LEGACIES.

66

better course appears to be not to attempt to enumerate the various classes of objects, but to give "all the effects in or about or belonging to or appropriated for" the house at the time of my death, other than money or securities for money and deeds and documents of title."

445

able stores.

If the testator is likely to have a considerable stock of Consumwine, or of other consumable articles, they may form the subject of a separate gift. Such articles cannot be given for successive interests; a specific gift of them to A. for life and after his death to B. vests them absolutely in A. There is, however, an exception to this rule in the case of stock in trade given as part of a business; Cockayne v. Harrison, L. R. 13 Eq. 432; see Breton v. Mockett, 9 Ch. D. 95. Sometimes the furniture, &c., in a house is bequeathed Settled to the testator's widow for life, and is directed either to be divided among the children, or to go to some particular child at her death (see forms in 2 K. & E. 687). In this case the questions occur-first, whether an inventory is to be taken or not; and, second, whether the tenant for life is to keep the furniture in repair.

furniture.

In the absence of any directions on the subject, it Inventory. appears to be the duty of the executors to require an inventory to be made (Slanning v. Style, 3 P. W. 334; Leeke v. Bennett, 1 Atk. 470; Bill v. Kinaston, 2 Atk. 81), as otherwise there is a risk of some confusion occurring, at the death of the tenant for life, between the settled chattels and his own property. If, owing to the property being small, or for any other reason, the testator considers it unnecessary to require an inventory, the will should state so explicitly. Generally, directions should be given for insurance by Insurance. the tenant for life, and possibly for repairs; but when this is the case, the executors should be expressly exonerated from seeing that the insurances are kept up and the repairs made. It is convenient, where power is given to let a house and settled furniture, which on the death of the tenant for life may go to different persons, to give power to let the house and furniture together at a gross rent (ante, p. 269),

Business.

Special

executor.

Partnership.

with power to the trustees, if necessary, to apportion the rent as between the owners of the house and the furniture.

Where the testator is in trade, it will be proper to give special directions as to his business. It must be remembered, first, that executors who carry on the testator's business, without express authority given by the will, commit a breach of trust (e); and therefore, if it is intended that they should do so, express power must be given to them; and, secondly, that executors who carry on the testator's business, either with or without such authority, cannot escape personal liability towards the persons with whom they deal (ƒ). It is generally desirable, when the testator's business is bequeathed to any person for his own benefit, to make him the executor so far as regards the business or, if there be any doubt as to whether the residue of the testator's property will suffice to satisfy his debts other than business debts, to appoint the legatee executor jointly with the general executors for the purposes of the business only. As one executor alone can give receipts for debts due to the testator, the legatee of the business can practically act (if the second plan be adopted), without any interference from the general executors; and, on the other hand, they can interfere if, owing to the deficiency of the testator's general assets, it becomes necessary to do so. If it is intended to settle the testator's business, this must be done by bequeathing it to trustees in trust to carry it on. It is hardly necessary to point out the great difficulty of finding trustees willing to undertake such an onerous trust, unless they are beneficially interested. Where the testator is in partnership, it is proper to 439. Executors properly carrying on the testator's business entitled to a general indemnity out of his estate, and may under the circumstances of the case be entitled to an indemnity even in priority to claims by creditors. Dowse v. Gorton (1891), A. C. 190

273.

(e) Kirkman v. Booth, 11 Beav. But where there is a trust for sale with the usual power to postpone a sale, executors may be justified in carrying on the business; Re Chancellor, 26 Ch. D. 42.

(f) Lucas v. Williams (No. 1), 4 De G. F. & J. 436, and Lucas v. Williams (No. 2), 4 De G. F. & J.

are

BUSINESS PARTNERSHIP-ANNUITIES.

authorise the executors to make arrangements with the continuing partners as to the method of winding up the business, or as to leaving the testator's share in the business; or, if the partnership articles authorise the testator to nominate a successor, and he desires to nominate trustees to succeed him, he should give them full power to act (within the limits provided by the articles of partnership) for the benefit of his estate.

Sometimes the testator's business or share in a partnership is bequeathed charged with an annuity or other provision for his widow.

447

An "annuity" is a "legacy" (Heath v. Weston, 3 De Annuity. G. M. & G. 601), so that a direction to pay "legacies" out of any particular fund charges the annuities on that fund also, unless the contrary intention appears (Cunningham v. Foot, 3 App. Cas. 974, 989) (g).

