CHAPTER II.
As it is of very little use for a man to find himself legatee of an estate, out of which there is nothing to pay his bequest, so also is it an equal evil if notwithstanding the existence of property to constitute an estate the assets, or the produce of that property be either uncollected or wasted, so that the legatees derive no benefit from them. One of the first things, therefore to be considered, is, whether there be any assets; and next, whether the executor has collected them for distribution. From the various nature of property arising out of the complex state of society, and the different periods and the different circumstances at which, and out of which that state of society and its customs arose, the legislators of the country in their care to secure the safe possession and the right appropriation of property, have endowed it with peculiar privileges, and made it subject to certain contingences according to its kind. Hence it is that the heir-at-law takes the whole of a property in fee tail, or entailed freehold, as it is called in popular language, to the exclusionof every one else; hence it is on the other hand, that by the custom ofgavel kindwhich prevails in the county of Kent, all the children of a proprietor are considered as heirs-at-law and inherit in equal proportions; hence it is that copyholds are subject to different rules to freeholds; and hence it is, also, that the several portions of a man’s property, after his death, are often liable to different contingencies, and have obtained the different denominations of assets. These have been usually distinguished by the several terms ofreal, personal legal, and equitable, assets. They may be more broadly divided into assets, derived from real property, and those arising from personalty; the real and equitable being chiefly dependant on the former, and the legal, and personal from the latter of these two species of property.
Though real assets more often partake of an equitable character, that is, are subject to distribution according to the custom of a court of equity, yet, there are also real assets which are of a legal nature or subject to the rules of the common law. Until within a few years, real estate could not be touched for the satisfaction of debtsof common specialty or simple contract; but that system is now obviated, and funds which have descended to the heir infee simple, that is unentailed freeholds, and even an advowson so descended, may be appropriated to the benefit of specialty creditors. An estatepur autre vie, or an estate held upon the life of another, when there is no special occupant, goes, according to the statute of frauds, and if does not it descend to the heir through occupancy, will fall to the executor and be assets in his hands for the satisfaction of claims, and by the 14 Geo. II., c. 20 will be appropriated like any other chattel interest. An estatepur autre viein incorporeal hereditaments—as a rent, for instance, granted by one person to another, during the life of a third party, and the grantor of which dies during the life-time of the person who holds the property—goes to the executor.
“A., tenant for three lives to him and his heirs, assigned over his whole estate in the premises by lease and release to B., and his heirs, reserving rent to A., his executors, administrators, and assigns, with a proviso that on non-payment, A., and his heirs might re-enter, and B. covenanted to pay the rent to A., his executors and administrators; the rent was held payable to A.’sexecutors and not to his heir, on the ground that there was no reversion to the assignor, and the rent was expressly reserved to the executor.” So that in the case of the heir having entered, he would have been only trustee for the executor.
If a testator be a lessee, his executor will take the fish, rabbits, deer, and pigeons, as accessory chattels partaking of the nature of their principals, the land, the warren, the park, and the dove house. If an executor succeeds to a lease of land for years, the assets are comprised in the clear profits; but a reversion of a term forms assets, according to its utmost value. And if he renew the lease, that will form assets as well as the old lease. Should an executor be possessed of a term in right of his office, and he purchase the reversion of the freehold, he is accountable for the assets of the term, although it be extinguished; and so also if the executor of the lessee, surrender the lease, it shall be considered as assets, notwithstanding the term is extinguished. A person held a term in right of his wife as executrix, and he purchased the reversion; the term was extinct so far as she was concerned, but it was considered with respect to a stranger, that is, any other person, as assets in herhands. But where an individual, on the marriage of his son, settled a lease for years, on him for life, and on his wife, and then on the issue of the marriage; and the son covenanted to renew the lease, and to assign it on the same trust; and he renewed the lease in his own name, but made no assignment to the trustees and died; the lease was held to be bound by the agreement on the marriage, and that it was not assets, nor liable to his debts, nor of course to his legacies. Neither is a lease for years granted on condition of being void on non payment of rent, which occurs, and the lessee afterwards dies. As little so is a term in the hands of the executor of acestui que trust.
A term for years held by a testator, cannot be relinquished by his executor, when he has assets, unless he relinquishes the office altogether; but he is bound to continue tenant as long as the term continues, or as long as his funds hold out, if they will not continue the whole term.
A leasehold in Ireland is considered as personalty in the property of an English testator dying in England. A lease granted to A. and his executors, and accordingly to the executors after the death of A., becomes assets. If alessor also, covenant to renew a lease at request of the lessee, who, however, dies within the term without making the request, but it is made by his executors, the lessor is bound to renew for the legal rights of the deceased survivor to his representatives, whom the law presumes to be another self, and therefore implied although not named.
