John Beaumont, C.J.
1. This is an appeal from a decision of Mr. Justice Blackwell, and it raises interesting questions of law relating to charitable trusts.
2. The parties are all Mahomedans of the Shia sect, and on October 29, 1895, Abdulhussein Isubhai a member of that sect executed a deed of trust by which he conveyed certain immovable property to himself and another as trustees. upon trust that the income should be paid to himself for life, and after his death the income was to be divided into five parts. Stated shortly the trusts were to pay the income of one part equal to ten per cent to the settlor's widow for her life, to pay the income of another part equal to thirty per cent. to one of the settlor's daughters for her life and then to her named children for their lives, to deal with another part equal to thirty per cent upon similar trusts for the other daughter and her named children, and subject to these trusts the whole property was given to objects which are admittedly charitable according to Mahomedan law. There was a power to appoint new trustees, which vested after the death of the settlor in his two daughters, and the survivor and after her death in the surviving or continuing trustees, or administrators or executors of the last surviving trustee. The widow and daughters are dead and the only child of a daughter now living is defendant No. 1.
3. The property, the subject of the settlement, was entered in the municipal records in the name of the settlor, and no change was made after the execution of the document. But if the document was valid, the presumption that possession follows title would apply, and the possession of the settlor would be treated as that of tenant for life under the settlement, and not as owner claiming against the settlement. The settlor died in 1897, but the property remained standing in his name in the municipal records until 1927.
4. By a deed of March 14, 1901, the daughters of the settlor appointed defendant No. 1 as the sole trustee of the deed, the power of appointment under the deed enabling the number of trustees to be reduced on a new appointment. In January, 1908, defendant No. 1 was adjudicated insolvent, and by a deed of April 21, 1908, the then surviving daughter of the testator appointed the father of defendant No. 1 and another person, neither of whom had any interest in the trust property, to be trustees of the deed. In 1912 the father of defendant No. 1 was adjudicated insolvent, and on June 8 in that year the surviving daughter appointed another person in place of the father of defendant No. 1. In 1914 the insolvency of defendant No. 1's father was annulled, and in 1918, after the death of the surviving daughter of the testator, the surviving trustee reappointed the father of defendant No. 1 as a trustee. The other trustee died in 1918, and in 1924 the father of 'defendant No. 1, who was then the sole trustee, died. Defendant No. 1 took out letters of administration to his father's estate, and by a deed of August 28, 1925, he appointed himself and defendants Nos. 2 and 3 to be trustees of the deed of October 29, 1895, I may mention in passing that the power to appoint new trustees is worded in much the same language as the power contained in the English Trustee Act, 1893, under which it was held in Sampson, In re : Sampson v. Sampson [1906] 1 Ch. 435 and other cases that a person could not appoint himself to be a trustee. That point has not been taken in this case, and, indeed, the written statement admits that the three defendants were appointed trustees, and I may say that if the point had been taken, I should not have been prepared, sitting as a Judge in India, to follow In re Sampson (supra), which, I have always thought, was wrongly decided. Where power is given on the death or retirement of a trustee to some person to appoint another person in place of the deceased or retiring trustee, it seems to me that, looking to the purpose of the power, the word 'other' means other than the trustee dying or retiring, and not other than the appointor. I have, therefore, no doubt that the three defendants were validly appointed as trustees. It is to be noticed that in all the deeds of appointment the persons appointed recognised that they were appointed trustees of the settlement of 1895, and in the appointment of the defendants it is expressly provided that they shall hold the property jointly upon the trusts by the said indenture of settlement declared concerning the same or such of them as were then subsisting and capable of taking effect.
5. I have mentioned that in 1927, about a year and a half after the appointment of the defendants, the land, the subject of the settlement, was transferred in the municipal records into the names of the defendants as trustees. In 1939 a suit was brought by one of the heirs of the settlor alleging that the settlement of 1895 was wholly void, In that suit the trustees, under some pressure from the Court, eventually put in a written statement in which they contested the plaintiffs' claim, and alleged that the settlement was perfectly valid. The suit was dismissed on the ground that the plaintiffs' claim was barred by limitation, the Court taking the view that if the settlement was void, the plaintiffs could have set up their claim immediately after its execution, and having waited for more than forty years, their claim was barred.
