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The Columbia University Libraries reserve the right to refuse to accept a copying order if, in its judgement, fulfillment of the order would involve violation of the copyright law. Author: Whinney, Frederick Title: Executorship accounts Place: London Date: [1 893?] 9i'?2/n-^ MASTER NEGATIVE # COLUMBIA UNIVERSITY LIBRARIES PRESERVATION DIVISION BIBLIOGRAPHIC MICROFORM TARGET ORIGINAL MATERIAL AS FILMED - EXISTING BIBLIOGRAPHIC RECORD wm BUSINESS 430.156 W57 ■* 1/Vhinney, Frederick Executorship accounts; a lecture delivered to the Chartered accountants students* so- ciety of London, on the 10th, 17th and 24th April, and 1st Vay, 1888, by Frederick V^/hinney • . . and an appendix containing an epitome of a will and a set of executorship accounts, by Arthur F. '//hinney ... 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AUTHORS' lATORKS PRINTED AND PUBLISHED Bchool of Buiinees Library Columbia Univeri-ity MAY 2 4 1940 EXFXUTORSHIP ACCOUNTS A LECTURE Delivered to The Chartered Accountants Students' Society OF London, On the 10th, 17th and 2Mh Ap/ll, and 1st May, 1888, BY FREDERICK WHINNEY. Jun., B.A. Barrister-at-Law, AND AN APPENDIX containing an Epitome of a Will and a Set of EXECUTORSHIP ACCOUNTS, BY ARTHUR F. WHINNEY, • • . . • • • ' GEE AND OOrs-^Pirmi- jQNS. -,,1 III ■' ■'•'»--yy-« — rr—f .55 - Q ■ ■ • 'Lo.'.Do:*: > J t J . , 1 Gee and Co., Printers and Px/Blishers, 34 Moorgate Street, E.G. AMERICA; BUIL»IN«c MEW YORK. \Al6l CONTENTS. ^ PART I.- • • • • • • • • • « • • •••••• • !• • •••• • ••••• • -An Executor's General Position as an Accounting Party — His Special Duties and Liabilities as such ,, II. — Proceedings preparatory to Probate — Probate Duties ,, III. — Legacy and Succession Duty ,, IV. — Powers of an Executor — His Duties and Responsibilities — Form of an Ordinary Administration Judgment and of the Accounts to be brought in under it >» • • * a • • • • • • • •••••• • ••••• ' • •'• • •• 1 : • • • • • • V. — Getting in and Realising the Estate — Investing and holding same — Principles on which an Executor is made liable for breaches ,, VI. — What Payments and Discharges will be allowed to an Executor — Interest on Legacies — Capital and Income appor- tionment „ VII. — Insufficient Estates — Priority of Debts — Order of application of Assets — Insolvent Estates — Executor's leiease •<• ••• ••• APPENDIX. — Prefatory Observations ... * t * • ♦ • • • • » • • ••• • • •• • • ■ • • • • •• • • • • • >» PAGE 13 29 65 81 111 146 161 Epitome of Will and Set of Accounts 163 'I EXECUTORSHIP ACCOUNTS. Br Mr. FREDERICK WHINNEY, Jun., B.A. Barrister-at-Law. Part I. >» A71 Executor's General Position as " A71 Accounting Party, His Special Duties and Liabilities as such. An executor is the officer of the Court appointed on the Definition, nomination of the testator, made by his will, who becomes by such appointment charged with the duty of administering in due course the testator's estate. An administrator is an officer having similar duties but appointed by the Court by reason of no nomination having been made by the testator by a testa- mentary instrument, or by reason of any such nomination having failed. The distinction between these two kinds of officers is not very great, and consists mainly in the fact that an executor is invested with somewhat greater powers than an administrator. One further important distinction, however, Jurisdiction. 2 EXECUTORSHIP ACCOUNTS. arises froin the fact that an executor, being presumed to have the personal confidence of the testator, is enabled to continue the trust to an executor of his own appointment, whilst an administrator is precluded from so doing. Thus an executor of an executor becomes the executor of the original testator, and is ipso facto clothed with all the consequential powers and duties. This continues as long as the train of representation is complete, while, on the other hand, the administrator of an executor or the executor of an administrator does not repre- sent the original testator ; and, whenever the chain of repre- sentation is thus broken, it becomes necessary, if the estate of the original testator has not been completely administered, that a new grant of administration to an officer called an administrator dc bonis nan should be made. The original jurisdiction over executors was assumed by the Ecclesiastical Courts somewhere about the time of Heury I., when these courts began to take upon them the duty of seeing that the personal property of the deceased person was appUed in accordance with his last wishes, as these last wishes in almost all cases contained a gift to a church or other ecclesi- astical institution for the purpose of purchasing masses to be said for the repose of the soul of the deceased. In cases where the last wishes had been expressed in some written document, either a will or a codicil, the distribution of the estate was, of course, carried out in compHance with it, but where no such directions had been given, the ecclesiastics, who were imbued with the principles of the Koman law, caused the surplus to be distributed amongst the relatives of the deceased, upon the principles laid down in that law ; and this continued to be the rule of the Court, according to which the personal property of an intestate was distributed until the Statute of Distributions 29 Charles II. adopted the rule of the Roman law, with some slight modifications, as the statute law of the land. The Ecclesiastical Courts, however, after a conflict with the tem- EXECUTORSHIP ACCOUNTS. poral powers, had their jurisdiction over laymen very much curtailed by the Constitutions of Clarendon, and in time their functions became limited to the constituting a personal repre- sentative of the deceased, after the proper security had been taken for the due performance of the office, and the task of seeing that the administration was carried out in due course began to be taken over by the Court of Chancery, under the jurisdiction which it assumed to enforce the carrying out of trusts as binding upon men's consciences. This double juris- diction lasted until a very few years ago, when in the year 1859, by the constitution of the Probate Court, the last trace of the assumed ecclesiastical jurisdiction over individuals was wiped out, and a Civil Court constituted for the purpose of continuing the function of the Ecclesiastical Court in this respect, which Court was eventually in the year 1875 consti- tuted one of the Divisions of the High Court of Justice, having a jurisdiction— theoretically, at least— equal to that of the Chancery Division, although since this date, both under the provisions of the Judicature Acts and also by reason of the convenience in practice, the taking accounts of the adminis- tration of deceased persons' estate has, as heretofore, been confined to the Chancery Division, this Division being fur- nished with a staff of officials specially available for the purpose. The enforcing the due administration of deceased persons' estates having been taken up upon the same principle that trusts began to be administered by the Court, executors came within the former exclusive jurisdiction of the Court of Chancery, and thus became subject to the rules of that Court governing the Habilities of accounting parties. In considering what are the special liabilities incumbent Liability to upon an accounting party, it is important, in the first place, to^ notice that, as will be seen more fully hereafter, the principles upon which accounts are taken in chambers differ very httle from those which would be observed, were the Account. EXECUTORSHIP ACCOUNTS. EXECUTORSHIP ACCOUNTS. accounts being taken before a jury at law, that is to say. that the party representing the plaintiff has ordinarily to prove the moneys had and received to his use by the party defen- dant, either by his own admissions, or by evidence m the ordinary way, and the latter has to prove the items paid to or for the plaintiff, and so discharge himself ; and as discovery could always have been had in an action at law, either through its own jurisdiction of late years, or by the help of equity, there does not to this extent appear to be any peculiar habihty incumbent on the party against whom the account is taken which would justify his being distinguished by the pecuhar title of "an accounting party" to any greater extent than a defendant in any ordinary action who has received and paid money to and for the use of another person. There are, how- ever, some classes of persons to whom the name " accounting party " is with propriety applied, and these are those persons over whom Equity in the first instance assumed the jurisdic- c.f. Smith's tion to order accounts, for in them the Courts of Equity do ^1"'*^' recognise a peculiar duty to account which is not incumbent on other parties, and upon them special penalties are imposed beyond the ordinary penalties used for enforcing its decrees if they fail to perform such duty. Thus, it was laid down in the Pearse . case of Pcarse v. Green (1 J. & W. UO). that it is the first Green, 1 J. & ^^^y „£ an accounting party, whether an agent, a trustee, a ^■' ""• receiver, or an executor (for in this respect, as was remarked Lord Hard- by the Lord Chancellor in Lord Eardmcke v. Vcrmn, they all wicke V. stand in the same situation) to be constantly ready with tas ''""°- accounts ; and that with agents and trustees, if they neglect to account properly, if they violate their duty, the Court, for the sake of compelling them to perform it, says that they may be charged with interest on what they have retained ; and, as a further penalty, in that case the defendants, being agents, havin.r rendered the suit necessary by not keeping accounts, were ordered to pay the costs. This principle, showing the distinctive liability of such persons, is very clearly shown in Makepeace v, Bogers, (34 L.J., Ch. 896) where V. C. Stuart J,^akepeace v. J ,.T ■ ^ ^ Rogers, 34 said: "1 conceive that, wherever the relation between L. J., Ch. 396. *' the person who seeks an account and the person against ** whom it is sought arises out of an employment which par- " takes of a fiduciary character, the fiduciary character of the '* employment imposes upon the person employed the duty of " keeping accounts and of preserving vouchers." And in the great case of White v. Lincoln (8 V. 363) Lord Eldon says : ^.^^^^ ^• " With reference to the character of general agents, auditors, 363. " land stewards, and managers, the Court must, for the safety " of mankind, lay down as a rule to be departed from only " upon very special circumstances, that a man standing in *' that relation is bound to keep regular accounts of his trans- " actions on behalf of his employer, not only upon his own *' part accounts of his payments, hut also, on behalf of his " employers, accounts of his receipts." And later on his Lord- ship said: "With respect to Jackson's demand as auditor, " steward, agent, and all except his bills as attorney, as to all '* which he was bound to keep accounts of those transactions, •' I must lay down the rule that a man standing in a relation *' imposing a duty to keep regular accounts cannot be per- " mitted to make a demand for work and labour in that " character, with reference to which he has kept no account, *' which is justified by a principle that ought to be loudly " published, that a receiver who does not pass his accounts " regularly ought not to be allowed any poundage. That ** principle applies to all these demands except the bill of ** costs." The limits of the rule are also very well marked in the same case, viz., that equity imposes no such hability on a person who merely stands in the legal relationship of agent with no fiduciary character; for Lord Eldon there says: *' Irregularity in an attorney's accounts is no ground for saying ' " that he shall make no demand. It will press him with more II! g EXECUTOBSHTP ACCOUNTS. " difficulty in making the demand, but if finally he can make " it out by documents and proofs which the Court can receive, <■ he must be paid." It must, however, be remembered that this statement as to an attorney's accounts applies to his accounts of his dealings and transactions purely m that capacity. It was said at a time when solicitors did not take charge of men's moneys and put them to use for them to the extent they do now, there being a separate class of scriveners who performed such duties. And in that very case, as the attorney united in his own person the fiduciary position of general agent, auditor, land steward, and manager, as well as attorney, the Court held that his inability to render his accounts in his fiduciary capacities prevented his recovery on his bill of costs, for these would, had they been duly delivered, have merely formed items in his general accounts. Tbe same V ru Lee principle is enumerated in the case of ex parte Lee, re NevtUe f. C^m^"' (4 Ch Ap. 43), where L.J. said : " A solicitor receiving 4 Ch. Ap., 43. __ ^^^^^^ belonging to his client, particulars of which the " client must have known, is not bound to keep accounts of <■ them, and cannot be deprived of his costs for not doing so. " The principle of White v. Lady Lincoln only applies where " a soUcitor has acted as general agent, so that he might " have received money to an amount which you have no " means of finding out, unless he keeps accounts of his receipts " and payments. For anyone engaged in business not to keep .. accounts is blameable, but it is not a breach of duty towards " another person, such as ought, in the absence of actual fraud to be visited with the consequences of fraud, unless the partv omitting to keep them stands in the relation of general 'agent to the other." The same view was very clearly expressed by Lord Hatherley in a case of Moxonv. Moxon V. Bright (4 Ch. Ap. 292). In that case he points out the dis- Bright 4 Ch. ^.^^^j^^ ^^j^.eg„ the different kinds of agency m which an '■' accounting liability exists in equity, and those in which the l( (< << EXECUTORSHIP ACCOUNTS. I relief is to be had by a mere action at law for a balance of account. He says: ''Where the relation of principal and ** agent has imposed a trust in the agent, the Court of " Chancery will entertain a bill for an account, and the only *' difficulty is in determining what constitutes this species of ** trust. It is not every agent who holds a fiduciary position ** as between himself and his principal. Foley v. Hill showed " that though a banker is the agent of his customer, for many " Durposes they are not such as would constitute a trust." And, as between master and servant, such an agency did not exist, i.e., as regards bill by servant against master. Beyond the special liabilities above referred to, viz., the being charged interest on balances in hand, and the losing all remuneration, which latter penalty does not of course apply in the case of executors, the party who was not ready with his accounts and vouchers when they were called for, at however great a lapse of time, was liable to be deprived of his costs of the action which he otherwise would, in the ordinary course, have had allowed to him out of the estate which he had to administer, and this penalty was for this very reason imposed by V. C. Bacon, in a case of Payne v. Evans, 18 Eq., 356, although the delay of the beneficiaries had on this case been so great that an account was refused upon general evidence being produced that a distribution had taken place about twenty years before. The existence of such a fiduciary relationship between the parties has generally the further effect of preventing the party called upon to account, or his heir-at-law if he have died intestate, from setting up any Statute of Limitations, but, as the Statutes of Limitations do not apply to equitable demands except in cases where the Courts of Equity think fit to apply them for the purpose of doing complete justice, the Courts will in some cases, such as the above mentioned Smith V. Leveaux (2 D. J.andS.l) Penalty for not accounting. Payne v. Evans, 18 Eq., 356. Statutes of Limitation as affecting accounting parties. Gellard v. Lawrenson, 57 L.J., 364. r tmumtuim iiUMjuaaitiMUUiiaiia « 8 EXECUTORSHIP ACCOUNTS. m\ ■\H n case of Payne v. Evans, refuse to interfere actively for he purpose of giving relief w-here the demand is stale and the Jardes being sui juris, and having a full kno.^edge of the facts have stood by so long that they must be held to have acquiesced in the existing state of things. Neither can an accounting party set up any inconvenience he may suffer from a possible loss or destruction of vouchers or papers as a reason for the account not being ordered ; for as was sa,d Lady in the case of Lady Ormond v. Hutchinson, 13 V., 53. it is HuThtson " not necessary to call for an account from a steward : his fsvX' .. duty requires him to render accounts periodically, and it .. from negligence or any other cause he fails in that he .. cannot make the obscurity occasioned by that mission a .. cover to him," but v.here such a peculiar fiduciary relation does not exist between the parties, and they are more on a position of equality, as in the case ol partners in a great trading company, upon a bill for account runnmg through a vast series of years, open to all the objection and difficuUy arising from the length of time, the Court feeling the injustice of giving the account as it would be given i sought within a reasonable time, compelling the defendant to ransack his papers and produce vouchers for -^l^y l'^"' ^"^ considering it not unreasonable that the Pla'»tiff should have an account, would give that relief with a modification calculated to do the best justice that the circumstances admit, giving the necessary directions for that purpose that for certain items vouchers shall not be required, and so forth The tendency, however, of modern decisions is towards a greater leniency in the ordering accounts even against persons standing in a fiduciary relationship, and the principles laid down in the last menUoned case wou d probably now be acted upon in all cases where the bona fid s of the transactions was not impeached, and there would be a real hardship arising from a general order to account, a Adley v. Whitstable Co. 17 V. 324. I I i EXECUTORSHIP ACCOUNTS. 9 any rate in all such cases except those of paid agents, and in fact a very common form of inquiry in an administration action where the trust has lasted for some years is to start with an inquiry of what particulars the trust estate now consists, without requiring too minute an account of how it came to consist of those particulars, leaving it to the party obtaining the order for an account to make out a charge in respect of earlier transactions if he can establish it by independent evidence. At the same time, it has also been laid down that, although omission to render periodical accounts in the case of a paid agent will not excuse him from rendering his accounts when called upon, still, if he is able to render them when so called upon, he is not to be treated as having been in default so as to charge him with interest, at any rate unless he kept unnecessarily large balances in his hands, and not even in such cases if he had really in fact acted as a sort of banker to a principal, requiring him always to have sufficient funds in hand to honour drafts. (Turner v. Burkinshaw, 2 Ch.Ap. 488.) Turner v. This consideration shows how necessary and important it 2Ch.Ap.!488. is that the accounts of an estate should be kept upon a clear and intelligible principle, and in such a way that the vouchers and other necessary documents may be readily forthcoming, so as to enable the accounts to be rendered at any time. The tendency of modern legislation, both statutory and judicial, has, however, been to restrict the taking away the defence of the Statute of Limitations, to cases of express trustees only, and to the extent to which, therefore, an executor has become an express trustee, i e., when he has completed his administration, and holds the funds in hand as distinct funds according to, and upon the, trusts declared by the will, he comes within the rule of equity that the Murray Vm Statute of Limitations, does not run in his favour ; but & Cr., 309. 10 EXECUTORSHIP ACCOUNTS, il' Cadbury v. Smith, 9 Eg., 37. Pilgrem v. Pilgrem, 18 CD. 93. Re Marsden, 26 CD. 783. Cadbury v. Smith, ubi sup. Re Gale, 22 CD. 820. Re Marsden uhi sup. Roe V. Birch, 27 CD. 22. Re Baker, 20 CD. 230. Blake i'. Gale, 32 CD., 591. c.f. Andrew V. Wrigley, 4 B.CC, 135, Smith, 326. neither an executor nor an administrator is as such an express trustee so as to exclude the operations of the Statute of Limitations even as to funds remaining in his hands as a general undistributed balance, and it has been held that where an executor retains the assets, and holds them and deals with them with the knowledge of the beneficiaries in a manner inconsistent with the trusts of the will, they will after a considerable lapse of time, even shorter than that provided by the statute, be held barred as being presumed to have made a gift of them to the executor. A mere general admission of assets does not appear to create a trust sufficient to enable a creditor or legatee whose claim would otherwise be barred to have a judgment for administration, but where the executor has admitted assets and kept the debt alive by paying interest, he cannot set up the statute on the ground that he distributed more than six years before, and so committed a devastavit, which ordinarily is barred after six years, unless he can show not merely knowledge and acquiescence, but conduct amounting to an actual consent or authority to distribute. All such questions of conduct by creditors amounting to an equitable release must depend on their own circumstances, and where the right of the creditors is merely equitable, as in the case of a claim by mortgagees of the realty whose security turns out to be insufficient, and who resort to the residuary personalty, this will not be allowed after it has been dis- tributed with the knowledge and acquiescence of the creditor more than twenty years before, notwithstanding that the debt was kept alive by payment of interest, otherwise no mere acquiescence short of twenty years' lapse of time can bar creditors. And now see the Trustees Act, 1888. Executors are, as regards their administration of the trust, therefore, liable at any time to be called upon to render their accounts to the Court, although the Court always takes EXECUTORSHIP ACCOUNTS. 11 steps to prevent injustice where the lapse of time has been so great that vouchers might not be forthcoming, and in addition even in cases of legacies charged on land under an express trust, the Court in cases of great delay, not within the 1874 Act, applied the analogy of the Statute of Limita- tions, and gave only six years* arrears of interest, and now under 37 and 38 Vic. 57, section 10, six years' arrears are all that could be recovered in any case of a legacy supported by an express trust. Executors have in addition been specially provided by statute with certain exceptions in their favour as regards the non-applicability of the Statutes of Limitations to cases of fiduciary relationship. Under the Real Property Limitation Act, 1874, no proceedings can be brought to recover any legacy but within twelve years next after a present right to receive the same shall have accrued to some person capable of giving a discharge for or release for the same, unless some payment of principal money or interest shall have been made, or some acknowledgment in writing shall have been given, of the right of such party. In each case the twelve years runs from the payment or acknowledgment, and under section 42, of 3 and 4 Will. IV., c. 27, only six years' arrears of interest on a legacy can be recovered. By Section 10 of the Statute of 1874, an exception is also made to the rule that the Statutes of Limitations do not apply in the case of express trusts to the extent that no proceeding is to be brought to recover any legacy charged upon, or payable out of, any land or rent, and secured by an express trust or any interest in respect thereof, except within the time within which the sum would be recoverable if there were not any such trust, — that is, within twelve years, — as to the principal, with only six years* arrears of interest. In order that the Statute should apply, there must, however, be some person distinct from the party to receive, from whom the legacy can be demanded, and, therefore, the Statute does not run in respect of a legacy Thomson v. Eastwood, 2 Ap. Ca. 215. 37 & 38Yic., c. 57. 3 &4 Will. IV. c. 27, s. 42. 37 & 38 Vic, c. 57, sec. 10. Binns v. Nichols, L.R., 2 Eq., 256. EeBlackfoid, 27 CD., 676. if l\ I 12 EXECUTORSHIP ACCOUNTS. EXECUTORSHIP ACCOUNTS. 13 given to an executor or trustee until some new personal representative or trustee is appointed in his place. A similar provision also exists under the Statute 23 and 24 Victoria c. Sly.. Bl«ke, 38, section 13, which, as well as the Act of 3 and 4 WiU. IV., 29 CD., 973. is retrospective in favour of the legal personal representative of an intestate, the time provided by that Act being twenty years and not twelve, the legislature having omitted to make the necessary alteration in this respect in the Act of 1874 (per Jessel, M.K., in Sutton v. Sutton^ 20 Ch.D. 517). It has Sly .. Blake, lately been held that this latter Act does not apply to prevent ^^^ '''^'- accounts being directed as regards monies, either bemg the proceeds of a reversionary asset, or which for some other reason cannot be got in earlier, first coming to the hands of the legal personal representative within twenty years of the com- mencement of the action, however long ago the death may have happened, there being no present right to receive the same until the administrator has obtained possession, but that a payment made out of any such assets ^vhen so received does not operate as an acknowledgment so as to revive the rioht to have the accounts taken from any earlier period. The principle of this case also applies in the case of interests given by will, and on this ground legatees who were ultimate y paid out of the proceeds of a reversionary asset were he d entitled to interest from the end of a year after the death ^.BlacHora, and not merely to six years' arrears As -g-ds t^^^^^^^^ 27 CD., 676. creditors in whose favour no trust for payment of debts has been declared, the ordinary rules under the Statute of Limitations apply, so that a creditor's claim is barred at the end of six years from the date at which he is entitled to demand payment of his debt, or of some payment on account. or written acknowledgment of indebtedness. The rule is, however, subject to one exception, namely, that if time has not began to run before the death of the testator, it does not begin to run until the appointment of a legal personal representative, as until such appointment there is no person to whom payment can be claimed, but if, on the other hand, time has begun to run against the deceased, it will continue to do so notwithstanding that the personal representative has not been constituted. Time also ceases to run as against creditors as soon as a decree has been made in an adminis- tration action for the administration of the estate, although if the decree only applied to the administration of the personal estate the account would not be sufficient to keep alive the claim of the creditor against the persons entitled to the real estate of the testator ; and in the case of Sterndale V. Haivkinson, 1 Sc. 393, it was laid down that the mere filing of a bill upon which a decree was subsequently made in favour of all creditors prevented the Statute running against them, although this rule has been somewhat narrowed, so that there must be some express or impHed bargain that the particular creditor is to have the benefit of the action already commenced, in consideration of his not taking proceedings himself, and the late Master of the EoUs, in re Greaves, 18 Ch.D. 551, said that no creditor now ought to rely on the case of Sterndale v. Hawkinson, as since the Act of 1852 actions for administration of personalty are no longer brought on behalf of all creditors, and any creditor can now obtain judgment in a few days. Boatwright v. Boatwright, L.R.,17Eq., 71. Sterndale v. Hawkinson, 1 Sc, 393. Eddis on Administra- tion of Assets, p. 143. Be Greaves, 18 CD., 551. Part II. Proceedings pre'paratory to Probate — Probate Duties. It is the dutv of a executor named in a will immediately immediate upon the death to make up his mind whether he will act in gxeitftor.^'^ the trusts of the will or not, and he must be careful not to do any acts which, as indicating the assertion of ownership, could be held to amount to an election to act for acts which, in a stranger, would impose no liability upon him as an executor de son tort, or otherwise would in the case of an 14 EXECUTORSHIP ACCOUNTS. I» if Re Masonic Co., 32 CD., 373. Sykes v. Sykes, 5 C.P., 113. Newton v. Met. Ry. Co., lDr.&S.383. Application to the Court for appoint- ment. executor named in the will be held to estop him from saying that he was not an executor. If he decides to act it is his duty to at once take all steps that may bo necessary for the preservation and protection of the assets, and also to see that the deceased is buried in a manner suitable to his posi- tion in life and the apparent condition of his estate. For these purposes he is by common law entitled to the custody of the deceased's body, and is also, even before probate, in- vested with nearly all the powers of an executor, so that he can before, but pending the taking out of probate, do all acts that he could do afterwards, including the giving receipts for money or property forming part of the estate, although the person who has to pay can refuse to pay until production of the probate, as this is the only proper and complete evidence of the executor's title [Nexuton v. Metropolitaii Bailway Com- pany, 1 Dr. & S. 383). He cannot bring, so as to prosecute to an end, actions not founded merely upon possession, although, even as to these he may commence such actions and continue the proceedings upon condition that he pro- duces the probate at the hearing {Tarn v. Commercial Bank of Sydney, 12 Q.B.D. 294), but where the defendant is willing to pay, but only requires to see the probate as evidence of the title, the action will be stayed until probate is pro- duced. All acts done by him in his capacity of an executor nominal including assignments by him, or payments to him, are valid, even if he dies before probate. The executor should also at once make a detailed inventory of the deceased's estate, so as to enable him within the proper time to prove the will. The object of applying to the Court for probate of the will or for the grant of letters of administration is that the executor or administrator may have a complete and legal title conferred upon him enabling him to collect, get, or realise and deal with the property of the deceased in accor- EXECUTORSHIP ACCOUNTS. 