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(a) the rules of Muhammadan law as to waqf, that is, transfers or bequests of property for religious or charitable purposes :

(6) the mutual relations of the members of an undivided family as determined by any customary or personal law.

It also declares that nothing in the Act applies to
(c) public or private religious or charitable endowments", or

(d) trusts to distribute prizes taken in war amongst the captors

It declares, lastly, that nothing in the chapter relating to the creation of trusts applies to trusts created before the ist March, 1882.

To avoid the risk of confounding trusts with bailments, the Act defines 'trust' as 'an obligation annexed to the ownership of property, and arising out of confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owners.' And to prevent the introduction into the Mufassal of conceptions resembling the English legal estate and equitable ownership, the beneficial interest' of the beneficiary is defined as his right against the trustee as owner of the trust property.' Under the Act, the beneficiary has no estate or interest in the subject-matter of the trust. ·Breach of trust' is the breach of any duty imposed on a trustee as such by any law for the time being in force.

1 This total exclusion is unfortunate, 24, amongst Hindús, it is these classes of trusts which most frequently form the subjects of litigation, West & B., 3rd ed., p. 441, note. It would have sufficed to have said that nothing in the Act should affect the rules relating to public or private religious or charitable endowments. The generally inalienablecharacter ofendowments under the Hindú as under the Muhammadan law is recognised by the Courts, and in some places also by the Legislature; see Bom. Act II. of 1863, s. 8. The Government in 1863 withdrew from the management of these endowments, Passing an Act (XX of 1863) handing itover to bodies of Natives, which was extended to Kanara by Bom. Act VII of 1865. See also the Code of Civil Procedure, sec. 530.

* As to these, see Alexander v. Duke of Wellington, 2 R. & M. 35:

Kinlock v. Secretary of State for India in Council, 15 Ch. D. 1: 7 App. Ca. 619, where the appellant's name is Kinloch. Mr. Lewin thus states the effect of these decisions :—' All prizes taken in war vest in the sovereign and are commonly by the royal warrant granted to trustees upon trust to distribute in a prescribed mode among the captors; but an interest of this kind is held not to vest an interest in the cestuis que trust which they can enforce in equity, but it may at any time be revoked or varied at the pleasure of the sovereign before the general distribution. The effect of such an instrument is merely to appoint the persons named to be the agents of the sovereign to effect the distribution.'

3 The definition of 'trusts' in the draft New York Civil Code, $ 1681, seems open to this criticism,

Registered' and 'notice' are defined as in the Transfer of Property Act, supra p. 747, and all expressions used in the Trusts Act and defined in the Contract Act-e.g. 'fraud'-are to have the meaning attributed to them by the latter Act.

CHAPTER II. OF THE CREATION OF TRUSTS. Here the Act declares that a trust may be created for any lawful purpose, and that a purpose is lawful unless it comes within any of the categories mentioned in the Contract Act, sec. 23: that every trust of which a purpose is unlawful is void : and that where a trust is created for two purposes, of which one is lawful and the other unlawful, and the two purposes cannot be separated, the whole trust is void. An explanation suggested by Nelson v. Bridport, 8 Beav. 547, shows that where the trust property is land situate in a foreign country the trust to be valid must be in accordance with the law of that country.

It is obviously desirable to exclude oral declarations of trust whenever land forms the subject-matter. Section 5 therefore declares, in general accordance with the seventh section of the Statute of Frauds, that no trust in relation to immoveable property is valid unless declared (a) by a non-testamentary instrument in writing, signed by the author of the trust or the trustee and registered, or (6) by the will of the author of the trust or the trustee. Theoretically, this modifies the Hindú law, which in no transaction absolutely requires a writing '; but trusts by merely verbal declaration are as rarely met with as mortgages by merely verbal agreements: the change, therefore, in practice makes no alteration.

In case of trusts of moveable property, they must either be declared as aforesaid, or the ownership of the property must be transferred to the trustee.

These rules do not apply where they would operate so as to effectuate a fraud, as, for example, where a father having power to bequeath certain land is induced not to make a will of that land by the promise of his heir presumptive that he will provide thereout for his relatives 2.

Section 6 states the four requisites to the creation of every trast, and adds a fifth—the transfer of the trust property-except where the trust is declared by will or the author of the trust is himself to be the trustee. In England it now seems impossible for an infant

1 2 Mad. H. C. 39, per Holloway * Sellack v. Harris, 5 Vin. Ab. J. The dictum of Spankie J., 3 All. 521, and other cases cited by Lewin, 466, if meant to apply to Natives, is

61. clearly wrong.

8th ed.,

to create (except in the case of a marriage settlement ") a trust which cannot be set aside, for he cannot make a will, and his deeds may be avoided. Under section 7 however a minor may, , with the permission of the Court, create a valid trust.

The subject matter of every trust must be property transferable to the beneficiary; and in order to preclude the complications that would arise from allowing a trust upon a trust, section 8 declares that the subject matter must not be a merely beneficial interest under a subsisting trust.

Section 9 declares that every person capable of holding property may be a beneficiary. As under the General Clauses Act 'person' includes a corporation, the Act here varies from English law. But the variation is intentional, as it has been more than once ruled that the Mortmain Statutes are not in force in India.

