between chari By the decree the will was established, and the trusts directed Contribution to be carried into execution, except as to the money secured on ties and next of real estate; and an account of the personal estate was directed. kin, where reFrom the Master's report, it appeared that part of the personal the former, considue given to estate, which was held to pass by the bequest for the improve- sisting partly of mortgages and ment of the city of Bath, consisted of mortgages to the amount of leaseholds. 4,950, certain bonds of the commissioners for the improvement of the city of Bath, Bath corporation and turnpike bonds. The cause coming on for further directions, a point was made on behalf of the next of kin, that the debts, legacies and funeral expenses, and the costs of all parties were to be paid in equal shares, out of the personalty bequeathed for the improvement of the city of Bath and the personal estate undisposed of. On behalf of the next of kin, Attorney General v. Winchelsea was cited, and it was urged, that "where a residue is left for charitable purposes including mortgages and other interests that cannot go to the charity, the debts and legacies shall be paid out of the two parts of the estate pro ratâ ;" and the Lord Chancellor said, the bequest to the city of Bath of particulars enumerated was specific, that the articles not enumerated went to the next of kin, and that the general residue was to be applied, in the first place, in payment of debts and other charges. He further observed, that the case was directly within Attorney General v. Winchelsea, with regard to the mortgages and other things that were taken out of the bequest; because the law takes them out of it. The decree declared, that the bequest for the improvement of the city of Bath was a charitable bequest, and that the mortgages and bonds of the commissioners for the improvement of the city of Bath and the turnpike bonds did not pass, but were undisposed of by the will, and belonged to the next of kin; and it was directed that the Master should distinguish such of the particulars of the personal estate specifically bequeathed for the improvement of the city of Bath, as were well given, from such particulars as did not pass thereby, but belonged to the next of kin; and it was further ordered, that the same be applied pro ratâ for the payment of so much of the testator's debts, legacies and funeral expenses, and of so much of the costs as the general residue of the testator's personal estate undisposed of by his will would not extend to pay, and that such particulars of the personalty, specifically bequeathed for the improvement of the city of Bath, as did not pass, be divided, after payments before directed, among the testator's next of kin, according to the Statute of Distribution; and that such particulars, specifically bequeathed for the Contribution between chari improvement of the city of Bath, as were well given, after the ties and next of payments thereout directed, be paid to the defendant, the clerk to the commissioners for the improvement of the city of Bath. kin, where residue given to the former, con sisting partly of mortgages and leaseholds. Again, in Paice v. The Archbishop of Canterbury (e), Mary Wilks gave the remainder of her different bequests to the Archbishops of Canterbury and York for the time being, in trust for charitable purposes, and bequeathed her house in Grosvenor Square, and all her property in London, to be sold; and after payment of a mortgage, the monies arising from the sale to be applied to the general purposes of her will. The first question was, if the general residue passed to the Archbishops of Canterbury and York for charitable purposes; and secondly, if so, whether the money produced by the sale of the testatrix's leasehold house in Grosvenor Square, and freehold estate in London, were liable to any part of the debts, legacies, and costs. The Lord Chancellor decided, that as to the real estate devised to the charity, and personal estate connected with land, as leaseholds and mortgages, the disposition was void under the statute (f); and, at the conclusion of his judgment, observed, the same arrangement must take place by apportionment of the charges between the funds, as in the case of Attorney General v. Winchelsea. Lastly, in the case of Curtis v. Hutton (g), the above rule received a further confirmation. In that case, George Hutton directed his real estates to be sold, and declared that the produce of such sale, and the rents in the mean time, should constitute part of his personal estate, and be subject to the trusts thereof: and he bequeathed his personal estate, and the monies to be produced from his real estate, to trustees, to pay debts and legacies. He then bequeathed 2007. to the trustees of a charity school in Butt Lane, Deptford, for the purpose of purchasing lands contiguous: and he declared the trusts of the residue of his personal estate to be for such purposes as he should by deed or codicil appoint. By codicil, the testator directed the trustees to lay out the trust monies in the purchase of freehold estate in Great Britain, or in the public funds, or in other proper security, the income of the trust fund to be applied in an establishment for students in the King's College of Old Aberdeen. The bill was filed by the trustees against the widow and only daughter (e) 14 Ves. 372; see 1 Rus. & Myl. 759, note. (f) 9 Geo. 2, c. 36. (g) 14 Ves. 537; see also Crosbie v. The Mayor of Liverpool, 1 Rus. & Myl. 761, n. ties and next of sidue of a of the testator, to have the will established, and trusts carried Contributions into execution. The answer insisted that the bequests of the between chariresidue to the college at Old Aberdeen of the 2007. to the charity kin, where rewere void, and submitted, whether, if the former were good as mixed nature to the personal estate, it ought not to be postponed until after given to the charity. payment of debts and legacies. It was contended on their behalf, that, supposing the disposition void, the debts, legacies, and annuities must be thrown upon the fund which was effectually given to the charity; and also upon that fund, the disposition of which failed, in the proportion the respective funds bore to each other, according to the rule established in the Attorney General v. Winchelsea. The Master of the Rolls said, the rule, as contended for, was settled by many cases: and he determined also, that nothing which was the produce of the testator's real