The Dead Hand and the Law of Trusts in the Nineteenth Century

TLDR: The authors discusses a fundamental paradox at the core of liberal property law that individual freedom to dispose of consolidated bundles of rights cannot simultaneously be allowed and fully maintained, and argues that the legal system, in deciding whether to enforce or void a restriction, must resolve whose freedom it will protect, that of the donor or the donee.

Abstract: This article discusses a basic paradox at the core of liberal property law.' Individual freedom to dispose of consolidated bundles of rights cannot simultaneously be allowed and fully maintained. If the donor of a property interest tries to restrict the donee's freedom to dispose of that interest, the legal system, in deciding whether to enforce or void that restriction, must resolve whose freedom it will protect, that of the donor or that of the donee.

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The
Dead
Hand
and
the
Law
of
Trusts
in
the
Nineteenth
Century
Gregory
S.
Alexander*
This
article
discusses
a
basic
paradox
at
the
core
of
liberal
property
law.'
Individual
freedom
to
dispose
of
consolidated
bundles
of
rights
cannot
simultaneously
be
allowed
and
fully
maintained.
If
the
donor
of
a
property interest
tries
to
restrict
the
donee's
freedom
to
dispose
of
that interest, the
legal
system,
in
deciding
whether
to
enforce
or
void
that
restriction, must
re-
solve
whose
freedom
it
will
protect,
that
of
the
donor
or
that
of
the
donee.
Although
post-realist
American
property
lawyers
acknowl-
edge
this
conflict,
at
least
nominally,
2
it
did
not
emerge
in
legal
consciousness
in
so
starkly visible
a
form
until
the end
of
the
nineteenth
century.
Several
features
of
antebellum
legal
thought
*
Professor
of
Law,
Cornell
University.
I
am
grateful
to
Duncan
Kennedy,
E.F.
Roberts,
Lawrence
Waggoner,
G.
Edward
White,
and
especially
to
Robert Gordon
and
Mark
Kelman
for
reading and commenting
on
earlier
drafts.
1.
Two characteristics
distinguish
liberal
property
law.
First,
it
promotes
individ-
ual
freedom
of
disposition
as
the
basic
mechanism
for
allocation. Second,
it
exhibits
a
strong
preference for
a
fully
consolidated
form
of
property
interests.
By
"consolidated
form"
I
mean
that
liberal
property
law
seeks
to
concentrate
in
a
single
legal
entity,
usu-
ally
an
individual
person,
the
relevant
rights,
privileges,
and
powers
for
possessing,
us-
ing, and transferring
discrete
assets.
This description
of
the
conceptual model
of
property
rights
under
the
regime
of
liberal
legalism
is,
of
course,
very
crude and
incom-
plete.
It
is
sufficiently
accurate,
however,
for
my
purpose
of
discussing
the
conceptual
dilemmas historically
posed
by
what
Charles
Donahue
calls
the
"agglomerative
ten-
dency"
of
Anglo-American
property
law.
Donahue,
The
Future
of
the
Concept
of
Property
Predicted
From
Its
Past,
in
NoMos
XXII:
PROPERTY
28
(1980).
Frank
Michelman
provides
an
elegant
description
of
the
liberal
model
of
property
in
his
paper,
Ethics,
Economics,
and
the
Law
of
Property,
in
NOMOS
XXIV:
ETmICS,
ECONOMICS,
AND
THE
LAw
3,
8-21
(1982).
What
he
there
labels
as
the
"policy
of
internalization"
is
analogous
to
what
I
refer
to
as
the
consolidation
form,
and he
discusses
the
"contradictory
implications"
of
that
policy
in
very
similar
terms
to
those used
in
this
article.
Unlike
this
article, however,
his
focus
is
analytic
and
not
historical.
2.
See,
e.g.,
RESTATEMENT
(SECOND)
OF
PROPERTY:
DONATIVE
TRANSFERS,
introduc-
tory
note,
part
II, at
2-3
(Tent.
Draft
No.
3,
1980).
In
Part
IV,
I
shall discuss
how
modern
policy analysis
attempts
to evade
the
conflict
even
while
purp6rting
to recognize
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obscured the
problem
in
the
"dead
hand"
3
doctrines.
Incident
to
the
Classical,
or
late
nineteenth
century,
effort to
recategorize
and
rationalize
private
law
rules
on the
basis
of
"scientific"
prin-
ciples
that
abandoned
the
old
"feudal"
policy
supporting
prop-
erty's
"technical"
elements,
these
pre-Classical
mediating
devices
began
to
erode.
