk of his or her investments, and so the unit trust offered an attractive way to pool many investors wealth, and share the profits (or losses). Nowadays, unit trusts have been mostly superseded by Open-ended investment companies, which do much the same thing, but are companies selling shares, rather than trusts. Nevertheless, trusts are widely used, and notorious in offshore trusts in "tax havens", where people hire an accountant or lawyer to make an argument that shifting assets in some new way will avoid tax. The third main contemporary use of the trust has been in the family home, though not as an expressly declared trust. As gender inequality began to narrow, both partners to a marriage would often be contributing money, or work, to pay the mortgage, make their home, or raise children together. A number of members of the judiciary became active from the late 1960s in declaring that even if one partner was not on the legal title deeds, she or he would still have an equitable property interest in the home under a "resulting trust" or (more normally today) a "constructive trust". In essence the courts would acknowledge the existence of a property right, without the trust being expressly declared. Some courts said it reflected an implicit common intention, while others said the use of the trust reflected the need to do justice. In this way, trusts continued to fulfill their historical function of mitigating strict legal rules in the interests of equity.