PAYMENT OF LEGACIES.
With respect to the _time of paying legacies_, it may be observed that
whilst, on the one hand, the assent of an executor is necessary to the
title of a legacy, the law has taken care that he shall not be hurried
into the performance of his important duty, and be led into errors
without due deliberation, and has provided therefore that he shall
not be compelled to pay the bequests of his testator before a year
has expired from the period of his death. This custom is adopted from
the civil law, and it is conceived that during this time he will have
opportunity of fully informing himself as to the state of the property
and its competency to pay all the calls which either the will of the
deceased has imposed in the shape of legacies, or which have arisen
from his proceedings in the shape of debts. An executor, therefore, who
after the satisfaction of all these leading calls, shall pay over the
remainder of the estate, if any, to the residuary legatee, cannot plead
that he has _fully_ and rightly parted with all the property, in reply
to his testator’s liability on a covenant which is only made apparent
after that time and within twelve months of his decease. Against the
legatees, indeed, who have obtained too much, and before the time, he
has a remedy; for it was decided in the case of _Livesey_ v. _Livesey_,
that where an executor had by mistake made payment of an annuity before
the legatee was entitled to receive it, he was entitled to retain the
amount of the payments he had made out of the future payments. And if
a legacy be paid in instalments, and through inadvertence the executor
pay a larger amount in the first instalment than he ought to have
done, he may either retain it altogether out of the next, or deduct it
equally from each of the subsequent instalments.
THE LEGATEES.
If a testator leave a legacy to an individual “and to the heir of his
body,” or to a female, “and to be secured to her and to the heirs of
her body,” or to one “and to her issue,” they are _absolute_ legacies,
the sole and entire property of the party to whom they are left, and
those parties are entitled to receive them. Such is the case also where
a legacy is left to a female, “when and if she should attain the age
of twenty-one, to her sole and separate use; and in case of her death,
having children, her share to go her children,” and to her personally,
or to any deputy or attorney, as the law phrases it, properly
authorized to receive it, must the legacy be paid. But if a legacy be
only generally expressed as to be given to a certain individual, and
“to her heirs or children,” the legatee only takes a _life interest_.
Where legacies are left to each of a certain number of relatives,
_or_ to their respective child or children, and should any of them
die without a child, the share reverting to the residuary legatee,
the relatives so named who survived the testator will each take their
share absolutely; for the law cannot contemplate so distant an event
as the possibility of the legatees having no children all their lives,
and therefore passes the property of the bequest to them in full, and
thereby destroys any reversionary right of the residuary legatee.
When a legacy is left to an infant, or person under twenty-one years of
age, payable on his attaining that age, and he die before the time, his
representative, although he will inherit the property, cannot claim it
until the period arrives when the party through whom he claims would
have received it. But if the will states that the legacy is to carry
interest, the representative can claim it immediately on the death of
his principal. Should a legacy be made payable out of _land_, at some
future time, although it should carry interest in the meantime, it was
decided in _Gowler_ v. _Standerwick_, that if the legatee should die
before the time arrives, the fund should not be raised until that time,
securing, nevertheless, a personal fund for a future or contingent
legatee. When, however, it was stated by the will that certain legacies
should be paid on the land, _but expressed neither_ time nor _manner_
in which the money should be raised, nor did it appear that the estate
was a reversion, which was in fact the case, it was held that the
estate should be disposed of in order to raise the legacies, and that
they should be paid with interest from the time of the testator’s
death, and not from the period when the estate would accrue.
Should the will express that a legatee is to take on attaining the age
of twenty-one, and in the event of his dying before twenty-one, then
that it is to go to another, that other person will take the legacy
immediately on the death of the first-named legatee, if he should
die before twenty-one, because he does not claim through the first
party, but, in consequence of a direct right which became his on the
death of that party. But in the case of _Moore_ v. _Godfrey_, where
legacies were given to three co-heiresses, to be paid to them on their
respective marriages, and in case of the death of any of them before
marriage, her or their share to go to the survivor or survivors, and
one of the sisters did die unmarried, it was held, that the portion
of the deceased did not accrue to her sisters, any more than their
original shares, until the period of their marriage, according to the
terms of the original devise.