The grant of the next presentation to an advowson during the life of the grantee does not convey the presentation to his executors if he die before the church becomes vacant, for it is equal to a lapsed legacy.
If rent be reserved on a lease for years, and the rent be in arrear at the time of the lessor’s death, it is assets in the hands of the executor. Trees felled during his life on land held by a lessee, without impeachment of waste, are assets to his executor after his death; but unless they are severed during the term, they belong to the lessor as owner of the freehold.
The executor does not come into any corporeal hereditaments, as leases for years of houses or lands, until he is in actual possession, and they cannot therefore until then be esteemed as assets: the dispossession of incorporeal hereditaments, such as leases of tithes,is constructive, and ensues immediately on taking office; for it is evident that in these there can be no personal entry, and as soon therefore as tithes are set out, however remote the goods may be, he is in legal possession of them; but if the lease be of a rectory, where there are glebe lands as well as tithes, it would seem that he is not in possession of the tithes till he enter upon the lands, which being a corporeal hereditament, gives an opportunity of actual entry.
Personal assets are either moveables not attached to the land or their produce, and derive their appellation from being either attached to the person of the owner, or from being capable of being moved about with him. They are either animate as living creatures, or inanimate, as vegetables, and include all the vast variety of property which necessity or luxury has called into existence. Properly speaking they are not assets until converted into money for the payment of debts or legacies, though they may certainly constitute the subject of specific legacies. As however they either form subjects of bequest, as they are, or the means by which itis to be produced, we will follow the arrangement into which they naturally fall.
Animatechattels, as before they are converted into assets they are properly called, are divided intodomitæandferæ naturæ, or such as are tame or reclaimed, and such as are wild; the former admitting of an absolute, the latter of only a qualified ownership—the former embracing all kinds of farming stock and poultry, the latter all those which, unsubdued to confinement, still enjoy their natural liberty, and therefore cannot pass to representatives. Such also are fish in any natural stream or reservoir of water; but fish in a tank, as well as creatures in confinement, are capable of sale, and therefore of transfer: and this is the case also with all the young, the weak, or the lame, of all those wild creatures which, either from feebleness or any other cause, cannot assume their natural liberty. Under this specification come also all hounds, greyhounds, and spaniels, and all the accessaries of falconry or the chase, as well as every thing kept either for curiosity or from whim. An executor is also entitled to appropriate as assets deer in a park, hares or rabbits in an enclosed warren, doves in a dovecot, pheasants or partridges in a mew, fish in a private pond, andbees in a hive of the testator, where lessee for years of the premises to which they respectively belong, so long as they continue in a state of subjugation, and no longer; for as soon as they obtain their natural freedom, they pass into the class offeræ naturæ, and are beyond the reach of his domain.
Vegetable chattels which may be appropriated as assets are the fruit of a tree or plant when separated from the body of the thing that bears it; or the tree or plant itself when severed from the ground, as grass that is cut, and trees which are felled, or branches which are lopped. Of the same character also are all those vegetable productions which are produced by the exertion and skill of the owner or occupier, and which are technically called emblements; extending to roots planted or other artificial profit, and including corn, growing crops, hops, saffron, hemp, flax, clover, saintfoin, and, in short, every other yearly production in which art and industry combine with nature. The executor has also been held entitled to hops though growing on ancient roots, as cultivation was necessary to produce them. Manure, in a heap, also, before it is spread on the land, is personalty; but afterwards it becomes attached to the soil, andis consequently indirectly the property of the owner of the soil.
The inanimate chattels, which constitute personalty, are furniture, merchandize, money, (including stock in the funds, shares in public companies, and property of similar kind) pictures, clothing and jewels, and, in fact, every thing that can be moved from place to place. The presentation to a living, if the living be occupied at the time of the testator’s death, is, as has been stated, property of a real nature, and of course goes to the heir; but if it be open or unoccupied, it forms a personal chattel, and becomes assets in the hands of the executor. Copyrights and patents are also considered as personal chattels.
All these things become assets in the hands of the executor, in whatever part of the world they may be, at the moment of the testator’s death. But in order to their becoming so, it is necessary that the testator must have professed an absolute property in them; and therefore it is, that, if he, having been the obligee of a bond, has assigned that bond with a covenant not to revoke, it does not become part of his assets. Nor are goods bailed, as it is called, or delivered for a particular purpose to a carrier, or to aninnkeeper, to secure in his inn; nor goods pledged, until the time of redemption shall have passed. Neither are the goods of an outlaw assets at the time of his death, for his executor has no right to touch them.
