person in insolvent circumstances 1; and, unless the personal law of the beneficiary allows otherwise, a married woman and a minor2. Explanation II.—When the administration of the trust involves the receipt and custody of money, the number of trustees should be two at least. Illustrations. (a) A, one of several beneficiaries, proves that B, the trustee, has improperly disposed of part of the trust-property, or that the property is in danger from B's being in insolvent circumstances, or that he is incapacitated from acting as trustee. A may obtain a receiver of the trust-property 3. (b) A bequeaths certain jewels to B in trust for C. B dies during A's lifetime; then A dies. C is entitled to have the property conveyed to a trustee for him. (c) A conveys certain property to four trustees in trust for B. Three of the trustees die. B may institute a suit to have three new trustees appointed in the place of the deceased trustees. (d) A conveys certain property to three trustees in trust for B. All the trustees disclaim. B may institute a suit to have three trustees appointed in place of the trustees so disclaiming. (e) 4, a trustee for B, refuses to act, or goes to reside permanently out of British India, or is declared an insolvent, or compounds with his creditors, or suffers a co-trustee to commit a breach of trust. B may institute a suit to have A removed and a new trustee appointed in his room. 61. The beneficiary has a right that his trustee shall be Right to compelled to perform any particular act of his duty as such, compel to and restrained from committing any contemplated or probable of duty. breach of trust. Illustrations. (a) A contracts with B to pay him monthly Rs. 100 for the benefit of C. B writes and signs a letter declaring that he will hold in trust for C the money so to be paid. A fails to pay the money in accordance with his contract. C may compel B on a proper indemnity to allow C to sue on the contract in B's name. 1 In re Barker's Trusts, 1 Ch. D. 43. 2 Where there are co-beneficiaries, one of them should not be appointed trustee, if this can be avoided, Ex p. Clutton, 17 Jur. 988. 3 Scott v. Becher, 4 Price, 346, where an administrator was insolvent. Other instances in which a receiver will be granted at the instance of a bene- 4 Brown v. Higgs, 8 Ves. 570. any act Wrongful purchase by trustee. trust pro (b) A is trustee of certain land, with a power to sell the same and pay the proceeds to B and C equally. A is about to make an improvident sale of the land. B may sue on behalf of himself and C for injunction to restrain A from making the sale'. 62. Where a trustee has wrongfully bought trust-property, the beneficiary has a right to have the property declared subject to the trust or retransferred by the trustee, if it remains in his hands unsold, or, if it has been bought from him by any person with notice of the trust, by such person. But in such case the beneficiary must repay the purchase-money paid by the trustee, with interest, and such other expenses (if any) as he has properly incurred in the preservation of the property; and the trustee or purchaser must (a) account for the nett profits of the property, () be charged with an occupation-rent, if he has been in actual possession of the property, and (c) allow the beneficiary to deduct a proportionate part of the purchase-money if the property bas been deteriorated by the acts or omissions of the trustee or purchaser. Nothing in this section (a) impairs the rights of lessees and others who, before the institution of a suit to have the property declared subject to the trust or retransferred, have contracted in good faith with the trustee or purchaser; or (4) entitles the beneficiary to have the property declared subject to the trust or retransferred where he, being competent to contract, has himself, without coercion or undue influence having been brought to bear on him, ratified the sale to the trustee with full knowledge of the facts of the case and of his rights as against the trustee. Following 63. Where trust-property comes into the hands of a third perty- person inconsistently with the trust, the beneficiary may require him to admit formally, or may institute a suit for a declaration, that the property is comprised in the trust3. into the hands of third persons; into that Where the trustee has disposed of trust-property and the into which money or other property which he has received therefor can it has been be traced in his hands, or the hands of his legal representative converted. 1 See Act I of 1877, sec. 54, ill. (ƒ). 