15 dance with the provisions of the will, or of the law regulat- ing its application and devolution. This sanction is only given in the case of an executor after he has been sworn to duly administer the estate, and in the case of an administra- tion after proper security has been taken by means of a bond with two securities given to the judge for the due fulfil- ment of such duties, and the document whereby such sanction is evidenced becomes the document of title of the executor or administrator. This document of title, like all other documents of title, is required by the Legislature as a source of revenue to be stamped with a certain ad valorem stamp, this being the means by which the duty which is known as probate duty is collected. It is important to remember the fact that this duty is only one of the numerous class of duties known as stamp duties, as it has an important bearing in determining many of its incidents, e.g., on this account the duty can only be charged upon the property, the title to which can only be made out under, and by means of the instrument. The Act of 1881, which now regulates the probate duty ProbateDuty. has, however, as will be hereafter seen, in some respects ^^ ^''^' "^^ ■^^' departed from the strict logical deductions which were held to flow from this fact. The duty was first imposed w^itb other duties on parchments, vellum, &c., used for legal and other purposes, by an Act of 1694 (5 & 6 W. & M. c. 21) as a temporary war tax, but it has been continued since that date 5&6W.«feM., down to the present time in a more or less altered form. In order that the property should be liable to probate duty it must, first, be capable of being received or recovered by the executor or administrator by virtue of his office, and inde- pendently of any direction, i.e., it must either be itself of a personal nature such as goods, debts, or chattels, or it must have had that character absolutely impressed upon it by some act of the deceased in his lifetime, or as was said c. 21. ! 16 EXECUTORSHIP ACCOUNTS. Forbes v. Stevens,L.B., 10 Eq„ 185. A. G. V. Marquis of Ailesbury, 12 Ap. Ca., 672. Watson V. Swift, 8 B. 368. Lord V. Colvin, 3 Eq., 737. A. G.v. Browning, 8H.L.C.,243, Forbes v. Stevens, 10 Eq., 185. by James, V.C. in Forbes v. Stevens, 10 Eq. 185, probate duty is payable or not payable according to the character of the property (in the eye of the law) at the time, ^Yhereas legacy duty is payable according to what the legatee receives, or, in other words, for the purposes of probate duty the property is considered to be realty, or personalty according to the condition in which it ought to be (not is) at the time of the death, and, therefore, realty purchased out of the accumulations of a lunatic's personal estate under an order of the Lords Justices which directed that it should for all purposes be deemed part of the lunatic's personal estate, was held liable to probate duty (A.G. v. Marquis of Ailesbury, 12 Ap. Ca. 672). Leaseholds which partake of the nature of realty and personalty are, strangely enough, expressly treated as personalty for purposes of probate duty (55 Geo. in. c. 184, sec. 38), but by 16 & 17 Vic. c. 51, sec. 19, are, after the passing of th^.t Act, no longer to be subject to legacy duty as personalty, but to succession duty as realty. Eeal estate belonging to a deceased which is to be converted into money by some acts to be done at or after his decease, either by reason of the provisions of a will, or voluntary deed, does not become subject to probate duty, as both in law and in equity it is realty at the time of his death, the case of Watson v. Swift to this extent seeming to be' law, notwithstanding Lord Macnaghten's comments on it in A. G. v. The Marquis of Ailesbury (12 Ap. Ca., 672), but real estate which has been agreed to be sold by the testator, or in respect of which an option has been conferred which is afterwards exercised, is in equity deemed to become money immediately on the contract for sale, or giving the option, being entered into, provided it is even- tually carried out or exercised, so that if a contract for sale of realty is in process of being carried out at the time of the death and is completed by the personal representa- EXECUTORSHIP ACCOUNTS. ^ 17 tives afterwards, and the purchase money received, this becomes at once liable to pay probate duty. In the same way real estate forming part of the partnership assets is liable to probate duty, although the partners mav have the property conveyed to, and held by, them in such manner that they hold it in undivided shares as realty, and not as a mere channel of investment of partnership assets which must be turned into money in order to be divided, and in such case it will not be liable to probate duty. Secondly, the property must actually, or by construction of law, belong to the deceased for some interest or other at the time of his death, or else fall within the provision of 23 and 24 Vic. 0. 35, as being personal estate and effects which any person thereafter dying shall have disposed of by will under any authority, enabling him to dispose of it as he' shall think fit. An instance of property being, by construction of law, the property of the deceased at the time of his death, and therefore liable to probate duty as part of his estate, is furnished by the case of a child of a testator to whom property has been given dying in the lifetime of the testator leaving issue. In this case, under the Wills Act, 7 Wm. IV., and 1 Vic. c. 26, s. 33, the property is to go as if the child had survived the testator and died the moment afterwards, and as, in such event, it would have formed part of his estate it is liable to probate duty, and passes under any will he may have left. Thirdly, it must be locally situate within the United Kingdom, so that title to it can be made under the document of title granted by the Courts here. Probate duty is, there- fore, not payable on property such as French Rentes or United States Stock, which can only be legally transferred in their respective countries, where, in consequence, a title must be made to them. But British ships, wherever situate— as the A. G. V. Hubbuck, 13 Q.B.D., 275. Custance v. Bradshaw, 4 Ha., 315. Per Bowen, L.J., in A. G. V. Hubbuck. 23 & 24 Vic, c. 15. 7 W. IV. and 1 Vic. c. 26, s. 33. Perry'sExors. V. Reg., L.R., 4, Ex. 27. A. G. r. Dimond, 1 Cr. and Jer., 356. A. G. V. Hope, 1 CM. & R., 350. 1 ' f ' n i P' 1, 18 EXECUTORSHIP ACCOUNTS. I Assessment of Duty. title to them depends only on the register here,— and property on transit to this country at the time of the death, whether on a British or foreign ship, as having no local situation except the one it is about to obtain, and any foreign bonds or stock which pass by delivery or which do not require the chain of title to be completed in the foreign country, must be included in the affidavit of value for the purposes of probate duty. Shares in public companies not passing by delivery are con- sidered to be locally situate where the head office of the company is, but partnership assets wherever the business in which they are employed is carried on. Probate duty being essentially a mere stamp tax charged on the value of the property comprised in the instrument, the rules as to its assessment and collection are very simple, depending only on the rate per cent, to be charged, and value of the property chargeable. One very important alteration introduced by the Act of 1881 was the assimilation of the duties on estates passing under an intestacy to those passing under a will. Before that time the duty payable on letters of administration was 50 per cent, more than on the probate of 44 Vic, c. 12, a will. By section 27 of the Act of 1881, duties of the same ^' ^^' amount on both testate and intestate estates are imposed at the rates therein specified on all probates and letters of administration granted after the 1st of June 1881. The duties imposed on estates are, roughly speaking, 2 per cent, up to £500 in value, are £2 10s. per cent, up to £1,000 in value, and £3 per cent, above £1,000 in value. Before this time the rate had decreased as the estate increased in value, the smaller estates paying a much higher proportionate rate than the larger, and the estates were grouped between certain amounts in an unsatisfactory way that made the calculations by no means simple, besides holding out a direct inducement to defraud the revenue. The duty is, according to that section after the above-mentioned date, no EXECUTOBSHIP ACCOUNTS. 19 longer to be charged and paid on the probate or the letters of administration, but on the affidavit of value which is required to be made by the executor or administrator, or bv someone competent to make it on his behalf, in support of the application for the grant. This change was rendered necessary in order to carry into effect a boon which was conferred by this Act, viz., the charging of the duty in the first instance upon the net instead of the gross value of the estate. It is, however, obvious that the value of the estate shown in the probate or letters of administration must still be the gross value, for the title of the executor or adminis- trator being limited to the property included therein, he would not be able to get in and reahse the estate, out of which the debts and funeral expenses now allowed to be deducted have to be paid, unless the probate or letters of administration were sufficient to cover this, but it would be contrary to the principle which I stated to you above, to allow the amount of stamp duty paid appear from the document of title to be a varying one, not bearing a fixed ratio to the property covered by it, and therefore section 27 44 Vic. c. 12, provided that the duty should in the future be paid upon the ^' ^^• affidavit of value. Under section 28 the person applying for the grant may now deliver with, or annex to his affidavit of value, a schedule showing the debts due from the deceased to persons in the United Kingdom, and the amount of funeral expenses, which must be only such as the Courts allow as reasonable funeral expsnses, viz., such as I have above indi- cated, and these being deducted from the value of the estate, as shown by the affidavit, the duty is assessed and paid on the difierence. The affidavit is then stamped with the proper stamp, the stamp being, according to the regulations of the Commissioners made under the powers of section 26, an impressed stamp to denote the duty on the thousands, and adhesive to denote the duty on the hundreds or parts of In 20 EXECUTORSHIP ACCOUNTS. 44 Vic c. 12, hundreds in the value of the estate, and thereupon, according ^' 30- to section 30, the probate or letters of administration are granted, bearing a certificate signed by the proper officer that the affidavit was duly stamped, and showing the gross value of the estate appearing in the affidavit. The deduction of debts and funeral expenses allowed by section 28 may only be made in the case of a person dying domiciled in any part of the United Kingdom, and in order to take the benefit of it it is necessary to state in the affidavit the place of such domicile. The question of domicile being one of the most difficult and complicated that it falls to the lot of the Courts to determine, executors or administrators will probably be advised, wherever there can be any doubt upon the point, not to take advantage of the power of deduction, for it is by no means obligatory, and if not done in the first instance a return of duty over-paid can at any time afterwards be obtained under section 31. In cases where the benefit of section 28 is not taken, the provisions of 31 and 32 Vic, c. 124, may still be had recourse to, and under that Act the executors or administrators will bJ able to deduct from the value of the deceased's leaseholds the amount of any mortgages for which those leaseholds form the sole security, and also probably from the value of any other part of the deceased's personal estate the amount of any charges which so aftect the property that the deceased or his representatives could only recover payment of the balance in an action. Section 28 also restricts the class of debts which may be included in the schedule for deduction to those which are due from the deceased to persons resident in the United Kingdom, and the debts must also be only such as are payable by law out of the estate and effects comprised in the affidavit. The debts must also be due and owing from the deceased in his personal, and not in a representative, character, and they must be such as are payable primarily and solely out of the personal estate of the deceased, and so payable EXECUTORSHIP ACCOUNTS. 21 independently of any direction in his will. For instance, mortgage debts, whether charged on freeholds or leaseholds, are, by virtue of Locke King's Act, 16 and 17 Vic, c 113, and the Amending Acts, to be borne by the properties on which they are charged, unless a contrary intention appears in the will, so that even if the executors or administrators pay them out of the general personal estate the estate must be Ha. 30. reimbursed by the mortgaged property, except in the case where the real and psrsonal estate of the deceased devolve beneficially upon the same individual, in which case there being no right of reimbursement enforceable, the deduction will be made in respect of so much of the debts as are, in fact, paid out of the personalty. In the case of leaseholds, how- ever, the mortgage debts could, independently of this section, in this case be deducted from the value of the leaseholds stated in the affidavit by virtue of the provisions of the Act above referred to (31 and 32 Vic c 124). Voluntary debts payable at the death of the deceased, or payable under any instrument which shall not have been bond fide delivered to the donee three months before the death, are also excluded from the class of debts that may be deducted. Executors 44 Vic. c. 12, must also remember that it is not all debts which they may lawfully charge against the estate that may be deducted, but only debts actually due at the death or payable in respect of some contract entered into by the deceased; but debts incurred after the death in carrying on the business, or keeping up the establishment of the deceased, could not be deducted. By section 29 the affidavit to be made on the application for the grant is to verify both the account of the estate and the schedule, and is to be made in a form prescribed by the Treasury. Forms of affidavits, with accounts and schedules annexed, have been, in accordance with this section prescribed, adapted to various estates, and these contain directions of the most minute character as to s. 29. 22 EXECUTORSHIP ACCOUNTS. Correction in amount of Duty paid. Phillipo V. Munnings, 2 My.&Cr.,309 A. G. V. Campbell, L.R., 5, H.L.C., 52i. the way in which they are to be filled up, and these are so precise that they need no further comment. Forms have also been provided applicable to cases where a grant is necessary, but no stamp duty payable, by reason that all the personal estate was originally situate abroad or was merely trust property. Provision is contained in the Act of 1881 for cases where an erroneous return has in the first instance been made, and either too much or too little duty paid under section 31. If. during the administration of the estate (which, presumably, means during such time as the executor or administrator in that capacity retains any part of it in, his possession or under his control, and before the estate has been distributed or retained by the executor to answer the trusts declared by the will in favour of beneficiaries when, in fact, the executor converts his position into that of trustee), it is discovered that the value mentioned in the certificate endorsed in the grant exceeds the true value of the estate, or if, within three years from the date of the grant or any extended time allowed by the Commissioners of Inland Eevenue, it appears that no deduction or an insufficient deduction has been made on account of debts and funeral expenses, the Commissioners are, upon proof of the facts to their satisfaction, to return the amount overpaid, and to cause an amended certificate to be granted. The Com- missioners require the facts to be verified by affidavit according to a form settled by them, which is applicable, and can be adapted both to cases of over-payment and under-payment of duties, and certain regulations as to the course to be followed have also been laid down, which are given in the appendix to Hanson's Edition of the Inland Eevenue Acts of 1880 and 1881. Under the former Acts the application could only be made by or on the evidence of the executor or administrator who paid the duty originally, as EXECUTORSHIP ACCOUNTS. 23 the affidavit in use at that time did not disclose the way in which the amount was arrived at, but having regard to the full details now required in the affidavit of value, it will be easy for any one to correct any errors contained in it, and therefore the application is allowed to be made by any person legally representir '^ the estate. Under section 32, if at any time it is discovered that the estate was under- valued, or that any deduction for debts or funeral expenses was made erroneously, the person acting in the administration of the estate, which words would include all persons who, whether under a legal title or otherwise, take upon themselves the burden of administering the estate, but would, probably, not include persons merely holding some ascertained part of the estate upon the trusts of the will, is bound, within six months after the discovery, to file a further affidavit (which, like the original affidavit, may either be made by himself or by some one competent to make it on his behalf), with an account, and to pay the duty chargeable on the difference, with interest at 5 per cent., either from the date of the grant, or such later date as the Commissioners think proper under the circumstances, and the certificate of stamping is then corrected. The penalty for not complying with the provision of this section is contained in section 40, which imposes a penalty of double the value upon the person who ought to deliver the further affidavit, making the same a debt due from him to the Crown ; but, if my interpretation of section 32 is correct, and the decisions of the House of Lords in A. G, v. Campbell, L.R. 5, H. L. 734, and of V. C. a g. v. Malins, in Clegg v. Boivland, 3 Eq. 368, proceeded entirely fTPJ'^iJv on this footing, it is evident that where the executors have 734. wound up the estate, and only hold it, or some part of it, qtia Rowfaod, trustees, the Crown may be without remedy, as the duty is ^ ^1' ^^S- not made a charge upon the estate unless the Courts should hold that the administration of the estate must be presumed H if 24 EXECUTORSHIP ACCOUNTS. It ''i i to be still incomplete by reason of the ^hole duty not having been accounted for. It is rather curious to notice the difference in the wording of these two sections, which certainly seems, contrary to the usual state of affairs, to make against the interest of the authorities. Under section 31 the amount of duty overpaid is to be returned, if, at any time during the administration of the estate, the value mentioned in the certificate exceeds the true value of the estate, so that it would seem that a return could be claimed, if, by reason of the failure of debtors to the estate, or otherwise, the assets should not prove to be so great as was originally estimated ; whilst, on the other hand, under section 32, a further affidavit is only required if it is discovered that the estate, not proves to be, but icas, at the time of the grant, of greater value than that mentioned in the certificate, so that if any debts or other aissets, which are honestly valued at the time, afterwards, on realisation, Colvin, 3 Eq., pj.Q^uce more than was anticipated, either through a debt '^^'^' valued as doubtful or desperate turning out good, or through a reversionary interest falling in, the Commissioners do not appear to be able to claim duty on the increased value, nor apparently do they exercise this right where an honest valuation made by a competent valuer, accepted by them turns out to be immensely below the amount obtained on realisation, in which case the estate was governed by the old Act, 55 Geo. III. c. 184, s. 41, which seems to have been much stronger in favour of the Crown. On this principle Hanson suggests, in his note to section 32, that debts cannot be considered to have been deducted erroneously if they in fact existed as debts due by the testator on his own account at the time of the grant, not- withstanding that in the event the estate is relieved from payment of them, as e.g., in the case of a legacy given to a creditor on condition of his releasing his debt. Lord V. A. G. V. Dardin, 11 Q.B.D. 16. EXECUTORSHIP ACCOUNTS. 25 At the same time it must be borne in mind that it was laid down in the House of Lords in ^. G. v. Brunning, 8 H.L.C. 262, that an executor is bound to state all the property of the deceased, notwithstanding that he thinks it is of no value or of uncertain value, to this extent over- ruling Moses V. Grafter, 4 C. and P. 524, where Lord Tenterden held that desperate and doubtful debts might be omitted in estimating the value for probate. If an executor inserts everything, however contingent, valueless, or uncertain the right may be, and values it properly and honestly according to its then value, this would seem to bind the Crown, but if anything is omitted and not valued at all, then probate duty must be paid on the amount actually recovered. In the case of A. G. v. Brunning, this was extended to a claim sounding in damages for breach of contract committed in the testator's lifetime, and this also applies to all claims in respect of torts affecting the deceased in his property, real or personal, but not in his person, the right of action in respect of damages to the latter dying with him (per Lord Wensleydale, 8 H.L.C. 262). In connection with this, however, it is important to remember that an executor cannot maintain an action without production of the probate, and, if the gross value stated thereon •does not appear to be sufficient to cover the amount of the claim, he could not recover in that action, even although he be suing for a doubtful or disputed debt or claim, although, as a general rule the Court will allow the matter to be adjourned for the purpose of having the proper stamp duty paid ; but it does not appear to have been decided whether he could be cross-examined to show whether he had, in fact, included the amount of the claim in his particulars of the gross value, prima facie appeared to be sufficient to include it. The Act of 1881 contains provisions for making, subject to duty at the same rate as probate duty, certain property of a deceased person, which, although not in strictness devolving A. G. V. Brunning, 8 H.L.C, 262. Moses V. Grafter, 4 C. & P., 524. Lord V. Colvin, 3 Eq. 737. A. G. V. Brunning, ubi sup. Hunt V. Stevens, 3 Tamet, 113. Christopher V. Devereux, 12 Sc, 264. Carr v. Roberts, 2 B. & Ad., 905 26 EXECUTORSHIP ACCOUNTS. X 9 under a will or an intestacy, ought, on the ground of public 44 Vic. c. 12, policv, to be classed with it. By sections 38 and 39 of the Act, sa.38&39. ^^^^^ ^^^^^ ^j^^, as beneficiary, trustee, or otherwise, acquires possession or assumes the management of any personal or moveable property : (a) comprised in a donatts mortis causa or death-bed gift, or taken under a voluntary disposition by way of gift inter vivos not bond fide, made three months before the death ; (6) which formerly belonged to the deceased absolutely, and has by him been transferred voluntarily into joint names, so as to pass the beneficial interest therein to any other person by survivorship on his death ; or (c) which passed under any voluntary settlement made by the deceased by deed or other instrument not testamentary, under which a Ufe interest is expressly or impliedly reserved to the settlor, or which contains a general power of revocation, must deliver an account of such property on oath to the Commissioner of Inland Eevenue at the tune of retaining for his own use, or distributing, or disposing of the same, or, in any event, within six calendar months after the death of the deceased, otherwise he becomes subject to the penalty of double duty imposed by section 40. In section 38 Grossman .. the word voluntary includes all dispositions not made for ?^^-^\.c pecuniary or other valuable consideration, such as marnage. Q.B.D., 25G. ^^ ^ ^^^_^^ ^^^.^^^ ^^^ increased charge for probate duty imposed by the Act of 1881, certain concessions have been made in favour of the smaller estates, and a remission has been made of legacy and succession duties so far as they were payable by lineal ascendants or descendants of the deceased. 44 Vic. c. 12, Under section 27, which fixes the rate of duty to be borne by «-27. estates of different values, no provision is made for any duty to be imposed on estates under the value of £100 and by section 33, where the whole personal 44 Vic c 1" estate of the deceased is over £100 and under £300, a 8- 33. ■ ' fixed charge for duty of 308. is provided, which, by section EXECUTORSHIP ACCOUNTS. 2' 36 also satisfies all claims for legacy or succession duty in 44 vie. c. 12, respect of the property comprised in the affidavit. It is ^' ^^• important to notice that, in ascertaining whether the estate is below the value of £100, so as to be altogether exempt from duty, the net value of the estate is to be taken, but in ascertaining whether it is under or over £300 no deduction is to be made for debts or funeral expenses, and it is to include all property made by law subject to Probate Duty, and also all personal estate situate out of the United Kingdom. It does not, however, apparently include property which, not being in law the testator's property at the time of his death, is made liable to duty under section 38. By section 33, a very summary mode of obtaining a grant 44 vic. c. 12 of probate, or of letters of administration, in cases where the ^* ^^' whole estate is under £300, as defined in that section, is provided, under which, on filling up the required forms, and depositing a fee of 15s. for expenses, together with the 30s. duty where payable, the proper officer is bound to obtain the grant for the applicant without further proceedings on the part of the latter ; but, under section 35, if at any time after- 44 Vic. c. 12, wards it is discovered that the personal estate of the deceased ^* ^^' was over £300 in value, the full duty becomes at once a debt due from the person acting in the administration of the estate (as to which the remarks already made apply), and the duty and deposit already paid are forfeited, and the relief from legacy and succession duty, otherwise granted under section 36, is taken away. The provisions for insuring the due payment of probate duty, consist chiefly in imposing penalties on all persons who intermeddle with, or administer, the estate without obtaininfr a grant. Section 37 of 55 Geo. III., c. 184, which is still in 55 Geo. III., force, imposes a penalty of £100 and 10 per cent, additional on ^- ^84, s. .37.' the amount of duty on every person who takes possession of, or administers any part of, the estate without obtaining a If 'If 28 EXECOTOKSHIP ACCOUNTS. 28 & 29 Vic, c. 104, s. 57. I I I 't 44 Vic. c. 12, S.40. 44 Vic. c. s. 37. 12, grant within six months after the death, or within two months after the determination of a probate suit if it be not concluded within four months after the death, and in any such case, under section 57 of 28 and 29 Vic. c. 104, summary proceedings can be taken for obtaining an account of the estate and payment of the duty, but such proceedings are to constitute a waiver of all penalties incurred under the Act of Geo. III. Section 40 of the Act of 1881 imposes a penalty of double duty on any person who, being to that effect under obligation, neglects to obtain probate or administration, or to deliver a further affidavit, or an account under section 38, within the time prescribed by law for the purpose. It is not clear whether or not this penalty will be held to be cumulative to the penalties provided by the Act of Geo. III., but it would seem that it may be so held, as the penalty under this section is imposed on the person who ought to obtain the grant, i.e., who is de facto administermg, for mere neglect to obtain such grant, whilst the penalties under the Statute of Geo. III. are imposed on the person who adminis- ters after a certain time without obtaining the grant. The distinction is very narrow, but as the Act of Geo. III. is not repealed it may be considered sufficient to make the penalties cumulative. Another and very useful power is, however, conferred by section 37 of the Act of 1881 on the Com- missioners, under which they may at any time within three years after the date of the grant require the person acting in the administration to furnish such explanations, and to produce such documentary and other evidence respecting the contents of, or the particulars, verified by the affidavit as the case may seem to them to require. Some power of this kind was needed as, owing to the abolition of the 1 per cent, legacy and succession duty, the fiHng of a residuary account will be much less frequent than formerly, but the power is very inquisitorial, and might be used for collateral purposes. EXECUTOKSHIP ACCOUNTS. 