Vol. 12 · pages 346–350

PART II EXPRESS OR DECLARED TRUST CHAPTER I. Two kinds of Declared Trusts— (i) Executed. (ii) Executory. CHAPTER II. The Creation of an Express Trust. CHAPTER III. The Revocation of an Express Trust. Declared CHAPTER IV . The Extinction of an Express Trust.

CHAPTER I Two kinds of Declared Trusts Executed and Executory An Express Trust is either an Executed Trust or is an Executory Trust. I. EXECUTED AND EXECUTORY TRUSTS 1. The expressions Executed and Executory as used in relation to contract have not the same meaning which they have when used in relation to trust. 2. When used in relation to a contract they refer to the carrying out of the contract. When used in relation to a trust they refer to the creation of a trust as distinguished from its carrying out. 3. In the sense in which the term is used in contract every trust is executory until it is over. But that is not the meaning in which the word is used in relation to trust. 4. When the words Executed and Executory are used in connection with a trust they have different meaning. (1) A trust is an Executed Trust when the author of the trust has not only designated the persons who are to benefit by the trust but has also indicated the interests which they are to take in the trust property. (2) A trust is said to be an Executory Trust when the author of the trust has only designated the persons who are to benefit by the trust but has not indicated the interests which they are to take in the trust property but has left it to be defined by another person by another instrument. Illus.—On the marriage of A and B it is agreed between them that certain property shall be settled on trust for them and for their children. NOTE.—Here the parties who are to benefit by the trust are defined—They are A and B and their children— (1) But what benefits A and B their children are to take is not defined. (2) Therefore, it is an Executory Trust. (3) The line of cleavage between an Executed Trust and an Executory Trust is different from the line of cleavage between a completely constituted trust and an incompletely constituted trust.

328 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES (4) The line of cleavage between a completely constituted trust and an incompletely constituted trust is :- in the former the property is vested in the Trustees upon trust; in the latter the property is not so vested. (5) The line of cleavage between an Executed Trust and an Executory Trust is that in the former the interests of the beneficiaries are defined when in the latter they are not so defined. (6) That being so an Executory Trust may be a completely constituted Trust. II. PARTIES TO A TRUST. 1. Apparently there are three parties to the transaction of a trust— (i) The party who makes the trust. (ii) The party who accepts the trust. (iii) The party for whose benefit the trust is made. 2. The party who makes the trust is called “the author of the trust”. The party who accepts the trust is called the trustee. The party for whose benefit the trust is made by the author and accepted by the trustee is called the beneficiary. 3. Is it necessary that the three parties should be distinct and separate and that one of three cannot occupy the role of any two of them ? The answer to this question is some of them can play the role of two. (i) The author of the trust and the beneficiary of the trust must be distinct and separate. (ii) The trustee and the bebeficiary must be distinct and separate. (iii) The author of the trust need not be distinct and separate from the Trustee.. 4. The reasons why some parties can occupy the role of two in one and some cannot are important. (i) The making of a trust results in the creation of two different estates in the property which is the subject-matter of the trust— the legal and the equitable. A trust lasts as long as these two interests remain separate, (ii) If the legal and equitable estates happen to meet in the same person, the equitable is forever extinguished by being absorbed in the legal. In other words, where the legal and the equitable interests are co-extensive and

329THE LAW OF TRUST vested in the same person the equitable merges in the legal interests which means that the trust comes to an end. There are two principles to be borne in mind (i) There is no trust if it does not create a separate equitable interest. (ii) There is no trust if the separate legal and equitable interest become merged. 5. Applying these two principles we reach the following conclusion— (i) There is no merger when the author of the Trust and the trustee are the same. Therefore, they need not be distinct. (ii) There is no creation of a separate equitable estate when the author of the Trust and the beneficiary are the same. Therefore, they must be distinct. (iii) There is merger when the trustee and the beneficiary are the same. Therefore, they must be distinct. To sum up. The author of the trust and the trustee may be one and the same person. But the beneficiary must always be a distinct person separate from the author of the trust as well as from the trustee. 6. So far we have taken simple cases where the parties are single individuals. What happens when the parties are multiple parties, and where some of them play double role. Illus. (i) A and B are the beneficiaries of a trust. Of them A is also a trustee. Is such a trust valid ? (ii) A and B are beneficiaries of a trust. Of them A is the author of the trust. Is such trust valid ? 7. The answer to the first question is in the affirmative. It is found in Section 6 which defines a trust. The definition does not give an answer to the Second question. Yet such a trust is invalid. zz