Pat

naLawCol
lege-Semest
erI
II

Equi
tyAndTr
ust-ByRahi
laI
mam

Topi
cst
obedi
scussundert
heI
ndi
anTr
ustAct1882:
-

I
ntr
oduct
ion

Hi
stor
yoft
heTr
ust
's:
-Conceptofat
rust

Howat
rustar
ises?

I
nEngl
i
shLaw

I
nRomanLaw

I
nIndi
a

Def
ini
ti
onandMeani
ngoft
heTr
ust

Di
sti
nct
ionbet
ween:
--ATr
ustandBai
l
ment

-Tr
ustandCont
ract
s

-Mor
tgages

-Debt
s

-Agency

Cl
assi
fi
cat
ionofTr
ust
s

Cr
eat
ionofTr
ust-
:(a)
Par
ti
est
oaTr
ust(
b)Whomaycr
eat
eat
rust(
c)Whomaybe
benef
ici
ary(
d)Whomaybeat
rust
ee

Rul
eofCer
tai
nit
ies

Publ
i
corChar
it
abl
eTr
ust-Gener
alDef
ini
ti
on

-Doct
ri
neofCy
press

-Di
ff
erencebet
weenPubl
i
cTr
ustandPr
ivat
eTr
ust

Tr
ust
ees:
-Dut
ies,
Right
sandPower
,Li
abi
l
iti
es

Benef
ici
ary:
-Ri
ght
sandLi
abi
l
iti
es

Ext
inct
ionofTr
ust
s

1
I
ntr
oduct
ion

"
Atr
usti
sthebi
ndi
ngoft
heconsci
enceofonet
othei
ntent
ionofanot
her
"-

Bacon

Todef
ineat
rusti
sav
eryuphi
l
ltask.Ther
eisnosuchdef
ini
ti
onwher
eit
smeani
ngi
s
def
inedcl
ear
lyori
ntot
ali
ty.Soal
loft
het
hinker
s,j
uri
sts,ei
therhav
edescr
ibei
tby
compar
ingi
twi
thot
heri
deasorhav
epr
ovi
dedi
ncompl
etedef
ini
ti
on.

Ther
efor
eat
rustmaybedef
ineasanequi
tabl
eobl
i
gat
ionbi
ndi
ngaper
son(
cal
l
ed
t
rust
ee)t
odealwi
tht
hepr
oper
tyov
erwhi
chhehascont
rol(
cal
l
edt
het
rustpr
oper
ty)
f
ort
hebenef
itofper
sons(
cal
l
edt
hebenef
ici
ari
esorcest
uisquet
rust
)ofwhom he
mayhi
msel
fbeoneandany
oneofwhom mayenf
orcet
heobl
i
gat
ioni
.eat
rusti
san
obl
i
gat
ion-Anequi
tabl
eobl
i
gat
ionbi
ndi
ngaper
son'
sconsci
ence.I
tisconcer
ned
wi
thpr
oper
tywhi
chi
stobehel
dinconf
idenceandmanagedf
ort
hebenef
itof
cer
tai
nper
sonscal
l
edbenef
ici
ari
es.

Forex:
-At
ransf
ershi
spr
oper
tyt
oBf
ort
he'
use'
ofandi
ntr
ustofX.Ai
stheowner
oft
hepr
oper
ty,Xi
sthebenef
ici
aryandBi
sat
rust
eei
nwhom conf
idencebyt
he
owneroft
hepr
oper
tyi
sreposed.

Hi
stor
yoft
heTr
ust
s

Theopi
nionr
egar
dingt
heor
igi
norhi
stor
yofTr
ust
sisal
sov
eryconf
usi
ng.Some
aut
hor
iessai
dthatt
het
rustf
ir
stl
ydev
elopedundert
heRomanLaw.Ot
hersai
d
Engl
i
shLawi
sthef
ir
stt
oadoptt
heconceptofTr
ust
.

