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The declaration of trust identified Mr. Jeter8 as the
trust’s creator and Mr. Norton as the trustee and described the
Pago Trust as a “Common Law contractual business trust
organization” governed by the common law of England.9 The
declaration of trust further provided that the company formed
under the trust shall be domiciled in California and “shall not
operate as a partnership, association, joint venture, joint stock
company, corporation or statutory trust.” The trust indenture
described the purpose of the Pago Trust as “fraternal, social,
economic and remunerative” and stated that “the Trustee(s) shall
have freedom to conduct capitalistic enterprises dealing in
properties, patents, copyrights, trademarks, formulae and
equities, and the acquisition of deeds and deeds of trust in the
aforesaid county.”
The trust indenture granted sole dominion and control over
the administration of the trust to the trustee and expressly
prohibited the creator and any beneficiaries from having any
voice in the trust’s administration. The trustee had the
discretion to determine what amounts constituted capital or
income and was required to distribute all capital gain and
income. The trustee could resign only by tendering a written,
8Mr. Jeter was not compensated for creating the Pago Trust.
9By use of the terms “trust”, “trustee”, “beneficiary”, and
other related terms, we intend no implication as to the validity
of the trusts involved in these cases.
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Last modified: May 25, 2011