Section 26 - Non-liability for co-trustee's defaults. - Indian Trusts Act, 1882

Non-liability for co-trustee's defaults. 26. Subject to the provisions of sections 13 and 15, one trustee is not, as such, liable for a breach of trust committed by his co-trustee: Provided that, in the absence of an express declaration to the contrary 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 reason able time take proper steps to protect the beneficiary's interest. Joining in receipt for conformity. A co-trustee who joins in signing a receipt for trust-property and proves that he has not received the same is not answerable, by reason of such signature only, for loss or mis-application of the property by his co-trustee. Illustration A bequeaths certain property to B and C, and directs them to sell it and invest the proceeds for the benefit of D. B and C accordingly sell the property, and the purchase money is received by B and retained in his hands. C pays no attention to the matter for two years and 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 compelled to make good the amount.