6. In 1941 this suit was brought with the consent of the Advocate General under Section 92 of the Civil Procedure Code by persons interested in the charities named in the settlement. The object of the suit is to remove the defendants as trustees on the ground that they have committed breaches of trust, and to appoint new trustees, and to obtain other consequential relief. In this suit the defendants claim that the settlement of 1895 is wholly void, and that they are entitled, therefore, to retain the property as against the plaintiffs, without any liability to account. Their claim succeeded in the lower Court, with the result that these trustees have defeated the claim of the heirs of the settlor by affirming that the settlement is good, and have defeated the claim of the beneficiaries under the settlement by affirming that the settlement is void. In the result, as far as I can see, they will be able to retain the property for themselves, a conclusion which must strike any one trained in equitable principles as startling.
7. The contention that the settlement is void is based on this. As I have mentioned, the settlor and all the trustees and other parties were Mahomedans of the Shia sect, and under the Mussalman Wakf Validating Act of 1930 the reservation of a life interest in favour of the settlor under a wakf made by a Shia Mahomedan is impliedly prohibited. It is not disputed in this case that the effect of reserving a life interest to the settlor was to render the deed of settlement, regarded as a wakf, Wholly void. It was, however, contended in the lower Court that, although void as a wakf, the settlement might be good as a declaration of trust; but I agree with the view taken by the learned Judge that if the deed falls within the definition of 'wakf', given in the Act of 1913, (as it does), and if the effect of the Act be to render the wakf void because of the reservation to the settlor of a life interest, it cannot be rendered valid by calling it by another name. It seems to me that the deed, being void as a wakf, is void altogether, and I base my judgment on the footing that the settlement of 1895 was wholly void.
8. The subsequent history I have stated and it comes to this. The settlor died in 1897. Thereafter new trustees were appointed, and at certain periods none of the trustees had any interest in the trust property. The possession of the trust property remained with the trustees, at any rate after the death of the settlor. The fact that the municipal records were not altered, and that the land was not entered in the names of the trustees, is really immaterial on the question as to who was in possession, because the records remained in the name of the settlor for thirty years after his death, when obviously he was not in possession. The learned Judge accepted the view that the trustees were in possession for thirty years after 1897, but he expressed the opinion that they took possession either as agents for the heirs of the settlor or on their own behalf, and that it was not necessary to consider in which capacity. But there is not a particle of evidence that they took possession in either capacity. The property was let out to tenants, so that the only possession open to the landlords was the receipt of the rents. The trustees received the rents ; they did not pay them to the heirs of the settlor, nor did they retain them for themselves; they applied them generally on the trusts de clared in the settlement, and I can find no justification whatever for the view which the learned Judge expressed. I have no doubt that the trustees appointed from time to time were in possession from 1897 until the present time, and they were in possession on behalf of the charity, which they believed to have been validly established. Now, what is the effect in law of that?
9. In England, in the case of a conveyance of real estate to or for the benefit of any charitable use, various conditions are imposed by Section 4 of the Mortmain and Charitable Uses Act, 1888. The deed, for instance, must take effect in possession; it must not reserve any interest to the grantor; it must be executed in the presence of two witnesses, and it must be enrolled in the Central Office of the Supreme Court. It sometimes happens that some of those requirements are overlooked, and the deed in the result is void. The position arising from that state of affairs has been considered in several cases and it is, I think, clear from Churcher v. Martin (1889) 42 Ch. D. 312 and Lacy, In re : Royal General Theatrical Fund Association v. Kydd [1899] 2 Ch. 149 that trustees in possession under such a void deed can acquire a good title by adverse possession as against the settlor and those claiming under him; that is to say, the trustees acquire a possessory title against these claiming under the trust resulting from the invalidity of the charitable trust, since a claim under such resulting trust is a claim adverse to the deed. In both those cases, as far as I can see, the trustees did not claim the property for themselves. In Churcher v. Martin (supra) the report notices that they did not. In the case of In re Lacy (supra), a note in 'Tudor on Charities,' Fifth ed., at p. 240, states that the Judge directed the executor to convey the property to charity, but that was probably done with the consent of the trustees. There is nothing in the report to suggest that the question whether the trustees could claim for themselves any beneficial interest was considered by the Court. As far as I know, there is no case in England or India in which it has been held that trustees, who enter into possession of property ostensibly on trusts subsequently ascertained to be void can retain the property for themselves when the claim of the settlor and his heirs has become statute-barred. I can imagine cases in which such a claim might be supported by powerful arguments, but, in my view, this is not such a case.