Conceptofat
rustandHowat
rustar
isedi
nEngl
ishLaw

Someaut
hor
ssay
sthatt
het
rusti
nEngl
i
shl
awi
sconnect
edwi
tht
heRomanswhi
l
e
somesay
sthati
tisdev
elopedandi
ntr
oducedf
ir
sti
nEngl
andi
tsel
f.Whenweseei
n
t
heabov
eexampl
e,i
nCommonLaw,
Awast
hel
egalownerandBwast
olookaf
ter
t
hepr
oper
tyandmanagei
tfort
hebenef
itofX.Thesewer
eB'
smor
alobl
i
gat
ions.
Engl
i
shl
aw coul
dn'
tenf
orcet
heobl
i
gat
ionofB becauseenf
orcementofmor
al
obl
i
gat
ioni
snotpossi
ble.I
ntheequi
tycour
tsal
so,i
twasal
sodi
ff
icul
tint
he
begi
nni
ng t
o enf
orce t
he obl
i
gat
ion as "
equi
tyf
oll
ows t
he l
aw"
.Butgr
adual
l
y
chancer
ylawy
ersandj
udgesf
oundawayoutt
oenf
orcet
hisobl
i
gat
ionofBand
pr
ovi
dedpuni
shmenti
ncaseofnonf
ulf
il
lment
.HenceBwasboundt
ohol
dand
managet
hepr
oper
ty,and nott
o gi
vei
tawayt
o any
bodyordamaget
o av
oid
puni
shment
.

2
Equi
tyconv
ert
edmor
alobl
i
gat
ioni
ntoequi
tabl
eobl
i
gat
ionbydi
ssoci
ati
ngbenef
ici
al
i
nter
est
s.At
rustt
husar
iseswhenbenef
ici
ali
nter
est
sisdi
ssoci
atedf
rom l
egalt
it
le
andconf
idencei
sreposedi
nthel
egal
tit
lehol
der
.

Ot
hert
hingt
obenot
edi
sthatunderEngl
i
shl
awaccor
dingt
otheMai
tl
andt
hewor
d
'
use'i
sder
ivedf
rom t
heLat
inwor
d"adopus"meani
ngi
s"onbehal
fof
".Andt
he
pr
oper
tywashel
daf
tert
heagr
eementbet
weent
hei
nterv
ivos,i
.ebot
hthepar
ti
es
mustbeal
i
veal
ongwi
tht
hebenef
ici
ary
.Mai
tl
andsai
dfr
om t
hisconceptt
hel
and
washel
dper
manent
lybyonemanonbehal
fofanot
herwhi
chl
eadt
othef
ormat
ion
oft
rust
.

Conceptofat
rustandHowat
rustar
isedi
nRomanLaw

Undert
he Roman Law,t
he conceptoft
rustwas t
aken f
rom t
he t
erm "
fi
dei
commi
ssum"whi
chexpr
essest
heobl
i
gat
ionoft
hehei
rtoexecut
ethel
astwi
shesof
t
hedeceased.Thatmeanst
heappoi
ntedhei
rwhogotpr
oper
tyi
ntr
ustf
oranot
her
wast
ermedf
ideicommi
ssum.Andt
heci
ti
zenwhi
l
eappoi
nti
ngat
est
ament
aryhei
r
hadbutal
i
mit
edchoi
cei
nsof
arashecoul
dnotappoi
ntanal
i
en,
notapost
humous
chi
l
dout
sidehi
sfami
l
y,norawoman,
toi
nher
ithi
spr
oper
ty.

Sot
hel
aw wasadopt
edt
her
etoappoi
ntaper
sonwhoi
squal
i
fiedasahei
rand
madehi
mtot
ransf
ert
hepr
oper
tyt
otheper
sonwhowast
obet
her
ealobj
ect
.Thi
s
subsequentt
ransf
erwasi
nthef
orm ofagi
ftwhi
cht
heper
sonr
ecei
vi
ngwasnot
pr
ohi
bit
edt
orecei
ve.Thequal
i
fiedper
sonwast
hust
ohol
dthepr
oper
tyi
ntr
ustf
or
anot
herunt
ilhet
ransf
err
edi
ttot
her
eal
obj
ect
.

