1806, are still unsatisfied? Even if there are any demands against the assets of the intestate, they can at the utmost affect only the quantum of the debt due to the testatrix, and they cannot cause her distributive share of that surplus of the legacy, which may remain after these demands are satisfied, to cease to be a sum of money owing to George Bryan, and in equity belonging to her.

Mr. Lorraine, contra.

Feb. 20. The Master of the Rolls [Lord Gifford]. It is contended, in this case, that, inasmuch as George Bryan received rents and profits of the lands, charged with the legacies of James Bryan, more than sufficient for the payment of those charges, he thereby became indebted to Aylmer Bryan in the amount of the legacy of £1000 with interest; that Jane Clementina Bryan, as one of the nieces of Aylmer Bryan, was entitled under the statute to one fourth of his personal estate, including the legacy; that, under the will of Pierce Bryan, she [139] was entitled to other two fourth parts of it; that she, therefore, ought to be considered as a creditor of George Bryan to the amount of three fourths of the sum due from him in respect of the legacy and interest upon it; and, consequently, that that proportion of the legacy and interest passed by the bequest in her will," of all such sums as should be owing to her at the time of her decease from her brother George Bryan." The Master is of opinion that this legacy constituted part of the assets of Aylmer Bryan, and was liable to the payment of his debts and funeral expences; and, inasmuch as Jane Clementina Bryan did not take out letters of administration to Aylmer Bryan, he does not find that any sum of money was, at the time of her decease, due to her from George Bryan on account of the legacy. The facts are not controverted, and the only question is, as to the conclusion of law to be derived from them. It appears to me, that the Master has drawn the right inference.

This was a debt, if debt it was, which constituted part of the assets of Aylmer Bryan; and if, when the assets are administered, there is a surplus after the payment of his debts and legacies, Jane Clementina Bryan's estate will be entitled to her distributive share of that surplus: but neither at law nor in equity could she, in respect of this legacy, have enforced any demand against George Bryan; not at law, for, as she was not the personal representative of Aylmer Bryan, his rights were never legally vested in her; not in equity, because she could not there have recovered any part of the assets of Aylmer Bryan, except through the medium of a personal representative. Suppose that this had been a bequest of all the debts which were due and owing to the testatrix at the time of her decease, it must have been contended, if the principle on which this exception [140] proceeds be right, that every debt due to any person, to a distributive share of whose estate she was entitled, was to be considered as a debt due to her, and passed by this clause in her will. Such a proposition it would be impossible to support. The legacy was, at the utmost, only a debt due from George Bryan to the personal representative of Aylmer Bryan. When the intestate's effects were administered, she would have a right to come in, through the medium of that personal representative, for her distributive share of the residuary assets; but no part of those assets, though consisting of debts due to the intestate, could be regarded as a debt due to her.

Another circumstance in this case is, that there was a debt due to the testatrix from George Bryan, to answer the words of bequest which she has used; for George Bryan had given her a bond to secure a balance, in which he was indebted to her on another account; and, on that bond, a considerable sum was owing to her at her death.

Exception overruled.

[141] HOCKLEY v. BANTOCK. Rolls. Feb. 17, 1826.

[See Shepherd v. Mouls, 1845, 9 Jur. 508.]

Trustees and executors under the will of a testator, who had directed them to invest a share of his residuary estate either in the public funds or on mortgage at 5 per cent., having admitted by their answer that they had, from time to time, balances in their hands, and it being proved that, many years after the death of the testator, they had not invested the share either in the funds or on mortgage; inquiries will be directed at the original hearing concerning the balances retained by them, and

the prices of 3 per cent. stock at the several times when such balances were in their hands. Executors, who are also trustees, agree to give one of the residuary legatees, as a security for his share, a legal mortgage of real estate, part of the testator's assets, and, for the purpose of having the mortgage prepared, they deliver the title deeds to his agents: this gives him an equitable lien on the property, as against the executors, though not as against the other residuary legatees.

Hugh Bantock bequeathed a share of his residuary estate to Mrs. Hockley during her life, with remainder to her children; and he directed the executors and trustees of his will either to invest this share in the public funds, or to lay it out on mortgage at 5 per cent. interest. He died in 1812.

The bill was filed by Mr. and Mrs. Hockley, and their infant children, against the executors and the other residuary legatees. It made a special case of breach of trust against the executors; charging them with having retained balances which ought to have been applied in satisfaction of the bequest to Mrs. Hockley, and with having omitted either to invest those balances in the funds or to lay them out on mortgage. The executors insisted, that Mrs. Hockley had received more than the amount of the yearly interest of her proportion of the residue; but they admitted, that they had from time to time kept balances in their hands; and it was proved, that, so late as 1822, they had not made any investment on account of that lady and her children, though they had, in 1814, laid out £400 in the purchase of stock for another residuary legatee, whose share was equal only to one-half of that which the Plaintiffs were entitled to receive.

