purchase of land, one undivided moiety of which is devised to A., and the other undivided moiety of which is devised to B. It has been decided that either A. or B. may elect to take his share as money. If, however, the direction is that certain land should be sold, and the money divided between the two persons, neither of the parties can elect to take half the land (1). The principle upon which the law proceeds is, that if this were allowed, the interest of the party entitled to the other moiety would be to some extent sacrificed, as it is probable that half of an estate could not be sold on as advantageous terms as if the entire estate were sold together.

A striking illustration of conversion by Act of Parliament is afforded by the case of Frewen v. Frewen (2). A testator had devised an advowson. The Irish Church Act abolished advowsons and gave in lieu thereof pecuniary compensation. The Court of Appeal decided that the advowson was converted into personal estate.

Lord Justice James, in delivering judgment, said: "The Act of Parliament destroyed the advowson, that is to say, it converted that which was an advowson with a perpetual right of presentation to a living in the Established Church into something different. The property, which was vested in the testator at the time when the Act was passed, had its character permanently changed and practically destroyed. The same case arises when land is taken from a man who cannot help himself, when, though the money may not be paid till some time afterwards, still the land becomes personal estate” (3).

Where money is paid into Court in respect of land taken under the Lands Clauses Consolidation Act, 1845 (see post, p. 690), the land is regarded as converted into money if the parties are competent to convey; but if the parties are under disability there is no conversion. The principle upon which the Court proceeds is, that in the former case there is contract, and therefore conversion, but that in the latter case, i.e. where the parties are under disability, there is no contract and therefore no conversion. Mere notice to treat does not affect a conversion, but as soon as the price is fixed there is a binding contract and the land is treated as converted into money (4).

(1) Seeley v. Jago, 1 P. Wms, 389; Holloway v. Radcliffe, 23 Beav. 163. (2) L. R. 10 Ch. 610.

(3) Frewen v. Frewen, L. R. 10 Ch. 610.

(*) In re Harrop, 3 Drew. 726; Kelland v. Fulford, 6 Ch. D. 491;

Haynes v. Haynes, 1 Dr. & Sm. 426; Ex parte Hawkins, 13 Sim. 569; In re Piggott and the Great Western Railway Company 18 Ch. D. 146; and see Fry on Specific Performance, 2nd ed. p. 49, et seq.

CHAPTER III.

ADMINISTRATION.

on which adminis

tration is

based.

The principle on which the jurisdiction of the Court in Principle respect of administration is based, has been well stated as follows (1): It is founded on the right, recognised from the earliest times by the Court of Chancery, of any person who may have, either alone or along with others, a claim against a particular property, or the holder of a particular property to have a discovery and account of the property liable to meet his demand, and then to have such property, when so discovered, secured until the validity of his own and the other demands upon it is tried and ascertained, and if they are established, then to have them satisfied thereout in a just and regular

course.

Proceedings for the administration of the estate of a deceased Commenceperson, either general or partial, may, generally speaking, be commenced by any of three classes of

persons.

(1) Creditors, whether simple contract creditors, or specialty creditors; or

(2) The persons beneficially interested in the estate, e.g. the legatee, or one of the next of kin in the case of personalty, the heir or devisee in the case of real estate; or

(3) The executor, administrator, or trustee (see post, p. 784). A fact, however, which must not be lost sight of in considering the subject of administration, is that in scarcely any portion of the law have greater changes been introduced alike in principle and in practice than in that which concerns the administration of the estates of deceased persons. Allusion has already (ante, p. 46) been made to this subject in connection with the liability of the fee simple estate to be applied in payment of the debts of its deceased owner. The old law, as was well said, permitted and almost encouraged dead men to sin in their graves, and the creditor at one time could only recover payment of his just demands by the bounty of his debtor. Now the law has been gradually altered until finally by two

() Williams on Executors, 8th ed. p. 2013; Haddan on Administration,

ad init.

ment of proceedings.

the law.

Changes in enactments the distinction between simple contract and specialty debts has been abolished, and in the administration of insolvent estates the principles of the bankruptcy law have been introduced in certain cases (infra). A most important change has also been introduced into the practice of the Courts with regard to administration. Formerly a decree for an administration was a matter of course, but now the Judicature Rules provide that it shall not be obligatory on the Court or a judge to pronounce or make a judgment or order, whether on summons or otherwise, for the administration of any trust, or of the estate of any deceased person, if the questions between the parties can be properly determined without such judgment or order. The practical effect of this rule is that an order for "general administration" is now but seldom granted (see post, p. 785).

Hinde
Palmer's
Act.

Judicature

s. 10.

Let us now consider the mode in which the property of a deceased person is to be applied in satisfaction of his liabilities.

It must be borne in mind that not only may the property of a deceased person consist of a great many different descriptions of property, but the debts and liabilities attaching to it may also be of different characters, e.g. the debts may be by specialty or by simple contract.

Attention may first be directed to the recent statutes which made most important changes in the law of administration with regard to the different classes of debts which are to be paid.

