Judgement Appeal (No. 91 of 1936) from a judgment and decree of the High Court in its appellate jurisdiction (December 7, 1934) affirming a judgment and decree of the High Court in its ordinary original civil jurisdiction (February 15, 1932). The only question for decision in this appeal was whether a deed of mortgage, executed on April 11, 1927, by the respondents, Dhirendra Chandra Kerr and Narendra Chandra Kerr, as executors of the will of their father, Thakur Das Kerr, in favour of Sreemutty Indira Ghosh, now represented by the respondents, Prabas Chandra Mullick and Dulal Chand Aich, was a valid mortgage binding on the estate of Thakur Das Kerr and on the properties which were the subject of the mortgage. Thakur Das Kerr, who died on October 5, 1919, had carried on a publishing and printing business under the name of R. Cambray & Co., and by his will, dated December 16, 1917, he appointed two of his sons to be executors (the above-named respondents) and authorized them to carry on his business. He died possessed of zemindary properties outside Calcutta, house property in Calcutta, Government promissory notes, War Stock, and shares in railways, banks and various companies, all of which he had acquired out of the profits of his business. On April 11, 1927, the executors executed a mortgage in favour of Sreemutty Indira Ghosh of Nos. 11A, 11/1, Halder Lane, and Nos. 3, 5 and 6, Halder Lane, Calcutta, to secure a sum of Rs.65,000, with interest at nine per cent. The money so borrowed was to be used for the purposes of the business. In 1929 the mortgagee brought a suit on her mortgage in the High Court, and on July 5, 1929, she obtained a preliminary decree, and on August 18, 1930, a final decree. The money so borrowed was to be used for the purposes of the business. In 1929 the mortgagee brought a suit on her mortgage in the High Court, and on July 5, 1929, she obtained a preliminary decree, and on August 18, 1930, a final decree. In the meantime—namely, on August 31, 1929, the appellant, Sunil Kumar Kerr, and the respondents, Sisir Kumar Kerr and Sasadhar Kumar Kerr, who were all grandsons of the testator, being the sons of Narendra Chandra Kerr, one of the executors, as plaintiffs instituted in the High Court the suit out of which this appeal arose against their father and uncle, the two executors, the mortgagee, a puisne mortgagee, and various unsecured creditors and other members of the family, asking for (inter alia) construction of the will of Thakur Das Kerr, administration of his estate, and a declaration that the mortgage was invalid and not binding on the estate. The facts and the terms of the will appear from the judgment of the Judicial Committee. Ameer Ali J., who heard the suit, dismissed it as regards the declaration claimed. On appeal by the appellant to the Appellate Bench of the High Court (Lort-Williams and Jack JJ.) the judgment of the Court was delivered by Jack J., who said that one of the points to be decided was whether the executors had authority to mortgage the immovable properties of the testators estate for the purpose of the business, and he considered that in the circumstances it was difficult to hold that the Calcutta house properties which were the subject of the mortgage could be regarded as quite unconnected with the business so as not to be available in order to raise funds for the business when required, and he therefore concluded that the trial judge was right in holding that the executors were authorized to execute the mortgage in question. The appeal is reported at ( 1934) I. L. R. 62 C. 552. 1939. Oct. 26, 27. L. P. E. Pugh K.C. and S. P. Khambatta for the appellant. When a testator simply states in his will that his business is to be carried on by his executors, they can only resort to whatever part of his estate was engaged in that business at the time of his death. 1939. Oct. 26, 27. L. P. E. Pugh K.C. and S. P. Khambatta for the appellant. When a testator simply states in his will that his business is to be carried on by his executors, they can only resort to whatever part of his estate was engaged in that business at the time of his death. In order, therefore, that a mortgage effected by the executors can operate to take away property from the legatees under the will, it must be shown that the testator had actively engaged that particular property in the business. The testator in the present case had never mortgaged his immovable property at all. It must be admitted that the property which was mortgaged by the executors originally came out of the profits of the business. There is nothing on the construction of the will which indicates that the testator ever intended that his immovable property should ever be treated as part of his business. The respondents