Where stock is left to trustees to pay the dividends from time to time
to a married woman for her separate use, the bequest is an unlimited
one, and passes the capital as well as its interest, and she may
appoint or direct its disposal at her death. And where a certain sum
had been left to trustees, in trust, to pay the dividends to a party,
until an exchange of certain lands should be made between him and
another party, the capital then to be equally divided between them, and
the latter died before the time for making the exchange expired, the
former party obtained the whole of the legacy.
If a legatee is to receive an estate, including residuary legateeship,
on condition of paying the debts of the deceased, and he take the
estate, he is liable for the whole of the debts, though they may exceed
the value of the estate tenfold.
Conditions may be annexed to legacies, which in some cases become
substantive parts of title, but are in others void and useless. Thus,
when a legacy was bequeathed, on condition that the legatee “should
change the course of life he had too long followed, and give up low
company, frequenting public houses, &c.,” it was held that it was a
condition that ought to be complied with, and the court directed an
inquiry to ascertain whether it had been before it would direct the
payment of the legacy. But when, on the contrary, a legacy was left to
a married woman, on condition that she lived apart from her husband,
the legacy was awarded notwithstanding the breach of the conditions,
because it was deemed contrary to good morals and Christian duty. When
a condition was annexed that the legatee should take, provided he did
not marry without the consent of the executor, expressed in writing,
and he did marry with the consent of such executor, but expressed
verbally and not in writing, it was held that he was entitled to the
legacy; and the consent of a co-executor, who had not acted, was not
considered requisite.
A legacy was given on condition that the legatee intimated to the
executor his willingness to forgive certain debts, and he filed a bill
in Chancery to recover his claims, it was decided that he had forfeited
the legacy. In a case where a testator authorized his executors, at
any time before a certain person attained the age of twenty-six, to
raise £600 by sale of stock, and apply the same towards his advancement
in life, or for any purposes for his benefit, as the executors might
think proper, and at the age of twenty-six he made an absolute gift of
the £600 to that person, the executors declined to act, and the court
refused to give any portion of it, until it could ascertain whether the
legatee’s position was such that he would suffer detriment unless the
whole, or a portion, were paid.
TO WHOM LEGACIES SHOULD BE PAID.
No small care is required on the part of executors to pay legacies
into the hands of those who are entitled to receive them; for it has
not unfrequently happened, that an honest man has been reduced to
ruin by the obligation to pay money over again out of his own pocket,
in consequence of mistakes, in regard to those who were entitled to
receive portions of the estate of his testator. Nor has it been a very
unfrequent circumstance, that legatees have been deprived of their
just, and perhaps necessary rights, in consequence of their inability
to recover from an executor that which he had wrongly paid to other
persons.
Many of these misfortunes have occurred from the misapplication of
legacies to infants; and the general rule is now established, that
an executor has no right to pay a legacy to the father of an infant,
or person under age, or to any other relative of his, without the
sanction of a court of equity. Even in the case of an adult child, such
payment must be made with the consent of the child, and confirmed by
his ratification at an after period. For cases have occurred, where,
with the most honest intentions, an executor has paid a legacy to the
father of an infant, and has been obliged to pay it over again to the
legatee himself on coming of age; and although several of these cases
have been attended with gross hardship to the executors, yet the custom
is attended with such serious danger to the interests of infants, that
the court would never consent to sanction the practice. Nor will it do
so, even though the testator on his death-bed desire it, as was shown
in the case of _Dagby_ v. _Tolferry_, where the points were extreme. An
executor will, however, be justified in paying a portion of a legacy
left to an infant, to the infant himself, or to his guardian, if it
should appear that the money is absolutely needed for necessaries for
such infant. But should a legacy to an infant be too inconsiderable
to apply for the authority of the Court of Chancery, the executor
would be justified, too, in paying it into the hands of the infant,
or its father; but he is not generally warranted in so doing. And if
the father institute a suit in a spiritual court, in order to have his
infant’s legacy paid into his hands, a prohibition against it may be
readily obtained by the executor.