29 Whether the executor or administrator could, by winding-up the estate before the three years, and by distributing the residue or commencing to hold the same as trustee and not as executor on the trust of the will, avoid liability to give explanation under this section, is a matter that may have to be decided. In any event, although the powers to require information is Hmited to the three years, the Commissioners can, of course, make such use as they are able to of informa- tion obtained by them ahund after that time. Part III. Legacy and Succession Duty. Closely akin to the subject of probate duty comes that of legacy and succession duty; and, although in the course of the administration of the estate these duties are not usually paid at the same time as the probate duty, it will be very convenient to deal with them here. Legacy duty when originally imposed was nothing more Distinction than a stamp duty imposed upon the receipts crimen for ^^etween legacies, but by the provisions of later Acts the amount of the Eega^y' '"^ duty has been increased and its nature has been changed, so ^''^'^'• that it is now a tax upon the property itself not paid by melns of stamps. This constitutes an essential difference between this duty and probate duty, and, as a result of this, these duties do not necessarily attach to the same property of a testator, for although both duties are payable in respect of his personal property, probate duty— as being a mere stamp duty upon the document of title of the executor or administrator- is only payable upon the property to which such document confers a title, that is, only to the property locally situate within the jurisdiction of the Court making a grant, and for the same reason is chargeable in respect of the property to be comprised in, or recovered by virtue of the document of title for which application is made, whether the deceased to whom \w \n ■■ r. ilii i 30 EXECUTORSHIP ACCOUNTS. C. 62. the property belonged was domiciled within the jurisdiction or not. On the other hand, legacy duty being a tax imposed upon the personal property of persons who die subject to the English jurisdiction, is payable in respect of all personal property belonging to persons domiciled within the jurisdiction at the time of their death, wherever such property may be situated, but is not payable in respect of personal property situate within the jurisdiction of persons, even EngUsh subjects, who die domiciled abroad. The Acts now in force regulating the amount of legacy duty 5 Geo. III., are 55 Geo. III. c. 184, and 44 Vic. c. 12-the Act of 1881,- 44 Vk c 12 ^^H 52 EXECUTORSHIP ACCOUNTS. In the event of the successor availing himself of this option, he is to be entitled to tender the duty in advance under discount at rates and according to regulations to be prescribed by the Commissioners of the Treasury. Whether the Commis- sioners will construe this liberty as only exercisable at the time of option, or will allow the balance of duty to be paid at any time under discount remains to be seen, although the reference to this power in sub-sec. 3 (b) would seem to imply that it is to be a liberty available at all times. The result of this enactment is to afiord relief to the suc- cessor during the early years of his tenure of the estates by giving him in certain events eight years instead of four to pay the whole duty, and in any event if he exercises the option by postponing for four years the payment of half the duty. Provision is, however, made for ensuring that the successor shall have the same amount of relief and no more, in the event of his dying before all the instalments are paid, as he would have had under the Succession Duty Act. By sec. 22, sub-sec. 3, if he dies before the day fixed for the pay- ment of the last instalment of the first moiety he is, if his interest be not a continuing interest in the property of which he could dispose by will, to be relieved from the same proportion of the duty as he would have been relieved from under the Succession Duty Act, and the balance is to be a debt due from his estate. If he die after the date fixed for payment of the last instalment of the first moiety he gets no further relief, but the balance is in the case of a continuing interest made chargeable on the interest, and otherwise is made a Crown debt due from his estate. No security is, however, provided for the payment of this debt, and it is, therefore, conceivable that in a good many instances, par- ticularly in the case of married women, whose whole property often consists only of their life interest, the Crown may lose the balance of duty. 1 EXECUTOKSHIP ACCOUNTS. 53 Under sub-sec. 141 of sec. 22, successors whose succession accrued on a death before the 1st of July, 1888, are to be en- titled to the privileges granted by the section, if either no instalment of duty has become due, or if only one instalment has become due, and been paid before that date. The only exceptions to this rule of calculating the value of successions in real estate is in the case of successions passing to charities or corporations, in which case the duty is calcu- lated upon the principal value of the property comprised in the succession, which duty, in the case of charities has to be raised and paid at once, but in the case of corporations, is payable by instalments as if given to an individual. A new tax was, however, imposed by 48 and 49 Vic. c. 51, on corporations and similar bodies to compensate the revenue for the loss of Probate, Legacy, and Succession Duties, through such property being held by corporations and other bodies which never die. The duty is at the rate of 5 per cent. per annum on the income of such corporate bodies, after deducting all necessary outgoings and expenses of collection and management, and it is made a charge on the property itself, so long as the corporate body owns it, and any arrears at the time of transfer remain charged on the property in the hands of a transferee taking with notice of such arrears. A similar exception is provided in the case of real estate which produces no income to that made in the case of per- sonalty ; and under ss. 23 and 24 of 16 and 17 Vic. c. 51, duty only becomes payable on any such property when sold, upon the amount realised by the sale. In estimating the annual value of real property, which yields, or is capable of yielding, a steady income, the value of the property, if it be let, is taken at the amount of the rent, but if not it is usually taken at the valuation for property tax. Under section 22 an allowance is to be made for all necessary outgoings, which means, of course, those which are, under the I : Duty in the case of Corporations and Charities 16 & 17 Vic, c. 51, s. 16. 16 & 17 Vic, c 51, s. 27. 48 & 49 Vic, c. 51. 16 & 17 Vic, c 51, ss. 23 & 24. 16 & 17 Vic, C. OJ., s. ^^. 54 EXECUTORSHIP ACCOUNTS. i .' particular circumstances of the case, borne by the landlord, e.g.y if the premises are let at a rack rent upon a lease con- taining strict covenants, under which the tenant does the repairs, and pays all rates, taxes, tithe rent charge, etc., and also insures, there will be no deduction to be made from the amount of the rent, as it has been held that income tax is not an outgoing. If, however, the landlord, according to the terms of the lease, has to bear any of these charges, or if the property is in hand, a proper allowance must be made ; but if, « in the case of property in hand, the property tax valuation is taken as the basis, it is always assumed that this was calcu- lated on the footing of making an allowance for rates, taxes, and tithe rent charges, and no further deductions will be allowed for these. Necessary outgoings in the above-mentioned section would appear to be permanent charges made on the occupiers of the JRe Elwes, land, or falling entirely on the land, such as repairs, poor .&R.,726. rates, highway, sewer and county rates, town rates, drainage rates and the like, some of which may be payable occasion- ally, still they are permanent charges and capable of valuation, so as to render it possible to calculate the annual amount (per Watson, B., 3 H. & N. 726). Be The term " necessary outgoings" means all such outgoings lS. 1°Ex^' ^® *^^ predecessor may have thought proper to expend, but all such as are intrinsically necessary, such as it was not in the option of the predecessor to expend or not. An agent's charges for collecting rents or the wages of a woodman or mmeral agent, in the case of timber or minerals, would not be allowed as a deduction (per Bramwell, B., L.K., 1 Ex. 294). All charges incidental to the tenure, such, e.g.^ as the ground or superior rent payable in the case of leaseholds, or the j5nes, relief or other charges payable in the case of copy- holds, and all incumbrances to which the property is subject 294. EXECUTORSHIP ACCOUNTS. 55 when it comes to the successor, or which are subsequently created under an overriding power, must also be taken into account. In the case of incumbrances this is done by deduct- 16 & 17 Vic, ing the amount of interest payable thereon from the annual ' * ' ' value, but fines and other charges are to be deducted from the s. 28. capital value of the interest, when calculated for assessment, and this is usually effected by turning the amount of the deduction into an annuity calculated in the same way as the annual value of the succession, and then assessing the duty on the balance. Provision is also made under section 34 for certain excep- tional cases in which the successor may have at his own expense effected substantial repairs or permanent improve- ment in the property before he becomes chargeable with the duty ; this might happen in cases where, by the surrender of prior interests or by transfer, he obtains the beneficial enjoy- ment of the property before the time at which, under the instrument creating the succession, the duty would have been payable, in both of which cases the duty is payable as if such event had not happened (sec. 15). Under section 38 the 16 & 17 Vic, successor is also to have an allowance for any property which °* ^^' ®" ^®* he may lose or be bound to give up on taking his succession, but as in the case of personal property, no deduction is to be made in the first instance for any contingent incumbrances, such as future portions to be raised for younger children or any contingency on which the successor may lose the whole or any part of the property, but upon the contingency happening, a fresh estimate of the duty is to be made according to the altered circumstances, and the overpaid duty is to be returned. If the property is not let at a rack rent, the duty is in the first instance calculated only on the actual rent receivable, and when the lease comes to an end an increased amount of duty has to be calculated and paid upon the increased value of the interest, but if it were let at what at the date of the lease I I 1 I' 'I P;f I! ^11 »^ ' «' ill in 1 i i 56 EXECUTORSHIP ACCOUNTS. 16 & 17 Vic, c. 51, s. 25. 16 & 17 Vic, c. 51, s. 26. 36 Geo. III., c. 52, s. 6. Who pays the duty. 42 Geo. III., 98 & 29 Vic, c 104. purported to be a rack rent, then no further duty is payable when the lease falls in, no matter how much the property may then have increased in value over the amount of such rent. If, however, the lease be renewed upon pay- ment of a fine or premium, additional duty must be paid upon the successor's interest in such fine or premium. Where the property yields a fluctuating income, such, e.g,, as mines, manors, &c., the annual value is to be taken at the average profits or income derived therefrom, after deducting all necessary outgoings calculated over a number of preceding years to be agreed on between the Commissioners and the successor, or in the option of either party, it is to be taken at 3 per cent, upon the capital value thereof. By section 6 of 36 Geo. III., c. 52, the person having or taking the burden of the execution of the will, or other testamentary instrument, or the administration of the estate of any deceased person is, subject to the exceptions contained in the Act, made personally accountable to pay all legacy duty payable in respect of the estate administered by him, and if any such person pays or retains any legacy without first paying the duty, the amount thereof is made a debt due from him to the Crown, and the person receiving payment of any legacy without deduction of the duty is also made a debtor for the amount to the Crown. This Act did not, however, impose any duty upon any person to render an account to the Commissioners showing upon what amount or part of the estate duty was payable, and, accordingly, by sec. 2 of 42, Geo. III., c. 99, power was conferred upon the Commissioners of obtaining such an account, and now, under 28 and 29 Vic, c. 104 and 105, a very short and summary procedure is estabHshed for enabling the Commissioners to obtain a residuary account in cases where it ought to be rendered, and also to enforce the payment of the duty when assessed. In connection with this subject it is very important to EXECUTORSHIP ACCOUNTS. 57 remember the provisions of 13 and 14 Vic, c 97, s. 8, under 13 & 14 Vic, which, if any person has received money as, and for, legacy ^' ^^' ^' ^' . duty the amount of it immediately becomes a debt due from him to the Crown, and this has been interpreted to mean that if anyone is entrusted with money for the purpose of paying legacy duty he is bound to appropriate it for that purpose and for no other, and cannot, even although a mere agent of the executor, pay back the money to them on their revoking his authority. Under sec 13 of the 36 Geo. IIL, c 52, the executor or 36 Geo. III., administrator is absolved from his obligation to see to the °' ^^' ^* ■^'^* payment of duty in cases where the legacy is given to several persons in succession who pay different rates of duty, and he has properly paid over the amount of the legacy to the trustees of some instrument entitled to receive and hold it, and the obhgation is, in that event, imposed upon them. Again, in the case of annuities given by will, and charged generally on some legacy given by the same will, the duty upon the annuity has, according to the express provision of sec. 9 of 36 Geo. III., c. 52, to be paid by the legatee, who has 36 Geo. III., to deduct the amount thereof from the first four payments of ^' ^^' ^' ^' the annuity, and under sec 14 the duty payable upon articles ^- ^^* not producing income, which are bequeathed to persons in succession, and which do not pay duty until they are sold or become the absolute property of some person, has to be paid by the person who becomes absolutely entitled thereto, and not by the executor or administrator. Under sec 25 of 36 Geo. III., c. 52, and s. 53 of 16 and 17 36 Geo. III., Vic. c. 51, any Court administering or distributing any property iQ^&ii yi^ liable to duty under either of those Acts, is charged with the ^ 51, s. 53. *' obligation of seeing that all duty is duly paid, and must raise the amount out of the property administered. In this latter case, however, the duty of rendering the account to the Com- missioners to enable them to ascertain the amount of duty 58 EXECUTORSHIP ACCOUNTS. 45 Geo. III., c. 28, s. 5. ! ii remains with the parties who would be otherwise accountable, and this liability is of course in all other cases imposed on the person liable for the duty. By the Act 45 Geo. III., c. 28, s. 5, legacy duty upon legacies charged upon real estate, or the proceeds of sale of real estate which, however, since 51 Vic, eh. 8, s. 21, will not be payable in respect of the estate of a person dying after the 1st of July, 1888, must be accounted for and paid by the persons charged with the duty of selling and satisfying the legacies, or else by the person entitled to such real estate subject to such legacy, so that probably a purchaser of such land would become liable to account for the duty in this respect, being different to the purchaser of land devised on trust for sale, as in this case the duty is expressly charged upon the proceeds. The liability of executors and others, however, in respect of duty has now been materially lightened by a provision of 43 Vict., c. 14, 43 Vic.,c. 14, sec. 12, which enables an executor, administrator, c. 12. or trustee, to give notice to the Commissioners, in writing, in effect calhng on them to state any claim they may have to legacy or succession duty in respect of any funds in his hands which he intends to distribute, and, thereupon, to furnish them with all particulars they may require to enable them to ascertain their claims, and then, after satisfying any claim they may make, he will be at liberty to distribute the fund, and will be entitled to receive a certificate discharging him from all liability in respect of duty payable on that fund, but without prejudice to their claims against any other persons liable for any duty not paid. The liability to account for succession duty is imposed upon a larger class of persons than the corresponding liability for legacy duty, and is, in addition, made an express charge upon 16 & 17 Vic *^® property itself. Under sec. 44 of the Successions Duty c. 51, s. 44. Act, the successor and all persons deriving title under him in whom the property, subject to the duty, may be vested at the EXECUTORSHIP ACCOUNTS. 59 time the duty becomes payable, and every person who, in a fiduciary capacity, has the management of the property at such time, is made accountable for the duty ; but only to the extent of the property he receives or has the control of, and if the duty is not then paid the amount of it becomes a debt due from the accountable party to the Crown. If, however, the successor alienates the property after he has become entitled to the enjoyment of it, the liability to render an account is not transferred, nor, in the case of personal pro- perty, does the Hability to pay the duty pass, for in the case of personal property the duty is only made a charge upon the property so long as it remains in his ownership or control, or in that of a trustee for him, but in the case of realty the duty is a continuing charge in the hands even of a purchaser for value, and although he cannot be compelled to render an account, the Commissioners can probably have the value determined and the duty assessed under sec. 45. If, however, the real estate is sold under a power or trust con- tained in the instrument creating the succession, the liability to the duty does not pass with the property, but attaches to the proceeds of sale, and to the successor's interest in any real estate which may, according to the trust, be purchased therewith. The continuance of the charge of duty upon real estate even after sale might cause great difiiculties but for the power con- ferred by sec. 43 on the Commissioners to assess the amount c. 51, s. 43. ' separately payable upon any particular property, in which case the property only becomes chargeable with the duty so separately assessed, and they are also bound to keep a book in which to enter the payment of the duty, and to give a stamped receipt for it, and from time to time to give a certificate of payment to any person interested, which receipt or certificate c 61. exonerates a purchaser for value without notice, notwith- standing any insufficiency or invalidity in the assessment, and : H it 'I 60 EXECUTORSHIP ACCOUNTS. c. 28, s. 9. »! |JH in no purchaser is to be liable for any duty, the liability whereof c. 52. depends upon extrinsic circumstances not appearing on the face of the title under which he purchased. Receipt. For the purposes of the collection of the duty payable on 36 Geo. III., legacies and shares of residue, it is provided by 36 Geo. III. c. 5 ,8. JJ. ^ 22 s. 27, which is the statute still governing the case, and 45 Geo. III., which, by sec. 9 of 45 Geo. III. c. 28, is made applicable in the case of the duties imposed by that Act on the proceeds of sale of real estate, that every person being a person liable under the Act to account for the duty, and paying any legacy or share of residue, shall take from the person to whom it is paid a receipt which has to contain the following particulars : — (a) The date of the receipt ; (b) the name of the testator or intestate ; (c) the name of the person to whom the receipt is given ; (d) the name of the person receiving the legacy or share of residue ; (e) the amount of the legacy ; and (/) the amount and rate of the duty payable. Printed forms have been settled and approved by the Commissioners for the purpose of paying legacy duty, which can be obtained either at Somerset House or from any stamp distributor in the country. There are three forms for legacies : No. 1 for all legacies ; No. 2 for annuities ; and No. 3 for accounts of residue. This receipt must, within twenty-one days after its date, be brought to an office of the Commissioners for the pur- pose of being stamped, and, on the proper amount of duty being paid, an acknowledgment of the payment is written on the receipt, and the particulars of the payment entered in the book, to be kept by the Commissioners according to sec. 4 of the statute, and thereupon the receipt is stamped in the manner provided by the section, with one of the Commissioners' stamps provided according to sec, 3. No evidence of any kind as 10 the payment of a legacy is to be accepted in any case without the production of a stamped receipt or a copy of the entry in the Commissioners' books, showing that the JM EXECUTORSHIP ACCOUNTS. 61 proper duty has been paid. In case the receipt is not stamped within the twenty-one days, provision is made by the statutes, under which, within three calendar months of its date, it may be stamped on payment of the duty, and an additional 10 per cent, on the duty by way of penalty ; but after the three calendar months it can only be stamped on payment of the duty and 10 per cent, on the value of the property for which the receipt is given. If the person accountable for the duty neglects either to take a receipt on payment, or to get it stamped, he is hable to a penalty of 10 per cent. on the amount of the property, and the same amount of penalty is imposed on all persons accepting pay- ment of a legacy or share of residue without giving a receipt, but in the latter case the duty is only to give a receipt, and there is no obligation on the party to pro- cure it to be stamped, and under sec. 31 of the Act, either party offending against the Act who, within twelve months after the offence, informs against the other guilty party, so that he can be prosecuted to conviction, is relieved from all penalties. Where, however, a bo7id fide mistake has been made in paying the amount of duty, the Commissioners may, if satisfied on oath of the fact within three calendar months after the payment, accept the difference with 10 per cent, on the difference by way of penalty, and give a stamped receipt as if the full amount had been paid in the first instance. As it may be impossible for the persons accountable for the duty to obtain a proper receipt in certain cases within the time limited by the Act, either by reason of infancy or absence beyond the seas, the legacy or share of residue may, in such cases, be paid into Court in the Chancery Division after 35 Qeo. III. deducting and paying to the Commissioners the proper amount ^- ^2, s. 32. of duty, and in such cases the receipt of the Paymaster- General for the money so paid in is, if the duty be also duly paid, a sufficient discharge for the money. 1 Ri ^1 ti ■i i 62 EXECUTORSHIP ACCOUNTS. ^1 III! When the person accountable for the duty is himself entitled to a legacy or share of residue, as he cannot give himself a receipt, he must, as soon as he is in a position to retain the amount of his legacy or share, transmit the full particulars to the Commissioners to enable them to assess 36 Geo. III., ^Y^Q duty, and such duty must be paid within 14 days under a C. D^, S. OO. penalty of treble the amount. This section only applies, however, to cases where the legacy or share is retained for the benefit of such person, and not where it is retained in trust for others, and there does not seem to be any penalty provided for non-payment of the duty before retainer in such cases except that according to section 6 ; the amount of the duty then becomes a personal debt to the Crown from persons accountable for the duty, but under the general power before referred to, of compelling the delivery on oath of a residuary account, the Commissioners are enabled to ascertain and enforce the payment of duty in all cases. The Succession Duty Act provides a somewhat similar machinery for collecting the duty. Under section 45 the persons accountable for the duty are required, in the case of personal property, at the time of first paying or retaining it for the successor, and in the case of real property, at the time when the duty first becomes payable, that is, at the end of twelve months after the successor becomes entitled in enjoyment, to give notice to the Commissioners of their liability and to transmit full particulars of the property and its value with any deductions they claim, and with the names of the predecessor and successor and their relationship. Printed forms have also been provided by the Commissioners for this purpose, and consist of No. 4, for settled personal property, when the duty is chargeable on the capital ; No. 5, for the like property when the duty is chargeable by way of annuity; No. 6, for accounts of real property; and No. 7, for the second and subsequent instalments of duty on real property. 16 & 17 Vic, c. 51, s. 45. EXECUTORSHIP ACCOUNTS. 63 Power is conferred upon the Commissioners bv section 49 16 & 17 Vic, c 51 s 49 to require the persons accountable to produce any books or * * * documents in the custody or control of such persons which can afford any necessary information. If the Commissioners are satisfied, they can either assess the duty according to the account delivered to them, or they may appoint some person to estimate the value of the property on their behalf, and may then assess the duty on his estimate subject to the right of appeal to the High Court. If the Commissioners' estimate is higher than that put forward by the accountable person, and no appeal is entered, the Commissioners may charge the successor with the expenses of the assessment, but if there is an appeal the payment of the expenses is in the discretion of the Court. Heavy penalties are imposed by section 46 at the 16 & 17 Vic, rate of 10 per cent, per month on the amount of duty that °' ^^' ^' ^^' would be payable, calculated at 1 per cent, both for neglect to send the notice of liability within the time specified, and also for neglect to pay the duty within 21 days after it has been finally ascertained, but none of the penalties provided by these Acts are in general now enforced, as under the Act 31 and 32 Vic. c. 124, sec. 9, interest is made payable in all cases 31 & 32 Vic, on arrears of Legacy and Succession Duty at 4 per cent., and °' -^^^^ ^* ^' it is expressly provided that if the Commissioners accept the arrears of duty with interest, it is to operate as a waiver of all penalties under the Legacy and Succession Duty Acts, and the usual practice of the Commissioners is now to accept such arrears and interest. Apart from this express provision as to interest on arrears, it was long ago decided in A. G, v. Cavendish {Wythe 82) A. G. r. that the accounts of legacies and residue rendered to the (Wytht'82). Commissioners must include the principal value and all income or interest accrued on the property between the date of the death and the rendering of the account, and that the duty must be paid on such value. It 1; t f : • 64 EXECUTORSHIP ACCOUNTS. 16 & 17 Vic c. 51, s. 39. 8. 40. 8.41. 43 Vic 8.11. General powers are conferred upon the Commissioners by the Succession Duty Act, under which (sec. 39) they can in special cases, in which they think it expedient so to do, enlarge the time for payment, and in cases where the value is not readily ascertainable, or where the circumstances connected with the value of a succession, or the recovery and assessment of duty are complicated, they may accept a composition for the duty, and (sec. 40) receive it under discount in advance. Power is also conferred upon them by sec. 41 to commute the duty payable upon an expectant succession on the application of anyone entitled to the succession, and under 14, 43 Vic. c. 14, s. 11, they may make a similar commutation on the application of an executor, trustee, or person who would be accountable for the duty if the expectancy were then in possession, but under this latter Act it can only be done in respect of future payments, when all present claims for duty in respect of the same succession have been satisfied. Under section 37 of the Succession Duty Act the Commis- sioners may return any duty paid in error or in respect of property which the successor cannot recover, or from which he is evicted by superior title, or where for any other reason 36 Geo. III., it ought, in their opinion, to be refunded. Under 36 Geo. III. c. 52 s. 34, they have also similar powers to return duty paid in respect of property which the legatee has subsequently to refund, either by reason of a debt being recovered against the estate, or of a loss happening, or for any just cause, or under a grant of probate or administration which is subsequently revoked (sec. 37), unless in the latter case the duty is properly payable, in which case it is allowed on account with the rightful representative of the deceased when duly constituted. The cost of proving the will and of preparing for and ren- dering Legacy Duty accounts are part of the expenses of administration, and must be borne by the general estate, but 16 & 17 Vic, c. 51, s. 37. c. 52, s. 32. 8. 37. EXECUTORSHIP ACCOUNTS. 65 the costs of preparing and rendering Succession Duty Earl Cowley V Welleslev accounts on the succession of the first tenant for life must, I'sq. 656. whether such life tenancy be a legal or equitable one, be borne out of income, although the valuations, etc., then obtained are of the greatest practical value to the remain- dermen. Part IV. Powers of an Executor. His Duties and Besponsihilities. Form of an Ordinary Administration Judgment and of the Accounts to be brought in under it. As soon as an executor has proved the will he becomes in the eye of the law the absolute owner of all the property, whether legal or equitable assets, which are comprised in bis affidavit, and which he can recover virtute officii, and he becomes thereupon invested with the fullest rights and powers of dealing with them, whether for getting them in and realising them, or for distributing them in a due course of administration. It is a general rule of law and equity that an executor or • administrator has an absolute power of disposal over the whole personal effects of his testator, and that they cannot be followed by creditors much less by legatees, either general or specific, into the hands of the assignee. The principle is that c.f. Smith's the executor or administrator in many instances must sell in ^^"^^y* 325. order to perform his duty in paying debts, etc., and it is clear that an executor would be very much hampered in the bene- ficial administration of the estate if he were unable to dispose of the testator's property which is in his hands available for the payment of debts and other purposes, without the purchaser or mortgagee being bound to enquire whether the sale or mortgage was necessary for the purposes of the admin- Pennington istration, as this would involve in each case the taking of the ^- ^^y^^* J3 ^ vi_i.v g^ W.R. 512 whole accounts of the trust before a transaction could be Mil w\ i .1(1 66 EXECUTORSHIP ACCOUNTS. Pli' carried out, or as Lord Hatherly says in the case of Earl Vane Earl Vane v, y^ Byden (5 Ch. Ap. 668), *' an executor is at liberty either to 5 Ch.Ap., 668. " sell or to pledge the assets of the testator ; in fact, he has ** complete and absolute control over the property, and it is for " the safety of mankind that it should be so, and nothing ** which he does can be disputed except on the ground of " fraud and collusion between him and the creditor. And it is *' equally clear that an executor may do all things necessary " for the purpose of making as perfect as possible any assign- '* ment made by him." Accordingly, in that case, it was held that an executor transferring debts could give a power to enable the mortgagee to get in those debts in her name, the executor for this purpose standing in the position of an absolute owner, and not of a mere trustee unable to delegate, although this is otherwise if a mere power of sale be conferred upon him with a discretion as to the time and mode of exer- cising it; Sugden Powers, 6th Ed. 772. Upon the same principle it has often been held that, in mortgaging any part of the testator's estate, an executor can confer a power of sale upon the mortgagee, although these decisions have now become of no great moment except as laying down principles, inasmuch as under the Conveyancing Act a power of sale is now implied in all mortgages created by deed. This power of dealing with the assets of the testator applies not only to the personal estate which devolves upon the executor by virtue of his office, but also, under the powers conferred upon him by statute, extends to the real estate so far as it is necessary for payment of debts. It has, however, been decided upon the principles above enunciated that, even in the case of real estate where the executor has a mere power, a purchaser or mortgagee is not bound to enquire whether there are any debts outstanding, and whether, therefore, the executor's power is exerciseable, unless there be circumstances sufficient to fix him with notice of the fact that there are no debts out- Re Jones, 84 R.J. 11, 38 W.R. 90. EXECUTOESHIP ACCOUNTS. 