say that under s. 307 of the Indian Succession Act, 1925 ((1) By s. 307 of the Indian Succession Act, 1925 (1.) Subject to the provisions of sub-s.2, an executor or administrator has power to dispose of the property of the deceased, vested in him under s. 211, either wholly or in part, in such manner as he may think fit. Illustrations.... (ii.) The executor in the exercise of his discretion mortgages a part of the immovable estate of the deceased. The mortgage is valid. (2.) If the deceased was a Hindu ...the general power conferred by sub-s. 1 shall be subject to the following restrictions and conditions, namely— (i.) The power of an executor to dispose of immovable pro perty so vested in him is subject to any restriction which may be imposed in this behalf by the will appointing him, unless pro bate has been granted to him and the court which granted the probate permits him by an order in writing, notwithstanding the restriction, to dispose of any immovable property specified in the order in a manner permitted by the order.), an executor has a power to mortgage his testators immovable estate. It is submitted that, taking that proposition at its widest, it cannot be right. What was done in the testators lifetime was really irrelevant; the question is What is the position on his death? It is submitted that, taking that proposition at its widest, it cannot be right. What was done in the testators lifetime was really irrelevant; the question is What is the position on his death? Did the will result in giving the executors power to mortgage the immovable property? One cannot mortgage as testamentary trustee immovable property unless there is found in the will an express power to do so, or unless, notwithstanding an express power, the immovable property was engaged in the business by the testator at the date of his death. It is a matter of the construction of the will, and the prior dealings are absolutely irrelevant except so far as they go to show what was the property which the testator was engaging in the business when he died. The respondents say that they mortgaged this property as executors, but they could not; they were carrying on the business as testamentary trustees Jethabhai v. Chotalal (( 1909) I. L. R. 34 B. 209, 219.); In re Morgan. Pillgrem v. Pillgrem.(( 1881) L. R. 18 Ch. D. 93,103.) The latter of those cases shows that although the person there is described as executor, if in fact what he is directed to do is appropriate to the position of a trustee, then he becomes a testamentary trustee. MNeillie v. Acton (( 1853) 4 De G. M. & G. 744.) would appear definitely to show that if a grocer has a business in London and immovable property in Northumberland, that immovable property could not be made liable for the debts of the grocery business unless he has made a definite charge of debts on the real estate. On the general principle that a mortgage, like a creditor, can only operate on the assets embarked in the trade see Ex parte Garland ((1804) 10 Ves. 110); Ex parte Richardson and Others. In re Hodson and Others ((1818) 3 Maddock 138.); and Halsburys Laws of England, 2nd ed., vol. xiv., p. 386, where the whole matter is summed up. An executor is ordinarily supposed to wind-up an estate in a year. He may be expressly appointed executor and trustee. As soon as he has paid the debts he then holds as trustee, and not as executor, from that time onwards, and tht is by reason of assent. xiv., p. 386, where the whole matter is summed up. An executor is ordinarily supposed to wind-up an estate in a year. He may be expressly appointed executor and trustee. As soon as he has paid the debts he then holds as trustee, and not as executor, from that time onwards, and tht is by reason of assent. It is not contended that strictly for administration purposes the estate did not vest in the executors; but when there is a direction to carry on the business, that trust, on the terms of this will, is exactly the same as if the testator had said "I appoint you executors and trustees "to carry on my business; as soon as you begin to carry on "the business you are not doing it as executors, but as trustees." [Reference was also made to Solomon v. Attenborough ([ 1912] 1 Ch. 451; [ 1913] A. C. 76.); to Halsburys Laws of England, 2nd ed., vol. xiv., pp. 344, 395; and to In re Tanqueray-Willaume and Landau. (( 1881-2) 20 Ch. D. 465, 473)] It is a simple assent to the whole trust, and the whole trust, whether it be large or small, has come into their possession qua trustees. As soon as there is assent it relates back to the testators death in the sense that one is taken to hold as testamentary trustee. Shri Beharilalji v. Bat Rajbai ((1808) I. L. R. 23 B. 342, 348) laid down that the powers similar to those given