1942 Present: Howard C.J. and Hearne J.

CHINNIAH v. FERNANDO.

64-D. C. Colombo, 2,390.

Trust-Power given by wife to husband to invest or reinvest proceeds of sale of property for the benefit of children-And to distribute or redistribute moneys in terms of last will-Conveyance of property and money in court to children subject to conditions-Right of children to draw the money.

Mrs. Chinniah in anticipation of the sale of certain property she had inherited appointed her husband Chinniah trustee over the proceeds of sale for the benefit of her children. The powers given to the trustee by the document (P 1) included (a) to receive all the proceeds of the sale of the property and to hold the same in trust for the children, (b) to invest or re-invest the said moneys in any manner he thinks proper. (c) to distribute or redistribute the said moneys in terms of the last will and testament already executed, among the said children. By (P 2) Chinniah conveyed three allotments of land to three children and also the money lying in the District Court of Jaffna.

The habendum clause states that the premises conveyed or intended to be are to be held, subject to three conditions (1) that the properties are subject to a life-interest in the author of the trust, (2) that the money lying in the District Court of Jaffna should after meeting certain claims of R (one of the children) be used in completing the buildings on the immovable property or redeeming the mortgage of an estate purchased with moneys belonging to the trust fund, (3) that the author of the trust fund shall have the power to redistribute the property.

Held, that there had been no distribution of the money in the District Court of Jaffna among the three children absolutely or for their exclusive benefit by P 2 nor was such a distribution intended at the time it was executed.

APPEAL from an order of the District Judge of Colombo.

H. V. Perera, K.C. (with him M. M. K. Subramaniam), for respondent, appellant.

M. T. de S. Amarasekere, K.C. (with him N. Nadarajah and F. C. W. VanGeyzel), for applicant, respondent.

Cur. adv. vult.

January 26, 1942. HEARNE J.

This appeal involves the interpretation of certain documents. Mrs. Chinniah, acting in anticipation of the sale by her of property she had inherited, appointed her husband, Dr. Chinniah, trustee over the proceeds of sale for the benefit of her children of whom there were, at that time, five. (P 1 dated February 15, 1920).

Immovable property at Greenpath was purchased out of the trust funds and a mortgage was taken of another property. The money due under the latter was paid, by the legal representative of the mortgagor who died, to the credit of D. C. Testamentary, Jaffna No. 5,426.

In July, 1927, by deed P 2, after reciting that two of the children had been adequately provided for, Dr. Chinniah ., conveyed" to the remaining three children the Greenpath property which had been divided into lots. With that conveyance this appeal is not concerned. In the same deed he also dealt with the money" lying in the District Court of Jaffna in testamentary case 5,426". He" gave, conveyed and transferred the money to the three children but elsewhere in the deed earmarked it for certain specific purposes including the redemption of the mortgage of another estate purchased out of the trust funds ".

In 1930 Dr. Chinniah on an application made to the District Court of Colombo was appointed curator of the property of the three minor children. In 1935 he applied to the court for permission to purchase immovable property with the money on deposit in the Jaffna testamentary case but on June 28 of that year, when his application was before the court, it was found that the three minors had attained their majority.

On July 13, 1935, Dr. Chinniah, after reciting that he had overlooked a child, Kumarasamy, who had been born after the execution of P 1, " revoked" the conve