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WALCOT v. HALL.

CHANCERY. 1788.

[Reported 1 P. Wms. 493, note.] J. PEARCE by will, gave to the plaintiff £50 to be paid to him at his age of 21 years, or day of marriage, the same to be put out at interest in the name of his executor, Charles Pearce Hall, &c. He then disposed of the residue, and appointed C. P. Hall executor. Hall proved the will, retained the £50 for the plaintiff's legacy, and paid orer the residue to the residuary legatees, and afterwards becaine bankrupt, and obtained his certificate. The plaintiff having attained his age of 21 filed this bill against the executor and the residuary legatees for payment of the legacy. His Honor [Sir LLOYD KENYON, M. R.] said the residuary legatees could not be liable ; that the distinction was between the cases, where there was originally a deficiency of assets, and where the executor had wasted them ; in the former case, a legatee, who had been paid more than his proportion, must refund to the others; but here the residuary legatees bad received no more than they were entitled to, and the executor was therefore the only person to be resorted to. And his Honor, being of opinion that this demand, as against the executor, was barred by his certificate, dismissed the bill. Sed vide Orr v. Kaimes, 2 Vez. 194."

GITTINS v. STEELE.

CHANCERY. 1818.

(Reported 1 Swanst. 199.] In preparing the minutes of the decree on the appeal in this case [reported 1 Swanst. 24], a question arose whether in refunding so much of the legacy of £7,000 as had been paid out of the personal estate, the legatees of that sum, who were also residuary legatees, should be charged with interest.

Mr. Bell, Mr. Oven, Mr. Horne, and Mi. Trouer, for different parties, opposed the charge of interest.

Mr. Wetherell, in support of the chargc.

THE LORD CHANCELLOR [ELDON). Where the fund out of which the legacy ought to have been paid is in the hands of the court making

"the legated with inte

Horne

1 s. c. 2 Bro. C. C. 305.

See Anon., 1 P. Wms. 495 (1718) ; Fenwick v. Clarke, 31 L. J. Ch. 728 (1862); Peterson v. Peterson, L. R. 3 Eq. 111 (1866); Luplon v. Lupton, 2 Johns. Ch. 614 (1817).

interest, unquestionably interest is due. If a legacy has been erroneously paid to a legatee who has no farther property in the estate, in recalling that payment I apprehend that the rule of the court is not to charge interest; but if the legatee is entitled to another fund making interest in the hands of the court, justice must be done out of his share,

The order directed payment of interest at the rate of 4 per cent. Reg. Lib. A. 1817, fol. 1689.

EX PARTE CHADIVIN.

CHANCERY. 1818.

[Reported 3 Swanst. 380.] WILLIAM Roe, by his will dated the 11th of January, 1804, and duly executed to pass real estates, after directing that all his just debts, and funeral and testamentary expenses, should be paid out of his real and personal estate, devised and bequeathed to George Chadwin, his brother-in-law, and Thomas Dakin, all his real and personal estate to them, their heirs, &c., upon trust to sell, with a direction that their receipts should be sufficient discharges; and upon farther trust, and he directed his trustees in the first place, to place out at interest the sum of £400, on mortgage or government security, the interest to be paid to the testator's widow half-yearly during her life, in bar of dower; and immediately after her decease he bequeathed the said sum to his nephew William Chadwin ; and upon farther trust, out of the residue of the money to arise from the sale of his estate and effects, to discharge all his debts, funeral and testamentary expenses, and the expenses of the trust, and subject thereto, on trust to place out at interest the farther sum of £100 upon mortgage or government security; the annual interest to be paid to his brother John Roe during his life, and immediately after his decease, the said sum to be called in and divided among the children of John Roe equally ; and on farther trust out of the residue of the money to arise from the sale, to pay to each of the testator's nephews £100, and to each of his nieces £50, when they should attain twenty-one; and the residue of his estate he gave to his nephew William Chadwin, and appointed George Chadwin and Thomas Dakin executors.

Dakin having renounced probate, the will was proved in March, 1804, by George Chadwin, who sold the testator's estates, and paid his debts and funeral and testamentary expenses ; and instead of investing the residue according to the trusts of the will, employed it in trade, and in the purchase of a real estate for his own benefit. Interest on the sum of £400 was paid to the testator's widow to the 25th of March, 1812,

missionele bankrupte from other was

and interest on the like sum was paid to the testator's brother, John Roe, to the same time; and two of the testator's nieces received the legacies bequeathed to them.

In July, 1811, a commission of bankrupt was issued against George Chadwin, the executor.

Soon after the bankruptcy, William Chadwin, the nephew and residuary legatee of the testator, presented a petition, on which an order, dated the 15th of April, 1813, was made, directing a reference to the commissioners to take an account of the assets of the testator possessed by the bankrupt, and how he had applied and disposed thereof, and what remained due from him on account thereof at the time of the bankruptcy, and the petitioner was to be at liberty to prove such sum as should be found due upon the account directed; and it was ordered that the assignees should pay the respective dividends which should be declared upon the amount of such proof (the amount of such respective dividends so to be paid from time to time, to be verified by affidavit), into the bank, with the privity of the accountant-general of the Court of Chancery, in trust in this matter, to be placed to the account of the personal estate of the testator, subject to farther order ; with liberty for the petitioner and all other parties interested under the said testator's will, to apply as they should be advised ; and it was ordered that the costs of the application should be paid to the petitioner.

By virtue of this order the petitioner proved a debt of £3,185 58. 11d. under the commission; and two dividends thereon, amounting to £1,313 18s. 7d., were paid into the bank.