Chattels, however, whether real or personal, may be held in joint tenancy as well as in common; so if a lease be granted, or a house be given to more than one person absolutely, they are joint tenants of it, and unless the jointure be severed, it shall be the exclusive property of the survivor. But if the jointure of interest be severed by one of the parties disposing of his share to another, that other person becomes, with the previous owner or owners, atenant in common, instead of ajoint tenant; and the principal of survivorship does not hold, but the chattel, or the portion of it which belonged to the testator, whatever it may be, falls to the executor, and becomes assets. Thus, money left to two parties to be divided between them, occasions a tenancy in common, because it can be divided without injury to either; but not so with a horse or a house, for that could not be severed without destruction to it, and a consequent defeat of the testator’s will. But on the argument of convenience and justice, and forsake of encouraging husbandry and commerce, the goods of a warehouse or a shop, or the stock of a farm, although occupied jointly, will, in the absence of any express contract to the contrary, be considered as property in common; and on the death of any part owner of such property, his share would fall to his executors, to meet the claims of legatees, according to the will. So also, on that principle of personalty which the law invariably recognises, and that distinction which it invariably observes between the rights and actions of individuals, and the attachment and nature of property, the executor of a testator who has been joined in any action for the recovery of property, cannot take his place in the action and carry it on, however indolent or negligent the survivor in the action may be in endeavouring to bring it to a fortunate conclusion; but he has a right of action against him for the injury sustained by the property through his negligence, and also to oblige him to account when the action has terminated. In such a matter a court of equity will in general interfere.
Occasionally it happens that chattels real are changed into chattels personal, and thus become available for the payment of legacies; and chattelspersonal are sometimes changed into chattels real; and thus the legatees are deprived of the amount for the liquidation of their claims. The former instance occurs when a debt has become due to an executor by statute, recognisance, or judgment, and he has in consequence taken thelandsof the debtor in execution; for here the original property in the debt, which was money, and consequently personalty, has been converted into realty, to which the heirs’ claim supersedes that of the legatees. Chattels real, on the other hand, are converted into personalty by the redemption of a mortgaged estate. Had the mortgage which the testator held become foreclosed through the negligence or inability of the mortgagor, the property would have continuedrealas it was at the time of his death, but by the payment of the debt, the estate again becomes money, and consequently a personal asset to meet the legacies, or any other claims upon the testator’s estate.
It is neither an improbable nor unfrequent occurrence, that, at the time of a testator’s death, much of his property is outstanding, which, if got in, would satisfy all the claims ofthe legatees, while, if it were neglected, they would lose half their bequests; and it is therefore necessary to consider the executor’s interest in what are calledchoses in action, as well those where the right of action accrued during the life time of the testator, as after his death.
Firstly, then, the executor is entitled to every debt that was due to the testator, whether they be debts due on judgment, statute, record, recognizance, or bond, or on special or simple contracts, rents, or covenants, under seal or promise, all of which constitute assets for the purposes of the will. He is also entitled, by the 4 Ed. III., c. 7, to damages for trespass committed during the testator’s life time, or for the conversion of the same, or for trespass with cattle in his close, or for cutting and carrying away his growing corn, or for a debt incurred by the not setting out of tithes, to an action of prevention against the disturbance of his patronage; as, when a living has been void at the death of the testator, and another has presumed to appropriate this chattel, then become personal, to his own use, by presenting to the living, or to an action of ejectment against him whom he has presented. An executor is also entitled to damages for breachof a covenant to do a personal thing, provided the breach occurred in the testator’s life time; and this, notwithstanding the covenant has reference to realty, as felling, stubbing up, lopping or topping timber trees; for the damages are of the nature of personalty, though that on account of which they were recovered is real. Equally, also, and on the same grounds, can he sue for the loss of interest occasioned by non-payments on deposit-money, for the expense of investigating a title, where the vendor omits to make out a good title within the stipulated time, and the vendee dies. The executor of an assignee may also recover on a bail bond. In fact, in all those rights which accrued to the vendee before his death, and the proceeds of which are all of a personal nature, does the executor equally enter; and he is bound to the legatees to recover, if possible, whenever policy or necessity dictate the attempt.