by s. 307 of the Indian Succession Act are subject to the ordinary rules of equity; it has always been held in India that s. 307 has never been applied in the widest sense that the respondents are now seeking to apply it. Under the Indian law a mortgage creates nothing more than an interest in immovable property. That interest arose in this case in 1927; but there was in existence a prior interest, namely, the trust estate in the widow and in the grandsons, and also the rights of residence and the various annuities, all of which date from the date of the testators death in 1919. There being these two interests, it is simply a question of priority of interests. In England it would be held that the appellants prior equity is a sufficiently good and powerful equity to defeat the respondents claim. There being these two interests, it is simply a question of priority of interests. In England it would be held that the appellants prior equity is a sufficiently good and powerful equity to defeat the respondents claim. The appellant, however, has simply to leave it as two conflicting interests. The Board may therefore say that this mortgage was wholly infructuous and bad because the testator had never mortgaged immovable property in his lifetime; on the other hand, the Board may take the view that it is a question of two conflicting interests, and that the equity under the will is a better and prior equity. S. P. Khambatta followed. Sect.307, sub-s.2, of the Indian Succession Act, 1925, does not override the restrictions imposed in the will on the powers of the executors to mortgage the real estate for the business; the section expressly leaves open the construction of the will. On the question that in the absence of directions in the will there must be found a practice by the testator of using his real estate for the benefit of the business, see In re Cameron. Nixon v. Cameron (( 1884) 26 Ch. D. 19.); and on the question of the mortgagees being required to inquire into the powers of the executors to mortgage the immovable property, see Benares Bank, Ld. v. Hari Narain.(( 1932) L. R. 59 I. A. 300, 307.) Sir Herbert Cunliffe K.C. and J. M. Pringle for the respondents Prabas Chandra Mullick and Dulal Chand Aich. This was simply an action to set aside the mortgage on the ground that it was invalid. The respondents rest their case in the first place on s. 307, of the Indian Succession Act. There is the appointment of the executors, plus the powers under s. 307, and there is thus a complete power in the executors to dispose of the immovable property unless there is any restriction in the will. So far from there being any restriction, there is in the will an explanation by the testator that in this appointment of the executors he does not want there to be any doubt about their right to carry on the business. That cannot possibly be read as a restriction upon the executors powers. So far from there being any restriction, there is in the will an explanation by the testator that in this appointment of the executors he does not want there to be any doubt about their right to carry on the business. That cannot possibly be read as a restriction upon the executors powers. If that be so, there is an end of the case, and any question as to what kind of business is being carried on has no bearing at all. The question of the construction of the will must be based on the finding of fact that the business carried on by the testator and the executors was one. The respondents are not concerned with the rights of the legatees as between themselves and the executors. The sole question is Is this a valid mortgage? and one comes back to s. 307 of the Succession Act. English law is not applicable here, but a totally different condition of things in Indian law, in which the powers of the executors are defined by statute with perfect clearness. With regard to the argument for the appellant as to the termination of the office of executors and the beginning of their position as testamentary trustees, there is nothing in this case on which the appellant can rely to show that the executors ever abandoned their position as executors. They were directed by the will to carry on as executors right down to the time of distribution. On the authorities, there must be some overt act upon which the Court can say that this marks an assent. In any case, this point has never been raised before in this case, and cannot be raised now. Further, even suppose that the executors were trustees, their powers as trustees in the absence of notice were greater than those as executors—-as trustees they would have complete power to mortgage. Whether there has been that transition is a question of fact, and some facts must be shown on which that conclusion can