With
the disintegration
of
the
pre-Classical
con-
ceptual
structure,
Classical
lawyers
explicitly
faced
the
problem
of
the freedom
of
disposition principle.
Their
effort
to
construct
a
synthesis
that
resolved
the
contradiction
on
an
objective
basis
and
that
assimilated
equitable
with
legal
doctrine
failed
toward
the end
of
the
nineteenth
century.
The
demise
of
the
Classical
synthesis
was
signaled
by
the
adoption
in
most
jurisdictions
of
a
pair
of
new
trust
law
doctrines
3.
Historical
understandings
of
the
"dead
hand"
problem
have
been
discontinu-
ous,
so
one cannot
accurately
speak
of
a
monolithic
problem.
This
discontinuity
is
re-
flected
in
the
stages
of
usage
of
the
term
"dead
hand"
itself. One strand
of
usage
associated
the
dead hand
with
that
of
the
donee,
specifically,
alienations
of
land
to
reli-
gious
corporations.
Since
such
bodies
never
died, transfers
to
them
would
place
land
in
mortmain.
This
aspect
of
the
dead
hand question and
its
effect
upon
the
development
of
the
law
of
charitable
transfers
has received
too
little
attention
from
legal
historians.
Stanley Katz's
work-in-progress
on the
history
of
American charity
law
promises
to
rem-
edy
the
oversight
for
the
American
side.
The
discontinuities
within
the development
of
the
law
regulating
charitable
trusts
are
discussed
in
his
recent
illuminating
paper.
Katz,
Sullivan
&
Beach,
Legal
Change
and
Legal
Autonomy:
Charitable
Trusts
in
New
York,
1777-1893,
3
LAW
&
HIST. REv.
51
(1985).
In
the
nineteenth
century
the term
was
identified
with
all
property
settlements,
both
charitable
and
private,
that
resulted
in
making
property
less
accessible
to
public
use.
In
Victorian
and
Edwardian
England
the dead hand
was a
central
symbol
in
the
land debate
and
was
part
of
the
argument
by
which
Liberals
like
Sir
Arthur Hobhouse
developed
Individualist premises
in
a
Collectivist
direction.
See
A.
HOBHOUSE,
THE
DEAD
HAND:
ADDRESSES
ON
THE
SUBJECT
OF
ENDOWMENTS
AND
SETTLEMENTS
OF
PROPERTY
(1880).
The
New
Liberal
theme
that
public
control
of
land
was
required
for
the
common
good
was
developed
by
his
more
famous
nephew,
Leonard
Hobhouse,
in
a
famous
essay,
The
Historical
Evolution
of
Property
in
Fact
and
in
Idea,
in
PROPERTY:
ITS
DUTIES
AND
RIGHTS
(C.
Gore ed.
1922).
For
a
discussion
of
this
essay
in
the
context
of
late
Liberal
thought
and
its
transition
to
Collectivism,
see
S.
COLLINI,
LIBERALISM
AND
SOCIOLOGY:
L.
T.
HOBHOUSE
AND
POLITICAL
ARGUMENT
IN
ENGLAND
1880-1914,
at
129-46
(1979).
For
an
account
ofJ.S.
Mill's
increasingly radical
attitude
to
land, breaking
from
the
orthodoxy
of
political economy,
see
W.
WOLFE,
FROM
RADICALISM
TO
SOCIALISM:
MEN
AND
IDEAS
IN
THE
FORMATION
OF
FABIAN
SOCIALIST DOCTRINES,
1881-1889,
at
52-65
(1975).
In
the
United
States
the term
was
used
less in
the
service
of
radical
thought
than
to
support
progressive
reform.
Exemplary
of
this
tendency
is
1
R.
ELY,
PROPERTY
AND
CON-
TRACT
IN
THEIR
RELATIONS
TO
THE
DISTRIBUTION
OF
WEALTH
451-74
(1914).
For
discus-
sions
of
Ely's
thought,
see
S.
FINE,
LAISSEZ
FAIRE
AND
THE GENERAL-WELFARE
STATE
198-251
(1956)
(setting
it
in
relation
to
the
thought
of
the
new
political
economists,
such
as
John
R.
Commons,
Edmund James,
Andrew
Dickson
White,
Edward
Bemis
and
Henry
Center
Adams,
who
established
a
middle
ground
between laissez-faire
theory
and
socialism),
and
R.
