Chapter 4 Chapter 4

Of Certain Obligations in the Nature of Trusts

Trust incapable of execution or executed without exhausting trust-property.—Where a trust is incapable of being executed, or where the trust is completely executed without exhausting the trust-property, the trustee, in the absence of a direction to the contrary, must hold the trust-property, or so much thereof as is unexhausted, for the benefit of the author of the trust or his legal representative.

Transfer for illegal purpose.—Where the owner of property transfers it to another for an illegal purpose and such purpose is not carried into execution, or the transferor is not as guilty as the transferee, or the effect of the transfer is to defeat the provision of any law, the transferee must hold the property for the benefit of the transferor.

Property acquired with notice of existing trust.—Where a person acquired property with notice of an existing trust, or has before the acquisition of the property paid the consideration, the former must hold the property, for the benefit of the latter, to the extent necessary to give effect to the trust.

Advantage gained by fiduciary.—Where a trustee, executor, partner, agent, director of a company, legal advisor, or other person bound in a fiduciary character to protect the interests of another person, by acting in that character, gains any pecuniary advantage, or where any person so bound enters into any dealing under circumstances in which his own interests are, or may be, adverse to those of such other person and thereby gains a pecuniary advantage, he must hold for the benefit of such other person the advantage so gained.

Property acquired with notice of existing trust.—(Note: This appeared in text as Section 91, repeating the previous entry title per source structure).

Purchase by person contracting to buy property to be held for others Purchase by person contracting to buy property to be held for others.—Where a person contracts to buy property to be held on trust for certain beneficiaries and buys the property accordingly, he must hold the property for their benefit to the extent necessary to give effect to the contract.

Advantage secretly gained by one of several compounding creditors.—Where creditors compound the debts due to them, and one of such creditors, by a secret arrangement with the debtor, gains an undue advantage over his co-creditors, he must hold for the benefit of such creditors the advantage so gained.

Advantage secretly gairted by one of several compounding creditors.-- Where creditors compound the debts ue to them, and one of such creditors, by a secret arrangement with th debtor, gain4 an unduc advantage over his w-creditors, he must hold for the benegt of such creditors the 'advantage sd gained.

Constructrve trusts m cases not case not coming within the scope of any there is no tmSt, but the gerson having the whole beneficial htcrst sticrcid, he . beneftt of the persons ha. .ng such cast pay be), to the urteli:

1. (a) A, an executor, distributes the legatees without having paid the whole the bentfit of B's creditors, to the extent demands, the assets so distributed.
2. (b) A by mistake assumes the character wlour of the trust receives certain money. B for saoh moneys.