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that such other person did not intend to pay or provide such consideraconsideration for the benefit of the transferee, the transferee by another. must hold the property for the benefit of the person paying or providing the consideration ?

Nothing in this section shall be deemed to affect the Code of Civil Procedure, section 317, or Act No. XI of 1859 (to improve the law relating to sales of land for arrears of revenue in the Lower Provinces under the Bengal Presidency), section 36.

83. Where a trust is incapable of being executed, or where Trust inthe trust is completely executed without exhausting the trust- capable of property, the trustee, in the absence of a direction to the con- or executed

without trary, must hold the trust-property, or so much thereof as is

exhausting unexhausted, for the benefit of the author of the trust or his trust

property. legal representative

Illustrations. (a) A conveys certain land to Bupon trust,' and no trust is declared; or

upon trust to be thereafter declared,' and no such declaration is ever made; or

upon trusts that are too vague to be executed; or upon trusts that become incapable of taking effect; or

in trust for C, and C renounces his interest under the trust. In each of these cases B holds the land for the benefit of 4%.

(6) A transfers Rs. 10,000 in the four per cents. to B, in trust to pay the interest annually accruing due to C for her life. A dies. Then C dies. B holds the fund for the benefit of A's legal representative.

(c) A conveys land to B upon trust to sell it and apply one moiety of the proceeds for certain charitable purposes, and the other for the maintenance of the worship of an idol. B sells the land, but the charitable purposes wholly fail, and the maintenance of the worship does not exhaust the second moiety of the proceeds. B holds the first moiety and the part unapplied of the second moiety for the benefit of A or his legal representative *.

(d) A bequeaths Rs. 10,000 to B, to be laid out in buying land to be conveyed for purposes which either wholly or partially fail

16 Moore, I. A. 53. A and his 1864, Civ. R. 103. The presumption son B, two Hindús, live together that the property is joint is not reas an undivided family. B buys a butted by the mere fact of the purchase house with funds forming part of the

in B's name. family property, and has it trans- 2 Bom. 410. Cooke v. Stationers ferred to himself. There is nothing Co., 3 My. & K. 264, 265. to show that A intended that the 3 See Lewin, 148, for the cases from purchase should be made for the sole which these illustrations are taken. benefit of B. B holds the house for • Here the English rule (Lewin, the benefit of A and himself, Suth. 161,162) is intentionally departed from

2

is pre

to take effect. B holds for the benefit of A's legal representative

the undisposed of interest in the money or land if purchased '. Transfer 84. Where the owner of property transfers it to another for illegal for an illegal purpose and such purpose is not carried into purpose.

execution, or the transferor is not as guilty as the transferee, or the effect of permitting the transferee to retain the property might be to defeat the provisions of any law, the transferee

must hold the property for the benefit of the transferor?. Bequest 85. Where a testator bequeaths certain property upon trust forriblegal and the purpose of the trust appears on the face of the will to purpose

be unlawful, or during the testator's lifetime the legatee agrees with him to apply the property for an unlawful purpose, the legatee must hold the property for the benefit of the

testator's legal representative 3. Bequest Where property is bequeathed and the revocation of the of which revocation bequest is prevented by coercion “, the legatee must hold the

property for the benefit of the testator's legal representative. vented. Transfer

86. Where property is transferred in pursuance of a conpursuant to tract which is liable to rescission or induced by fraud or contract. mistake, the transferee must, on receiving notice to that effect,

hold the property for the benefit of the transferor, subject to

repayment by the latter of the consideration actually paid. Debtor 87. Where a debtor becomes the executor or other legal becoming creditor's representative of his creditor, he must hold the debt for the represen- benefit of the persons interested therein. tative. Advantage

88. Where a trustee 6, executor?, partner, agent, director of gained by fiduciary.

a company ®, legal adviser, or other person bound in a fiduciary character to protect the interests of another person', by availing himself of his character, gains for himself 10 any pecuniary Cogan v. Stephens, 5 L. J., N. S., cases cited pp. 393, 394. They are

liable to be sued for a breach of trust See Symes v. Hughes, L. R., 9 Eq. in case they have not dealt with the 475: Lewin, 106.

property of the company and watched 3 Cases in Lewin, 63, note (). over its business as carefully as a man • Contract Act, sec. 15.

of ordinary prudence would deal with Freakley v. Fox, 2 B. & C. 134 : such property, and watch over such Ingle v. Richards, 28 Beav. 366. business, if they were his own, ibid. Lewin, 180-187.