WIEBE,
THE
SEARCH
FOR
ORDER
1877-1920,
at
141,
155-56
(1967)
(setting
it
in
relation
to
the
turn
toward
altruistic
values
that
preceded
Progressivism).
1190
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THE
DEAD
HAND
that reversed established
trust
rules.
The
spendthrift
trust
doc-
trine
permitted
trust
transferors
to
tie
up
a
beneficiary's
interest
by
imposing
direct
restraints on
its alienability.
4
The
Claflin
doc-
trine
soon
thereafter
immunized
private
trusts
from
attempts
by
beneficiaries to
destroy
them
through premature
termination.
5
Far
from
being
reconcilable
with
the
conventional
property
rules
which
invalidate
most
restraints
on
legal
interests,
6
these
doc-
trines placed
trust
and
property,
equity
and
law
in
fundamental
conflict
over
the
problem
of
freedom
of
disposition.
This
doctrinal development
and the
changes
in
legal
con-
sciousness
that
underlay
it
are
central
to
a
historical
understand-
ing
of
the
ideology
of
private
property
in
liberal
legal
thought.
Anglo-American
lawyers
have
long
identified
the
lifting
of
re-
straints on alienation
as
the major
defining characteristic
of
a
lib-
eral
commercial
society
as
opposed
to
a
feudal
one.
7
Along
with
liberty
of
contract,
free
alienation
is
one
of
the
keystones
of
the
twin
policies
of
promoting
individual
autonomy
and
free
ex-
change
in
competitive
markets.
Nineteenth
century
lawyers
con-
flated
the
distinction
between
state-imposed restrictions
on
alienation
and
privately
imposed
restraints,
treating
the
policy
underlying
rules
proscribing the
latter
as
continuous
with
the
policy
opposed
to
the old
feudal
restraints.
Their
historical
vi-
sion,
which
persists
today,
sees
the
development
of
the
law
of
disposition
as
continuous
and
directional.
Within
this vision,
modem
lawyers
have
pushed
the
deviationist
trust
rules
into
a
corner
as
aberrational
or
accommodated
them
on
the
basis
of
in-
strumentalist
accounts
of
the
doctrines
as
pragmatic
responses
to
4.
See
text
accompanying
notes
39-41
infra.
5.
See
text
accompanying
notes
43-45
infra.
6.
For
a
typical
example
of
work
in
this
vein,
see
the
series
of
articles
by
Schnebly,
Restraints
upon
the
Alienation
of
Legal
Interests,
44
YALE
LJ.
961,
1186,
1380
(1935).
The
history
of
English
land
law
is
basically
reduced
in
this work
to
theme
and
variation,
the
theme
being
a
battle
pitting
the
dynasts
(feudal nobility
or,
later,
newly
landed
gentry)
versus
the
royal
courts
(lovers
of
alienability
or
pawns
of
the
Crown).
See
also
6
AmERI-
CAN
LAW
OF
PROPERTY
§
26.1,
at
409-10
(AJ.
Casner
ed.
1952).
7.
On
this
theme
of
alienability
as
the
unifying
element
in
the
development
of
An-
glo-American
property
law,
A.W.B.
Simpson
has
succinctly
expressed the
conventional
wisdom:
Modern
textbooks
as
well
as
historical
works
tend
to
portray the
law
of
real
property
as
a
body
of
law
which
has zealously
protected
the power
of
free
alien-
ation
of
land,
and the rule
against
perpetuities (and
associated
doctrines)
as
an
effective
curb against
attempts
to
destroy
this
power
in
landowners.
A.
SIMPSON,
AN
INTRODUCTION
TO THE
HIsToRY
OF
THE
LAND
LAw
224
(1961);
see
also
L.
SIMES, PUBLIC
POLICY
AND
THE
DEAD
HAND
33-36
(1955).
May
1985]
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STANFORD
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existing
social
"needs."
Against
this
consensus
view,
this
article
relates the
doctrinal
conflict
between
property
and
trust
law
to
the
internal
contradic-
8.
Bordwell,
Alienability
and
Perpetuities
II,
23
IowA
L.
REV.
I,
22
(1937).
Elsewhere
he
writes:
[O]ne
is
struck
by
the
fact
that the
makers
of
the
English
law
were
not
men
with
one-track
minds.
They
did
not
start out
with
general
notions
of
alienability
or
of
remoteness
of
vesting
but
took
institutions
and
the
common
forms
of
con-
veyances
as
they
found
them
and
adapted
both
to
their
needs.