Where the testator wishes to make the bequest of an annuity, he should provide from what fund it is to be payable, and whether it is to be charged on the corpus or on the income only. If the annuity be charged on land, it may be limited as a rent-charge, thus charging it on the corpus of the property. If the annuity is to be secured on personalty, either of the following methods may be adopted: the annuity may be charged on the income of the whole residuary estate, with power to the trustees (see form in 2 K. & E. 724), if part of the residuary estate is wanted for division, to appropriate such part as they may think fit to answer the annuity; or the trustees may be directed to purchase at once a sufficient sum of Consols to meet the annuity out of the dividends, with power to apply the income of any part of the residuary estate to answer the annuity till appropriation. If the annuity be large compared with the probable income of the residuary estate,

(g) An annuity is primâ facie payable out of income; Fearns v. Young, 9 Ves. 553; Re Owthwaite (1891), 3 Ch. 497; Hicks v.

Ross (1891), 3 Ch. 499. As to
giving an annuity "free of income
tax," see ante, p. 376.

Spendthrift.

it may be advisable to charge it on the corpus; and, at all events, it should be charged on the corpus of any special fund set aside to meet it. It will be remarked that, when the annuity is payable out of the whole or an appropriated part of the residuary estate, it necessarily defers the final distribution till the death of the annuitant; it is therefore sometimes convenient to authorise the trustees to purchase an annuity either from Government or an insurance office on the life of the annuitant, either in the name of the trustees or the annuitant. Where instead of the trustees being authorised they are directed to purchase an annuity, the annuitant is entitled to receive the value of the annuity (Stokes v. Cheek, 28 Beav. 620), unless the purchase is directed to be made in the names of the trustees and there is a gift over (Power v. Hayne, L. R. 8 Eq. 262), or a proviso for cesser (Hatton v. May, 3 Ch. D. 148) on alienation; but if the purchase is directed to be made in the name of the annuitant, the latter provision will be rejected as repugnant. (Hunt-Foulston v. Furber, 3 Ch. D. 285.) See Re Mabbett (1891), 1 Ch. 707.

The time at which the annuity is to begin, and the date of the first payment, should be mentioned. In the absence of any special directions, the annuity is held to commence from the testator's death; but the first payment, even if the annuity be directed to be paid quarterly, will not, in the absence of a direction to the contrary, be actually payable till the expiration of a year from the testator's death, at which time the whole of the payments accruing during the first year will have to be made. (See 4 Dav. Prec. 105 n.)

Generally speaking, a gift of an annuity is construed to mean an annuity for the life of the legatee (Yates v. Maddan, 3 Mac. & G. 532; Blight v. Hartnoll, 19 Ch. D. 294; Re Morgan (1893), 3 Ch. 222), but as the rule is subject to numerous exceptions (Hawk. Wills, 125), it is better to state so distinctly.

Provision may be made for a spendthrift by giving a discretionary power to the trustees of the will to raise out

CONDITIONS.

of the income of the residuary estate an annuity and to pay it to the spendthrift; or, if anything should happen which would prevent him from enjoying it, to apply it for the benefit of him, his wife, and children, or any of them. (2 K. & E. 722.) If the spendthrift is unmarried, it would be advisable to add other persons as objects of the discretionary trust (ante, p. 340).

It is of the utmost importance that the student should Condilearn the rules as to the vesting of legacies.

But first, it is necessary to consider the meaning of a condition, and the difference between conditions precedent and conditions subsequent. Where there are two events, A and B (and A is of such a nature that it may or may not happen), and event B is to happen only if event A happens, A is called a condition (h). A condition precedent is one which must happen before the interest can vest; e.g., a gift of £100 to A. if he comes to London: here the condition of coming to London must be performed by A. in order to entitle him to the £100; and on its performance he becomes entitled to the gift. A condition subsequent is one which defeats or divests an interest already in existence; thus, suppose I give an annuity to A., and declare that it shall cease if he comes to London; here, if he performs the condition, i.e., if he comes to London, the annuity ceases. good example of a condition subsequent is afforded by the proviso for re-entry in a lease: where, if the condition is performed by the tenant committing a breach of covenant, his estate is divested on the re-entry of the landlord.

A

A condition may be subsequent as to one interest and precedent as to another. Thus an annuity may be payable to A. B. for life, subject to the condition that if he does some particular thing (changes his religion, for instance) it shall be payable during the rest of his life to C. D. Here the condition is subsequent to, or divests, A. B.'s interest; it is precedent to, or must happen before, C. D.'s interest

vests.

tions.

E.I.C.

(h) See M. L. R. P. 187.

29

449