[142] Under these circumstances, the Master of the Rolls was of opinion, that the Plaintiffs had a right, not merely to the common decree for an account, but also to an inquiry what balances had been from time to time in the hands of the executors.

The Plaintiffs insisted further, that an inquiry ought to be directed as to what were the prices of 3 per cent. stock at the respective times when any balances should be found to have been in the hands of those Defendants.

Mr. Heald and Mr. Randall, for the executors. The sole object of such an inquiry would be, to charge the executors in respect of the difference which may have taken place in the price of the 3 per cents. The Court, however, has no authority so to charge them; for they were not bound to invest any portion of the residue in the public funds, and they cannot be held answerable in a court of equity for not doing that which it was lawful for them to omit. The will of the testator left it expressly to their discretion to lay out the money either in the purchase of stock or on mortgage at 5 per cent. How, then, can the cestuis que trust, or the Court on their behalf, say, We shall hold you answerable for not investing in the '3 per cents. the balances, which it was competent for you to have lent out on real security"? Therefore, the inquiry which is prayed ought not to be directed in this stage of the cause.

66

Mr. Pemberton and Mr. Patteson, for the Plaintiffs. Though the executors had an option to invest the money either in the funds or on mortgage, yet, as they did neither of the two things, either of which they might [143] with propriety have done, and one or other of which it was their duty to do, the cestuis que trust have now a right to say, You have committed a breach of trust; and for that breach of trust you shall be answerable, not in the way which may be most convenient for you, but upon the principle which shall be most beneficial to us." Such is the universal rule applicable to every case of breach of trust. Where a trustee employs the trust monies in business, he may be made to account, not merely for interest at 5 per cent., but for the profits of the trade, though it could in no case have been his duty to invest the fund so as to produce more than legal interest. Not having lent out the money on mortgage, these Defendants had no other alternative except that of purchasing stock. Stock, however, has not been purchased; and the Plaintiffs will hereafter have a right, if they think proper, to call upon the Court to compel the executors to place them in the same situation as if stock had been bought. Upon that claim, when advanced, the Court will decide: but, in the mean time, the cestuis que trust have a right to this inquiry, for the purpose of ascertaining and placing on the record those circumstances by which they must be guided in determining on which of two principles they shall endeavour to bring those defaulting trustees

to an account.

The Master of the Rolls [Lord Gifford] at first expressed a doubt, whether he

ought to direct an inquiry concerning the prices of stock, where the executors, who had retained the balances in their hands, had the alternative expressly given them by the will, of investing the assets either on government securities or on mortgage. Finally, however, he decided, that the Plaintiffs were entitled to the inquiry.

[144] The executors had taken a conveyance of a freehold house in part discharge of a debt due to the testator; and, upon being urged to invest the Plaintiffs' share, they had proposed to give a security for it, to the extent of £800, by a mortgage of those premises. This proposal was accepted; and the title-deeds of the house were delivered to Mrs. Hockley's agents, in order that a mortgage-deed might be prepared. The executors, however, subsequently receded from their agreement, on the ground that they had no right to mortgage a part of their testator's assets; and the intended mortgage had never been executed. The Plaintiffs now insisted, that, as between them and the executors, they had an equitable lien on the house for their share of the residue, to the extent of £800.

Mr. Pemberton in support of the lien. The agreement to execute a legal mortgage, with the subsequent delivery of the title-deeds, creates an equitable lien on the house. It is true, that Sir William Grant, in Norris v. Wilkinson (12 Ves. 192), held, that an agreement to execute a legal mortgage, and the delivery of the title-deeds, as a step towards its preparation, were not sufficient to constitute an equitable mortgage, and that the delivery of the title-deeds gave no lien in equity, unless there was an intention to put them into pledge as an equitable security. But the case of Edge v. Worthington (1 Cox, 211) (which was not in print when Norris v. Wilkinson was decided), is an authority to the contrary; and in Ex parte Bruce (1 Rose, 374), Lord Eldon decided, that the delivery of deeds, not as a security, but in order that a legal mortgage might be prepared, did constitute an equitable mortgage.

[145] Mr. Heald insisted, that, inasmuch as the house was part of the testator's assets, the executors could not give a mortgage upon it either in law or in equity.