Conceptofat
rustandHowat
rustar
isedi
nIndi
anLaw

I
nIndi
atheI
ndi
anTr
ustAct1882wasexcl
usi
vel
yenact
edf
ort
het
rustal
thoughi
t
onl
y be i
mpl
ement
ed on t
he Pr
ivat
e Tr
ust
.Unl
i
ke Engl
i
sh l
aw wher
e doubl
e
owner
shi
ppr
evai
l
si.
e.t
her
ear
etwoki
ndsofest
ates,l
egalandequi
tabl
eofwhi
ch
t
wodi
ff
erentper
sonscanbet
heowner
sandt
heseowner
scanwel
ltr
ansf
ert
hei
r
r
espect
ivei
nter
est
stoanyper
sonorper
sons.Butt
her
eisnosucht
hingl
i
kedoubl
e
owner
shi
pconcepti
nIndi
a.

Bef
ore1882,t
rust
sunderHi
ndul
aw andMohomedanLaw wer
eenf
orcedbuti
n
doi
ngsopr
inci
plesofEngl
i
shequi
ty,j
ust
iceandgoodconsci
encewer
eappl
i
ed
wher
enecessar
y.Butaf
tert
heenact
mentofTheI
ndi
anTr
ustAct1882t
het
rustwas
madeal
egal
lawi
nIndi
a.

3
Def
ini
ti
onsofTr
ust

I
roni
cal
l
ythedef
ini
ti
onsoft
rustgi
venbyt
heaut
hor
sar
enotexcl
usi
vedef
ini
ti
ons.
Somear
enar
rowsoar
eincompl
eteorv
erybr
oad.So,
iti
sbet
tert
odescr
ibet
hant
o
def
ineat
rust
.

Fol
lowi
ngar
esomeoft
hedef
ini
ti
onoft
rust
:-

Accor
ding t
otheUnder
hil
l'
sdef
ini
ti
onwhi
chwasal
so quot
ed byt
hecour
tsi
n
Mar
shal
laswel
lasGr
eencasewhi
chsay
s"at
rusti
sanequi
tabl
eobl
i
gat
ionbi
ndi
ng
aper
son(
whoi
scal
l
edat
rust
ee)t
odealwi
thpr
oper
tyov
erwhi
chhehascont
rol
(
cal
l
edt
het
rustpr
oper
ty)
,fort
hebenef
itofper
sons(
cal
l
edt
hebenef
ici
ari
es)
,of
whom hemayhi
msel
fbeone,
andany
oneofwhom mayenf
orcet
heobl
i
gat
ion"
.

Butt
hisdef
ini
ti
on i
sa nar
row def
ini
ti
on becausei
tcannotcont
ainschar
it
abl
e
pur
posesorpur
poset
rust
swhi
chl
ackhumanbenef
ici
arywhocanenf
orcet
hem e.
g.
t
rust
sofi
mper
fectobl
i
gat
ionsorhonor
aryt
rust
s.

Accor
dingt
otheLewi
n'
sdef
ini
ti
on,at
rusti
s"aconf
idencer
eposedi
nsomeot
her
,
noti
ssui
ngoutoft
hel
and,
butasat
hingcol
l
ater
al,
annexedi
npr
ivi
tyt
otheest
ateof
t
hel
and,andt
otheper
sont
ouchi
ngt
hel
and,f
orwhi
cht
hecest
uiquet
rusthasno
r
emedybutbysubpoenai
nthechancer
y".

St
orydef
inest
het
rust"t
obeanequi
tabl
eri
ght
,ti
tl
eori
nter
esti
npr
oper
ty,r
ealor
per
sonal
,di
sti
nctf
rom t
hel
egal
owner
shi
pther
eof
.

Accor
dingt
oSmi
that
rust"i
sasadut
ydeemedi
nequi
tyt
orestont
heconsci
ence
oft
hel
egal
owner
."

