Statute of Uses
STATUTE OF USES
Anenglish lawenacted in 1535 to end the practice of creating uses in real property by changing the purely equitable title of those entitled to a use into absolute ownership with the right of possession.
The Statute of Uses was a radical statute forced through a recalcitrant English Parliament in 1535 by a willful King Henry VIII. Essentially, the statute eliminated a sleight of hand that had been fashioned by landholders to avoid paying royal fees associated with land. These royal fees, called feudal incidents, had been slipping away from the Crown for a century or so before the statute was passed.
Landholders in sixteenth-century England were supposed to hold their land at the will of a lord, who worked in the service of the king or queen. In exchange for the land, landholders were obliged to pay certain fees to the lord, who kept some and turned the rest over to the Crown. Many of the royal incidents associated with real property were exacted by the Crown when the landholder died. However, the Crown could collect incidents only if the legal title passed from the landholder to an heir.
In the fourteenth and fifteenth centuries, landholders had devised a way to both profit from their land and avoid feudal incidents. The landholders would place their property in the name of one person for the benefit of a third party. This third party, called the cestui que use, the beneficiary of the use, was either the original landholder or a person of the landholder's choosing. The arrangement created a form of land ownership, or estate in land, called a use.
Soon courts began to recognize the right of a landholder, as feoffor, to give possession of his land to a peasant tenant while giving legal title to a third party, or feoffee. They also enforced agreements between a feoffor and feoffee in which the feoffee held title to the land only for the benefit of the cestui que use.
Under the common law, when legal title to land was held by more than one feoffee, partial title did not pass to the deceased feoffee's heirs upon the death of a feoffee. Instead, the deceased feoffee's portion of the title passed to the other feoffees. A landholder, as a feoffor, could give legal title to several feoffees and add a new feoffee to the legal title upon the death of any feoffee. Under this system, the death of a title-holding feoffee did not give rise to an inheritance incident. Thus, a landholder could avoid feudal incidents while he himself or a person of his choosing continued to reap profits from the land.
By giving legal title to two or more feoffees, a feoffor also was able to avoid other royal incidents, such as marriage fees and other fees associated with the death of a landholder. If the property was held in other persons' names, a landholder could also avoid losing the property due to debt or felony conviction. By the end of the fifteenth century, almost all of the land in England was owned in use. Because most of the land was owned by a relatively small number of wealthy landowners, in most cases the actual title owners did not actually live on their parcels of land. Another consequence was that the Crown had lost substantial revenues due to the avoidance of the land-based feudal incidents.
King Henry VIII attempted to reclaim these lost revenues with the passage of the Statute of Uses. Under the act, the full title to land was automatically given to the person for whom the property was being used, the cestui que use. The act also reinstated the old feudal rule of primogeniture, which held that land should go to the oldest son upon the death of the landowner.
Landholders strenuously objected to the statute. Over the next four years they conducted a Pilgrimage of Grace to London in an effort to convince the king and Parliament to eliminate primogeniture and reverse the abolition of the use estate.
The campaign caused Henry VIII to loosen the royal grip on land ownership. In 1540 Parliament passed the Statute of Wills, which abolished primogeniture and gave landholders the right to devise their property to whomever they pleased in a written will and testament. However, Parliament did not abolish the Statute of Uses.
Immediately after the act was passed, landholders set about creating loopholes. The courts also were hostile to the legislation. They accommodated landholders by giving the statute a strict technical construction and by expanding other methods for landholders to put their property in the name of another person while keeping it for their own use or profit or for the use or profit of another person. In particular, the English courts expanded the concept of the trust to fill the void. A land trust is an arrangement whereby one person holds full title to property for the benefit of another person, who may direct the management and use of the property.
Courts focused on the difference between a trust and a use to achieve essentially the same result for landowners. In a trust the title owner plays some active role in connection with the use of the property. In contrast, with a bare use, the feoffee performed no work in connection with the property and served only as a strawperson. If a feoffee was performing duties in connection with the property, the land was not in use, courts reasoned, but in trust. Many of the rules on land trusts that developed in response to the Statute of Uses were adopted in the United States and continue in effect today.
In 1660 Parliament abolished all remaining feudal incidents associated with land in the Statute of Tenure. This obviated the need for a Statute of Uses because there no longer was any need to evade feudal incidents. The Statute of Uses was finally repealed by Parliament in 1925 by the Law of Property Act (12 & 13 Geo. 5, ch. 16, sec. 1(7)).
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Uses, statute of
J. A. Cannon