Court Decisions that Recognize the
Validity of Business Trusts
"It is established by legal precedent that business pure
trusts are lawful, valid business organizations." Baker v. Stern,
58 American Law Reports, 462.
"A business trust is a common law entity formed by contract,
and thus, is not subject to the same types of state regulation as a
corporation." Elliott v. Freeman, 220 US 178; and
Crocker v. Malloy, 39 US 270.
"The business trust also called common-law trusts, are
created under the common law of contracts and do not depend upon any
statute." Schuman-Heink v. Folsom, 159 NE 250.
"A pure trust is not subject to legislative control. The
U.S. Supreme Court holds that the trust is created and its relationship
comes under the realm of equity based upon the common law and is not subject
to legislative restrictions as are corporations and other statutory entities
or organizations created by legislative authority." Croker v. MacCloy,
649 US Supp 39; and Elliott v. Freeman, 220 US 178.
"One of the objectives of business trusts is to obtain for
the trust associates, most of the advantages of corporations, without the
authority of any legislative act and with the freedom from the restrictions
and regulations generally imposed by law upon corporations." 13 Am Jur 2d,
Page 379, Paragraph 51.
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