10. There are, I think, two answers to the defendants' claim. The first is that a trustee is not entitled, when asked to account by his beneficiaries, to challenge the trust under which he holds. The rule is stated by Lord Macnaghten delivering the judgment of the Privy Council in Srinivasa Moorthy v. Vankatavarada Iyengar in these terms (p. 136) :
The appellant who was the only son of the deceased, was one of the executors and trustees named in his will and sole residuary legatee. He joined in obtaining probate. He took upon himself the management of the estate and possessed himself of all the assets. For some years he acted in execution of the trusts of the will. Called upon to account and charged with various breaches of trust, he now asserts that the will was wholly inoperative and that the entire estate was joint family property, and that it belongs to him in his individual capacity by right of survivorship.
To such a contention advanced under such circumstances it would be a sufficient answer to bay that no person who has accepted the position of trustee and has acquired property in that capacity can be permitted to assert an adverse title on his own behalf until he has obtained a proper discharge from the trust with which he has clothed himself.
The learned Judge in the Court below considered that that statement of the law must be considered in reference to the facts of the particular case, and the facts were that the trustee of a will was challenging the title of the testator to the property purported to be disposed of by the will. It is said that in this case the trustees are not challenging the title of the settlor; they are only challenging his right to make the settlement. In my opinion, the principle stated by Lord Macnaghten is as applicable to the one case as to the other. It matters not whether the trustee challenges the settlement on the ground that the settlor did not possess the property which he purported to settle, or on the ground that the settlor did not possess the power to create the settlement which he purported to create. Lord Macnaghten was one of the last Judges to state as a general principle of law a proposition valid in the circumstances of the particular case before him, but not applicable generally. I have no doubt that Lord Macnaghten's statement that a trustee cannot be permitted to assert an adverse title on his own behalf until he has obtained a proper discharge from the trust with which he has clothed himself, means exactly what it says.
11. Mr. Justice Blackwell took the view that the principle, so far as it exists at all, is based on estoppel, that estoppel cannot be good against a statute, and that to debar the defendants from challenging the trust would be to defeat the Wakf Validating Act of 1830. I doubt whether the principle is based upon estoppel, in the strict sense, as a mere rule of evidence. It seems to me that the rule that a trustee, who is asked to account for the property which he holds as trustee, cannot assert that the trusts are invalid whilst remaining a trustee, arises from the principles which Courts of Equity apply to trustees. At common law the Courts recognised only legal ownership and ignored trusts. But Courts of Equity fastened the trust upon the conscience of the trustee, holding it to be unconscionable that a man, who has obtained possession of property on the express basis that he will deal with it in a certain manner, should retain the property, and ignore the obligation which he has undertaken. It seems to me a corollary of that principle to hold that a trustee, retaining his office, cannot deny the validity of the trust. A trustee who is in doubt whether a trust which he has accepted is valid can always come to the Court and ask for directions as to how he should deal with the property. If the Court comes to the conclusion, after hearing all interested parties, that the trustee can retain the property for himself, then the trustee's conscience is clear. But this is not a case in which the trustees come to the Court for directions. The beneficiaries are asking the trustees to account for the trust property, and, in my opinion, in such a case it is not open to the trustees to deny the trust so long as they retain possession as trustees. If defendant No. 1 wishes to assert his claim to the trust property as one of the heirs of the settlor, he must resign from the trust. But in that case he would be in the same position as the plaintiff in the suit of 1939, and his claim would be barred by limitation.