67 standing. In the case of Tanqueray-Willaume and Landau ^^ (20 CD. 473), it was held that no lapse of time short of 20 Willaume years, which forms an absolute bar to all debts, was sufficient 20 c.D., 473.' to put the purchaser upon enquiry whether any debts were outstanding ; and in the case of re Whistler and Richardson, ^J^^^^^^^^ that even a lapse of time as great as this could not put a pur- 35 C.D. 560. chaser upon enquiry in the case of assets which an executor was able to sell by virtue of his office under his common law powers, viz., in the case of leaseholds unless there were other circumstances affecting the purchaser with notice that the executor was dealing with them improperly and for his own purposes and not for the purposes of the estate. The above- mentioned case of Earl Vane v. Byden also laid down Earl Vane v. clearly the principle that, so long as there is horid fides, an ^J^^ ^^^^ executor is entitled to prefer any one creditor of the same degree to another in the order of payment, and for this purpose may either assign to him by way of satisfaction or as security any part of the testator's assets, or may consent to a judgment being entered against him, upon which execution can at once issue. And it was also held in the case of Berry J^'fy ^'• Gibbons, V. Gibbons (8 Ch. App. 747), that the mere pendency of an 8 Ch.Ap., 747. administration action does not take away from an executor this power of preferring one creditor above another until a receiver is appointed or an injunction granted to prevent the executor from further dealing with the assets. And the late Master of the Eolls, in the case of European Assurance Society European V. Badcliffe (7 C.D. 733), suggested that the proper course in society v. every case, on the commencement of an administration action J^?;^^^^^' " ^ ^ 7 CD. /33. where an estate is likely to prove insufficient, was to apply for a receiver to prevent any further preferences being made. This suggestion has, however, since been discountenanced by the Court of Appeal, on the ground that a receiver ought not to be appointed as a matter of course as against executors, except in cases where it could be shown that the executor was '' f 1 -i^. ' 'I; 1 ■ 68 EXECUTORSHIP ACCOUNTS. Limit to Executor's Powers. Farhall v. Farhall, 7 Ch.Ap., 123. Carrying on business, Owen V. Delamere, 15 Eq., 139. guilty of a breach of duty involving loss or damage to the assets, and in a recent case before Mr. Justice Chitty it was held that the fact that an executor was giving preferences to creditors in the case of an insolvent estate was not sufficient ground to justify the appointment of a receiver as against him. An executor's powers are, however, limited to the doing of such acts as are expressly or impliedly necessary for the purpose of enabling hirn to fulfil the duty of realising and getting in to the best advantage, and distributing the estate of the deceased ; accordingly, although he has the fullest power of realising and pledging specific assets, which, after all, is only one mode of realising them, and also in some cases of pledging the realty, he cannot make any person a direct creditor of the estate of the deceased so as to enable him to prove his debt against it. On this principle, whatever debts are contracted in the course of the administration, whether for goods supplied, moneys advanced, or even for funeral or administration expenses, are, in strictness, only debts of the executor, and can only be recovered by a personal judgment against him, although, to the extent to which the executor is himself entitled to be indemnified out of the deceased's estate, a court of equity will allow any such creditor to stand in the shoes of the executor against the estate. This principle is well exemplified in the case of an executor being authorised to continue the business of the deceased. As was said by Bacon, V.C, in Owen v. Delamere, 15 Eq. 139, " If an " executor is authorised to carry on the business of a *• testator, and carries it on, he is liable for every shilling on " every contract he enters into, and, besides that, if he " becomes a bankrupt, the persons who have trusted have a " right to say that that portion of the trust estate which was " committed to him for the purpose of carrying on the " business shall not be the subject of general administration. "f-" 111 EXECUTORSHIP ACCOUNTS. 69 (( (< <( It i( It ** It is not the general estate of the testator, as in ex parte '* Bichardson, that is liable to this equity, but only so much " as he has authorised to be employed in the business. There " can be no proof whatever on the part of the testator's estate " against the bankrupt estate, unless the executor has gone beyond the limits of his trust, in which case the amount of excess may be proved for in the Bankruptcy as a debt due to the estate of the testator. These principles are clearly and distinctly laid down in ex parte Garland, 10 V. 110, are confirmed in ex parte Bichardson Bitch, 202, and adopted in Cutbush V. Cutbush, 1 B. 184." Accordingly, in that case it was held by Bacon, V.C, that a creditor of the business where the executor was not insolvent, and stated that he was and always had been, ready and able and willing to pay the debt, could not have a judgment for administration of the testator's estate even limited to the amount of the assets employed in the business. This case also indicates another well defined principle, viz., that in carrying on the testator's business where he is authorised so to do, an executor may not employ any assets of the testator beyond those expressly authorised, or, in fact, employed in the business at the time of the death, and commits a breach of trust by employing any more in the business. The limits of the rights of creditors in this direction are also very well shown by the case of Shearman V. Bobinson, 15 CD. 548, where it was laid down that, where a trader has by his will directed his executor or trustee to carry on his trade, and to employ a specific portion of the trust estate for the purpose, the rule is that, though the executor or trustee is personally liable for the debts incurred by him in carrying on the trade pursuant to the will, he has the right to resort for his indemnity to the specific assets so directed to be employed, but no further, and, consequently, that the creditors of the trade are entitled to stand in the place of the executor or trustee, and to claim the benefit of Ex parte Garland, 10 v., 110. Ex parte Richardson Buck, 202. Cutbush V. Cutbush, 1 B., 184. Shearman v. Robinson, 15 CD. 548. !^ HI ; r ifi u I ♦ I. . ; ■ f i;:t I ■ ^»k||J! ^ i ■ I Pillgrem v, Pillgrem, 18 CD., 93. tinl! •■!i 70 EXECUTORSHIP ACCOUNTS. that right so as to obtain payment of their debts, but that the rule does not apply where the executor or trustee is in default to the specific trust estate devoted to the trade. In such a case the defaulting executor or trustee not being himself entitled to an indemnity except upon terms of making good his default, the creditors are in no better position, and, are, therie- fore, not entitled to have their debts paid out of the specific assets unless the default is made good. In the same way it was held in a case of Pillgrem v. Pillgrem, 18 CD. 93, that if an executor carries on the estator's business in his own name, in pursuance of such direction using the testator's assets, they can only be resorted to by the pure trade creditors on the principle above laid down, and through the medium of a court of equity, and that the assets cannot be taken directly in execution by a creditor of the executor's, and even if the debt be contracted in connection with the business, still if it be not a pure trade debt he cannot obtain relief against the assets on the above mentioned principle, but can only claim personally against the executor. In this case, Fry, J., dealing with the question of dispositions by way of mortgage of assets by executors, said, ** There are three possible cases. *' (1) Anexecutormay as executor borrow money ostensibly for ** executorship purposes, on the security of the testator's ** assets. This is a valid transaction. (2) A man known to " be an executor borrows on the security of the assets '* admittedly for his own private purposes. This is invalid. ** (3) An executor, not known to be such, borrows money for " his own private purposes on the security of that which ** appears to be his own private property, but is really " the testator's property. Will that be supported? There ** seems to be no authority on the point." And from the actual decision of the case it would seem that he came to the conclusion that it could not be supported. Where there are no specific assets of the testator appro- ■ « Hi l l" mmmmim EXECUTORSHIP ACCOUNTS. 71 priated, either expressly or impliedly, for carrying on the business, the creditors of the business from and after the death, have only personal claims against the execator without any right of indemnity, Strickland v. Symons, 26 Strickland v. CD., 245, but query as regards assets brought into existence 26 CD., 245. by the carrying on of the business, Douse v. Gorton^ 37 ^Iq^^^^^j W.R. 341. Be Johnson, The Courts regard each executor as possessing a separate, co-equal and independent power and authority enabling him to deal on his own responsibility with any of the testator's assets in a due course of administration. For this reason it is held that one executor alone can give a valid receipt for any money, securities, or property, belonging to the testator's estate ; whilst on the other hand, trustees, however many their number, are regarded as forming one entire body, and the receipt of all the trustees must be obtained to be a valid discharge. It has, therefore, been held that an executor who joins with another executor in giving a receipt for assets, as he does so voluntarily and not of necessity, becomes chargeable with them, whether he in fact receives them or not, but that trustees who join in receipts of necessity and for conformity's sake, as it is said, may discharge themselves by showing that they did not in fact receive the property. A debtor to the estate of the deceased may, however, at any time, however great the lapse of time since the death, obtain a valid receipt and discharge from one executor alone for the payment made by him to the estate and is not by the lapse of time put upon enquiry whether the executors have not in fact completed their administration of the estate, and begun to hold the surplus upon the trusts of the will as trustees, according to the principles of Philivpo v. Murray s (2 My. & Charlton v. K.), nor is he bound to obtain joint receipts by reason that he Durham, has given a security in renewal of his debt to the executors ^ ' ^'^' ' jointly but still in their capacity of executors. r. ^li ill ill 72 EXECUTORSHIP ACCOUNTS. EXECUTORSHIP ACCOUNTS. 73 II Executor de son tort. It follows from the same principle that, as the responsi- bility of each executor is co-equal and independent, one executor cannot by handing over assets to the other executor or by accounting to him, discharge himself of those assets, as ?E ^'qq^^*^^' against the estate of the testator, nor is this principle in con- flict with the rule which enables one executor who lives, say, in the country, to remit assets which he has collected to his co-executor, say, in London, where it is reasonable or neces- sary in the course of the administration, and to free himself from further responsibility in respect of them, for this is only part of the general doctrine that, where necessity or the usual course of prudent men requires it, an executor may employ agents, his co-executor being for this purpose regarded as his agent. A person who not being an executor has made him- self responsible as an executor de son tort by intermeddling with the estate can, however, effectually discharge himself by handing over the property and accounting to the legal per- sonal representative of the testator before action brought, and Hill V. Curtis, he is thenceforward free from liabihty, whether the legal 1 q., 90. personal representative duly administers the assets or not. A person becomes liable as executor de son tort if he, not being named an executor of the will, intermeddles with the property, and he is then responsible for any loss sustained, however bond fide he may have acted, unless, probably, his acts were reasonably necessary for the protection and preservation of the estate. There are, however, many minor acts which a stranger may perform without incurring the hazard of being involved in an executorship de son tort, such as the locking up of the goods for preservation, directing the funeral in a manner suitable to the estate which is left, and defraying the expenses of such funeral himself or out of the deceased's eflects, making an inventory of the property, feeding his cattle, effecting necessary repairs to his houses, or providing necessaries for his children {Williams on Executors, cited with approval in Kirh V. Gregory). Kirk V. Gregory. If, however, he be named executor in the will, then by doing the smallest act evidencing ownership he becomes an executor by estoppel, and thenceforward is as much liable as an executor as if he had proved the will. A person, however, who deals with goods of the deceased purporting to act as an agent of the executors, whether they have proved or not, cannot be charged as an executor de son tort. An executor is, however, entitled to the assets, and must hold them when collected subject to the trust of administering them in a due course of administration, for although he is not possessed of them upon a clear trust for specific individuals, so as to make him a trustee of the assets, he is, nevertheless, bound by his office to administer them in a certain way, which will be enforced by a court of equity in the ordinary way in which it enforces the performance of all trusts. Possibly, therefore, the most convenient way to treat the subject is to assume that the Chancery Division has taken upon itself to enforce and carry out the administration of the estate, and to ascertain what are the principles upon which it requires the estate to be carried out, for these are the ultimate tests by which all questions arising in the administration of an estate outside the Court must be determined. The ordinary form of judgment in such an action brought by beneficiaries to have accounts taken, both of the real and personal estate, runs as follows : — Declare that the trusts of the will ought to be performed and carried into execution, and order and decree the same accordingly. Let the following accounts and inquiries be taken and made, that is to say, (1) An account of the personal estate of the testator, not specifically bequeathed, come to the hands of the executors, or of any or either of them, or to the hands of any other persons by the order or for the use of the executors, or any or either of them. (2) An account of the Sykes v, Sykes, 5 C.P., 113. Sykes v. Sykes, ubi sup. Re Marsden, 26 CD. 783. Judgment for Administra- tion. ^ II 74 EXECUTORSHIP ACCOUNTS. testator's debts. (3) An account of the testator's funeral expenses. (4) An account of the legacies and annuities given by the testator's will. (5) An inquiry what parts of any of the testator's personal estate are outstanding or undisposed of. And let the testator's personal estate (not specifically bequeathed) be applied in payment of his debts and funeral expenses in a due course of administration, and then in payment of the legacies and annuities, if any, given by his will. And let the following further inquiries and accounts be made and taken, that is to say, (6) an inquiry what real estate the testator was seized of, or entitled to, at the time of his death ; (7) an account of the rents and profits of the testator's real estate, received by the trustees of the testator's will, or any or either of them, or by any other person or persons, by the order, or for the use of the said trustees, or any or either of them. Then follow further inquiries as to the amounts due on any incumbrances affecting the real estate, and as to their priorities, and direction as to the sale of the real estate and bringing the proceeds into court, and their consequential application. It will be seen from this that the judgment consists of two principal parts : (1) A number of inquiries which are framed in such manner as to put the Court in possession of all the facts connected with the estate, which it ought to know in order to enable it to administer the estate ; and (2) an order that the estate be administered in a due course of administra- tion. Of course different forms of judgment are adopted according to the particular circumstances of the case, accord- ing as to whether it is an intestate or testate estate, solvent or insolvent, and whether the action is brought by creditors, executors, or beneficiaries, but every such order consists of the two distinct parts above mentioned. Under the old practice, before the rules of the Supreme Court of 1883, such a judgment as above indicated could be Hli EXECUTORSHIP ACCOUNTS. 75 obtained as a matter of course and of right in respect of the estate of any deceased person by any unsatisfied creditor, or any beneficiary, executor or administrator of such estate. It was not necessary to prove that the administration was being carried out in any way improperly, unskilfully, or negligently, or, except in the case of a creditor or pecuniary legatee, that satisfaction had not been obtained of the particular claim, it being, in fact, only necessary to show that there was an estate of a deceased person in order to obtain a judgment for full and complete administration, and as was laid down in the case of Ewing v. Orr Eiving, 9 Ap.Ca. 34, no Ewing v. Orr less order than a full administration decree could be made, 9 Ap. Ca., 34. even if only some isolated point of construction or single difficulty had to be disposed of, although the late Master of the Bolls had attempted to introduce a practice by which, after making such a decree, the further prosecution of the decree was limited to such step as the Court should from time to time direct. An administration judgment could formerly, and can now be obtained, either in an ordinary form of action commenced by writ of summons asking for administration, or, in a more summary way, by taking out an originating summons for the purpose in Chambers, but all such proceedings must be taken in the Chancery Division, as the administration of deceased persons* estates is one of the matters specially assigned to that division by sec. 34 of the Judicature Act, 1873. Even if the proceedings take the shape of an action com- menced by summons, as the indorsement of the claim for administration involves the taking of accounts, an immediate order for administration in the ordinary form without formal trial can be obtained under Order XV. r. 1, unless the defendant satisfies the Court that there is a preliminary question to be tried. Many grave objections, of course, could be, and were raised ;P 4 Croggan v. Allen, 22 CD. 101. ,: . *. 76 EXECUTORSHIP ACCOUNTS. Jones V. Blake, 29 CD., 913. 4 to the old practice, which were of most weight in those cases where a full administration was rendered necessary by reason that some small point had to be decided or dealt with, and, although the Courts had intimated very plainly in the case of Croggan v. Allen, 22 CD., and other cases, that costs would only be given out of the estate in cases where there had been reasonable ground for believing that the proceedings would produce some real benefit to the estate, or had in fact in the result produced such benefit, it was felt that the power of obtaining unlimited administration at the expense of the estate afforded very grave opportunities for abuse. Accord- ingly, under the new rules of 1883, a twofold change had been made', as it is now possible, under Order L.V. r. 3, to obtain the decision of the Court upon any one or more questions arising in the course of administration without the necessity of administering the estate in Court, and under Order L.V. rs. 10 & 15, no order for administration is to be made except by the Judge in person, and it is not to be obligatory to make an order for complete administration if the questions between the parties can properly be determined without. The effect of this rule on the rights of litigants has been considered in several cases, but the real principle which ought to govern the Judges in the application of the rule is, perhaps, bes°t summed up by Fry, L.J., in Jones v. Blake, 29 CD. 913, 33 W.E. 886, where he says :— " In my view the rules do not " entitle the Court to refuse to determine questions which are " really raised between persons interested in the estates of " deceased persons. The object of the rules is to prevent a " general administration when the questions in controversy - can be otherwise properly determined, whether by an action - brought against a third person, or by an administration *• Hmited to certain inquiries or accounts." On this principle it was decided in the above-named case that residuary legatees are entitled in any event to such EXECUTORSHIP ACCOUNTS. 77 1 accounts and inquiries as are necessary for ascertaining the amount of the trust estate, and how it has been dealt with and disposed of, together with such other accounts and inquiries as are necessary for enabling their claims to be ascer- tained and satisfied, but it was laid down that the costs of all such proceedings, except the costs of executors and trustees who act properly, are in the absolute discretion of the Court, and that the costs of any accounts and inquiries which prove not to be beneficial to the estate may have to be borne by the party who obtained the order for them. In the same case it was also laid down that the fact of the plaintiffs being infants does not entitle them as of right to have a general administration order made, it being always possible for the Court in the first instance to direct an inquiry whether it is beneficial for the infants that the proceedings should be continued, and to this extent the decision of Pearson, J., in Be Wilson, Alexander r. Caldcr, must be taken ^ones^-^^ to be overruled. 38 CD., 319. The fact that a testator has by his will directed his estate to be wound up by the Court is not sufficient to take away from the Court its discretion as to whether any such order is proper, although the Court will give weight to the testator's direction in considering whether any such order should be made. n . It is now the practice of the Court under this order to refuse an administration order in the High Court where the estate is of small value, leaving the parties to the County Court, and in one case Pearson, J., said the judges had i^e Petty, determined to refuse such an order where the estate is under £500. This limit can, however, only apply to cases where the gross value of the estate, before the deduction of debts, is under £500, as the County Court jurisdiction is determined by the gross and not the net value. I i t Lewis V. Pritchard, 67 L.J., 858. k 78 EXECUTOESHIP ACCOUNTS. It is also now somewhat common practice when the admin- istration summons comes on for hearing, if the trustees have not already absolutely refused to account, to adjourn the hearing for a time to enable them to render accounts out of court, leaving the subsequent proceedings to be determined by the result of such accounts. The utility of such a course is obvious, but it may sometimes operate hardly against stupid or ignorant trustees in giving the Court a handle for depriving them of costs, although it has been held that an appeal will lie against an order on an executor to pay the costs of an administration action merely for a refusal to render accounts. In the case where an order for the general administration of the estate has been made, it then becomes necessary to answer the accounts and inquiries directed by the judgment ; and, according to the practice of the Court, these answers have to be brought in in a certain specified form. The specific inquiries as to legacies, debts, funeral expenses, etc., have to be answered categorically by aflBdavit, and the general accounts of the dealings with the estates by the executors have to be brought in in the following form, viz. : A.— A schedule of all the personal estate left by the deceased. B. — An account of receipts and disbursements in reference thereto. C. — A schedule of the personal estate left outstanding at the date of the accounts. D. — A schedule of the real estate left by the testator, giving short particulars thereof. E.— A schedule of the incumbrances (if any) on the real estate. F. — An account of receipts and disbursements in reference to such real estate. All which schedules and accounts must be verified by affidavit. li EXECUTORSHIP ACCOUNTS. 79 i \ These accounts will, if a distinction is made in them, provided the judgment so orders between amounts received on account of capital and on account of income respectively, give all the information necessary for the purpose of winding up the estate. For instance, supposing a testator to leave a sum of bank stock which the executor afterwards sells, and the proceeds of which he invests in purchasing a sum of three per cent. Consols, the bank stock will appear in schedule A, the proceeds of the sale on the debit side of the cash account B, the cost of the Consols on the credit side, and the amount of the Consols will form an item in the schedule C of assets out- standing. The attention of an accountant must, of course, be principally directed to the accounts containing the receipts and disbursements, but he will find it necessary to refer to the schedules A and C for the purpose of checking such accounts in reference to the personal estate, and to the schedules D and E in reference to real estate. The form of cash account B is prescribed by the new rules of Court, and will be found to be form 12 of appendix L to such rules, and at p. 510 of Daniel's Chancery Forms, by Burney, a very full form of affidavit with the accompanying accounts will be found. The items on each side of the account are to be chronologically arranged and numbered, the items of debit to form a distinct series to the items of credit. When the account has been brought in, any party who is dissatisfied with it may enter into evidence, to show that the accounting party has received more than he has admitted by his account, and in the same way the items of disbursement have to be proved by the accounting party, those over forty shillings by the production of the vouchers, and those under that amount by the oath of the accounting party, giving full particulars. No item for general expenses will, in any event, be allowed. The vouching of such items is, however, only » . i j 4 i I I . 80 EXECUTORSHIP ACCOUNTS. Daniels, Ch. Pr., 6th Ed. p. 1048. Jones V. Morrall, 2 So. N.S. 241. Interest on amounts due. Gordon v. Traill, 8. Price, 416. evidence that those amounts have been actually paid, and any party may apply for the disallowance of any of such items upon the ground that they were not proper disbursements. In taking an account, no balance is in general struck until all the receipts and payments have been gone through, and no rest can be made unless directed by the decree, although simple interest may be charged in a proper case without any such directions in the decree. Where an account is directed to be taken, and with rests, as against an accounting party, a balance must be struck at each rest which the decree requires to be made, by deducting the amount of the payments from the amount of receipts up to that time. Interest at the rate ordered is then calculated on the balances and carried into the next account, so as to charge the accounting party with compound interest. As far as I can gather from a consideration of the cases, interest would not ordinarily be allowed at any rest upon a balance in favour of the accounting party, for, except by the direct terms of the decree, the ordinary form of which only directs the account to be taken as against the accounting party with rests, interest can only be allowed upon the final balance ascertained in taking the whole account, because it is only then that it appears that the executors have not a balance in their hands. Although in the case of Finch v. Prescottf 17 Eq., where an executor had been directed to carry on the testator's business, and had continually been under advances to the estate, for that purpose he was allowed simple interest on the balances appearing to be due to him at the end of each year. It will be seen, therefore, from this short consideration of the mode of taking accounts, that it is of the utmost importance to know upon what principle an executor will be charged with, or allowed, any particular items in taking the accounts, and EXECUTORSHIP ACCOUNTS. 