estate passed under the dispositions to the charities. The reader will observe the distinction between the rule of contribution established by the class of cases just discussed, and the case of marshalling. By marshalling, the Court would indirectly allow the charge upon the real estate for the benefit of a charity, contrary to the Statute of Mortmain; and the practical result would, in most cases, be that of excluding the next of kin wholly, or in part, from that portion of the residue which fails by the statute, and to which by law they have an equal right with legatees, to whom legacies are effectually given. On the other hand, the Court, in adopting the rule of contribution before stated, considers the equities of the next of kin and the charities equal, and therefore directs a rateable contribution from each toward the payment of debts and legacies. Since the former edition of this work cases have arisen, in which the above rule of apportionment has been further discussed and applied; they seem to have suggested the conclusion, "that every charitable legacy bequeathed by any testator, whose will does not contain the usual clause directing such legacies to be paid exclusively out of the personalty, and the general residue of whose property consists partly of leaseholds or real securities, is pro tanto" (h). The rule of apportionment adopted by the Court of Chancery in such cases, as clearly stated by Lord Cottenham, C., in Williams v. Kershaw (i), is to appropriate the fund as if no legal objection existed to applying any part of it to charity legacies, then holding so much of the charity legacies to fail, as would in that way be paid out of the prohibited fund. void (h) 1 Jar. on Wills, 210, ed. 1844. (i) 1 Keene, 274, n. Contributions between charities and next of kin, where residue of a mixed nature given to the charity. Nor in favour of an alien. The decree in Baker v. Sutton (j) carries out this rule, which The rule as above stated and acted upon being established, the precise arrangement of his property adopted by the testator to effect his charitable purpose, would seem to be perfectly immaterial; so that, if he fails to direct the payment of a charity legacy exclusively out of his pure personal estate, the rule of apportionment must equally apply, whether the bequest is of a mixed fund upon trust to sell and thereout to pay the charitable legacy, or whether the charity legacy is of a pecuniary nature, or the general residue given to others, or particnlar legacies are given to one charity, and the residue is given to other charities. 4. A fourth instance in which Courts of Equity will not marshal the assets of a testator is in the case of an alien; but they adopt the same rule of contribution as in the case of legacies to charity out of a mixed fund. Thus, in Fourdrin v. Gowdey (1), an alien who had obtained letters of denization, directed by his will that all his property, consisting of freehold leasehold and other personal estate, should be converted into money, and after payment of his debts and legacies, that the residue should be divided among his brothers and sister, who were aliens residing abroad. One of the questions in the cause was between the Crown and the testator's next of kin, how the charges on the several descriptions of the testator's property were to be apportioned, with reference to the admitted right of the residuary legatees to the surplus of the pure personal Sir John Leach, M. R., decided that the estates of the testator, partly real and partly personal, must bear the charges imposed on them in proportion to their respective values; observing, that an alien may take beneficially money or other personal estate, not consisting of chattels real; and in order to apportion the burthen, the rule to be applied in that case was (j) 1 Keene, 224. (k) Ib. 273. (1) 3 Myl. & K. 383. estate. between chari the rule adopted in the case of charities; the proper course would Contribution be for the Master to inquire how much of the general produce ties and next of of the testator's estate had arisen from real estate and chattels kin, where mixed residue real, and how much from personal estate, and then to set a value given to forupon the two portions of the estate respectively, and the legacies mer. and charges must be borne by each in proportion to its value. SECT. VII. The mode in which equitable assets are distributed among creditors and legatees. assets distri creditors and legatees. When assets are marshalled in favour of a legatee, the personalty How equitable having been wholly or in part applied in payment of a debt, we buted among have seen that since the 3 & 4 Wm. 4, c. 104, the legatee may resort to the real estate to the amount of the personalty applied in satisfaction of the debt; and in such case, if there are several legatees, they will be paid pari passu; and if the fund be insufficient to satisfy the whole of their respective legacies, each legatee must abate in proportion to the amount of his legacy. But if the case is not one of marshalling, there being but one fund for the payment of all claimants, as, for example, where there are not any personal assets, and the real estate is either devised upon trust to pay, or only charged with the payment of debts and legacies, in such case the assets are equitable; and it remains to consider in the present section, the mode in which such equitable assets are distributed among creditors and legatees. Before the statute of 3 Wm. & Mary, c. 14, a specialty creditor had not at common law any remedy for the recovery of his debt against a devisee of the real estate for the payment of debts (m), but he was obliged to resort to the assistance of a Court of Equity. The estate, therefore, thus devised was considered equitable assets. By the statute above mentioned, devises of real estate were made void against specialty creditors, their real and personal representatives; in favour of whom remedies were given by the statute against the heir and devisee, without the aid of a Court of Equity. In this act, there is a proviso excepting out of its operation devises of real estate for the payment of debts, or portions for children under articles or settlement before marriage; so that such devises for payment of debts and portions, continued as they were before the statute, subject to equitable jurisdiction; and consequently real estates thus devised were assets distributable upon the principle of the Court, that equality is equity. (m) Plunket v. Penson, 2 Atk. 291. |