The Act provides for disclaimers by proposed beneficiaries as well as by intended trustees. CHAPTER III. OF THE DUTIES AND LIABILITIES OF

TRUSTEES. Their duties are to execute the trust (sec. 11), to inform themselves of the state of the trust-property (sec. 12), to protect the title thereto (sec. 13), not to set up a title adverse to the interest of the beneficiary (sec. 14), to take due care of the trust property (sec. 15), to convert perishable or reversionary property when the trust is for several persons in succession (sec. 16), to be impartial (sec. 17), to prevent waste (sec. 18), to keep accounts and render information (sec. 19), and, lastly, to invest trust-funds on certain specified securities (sec. 20). The necessity for this last provision was pointed out by the High Court of Bombay in De Souza v. De Souza, 12 Bom. H. C. 184. As to these securities, the late Chief Justice of Bombay remarked, in his comments on the Bill, that in parts of India the most ordinary and popular investment made by Native trustees is an investment of money with merchants or shroffs of good repute to run at interest. The Act therefore, in addition to the specified securities, authorises investment on securities expressly authorised by the instrument of trust or by any rule which the High Court may from time to time prescribe on this behalf. Investments on mortgages of leaseholds for years are forbidden, unless of course such investments are expressly authorized by the trust-deed. In England, no doubt, trustees empowered to lend on a mortgage of realty may invest on a long term of years at a peppercorn rent. But in India such terms are practically

1 See 18 & 19 Vic. c. 43.

Liabilities

unknown. Section 21 allows a trustee to deposit a trust-fund not exceeding Rs. 3000 in a Government Savings Bank', and to invest on mortgage of land already pledged as a security for an advance under the Land Improvement Act, 1871. A power like the latter is conferred in England by 27 & 28 Vic. c. 114, s. 161.

The liabilities of trustees are: to make good losses which the trust property has sustained by a breach of trust (sec. 23), with special provisions where gain has accrued to a portion of the trust property through another breach (sec. 24), where the breach has been committed by their predecessors (sec. 25), or by their co-trustees (sec. 26), or by co-trustees jointly (sec. 27). The principle here followed is that the trustee shall not profit by his own wrong. Section 23 embodies as illustrations the rules on which Courts of Equity act where trust-property improperly left outstanding is lost, or where & trustee retains money which should be invested, or neglects a direction to invest, or to accumulate, or improperly sells trust-property, or is guilty of unreasonable delay in investing trust-funds or in paying them to the beneficiary. When the beneficiary's interest is forfeited to Government, the trustee must hold the trust-property to the extent of such interest for the benefit of such person as the Government directs.

Rights of
Trustee.

CHAPTER IV. OF THE RIGHTS AND POWERS OF THE

TRUSTEE This chapter embodies the substance of Act XXVIII of 1866, secs. 2, 3, 5, 32, 33, 36, 37, 39 and 43. The trustee's rights are to have in his possession the instrument of trust and the title-deeds relating solely to the trust-property (sec. 31); to reimburse himself his expenses properly incurred in the execution of the trust or the protection or support of the beneficiary, and to be recouped for erroneous over-payments to him (sec. 32); to be indemnified by the gainer by a breach of trust (sec. 33); to apply to the Court (i.e. either a High Court Judge or a District Judge) for guidance in the management of the trust-property (sec. 34); and, on completing his duties, to have the accounts settled (sec. 35).

His powers are generally to do all acts proper for the benefit of the trust property and for the protection or support of beneficiaries incompetent to contract; but except with the permission of the Court, no trustee can lease trust-property for a term

See Act V of 1873. Power to • The English rules on this subject deposit municipal funds in such banks (Lewin, 679) are complicated by the is given by Madras Act III of 1871, double ownership of trustee and cestui 8. 36, and Ben. Act V of 1876, e. 75.

que trust.

Powers of
Trustee.

exceeding twenty-one years (sec. 36). A trustee for sale has also the usual powers to sell in lots and either by public auction or private contract (sec. 37), to sell under special conditions, buy in, re-sell, and fix the time for selling (sec. 38), to convey on completion (sec. 39). The trustee may vary investments, but only with the consent in writing of the beneficiary when the latter is competent to contract and entitled at the time to receive the income of the trust-property for his life (sec. 40). Trustees for minors may apply the income not only for their maintenance, education and advancement, but also for the reasonable expenses of their religious worship’, marriage, and funeral; and with the permission of the Court, such trustees may apply the property itself to the minor's maintenance, education, and advancement (sec. 41). Trustees, too, may give receipts for trust-moneys, which, in the absence of fraud, will be good discharges (sec. 42). Two or more trustees acting together may compound or allow time for payment of debts or claims relating to the trust (sec. 42). A like power had been given, by Act XXVIII of 1866, to executors. When one of several trustees disclaims or dies, the authority to deal with the trust property may as a rule be exercised by the continuing trustees (sec. 44). Lastly, the Act provides (sec. 45) for the suspension of a trustee's powers by a decree in a suit for the execution of the trust.

CHAPTER V. OF THE DISABILITIES OF TRUSTEES. Here the Act declares that a trustee who has once accepted the trust cannot renounce it except with the permission of the Court, the consent of the beneficiary, or by virtue of a special power in the instrument of trust (sec. 46). He cannot as a rule delegate his office or any of its duties (sec. 47). Co-trustees cannot act singly (sec. 48). If a trustee fails to exercise a discretionary power reasonably and in good faith, such power may be controlled by the Court (sec. 49). He must not charge for his services, unless (a) the instrument of trust contains express directions to the contrary, or (6) he has when accepting the trust entered into a contract to the contrary with the beneficiary or the Court (sec. 50). He must not use the trust-property for his own profit (sec. 51), and if he does, an obligation in the nature of a trust arises (sec. 88). If he be a trustee for sale of trust-property, he or his agent must not buy it (sec. 52). The transaction is absolutely void, not merely, as in

1 This clause was inserted at the men, called the British Indian Assosuggestion of a body of Native gentle. ciation.

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