Snel
lcal
ls"
atr
ustabenef
ici
ali
nter
est
sin,orabenef
ici
alowner
shi
pof
,realor
per
sonal
proper
tyunat
tendedbyt
hel
egal
owner
shi
p."

Her
epoi
ntt
obenot
edi
sthat
,thel
egalt
it
lev
est
sint
het
rust
eebuthei
sthenomi
nal
ownerast
her
ealbenef
itdoesnotaccr
uet
o hi
m,whi
l
eabenef
ici
aryhast
he
equi
tabl
eti
tl
einhi
m andi
sabenef
ici
alowner
,ast
her
eal
benef
it
saccr
uest
ohi
m.

Def
ini
ti
onundert
heI
ndi
anTr
ust
sAct1882

Sec3oft
heActsay
sli
ket
his"At
rusti
sanobl
i
gat
ionannexedt
otheowner
shi
pof
pr
oper
ty,andar
isi
ngoutofaconf
idencer
eposedi
nandaccept
edbyt
heowner
,or
decl
aredandaccept
edbyhi
m,f
ort
hebenef
itofanot
her
,orofanot
herandt
heowner
,

Theper
sonwhor
eposedordecl
aredt
heconf
idencei
scal
l
edt
he"aut
horoft
he

4
t
rust
";t
heper
sonwhoaccept
stheconf
idencei
scal
l
edt
he"
tr
ust
ee"
;theper
sonf
or
whosebenef
itt
heconf
idencei
saccept
edi
scal
l
ed"
benef
ici
ary
";t
hesubj
ectmat
ter
oft
het
rusti
scal
l
ed"
tr
ustpr
oper
ty"or"
tr
ustmoney
";t
he"
benef
ici
ali
nter
est
"or
"
int
erest
"oft
hebenef
ici
aryi
shi
sri
ghtagai
nstt
het
rust
eeasowneroft
het
rust
pr
oper
ty:andt
hei
nst
rument
,ifany,bywhi
cht
het
rusti
sdecl
aredi
scal
l
edt
he
"
inst
rumentoft
rust
";"abr
eachofanydut
yimposedonat
rust
ee,
assuch,
byanyl
aw
f
ort
het
imebei
ngi
nfor
ce,
iscal
l
ed"abr
eachoft
rust
".

Thedef
ini
ti
onundert
heI
ndi
anTr
ustAct1882i
snar
row anddef
ect
ivebecausei
t
onl
ycov
ersaspeci
fi
cfi
eldi
ntheconceptoft
rust
s,pr
ivat
eexpr
esst
rust
s,andt
he
sect
ioni
tsel
fcl
ear
sthi
s.Appar
ent
lyt
hisdef
ini
ti
oni
sinspi
redbyt
hedef
ini
ti
ongi
ven
byt
heLewi
n.I
temphasi
sesupont
heobl
i
gat
ion,l
ayi
ngdownt
hatat
rusti
san
obl
i
gat
ionannexedt
otheowner
shi
pofpr
oper
tyf
ort
hebenef
itoft
heanot
her
.Ther
e
i
snot
rustwher
esuchobl
i
gat
ioni
sabsent
.Secondl
ythebenef
ici
aryhasnoi
nter
est
i
nthet
rustpr
oper
tybuthasonl
yar
ightagai
nstt
het
rust
eewhoi
stheowneroft
he
pr
oper
tybuthasonl
yar
ightagai
nstt
het
rust
eewhoi
stheowneroft
hepr
oper
ty.
Andl
ast
ly,
theset
tl
orhi
msel
fcanbeat
rust
ee.

Fol
lowi
ngar
ethef
ouressent
ialchar
act
eri
sti
csoft
heTr
ust
:-

(
a)t
hei
ntent
ionoft
heset
tl
ort
ocr
eat
eat
rustmustbeexpr
essandcl
ear
,

(
b)t
hepur
posef
orwhi
cht
het
rusti
stobecr
eat
ed,

(
c)t
hepr
oper
tyt
hati
stobehel
dint
rust
,and

(
d)t
hebenef
ici
ari
eswhoar
etobenef
itf
rom t
het
rustmustbecer
tai
nanddef
ini
te.