The Master of the Rolls [Lord Gifford]. It is proved that the executors agreed to give the Plaintiffs a legal mortgage on the house for the sum of £800, and that the title deeds have been delivered to the Plaintiffs or their agents for the purpose of having that agreement carried into effect. The agreement and the delivery of the deeds constitute a mortgage in equity as against the executors, though not so as to bind the interests of the other residuary legatees: and the Plaintiffs are entitled to a declaration, that, as against the executors, they have an equitable lien on this house for the sum which shall be found due to them, to the extent of £800.

[146] SUTTON v. SHARP. Rolls. Feb. 16, 17, 1826.

A testator, after expressing an intention to dispose of his whole estate, and giving legacies of £100 to each of five persons, desires all his goods and moveable effects to be divided equally between them, and then bequeaths £20 to a person whom he appoints executor; afterwards, by a codicil, he directs the money to be paid to those five persons in twelve months, and his utensils and goods to be given to them in one month after his decease: Held, that the words "goods and moveable effects" are to be limited to utensils and articles ejusdem generis, and that the testator died intestate with respect to the beneficial interest in the general residue of his property. An executor, being a trader, who, after paying pecuniary legacies in due time, retains for many years balances belonging to the residue, and mixes them with his own monies, will be charged with interest at £5 per cent., though it could not be ascertained, without a decree of the Court, who were the persons entitled to the fund.

The will of John Avery, dated the 2d of November 1779, began with these words: As touching such worldly estate wherewith it has pleased God to bless me in this life, I give, devise, and dispose of the same in the following manner and form.” The testator then bequeathed to John Avery £100, to Henry Feathers £100, to Charles Sutton £100, to John Sutton £100, and to William Turner £100. After these bequests came the following clause: " Also I desire all my goods and all my moveable effects to be equally divided to the five persons as above." He concluded by giving John Whitfield a legacy of £20, and appointing him executor.

He afterwards made the following codicil: The which I have not mentioned.

before is, that those persons whom I have willed my monies, goods, and effects, that the money to be paid in twelve months after my decease; on all my utensils and goods, in one month after my decease." (Note: The orthography in both the will and the codicil was that of an extremely illiterate person.)

The testator died in April 1799, leaving only personal property. John Sutton, one of the five legatees, died in his life-time.

[147] The question was, whether the clause, " also I desire all my goods and all my moveable effects to be equally divided to the five persons as above," operated as a general bequest of the residue of the testator's estate, or merely as a specific bequest of utensils, household goods, and other articles of a similar kind.

Sir Giffin Wilson and Mr. Barber, for the parties who contended that the testator died intestate with respect to the beneficial interest in the general residue of his

estate.

If these five persons had been intended to be residuary legatees, the preceding pecuniary bequest of £100 to each of them would have been totally superfluous : and the subsequent gift of £20 to the executor is likewise inconsistent with the notion that the testator conceived himself to have disposed of all his property by the preceding clause. Besides, in the codicil, the testator directs the pecuniary legacies to be paid within twelve months, and the utensils and goods to be distributed within one month, after his decease. The utensils and goods spoken of in the codicil are the same with the goods and effects mentioned in the will: and, therefore, as it never could be his meaning that the general residue of his estate should be distributed before the pecuniary legacies were paid, the Court must interpret the words as referring only to household furniture, utensils, and other articles ejusdem generis. That construction is justified by the limited signification which has been put upon similar words in the cases of Roberts v. Ruffin (2 Atk. 113), Crichton v. Symes (3 Atk. 61), Green v. Symonds (1 Bro. Cha. Cas. 129, note. Mr. Belt's edition), and Moore v. Moore (1 Bro. Cha. Cas. 127).

[148] Mr. Shadwell and Mr. Simons, for the parties who contended that the testator had disposed of the beneficial interest in the whole of his property, except only that share of it which had lapsed by the death of John Sutton in his life-time.

The present case is not governed by the authorities cited, in all of which there are to be found words of direct reference either to local situation or to articles of a particular sort. In Roberts v. Ruffin. the testator gave "all goods and things of every kind, which should be found in a particular closet at his death." In Moore v. Moore, the bequest was of "all my goods and chattels in Suffolk." In Crichton v. Symes, the testatrix gave all her goods, wearing apparel of what nature and kind soever, except her gold watch. In Green v. Symonds, the bequest was of all the testator's goods and moveables whatsoever in his study, except his books and writings. In all these cases, the specification of articles of a particular kind, or the reference to local situation, formed a clear ground for restraining the general import of the words. Here, on the contrary, there is no reason for introducing any restriction. The testator expresses his intention to dispose of the whole of his worldly estate; and the phrase," all my goods and all my moveable effects." is ample enough for that purpose. The equal legacies given to the alleged residuary legatees do not raise any presumption to the contrary; for a gift to them of a specific sum to be paid at a prescribed time is not inconsistent with an intention, that they should share equally in the ultimate residue of his estate. The bequest to his executor proves only, that he thought fit, after he had disposed of every thing, to except a sum of £20 from the operation of the preceding residuary clause. And even if it were admitted, that the words, " all my utensils and goods," occurring [149] in the codicil, are to be confined to specific articles, there is nothing to qualify the term effects, which is to be found in both the will and the codicil. Bennett v. Batchelor (1 Ves. Jun. 63), Michell v. Michell (5 Mad. 69), Hearne v. Wigginton (6 Mad. 119).