81 whether in any case he will be charged or allowed interest, and, if so, at what rate and upon what terms, and whilst in ordinary cases it will of course be easy to distinguish between receipts in respect of capital and of income, it may become necessary sometimes to make distinctions between capital and income in respect of amounts which do not obviously belong to either, and therefore it is most important Per to know what principles to follow in so doing, and also what l^ c. Styles'^. payments to tenants for life an executor will be allowed as ^^J^J- ^A^i'- and G. 432. being properly made in respect of income. In the succeeding remarks it must be borne in mind that although executors and trustees are spoken of as if they were interchangeable terms, that is not really so ; executors have well-defined duties to perform in the administration of an estate, and are liable for the performance of those duties, but, so far as they hold funds on behalf of other persons, they are trustees, and liable to the ordinary rules governing trustees in such cases. Part V. Getting in and realising the Estate. Investing and holding same. Principles on which an Executor is made liable for breaches. Let us, therefore, consider in ths first place, what are the executor's duties in regard to collecting and getting in the assets of the testator, and with what amounts he will be charged in respect thereof. The general rule is that an executor will, firstly, be charged with all assets that belonged to the testator at the time of his death, and that have come to his — the executor's — hands, or as it is otherwise put " all those goods and chattels, actions, Touchstone, and commodities which were of the deceased in right of action ^^^• and possession as his own, and so continued to the time of his I n \k ■: 82 EXECUTORSHIP ACCOUNTS. death, and which, after his death, the executor or administrator doth get into his hands as duly belonging to him in the right of his executorship or administratorship, shall be said to be assets in the hands of the executor or administrator, to make him chargeable to a creditor or legatee." This, however, though it was formerly the strict rule of law,does not express quite accurately an executor's liability in an administration action, for he will not be charged with the assets themselves existing Buxton V. at the death of the testator, but only with the amount which & Cr. 80. they ought to have produced for the estate, at the date at Marsden V. ^^ich it is his duty to account for them, viz., generally at the Kent, 5 CD., •' . 698. lapse of a year from the death of the testator, and since the Judicature Acts this is the rule prevailing in the High Court of Justice. All the assets themselves must, of course, find a place in the Schedule A., in order that the Court may be able to ascertain with what amounts he ought to be charged according to the above principle, and the Cash Account B, and the Schedule C, ought, between them, to account for the proceeds of all the assets in Schedule A, either as having been properly paid away by the executor in the course of administration, or as existing for the benefit of the estate in a proper and authorised permanent state of investment. Besides the assets, however, which belonged to the testator at the time of his death, the executor will also be charged in his accounts with all property which comes to Williams on his hands by virtue of his executorship, even although it never Ed. 1663-6 ^^ ^^ct belonged to the testator, such, for instance, as moneys which became due to the testator or his executors after the date of his death, either upon a contract or by way of damages ; chattels accruing to the executor by way of remainder after the life interest of the testator, or of any other person who dies after him ; and all natural increase or profits accruing on the property, or made by the executor by the use of such property, either in carrying on the testator's EXECUTORSHIP ACCOUNTS. 83 trade or otherwise, even although carried on in pursuance of Giblett v. a provision in the will or in the testator's articles of partner- Mod. 459. ship, and even although none of the testator's assets be employed in such trade ; or out of his office ; or through any consideration or influence derived from it, as, e.g., the renewal of a lease of the testator ; for the executor will not be allowed ^^°^ ^- ^*^^* 154 Ex p. to make any profit for himself, but must account for it all, for James, 8 Ves. the benefit of the estate ; therefore, if he compounds debts or mortgages, or buys them for less than the nominal amount, it is for the general benefit of the estate ; or if he purchase either directly or indirectly any part of the estate, it cannot Cook v. be allowed, and he must account for every advantage of any j^J 607 sort or kind that accrued to him out of it. The strictness of the Courts in this respect is well shown by the decision of the House of Lords in Vyse v. Foster (L.R. 7, H.L. 318), where it was laid down that, if an executor trade with the trust estate, he must account for a due share of the profits, and therefore if a mere option is given to the deceased's co-partners, one or more of whom are executors, to take to the deceased's share and they do not exercise it strictly, then it is an unliquidated partnership, and they must account for a due share of the profits ; but in cases where there is not a mere option given, but an actual contract for sale is contained in the partnership articles, then, even though also executors, the surviving partners cannot be made liable to account for a share of profits either on the ground of delay or on the ground of the provisions not having been strictly followed ; and it was further laid down that, if one executor without justification, and with the knowledge of his co-partners, uses the assets in the trade, all are liable to account for the profits, but if the other partners have no knowledge, then the executor alone is liable to account for the profits, and semble he can only be made to account for his share of them, and not for what his partners have received. , ( Ik : ll 84 EXECUTORSHIP ACCOUNTS. lit II Williams, p. 1670. An executor will be charged with all such assets, no matter in what part of the world they may be, if only they have come to his hands. It is important to remember that the phrase "come to his hands" has a technical meaning, and does not only include those of which he in fact possesses himself, but that assets will be deemed to have come to the hands of the executor, and therefore be charged against him, so far as they are actually received by him, or by anyone on his behalf, or might, but for the neglect or default of himself or his agent, have been received, for all the assets in England vest in him upon probate by virtue of his office, i.e., he thereby becomes in the eye of the law the absolute owner of them as much as the testator himself, and therefore entitled to recover them by all lawful means, subject to this difference that, as he becomes the owner subject to the rights of others for whom he is trustee, he is not at liberty to waive his rights to them as the testator might have done ; but Courts of Equity having taken a lenient view of his duties have held that, for the purposes of his accountability towards the various persons interested, he stands only in the condition of a gratuitous bailee, and is, therefore, not to be charged without some personal default, but this doctrine only applies to those assets which are in fact in his hands or in those of his agents, and, as will be after- wards seen, does not apply so as to excuse negligence in taking steps for the preservation and collection of assets actually outstanding. The assets in all other parts of the world will also vest in him or his representative, upon complying with the necessary formalities to constitute himself the legal personal representa- tive of the testator in the countries in which they are situated, and as by the comity of nations an executor properly consti- tuted at the domicile of the testator is allowed to quahfy him- self— as, of course, in every other country — he will be held EXECUTOKSHIP ACCOUNTS. 85 liable for the whole of such assets, or, at any rate, for such Cook u. part of them as by the law of that country he will be enabled d!^r ^286. to get by virtue of his office and to brincj away with him. Story Conflict / o J of Laws, § The importance of this latter qualification is very clearly 513-8. shown by a late case of re Kloebe (28 CD., 175), where Mr. ^^ Kloebe, 28 C D 175 Justice Pearson said : " Every administrator, principal, or " auxiliary, must apply the assets reduced into possession " under his grant in paying all the debts of the deceased " whether contracted in the jurisdiction from which the grant •* issued or out of it, and whether owing to creditors domiciled " or resident in that jurisdiction or out of it, in that order of *' priority which, according to the nature of the debts or of " the assets is prescribed by the laws of the jurisdiction from " which the grant issued, i.e., in collecting assets and in their " administration the lex fori, that is, the law of the tribunal of " the country out of which the grant issued, must be observed, " so that if a man dies domiciled in England possessing assets " in France, the French assets must be collected in France, " and distributed according to the laws of France." If the French creditors are entitled according to that law to be paid in priority, that rule must be observed, because it is the lex fori, and for no other reason. On the other hand, English assets must be distributed according to English law, which gives no priority to Enghsh creditors over foreigners. But if the foreign creditors have had more than their share out of assets collected abroad, the English Courts would take steps to equalise matters before allowing them to participate further. The special administrator appointed by the Courts of a particular country being the only person recognised in that country . as the representative of the deceased's estate, questions sometimes arise as to whether, and to what extent, the acts of such administrator bind the general estate of the deceased. There appear to be no English authorities upon this subject, but there are some American authorities referred ! * 1 t i ) 86 EXECUTORSHIP ACCOUNTS. \ Hill V. Tucker, to ia Story's Conflict of Laius, § 522, which would probably be accepted here, from which the following principles may be deduced : — The acts of an executor as the person appointed by the deceased himself bind the estate of the deceased, at any rate to the extent to which the executor could have recovered it by virtue of his office, so that, e.g., debts established against or admitted by the executor would be held to be good debts against the estate in all parts of the world, subject only to such rights of local creditors as may be given by the law of the particular country where the debts were contracted. It is also probable that, where a testator has appointed 13'h.''('u.S.) ' I- i |i 1^: II : Philips V. Homfray, 24 CD. 439. i' It Halehard v. Mige, 18 Q.B.D. 771. Oakey t\ Dal ton, 35 CD. 700. Philips V. Homfray. Agents. he is enabled to do so by the statute of William IV. Both at common law and under that statute, as regards actiocs for wrongs, the rights and liabilities of administrators are the same as those of executors. It is not, however, every wrongful act by which a wrong- doer can indirectly benefit that will support an action against his executor, if the benefit does not consist in the acquisition of property or its proceeds or value. Where there is nothing among the assets of the deceased that in law or equity belongs to the plaintiff, and the damages which have been done to him are unliquidated and uncertain, the executors of a wrong-doer cannot be sued merely because it was worth the wrong-doer's while to commit the act complained of, and an indirect benefit may have been reaped thereby to himself, ^;cr Bowen, L.J. Accordingly in this latter case damages for the concealed use of a way leave by the defendant, and for injury caused to the property of the plaintiff by the manner of the defendant's working, were held to be personal and to die with him. Wrongs, however, which are in the nature of mere personal wrongs do not come within this class if they really result in injury to property, and thus action for slandering the title of the plaintiff's trade mark or other property, and actions for infringement of trade mark and imitations do not lapse if they have been commenced in the lifetime of the deceased. If, however, the plaintiff have once obtained final judgment in the action in the lifetime, he can enforce it afterwards, but a mere interlocutory decree ordering an inquiry as to the damage committed is not sufficient. An executor will be charged with all loss to the estate through the dealings of any agent employed by him, where such agent was not proper to be employed, or had been em- ployed in an improper way, or had been entrusted with the assets for an unreasonable time, as to all which cases, as I have before said, the Courts are guided by the reasonable EXECUTORSHIP ACCOUNTS. 107 usages of mankind in matters of business, with the exception that they will not allow the executor, however usual it may be, to deposit the trust funds at interest with an agent other than a banker instructed to seek for a permanent investment of them. A. compromised debts due from the estate, the solicitor being then in good repute, and acting on his representations that a compromise had been effected for £310, which was not the fact, sent him a cheque for the amount, which the solicitor misappropriated. It was held that, although the executors, sohcitors, and the creditors all lived iu London, he had acted as a prudent man of business in remitting the money to the solicitor who had the conduct of the negotiations, and was held not liable for the loss. Be Bird, 16 Eq., 203. Executors must, however, exercise the reasonable care of a prudent man in selecting such agents, and must employ them only within the scope of their business. It is not within the scope of the business of a solicitor to receive money for his cHents, and executors will not, therefore, in general be safe in employing them to do so, unless it be in the course of legal proceedings, e.g., where an executor employed the soHcitor who drew the will, and who has been frequently employed by the testatrix in her lifetime to negotiate. When there are several executors, one executor is, as a general rule, only liable for the assets he himself receives, which principle is expressed as a legal maxim by saying that " receipt of one executor is not the receipt of all," and he is therefore not responsible for the neglect or default of any of his co-executors in dealing with any assets that have not actually come into his own hands, unless he has been a party to such neglect or default, either by putting his co-executor in a position to commit it, or by standing by himself and know- ingly allowing it to be committed when he might have prevented Per Ld. Blackburn, Speight V. Gaunt, 9 Ap. Ca. 19. Re Bellamy. Re Flowers. Terrell v. Mathew, 1 Mac. and G., 433. t I; I M 108 EXECUTOKSHIP ACCOUNTS. Interest on default. ill I PrTgTers CI. ^^' ^^^ ^^^^^^'® ^y ^^^y ^^* ^°^^ ^y ^°® executor, any part of the & F. 288. estate comes to the hands of his co-executor, the former will be answerable for the latter in the same manner and in the same cases as he would have been for a stranger whom he had entrusted to receive it. Where an executor is made liable for any loss he will in general be charged with interest from the date of the breach Fry v.Tapson of trust or other improper dealing or neglect through which 28 CD. 268. the loss eventually occurred, and through which he became chargeable with it, subject of course to his discharging himself by showing that he has paid interest at the rate charged him at the least to the tenant for life during such period. He will also be charged with interest where, apart from cases of non-investment of trust funds permanently, he has neglected to lay out monies which he was bound to do for the benefit of the estate, as, e.g., by keeping balances in his own hands during the course of administration. There must, however, be a clear case of improper retention of Jones v.Mor- balances to a considerable or substantial amount, and it must N.S. 241,252. ^^ clear that they are not with reasonable probability required for the purposes of the estate. Within a year after the death the presumption is in favour of the executor who retains large balances, but such pre- sumption may be rebutted, and the existence of outstanding accounts will not afford sufficient justification for retaining large balances unless there is a reasonable probability that the money will be required immediately. If the executor honestly believes in his own title to the balances he will not be charged with interest even although he turned it to his own use, if the will, reasonably construed, justified him in such a belief. In case of mere neglect in the absence of special reasons an executor will only be charged with 4 per cent., except in the case of delay in accounting for income, when in the absence 1 EXECUTORSHIP ACCOUNTS. 109 of special circumstances he will not be charged interest, but it is the settled rule of the Court that if a trustee having trust money in his hands knowingly apply it to his own use he shall be charged with 5 per cent, interest. If he employs the trust fund in trade the cest. qu. tr. have their option of charging him with 5 per cent, interest with annual rests, or with the actual profits made, but they must make their election for the whole period to take interest or profits. Cest. qti. tr. have the same right of election as to a propor- tionate share of the profits if the executor has mixed the trust funds with his own and employed the whole in trade, and even if he does not use the funds in trade, still, if being a trader, he puts it to his own account at the bankers, increas- ing his balance and obtaining greater credit, he will be charged with 5 per cent, simple interest, the reason being in all the above cases that the funds have been liable to an extra risk of loss by being employed in trade, the cest. qu. tr. ought to be remunerated with a proportionately large amount of yearly income. Again, if an executor has, in fact, made 5 per cent, interest or more with the trust funds he will be made to account for the whole as he may make no advantage out of his trust, or if but for his negligence or misconduct he might have made more than 4 per cent., as e.g., if he have improperly converted securities authorised by the trust and producing more interest, he will be charged either with interest at 5 per cent., or with the interest which, but for his negligence or misconduct, he would have made. The rules as to charging an executor with interest are very well summarised in a case oi A. G. V. Alford by Lord Cran worth, where he said that he did not approve of the rule that for mere misconduct an executor should be charged with 5 per cent, interest, but that the Court must charge him only with the interest he has Burden v. B., cited 1 Jac. & W. 134. Jones V. Foxall, 15 B. 388. Heath cote v. Holme, 1 Jac. & W. 122. Vyse V. Foster, 7 H.L. 318. Re Emmet, 1 CD. 142. ! 4 D.M. & G. 843. 110 EXECUTORSHIP ACCOUNTS. Mayor of Berwick v. Murray, 7 D.M. & G. 497. actually received, or which the Court is justly entitled to say he ought to have received, or which it is so fairly to be presumed that he did receive, that he is estopped from saying that he did not receive it, but if he has improperly used it for his own purposes, the Court will not enquire what was the result of his own speculation, but will infer that he did either make 5 per cent., or ought to be estopped from saying he did not. This case appears to extend the rule as to charging 5 per cent, simple interest to all cases where the trustee makes use of the trust funds for his own purposes, whether being a trader or not, but in such cases it would be ordered without annual rests. As a general rule the Court only orders simple interest, but executors will be charged with compound interest upon sums for which they are made liable, when by the terms of the trust they ought to have made it, as e.g., where there was a direction to accumulate during a minority, or if they had used the money in trade for their own benefit, in this latter case as a penalty for their misconduct. Where, by the terms of the trust, trustees are bound to accumulate up to a certain period, at which they ought to account to the cest. gu. tr., e.g., on their attaining majority, then if the trustees do not inform the cest.qu. tr. of their rights at that time and render them accounts, but retain the moneys in their hands, they will be held bound to account for accumulation at the rate directed up to the date of actual payment, or, if no rate is fixed, then if the fund is invested in 7?e Emmett, authorised securities, they must account for accumulation at J.7 Kj.Jl). 14z( the rate made by them, but if not so invested, or if the funds are mixed with the trustee's own funds it will be at 4 per cent. If, however, the direction to accumulation comes to an end by reason of its coming within the prohibitions of the Thelusson Act, which prohibits accumulation for more than twenty-one 1 EXECUTORSHIP ACCOUNTS. Ill years, or during the minority of any persons for the time being entitled, they will not be bound to account for accumulations, Wilson V. Peake, 3 Jur. N.S. 155. Apart from the provisions of Thelusson Act, the law does not, however, allow income to be accumulated after the attainment of twenty-one by any person clearly entitled to it, but where the accumulation was ordered of the whole income until the youngest attained twenty-one, the will showing a strong intention to keep the property together, it was held that no one could insist on its being divided earlier. Compound interest will be ordered if by the terms of the trust they were bound to make it, even in cases where they are only charged with less than 5 per cent, interest. Having thus now dealt with the principles regulating the debit side of the account, we may now proceed to consider the items on the other side. Generally, an executor is entitled to be allowed all payments properly made by him for the purposes of the estate, but not expenses improperly incurred by him, such as defending or bringing an action which he ought not to have done. Payments proper to be allowed are such as those made for the funeral and testamentary expenses of the testator, pay- ments made in respect to his debts, and to beneficiaries under the will, and, in addition to these, executors are entitled to what are called just allowances, but it is always necessary to remember that it is for the executor to discharge himself of the assets come to his hands, and to prove that he ought to have any payments allowed to him. I have already said that an executor will not be allowed any moneys paid for funeral expenses which were not suitable to the position in life of the testator, nor can he be allowed, at least as against creditors and pecuniary legatees, expenses paid for mourning for the widow and family. As regards the testamentary expenses, he is of course entitled to be allowed Wilson V. Peake, 3 Jur. N.S. 155. Saunders v. Vantier, 4 B. 115. Hilton V. Hilton,14Eq. 468. Knox V. Cottee, 16 B. 77. Part VI. What pay- ments and discharges will be allowed to an executor. Interest on legacies, capital and income apportion- ment. Blogg V. Johnson, 2 Ch. Ap. 225. la if t' Johnson v. Barker, 2 Car. and P. 207. I' :■ 112 EXECUTORSHIP ACCOUNTS. . I I ! Sharp r. Lu8h,10C.D., 4G8. Sharp V. Lush, sup. Field V. Peckett29B 676. Re Corsellis, 34 CD. 675. Wilkinson v. W., 2 Sc. and Stu. 237. all proper expenses in proving the will, and in paying probate, and also legacy duty where there are sufficient funds for the payment of the legacies, and all other proper testamentary expenses, including costs of administration action. He will also be allowed all proper expenses incurred in the realization and administration of the estate, including the expense of warehousing specific legacies and the keeping up of the domestic establishment of the testator for a reasonable length of time, in order to enable him to consider, what had best be done with it, but for this purpose he is by no means entitled •> to the full period of a year, and each case must be considered according to its own circumstances. An executor is, however, entitled to be indemnified to the fullest extent against all expenses properly incurred by him in the course of the realisation and administration of the estate, and since he is entitled, as I have before said, to employ agents, such as auctioneers, solicitors, and others, where the ordinary usages of mankind would allow him, he will be entitled to be allowed the costs and expenses of their employment, but only for such acts as he could not himself reasonably perform and as were strictly within the business usually performed by an agent of that kind. It is, however, a part of his duty to collect and get in the assets himself, and he will therefore only be allowed the expenses of employing persons to collect it where, according to the usages of mankind, looking at all the facts of the case, he could not be expected reasonably to do it himself ; for in- stance, an executor has been allowed the expenses of a rent collector where the property consisted of 30 or 40 small houses let at weekly tenancies, but he would certainly not be allowed the expenses of a collector for getting in rents of a few houses where the rents were payable quarterly, unless under exceptional circumstances. He would also only be allowed the expense of employing a solicitor for the transaction of purely legal business such as he could not himself transact, EXECUTOKSHIP ACCOUNTS. 113 and accordingly a solicitor being the sole executor can in no case, unless expressly allowed by the will, charge the usual costs for business transacted for the estate, either contentious or not, and whether transacted by himself or his partner, although he may employ another solicitor, but so far as he is bound to transact the business, he may in certain cases have an allowance made him by the Court for his trouble, and of course is entitled to all costs out of pocket ; but where he is one of several executors he is not bound to transact any of the legal business; and if retained by the executors as their solicitor in non-contentious business, he can only be allowed his costs out of pocket, but he will be allowed his full costs for any other contentious business transacted for them as if he were a stranger to the estate, so far as the costs were not increased by his being a party to the action ; but in any such action he must be careful not to act in any matter where it could possibly be said that the interest he represented was adverse to the trust estate ; these rules depending apparently upon the principles that otherwise where there is no super- vision by the Court it would be placing his interest at variance with his duties. In consequence of these rules it has been customary where a solicitor is appointed an executor to insert a special direction in the will that he is to be allowed his costs, charges, and expenses, as if a stranger to the estate. The same rules apply to any executor rendering any other services to the estate in the way of his own business, and accordingly an executor being an auctioneer could not be allowed any commission for acting in the sale of the testator's estates either by himself or his partner, although as far as I can discover, there is no rule to prevent his being allow.ed the actual expenses of employing another auctioneer not being his own partner. Where anyone who has been employed by the testator in his lifetime to do some act in connection with the property, not completed at the death, is appointed executor, Macnamara V. Jones, 2 Dick. 5f57. Bainbrigge v. Blair,8 B.5S8. Lincoln r. Windsor, 9 Ha. 158. Cradock v. Piper, 1 Mac. &G., 664,682. Be Corsellis, ubi sup. Sheriff r. Axe, 4 Km. 33. i I 114 EXECUTORSHIP ACCOUNTS. ,! II il tl If! Remunera- tion. Ee Sherwood 3 B. 338. Moore v. Frowd, 3 My. & Cr. 48. Re Wyche, 11 B. 209. Stanes v. Parker, 9 B. 385. Berridge v. Turner, 31 S.J. 773. and proves the will, he cannot claim commission for what is done afterwards, but will be allowed a proper remuneration for what was done by him in the life time. Again, as an ordinary rule, where an executor supplies goods in the way of his own trade for the purposes of the estate, he would only be allowed the cost price of the goods supplied, although in one case where an executor who had been in the habit of supplying the testator with goods in his lifetime was directed to continue his trade, the Court directed that he should be allowed the proper market price of the day for goods supplied, and directed an enquiry for the purpose. These rules depend upon the principle that an executor can- not be allowed to make any profit out of bis trust, and hence he can in no case receive any remuneration for his personal exertions, however much he has benefited the estate, and even although he has thereby sustained loss in his own affairs, unless remuneration is directed to be paid him by the will itself or he has bargained for a remuneration before accepting the office. Executors and trustees may stipulate for a reasonable remuneration before proving the will or accepting office. This may be done by agreement with the beneficiaries, if they are all sui juris, without the necessity of an application to the Court, but such bargains are looked at with the greatest jealousy by the Court, and it must be shown to have been entered into by the beneficiaries without any pressure, and with the fullest disclosure of facts, and knowledge on the part of the beneficiaries of their rights, and in fact an inde- pendent solicitor ought, as in the case of all bargains between trustees and cest. qu. tr., to be employed and to peruse the agreement on their behalf. The Court will, however, in cases of great complication, and where the beneficiaries desire it, allow a proper remuneration to executors. In general the EXECUTOKSHIP ACCOUNTS. 115 application must be made to the Court before the executors have proved the will or accepted the trusts, but in the case of Bainbrigge v. Blair, where the solicitor trustee had proved the Bainbrigge v. _ TiTi/TTi Blair, 8 B. will, and acted partially m the trusts. Lord Liangdale, M.K., 595. said " where a trust being in course of execution, and many things remaining to be done, which can be done beneficially only by a particular trustee, who cannot from his situation do it without grievous personal loss, and that party comes to the Court and states that he is in such a situation, and is willing to do these things, but that he cannot consistently with his own interests proceed with such duties, and gratuitously devote his time for the benefit of the trust ; in such a case it is competent for the Court, considering what is beneficial to the cestui que trust, and is calculated to promote their interest, to take the matter into consideration, and to give proper remuneration to that person who alone by his own exertion can produce that benefit." It will be seen, however, that this was a very exceptional case, and in re Barber 35 W.E. 28, ^ l^tl^®'' ^^ Chitty, J., said that the case was overruled by Cradock v. Piper, 1 Mac. & G. 664, but this presumably was only on the point then before him as to the allowance of more than costs out of pocket, and was probably not meant to overrule the dictum that the Court had jurisdiction to make such allowance in a proper case, and in the above mentioned case of Berridge V. Turner, A. L. Smith, J., a vacation judge, made an order allowing remuneration to trustees. The safe course is, no doubt, to apply before undertaking the duties. The allowance by the Court to a solicitor trustee will not be the usual professional charges but a fixed remuneration. An example of such allowance was furnished by a recent case, where the will having contained a direction that a solicitor executor was to receive an allowance for all work Ames v. performed by him, and not only for purely legal business, the w.'K^ds?. taxing master was directed to assess a reasonable remu- neration. ■[ Barber v. Tebbit, 29 CD. 893. Statute of Limitations. 