THE

HONOURS EXAMINATION DIGEST.

PART I.

THE PRINCIPLES OF THE LAW OF REAL AND PERSONAL PROPERTY, AND THE PRACTICE OF CONVEYANCING; THE LAW, PRACTICE, AND PROCEDURE OF THE CHANCERY DIVISION; AND THE LAW, PRACTICE, AND PROCEDURE OF THE QUEEN'S BENCH DIVISION, AND OF THE COURT OF BANKRUPTCY.

ADMINISTRATION OF ASSETS.

1. State the order in which the different properties of a testator are, as between such properties, liable to satisfy his debts in the event of the estate being administered by the Court.

(1.) The general personal estate not bequeathed at all, or bequeathed by way of residue only.

(2.) After the general personalty, the next fund resorted to for the payment of debts is land devised upon express trust for their payment. Such land is equitable assets; and, therefore, in all cases distributed amongst creditors pari passu.

(3.) Next in order stand lands descended to the heir, and not charged with debts. Since 3 & 4 Will. IV. c. 106, if there is a specific devise of lands to the heir, he is considered to take them in the character of devisee, and not by descent. His position as

regards these lands is, therefore, the same as that of any other specific devisee.

(4.) Lands devised and personalty bequeathed charged with the payment of debts are next liable; and being equitable assets, are distributed in payment of debts pro ratâ. Moreover, if a devise of lands so charged lapses, and the heir consequently takes, this does not alter their place in the order of administration. They still rank as lands charged, and not as lands descended. Lands charged with debts being equitable assets, the Court, in its favour of an equal distribution amongst creditors, has been inclined to give as wide a construction as possible to any passage in a will which can be considered as amounting to a charge of debts. A mere declaration that the debts shall be paid by the executors will not, indeed, amount to a charge of debts on realty, which does not come to the hands of the executors at all. But if with such a direction real estate is devised to executors, then it is considered as charged in their hands, unless from the special circumstances of the case a contrary intention is apparent. If, moreover, there is a direction in general terms that debts shall be paid, not specifying by whom, and accompanied by an expressed intention to dispose of the real estate, that effectually charges devised lands. The principle is that such a general direction indicates an intention that the debts shall at all events be paid in preference to any disposition of real or personal property.

(5.) General pecuniary legacies next abate pro ratâ as far as is necessary. Annuities are equivalent to legacies, and after valuation (since the Judicature Act, 1875, sect. 10, on the principles of bankruptcy) abate pro ratâ with them. It must be observed also that if a general legacy be given for valuable consideration, such as the relinquishment of dower, or of a debt, it is entitled to priority over all merely voluntary legacies.

(6.) Then specific legacies and specifically devised real estate not charged with debts are resorted to pro ratâ.

Under this head it is to be observed that a residuary devise is considered to be specific.

(7.) A widow's paraphernalia was liable (with the exception of her wearing apparel) to her husband's debts; and this would appear to have been its proper place in the order of administration.

The effect of the Married Women's Property Act, 1882, would

seem to be to enable a married woman to hold her paraphernalia as separate property. It is submitted, however, that articles given to her by her husband would still be liable, as before the Act, for payment of his debts.

(8.) Lastly, real or personal property over which the testator has a general power of appointment, and over which he has actually exercised that power by will or by deed in favour of volunteers, is applicable. As the creditors can only claim under the appointment, which is a voluntary act, they will have no claim unless the power is actually exercised, since equity will not interfere to aid the non-execution of a power in favour of volunteers except as hereinafter mentioned. It must be observed, however, that a residuary gift will, under sect. 27 of the Wills Act (1 Vict. c. 26), operate as an appointment, unless a contrary intention appears. Property appointed is equitable assets, and accordingly distributable pro ratá. (H. A. Smith's Equity, 499-502.) The non-execution of a power will only be relieved against in cases of trust-powers and where the power is not exercised through fraud.

2. A testator who is considerably indebted but solvent, by his will gives certain specific and pecuniary legacies, appoints to A. real and personal property under a general power of appointment, bequeaths his residuary personal estate to B., devises a freehold estate to C. and D. upon trust to sell, and out of the proceeds to pay his debts, charges two other estates with the payment of his debts and subject thereto, devises one estate to E. and the other to F., devises another estate to G., and the rest of his real estate to H. and K. as tenants in common. K. died in the testator's lifetime. State the order in which the assets will be administered.

The different properties will have to bear the debts of the testator in the following order :

(1.) The residuary personal estate bequeathed to B.

(2.) The proceeds of the freehold estate devised to C. and D. (3.) K.'s interest as tenant in common, which would have devolved upon him if he had lived, but which, as he is dead, subject to the debts not paid out of the above properties, (1) and (2), devolves upon the testator's heir at law. (See A. 1 (3).)

(4.) The estates devised to E. and F. respectively, and charged

with the debts.