Requi
sit
esf
oraTr
ust

(
I)Tr
ansf
erofpr
oper
ty:
-At
rusti
nvol
vesat
ransf
erofpr
oper
tyf
rom t
heset
tl
ort
o
t
het
rust
ee.Wher
ethepr
oper
tyi
simmov
abl
epr
oper
tygi
venunderawi
l
lorbyanon-
t
est
ament
aryi
nst
rumenti
tshoul
dbei
nwr
it
ing,si
gnedbyt
heset
tl
orandr
egi
ster
ed.
Andi
ncaseofmov
abl
epr
oper
tyal
ongwi
thapar
oldecl
arat
iont
ogi
vei
tint
rust
woul
dbesuf
fi
cient
.

(
II
)Aut
hormustbecompet
ent:
-Theaut
hormustbecompet
entt
otr
ansf
er.I
tmeans
heshoul
dbecompet
entt
ocont
ractpr
ovi
dedundert
heSec11oft
heI
ndi
anCont
ract
Act1872.

(
II
I)Tr
ust
eemustal
sobecompet
entt
ohol
dthepr
oper
ty:
-Sec11oft
hecont
ract
actal
soappl
yont
het
rust
ee.Hemustbecompet
entt
ocont
ract
.

5
(
IV)Tr
ust
smustbeExpr
essandRegi
ster
ed:
-thatmeansi
mpl
i
edorconst
ruct
ive
t
rust
sundert
heEngl
i
shl
awar
enotwi
thi
nthepur
viewoft
hedef
ini
ti
onandat
rusti
n
I
ndi
amustber
egi
ster
ed.

(
V)Subj
ectMat
terofTr
ust:
-Thesubj
ectmat
teroft
rustmustbeapr
oper
ty
t
ransf
erabl
etot
hebenef
ici
ary
.

Case-CommonCause,
ARegdsoci
etyvUOI
1Int
hiscasei
twashel
dbyt
hecour
t
t
hatt
heMi
nist
erhol
dingadepar
tmentofmi
nist
ryhol
dsasacr
edt
rustonbehal
fof
t
hepeopl
e.Andt
hiscannotbeempl
oyedf
ort
hedet
ermi
nat
ionoft
heof
fenceof
"
Cri
minalBr
eachofTr
ust
"whi
chi
sdef
inedi
ntheI
PC1860.Whet
hert
heof
fencehas
beencommi
tt
edornothast
obedet
ermi
nedaccor
dingt
othedef
ini
ti
onoft
hat
of
fence.

CaseAl
lahabadBankl
tdvCI
T2:
-Int
hiscasei
twashel
dbySChel
dthatt
her
e
cannotbeat
rustwher
eobl
i
gat
ioni
sabsent
.Ther
eisal
way
sanobl
i
gat
iont
obea
t
rust.

Compar
isonbet
weenDoubl
eowner
shi
pandSect
ion3oft
heI
ndi
anTr
ustAct1882

Thei
deaandt
het
heor
yofdoubl
eowner
shi
pinr
elat
iont
othet
rustpr
evai
l
sinEngl
i
sh
l
aw.Thi
sdoubl
eowner
shi
pist
hepecul
i
aranddi
sti
nct
ivef
eat
ureoft
heEngl
i
sht
rust
.
Thet
rust
eei
sthenomi
nalownerort
hel
egalownerwhohasadi
rectandabsol
ute
owner
shi
pov
ert
hepr
oper
ty,whi
l
eabenef
ici
aryi
sthebenef
ici
alorequi
tabl
eowner
f
orwhosepur
poseandbenef
itt
het
rust
eehast
ohol
dandmanaget
het
rustpr
oper
ty.
Thedut
yoft
het
rust
eer
egar
ding"
usi
ng"hi
sri
ght
sar
eposi
ti
ve.