116 EXECUTORSHIP ACCOUNTS. Stahlach- midt V. Lett, 1 Sm. & G. 415. Mordie v. Bannister, 4 Dr. 432. ts 1 These rules are carried to such an extent that a surviving partner appointed executor is not entitled without express stipulation to an allowance for carrying on the trade after the testator's death. As an executor is, according to the general rule of the Court, not entitled to remuneration for his services, the Courts have come to regard every gift made to him by the testator in his will was in the nature of remuneration for services rendered, and therefore not payable unless those services are performed. As a general rule, said Cotton, L.J., in Barber v. Tehhit, the presumption is that a legacy to a person appointed executor is given to him in that character, and it is on him to repel the presumption, and in that case he cannot take unless he proves. The mere fact that the gift of the legacy precedes the appointment as executor, or that the legacies to several executors differ in amount or subject matter, is not enough to rebut the presumption : whether parol evidence is admissible to rebut the presumption is doubt- ful, Cotton, L.J., holding that it is, but Fry, L.J., doubting. An executor will be allowed the payment of all debts in respect of which an action could be maintained, and that whether they are barred by the Statute of Limitations or not. An executor may, but is not bound to, plead the Statute of Limitations, but is entitled when administering on his own responsibility, to pay statute-barred creditors, or even to revive statute-barred debts by an admission of indebtedness duly given, the Courts, to this extent, allowing him a discretion to decide whether he will, out of respect for the testator's memory, act as an honest man ; but as soon as the rights of other creditors have supervened, by the making a decree for general administration, he has no longer a dis- cretion, unless bound to set up the statute against creditors whose debts are beyond the time, so long as there are any other creditors unpaid, but when once the creditors are paid. EXECUTORSHIP ACCOUNTS. 117 I: the Court is not bound in the interests of a party beneficially entitled, but not represented before the Court, to object to the payment of such debts, if the administrators and other next- of-kin have no objection. An executor who pays statute- barred debts out of the personalty before judgment is entitled to be allowed the amount in his accounts against the devisee of the real estate, notwithstanding that other debts are by means of these payments thrown on the realty. An exception is, however, made to the rule that statute-barred debts cannot be paid in an administration action as against other creditors, and that is in favour of a statute-barred creditor who has commenced the action as plaintiff and been allowed to take a decree through the executor not pleading the statute, this being allowed him as a reward for his diligence ; but with this exception the objection may be taken by any other creditor, or, if the executor refuse to set it up, by any one interested in the assets. He will not, however, be allowed any payments made in respect of debts for which no action could be maintained, such, for instance, as a physician's fee, or for the payment of such charges as the schooling, etc., of the testator's children after his death, which are not properly chargeable against the estate. He may also, under the very wide powers conferred by the Conveyancing Act, pay any such debts as he may properly pay upon any evidence that he may consider sufficient. In the case of a claim by the survivor, but if the evidence of the survivor does bring conviction to the Court it is not to be rejected because not corroborated, per Sir J. Hannen, Beckett v. Ramsdale. And it should be remembered in reference to this that it has been lately laid down that there is no absolute rule of law or equity which requires Alston V. Trollope, 2 Eq. 205. Lewis V. Romney, 4 Eq. 451. Fuller V. Redman, 26 B. 014. c.f. Smith V. Chambers, 2 Ch. 221. Finch V. F. 23 CD. 267. corroborative evidence in the case of a claim against a Beckett v. Ramsdale, 31 CD. 177. deceased man's estate although such evidence is ordinarily required as a matter of prudence. The Court must take into Htf ' ^<' 118 EXECUTORSHIP ACCOUNTS. European Assurance Society v. RadclifEe, 7 CD. 733. Betainer. •Includes Adminis- trator c.f. Williams i' s + account whether in the necessary absence through death of one of the parties to the transaction it is natural to look for corroboration. An executor has, of course, general power for making any arrangement with the creditors of the testator whereby they should be induced to accept less than the full amount of their debts, but any profit made by such an arrangement must be strictly accounted for by him for the benefit of the estate. In paying such debts he must, however, unless the assets should be more than sufficient for payment of all charges, be careful not to pay a debtor of inferior degree before one of a superior class, for otherwise he will be disallowed the payment as against such creditor, but as between debts of the same degree he is entitled before decree in an administration action to prefer any one creditor to another, and is also entitled out of legal (but not equitable) assets to retain his own debt in preference to all creditors of the same degree. The principles upon which an executor"'' is and always has been allowed to retain his debt out of the assets depends on the principle of preference, and not of retainer. According to the principles of law which have governed the Courts in these matters, and which are still applicable, an executor has a right to prefer one creditor to another as amongst the creditors of equal degree, but he cannot prefer a creditor lower in rank to a creditor of a higher rank, but inasmuch as the executor being the proper person to pay and be sued for payment of debts cannot pay or sue himself so as to obtain a preference which a creditor gets by showing diligence and obtaining a judgment in his favour, the law enables an executor to pay himself in preference to all other creditors of equal degree, but his right of retainer cannot be exercised as against creditors of a degree higher than himself. Adminis- tration is now only granted to creditor on his undertaking to distribute _2^ro rata; In the goods of Brackenbury, 2 P.O. 272. The principle is however one which was not favoured by Courts of EXECUTORSHIP ACCOUNTS. 119 :l! Equity; and, although in this respect equity followed the law, it was only to the extent to which the law gave the right ; and in the administration of assets an executor can only retain his debt in priority to their creditor out of what are called legal assets, and can only share pro rata with other creditors in equitable assets which come into his possession. This right of retainer is not affected or taken away by judgment in an action for administration, although such a judgment takes away the executor's right of preferring other creditors, nor is it even taken away by the payment of assets into Court, whether they pass through the hands of the executor or not, provided that no order for the appointment of a receiver has been made ; and even after an order for the appointment of a receiver an executor does not lose his right of retainer out of assets collected by him before the date of the appointment, and handed over to the receiver without the right of retainer being exercised. The right is one which, however, belongs to an executor or administrator exclusively as regards the assets administered by him in that capacity, and accordingly it does not belong to the devisee in trust of real estate, whether he be also executor or not, although no real estate whether devised for payment of debts or applied for that purpose under the statute is only equitable assets the right of retainer would not apply for this reason also. The right is not, however, one which makes the executor a secured creditor within the tenth section of the Judicature Act, 1875, consequently is not affected by such section. The right is, however, one which is limited to so much of the assets of the testator as come into possession or control of the executor or are paid into Court during his lifetime, and if he does not assert his right of retainer out of the assets before his death he loses it altogether ; although, on the other hand, if he has once asserted his right in his lifetime, but dies without having exercised it, his representatives may exercise that right for the benefit of Bain v. Sadler, 12 Eq. 570. Re Barratt, 34 S.J. 12. Re Rounson, 29 CD. 358. Richmond v. White, 12 CD. 361. Latimer v. Harrison, 32 CD. 395. Walters v. Walters, 18 CD. 182. Lee V. Nuttall, 12 CD. 61. Norton v. Compton, 30 CD. 15. Ijii il 120 EXECUTORSHIP ACCOUNTS. i« Loane v. Casey, 2 W.Bl. 965. Campbell v, Campbell, 16 CD. 199. Walters v. Walters, 18 CD. 182. I- : his estate in respect of assets of the above description. On the other hand, the right is one which can be exercised not only in respect of debts but also in respect of claims not yet ascertained; as a balance to the former on taking partnership accounts and of unascertained damages for which the executor has a claim if these arise out of breaches of pecuniary contracts for which there is a certain standard or measure, but damages that are in their nature arbitrary, such as damages founded upon torts or where there is no certain measure for them, cannot be retained. The right of the executor is not lost even by his being the plaintiff on behalf of himself or all other creditors in an action for the administration of the estate and it is a right which is not merely personal to the executor, but applies in respect of debts due to a partnership of which he is a member, or of debts otherwise due ; but it does not apply to a debt bequeathed to the executor by a creditor who has proved, though it would appear to be otherwise if he had not proved to him jointly with other persons. The fact that this right of retainer depends upon the above mentioned principle of preference appears also very clearly from the decisions, which show that, although an executor may retain a debt of his own which is barred by the Statute of Limitations on the same grounds that he may before judgment in an administration action in his discretion pay any other creditor of the testator whose debt is so barred, he is bound to set up any defences such as the Statute of Frauds which would prevent another creditor recovering against the estate against his own debts, if there are any so situated, and cannot therefore retain them! That the right is one which is by no means favoured in Courts of Equity is shown very clearly in the case of Walters v. Walters, and it well exemplifies the principles above enunciated. Eeal estate being, by virtue of the Act of 3 and 4 William IV., c. 104, only made assets in equity for the payment of debts, the executor's right of retainer does not apply to such a8sets,'and EXECUTORSHIP ACCOUNTS. 121 ; where the executor was a simple contract creditor, and there- fore not entitled to his right of retainer as against specialty creditors, it was held that, where the personal estate would not have been more than sufficient for the payment of specialty debts, some part of which were, however, paid out of the proceeds of . real estate, an executor could not exercise his right of retainer as against a part of the personal estate subsequently got in, although all the specialty debts had been satisfied. An executor's right of retainer was, however, limited in the same way as his right to prefer other creditors, viz., that he could only retain his debt in preference to other creditors of the same degree ; and, accordingly before the passing of Hinde Palmer's Act, which placed specialty and simple contract creditors upon the same footing, he could not retain a simple contract debt due to himself or his firm in priority to specialty creditors ; and it has been held that the effect of that Act is not to extend the executor's right of retainer, so as to enable him to obtain priority over all creditors of both classes, but in a recent case of Calver v. Laxton it vvas laid down that the Calver v. Laxton, right is aff'ected to this extent that, inasmuch as specialty and 31 CD. 440. simple contract creditors are entitled to participate equally in the assets, the estate must be apportioned 2^^^'^ passu amongst both classes of creditors, and that then an executor who is a simple contract creditor can retain his debt in full out of the amount which would otherwise be distributable in dividends among the simple contract creditors. Notwithstanding that equity does not favour this right as being a preference, so that retainer is not allowed out of assets which are only made available in equity, another well- known principle, viz., that equity follows the law, is allowed to operate in the case of legal assets where a retainer is per- mitted, and out of these assets all debts, whether legal or equitable, may be retained so long as the equitable debt is one that could be ascertained in an action at law. Upon this 122 EXECUTORSHIP ACCOUNTS. I' Morris V. :Morris, 10 CD. Ap. 68. Ferguson v, Gibson, 14 Eq. 379. Sanders v. Heathfield, 19 Eq. 21. Sloper V. Oliver, 16 Eq. 480. ground an executor who was a beneficiary under a settlement was allowed to exercise his right of retainer in respect of a debt due from the testator to the trustees of the settlement, and which, therefore, he was equitably interested in, but only to the extent of the moneys that had been properly advanced to the testator by the trustees under a power contained in the settlement, and not as regards moneys which had been advanced in excess of the power, and therefore in breach of their trust, and in the case of Sanders v. Heathfield, this was extended to a debt due by the testator himself to an estate of which he was trustee, and his administrator was held entitled, and also if the ceshii que trust required it, bound to exercise the right of retainer in respect of the debt. There is another right of an executor, which is frequently confounded with the right of retainer, from its being called by the same name, viz., the right which an executor has to retain out of the legacy or share of a beneficiary the amount of his indebtedness to the estate, although it depends on quite different principles, being more akin to the right of set-off; but as Lord Selborne said in Sloper v. Oliver, the term set-off is somewhat inaccurately used in cases of this kind, the proper use of that expression seems appHcable only to the mutual demand of debtor and creditor. A right of this nature is rather a right to pay out of the fund in hand than a right of set-off, and such right of payment can only arise where there is a right to receive the debt so to be paid, and the legacy or fund so to be applied in payment of the debt must be payable by the person entitled to receive the debt accordingly ; in cases not within the Married Women's Property Act, a legacy given to a married woman, but payable by law to her husband, is in the same position for that purpose as a legacy to the husband himself, but is subject to the over-riding rights of the wife, viz., her right of survivorship in case of reversionary interest, and her equity to a settlement in the case of an EXECUTORSHIP ACCOUNTS. 123 equitable interest— SZo^jer v. Oliver, a considered judgment, since followed by Mr. Justice Kay in Poultcr v. ShacJcel. An executor or administrator can, however, retain out of a legacy or distributive share, a debt due to the testator or intestate by the legatee or next-of-kin, notwithstanding that it is statute-barred. The principle is that a legatee can get nothing from the bounty of the testator until he has discharged his debt to the estate, and accordingly where a legatee had become indebted to the estate in respect of the costs of a probate action dismissed with costs, the executor was held entitled to retain these even against an encumbrancer without notice {Knapman v. Wreford, 18 CD. 300). But where the debt has become irrecoverable by any other means than the Statute of Limitations, an executor cannot claim to retain the amount, as, e.g., if a legatee have effected a statutory com- position in the lifetime of the testator, the. executor can only retain the amount of the dividends payable under such com- position, even although the testator did not prove for, and a fortiori an executor can retain nothing where he himself has proved and taken dividends. The appointment by a testator of his debtor to be an executor of his will operates at law as a release of the debt, on the ground that the executor cannot sue himself, but in equity the liability is not merged, and he is bound to account for his debt to the estate, unless there is evidence forthcoming showing an intention on the part of the testator to forgive the debt, which continued down to the date of the death, for in such case, there being a release at law, equity will look to the intention as overriding the ordinary equitable rule. An executor will also be allowed payments in respect of interest on such debts as carry interest, but not upon any other debts until after the decree in an administration action, from which date all debts proved under the decree carry interest at 4 per cent., or such other rate as they respec- Poulter V. Shackel, 36 WIl.825. Courtenay v. Williams, 3 Ha. 539. White V. Cordwell. 20 Eq. 644. Knapman v. Wreford, 18 CD. 800. Cherry v. Boulbee, 4 Uy. & Cr. 442. Hodgson V. Fox, 9 CD. 673. Re Orpen, 16 CD. 202. Stammers v. Elliott, 3 CD. 195. Strong V. Bird, 18 Eq. 315. Allowances. Williams, p. 1043-5. ! I ■J Nil 124 EXECUTORSHIP ACCOUNTS. EXECUTORSHIP ACCOUNTS. 125 i 4 i t if Ord.'^L.V.'r. ^^^^^^ carry, but creditors whose debts do not carry interest 62. are only to be allowed their interest after satisfying the cost . of the action, the debts estabhshed, and the interests of such debts as by law carry interest. Therefore, where an executor has advanced money out of his own pocket, or borrowed it for the purpose of paying the Biggarr debts of the testator which carry interest, or of satisfying Eastwood, 15 r xu j-. . • L.R. Jr. 219. ^ome of the creditors who are importunate and threaten to bring an action, or if the debts be charged on realty and he find moneys to pay them, he will be allowed interest at 4 per cent., or such other rate as he has been compelled to pay upon such sums, but such interest is only calculated from the time of a balance being struck on the account, for until then it is not certain that the executor had not money in his hands. After satisfying debts, if there be sufficient assets for the purpose, the executor will be allowed all payments made to the beneficiaries under the will. As regards pecuniary legacies, they are considered by law as due at the expiration of a year from the death of the testator, unless ordered to be paid earlier, and accordingly the legatees are entitled to interest at 4 per cent, from the end of each year. Interest, at that rate will, however, be allowed from the death of Maxwell V. testator in cases where such legacies are charged on real Wettenhall, . . ,-1 . ^ ^ , 2 P. Wms. 2C. estate (but not where charged on the proceeds of real estate), Turner v. or given in satisfaction of debts due by testator, or given to Small V. Wing, 5 B.P.C. 71. Gordon v, Traill, 8. Price 416. Finch V. Prescott, 17 Eq. 554. Interest on Legacies. i 1 M Buck, 18 Eq. 301. Clarke v. Sewell, 3 Atk. 99. Wilson V. Maddison, 2 Y. and C.C.C. 372. Beckford v. Tobin, 1 V. Sen. 308. Stent V. Robinson, 12 V. 461. children of testator, or to other persons to whom he has placed himself in loco parentis, or again, where they are given to infants net children of testator, but with a direction super- added that the infants were to have an allowance for maintenance out of the interest. This rule does not, however, apply to legacies given to testator's widow. From these dates respectively the legacies will carry interest, although payment is from the condition of the estate impracticable, and although the assets be unrealisable and unproductive. The general rule as to interest is very well laid down in a Wood v. ° "^ Penoyre, case of Pearson v. P. (Williams, page 1432). 13 V. 334. " Whether the fund bears interest or not is totally im- Equity AL *' material in the case of pecuniary legacies. I remember a Freeman v. Simpson, " case of Greening v. Barker, where the fund did not come to q sc. 75. •' be disposable for the payment of legacies till nearly forty i ^j^^'^f^^ " years after the death of the testator, and yet the legacies " were held to bear interest from the year after the testator's ** death, and the Court there was of opinion that it was a ** general, settled, and fixed rule, that pecuniary legacies •• bear interest from the expiration of twelve months, if there " should at any time be a fund for the payment of them, and " that, in case the fund was productive within the twelve '• months, all the intermediate profits belong to the residuary '• legatee. The executor may pay the legacy within the " twelve months, but is not compelled to do so ; he is not to •* pay interest for any time within the twelve months, although ** during that time he may have received interest. But if he *' has assets, he is to pay interest from the end of the twelve " months, whether the assets have been productive or not." Annuities given by testator, without mentioning any time of payment, are considered as commencing from his death, and the first payment is due at the end of the year, but if not paid then, by reason of the estate not permitting it, or for any other valid reason, as a general rule the Court has Batten r. refused to give interest upon the arrears of an annuity. p wms. 103. Where a time for payment of a legacy is fixed by the will, no interest will be allowed until after that date, even although the legacy is vested, unless the fund for payment of the legacy is directed by the will to be set apart immediately t ^ -r ^ after the death from the rest of the estate, when it will pass 2 Ch. Ap. 782. with all its accretions, or the legatee is an infant, in which AUen^^ ^* case he is entitled to an allowance for maintenance, to be ^ ^^- ^'^^' . Conv. Act, made in the sole discretion of the trustees out of the interest, i88l, sec. 43. ■\\ ! ; 'i ■ m 1^1 ■i' ii !'■ i 1 i i ill *' 126 EXECUTORSHIP ACCOUNTS. Knight V. K., 2 Sc. and Stu. 490. R.S.C.830rd L.V. r. 64. Re Judkin's Trusts, 25 CD. 743. On residuary bequests. Caldecott v. C, 1 Y. and C.C.C., 312, 737. Hawkins v. Hawkins, 13 CD., 470. whether the legacy is absolutely vested in him or would pass away upon the happening of a contingency, or finally, unless interest is given on the legacy in the meantime : but in this latter case it only bears interest from the end of a year after the testator's death, and that whether the legacy be charged upon land or payable out of personal estate only. Main- tenance cannot be given, however, and therefore interest will not be allowed, unless the legacy is set apart by reason of its being contingent, and for no other reason. In these cases there is no right to maintenance, unless the legacy is one which according to the rules of the Court would have carried interest from the death, as in the case of legacies by parents or persons standing in loco parentis {re Jiulkins). In all other cases the residuary legatee is entitled to the income of a fund set apart to meet a contingent legacy {Atkinson v. Whittle). In all these cases where interest is allowed, it will be allowed at 4 per cent., and only at simple interest, unless there is a direction in the will to accumulate. As regards residuary bequests, the question of interest can not arise unless they are given to some persons for life, when the general rule is that the legatee is entitled from the death of testator to the income of such parts of the residue as are then in a proper state of investment, and to interest at 4 per cent, upon the balance of the residue from the end of a year, or if it has by that time been invested, then to the actual income made. Where an executor has assented to a specific legacy, the property passes at once, and even if he did so under a mistake it cannot be recalled, but the specific legatee takes the property cum onerc, that is, charged with all the liabilities affecting it at the death of the testator which subsequently ripen into debts. So that, e.g., a legatee of leaseholds subject to a claim for dilapidations, which are a mere liability and not a debt due at the decease, or until the term comes to an end, or the landlord enters, takes subject to them. EXECUTORSHIP ACCOUNTS. 127 On the same principle, executors who have set apart and appropriated assets to meet a legacy become trustees thereof for the legatee, and cannot retain or impound any part of the appropriated assets as against an assignee of the legatee to meet a liability ripening into a debt, from the legatee to the estate, although, as we have seen before, this is not so if the funds for payment of the legacy have not been set apart, or the legatee not yet been accounted with. The ordinary rule is that a mere admission of assets to satisfy debts or legacies is always susceptible of explanation, and must be construed according to the circumstances with which the executor was acquainted, but where an executor in his residuary account entered that he had retained £500 to meet a legacy, and had paid interest upon it for some years, it was held that he could not go into evidence to deny it, and that in effect amounted to a declaration of trust of funds to that amount ; but on the other hand, a trust not being created by the administration of assets, a mere admission of assets, unless a trust is created or a fund set aside, falls within the Statute of Limitations, and is barred by lapse of time, and in the same case it was held that a payment by one executor and residuary legatee on his own responsibility and out of his own pocket to another legatee is not an admission of assets for all legacies. The question whether an executor, by appropriating assets and setting aside a fund to meet particular legacies, can free the general estate from liability is very important, particularly at the present time, when owing to the conversion of Govern- ment securities many funds set apart to meet annuities have become insufficient. The ordinary rule is that until all pecuniary legacies and annuities are paid the residuary legatee takes nothing. If the annuity is a charge upon the whole personal estate, and not on a particular part of it, then the executor cannot by appropriating a special fund for the payment of that annuity Ballard v. Marsdeo, 14 CD., 374. Knapman r, Wreford, 28 CD. 300. Payne v. Little, 22 B. 69. Postle- thwaite v, Mounsey, 6 Ha., 35n. Brewster v. Prior. 35 W.R. 251. Cadbury v. Smith, 9 Eq. 37. Postle- thwaite v, Mounsey, 6 Ha., 35n. Relief on ground of accident, c.f. Smitic's Equity 223. I I 128 EXECUTORSHIP ACCOUNTS. Gordon r. Powden, 6 Mad. 342. May V. Bennett, IKus. 370. Davies v. Walter, 1 So. and Stu. 463. Boyd V. Buckle, 10 Sc. 595. Kendall v. Russell, 3 Sc. 424. Bagne v. Dumergne, 10 Ha. 462. Baker v. Baker, 6H.L.C.616. Hickman v. Upsall, 2 Gif. 124. As to surplus interest of fund set aside Re Gladwell, 34 S.J. 379. Arundell v. Arundell, 1M.&K.316. Baker r. Turner, 3 Ch. Ap. 537 affect the annuitant's rights to have the annuity paid in full, and the annuitant is in such case entitled to have the deficiency of income made good by sale of the capital from time to time, or by payments out of other parts of the residue available for the purpose. Where, however, the appropriation of the particular stock or fund is made by the executor in conformity with the direction of the testator, or that the bequest may be regarded as a gift of the interest only of the particular stock, the annuitant might have to take the risk of the stock not yielding sufficient income. There must, however, in such case be a clear intention shown that the corpus is not to be touched, but to go over intact to the remaindermen, or some other similar indication that the annuitant is to be confined to the income only, for, as a general rule, the gift of an annuity out of the general estate or out of a particular fund creates a charge on the corpus, and entitles the annuitant to be satisfied in full all payments of the annuity before anything can go over. If, however, the legatee of the annuity assents to the appro- priation of some particular fund for the payment of it, the failure, whether partial or total, would probably be at his risk, (Liimlcij on Anmiities, Wills, Executors, 1409n), but such assent must be clearly given and established. The same principles apply in the case of gifts of capital given, e.g., after the death of a tenant for life, and in such case if the securities, when the time for payment arrives, prove insuflBcient, the rights of the legatees should be governed by the rules above laid down. Where capital sums are given out of a specific fund, and an uncertain residue to another, then, unless the parties have all agreed to have the fund appropriated as specific, the residuary legatee takes nothing until the pecuniary legacies are all paid in full, in case of an eventual insufficiency of assets, whether arising from depreciation of investments or wasting of the assets. Where a legacy was given to an infant on his EXECUTORSHIP ACCOUNTS. 129 attaining twenty-one, with maintenance in the meantime, and charged on the realty if the personalty should be insufficient, then the personalty being sufficient at the time of the death to provide for such legacy, but being subsequently wasted by the legal personal representative, it was held that the legatee could not claim to be paid out of the legacy. The question of the sufficiency of the estate in such a case must be decided at the death, or if a time for payment of the legacy is fixed, then at the time so fixed ; but in this case the gift of maintenance in the meantime showed that the legacy was to be set aside at When an executor has accounted to one residuary Richardson V. Morton, 13 Eq. 123. once. legatee, and he has received his proper share, he cannot be called on to refund if the estate is subsequently wasted, but if the wasting took place before he received his share, he is liable to refund the amount over-paid ; the onus being on those who allege an overcharge to prove it. As regards specific legacies, they are held to be appropriated immediately on the death of the testator, subject only to the payment of debts, and pass with all their increase. So far we have dealt with an executor simply as accounting for assets in the lump, and, where the estate is wound up at the end of the year, no further questions can arise, so long only as he has kept distinct and duly accounted for the income upon so much of the trust funds as was in an authorised state of investment at the time of death, but after that date it becomes the duty of the executor to see that the fund is put into a proper condition, distinguishing between income and capital ; and, although for the purpose of making his pay- ments, the executor may make them out of any funds that come to his hands, questions arise, as between the several parties beneficially entitled in succession, and also between the different classes of beneficiaries where the estate is not sufficient for payment of all in full, and, in con- sequence, it will be necessary to consider the rules by which Paterson v. Paterson, 3 Eq. III. Capital and Income. i Allhusen v. Whittel,4 Eq. 295. 