be based. There were none here. The mortgagors in this case were purporting to act as executors and nothing more. Whether there has been that transition is a question of fact, and some facts must be shown on which that conclusion can be based. There were none here. The mortgagors in this case were purporting to act as executors and nothing more. It is submitted, further, that if it becomes necessary to construe the will, there is first of all a question of fact to be determined, and that in this case there are two concurrent findings of the Courts below that the testator treated these immovable properties and the business as being one thing. J. M. Pringle followed. The law in India contemplates that the executor shall remain in charge of his duties until the period of distribution arrives. Reference was made to the Indian Succession Act, 1925, ss. 211, 307, 308, 332 and 333, and to the Indian Trusts Act, II of 1882, s. 3. L. P. E. Pugh K.C. replied. Sect. 307 of the Indian Succession Act has no application once the stage is reached where the executors are acting as trustees. They are trustees within the meaning of the Indian Trusts Act, 1882. [Reference was also made to Barnardos Homes v. Special Income Tax Commissioners ([ 1921] 2 A. C. 1.), and to Halsburys Laws of England, 2nd ed., vol. xiv., p. 367, para. 688.] Nov. 10. The judgment of their Lordships was delivered by LORD THANKERTON. The only question in this appeal is whether two mortgages executed by the executors of Thakur Das Kerr are binding on the estate of Thakur Das Kerr and on the properties which are the subject of the mortgages. The issue arises in a suit filed by the appellant and respondents Nos. 1 and 2 on August 31, 1929, for construction of the will of Thakur Das Kerr and for certain declarations, including a declaration that the said mortgages are invalid, inoperative and nullities, and do not in any way bind the estate of the testator. Respondents Nos. 5 and 6, who alone appear in the appeal, are the representatives of the mortgagee under the first of the two mortgages. Respondents Nos. 5 and 6, who alone appear in the appeal, are the representatives of the mortgagee under the first of the two mortgages. This appeal is against the judgment and decree of the High Court of Judicature at Fort William in Bengal, in its appellate jurisdiction, dated December 7, 1934, which, as regards the declaration in question, affirmed the judgment of the said High Court in its ordinary original civil jurisdiction, made by Ameer Ali J., and dated January 18, 1932, which dismissed the suit as regards the said declaration. The testator died on October 5, 1919, leaving a will, dated December 16, 1917, and a codicil, dated April 16, 1919, the latter of which is not material. He was survived by a widow, four sons and three grandsons. Respondents Nos. 3 and 4 are two of the sons, and are the executors of the will. The three grandsons are sons of respondent No. 4, and are the appellant and respondents Nos. 1 and 2. At the time of his death, the testator was the owner of a printing, publishing and bookselling business, which he had started and carried on successfully under the name of R. Cambray and Company for about twenty-five years. In addition to a share in ancestral property in his village of Nalkorah, he died possessed of zemindari property outside Calcutta in Baraset and Bashirat sub-Divisions, house property in Calcutta, Government Promissory Notes, War Stock, and shares in railways, banks and various companies, all of which he had acquired out of the profits of the business. The house property in Calcutta consisted of— (a) Nos. 11A and 11/1, Halder Lane, which were used as the family dwelling-house, and in which the printing was done until 1915. (b) No.3, Halder Lane, to which the printing press was transferred when it was acquired in 1915. (c) Nos. 5 and 6, Halder Lane, which were acquired in 1913 and 1911 respectively, and which were let. The main business was carried on in hired premises in Hastings Street, with a branch in College Square. The material provisions of the will are as follows— "(2.) I appoint my sons Dhirendra Chandra Kerr and Narendra Chandra Kerr to be the executors of this my will with full authority to carry on the printing, publishing and bookselling business now carried on by me under the name and style of R. Cambray & Co. The material provisions of the will are as follows— "(2.) I appoint my sons Dhirendra Chandra Kerr and Narendra Chandra Kerr to be the executors of this my will with full authority to carry on the printing, publishing and bookselling business now carried on by me under the name and style of R. Cambray & Co. "(7.) I will and direct that my sons with their respective families (if any) shall be entitled to