Indian Trusts Act,1882
Act No : 2
Section : Non-liability for predecessor's default
26. Non-liability for predecessor's default.-Subject to theprovisions of sections 13 and 15, one trustee is not, as such, liablefor a breach of trust committed by his cotrustee: Provided that, in the absence of an express declaration to thecontrary in the instrument of trust, a trustee is so liable-- (a) where he has delivered trust-property to his co-trustee without seeing to its proper application: (b) where he allows his co-trustee to receive trust-property and fails to make due enquiry as to the co-trustee's dealings therewith, or allows him to retain it longer than the circumstances of the case reasonably require: (c) where he becomes aware of a breach of trust committed or intended by his co-trustee, and either actively conceals it or does not within a reasonable time take proper steps to protect the beneficiary's interest.Joining in receipt for conformity. Marginal heading. A co-trustee who joins in signing a receiptfor trust-property and proves that he has not received the same is notanswerable, by reason of such signature only, for loss ormisapplication of the property by his co-trustee. Illustration A bequeaths certain property to B and C, and directs them to sellit and invest the proceeds for the benefit of D. B and C accordinglysell the property, and the purchase-money is received by B andretained in his hands. C pays no attention to the matter for two yearsand then calls on B to make the investment. B is unable to do so,becomes insolvent, and the purchase-money is lost. C may be compelledto make good the amount.
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