130 EXECUTORSHIP ACCOUNTS. EXECUTORSHIP ACCOUNTS. 131 It Si Ibbotson V. Elam, 1 Eq. 188. an executor ought to be guided, in distinguishing between capital and income, and then to deal with the cases where the estate is not sufficient for all the purposes of the will. As a general rule, there is no difficulty in deciding what sums are to be treated as capital and what as income, but if any particular amount does not obviously appear to be one or the other, it becomes necessary to consider, firstly, whether it is in its essence capital or income ; and secondly, whether even if in its nature income, the executors may safely pay it away as such to the tenant for life. In the first place, it must be remembered that income accrued due up to the date of the death of testator forms part of the capital of the estate left by him, but where an amount • repriesenting income comes into the hands of the executor after the death, part of which only is in respect of a period before the death and part after, then if such income is in the nature of interest accruing due from day to day, either at common law, or as falling within the provisions of the Apportionment Acts, it is apportionable, the part accruing due before the death, being capital, and that accruing since, income. If, however, it does not in its nature accrue from day to day, or does not fall within the Act and cannot be said to have been earned during any specific portion of the period of time, but can only be first said to have been earned when the accounts have been taken at the end of such period, and it has been ascertained that there is a balance, then it mast be treated as income accruing due on the date at which it is ascertained, although made payable at a subsequent date, so that if it has been ascertained in the lifetime, it is capital, but if not, income. Of this kind are dividends paid by private trading com- panies, which are only ascertained when they are declared, irrespective of the time of which they have been earned, and which- if declared in the lifetime, but made payable after the death, form capital of the estate. These have been expressly held not to fall within the Apportionment Act, 1870, as the profits of a partnership are only separated from the general assets when the balance sheet is prepared. Cases of this description are now nearly all covered by the Apportionment Act, 1870, which provided that from and after the passing of that Act all rent, annuities, dividends, and other periodical payments in the nature of income should, like interest on money lent, be considered as accruing from day to day, and should be apportionable in respect of time accordingly. By section 5 of the Act the word rent was interpreted to include all kinds of rent, tithes, and all periodical payments, or rendering in the nature of rent or tithe, the word annuities was defined to include salaries, and pensions, and the word divi- dends, besides dividends strictly so called, was to include all payments made by the way of dividends, bonus or otherwise of the revenue of trading or other pubHc companies, divisible between all or any of the members of such respective com- panies, whether such payments should be usually made or declared at any fixed times or otherwise. This Act super- seded an Apportionment Act, 4 and 5 William IV., which had been decided not to apply to all cases where it was equitable that apportionment should take place, and as Lord Justice James said in the case of Clive v. Clive, the Act of 1870 extended the principle of apportionment so as to make it applicable to every reservation of income, which is in all cases to be treated as if it were accruing de die in diem. It has been decided upon this Act that it appUes to the income arising from all devises and bequests, whether specific or otherwise, and that it applies to all wills, whether coming into operation after or before the Act, and that it also applies to all devolutions of interest taking place after the Act, such, for instance, as the death of a tenant for life happening after the Act, notwithstanding the tenant for life became entitled before Browne v. Collins, 12 Eq. 586. Jones V. Ogle, 8 Ch. Ap.l92. Ibbotson V. Elam, sup. Apportion- ment Act, 1870. Clive I". Clive, TCh.Ap. 433. Hasluck V. Pedley,19Eq. 271. Constable v. Constable, 11 CD. 681. 132 EXECUTORSHIP ACCOUNTS. IM Lawrence v. Lawrence, 26 Ch.D. 795. Carr v. Griffiths, 12 Ch.D. 655. Jones V. Ogle, 8 Ch. Ap. 192. Re Cox, 9 CD., 159. Iilii the date of the Act and received the whole of the dividends without apportionment which fell due at the next period after he became entitled. It has also been held that all payments out of revenue, whether periodical or fluctuating, whether by way of dividends or bonus of any public, trading, or other company are apportionable. And it was said by the Master of the Rolls in that case that, without laying down a specific rule as to what was and what was not a public company, one of the indicia by which a public company may be known is the power to transfer the shares in such company, and it was there held that an insurance company incorporated with a deed of settle- ment, but not registered, by which the partners were entitled to transfer their shares as of right, was a pubhc company. It was, however, held in Jones v. Ogle that the other companies referred to in the Act meant companies of a similar character to public trading companies, and that, therefore, private partnerships were excluded, and in the case of re Cox's estate it was said that it, a priori, does not apply to a gift of the profits of a business directed to be carried on by the trustees where there were no other partners, and that where there was a gift of the profits of the business to persons in succession , a tenant for life could only claim profits ascertained at the end of a profit-earning period ending in his lifetime, but that he was entitled to the whole of such profits, whether such period began before he became entitled, and no matter at what time such profits were ascertained and directed to be paid, the principle being that the fixing of any time as the time at which a line should be drawn and profits ascertained is a purely arbitrary matter, and that it must be assumed that the parties themselves determined the best time for drawing such a line, and there- fore, that in fairness the ordinary practice of the business or partnership should be followed, and it would seern that this rule applies in the case of a continuing business where the testator had formerly carried it on alone, and by his will EXECUTORSHIP ACCOUNTS. 133 directed his trustees to continue it, as well as where he was only one of the partners, and the business continued to be carried on under the terms of the deed of partnership. Upon this principle it was held that where the income of a share of the business is given to persons in succession, then the rights of those persons must be decided according to the practice observed in the business for the time being. And in a business where the custom had been to divide the profits from time to time made, and to write ofi' all the losses against capital, the remaindermen were held not entitled as against the tenant for life to have losses so written off made good out of subsequent profits. But on the other hand, in a case where there were no other partners, and the testator directed his business to be carried on by his trustees for the benefit of successive tenants for Hfe, it was held that losses sustained during the first tenancy for life must be made good out of subsequent profits before any succeeding tenant for life could take anything. The Apportionment Act does not, however, apply in the case of changes of investments so as to entitle the tenants for life or remaindermen to have a loss of income or corpus, which has been occasioned on such a change of in- vestments by stocks being bought or sold, cum or ex dividend, made good to him, it being a general rule of the Court of Chancerv not to take such items into consideration where there has been 6owrt7i<^cs, although under special circumstances compensation may be allowed. Cases of apportionment not falling within the Apportionment Act also happen in connection with apportionment of legacies, annuities, or other charges charged upon two or more classes of property. The rule in such case is that where the annuity is given out of two or more classes of property they contribute to the annuity according to the actual annual income produced in each year, no matter how variable the one may be as compared with the other, and not according to the capital value, Gow V. Forster, 26 CD. 672. Upton V. Brown, 26 CD. 588. Freeman v. Whitbread, 1 Eq. 266. Barker v. Perowne, 18 CD. 160. Lord Londes- borough V. Somerville,19 Bevan, 295. Bulkeley v. Stevens, 3 New Rep. 105. Apportion- ment of Legacies, &c. 'i ; I i|: 't 1, " iBftii ;,,<. 134 EXECUTORSHIP ACCOUNTS. Ley V. Ley, 6 even although in the one case the capital value may be ascer- ^^' ^'^^' tained at seven years' profits, and in the other at thirty years' profits. In the cases, however, of legacies or other capital charges this must be apportioned according to the capital value of the premises on which they are charged. On the other hand, where the assets are not suflicient for Heath v. the payment of legacies and annuities in full, the value of the 2267 ' annuities for the purposes of abatement must be taken at the n^^n^}^^ 27 actual amount of arrear down to the date of the apportionment, CD. 703. , (. / 1 plus the actuarial value of the future payments of the annuity. Apart from questions of apportionment, it is, of course, obvious that the ordinary dividends of trading and other com- panies are in the essence income, but as regards payments Price V. made by way of bonus or dividends at irregular intervals the IJIiijl 80.^^73?°' ^^ ^"1® is ^^^^ i^ *^®y ^^^^ ^®®^ i^ ^^^* declared out of profits, !p they are income, although not necessarily distributable entirely amongst the tenants for hfe, but if the bonus or divi- dends have not been declared out of profits, i.e., if they can- not be shown to have been declared out of profits of any particular period, but generally out of accumulations, they will be considered capital, no matter at what time they accrue due, and this, of course, the more if the accumulations, although made out of profits originally, have been dealt with and applied as capital of the business, as e.g.j by sinking them in the extension of a colliery. And as was said by Fry, L.J., and approved by Lord Herschell in the case of Syroule v. Bonch, where a testator or settlor directs or permits the subject of his disposition c.f. Lindley's ^q remain as shares or stock in a company which has the 546. power either of distributmg profits as dividends, or of convert- m\jhtrof i^g *^®^ ^^^^ capital, and the company validly exercises this Deceased power, such exercise of power is binding on all persons inter- LindleyJ ested under the testator or settlor in the shares, and conse- Plumb V. Neild, 6 Jur. N.S. 529. Straker v. Wilson, 6 Ch. Ap. 503. Sproule V. Bonch, 12. Ap. Ca. 385. EXECUTORSHIP ACCOUNTS. 135 quently what is paid by the company as dividend goes to the tenant for life, and what is paid by the company to the share- holders as capital, or appropriated as an increase of the capital stock of the concern, enures to the benefit of all who are inter- Repairs, ested in the capital. On the other hand the mere determina- tion to distribute a fund which has been kept in reserve does not make it of necessity income, but all the circumstances of the case must be looked to in order to decide the character of the fund. Bonch v. Sproule. On the other hand, debts paid into a partnership in con- nection with its business dealings go to swell the profits of Maclaren v. the year in which they are paid, no matter at what time or j) p^^a^^' J. over what period they have been contracted, and therefore 202. where a large debt falling into a company was afterwards distributed by way of bonus to the shareholders, it was held to be income as between the tenants for life and remainder- men. When the executor has ascertained what amounts are in their essence capital and what income, it of course becomes his duty to invest according to the rules above laid down such parts as are capital, in order to make them produce income for the tenants for life, but he must not as of course pay over the whole of the amounts which are in their essence income to the tenants for life. This he will only be entitled to do if those amounts represent the income of invest- ments authorised by the trust or by law, or if the will clearly shows an intention that the tenant for life is to take Chancellor v. the whole of the income produced by the estate in its actual -^ j^ 455 state of investment, whether in authorised securities or not, and he will only be allowed in his accounts as against the remaindermen those payments which have been made upon the right footing as income, and will be charged with interest in favour of the tenant for life, on all amounts representing capital not duly invested by him. If' 136 EXECUTORSHIP ACCOUNTS. Conversion. Howe V. Earl Dartmouth, W. & T.L.C. 321. Tickner v. Hold, 18 Eq. 421. Macdonald r. Irvine, 8 CD. 112. Bate V. Hopper, 5 D.G.M. &G. 338. Where there is a general bequest of a perishable or wasting nature to persons in succession, it is the general rule of the Court, in the absence of any express or implied intention of the testator to the contrary, that such property ought to be converted and invested in such manner as to produce capital bearing interest, so as to preserve the capital in such a state that persons who enjoy it successively may have a proper enjoy- ment of it, and in order to do equal justice all round it was further laid down that reversionary property ought to be con- verted and invested in similar manner so as to give to the persons first entitled under the will an equal chance of enjoy- ment with those to come afterwards. The same rule has also been applied to all such existing investments as are not proper to be retained by the trustees either according to the rules of the Court of Chancery or to the express wishes of the testator, and which are, so far as they are not authorised investments, deemed by the Court to be more or less hazardous and objectionable, and it is a breach of trust on the part of trustees not to carry out the conversion in such cases. The reason for the rule has been stated to be not that the testator is presumed to have intended that such conversion should be made, but when the Court finds the intention of the testator to be that the objects of his bounty should take successive interests in one and the same thing it converts the property as the only means of giving effect to that intention. (Per Wigram V.C. 3 Hare, 611.) The rule accordingly only apphes to general or residuary bequests of properties to be enjoyed in succession, and does not apply to property which the testator has expressly or impHedly directed to be retained in specie. The mere absence of a direction to convert has never been considered to mean that it is to be enjoyed in specie ; but when a perishable, wasting or reversionary property is given specifically to persons in succession, then the express intention of the testator must be carried out notwith- EXECUTORSHIP ACCOUNTS. 137 standing that some of the persons indicated may not reap any benefit from the gift. It is not, however, necessary that the intention of the testator should be express, but it may be gathered from other sufficient indications to be found in the will, as for instance if there be a partial enumeration of the articles comprised in the gift, and there is a considerable list of authorities showing that many judges have been inclined to allow small indications of intention to prevent the applica- tion of the general rule ; but it was laid down by James, L.J., in the case of McDonald v. Irvine that the rule must be applied, unless upon a fair construction of the will a sufficient indication of intention is found that it is not to be applied, but that the burden of establishing such intention lies upon the persons who seek to escape from the general rule. The duty of trustees to convert such property may not only be taken away by the expression of an intention that the property is to be beneficially enjoyed in specie, but also by reason of direction contained in the will either imperative or discretion- ary, directing or enabhng the trustees to delay the conversion, which directions may or may not, according to the circum- stances, amount to an expression of intention that the tenant for life is to have the enjoyment of the property in specie. Where, therefore, the will contains an express direction to sell the property at a particular period this sufficiently indicates that there is to be no previous sale or conversion, and if in such case the period fixed for conversion is the death of the tenant for life, this is sufficient to entitle him to specific enjoyment of the property. But where the period fixed for conversion is one fixed without any obvious reference to the enjoyment of the tenant for life, then some further indication should be forthcoming in order to enable the tenant for life to have the whole income of the property while unconverted. Where, however, the direction to the trustees is not imperative, but discretionary, then the presumption is, in the absence of Macdonald v. Irvine, 8 CD. 112. Alcock V. Sloper, 2 My. & K. 699. Gray v. Siggers, 15 CD. 74. Green v. Britten, 1 De G. J. & S. 655. M 138 EXECUTORSHIP ACCOUNTS. Re Sewell's Estate, 11 Eq. 80. Collins V. Collins, 2 My. & K. 703. Pickup V. Atkinson, 4 Ha. 630, Harris v. Poyner, 1 Dr. 174. Hinves v. Hinves, 3 Ha 609. Roe V. Roe, 29 B. 276. Re Sewell's Estate, 11 Eq. 80. Crow V. Crosford, 17 B. 507. Thursby v. Thursby, 19 Eq. 395. Porter v. Baddeley, 5 CD. 542. Gray v. Siggers, 15 CD. 74. indications to the contrary, that the trust is one to be exercised for the purpose of the better realisation of the estate, and the trustees must not exercise it to the prejudice of either set of persons ; if, however, such discretion be exercised bond fide, it cannot be interfered with by the Court, whatever may be the result produced. In such case, however, a much stronger indication of intention is required to entitle the tenant for life to the income of the property until converted. If there is an indication in the will that the same specific property is to be in existence at the death of the tenant for life, either by reason of a direction that it should be sold at that date or by an indication that it is to come to the re- maindermen in specie, the tenant for Hfe will clearly be entitled to have the whole income, and it has been held that such an intention is implied from a direction to the trustees to divide the property after the death of the tenant for life (but this case has been somewhat weakened by the observations of Wigram, V.C, in the case of Pickup v. Atkinson) and in the case of Harris v. Poynder, where the testator devised and bequeathed all the residue of his real and personal estate and all his estate, term, and interest therein to his wife for life, and after her death devised the same and all his estate, term, and interest therein to his son, it was held that the widow was entitled to enjoy the property in specie. Where there is a direction to sell or renew lease- holds with the consent of the tenant for life, or where there is a general direction to sell with such consent, the tenant for life will be held entitled to specific enjoyment of the property until it is in fact converted, and on the same principles a direction to discharge encumbrances upon, to renew or keep in repair, or a power to demise leaseholds has been held sufficient indication that the tenant for life shall enjoy them in specie. On the other hand, a mere power to retain invest- ments, or a direction to trustees to retain or sell any part of EXECUTORSHIP ACCOUNTS. 139 the trust estate is not held sufficient to entitle the tenant for life to specific enjoyment. Where, however, there is an express direction to pay the produce of any portion not converted to the tenant for life, he will be entitled to the full income, however long conversion may be postponed, and such an intention may also be gathered Mackie v. , , - . - ., , i * 1-r 1-1- Mackie,5Hak. from the use of words in the gift to the tenant for life, wnicn 70. are only applicable if the property is retained in specie ; for instance, a trust to pay the rents, etc., of residue to persons in succession, where the testator has no other property except leaseholds to which the term rents is applicable, is sufficient indications of intention that they were not to be converted, but enjoyed by the tenant for life in specie. And, on the same Goodenough principle, the use of the word dividends has been held to nionds, 2 B. amount to a direction that the tenant for life should enjoy ^^2- long annuities in specie, if there be no other property to which the word was applicable. These decisions were, however, commented upon by Wigram, V.C, in Pickup v. Atkifison, where he laid down that the mere use of these words in com- pany with others, as indicating the various kinds of income that might be derived from investments, would not of itself be sufficient to indicate. A manifest intention on the part of the testator, such as was laid down iu the case of Howe v. Lord Dartmouth, is necessary to be shown, and probably it is necessary that there should be some other indication on the face of the will, as shown in the case of Cafe v. Bent, where the trustees were directed to retain a percentage of the rents Cafe v. Brent, -, _ 5 Ha. 36. collected. A mere direction to postpone the payment of legacies or the distribution of the estate until after the death of the tenant for life will not, unless there is something to show that it is done in the interests of the tenant for life, and not of the general interests of the estate, be sufficient to entitle enjoy- ment in specie, or liable to conversion under the principle '' 1 I; ! M I ■ ^- f n I9Hl' 140 EXECUTORSHIP ACCOUNTS. AUhusen v. Whittel, 4 Eq. 295. Lambert v. Lambert, 16 Eq. 320. above stated. Generally a tenant for life of a residue which is not expressly directed to be converted is, so far as it consists of permanent securities of a kind approved of by the Court, entitled to the income thereof from the time of the testator's death, after making the proper provision for the payment of debts and legacies, in order that the burden of satisfying debts 34 S J^n^"' ^^^ legacies should be equitably adjusted between the tenant for life and the remaindermen. It was laid down in the case of AUhusen v. Whittell, that the debts and legacies are to be taken as having been paid, not out of capital only, but out of so much of the capital as, together with the income of that capital for a year, is sufficient to pro- duce the amount, and in the case of Lambert v. Lambert j 16 Eq. 320, it was held that this rule is not affected by the fact that all the debts and legacies are paid before the expiration of a year from the death, and that the income of the estate to which the tenant for life would have been entitled, exceeded considerably 5 per cent, upon the capital. The reason for this is that the rule is a mere rule for the adjustment of accounts between the tenant for life and remaindermen in the adminis- tration of the estate by the executors, so far as regards the payment of debts and legacies, the executors being otherwise considered bound and entitled to pay such debts and legacies out of whatever funds they may have in their hands, without regard to the fact whether they represent capital or income, beneficiaries not being in strictness entitled to receive anything until after the executors have wound up the estate, the period of a year from the death being allowed them by law for this purpose. In the case of Marshall v. Crowther the same principle was extended to the case of debts charged by the testator on his real estate, this being, in fact, a mere extension of the general principle applicable between the parties entitled in succession to real estate, for as between himself and the remaindermen the tenant for hfe is bound to keep Marshall v. Crowther, 2 CD. 199. EXECUTORSHIP ACCOUNTS. 141 down the interest of all charges properly imposed upon the estate. A tenant for life is also entitled to the income from the death of the testator, calculated upon the above principles of all the securities which, although not authorised by the Court, Qgij^^y 2Ch the testator has authorised his executors and trustees to Ap. 758. retain or invest in so far as they are of a permanent character ; and, of course, where the tenant-for-Iife is, according to the proper construction of the will, entitled to the income of hazardous or wasting securities, he will be entitled to the income produced by them from the death, subject to the deductions necessary for payment of debts. Where, however, the tenant-for-life is not entitled to the specific enjoyment of hazardous or wasting securities, which are, however, retained Gibson v. , , . f . \ \- .- r .Bolt, 7 V. 89. by the executors in the exercise of a proper discretion conierred Meyer v. upon them by the will or otherwise, he is only entitled to ^^q"^^ g' ^ receive out of the income a sum equal to 4 per cent, upon the 723. capital value of the property taken at the testator's death, and Qeiiatly.' the balance of income must be invested and accumulated for ^ ^^^ ^^^ the benefit of the tenant-for-life. Where, however, the powers of . investment securities are improperly retained by the trustees, the tenant- ^re extended for-life is only entitled to the income of such an amount''- of ^y statute. Consols as would have been produced by the sale of the grown v. Gellatly. property at a year after the testator's death, and not to an Dimes v. income equal to 4 per cent, on their value. ~^^^ ' ^^^' Where trustees have been rendered liable for having paid too large an income to the tenant-for-life they are entitled to Hood v. . Clapham, 19 be recouped by him, or after his death by his estate. But b. 90. where the tenant-for-life is a married woman the trustees are g^^^^ ^28 bound to show that she acted with full knowledge of all the CD. 595. circumstances. Where part of the residue consists of rever- - . , , . , • • Recouping sionary property which the trustees in the exercise of a proper Trustees by discretion have allowed to remain unconverted until it falls ^^^*^^?°^^g into possession, a tenant-for-life will be entitled to have paid Eqidty, 113. i\ v I," i I 'ink Hi 142 EXECUTORSHIP ACCOUNTS. c.f. Turner v. to him out of the property, when received, the amount which Newport, 2 , . ^ . P.L. 14. ^e would nave received by way of mterest at 4 per cent, on the property had the trustees sold it at the end of a year from Re Earl of the death ; the value of such reversion to be calculated on Chesterfield's ,, ... Trusts, 24 the assumption that it was to fall m on the day which it wSiht^v actually fell in, and the interest to be calculated at compound Lambert, 6 interest from the date above-mentioned. In such a case there Wilkinson v. ^® ^^ difference in principle as to the way the reversion ought b"4OT^' ^^ ^^ ^^ rated, whether it is realised by sale, or by waiting until Walker v. it falls into possession. Neither ought any difference to be w!r!^76. niade in apportioning the sum actually realised, because for some years the reversion was contingent and of little value. Apparently there is no absolute duty upon trustees to reahse a reversion by sale, where it would operate harmfully to the estate, at any rate unbss it is required by some of the parties interested ; Walker v. Appach, per Kay, J. The principle of re Earl of Chesterfield does not, however apply where it is not the case of a sale of a reversion post poned in the interest of the remaindermen, so that there is no fund out of which compensation could be made for the damage sustained by the tenant for hfe, but where it is the Be Moore, 33 case of an insufficient sum being got in representing capital and income of a proper investment of the estate which has subsequently proved insufficient for them, the amount recovered must be apportioned between the capital and any arrears of simple interest. The rule in such cases was laid down in Turner v, Newport, and adopted by James, Vice-Chancellor, in Cox v. Cox, viz., ^^llS'^^' ® that the tenant for life is not entitled to be paid arrears of interest in priority out of the fund recovered, nor is the remainderman entitled to have the whole amount treated as capital. But a calculation must be made of what sum will produce the amount recovered at 4 per cent, simple interest, and the difference will belong to the tenant for life. The W.R. 447. Re Hill, 50 L.J. Ch. Turner v. Newport, 2 P.L. 14. EXECUTORSHIP ACCOUNTS. 143 same principle was followed in a case where an executor had absconded with the personal estate, and eventually a sum was recovered which was not sufficient to cover both capital and Ackroyd v. income ; Ackroyd v. Ackroyd, 18 Eq. 313. Eq. 313.' Again, it was held, where a lump sum was paid by way of compromise of a claim against a testator's estate many years after it arose, that as between tenant for life and remainder- Maclaren v. men, the sum paid must be compared with the amount of the Eq. 382. ' debt due with interest at 5 per cent, to the death and 4 per cent, afterwards, and that only the proportion attributable to the latter must be treated as income, and the rest as capital. Where over-riding charges upon the estate exist, i.e., charges upon the capital of the estate entitled to rank in priority to the claim of tenants for life, then the rule of the Court is that, as between the tenant for life and the remainder- men, the former is bound to keep down the interest on such charges, but is not liable for the capital. This rule, however, is a mere rule of equitable apportionment intended to do justice between the tenant for life and remaindermen, and does not create any direct right in favour of the incimabrances ; ^l^orley v. Morley v. Saunders, 8 Eq., 594. Eq. 594. ' A tenant for life, whether legal or equitable, is not, however, in the absence of express provisions on the subject, under any liability to effect repairs or keep up the property generally nor are trustees in general bound to do so, either by setting aside a fund or taking steps against a tenant for life, unless Powys v. possibly where they are acting on behalf of infants. In such 495.