12. There is a second ground on which I think the judgment of the Court below cannot be supported. As I have noticed, in all the appointments of trustees, the trustees agree to hold the property on the trusts of the settlement. In the appointment of the defendants they expressly agree that they will hold the property on the trusts of the settlement, so far as applicable. Now, those trusts are not invalid on any considerations of public policy. If they were, I agree that this second ground might present much greater difficulty. But the trusts are innocuous. Since the death of the settlor the trusts have even to pay parts of the income to members of his family and subject thereto to charity, and if the trustees say that they will deal with the property in that manner, specifying the trusts by reference to the settlement, I can see no reason why they should not do so. It is objected that on the appointment of the defendants, defendant No. 1 had himself an interest in the properly, and, therefore could not create a wakf. But in some of the earlier appointments the trustees had no interest in the property, and, in my opinion, before the appointment of the present defendants, the trustees had definitely established that this property was held on trusts stated in the deed of settlement. Even if the settlement was void, it can be looked at as a document of reference in order to explain what the trusts were on which the trustees were to hold the property. I think that view of the matter is supported by a recent decision of the Privy Council in Lala Hem Chand v. Lala Peary Lal (1942) L.R. 69 IndAp 437. In that case a charitable trust, purported to be created by a will, was void for uncertainty, but it was held that the executor of the will had himself by his conduct dedicated the property to charity, and that after twelve years' adverse possession the title to it had vested in the charity. That case is, no doubt, not on all fours with the present case, but it supports the view that even if the original trust in this case was void, the conduct of the trustees in subsequently admitting that they held the property on specified trust, to which there is no valid objection, established a charity on those terms. That case is also of great importance as a recognition of the principle of Churcher v. Martin (supra), and In re Lacy (supra).
13. I think on both those grounds the judgment of the learned Judge was wrong. The appeal must be allowed.
Kania, J.
14. The questions raised in this appeal are important and likely to have a far-reaching effect. The points involved are also liable to be presented in different aspects in different circumstances. I shall therefore briefly express my views on the questions argued before us.
15. The relevant documents have been referred to in the judgment of the learned Chief Justice and the effect of the original trust deed of 1895 is fully set out in the judgment of the trial Court. I shall only add that on July 22, 1918, Abdoolhoosein Hyderalli, who was then the sole trustee, and who had no beneficial interest in the trust premises appointed the father of defendant No. 1 as his co-trustee. Therefore long before the present trustees were appointed, trustees who had no beneficial interest in the deed of settlement had declared and agreed that the properties were held by them on the trusts mentioned in the deed of settlement. It was first argued that the deed being a wakf was void on two grounds : (1) because the settlor had reserved to himself a life interest, and (2) because the possession of the trust property was not transferred to the trustees as required by Mahomedan law. Proceeding further it was contended that as the plaintiffs had filed this suit under Section 92 of the Civil Procedure Code, 1908, they must satisfy the Court that there was a valid charitable settlement, and if they failed to do so, the suit must fail. In my opinion this line of reasoning is not correct in a case of this kind as the defendants have admitted that they are trustees. The next question to be considered is, 'Have they obtained and are they in possession of the property as trustees?' The documents exhibited in the case clearly show that since 1918 at least the persons appointed as trustees under different deeds of appointment have held the property and managed the same in their capacity as trustees of the deed of settlement. It is therefore futile to argue that the defendants were not in possession as trustees. The next question to be considered is, if so, what is the result of their possession for more than twelve years It is now recognised that trustees can acquire title by adverse possession against either the settlor or the heirs of the settlor if the trust deed is void ab initio. Lacy, In re : Royal General Theatrical Fund Association v. Kydd [1899] 2 Ch. 149 and Churcher v. Martin (1889) 42 Ch. D. 312 are instances in which the English Courts have affirmed the principle. In our Court Cowasji N. Pochkhanawalla v. R.D. Setna I.L.R. (1895) 20 Bom. 511 which follows and accepts the decision in Ardeshir v. Sirinbai (1899) 1 Bom. L.R. 721, is an instance where such title was recognised. I may point out that in Churcher v. Martin, one of the trustees was himself a beneficiary, but it was held that his possession was not in his capacity as the beneficial owner, and as the possession of the trustees was joint, it must be considered that his possession was also in his capacity as a trustee. In Ardeshir v. Sirinbai it was further held that if a trust deed was void ab initio and the trustees acquired a title by lapse of time, the Court cannot allow the trustees to set up a beneficiary title in themselves. The result therefore is that in this case it must be held that the trustees had acquired a title by adverse possession against the settlor and his heirs at law. Indeed in suit No. 459 of 1939, which was filed by an heir at law, the trustees contended that the trust deed was valid and the plaintiff's suit was barred by the law of limitation. On that contention being upheld that suit was dismissed. The result therefore is that the defendants have acquired possession in their capacity as trustees and have perfected their title by adverse possession against the settlor and his successors in title.