The Master of the Rolls [Lord Gifford]. In this case the testator begins his will with words which intimate an intention to dispose of all his worldly estate. Then, after giving equal pecuniary legacies to five persons, he says: "Also I desire all my goods and all my moveable effects to be equally divided to the five persons as above." Had he stopped here, it would have been difficult to have resisted the argument, that these words, notwithstanding the pecuniary legacies which precede

them, are a complete disposition of the residue. They are, however, followed by a pecuniary legacy to his executor; a circumstance rather unfavourable to the notion that the testator conceived himself to have previously disposed of the whole of his property. At the same time, I admit that it is by no means uncommon for a testator, after he has expressly bequeathed every thing, to give by a subsequent clause a specific or pecuniary legacy.

But then, when we look at the codicil, it is clear, that he who made it, conceived at the time, that he had by his will given money legacies and also disposed of his goods and utensils and he proceeds to direct that the money legacies shall be paid within twelve months after his decease, and the utensils and goods distributed within one month. That arrangement is wholly inconsistent with the supposition, that the goods pass as part [150] of the residue and yet the only words, by which the goods are disposed of, are those, which, it is contended, amount to a bequest of all the residue of the personal estate. Upon the will and codicil, therefore, taken together, there is enough to show, that the testator, in desiring all his goods and moveable effects to be divided among the five persons whom he names, meant utensils and goods ejusdem generis. The consequence is, that the general residue is not disposed of.

John Whitfield, the original executor, died in March 1800, having appointed the defendant Sharp his executor. Sharp possessed himself of Avery's assets, and paid the four legacies of £100 each in June following. The residue of the estate he had retained up to the present time; and he acknowledged, in his answer, that he had paid the balances, which remained in his hands in respect of the assets, into his banker's, whereby they became mixed and blended with his own monies. It was admitted at the bar, though it did not appear on the pleadings, that he was a watch-maker by trade.

Under these circumstances, it was insisted that Sharp ought to be charged with interest at 5 per cent. ; and in support of this claim, the cases of Raphael v. Boehm (11 Ves. 92), Rocke v. Hart (11 Ves. 58), and Tebbs v. Carpenter (1 Mad. 290), with the authorities cited in them, were referred to.

Mr. Heald and Mr. Sidebottom, for Sharp. An executor is never charged with interest at more than 4 per cent., unless he has been guilty of very gross misconduct, or has employed the trust fund in specu-[151]-lations for his own benefit. Now, the only misconduct, which this defendant is accused of, is, that he has retained the residuary estate in his own hands. But what other course could he have adopted? The obscurity and ambiguity of the will put it out of his power to part with the funds. So far as the directions of the testator were clear, he fulfilled them promptly; but till the decree of the Court was pronounced, he could not know who were the persons entitled to receive the residue. He has been always ready and willing to pay, as soon as it should be ascertained who were the residuary legatees; and there is no evidence that he has derived any profit from the employment of the money in speculations of his own.

The Master of the Rolls [Lord Gifford]. The general rule undoubtedly is, that an executor shall be charged with interest on the balances in his hands at the rate of only 4 per cent. ; but it is equally clear, that, if he applies them for his own benefit, he must pay 5 per cent. If a trader," says Sir William Grant in Rocke v. Hart (11 Ves. 61), "lodges money at his banker's, he has, in effect, a benefit from that. As he must generally keep a balance at his banker's, it answers the purpose of his credit, as if it was his own money, and I should hold that to be employment in his trade. The moment that is established, it is taken for granted that the trade produces 5 per cent. at the least; and it is for him to shew he made less." I consider it, therefore, as established doctrine, that a party, who, being a trader, and having, of course, an account with a banker, places trust monies at his [152] banker's in his own name, by that means increasing the balances in his favour, acquiring additional credit, and enjoying in his business the advantages naturally arising from that circumstance, must be considered as having employed the money for his own benefit. This executor is admitted at the bar to have been a trader; he acknowledges, that he mixed the trust monies with his own it necessarily follows that he must be charged with interest at 5 per cent.