William Chadwin then presented another petition, stating that the testator's widow and her second husband had assigned to him her interest in the sum of £400; that the testator's brother, John Roe, was still living, having four children, three of whom were infants ; that Thomas Roe, another brother of the testator, was also living, having one child, an infant; that the petitioner was the eldest son of Elizabeth Chadwin, the sister of the testator, who had five other children, the testator having no other brother or sister; and that the petitioner had thus become entitled to the present interest in the whole of the legacy of £400, and also to the legacy of £100, as one of the testator's nephews, and to all the residue of the testator's estate after payment of his debts and legacies ; and submitting that the legacy of £400 was by the will a primary charge on the produce of the sale of the testator's estates, and that the petitioner was entitled to be paid the same in full, out of the sum of £1,313 18s. 7d.

The petition prayed, a declaration that the petitioner was entitled to be paid the legacy of £400, with interest, from the 25th of March, 1812, in full, and payment thereof, out of the sum of £1,313 188. 7d., and an account of what was due to him for principal and interest, and payment of the residue of that sum among the petitioner and the other legatees, according to their several priorities, in part satisfaction of their legacies ;

had thus haring ner of the he petition

or, if the Lord Chancellor should be of opinion that the petitioner was not entitled to be paid the sum of £400 in full, then that an account might be taken of the clear amount of the testator's estate at the time of his death, and of the amount of the clear residue that would have remained of that estate, after paying all his debts, funeral and testamentary expenses and legacies, if the same had in fact been paid, and that the several legacies given by the will, and the amount of the said residue, might be ordered to abate proportionally ; and that the sum of £1,313 18s. 7d. might be apportioned among the petitioner and the several other legatees, in proportion to the amount of their several legacies, and of the said residue.

The master, on another petition by the same petitioner, having reported that all the debts of the testator were paid, in March, 1817, William Chadwin presented a farther petition, praying the confirmation of that report, and that the original petition might be farther heard.

The case was argued by Sir Samuel Romilly and Mr. Stephen, Mr. Horne, and Mr. Rose.

The cases cited were Dyose v. Dyose, 1 P. W. 305; Fonnereau v. Poyntz, 1 Bro. C. C. 472; and Humphreys v. Humphreys, 2 Cox, 184.

The LORD CHANCELLOR (ELDON). This petition prays payment, not out of the testator's estate, but out of dividends declared on the amount due to the testator's estate from the party who has become bankrupt, and claims a proportionate abatement among the pecuniary legatees and the residuary legatee.

The first part of this petition, which prays that the legacy of £400, the entire interest in which the petitioner has acquired by assignment from the testator's widow, may be paid in full, preferably to all the other legacies, is founded on the passage in the will, directing the trustees, “in the first place,” to invest that sum; and on the expressions which precede the subsequent bequests, “upon further trust, out of the residue of the money," to pay debts and funeral and testamentary expenses, and “ subject thereto and on trust,” to invest other sums; and it was insisted in the argument, that these expressions manifest an anxiety in the testator, that the sum to be invested for the benefit of his wife should have priority even over the payment of his debts. Each legacy in succession is given ont of the residue ; which, it has been properly contended, means what remains after the prior application of the fund.

Under the ulterior bequests infants are interested, and a considerable question arises how far their rights can be bound by an order on a petition in the bankruptcy of the executor; such an arrangement may be beneficial to them, but it appears to me that it can hardly be said that the court can so bind them. The question, whether by reason of the deficiency of the estate, not only the pecuniary legatees should abate among themselves, but a computation should be made of what would be coming to the residuary legatee, and he should be considered on the footing of a pecuniary legatee to that amount, and an abatement be made among them all, is extremely difficult, and ought to be made the subject of a bill, did not the small amount of the fund render it advisable to obtain a decision in this way, rather than to institute a suit, which would absorb the estate.

If there had been assets for payment of all the legacies no question could have arisen; the residuary legatee could not in that character have objected to the payment of the antecedent legacies, but must have been content with whatever might happen to be the residue, and while there was sufficient to satisfy the pecuniary legacies, there would have been no reason for discussing their priorities.

A question might have arisen involving no consideration of the consequences of the devastavit which has been committed. Supposing the testator's estate insufficient to satisfy all the legacies, the question would then have been, the funds left by the testator not being adequate to pay all that he intended to be paid, did he intend that the first mentioned sum of £400 should be paid in priority to all the rest, and each of the successive legacies in priority to those which follow it? But the case which I have supposed differs entirely from the present, assuming an estate unaffected by devastavit, and to be distributed according to the effect of the testator's will; whereas, in the events that have occurred, the executor instead of applying himself to the due administration of the testator's estate, paying the legacies according to their priorities, if there were priorities, and making proper investments, paid interest to the testator's widow, and to one of his brothers; and that sort of transaction introduces another question not touched by any prior decision, whether the legatees have not so dealt with this executor in regard to their respective legacies, as to have made him their debtor for each respectively; and whether the proper proof under the commission would not have been, not one entire proof, but sub. divided proof for the respective legacies?

Assuming that in this case the latter ingredient is not to be regarded, the court is to consider what the law is where, there being both pecuniary legatees without priorities among themselves, and a residuary legatee, and by reason of the devastavit of the executor, the estate having become insufficient to pay all the pecuniary legacies, the residuary legatee insists that the estate at the death of the testator being sufficient, and there then being a residue of £2,000 or £3,000, he is entitled to rank as a legatee of that sum, and to represent that the executor being a debtor to the aggregate body of legatees, he is to be considered a creditor for the residue?

In the first case cited, Dyose v. Dyose, 1 P. W. 305, Lord Cowper in the instance of deficiency by a devastavit, held that he was bound to consider the residuary legatee as entitled to something, if the state of the assets at the death of the testator left a residue; and that the wreck of the estate which could be recovered after the devastavit, was divisible not among the pecuniary legatees alone, but among all the legatees according to the proportion of their legacies, and allowing the

VOL. IV. — 47

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