reside in my said house at Bowbazar and at the ancestral house at Nalkorah in such manner as they may choose and to be maintained out of the income of my estate in the manner prevalent in my lifetime. If any of my sons or their widows do not reside in either of my said houses he or she will not be entitled to maintenance out of my estate. "(8.) I will and direct that my said sons Dhirendra Chandra Kerr and Narendra Chandra Kerr shall receive a monthly sum or allowance of Rs.52 and 50 respectively as remuneration for looking after the management of my estate. "(10.) I further will and direct that my executors shall be authorised in their absolute discretion to employ my sons Satyendra Chandra Kerr and Sailendra Chandra Kerr in the management of my estate and give each of them while so employed a salary or allowance of Rs.15 rising to Rs.30 a month according to ability. My said son Sriman Satyendra will not be entitled to any allowance if he refuses to be employed as aforesaid. My youngest son Sriman Sailendra besides the allowance provided herein being further entitled to a sum of Rs.1000 towards his marriage. "(15.) I further declare it to be my express will and intention that after paying the annuities and meeting the expenses hereby directed as aforesaid the residue of the income of my estate shall be invested in Government Promissory Notes or in purchasing profitable property in the vicinity of my said Bowbazar house or of my said ancestral house at Nalkorah and the said Government Promissory Notes or the property "as the case may be shall form a part of my estate. "(16.) I further declare it to be my express will and intention that the monthly sum or salary hereby directed to be paid to my sons shall on their respective deaths be payable to their respective male descendants then alive in equal shares if more than one. "(18.) I lastly give devise and bequeath the rest and residue of my estate in equal shares to the male descendants of my sons living at the death of my last surviving son, those in whose descent from me a living ancestor shall intervene being excluded by the others.” The will was duly proved, and respondents 3 and 4, as executors, took possession of the estate and carried on the business. On April 11, 1927, respondents 3 and 4, as executors, executed a mortgage in favour of Sreemutty Indira Ghosh, whom respondents 5 and 6 now represent, of the five properties in Halder Lane, to secure a sum of Rs.65,000, with interest at 9 per cent. The mortgage, after a reference to the will, contained the following recital "Whereas by the said will the testator authorised the said mortgagors to carry on the printing, publishing and bookselling business carried on by the testator in his lifetime under the name and style of R. Cambray & Co., in Calcutta and elsewhere, and whereas the said mortgagors are about to enter into contracts with the Governments of three Presidencies—namely, Bombay, Madras and Allahabad and also local Government for the exclusive licence to publish and issue verbatim reprint of the Indian Law Reports from the year 1921 to 1925, and whereas to fulfil the said contracts the mortgagors are in need of Rs.65,000." On September 3, 1927, the executors executed a first mortgage of the goodwill and connection of R. Cambray & Co., and the book debts outstanding and the stock in trade thereof, and a second mortgage of the Halder Lane properties in favour of respondent No. 7, to secure a sum of Rs.7500, with interest at 10 per cent. This mortgage contained recitals similar to those in the first mortgage. In fact, the printing and publishing of the reprints were carried out at a new branch at Madras, mainly owing to the cheaper cost of printing in Madras. This mortgage contained recitals similar to those in the first mortgage. In fact, the printing and publishing of the reprints were carried out at a new branch at Madras, mainly owing to the cheaper cost of printing in Madras. Both the Courts below have decided, on the terms of the will and the evidence, that these immovable properties were so connected with the business by the testator that the executors were entitled to mortgage them for the purposes of the business. It is true that Ameer Ali J., lays stress rather on the terms of the will, but the Appellate Court clearly relied on the evidence as to the testators practice in the treatment of his estate. Jack J., in whose judgment Lort-Williams J. concurred, said (( 1934) I. L. R. 62 C. 567.) "In this case, the evidence shows that the testator pooled all his liquid funds together, and mixed up the accounts of his property with those of his business, taking the expenses connected with both from the common fund. It is true that, though he mortgaged promissory notes for the purposes of