394, per Scott J. As to the distinetion ? This includes an executor of his between directors and trustees, see 6 own wrong (supra, p. 458), Mulvany v. Ben. 282, per Phear J. Dillon, i Ball & B. 409.

Hobday v. Peters, 6 Jur. N. 8794 & That directors are in the position 10 or for himself and some person of trustees, see 9 Bom. 373 and the jointly with him, L. R., 2 I. A. 18.

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Ch. 17.

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advantage, or where any person so bound enters into any dealings under circumstances in which his own interests are, or may be, adverse to those of such other person and thereby gains for himself a pecuniary advantage, he must hold for the benefit of such other person the advantage so gained 1.

Illustrations. (a) A, an executor, buys at an undervalue from B, a legatee, his claim under the will. B is ignorant of the value of the bequest. A must hold for the benefit of B the difference between the price and value.

(6) A, a trustee, uses the trust-property for the purpose of his own business. A holds for the benefit of his beneficiary the profits arising from such user.

(c) A, a trustee, retires from his trust in consideration of his successor paying him a sum of money. A holds such money for the benefit of his beneficiary.

(d) A, a partner, buys land in his own name with funds belonging to the partnership. A holds such land for the benefit of the partnership.

(©) 4, a partner, employed on behalf of himself and his copartners in negotiating the terms of a lease, clandestinely stipulates with the lessor for payment to himself of a lákh of rupees. A bolds the lakh for the benefit of the partnership?

(f) A and B are partners. A dies. B, instead of winding up the affairs of the partnership, retains all the assets in the business. B must account to A's legal representative for the profits arising from A's share of the capital.

(9) A, an agent employed to obtain a lease for B, obtains the lease for himself. A holds the lease for the benefit of B.

(1) A, a guardian, buys up for himself incumbrances on his ward B's estate at an undervalue. A holds for the benefit of B the incumbrances so bought, and can only charge him with what he has actually paid '.

89. Where, by the exercise of undue influence ", any ad- Advantage vantage is gained in derogation of the interests of another, gained by the person gaining such advantage without consideration, or undue

influence. with notice that such influence has been exercised, must hold the advantage for the benefit of the person whose interests have been so prejudiced 6.

1 In L. R. 4 I. A. 84 the Judicial ? Fawcett v. Whitehouse, 1 R. & Committee thought that a custom permitting the sale of a trusteeship

8 Powell v. Glover, 3 P. W. 251 n. for the pecuniary advantage of the • Contract Act, sec. 16. trustee would be bad in law. See • Maitland v. Irving, 15 Sim. 43. Sugden v. Crossland, 3 Sm. & G. See the Specific Relief Act, infra, sec. 192

3, ill. (6).

M. 132.

Owner.

Advantage 90. Where å tenant for life, co-owner, mortgagee? or other qualified qualified owner of any property, by availing himself of his

position as such, gains an advantage in derogation of the rights of the other persons interested in the property, or where any such owner, as representing all persons interested in such property, gains any advantage, he must hold, for the benefit of all persons so interested, the advantage so gained, but subject to repayment by such persons of their due share of the expenses properly incurred, and to an indemnity by the same persons against liabilities properly contracted, in gaining such advantage

Tlustrations. (a) A, the tenant for life of leasehold property, renews the lease in his own name and for his own benefit. A holds the renewed lease for the benefit of all those interested in the old lease?

(6) A village belongs to a Hindú family. A, one of its members, pays nazrána to Government and thereby procures his name to be entered as the inámdár of the village. A holds the village for the benefit of himself and the other members.