According to the usual legal phraseology, the difference between legal and equitable assets is this; “legal assets are such as constitute the fund for the payment of debts, according to their legal priority; whereas, equitable assetsare those which can be reached only by the aid of a court of equity, and are subject to distribution on equitable principles, according to which, as equity favours equality, they are to be dividedpari passuamong all the creditors.” This is a very important distinction, and of great consideration in the payment of debts, and it has accordingly been fully set out in the Hand-Book for the instruction of Executors and Administrators. There the difference is as to thedistributionof equitable assets, but here we have to regard their attainment. The difference between the different species of legacies will be shown hereafter, but in this place we may look upon them in one light, and consider that there is both sufficient to pay the debts and satisfy the legacies, if the assets are all got in, and properly distributed. With respect to the debts, the legal assets are applicable in a certain order, while the equitable assets are equally shared among the creditors. But with respect to the legacies, saving the instance first alluded to, of specific legacies which are to be noticed hereafter, the assets, whether legal or equitable, are all distributed equally, that is, in full, if sufficient to satisfy in full, or in proportionate equality, according to the amounts of the legacies,and the means to pay them. Our business, therefore, here is to show what the executor is entitled to, and what he ought to obtain in order that the legatees may not suffer from his negligence.
The executor enters, then, fully into the equitable title of the testator, in respect of personal property, and this whether it accrues before or after his death. Thus, if an individual shall have contracted to deliver certain goods to the testator on a certain day, and the day does not arrive till after his death, and they are delivered to his executor, they will constitute assets in his hands, and should the individual who has covenanted to deliver them fail in his duty, the damages that shall be recovered in consequence will be equally available to the creditors or legatees. So, also, if any party has covenanted to grant a lease of certain land by a particular day, and the testator dies before the day, the executor is entitled to the lease, or to compensation in the way of damages in lieu of the lease. To such an extent, indeed, does this run, that in the case ofHusbandv.Pollard, where a father held a lease of the church, renewable every seven years, and he assigned it to his son in trust for himself for life, remainderin trust for the son, himself, his executors, administrators, and assigns, and the father covenanted to renew the lease every seven years as long as he should live; and the son died; and the father failed to renew the lease within the seven years; and the executor of the son filed a bill to compel him to renew; it was decided that he ought to do so, and he was compelled accordingly; and this lease became assets in the hands of the executors at the father’s death.
If a defendant in execution at the testator’s suit escape after the testator’s death, the executor shall recover damages for the escape, they will form assets; so also are goods replevied after the death of a testator. If a testator die possessed of a term for years in an advowson, the term rests in the executors, and, in the event of their being disturbed, any damages they may recover in consequence will be equally available, as also any other property recovered by a suit in equity. But when a cause of action accrued before the testator’s death, neither cause nor damages are to be considered assets until the proceeds are, by execution or otherwise, reduced into possession. Neither is the balance of an account stated with the executor to be so considered until paid. If, however, they be recovered and released bythe executor, he will still be responsible for them, for the release is tantamount to an acknowledgment of receipt.
Should the cause of action accrue after the testator’s death, both the action and the damages become assets immediately, unless the breach of engagement affect the realty, in which case they belong to the heir. At the death of a joint merchant, all his interest in hischoses in action, or things coming, though not yet come, to hand, through legal or equitable suit, and whether, therefore, they be legal or equitable assets, devolve, according to the amount of the testator’s interest in them, to the executor.
Besides all these means by which property may be realised by an executor to pay the claims of the legatees, there are yet other more remote and uncertain sources from which he may in the course of time come into the possession of assets, which may enhance their interests. These consist in the peculiar conditions annexed to certain properties; properties again which may come to the testator’s estate in consequence of his being entitled to them as remainder man or contingent devisee, as his outliving some other individual,or happening to fulfil an engagement which that other has failed to perform. Or he may have been unconsciously entitled, as residuary legatee, to property, the surplusage of which has not been discovered, or recovered till after his death. Or property may have come to him through increase of some fund, or by assignment under some deed or covenant, or by limitation and selection.
An executor may become entitled to property in his official capacity by condition, as if the testator shall have granted a lease, or other chattel, to a certain person, on condition of his paying a sum of money, or doing some specific act, and it is discovered after the death of the testator that that person has failed in his part of the agreement, the chattels will then be assets in the hands of the executor. Or where the agreement is that the testator or his executors shall pay a certain sum, to avoid the grant, and the sum is paid. Or the testator may have pledged plate or a jewel, and the executor redeem it at the time and place appointed, before the day of redemption has passed. If he has redeemed with his own money, and, in consequence of the want of funds of the testator’s property, the chattel is obliged to be sold to pay the executor’s disbursements,and if it sell to more than they amount to, then the surplus above that amount will be assets in his hands, for the benefit of the creditors and legatees, or both.
