THE LAW OF TRUST 353
I. Where a trust is created for an unlawful and fraudulent purpose, the Court will neither enforce the trust in favour of the parties intended to be benefited nor will it assist the settlor to recover the estate (except in one case).
Q.—Why is a beneficiary not allowed to enforce it ?
A.—Because it would be giving effect to an unlawful purpose.
Q.—Why is the author not allowed to recover the estate if he has parted with it ?
A.—Because it would be helping him to take advantage of his own fraud.
II. The one case in which the settlor allowed to recover the property although the trust is for an illegal purpose is the case where the illegal purpose has failed to take effect.
Q.—Why is this exception made ?
A.—There are two reasons :—
(i) The purpose being unlawful no trust arose—it being void ab initio.
(ii) The trustee having paid no consideration has no right to retain the beneficial interest in the property which must, therefore, return to the settlor.
III. The disabilities attaching to the author of an unlawful trust do not apply to his legal representatives—
Q.—Why ?
A.—Because they are not parties to the transactions.
- The reason why section 85 recognizes a trust in favour of legal representatives is because they are innocent parties having nothing to do with the creation of an unlawful trust.
(2) Constructive Trusts arising out of unfair advantage —
I. Section 85.
The first case under this head arises where property is bequeathed under a will and the testator during his lifetime wanted to revoke the bequest and he is prevented from revoking it by coercion.
Under such circumstances the legatee takes the property not as a beneficial owner thereof but holds it as a trustee for the legal representatives of the testator.