the business, he never mortgaged his immovable properties for that purpose. Except his ancestral properties, the remainder of his house properties, including those in Calcutta, had been purchased Horn the profits of the business, and in one of the houses a printing press had been established. It is admitted that had funds been required for the protection of his house properties in an emergency, the executors would have been entitled to take them from the business. The beneficiaries of both the business and the house properties were the same and the executors were appointed managers of both. In these circumstances, it is difficult to say that the Calcutta house properties could be regarded as quite unconnected with the business so as not to be available in order to raise funds for the business when required.” These decisions settled not only that the mortgagees got a good title, but that, in a question with the beneficiaries, the executors were entitled to mortgage the properties. At the hearing before the Board the appellant put forward a contention to the effect that, at the date of the mortgage, the executors had assented to the trusts as regards both the business and the immovable properties, which had thereby become vested in them as trustees, and that, accordingly, the powers conferred on executors by s. 307 of the Succession Act, 1925, were no longer available to them. Whether this consequence would result from assent need not here be determined. The question of assent, in such circumstances, is a question of fact, and this question had not been put in issue or maintained in the Courts below; their Lordships are not satisfied that the evidence already taken establishes beyond doubt that the facts, if fully investigated, would have supported the plea, and therefore, in accordance with the practice of this Board, they are unable to entertain this plea at this late stage Connecticut Fire Insurance Co. v. Kavanagh. ([ 1892] A. C. 473, 481) It follows that, when they granted these mortgages, the executors, in a question between the estate and the mortgagees, must be taken to have had the powers conferred by s. 307 of the Succession Act, and only two questions arise for consideration. Firstly, having regard to s. 307, sub-s. 2 (i.), was any restriction on the statutory power imposed by the will in this case, and, secondly, had the mortgagees constructive notice of any defect in the proposed exercise of the power, so as to put them in bad faith? On the first point, their Lordships are unable to find in the will any restriction imposed on the statutory power of disposal. On the second point, it is necessary to assume, contrary to the judgments below, that, in a question between the executors and the beneficiaries, the executors were not entitled to use the immovable properties for the purposes of the business. If so, did the mortgagees know, or were they so put on their inquiry that constructive knowledge must be imputed to them that the executors were not so entitled? There is no evidence that the mortgagees knew anything outside the terms of the will and the recital in the mortgage. If so, did the mortgagees know, or were they so put on their inquiry that constructive knowledge must be imputed to them that the executors were not so entitled? There is no evidence that the mortgagees knew anything outside the terms of the will and the recital in the mortgage. These told them nothing as to the starting of a new branch at Madras, and nothing as to the testators practice, at the time of his death, with regard to treating the properties as connected with the business. Indeed, the will suggests that they are to be managed as one unit for the benefit of one set of beneficiaries. But, the question must be whether the proposed lenders had a duty to inquire into facts outside the will as they existed immediately prior to the testators death. Their Lordships are unable to hold that the mortgagees had any such duty, and the nature of the inquiry held in the present case and the decisions below, show how impracticable it would be for any such inquiry to be made by an intending lender. In their Lordships opinion, much of the usefulness of the statutory power conferred by s. 307 on executors in India would be nullified if such a duty of inquiry was imposed on parties dealing with executors. Their Lordships are therefore of opinion that the mortgagees got a good title from the executors, and it becomes unnecessary to consider whether the ground of decision of the Courts below was justified, but their Lordships are not to be taken as indicating any contrary opinion. Their Lordships will humbly advise His Majesty that the appeal should be dismissed, with costs, and that the judgments appealed from should be affirmed.