16. The next question is are they entitled to contend that they will not administer the trusts at the instance of the beneficiaries and can they be heard to contend against the beneficiaries that the trust is void? For this discussion, in my opinion, the question whether the trust deed is invalid or not is immaterial. The observations which I make in this judgment are strictly limited to the defence so raised in this suit. I do not propose to discuss what attitude or view the Court should take if in a doubtful case the trustee came to Court and invited opinion as to the validity of the objects of the trust and sought directions as to what was to be done about the payment of income. On the facts established here it seems to me that the answer to the question formulated above can be only that the defendants' mouth is shut and they are not entitled to raise this defence. In Srinivasa Moorthy v. Venkatavarada Iyengar Lord Macnaghten held that a trustee occupying the position he did in that case, under the circumstances could not be permitted to assert an adverse title on his own behalf until he had obtained a proper discharge from the trusts with which he had clothed himself. The arguments advanced in that case are more fully set out in 13 Bom. L.R. 520. of the report it is found that an argument was put forward in these terms :
When a man gets into possession by accepting a certain position, he cannot be allowed afterwards to deny his position; e.g. landlord and tenant; patentee and licensee. (Sir Arthur Wilson: Trustee and trust). See....Attorney-General v. Munroe.
In Att.-Gen. v. Munro (1848) 2 De G. & Sm. 122 the following statement is found in the course of the judgment (p. 163) :-
Now, I apprehend it to be conformable to the principles of equity and to the course of decisions in this Court, as well as the Court of Chancery in Ireland, to say that, where a person knowingly and expressly acquires the possession of property as a trustee merely, or, being in possession, makes himself, by contract, expressly and without qualification, a trustee of it, he cannot, upon any notion of remitter or otherwise, be allowed effectually to assert against the trust, at least as a defendant in a suit seeking the performance of the trust, any title (paramount and adverse to the trust) which he may himself have. That he is wholly and finally to lose the benefit of that title, I do not say; but he must assert it (if at all) without deriving,-he must assert it so as not to derive-any advantage for it from the possession which he has as trustee, or had in that character.
In such a just as I have just mentioned, therefore, so far as his paramount and adverse title, his paramount and adverse claim, is concerned, that title, that claim, must, I apprehend, be considered as not accompanied by possession, and be treated as if it were vested in a person out of possession....Again, it is, I apprehend, perfectly consistent with the principles and rules by which this jurisdiction is governed, and with the statute of Geo. 2, to hold, as I do, that where a person in possession of land, as owner, has devoted it by deed to charitable purposes, obeying the provisions, and fulfilling the conditions of the statute, and the possession and enjoyment have been afterwards uninterruptedly conformable to the deed, it is competent, notwithstanding any defect or infirmity in the donor's title, to institute a suit for the administration of the trust a suit to which it cannot be a defence or an answer, to shew that the land is recoverable against the charity by a title superior to that of the donor, when that title, not accompanied by possession, not clothed with possession, is a mere right of suit adverse to the charity.
