1. This is an appeal by the 1st defendant against certain specified findings of the lower Court against him in an administration suit brought by the widow of a Brahmin Vakil named Venkatacharlu, who appointed him as trustee under his Will. Four questions were originally raised before us, but with regard to the last of them which raised the question of the validity of a certain gift under the Will to a charity, it is quite clear that this defendant as trustee or executor has no interest. The trustee of the charity in the Court below suffered judgment to go against him and he has not appealed to this Court; and this defendant as executor or trustee can have no possible interest in the matter.
2. There are three other matters we have to consider. The first is the most important, regarding the sum of Rs. 2,000 which perished in Arbuthnot and Co.'s bankruptcy. The case for the plaintiff is that it was money which was deposited there at the time of the insolvency by the doing of the 1st defendant contrary both to his duties as trustee under the law and to the express terms of the instrument under which he purported to act, namely, the Will of Venkatacharlu under which he was trustee. The material clause of the Will is Clause 18. It begins by a direction to the trustee to collect the money due on a policy of insurance upon the testator's life and invest that sum in Messrs. Arbuthnot and Co., and then it goes on: "and for three years they should improve the principal and interest thereof" and in certain events "the money that may accrue till then (that is, till the end of the three years) should be considered as belonging to my wife and my daughter Ramanjamma.. Even then my younger brother Venkataramanjacharyulu and Dhupati Srinivasacharyulu (the 1st defendant) should continue to have the authority of supervision connected with that money as it was in the meantime." The construction sought to be put upon that by the plaintiff is this: she says that it means put the money in Arbuthnot's and keep it there for three years; after the expiration of the three years my share of it" (which I suppose can be taken as one moiety) becomes my absolute property and you retain it at your peril. If you do not hand it over, you are a trustee of it not under the provisions of the document at all, but under the general law and if you retain it in an unauthorised security after that time you are breaking the law, and you are liable if anything goes wrong." On the other side it is said that it is not the position at all, that the direction to the first defendant is to place the fund in Arbuthnot's and to continue as trustee of it under the terms of the Will until the beneficiaries exercise, and are legally able to exercise, the power of calling for a transfer of the legal title. They, therefore, contend that, in the absence of any direction to the trustee against the investment, he is perfectly authorized to retain the money in the firm in which he was originally directed to invest it. I need not trouble myself with the condition that was sought to be imposed upon the interest of the plaintiff, because the Subordinate Judge has held that bad and his decision on that point has not been questioned here. I have come to the conclusion upon this matter that the Will directed the investment to be made in Arbuthnot's, that it directed the defendant to remain trustee of that fund until he transferred it according to law to the beneficiaries and that he was accordingly entitled to retain the money in Arbuthnot's if he liked. I am not sure whether he could consistently with the terms of the Will have changed the investment; at any rate it is sufficient for me to say that there was no obligation upon him to change it. I think this is really consistent with the true construction of the Will, because if the plaintiff's construction were to prevail, it would follow that the trustee could not retain an investment which I understand everybody at the time regarded as absolutely safe and secure and fetched a high rate of interest. That disposes of that point, because in the view we take of the construction of the Will, it is unnecessary to go into the question of fact as to whether there was sufficient material to hold that the plaintiff on attaining majority assented to the retention of the investment.
3. The next matter is with regard to an investment on a first mortgage of certain immoveable property. The facts are these. The 1st defendant and his co-executor under the Will lent a sum of Rs. 1,800 to one Narayana Rao out of the estate of the deceased. That was in 1902. Not a pie of inter?st was ever paid by the mortgagor, and yet it was not until 1907 that the defendant took any steps to recover the arrears of interest and the principal. By that time the total amount, according to the Judge, that was due, when the costs of the action had been counted in, was over a sum of Rs. 3,600. The property was put up for sale and the best that the defendant could do in the absence of any reasonable outside bid was to buy it himself on behalf of the estate for Rs. 3,000. A letter, Exhibit C, was read to us which was written by Narayana Rao in answer to some sort of pressure for payment of interest from the 2nd defendant's father, the co-executor of the 1st defendant; and he says this "The pressure of my debts at present appears to make it inevitable to sell the mortgaged lands. You and Seeniah Garu will please consider and settle the sale of the lands without disadvantage to me or heavy loss to you. If time is allowed to pass away, the amount of interest will greatly increase and 1 shall be a great loser." By that letter the executors had express notice that this man was in ah embarrassed state financially and that the only hope he entertained of salvation was to sell the properties before they became saddled with large arrears of interest, which could only mean one thing that he knew quite well, and informed the creditors that if the arrears of interest were allowed to mount up, the property would not be security enough. In spite of that letter these gentlemen do nothing for seven years to protect the interest of the cestui que trust. We quite agree with the learned Judge that the 1st defendant is clearly liable on this, head of the claim. By agreement the amount has been settled at Rs. 3000. On the 1st defendant paying Rs. 3,010 with interest at 6 per cent. per annum from the date of the plaint, the properties together with any income that may have been received from them from the date of plaint will go to him.
4. The remaining point is a claim for interest on a sum of Rs. 800 which was payable to the 3rd defendant. Mr. Venkatarama Aiyar wisely concedes that it is not possible to make the 1st defendant personally liable for it and that only the estate would be liable.
5. That disposes of all the points that arise in this appeal. The parties will bear their own costs.
Appeal No 279 of 1913.
6. Appeal No. 279 of 1913 is allowed and the 2nd defendant, who is the appellant in that case, will be entitled to his costs from the plaintiff personally both here and in the lower Court.
7. This case having been posted to this day for being spoken to, the Court made the following
8. Three months' time from this date is granted for the 1st defendant paying Rs. 3,003 with interest as aforesaid. In default, the decree of the lower Court in respect of this matter will stand confirmed.