Where the circumstances are difficult, and the executor knows not how
to act, he may shelter himself under the directions of the statute
36 Geo. III., c. 52, s. 2, by which it is enacted, that “where by
reason of the infancy, or absence beyond the seas, of any legatee,
the executor cannot pay a legacy chargeable with duty by virtue of
that act; that is to say, given by any will or testamentary instrument
of any person who shall die after the passing of that act, it shall
be lawful for him to pay such legacy, after deducting the duty
chargeable thereon, into the Bank of England, with the privity of
the Accountant-general of the Court of Chancery, to be placed to the
account of the legatee, for payment of which the Accountant-general
shall give his certificate, on production of the certificate of the
Commissioners of Stamps, that the duty thereon hath been fully paid;
and such payment into the Bank shall be a sufficient discharge for such
legacy, which, when paid, shall be laid out by the Accountant-general
in the purchase of 3 per cent consolidated annuities, which, with the
dividends thereon, shall be transferred or paid to the person entitled
thereto, or otherwise applied for his benefit, on application to the
Court of Chancery, by petition or motion, in a summary way.” But, as in
all other cases, the executor is not bound to pay the legacy into the
Bank until the end of a year from the testator’s death.
When personal property is bequeathed for life to one party, with a
direction that it shall go to another after his death, the property
is retained by the executor, who must invest it in the 3 per cent.
consols, until the death of the first legatee, when it must be handed
to him. But this rule does not hold where a testator dies abroad,
having made his will out of this country, unless the first inheritors
come here, in which case the person in remainder has a right to have it
invested.
If an executor obtain a power to divide a sum of money committed to his
charge, at his discretion, a court of equity will interfere to control
his division, if it be unreasonable; as, where a testator left £1,100
to be divided between his two daughters (one of whom was by a former
marriage), at the discretion of their mother, and she gave £1,000
to her own child, and only £100 to the other, her distribution was
overruled, and an equal division was made. The misbehaviour, however,
of any of the children, will form a sufficient plea for unequal
division.
In a case where a testator had left a sum of money to a certain person,
but left it to the discretion of the executors out at interest, if they
should think such a disposition more to his advantage, with orders
to pay him the dividends, and directing the principal to be divided
amongst his children at his death, or at the legatee’s discretion in
default of children, and one of the executors died, and the other
renounced the trust, it was held that the legacy was absolute to the
legatee, and it was accordingly paid to him.
Another instance of unexpected contingency occurred in the case of
_Birch_ v. _Wade_, where the testator willed that one-third of his
principal estate and effects should be left entirely at the disposal of
his wife, if she should think proper, among his relations, after the
death of his sisters; she died without making any disposition, and it
was held a trust for her next of kin at the time of her death.
A legacy left to a married woman must be paid to her husband; and even
where she was living separated from her husband, without maintenance,
and the executor paid her a legacy and took her receipt for it, he
was compelled, on suit from the husband, to pay it over again with
interest. Nor is the rule altered in a case of divorce, _a mensâ et
thoro_; for there the husband alone can release it. But the executor
may decline to pay it to him, if it amounts to £200, unless he has
made, or will make, a sufficient provision for his wife. And if a woman
who is, or has been, married, becomes entitled to a legacy, the court
will require a positive affidavit that it has not been in any way
settled, before it will decree payment to her personally.
Money bequeathed to a charity established out of England, must be paid
to the persons named by the testator to receive it.
Legacies left to a bankrupt become the property of his assignees,
unless his certificate be signed, and even then, unless it has been
allowed by the Lord Chancellor; and they must, therefore, under such
circumstances, be paid to his assignees.
As the law now stands, all legacies are subject to the debts of
the testator, unless there be sufficient assets to pay both debts
and legacies; and in the event, therefore, of the estate proving
insufficient for the debts, after some or all of the legacies are
paid, the executor can compel the legatees to refund altogether, or in
proportion to the deficiency.