17. In that case it was contended that the first deed was invalid because it did not comply with the Statute of Mortmain. It was argued that the later deeds were free from that defect. In the judgment it was further observed as follows (p. 200) :-
The patties litigant are those who claim under the deed of 1832, and those who claim under the deed of 1844; that is to say, the dispute is whether the trustees of the deed of 1832 could not only repudiate their trust, but by so doing could create new and adverse interests in other parties; and whether such other parties so deriving title through such breach of trust, can be heard to claim the property for themselves or for any other interest which they may have created. The rules and principles of equity negative the possibility of any such claim being supported; and for that purpose it is immaterial whether the trustees of the deed of 1832 had or had not any valid title or legal interest in the land. Whatever interest existed, either in the money or in the land, was vested in them, upon trust which they were bound, as far as possible, to perform and give effect to ; and every person taking any such interest from or through their instrumentality became as much bound by such duties and trusts as they were themselves. The full knowledge of such trusts being proved and admitted by the deed of 1844, I lay aside all considerations of the Statute of Mortmain. If the deed of 1844 was effectual for vesting the legal estate in Burt and Stewart, and they were affected by the trusts of the deed of 1832, the original defect was cured; and if the deed was not effectual, the defect cannot be set up by the trustees, or those who claim under them, against their cestuis que trustent. A trustee cannot dispute the title of his cestui que trustent; for as between them, no question of title can arise ; and those are the only parties to the suit.
18. It is therefore clear that the principle stated by Lord Macnaghten was not limited to the attitude taken up by the claimant in that particular case, viz. an executor, who had obtained probate of the will and thereafter Wanted to contest the title of the testator to make the will. The proposition was stated in the judgment having regard to the position referred to in the course of the argument in Attorney General v. Munroe.
19. I should also notice in this connection the case of Dalton v. Fitzerald [1897] 2 Ch. 86 where Lopez L.J. observes as follows (p. 93) :-
A person having no title to land settles it on A. for life with remainder to B.A. enters and takes possession and deals with the property as tenant for life; that person is estopped from telling the truth-his mouth is shut; he has availed himself of the settlement for the purpose of obtaining possession of the land, and he cannot afterwards seek to invalidate that which enabled him to obtain possession, and this though subsequently he may have acquired a good title. If a man obtains possession of land claiming under a deed or will, he cannot afterwards set up another title to the land against the will or deed though it did not operate to pass the land in question; and if he remain in possession till twelve years have elapsed and the title of the testator's heir is extinguished, he cannot claim by possession an interest in the property different from that which he would have taken if the property had passed by the will or deed.
20. The other ground on which the plaintiff's case can be supported is pointed out in the recent case of Lala Hem Chand v. Lala Pearey Lal (1942) L.R. 69 IndAp 137. It is there pointed out that although an original dedication may be defective, a subsequent dedication, if proved, by the holders of the property, and acted upon, would create a valid title in the trustees so as to give the benefit thereof to charity. That in my opinion is briefly the effect of that decision. In the present case since 1918 by virtue of their deeds of appointment the trustees have agreed to and under their signature undertaken to carry out the trusts mentioned in the original deed of settlement. In the last deed of appointment to which defendant No. 1 is a party it is stated that he and the trustees agree to hold the property upon trusts as are subsisting and capable of taking effect. If the trustees have acquired possession of the property which has got vested in them on these terms, in my opinion, as a rule of law, and not necessarily of evidence only, the trustees are debarred from contending that they do not hold the property on the trusts mentioned in the deed of settlement and are bound to carry out the trusts for the beneficiaries named in the deed. On these two grounds in my opinion the learned Judge's judgment cannot be supported and the plaintiffs' suit should succeed. I repeat that I am not concerned with the question whether the original trust deed was ab initio void or not. In my opinion that is beside the point in deciding this appeal.
21. By consent, the Advocate General appearing and not opposing, and the Court being of opinion that the terms are beneficial to the charity, order in terms set out in the schedule to this order.