A statute known as Hinde Palmer's Act (32 & 33 Vict. c. 46), provides that "in the administration of the estate of every person who shall die on or after the 1st day of January, 1870, no debt or liability of such person shall be entitled to any priority or preference by reason merely that the same is secured by or arises under a bond, deed, or other instrument under seal, or is otherwise made or constituted a specialty debt; but all the creditors of such person, as well specialty as simple contract, shall be treated as standing in equal degree, and be paid accordingly out of the assets of such deceased person, whether such assets are legal or personal, any statute or other law to the contrary notwithstanding; provided also, that this Act shall not prejudice or affect any lien or charge, or other security which any creditor may hold or be entitled to for the payment of his debt."

The 10th section of the Judicature Act, 1875, contains the Act, 1875, following provision with regard to the administration of the estates of persons who died insolvent :-" In the administration by the Court of the assets of any person who may die after the

commencement of this Act, and whose estate may prove to be insufficient for the payment in full of his debts and liabilities ... the same rules shall prevail and be observed as to the respective rights of secured and unsecured creditors, and as to debts and liabilities provable, and as to the valuation of annuities and future and contingent liabilities respectively, as may be in force for the time being under the law of bankruptcy with respect to the estates of persons adjudged bankrupt (1).

adminis

Subject to the provisions of the three Acts, 17 & 18 Vict. Order of c. 113 (Locke King's Act) and the Amending Acts (post, p. 550, tration. et seq.), the general effect of which is to throw mortgage charges and liens for unpaid purchase-money on real estate of whatever tenure, the assets (2) of a deceased person are applied for the payment of his debts in the following order :

1. The general personal estate unless expressly or by implication exempted. The first charge on the personal property of a deceased person is that for the funeral expenses. Next come the expenses of proving the will, or taking out administration (3).

2. Lands expressly devised for the purpose of paying debts. 3. Estates which descend to the heir.

4. Real or personal property devised or bequeathed charged with debts.

5. General pecuniary legacies which contribute rateably to the payment of debts, or as it is technically phrased, pro rata.

6. Specific legacies and real estate devised, whether in terms specific or residuary, which are also liable to contribute rateably to the payment of debts.

7. Real and personal property which the testator has power to appoint, and which he has appointed by his will or by voluntary deed.

8. Widows' paraphernalia (ante, p. 226).

9. Land in a foreign country which is governed by the lex loci rei sitæ (see ante, p. 7), and therefore not liable for any debts which the law of the foreign country would not cast upon it (4).

(1) See Re D'Epineuil, 20 Ch. D. 217; Pratt v. Inman, 43 Ch. D. 175; Re Hargreaves, 44 Ch. D. 236; Re Baker, 44 Ch. D. 262.

(2) The term "assets" is derived from the French, assez, the right of the creditor originally depending on the sufficiency of the estate.

(3) See as to testamentary expenses including costs of an administration action: Miles v. Harrison, L. R. 9 Ch. 316; Harloe v. Harloe, 20 Eq. 471.

(*) See further, on this subject, Jarman on Wills, 4th ed. vol. ii. p. 622, and Theobald on Wills, 3rd ed. p. 570; and see Lancefield v. Iggulden, L. R. 10 Ch. 136; Tomkins v. Colthurst, 1 Ch. D. 626; Farquharson v. Floyer, 3 Ch. D. 109 (where the previous decisions are collected; and Hensman v. Fryer, L. R. 3 Ch. 420, is not followed); Trott v. Buchanan, 28 Ch. D. 446.

Order of administration.

This somewhat complicated enumeration becomes comparatively easy of remembrance when the reasons on which the law is based are understood.

The order in which the various portions of a testator's estate are applied for the payment of his debts, as is pointed out by the late Mr. Joshua Williams (1), has been established out of regard to the testator's intention. The "general personal estate" which, as we have seen, comes first in the order was long the only fund to which those creditors who had not specialities binding the heir could resort; cash, stock, and movables come first to hand, are most readily applicable, and are the funds out of which people in their lifetime usually pay their debts. The general personal estate accordingly, in the absence of any express direction to the contrary, is held primarily liable to the payment of the debts of the deceased. Next after that would naturally come any special fund set apart by the testator. The heir not being a beneficiary within the testator's intention, lands descended to him would properly follow next in order of application. Property expressly charged with the payment of debts would, of course, be applicable before legacies bequeathed, or property specifically given. Property over which the testator may have exercised a general power of appointment is, in favour of creditors, considered as supplementarily applicable after the whole of his own property shall have been exhausted. The widows' paraphernalia are, however, by a slight gallantry of the law, not sacrificed until even the appointed property has been exhausted.

The last place is filled by lands in a foreign country, a remote case illustrating the important principle which was stated in p. 7 of this work (2).

The general law as to when personal estate is or is not liable for payment of debts was stated with great clearness in a judgment of the House of Lords as follows:

The general rule of law as to pecuniary legacies (in the absence of any sufficient indication of a contrary intention) is,

() Williams on Real Assets. Some modifications have been introduced into Mr. Williams' statement, rendered necessary by the decisions noticed, ante, p. 548, note.

(2) The distinction between legal and equitable assets which was formerly of great importance, is now practically obsolete, as it only applies to the administration of the

estates of persons who died before 1st of January, 1870. This distinction was based on the remedy of the creditor, &c., not the nature of the property. The real test being, whether or not the property came to the executor virtute officii, as if it did it formed "legal assets"; if not it was "equitable assets."