3 6 Bom. H. C., O. C. J. 59: Pennell v. Deffell, 4 D. M. G. 372. or legatee, the beneficiary has, in respect thereof, rights as nearly as may be the same as his rights in respect of the original trust-property. Illustrations. (a) A, a trustee for B of Rs. 10,000, wrongfully invests the Rs. 10,000 in the purchase of certain land. B is entitled to the land. (b) 4, a trustee, wrongfully purchases land in his own name, partly with his own money, partly with money subject to a trust for B. B is entitled to a charge on the land for the amount of the trust-money so misemployed. 64. Nothing in section 63 entitles the beneficiary to any Saving of right in respect of property in the hands of— rights of certain (a) a transferee in good faith for consideration without transferees. having notice of the trust1, either when the purchase-money was paid, or when the conveyance was executed, or(6) a transferee for consideration from such a transferee. A judgment-creditor of the trustee attaching and purchasing trust-property is not a transferee for consideration within the meaning of this section 2. Nothing in section 63 applies to money, currency notes and negotiable instruments in the hands of a bona fide holder to whom they have passed in circulation, or shall be deemed to affect the Indian Contract Act, 1872, section 108, or the liability of a person to whom a debt or charge is transferred 3. trustee 65. Where a trustee wrongfully sells or otherwise transfers Acquisitrust-property and afterwards himself becomes the owner of tion by the property, the property again becomes subject to the trust, of trustnotwithstanding any want of notice on the part of intervening wrongfully transferees in good faith for consideration 4. property converted. 66. Where the trustee wrongfully mingles the trust- Right in property with his own, the beneficiary is entitled to a charge on the whole fund for the amount due to him 5. case of blended property. Wrongful employment by partnertrustee of trustproperty for partnership purposes. Liability of beneficiary joining in breach of trust. 67. If a partner, being a trustee, wrongfully employs trust-property in the business or on the account of the partnership, no other partner is liable therefor in his personal capacity to the beneficiaries, unless he had notice of the breach of trust. The partners having such notice are jointly and severally liable for the breach of trust 1. Illustrations. (a) A and B are partners. A dies, having bequeathed all his property to B in trust for Z, and appointed B his sole executor. B, instead of winding-up the affairs of the partnership, retains all the assets in the business. Z may compel him, as partner, to account for so much of the profits as are derived from A's share of the capital. B is also answerable to Z for the improper employment of A's assets. (b) A, a trader, bequeaths his property to B in trust for C, appoints B his sole executor, and dies. B enters into partnership with X and Y in the same trade, and employs A's assets in the partnership-business. B gives an indemnity to X and Y against the claims of C. Here X and Y are jointly liable with B to C as having knowingly become parties to the breach of trust committed by B2. 68. Where one of several beneficiaries (a) joins in committing a breach of trust, or (6) knowingly obtains any advantage therefrom, without the consent of the other beneficiaries, or (c) becomes aware of a breach of trust committed or intended to be committed, and either actually conceals it, or does not within a reasonable time take proper steps to protect the interests of the other beneficiaries, or (d) has deceived the trustee and thereby induced him to commit a breach of trust, the other beneficiaries are entitled to have all his beneficial interest impounded as against him and all who claim under him 3 (otherwise than as transferees for consideration without and dealt with as a common fund, the 1 Compare Lewin, 902, 913, Pollock on Partnership, § 25. 2 Flockton v. Bunning, 8 L. R., Ch. App. 323, note: Pollock, Ptp. p. 90. This includes his assignees, judg ment creditors, and general creditors. notice of the breach) until the loss caused by the breach has been compensated 1. When property has been transferred or bequeathed for the benefit of a married woman, so that she shall not have power to deprive herself of her beneficial interest, nothing in this section applies to such property during her marriage 2. liabilities 69. Every person to whom a beneficiary transfers his Rights and interest has the rights, and is subject to the liabilities, of the of benebeneficiary in respect of such interest at the date of the ficiary's transfer 3. 1 Raby v. Ridehalgh, 7 D. M. & G. 109, and cases cited by Lewin, 8th ed. p. 911. 2 See Stanley v. Stanley, 7 Ch. Div. 589. As between assignor and assignee of immoveable property, notice to the trustee is not necessary, though it should always be given, Lewin, 74, 701, 702. Otherwise where the pro perty is moveable, see the Transfer transferee. |