(c) A mortgages land to B, who enters into possession. B allows the Government revenue to fall into arrear with a view to the land being put up for sale and his becoming himself the purchaser of it. The land is accordingly sold to B. Subject to the repayment of the amount due on the mortgage and of his expenses properly incurred as mortgagee, B holds the land for the benefit of A".

Property 91. Where a person acquires property with notice that acquired

another person has entered into an existing contract affecting with notice of existing that property, of which specific performance could be enforced, contract.

the former must hold the property for the benefit of the latter to the extent necessary to give effect to the contract 5.

1 Where a mortgagee, in execution A and B, jointly entitled to a of a simple decree for money, the re- moiety of a certain shop, were transpayment of which is secured by mort- ported for life. C and D, the owners gage, attaches and sells the mort- of the other moiety, thereupon fraudegagor's right to redeem, and purchases lently took possession of A and B's that right himself, he holds the right moiety, and held it by theinselves as a trustee for the mortgagor, 5 Ben. or their assignees. B was para 450, 460. That a mortgagee is not a doned and returned (A having died). constructive trustee for the mortgagor The High Court ruled that C and D of his power of sale (supra, p. 782), see had taken possession for the benefit of Warner v. Jacob, 20 Ch. Div. 2 20. A and B, and that B was entitled

2 Where the interest acquired by as against the mortgagee to assert his the qualified owner is distinct from, right, 2 All. 361, 365. and not in substitution of the property, 3 See Act I of 1877, sec. 3, illussee Randall v. Russell, 3 Mer. 190. trations (9), (k). See, too, see. gó, 3 Eyre v. Dolphin, 2 B. & B. 290.

infra.

held on

trust.

92. Where a person contracts to buy property to be held Purchase on trust for certain beneficiaries and buys the property ac- contracting

by person cordingly, he must hold the property for their benefit to the to buy pro

perty to be extent necessary to give effect to the contract.

93. Where creditors compound the debts due to them, and Advantage one of such creditors, by a secret arrangement with the secretly

gained by debtor, gains an undue advantage over his co-creditors, he commust hold for the benefit of such creditors the advantage so creditors.

pounding gained.

tive trusts

94. In any case not coming within the scope of any of the Construcpreceding sections, where there is no trust, but the person in cases not having possession of property has not the whole beneficial expressly

provided interest therein, he must hold the property for the benefit of for. the persons having such interest, or the residue thereof (as the case may be), to the extent necessary to satisfy their just demands 1.

Illustrations. (a) A, an executor, distributes the assets of his testator B to the legatees without having paid the whole of B's debts. The legatees hold for the benefit of B's creditors, to the extent necessary to satisfy their just demands, the assets so distributed .

(6) A by mistake assumes the character of a trustee for B, and under colour of the trust receives certain money. B may compel him to account for such moneys S.

(c) A makes a gift of a lákh of rupees to B, reserving to himself, with B's assent, power to revoke at pleasure the gift as to Rs. 10,000. The gift is void as to Rs. 10,000“, and B holds that sum for the benefit of A%.

17 All. 25. Sec. 94 would include the case of the widow or some other member of the family of a missing person having possession of his estate, 2 Agra, Civ. Court Ap. 78. It would also seem to include the case of a wrongful invasion or continuance in possession of a stranger, whether with or without knowledge of the infirmity of his title. In such case, however, the Madras High Court held that the wrongdoer was not a constructive trustee unless he had been admitted into possession by a trustee so as to be affected by the trust, 5 Mad. 91, 105. Sec. 94 would include the case of a Hindú executor who, by the

will, is made an express trustee for certain purposes, and who is as to the undisposed residue constructive trustee for the testator's heirs, 2 Bom. 388. It would also apparently cover that form of constructive trust which the Panjáb courts have held to arise when a co-sharer in a village com. munity absents himself without expressly abandoning his rights.

2 Wms. Exors., 8th ed. 1457, 1458.

3 Rackham v. Siddall, 16 Sim. 297: 1 Mac. & G. 607.

+ See the Transfer of Property Act, sec. 126, supra, p. 811.

5 As to the case of an absent co-sharer, see 3 All. 458.

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