Under the will of a person residing abroad, or in the colonies,
legacies are payable in the currency of the country where the testator
resided at the time the will was made. Nor does it affect the case
that he has effects in this country as well as there, unless he shall
have separated the funds by his will, and charged the legacies on his
English property. When some legacies are described as _sterling_, and
others not so, they must be paid accordingly, and in compliance with
such description. So also, if a testator bequeath a legacy, either of
a single sum of money, or of an annuity charged on lands which are in
another country, the full amount shall be paid according to English
count, and without any deductions for the expenses of remittance.
DUTY UPON LEGACIES.
The executor is responsible for the duties upon all legacies, and must
pay them. He, therefore, pays every legacy specified in the will, short
of the amount which he has to deduct for duty; and on its payment he is
bound to take a property stamp receipt, according to the value of the
legacy and the relationship of the legatee to the testator.
A bond debt forgiven by will is a legacy, and therefore liable to duty.
Duty was charged upon a legacy of £50 a-year, to be laid out in bread
and divided among the poor of the parish, although some of them only
received about two shillings a-year each. But a residue to be divided,
in which the several recipients did not receive more than £15 each,
was not chargeable, though had any of the legatees been entitled to
more than £20, their share would have been.
Where a legacy is directed to be paid “without deductions” or “free
of expense,” the executors must pay the amount in full, and discharge
the duty from some other fund. Such, also, will hold with regard to
annuities as well as sole legacies. An expression, also, of “clear of
all outgoings and taxes,” with respect to an annuity, will carry the
same privilege.
If by the will a legacy be given free of duty, and by the codicil that
legacy is revoked, and a larger one given by way of increase, it is
equally free from duty as the original legacy. But if an annuity be
left in the body of the will, free from all stamps and taxes, with a
gift over, which is revoked by the codicil, and a small annuity left,
without the gift over, it is held to be altogether a new legacy, and
not entitled to exemption from duty.
Where a testator died in India, where his executors also lived, and
where all his property was situate, it was held that a legacy remitted
to a legatee in England was free from duty. When, however, part of such
a testator’s property was found in England, and a legatee instituted
a suit to have his legacy paid out of that portion of the assets, it
was liable to the duty. Property belonging to a foreigner, though it be
in this country and given to English legatees, is not liable to duty.
But American, Austrian, French, and Russian stock, if the property of a
person domiciled in this country, is liable to legacy duty. Yet probate
duty is not payable upon property situated in a foreign country, though
brought into this, and administered by an English executor.
In general it may be observed, that where an executor has inadvertently
paid a legacy without deducting the duty, he can compel the legatee to
refund, and in one instance, when an annuity had been paid for four
years without deducting the duty, until the executor had assigned the
whole of his interest, he was deemed to be only the surety of the
legatee, and could compel him to return accordingly.
INTEREST ON LEGACIES.
A distinction formerly prevailed as to the quantum of interest
payable on legacies charged on lands, and such as were chargeable on
personal property, for it was deemed but fair that as land never
produces a profit equal to the interest on money, so the interest
on a legacy charged on such property, should be one per cent. lower
than that charged on personalty. But the distinction is now set
aside, and whether legacies are charged on realty or personal estate,
the established practice is to allow only _four per cent._ where no
other rate of interest is specified by the will. This custom prevails
upon all legacies administered in England whether derived from home,
colonial, or foreign property.
When interest is payable upon a legacy, can alone be learned from
the will itself. Not that interest will only be paid when the will
expressly states that it should be, for the greater number of cases are
those in which interest has been paid from inference of the testator’s
intention as derived from the construction of his expressions. But
these are so various, that any attempt to specify the principles
on which the construction for interest is based would be futile; a
careful attention to the wording of the will generally enables any
one of ordinary understanding to ascertain when he may be entitled to
interest, when that effect is not plainly expressed. The ordinary rule
is, that wherever a legacy is made payable out of a fund bringing
interest at the death of a testator, as a mortgage or money in the
funds, the legatee is entitled to the interest his share of that fund
produces, until his legacy is paid; and wherever the bequest is made
upon property not bringing interest, as when a sum is left to a party
to be raised out of houses or land to be sold, the legatee is not
entitled to any such benefit.