Thust
het
rust
eehasr
ight
sbutt
heycannotusedt
hem notf
ort
hemsel
vesbutf
ort
he
accompl
i
shmentofacer
tai
npur
poseandf
ort
hebenef
itofaCest
uiquet
rust
(
benef
ici
ary
).

Butundert
hedef
ini
ti
onofSec3ofTheI
ndi
anTr
ustAct1882,
ther
eisnosucht
hing
l
i
kedoubl
eowner
shi
p.Equi
tabl
eowner
shi
pisnotr
ecogni
sed i
nIndi
a.And t
he
t
rust
eei
stheowneroft
het
rustpr
oper
tywheni
tisv
est
edi
nhi
m.Andt
heI
ndi
an
Benef
ici
aryi
snotanequi
tabl
eownerbuthehasonl
yri
ght
sagai
nstt
het
rust
ees.I
n
Tagor
evTagor
e3i
twashel
dbyt
hecour
tthatequi
tabl
eowner
shi
pisnotr
ecogni
sed
i
nIndi
a.Anddoubl
eowner
shi
pideai
sunknowni
nIndi
a.

1.(
1999)
6SCC667

2.1954SCR195AI
R1953SC476

3.(
1872)BLR377(
PC)

6
Di
ff
erencebet
weent
heTr
ustandOt
her
s

A)Di
ff
erencebet
weent
heTr
ustandBai
l
ment
:-

i
)Bai
l
mentwasr
ecogni
sedatCommonLaw andt
her
ight
sandobl
i
gat
ionsofa
bai
l
eear
elegal
wher
easat
rusti
smer
elyequi
tabl
ehav
ingequi
tabl
eri
ght
s.

i
i
)Onl
yper
sonchat
tel
scanbebai
l
ed,
whi
l
eanypr
oper
tymaybehel
dint
rust
.

i
i
i)A bai
l
eehasonl
yaspeci
alpr
oper
tyi
nthebai
l
ment
,thebai
l
orkeepsgener
al
pr
oper
tywi
thhi
msel
f,whi
l
eat
rust
eehast
hef
ulll
egalowner
shi
psubj
ectt
othe
obl
i
gat
ionsat
tachedt
othepr
oper
tyi
ntr
ustwi
thhi
m.

I
V)Onl
yabai
l
orcanenf
orcet
hedut
iesoft
hebai
l
ee,
butanobl
i
gat
ionundert
het
rust
canbeenf
orcedbyany
onewi
thoutnot
iceoft
het
rust
.

V)Abai
l
oruseshi
sspeci
alr
ight
sforhi
sownbenef
itbutat
rust
eei
sboundt
ouse
t
hepr
oper
tyonbehal
fandf
ort
hebenef
itoft
heot
her
.

B)Di
ff
erencebet
weent
heTr
ustandCont
ract
:-

I
)Acont
racti
sacommonl
awper
sonalobl
i
gat
ionr
esul
ti
ngf
rom anagr
eementwhi
l
e
at
rusti
sanequi
tabl
epr
opr
iet
aryr
elat
ionwhi
chcanar
isei
ndependent
lyofan
agr
eement
.

i
i
)Acont
racti
senf
orceabl
eatCommonLaw,
itgi
vesar
ighti
nper
sonam whi
l
etr
ust
r
eposedasamat
terofconf
idencewasenf
orcedi
nequi
tycour
ts.

i
i
i)Cont
racti
sgov
ernedundert
heI
ndi
anCont
ractAct1872whi
l
ePr
ivat
eTr
usti
s
gov
ernedbyt
heI
ndi
anTr
ustAct1882.

i
v)Cont
ractgi
vesr
ighti
nper
sonam whi
l
etr
ustgi
ver
ighti
nrem.