Bordwell,
Alienability
and
Perpetuities
VI,
25
IowA
L.
REv.
707,
707
(1940).
This
consensus
view
has
undergone
revision in
recent
historical scholarship.
The
revisionist
account
views
the
problem
of
dead
hand
control
in
terms
of
conflicts
between
various
social
groups,
whose
identities
vary as
the
social
and
economic background
changes.
In
the
later
Middle
Ages,
while
feudalism
still
prevails,
though
weakened,
the
conflict
is
between
landholders
and lords.
By
the
sixteenth
and
seventeenth
centuries,
with
the
passing
of
feudalism
and the
emergence
of
mercantilism,
a
new
tension
emerges
between
"the
established country
landowner
seeking
to
perpetuate
his
family
and
the
newly
wealthy
man
of
commerce
seeking
to
buy
country land."
Donahue,
supra
note
1,
at
42.
Thus
the
common
law
Rule Against
Perpetuities,
the notable
product
of
this
latter
conflict,
is
now
seen
as
a
rational
compromise
by
conservative
seventeenth
century
judges
who
were
sympathetic
to
the
interests
of
the
established
landed
aristoc-
racy
and
fashioned
an informal,
rather
open-ended "doctrine"
(not
"Rule")
that
favored
the
entrenched
gentry
without
permitting
them
to
lock
up
their
lands completely.
See
Haskins,
Extending
the
Grasp
of
the
Dead
Hand:
Reflections
on
the
Origins
of
the
Rule
Against
Perpetuities,
126
U.
PA.
L.
REV.
19
(1977).
This
history
is
revisionist
in
the
sense
that
it
does
not
describe
the development
of
doctrines
like
the
Rule
Against
Perpetuities
as
stimulated
by
the
desire
of
common
law
judges
to
promote
the
all-important
policy
of
alienability,
as
Maitland
had. Its
message
is
not
as
clearly
progressive
and
validating
as
that
which
emphasizes
the
continuity
of
the
alienability
theme,
for
it
considers
dead
hand
doctrines
to
be
the
products
of
shifting
alignments
of
interest
groups and power.
Yet this
history
is
still
essentially
adaptationist.
If
the
Rule
Against
Perpetuities
was
not
developed
to
adapt
property
law
to
the
needs
of
an
emerging
market
economy,
it
did
adapt
to
the
"needs"
of
a
particular
social
group
with
which
common
lawjudges
were in
sympathy.
By
identifying
discrete
and
powerful
social
groups
and
linking
together
their
postulated
needs
and
the
legal
doctrine,
this
revisionist
mode
of
history
renders coher-
ent
the
development
of
property
law
doctrines dealing
with
the
dead
hand
problem.
It
shares
with
directional
history
the premise that
the
conflict,
of
which
the dead hand
problem
is
expressive,
between
the
two
ideals
of
post-feudal
property
law,
alienability
and
individual
autonomy,
can
be and
has
been
reconciled
in
a
rational,
instrumental
way.
The
legal
system's
responses
to
recurrent
instances
of
the
dead
hand
question
are
rational responses
either
to
social
needs
or
to
those
of
a
powerful
interest
group;
under
both
views,
they
are
the
necessary
products
of
the
prevailing
mode
of
economic
organi-
zation.
For
a
more
skeptical
account,
which
can
usefully
be
contrasted
with
that
of
Has-
kins,
see
A.
SIMPSON,
supra
note
7,
at
195-96.
The
spendthrift trust
and
Claflin
doctrines
were
studied
in
Lawrence
Friedman's
history
of
American
trust
law
doctrines. Friedman,
The
Dynastic
Trust,
73
YALE
L.J.
547
(1964).
By
juxtaposing
these
doctrines
with
the
nineteenth
century
rules concerning
trust
investments,
Friedman
focused
on the
judicial
reaction
to
the
"dynastic"
motive.
His
concern
was
with
identifying
the
long-term,
dynastic
trust
as
a
discrete
category
of
private
trusts
in
society.
The
classificatory
scheme
of
the
law
of
trusts
does
not
distin-
guish
among trusts
according
to
the
background
motives
of
their
creators;
the
same
rules
apply to
short-term
"caretaker"
trusts
as
to the
dynastic
variety.
But
the
doctrinal
1192
HeinOnline -- 37 Stan. L. Rev. 1192 1984-1985