TMI Blog1926 (8) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... or in a claim by the plaintiff's father against the late Nawab of Banganapalle and collected about ₹ 65,000 from the Nawab; that out of that sum a sum of ₹ 10,000 was deposited in trust with the firm of Tawker Sons, the terms being that the defendants should invest the said sum of ₹ 10,000 at 9 per cent. in their firm or in any other firm as the defendants might deem fit, pay the interest and pay the' amount of the trust to the plaintiff when he attained 21 years; that a letter was passed on the 5th October 1919 containing the terms of the trust already arranged and that on the 22nd October 1919 a receipt for ₹ 10,000 was granted by the defendants; that the defendants were paying interest at 9 per cent. up to the date of plaint, but failed to invest the trust money and committed a breach of trust, that the defendants are heavily involved and are unable to pay the creditors and that they are convening a meeting of the creditors for the purpose of liquidating their debts and that the plaintiff apprehends that some of the creditors may adjudicate the defendants in insolvency and that his moneys may be lost unless the plaintiff's interests are safe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved in excess of the interest due on the date of the plaint and credit will have to be given for that sum towards interest from the end of 1923 up to this date. As regards the interest which accrued after 1st January 1924 credit will have to be given for ₹ 535 and the balance only will be paid to the plaintiff. 6. The main question is whether the plaintiff is entitled to any preferential claim as regards the ₹ 10,000. There is no dispute that the firm of Tawker Sons were trustees in respect of ₹ 10,000 deposited by the plaintiff's father with them in trust for his minor son, the plaintiff, to be paid on the plaintiff attaining majority. All the terms and conditions required for a valid trust have been complied with the moment the money has been handed over and the terms are admittedly that it should be kept with Tawker Sons and used either by them or invested as they chose and that interest at 9 per cent should be paid. The main contention, and in fact the only contention, raised by the Official Assignee is that in the events that have happened, and having regard to the fact that the money was used by Tawker Sons as part of their business and having r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence on the plaintiff's side. It cannot be suggested that Tawker and Sons who were doing business, did not sell any stock or purchase any stock during the period of 2 years. On the evidence of Sivasankar Bhat, which I see no reason to disbelieve, it is clear that, acting on the permission of the author of the trust when the trust was created Tawker and Sons, instead of keeping the trust funds invested separately or ear marked, used it for the purpose of purchasing show room goods. The goods were being sold, fresh goods were being bought and the plaintiff's money had been used for purchase and when the firm became insolvents the plaintiff was entitled to say that, as the trust money was used for the purchase of goods which went on being converted from time to time, he is in the absence of the preferential rights entitled to follow the goods in the show room and to claim a charge upon those goods or their sale proceeds to the extent of the moneys of the trust which have been utilized by Tawker and Sons who are admittedly trustees for the plaintiff. 9. If any authority is needed for the proposition, I think it is found in the observations of Jessel M. R. in In re. Hall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the firm of Arbuthnot and Co. it was recognized that it might not always be possible to secure this and that eventually all the trustees might be persons in no way connected with Arbuthnot and Co. 11. Again the learned Judge says: I think it is clear from the terms of the trust deed that the settlor regarded the body of trustees and banking firm of Arbuthnot and Co. as two distinct and separate entities. At first no doubt the persons named as trustees were the then members of the firm. But the deed contemplated the possibility that at any moment all the members of the firm might cease to be trustees and appoint persons entirely unconnected with the firm as trustees in their place, an event which has actually happened, and this possibility itself made it necessary to distinguish between the body of trustees and members of the firm. 12. The judgment of Munro, J., proceeded upon this distinction which, he emphasizes but in the present case there can be no such distinction as Ex. A, the letter, and Ex. B, the receipt did not contemplate the possibility of any person being a trustee except the firm of Tawker and Sons. Abdur Rahim, J., thinks that that distinction is not mat ..... 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