C)Di
ff
erencebet
weent
heTr
ustandMor
tgages:
-

i
)Amor
tgagei
sther
esul
tofacont
ractwher
easat
rusti
sar
esul
tofconf
idence,

i
i
)Amor
tgageedoesnothol
dthemor
tgagedpr
oper
tyasat
rust
eef
ort
hemor
tgagor
whi
l
eat
rust
eehast
ohol
dthet
rustpr
oper
tyf
ort
hebenef
ici
ary
'sbenef
it
.

i
i
i)Amor
tgageehasani
nter
estqui
teadv
erset
othemor
tgagorwhi
cht
het
rust
ee

7
cannothav
e.

i
v)Themor
tgageecanuseorgetsol
dthemor
tgagedpr
oper
tyi
nsui
tabl
ecases
whi
l
ethet
rust
eecannotuset
hepr
oper
tyhi
msel
f.

v
)Themor
tgageebecomesat
rust
ee,oncet
hemoneyi
srepay
edbyt
hemor
tgagor
butat
rust
eedoesnotchangehi
sposi
ti
oni
nat
rustev
enaf
terf
ulf
il
lmentofhi
s
obl
i
gat
ion.

D)Di
ff
erencebet
weent
heTr
ustandDebt:
-

i
)Adebt
orhast
hedut
ytopaymoneyt
othecr
edi
torbutat
rust
eehast
ohol
dthe
pr
oper
tyf
ort
hebenef
ici
ary
.

i
i
)Adebt
or'
sobl
i
gat
ioni
sper
sonal
whi
l
ethet
rusti
spr
opr
iet
ary

i
i
i)Adebt
ori
snotat
rust
eef
orhi
scr
edi
tor
,becausehehasnotuseanyr
ightf
orhi
s
cr
edi
tor
'sbenef
it
,butat
rust
eei
sboundt
oexer
cisehi
sri
ght
sfort
hebenef
itofhi
s
Cest
uiquet
rust
.

i
v)Adebt
orcanspendoruset
hemoneyobt
ainedordoany
thi
nghel
i
keswi
thi
t,but
at
rust
eehasnor
ightt
odeal
wit
hthet
rustpr
oper
tyl
i
ket
hat

v
)Att
het
imeofbankr
upt
cyadebt
or,
moneycannotbef
oll
owedbutmustbecl
aimed
asacr
edi
tori
nbankr
upt
cy.Whi
l
eint
rusti
ftr
ust
eeget
sbankr
upt
,thet
rustpr
oper
ty
canber
ecov
eredt
otheext
entofget
ti
ngr
ecov
ery
.

v
i)Adebt
ori
sboundt
orepayt
hemoneyev
eni
fiti
sst
olen,
whi
l
etr
ust
eei
snotl
i
abl
e
f
oracci
dent
all
oss

E)Di
ff
erencebet
weent
heTr
ustandAgency
:-

i
)Tr
ust
sar
egov
ernedbyt
heequi
tybutagencybyt
hecommonl
aw

i
i
)Agencynor
mal
l
yar
isesbycont
ractbet
weent
hepr
inci
palandagentwher
easmost
t
rust
shasnosuchcont
ract
ual
rel
ati
onshi
pbet
weent
rust
eesandbenef
ici
ari
es.

i
i
i)Pr
oper
tyoft
rustv
est
sint
het
rust
eebutpr
oper
tyofagencydoesnotv
est
sint
he
agent
.

i
v)At
rust
eecannoti
nvol
vehi
sbenef
ici
ari
esi
nli
abi
l
itywhi
l
eanagentcanmakehi
s

8
pr
inci
pal
li
abl
e.

v
)At
rust
eei
sfr
eef
rom t
hecont
rolofbot
haut
horandbenef
ici
arybutanagenti
s
al
way
sint
hecont
rol
ofhi
spr
inci
pal
.

v
i)At
rust
eecanpassal
egalt
it
let
oabonaf
idepur
chaserwhi
l
eanagentcannot
passt
hel
egal
tit
let
othesame.

v
ii
)At
rust
eeder
ivessuchaut
hor
it
yfr
om t
hei
nst
rumentoft
rust
swhi
l
eanagent
der
ivesaut
hor
it
yfr
om apr
inci
pal
.