Chattels may also accrue to an executor by remainder or increase, which never came into the testator’s personal possession, as if a lease be granted to a person for life, with remainder to his executors for a certain period, the remainder will be assets in their hands. Likewise where a lease is bequeathed by will to a person for life, and on his death to another, and that other dies before the first, although he never had any personal right in it, yet it will devolve to his executors, and be assets. So, also, a remainder in a term for years, though it never rested in the testator’s possession, and, though it continue a remainder, shall go to the executor and be converted for what it will obtain. Such, also, is the case with the young of cattle or the wool of sheep, produced after the testator’s death, as also the profits on lands devised over and above the rent, if he enter upon them, and the testator has been a lessee for years. Such, also, is the property in a trade in which the deceased has been a partner, and in the articles of partnership of which a covenant has beenmade, that his survivors should take his share. Or a testator may direct his executors to carry on his trade, appointing either the whole or a portion of his assets for its conduct, and then the proceeds will form assets.
An executor may also come into the possession of assets as a representative assignee, for if the testator shall have died an assignee, his executor will take his place, and use the assets which he derives, belonging to the testator, for the purposes of his will. So if a legacy is bequeathed to a person and his assigns, and that person die before its receipt, his executors will be entitled to take it as his natural assignee. Such is the case also if a person be bound to abide by the award of two arbitrators, and they award that he shall pay to another person, or his assigns, a certain sum of money before a day mentioned for that purpose, and that other person die before the day, his executor or assignee is entitled to the money. This principle however does not hold where any specific assignee is appointed, for then that assignee, and not the executor of the party named, will take; but where no specific assignee is named, the executor becomes the assignee.
Limitation also often becomes a source whencean executor derives assets. Thus in the case ofPinburyv.Elkin, where a testator directed that in case his wife should die without issue by him, his brother after her decease, should have eighty pounds; and, after testator’s death, the brother died in the life time of the widow, and she afterwards died without leaving issue, it was held that the possibility devolved to the executors of the brother, although he died before the contingency happened, and the legacy went accordingly with interest from the widow’s death. It was also held in the case ofChameyv.Graydon, that where legacies were bequeathed to children, to be transferred to them at their respective ages of twenty-one years, or days of marriage, and that any of them should die, or marry without consent, his or her share should go to others at their age of twenty-one years, Lord Chancellor Hardwick decreed that a share accruing by the forfeiture of a child’s marrying without consent vested in another child who attained twenty-one, but died before such forfeiture, so as to entitle the personal representatives of such deceased child to an equal share with other deceased children.
Where a person who has a legacy bequeathed to him out of a personal estate, and which legacyis to be paid when he is of the age of twenty-one years, and he dies before that time, his executors are entitled to the legacy at the moment of his death, if it is intended to carry interest, but if it is not to carry interest, then on the day on which he would have been twenty-one. But if the legacy is to be paid to the person to whom it is bequeathed at his age of twenty-one, or if he shall attain the age of twenty-one, and he die before that time the legacy will lapse. But if the interest is given before the time of payment, that is held tovestthe legacy; and his executors would consequently be entitled to the amount as assets.
With respect to the interest arising out of land, however, the rules are totally different; for whatever the nature of the legacies to which the land is to be appropriated, whether for a child or a stranger, and with, or without interest, the charges on land, payable on a future day, are not to be raised where the party dies, before the day of payment, except where the time of payment is postponed on account of the fund and not of the person. In the case ofWatkinsv.Cheek, where a legacy was charged upon real estate, to vest immediately on the testator’s death; and to be paid to the legatee on attaining twenty-one, the interest being applied in the meantime for maintenance, and the legatee died before attaining that age; it was held that the express direction, that the legacy should vest on the death of the testator prevented its sinking; and the representative of the legatee was consequently entitled to the legacy. Where lands are devised for the payment of portions, and any of the children entitled die before the lands are sold, the representatives of that child will be entitled to the money. In the case where a legacy is charged both upon the real and personal estate, and the executor claims out of the latter, he will succeed according to the rule of the spiritual court, where the claim is determinable, though the infant legatee should die before the time of payment, but the legacy will sink as far as it is charged upon the land.
Election is also a means by which an executor may claim, as in the instance where a testator was entitled to take his choice out of several chattels, and he has failed to choose; but if nothing passes to the grantee before his election, it should be made in his life time. Should the election determine the manner or degree in which the thing shall be taken, the executor may take it as well as the grantee, for then there is an immediate interest; as, for instance,if a lease be granted to a person for ten or twenty years, as he shall choose, the executor may elect.
We have thus at some little length endeavoured to make it as clear as possible what are the sources from whence the assets of a testator are to be derived. We will now proceed to see how they are to be disposed of when obtained, and ascertain what is technically called, the “Marshalling of the assets.”