^^^^^^ ^^' case if the trustees have to receive the rents and profits and hand them over to tenant for life, if there is anything to show that they have an active duty to preserve the property intact for the remaindermen, they must apply the rents in their hands towards effecting the repairs before handing them over' and are not bound to be content with the setting apart of a sum of money in the names as an indemnity against the i! t( t ! 150 EXECUTORSHIP ACCOUNTS. CD. 646. section in the above-mentioned cases was for a long time a subject of much discussion among the different judges of the Chancery Division. But the view which has eventually pre- vailed is that the object of the section was only to do away with the objectionable rule in connection with the claims of secured creditors which I have referred to above, and that therefore a change in the general law must be taken to have been made only to the extent necessary to bring about this result. In other words, as was said by Fry, L.J., in the case Re Maggi, 20 of rc Maggi, the section relates only to the rights of secured as against unsecured creditors considered as two conflicting classes of creditors, but that it does not affect the rights of the members of each of the two classes of secured and unsecured creditors inter se. The section has of course also introduced the bankruptcy rules as regards the determina- tion of the debts and liabilities provable and as to the valua- tion of annuities and future and contingent liabilities respec- tively. Following out this principle it has been held that the question as to what constitutes the person a secured creditor in the case of such an insolvent estate must be decided accord- ing to the rules of bankruptcy, and it was therefore held in the above case of re Maggi that a creditor who had obtained a judgment against the executor and had not taken any of the property of the testator in execution under his judgment, was not a secured creditor, but that inasmuch as the Act had not altered the rights of unsecured creditors inter se such judg- ment creditor was entitled to be paid in the third order of priority mentioned above, — that is, before the ordinary debts due by the deceased, whether specialty or not, such having been decided to be their order of priority, notwithstanding the pro- vision of Hinde Palmer's Act, in the case of Smith v. Morgan, even although such judgment has not been registered. Upon the same principle it was decided that this section does not introduce the rule of bankruptcy making an unregistered bill Smith V. Morgan, 5 C.P.D. 637. ' U:i EXECUTOKSHIP ACCOUNTS. 151 of sale, not falling within the Bills of Sale Act, 1882, void against creditors of a deceased insolvent. And in connection with the administration of estates of insolvent companies to which the above-mentioned section also applies, it was decided that the rights of preference belonging to particular kinds of creditors in the administration of bankrupt estates, are not introduced into the administration of insolvent estates in Chancery, and in Lee v. Nuttall, 12 CD., 61, it was decided that an executor's right of retainer being the mere right to pay himself in priority to other creditors, did not give him any express charge upon the estate, that he was not, therefore, a secured creditor within the meaning of this section, and that his right of retainer was not therefore affected by it, whether he had or had not exercised it before the date of the administration judgment. On the other hand, to the extent to which the section has been held to apply, the Bankruptcy rules are introduced into the estates of deceased persons to the very fullest extent, so that in Hill v. Bridges it was held that contingent liability must be proved against the estate in the same way as in Bankruptcy, viz., that a valuation of the contingency must be made at the date of the judgment for administration (this, and not the date of the testator's death being the date held equivalent to the date of adjudication in Bankruptcy), and that, just as in Bankruptcy, if the liability ripened into a claim during the administration, the proof could be amended by making it a proof for the full amount of the claim, less the proper rebate and interest from the judgment to the date of the accrual of the claim. In Green v. Smith it was held that the mutual credit clause applies in the ad- ministration of the estate of deceased insolvents, but that the practice is that until it is clear whether the estate will prove to be insolvent all monies paid in by a creditor who claims a set-off" must be carried to a separate account, until they can be dealt with on a proper footing. According to this decision, Tadman v. D'Epineinl, 20 CD. 217. Hill r. Bridges, 17 CD. 47. Green v. Smith, 22 CD. 86. Re Albion t Steel & Wire Co. 7 CD. ■ 647. . 1 Lee V. Nuttall, 12 CD. 61. ' 1 1 M ii 152 EXECUTORSHIP ACCOUNTS. Frire^'^'c.D. *^® <^ecision of the Master of the Rolls in Talbot v. Frerc is no 568. longer appHcable to the case of insolvent estates, although it 36 aa m '^ ^^'" undoubted law as regards all others. In that case he As to tacking ^^^^ ^^®^® ^^^ "^ ^^S^^ ^^ ^ person who happened to have in against heir his hands assets belonging to the testator, whether the c.f. Smith's surplus proceeds of a security or not, to set off the amount of ^3w%, p. such assets against a claim of the estate against him to this extent, not following the cases of Spalding v. Thompson, 26 Beavan, 637, re Easelfoot, 13 Eq. 327. The law now in such a case as that is, that where the assets have come into the hands of the claimant as the result of mutual credits or mutual dealings between the parties, a set- off will ipso facto arise between the parties where they have claims one against the other. Practically, the only exception is the case of a mere bailment or deposit of specific chattels, which remained in specie in the hands of the depositee, he having no right to sell the same, the better opinion being that Peat^. Jones, the introduction of the words mutual dealings has put an end to Jack V. ' *^6 former rule that cross claims to be set off against each other Q^RD.^ill ^°^^^ ^^^^ ^^^"^® ^^^^ ^® ^^^^ ^^ uiust terminate in debts, and those words having been held to be wide enough to apply to all cases, even of unhquidated damages. It must, however, be remembered that, in order that claims may be set-off, they must be due and owing to each party beneficially. For instance, it was held in the case of Ex parte o^i' "^JJ^^®' ^^^^J^^* *^i8.t a debt due from an executor cannot be set off against a debt due to him as an individual, unless in fact he is, by reason of all other claims having being cleared off, solely beneficially interested in the debt, or as was said in the case iJeMorier, ir^of re Morier — ** there can in such case be no set-off in eauitv " or under the mutual credit clause, unless the executor is so ♦' much the person beneficially interested that a Court of " Equity without putting him upon terms or without any '* further enquiry would have obliged the co-executor to CD. 491. EXECUTORSHIP ACCOUNTS. 153 " transfer the account into his name." In the same way it was held that all the Bankruptcy rules as to proof by secured creditors, including the rule allowing amendment to be made in the proof, apply in such cases, and in Bosioell v, Gurneij, it was laid down that a creditor against an insolvent estate whose debt bears interest can only prove for interest up to the date of the judgment, and not up to the date of payment. The Bankruptcy Act of 1883, however, introduced a new mode of procedure for winding up estates of insolveots, but it has been held, in the case of Ex imrte the Official Receiver, re Gould, that the only result of the section is to provide for the administration of the estate under the Bankruptcy jurisdic- tion instead of under the jurisdiction of the Chancery Division, and that it has not altered in any way the substantive law of the case, the Court deciding that the bankruptcy rules affect- ing the rights of parties in such administration were not in- tended to be introduced into such administration, whether taking place in Bankruptcy or in Chancery, to any greater extent than they were introduced by the provisions of the 10th section of the Judicature Act 1875, and accordingly in that case, it was held that section 47 of the Bankruptcy Act which deals with the setting aside of voluntary settlement does not apply to the case of a deceased insolvent's estate, administered under the Bankruptcy Act. The judgment of Mr. Justice Cave in that case, which is reported in 35 W.E., 458, is very instructive. In his opinion, out of the five portions into which part 3 of the Bankruptcy Act 1883 is divided, the only portions which under sub-section 6 of section 125 are to be considered applicable are in general the last two portions comprising sections 50 to 65, dealing with the realisation and distribution of property, and in general the first portion comprising sections 37 to 42, but even in these portions there are some sections such as 52, 64, and some portions of sections 37 to 42 as to which he was doubtful whether they were included, and on Williams v. Hopkins, 18 CD. 370. Boswell V. Gurney, 13 CD. 136. Ex p. Official Receiver, re Gould, 19 Q.B.D. 92. i l! li i II f; 154 EXECUTORSHIP ACCOUNTS. Fryman v. Fryman, 38 CD. 4C8. Marshalling. 11 Snell's Eq. 269. the whole he was of opinion that the two middle portions, including sections 43 to 49, were entirely inappHcable. In the case of re Williams, 36 Ch. D. 573, however, Mr. Justice North held that section 40 of the Bankruptcy Act did not apply in the case of the administration of assets of a deceased person in the Chancery Division, although he seemed to think that it would apply in the case of an adminis- tration of the same estate under the Bankruptcy jurisdiction, but he said that the apparent inconsistency in the adminis- tration thus arising need not be taken into account, as any creditor in his option can apply to the Court for a transfer of the administration to the Bankruptcy jurisdiction. The above-mentioned case of The Official Beceiver v. Gould was not, however, cited in the latter case. In the case of Fryman v. Fryman, Chitty, J. held that the Bankruptcy rule restricting the landlord's right of distress to one year's arrears was not incorporated with the administration in the Chancery Division of an insolvent estate. If after payment of all the debts out of the general assets there be any surplus, but not one sufiQcient to satisfy the claims of all the beneficiaries, they as amongst themselves are entitled to have the assets marshalled as it is called, i.e., to have the whole burden of the debts thrown on those classes of benefi- ciaries who ought to be postponed to them, or looking at it from the other side, there is a certain order in which property given to beneficiaries may be taken by the executor for the purpose of paying debts, and this perhaps is the best way in which to treat it for our purposes. First of all then, an executor ought to pay the debts out of such part of the general personalty as is either not be- queathed at all or only by way of a residuary bequest. Secondly, if this should not be sufficient he may resort to such part of the real estate as has been expressly devised for the EXECUTORSHIP ACCOUNTS. 155 purpose of paying debts. In the third place, he may have recourse to such part of the real estate as has not been devised at all, or as to which the devise has failed, and which has therefore descended to the testator's heir-at-law. Fourthly, he may take such portion of the real estate as although being devised has been devised subject specially to the pay- ment of debts. In the fifth place only can he come upon pecuniary legacies and annuities. Sixthly, if all the above classes be not sufficient, then such portion of the estate, whether realty or personalty, as has been specifically devised or be- queathed is liable to be taken. Seventhly, he may take the per- sonalty over which the testator had a general power of appoint- ment, which has been actually exercised by will. And in the last place the paraphernalia of the widow ; this consists of such apparel and ornaments given to the wife by her husband as are suitable to her condition in life, and as are expressly given to be worn as ornaments of her person only and not given to her absolutely. These articles are, as before mentioned, liable to the husband's debts, and may be disposed of by him during his life by sale or gift, but not by his will, and if not disposed of during his Hfetime they become the wife's property absolutely, subject to the liability to be applied in payment of her husband's debts by the executors. It must be remembered, however, that the testator may by express direction — showing at the same time an intention to exonerate the general personal estate from its primary liability, and thus, in fact, to make it almost a specific bequest — declare that the debts are to be paid out of any specific por- tions of his property, realty, or personalty, although in the case of personalty the intention to exonerate the general residue need not appear, and in that case the persons to whom such property is specifically given must take it subject to the burden. In the same way persons to whom real property is devised, As to married women exercising power of appointment, Smith, 374. Wife's executors claim for arrears of pin-money, Smith, 382. Snell's Eq. 270. M i, -; !'' i [I '• \ H 'r Ill I i 156 EXECUTORSHIP ACCOUNTS. 17 & 18 Vic. c. 113. 30 & 31 Vic. c. 69. 40 & 41 Vic. c. 34. Release. which has been charged or mortgaged by the testator in his h'fetime, take it subject to the burden of such charges, and cannot claim to have them paid by the executors as being debts of the testator unless so expressly directed in the will. This is so provided by the express statutory authority of what are known as Locke King's Acts, but, although they include leaseholds, the same rule does not otherwise apply to specific legacies nor to the paraphernaha of the wife, which, if pledged by the testator or otherwise charged in his lifetime, must be redeemed by the executor out of the general estate, for the benefit of the legatee or widow. When for any of the above purposes the executors have to deal with the real estate, or receive the rents and profits of any part of it, they must account for them in the same way as I have described, with reference to the personal assets, in accounts drawn up in similar form, as stated at the commencement of my lecture, but it must be remembered that executors, as such, have nothing to do with the real estate, except so far as it may be needed for the payment of debts, and that the real estate does not vest in them, they having only a special statutory power to sell it for the payment of debts, but that it vests directly, by force of the devise or operation of law, in the persons to whom it is devised, or on failure of them in the testator's heir-at-law, and that they are not, therefore, bound to get in or protect the real estate, unless it be needed for debts. When an executor has finally wound up his accounts and distributed the balances on his hands, the question of ten arises in what way he can get a proper settlement of his accounts and a release from liabihty. Of course, if he has to pay any- thing to residuary legatees who are of full age and sui juris, and therefore able to give him a discharge, he can present his accounts to them, and if they accept a division of the balance with full knowledge of all the facts, he is protected against any EXECUTORSHIP ACCOUNTS. 157 claims on their part, as we have seen above ; and, of course, to the extent I have mentioned above, he can by means of the statute 22 and 23 Vic. c. 35, obtain the limited protection afforded thereby if he issues the proper notices, and as regards all pecuniary legatees and annuitants he must of necessity have full notice of their claims, and can deal with the assets accordingly. It will be seen, however, that this by no means gives him an absolute or complete release from a possible liability to be called on to render his accounts. It was decided in one case, Ki7ig v. Mullins^ that an executor was King v. entitled on the estate being wound up to a release under seal d^ 3^^^' from the residuary legatee, although it w^as held in another Re Fortune's case that he could not claim one from a pecuniary legatee, e'^^^q-'i^ ^'^' but that he must be satisfied with a simple receipt. This distinction has also been held to apply in the case of all trustees, viz., that where his duties merely consist of the holding, preserving, and handing over securities or sums of money, he cannot demand anything more than a receipt, but that where his trust has involved a complicated series of dealings with the property, involving payments to others, changes of investment, and the getting in and dealing with property such as must practically arise in every executorship, he is entitled to a release under seal. The benefit of a release under seal is that under it a discharge can be obtained from general unascertained or unliquidated claims and liabilities which could not be covered by a simple receipt, and that as being a solemn act of a higher nature than a receipt, it is construed most strongly against the releasor, and throws on him the heavy onus of displacing it ; and if it purports to be founded on a full disclosure of the facts it can only be set aside on the ground of fraud, concealment or mistake. An executor, to the extent that he has funds in hand dis- tributable amongst other persons, can also avail himself of the provisions of the Trustees' Eehef Act, and where there is any IF * I ! J! I 158 EXECUTORSHIP ACCOUNTS. question as to the title of parties to the funds in hand or any difficulty in their distribution, he can pay them into Court, leaving the proper parties to appear and substantiate their claims before the Court, but in doing so he takes the heavy responsibihty of being made liable to pay the costs of obtaining the fund out of Court, if the Court should decide there was not sufficient justification for his paying in the moneys. Under the old practice of the Court of Chancery, and in fact of the Chancery Division down to the passing of the new rules in 1883, an executor could however always obtain an effectual and complete release by having his accounts taken in Court, and where the estate was large and the necessary deal- ings with it considerable, this was very often as cheap and certain a mode of securing a proper administration as could be devised, although in small estates the charges were no doubt a heavy burden on the estate. Under the new rules, however, an executor obtains the advantage, under order Lv! r. 4 and 5, of being able to get the sanction and protection of the Court in any case of doubt by means of an originating summons without having a complete administration of the estate, but, on the other hand, he equally with others is pre- eluded by rule 16 of order LV. from having his accounts taken as a matter of course, and obtaining a release in that way. A doubt was thrown out by Mr. Justice Pearson in Mills v Mills, W.N. (81) 21, whether anything short of a full administration judgment and an administration thereunder will protect the executor against creditors, but no doubt in ordinary cases if he avails himself of the provisions of 22 and 23 Vic. c. 35, he will obtain adequate protection. However, it is clear that many cases must arise where he cannot obtain a proper protection, and in re Dickinson, W.N. (84) 199, Mr. Justice Chitty held that the fact that the executors could not obtain sufficient protection without full administration was a ground for making such an order, but the general principle EXECUTORSHIP ACCOUNTS. 159 of that rule was held in Jones v, Blake, 29 CD. 913, to be that the right of persons to have questions decided arising between them and the estate of the testator has not been in any way taken away, but that any party interested is only to be entitled to an administration judgment where there are questions which cannot be properly determined except by an administration action, and that even in that case it need not be a full administration if the point can be decided by an order for limited accounts and inquiries. In any event, it is, I think, clear from what I have said, that it is of the most paramount necessity that the accounts of an executor should be kept so that they can be produced and vouched at any moment, however long deferred may be the request for them. I have, in these lectures, only spoken of executors strictly so-called, but the duties of an administrator are practically the same, although his rights are not nearly so extensive, e.g., the very wide powers of compromise conferred by the Conveyanc- ing Act do not apply to him, and the right of retainer does not, in ordinary cases, belong to an ordinary administrator, who is appointed as being a creditor of the testator, and he has not such extensive rights of acting before the letters of administration are actually granted as an executor has before probate. Of course his duties must be understood with this difierence, that, except in the case of administration cum tes- tament annexo, the beneficiaries to whom he has to account, are the next-of-kin of the testator according to the statute. h APPENDIX. A SUGGESTION haviug been made that a set of Executor- ship Accounts would render the reprint of the foregoing Lecture more complete and useful to students, I have laid down a very simple case, and have worked through the Accounts in connection therewith in a way which will, I hope, be of benefit to those who may have occasion to seek guidance in preparation for the Examinations of the Institute of Chartered Accountants. ARTHUR F. WHINNEY, Chartered Accoujitaiit. 8t Old Jewry, LoiidoUy E.G. May 16th, 1893. I 11 II EXECUTOESHIP ACCOUNTS. 163 ii . 1^ ' Epitome of the Will of GEORGE GRAY, who died 7th February y 1892. ! .1 Appoints William Brown, Thomas White, and Alfred Greene, Executors and Trustees. Bequeaths : — £100 to each Executor, if he acts. £3,000 to sister, Anne Cleves, to be invested and held in trust for her for life, then to her children in equal shares at 21, or sooner marriage. £50 to Home for Incurables. £25 to coachman, Hood. Leasehold house "The Gables," and household goods, pictures, china, linen, carriage, and horses, &c., to wife absolutely, she paying the rent, &c. Legacies to be free of duty, and interest at 4 per cent, per annum to be paid to Anne Cleves until securities are set aside. Residue of personal estate to Trustees on trust to pay income to wife, Jane Gray, for life, then capital to children, William and Mary, in equal shares at 21, or sooner marriage. William Brown and Thomas White accepted the trust, Alfred Greene renounced. 1892. Feb, 13. — Before instructing Messrs. Watt & Tyler, Solicitors, to prepare the necessary affidavit for probate, the Executors borrow £3,500 from the Union Bank of England, who agree to lend that sum at 4 per cent, interest per annum. The Executors thereupon open an account with that Bank, and the advance is passed to the credit thereof, the cash in the house at decease is also paid into the account. Feb. 14.— The Executors advance £200 to Mrs. Jane Gray on account of income. Mar. 10. — The Executors pay the funeral expenses and sume of the debts of the deceased. April 7. — The affidavit for probate is sworn, and shows the estate to be under £74,800. Probate duty is paid amounting to £2,244, being £3 per cent, thereon. The affidavit is as follows : — 't i 164 S ^i ?3j; III i! ■^8 EXECUTORSHIP ACCOUNTS. 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"la 'd o »-i 00 3.2 CO tn •f4 ■43 d -43 o d d |« ^ © 6«44 «5 " 2 CO © © t-l »H (8 o a CO a 'd © d bo • r-t 00 © O EH d o -d 00 © u CO d o CO © 34 O •43 'd © OQ cB © © © 'd © a o a 3 o a EXECUTORSHIP ACCOUNTS. 0Q»OC003>R*v.C^';oO»OO 169 CO oofl 3 S QTS d •^ 2 ©rd © J3 d 3 o u © < d a tc d d eS •43 d o O I -43 © Q •44 o d o I43 .&* *C o CO © O u J3 O (0 . S o « — (U-O "1 ac ., ■"Co t) cfl 3 C vm o — • O (U S (fl V o o • • • • s Q • • • 8 fe 1 »^ CO §. « g ■».■» <:u <3 CO ^.9 vDc:;fc)CqsHOot^6c) H »4 o -43 © o CO CO © "d 'd •d a e3 a 03 'd •4>l 1^ is ^ s Oh CO -Si OQ t^ a^ S >^ tq C^ K^ ^3 Q, « Xi T3 to i-^-S < •o c aj— < C "U o " o (u o .a ■" t; .«•* «4 CD c"-o| «^*3 E-g c a o > cfl "^is'^'S'sS ti 3 -OiJ-Cfl J3v„ QJ ,• « « CO ■" O M) to rt (o y —-r; _ O a) .-' _3 ^ J3 ja *• ^ ts Cfl'O L-ni*''«fl^3{flO Cfl 0) cfl 8 U 4<-a 0< CO •o - .^ act- oj 0) 0^.3 c" S -3 cfl 9 cfl -t; "o '. 58.3 « « S-^ HS2§c5^g 0*0 ? -' ^ CO t» 3 OS 0) .3. 3 ^ < V ■, 4. CO - •, « O "O - ■" S r! ™ C CO cfl CO cfl jC .fcrf CO © 00 d a o 2 fl 3 © -43 •43 d 3 o o o d oB to d d eS -43 d o o ►a; « _ 3 0) O 3 fl) S o «" •'^ «tfl^ c . (O c^S: 0-2 «T3 « 4,-73 rt " o „ o ■— "S-p^ cfl .SOU v.^ 00 PW • 73 a> g (o enses — Robert & Clive Valuers' fee Watt & Tyler Costs „ Anne Cleves, Trust Account — Quarter's Dividend on India 3i% Stock „ Legacies Account — William Brown .. Thomas White . . „ Legacy Duty Account— Inland Revenue, for Duty on above legacies.. „ Jane Gray— Balance of income to date . . „ Balance carried down 28 15 14 » » 22 14 »> 28 21 24 26 16 28 24 14 23 26 22 .. 24 23 »» 26 23 £ s d 2 15 3 10 13 6 2 3 10 346 268 600 I 5 o 12 7 9 3 12 o 50 o o 25 o o 39 o o 76 15 o 100 o 100 o o 175 (1) Cr. £ s d 200 o 42 9 o 28 8 9 2,244 o o 15 19 9 200 o o 3.542 3 10 38 15 10 90 o o 11,071 6 o 150 o 24 2 10 24 o 75 o o 7 10 o 115 15 o 24 2 10 200 O O 20 O O 723 7 " 2.990 13 O ;f2i,827 14 9 i. 176 Dr. (2) EXECUTORSHIP ACCOUNTS. CAPITAL. 1892 Feb. 7 1892 April 8 Oct. 31 I To Debts due at decease „ Funeral Expenses . . „ Balance carried down 14 15 To Legacies „ Loss on realisation of Stocks &c, London and South Western Railway Stock Bank of Japan shares .. „ Testamentary and Executorship Expenses Account- Balance transferred . . „ Legacy Duty Account- Balance transferred . . „ Dividends and Interest Account adjustment of correct appor- tionment of interest accrued to date of death „ Balances transferred — Canada 3% Bonds Egyptian State Domain Bonds Bankof Japan shares .. „ Balance carried down 23 6 7 22 26 27 t 7 i s d 57 15 6 484 6 o 80 8 3 176 9 8 229 II o i s d 68 8 6 42 9 o 74.720 3 6 £74,831 X o 11,110 o o 542 I 6 2,401 18 10 117 10 o 284 3 8 486 8 II 61,173 II I £76,115 14 o 1892 Feb. 7 i9^ April 7 Oct 31 1892 Nov. I EXECUTORSHIP ACCOUNTS. CONTRA. 177 By Canada 3% £10,000 at 94^ „ Egyptian State Domain Mort- gage Bonds, £10,000 at 102 • . „ London & North Western Railway Consolidated Stock, £6,500 at i6g „ London & South Western Railway Ordinary Stock, £3,000 at 186 „ Bank of Japan, 250 shares £20 each at 69 ,1 Dividends and Interest accrued due in respect of above In- vestments to date of afl&davit for Probate, viz.: Canada 3 % Bonds . . Egyptian State Domain London & North Western Railway London & South Western Railway Bank of Japan ,1 Cash in the house „ Cash at Bankers, Union Bank of England, Drawing Account „ Henry Gordon, amount due £750, valued at 2/- in £ „ Equitable Society, amount of Life Policy and Bonus „ Household Goods, Pictures, China, Carriages, &c „ Leasehold Property, known as "The Gables," estimated at By Balance brought down . . „ Profit on realisation of Stocks, &c.:— Canada 3% Bonds Egyptian State Domain Bonds London & North Western Railway Stock „ Henry Gordon, balance trans- ferred By Balance brought down 3 4 5 6 3 4 6 7 8 9 10 II 12 13 3 4 10 (2) Cr. £ 9.425 s d 10,200 10,985 5.580 17.250 677 o o 30 3 6 223 17 6 75 o o 12,550 o 4,260 o 3.575 o o £74.831 I o 74.720 3 6 720 10 6 675 o o £76,115 14 o fifl £61,173 II I 178 i8g2 Feb. 7 Oct. 31 EXECUTORSHIP ACCOUNTS. Dr. (3) CANADA 3% BONDS. 1892 Feb. 7 Oct. 31 To Capital Account— £10,000 Stock at 94^ „ Capital Account — Dividend accrued to date of affidavit for Probate „ Capital Account — Balance transferred Dr. (4) To Capital Account— £10,000 Bonds at 102 „ Capital Account — Dividend accrued to date of affidavit for Probate „ Capital Account — Balance transferred Stock. £ sd 10,000 o o Value. £ s d 9.425 o o 149 19 6 £10,000 o O' £9,574 19 6 Dividends. £ s d 80 8 3 £80 8 3 EGYPTIAN STATE DOMAIN Stock. £ sd 10,000 o c Value. £ sd 10,200 o o 237 9 o Dividends. £ s d 176 9 8 £10.000 o o £10,437 9 o £176 9 8 1892 May 25 Oct. 31 EXECUTORSHIP ACCOU^'TS. I 179 CONTRA. (3) Cr. By Stocks & Son— £10,000 at 96 £9,600 o o Less com- mission and duty 25 o 6 3^9.574 19 6 „ Capital Account- Balance transferred 16 Stock. Value. Dividends. £ sd lO.OOO • * £ s d 9,574 19 6 • • £ s d 80 8 3 £10,000 £9,574 19 6 £80 8 3 MORTGAGE BONDS. (4) Cr. 1892 May 25 June By Stocks & Son £5,oooati04 £5,200 o o Less com- mission and duty 656 £5,193 14 6 16 Oct. 31 Stocks & Son £5,000 at 105 £5,250 o o Less com- m ission &nd duty 656 £5,243 14 6 „ Capital Account — Balance transferred 16 Stock. £ sd Value. £ sd Dividends. 5,000 o c 5,193 14 6 £ s d 5,000 o c £10,000 o o 5.243 14 6 £10,437 9 o 176 9 8 £176 9 8 180 EXECUTORSHIP ACCOUNTS. Dr. (6) LONDON AND NORTH WESTERN To Capital Account— Stock. Value. Dividends. 1892 Feb. 7 £ sd £ sd £ s d £6,500 at 169 „ Capital Account — 2 6,500 10,985 Dividend accrued to date of affidavit for probate 2 Oct. 31 „ Capital Account — • • Balance transferred 2 333 2 „ Dividend and Interest Ac- count- Balance transferred . . 27 • • • ■ III 17 7 £6,500 £11,318 2 £239 9 8 Dr. (6) LONDON AND SOUTH WESTERN 1892 February 7 October 31 To Capital Account— £3,000 Stock at 186 „ Capital Account — Dividend accrued to date of affidavit for probate „ Dividends and Interest Account— Balance trans- ferred Stock. £ s d 3,coo o o Value. 27 £ s d 5.580 o Dividends. £ s d • • 62 19 o 50 6 £3,000 o o £5,580 o o £113 5 EXECUTORSHIP ACCOUNTS. 181 RAILWAY CONSOLIDATED STOCK. (5) Cr. 1892 April 30 June 8 By Cash, dividend to 31st December, 1892 . . „ Stocks and Son £6,500 Stock at 175 . . £11,375 o o Less com- mission and duty .. 56 18 o £11,318 2 CB I 16 Stock. £ sd 6,500 o o Value. £ sd 11,318 2 o Dividends. £ s d 239 9 8 £6,500 o o £11,318 2 £239 9 8 RAILW^AY ORDINARY STOCK. (6) Cr. 1892 April 30 June 8 Oct By Cash— Dividend to 31st December, 1892 . . „ Stocks & Son £3,000 Stock at ,185 . . £5,550 Less commis- sion & duty 27 15 6 £5.522 4 6 CB 1 16 Stock. £ s d 3,000 o o Value. „ Capital Account- Balance transferred £ s d 5r522 4 6 Dividends. £ s d "3 5 o £3,000 o o 57 15 6 £5.580 o o £"3 5 imtm 'M 182 EXECUTORSHIP ACCOUNTS. i5r. (7) BANK OF JAPAN SHARES. 1892 February 7 To Capital Account— 250 Shares £20 each, at 69 „ Capit.il Account- Dividend accrued to date of affidavit for probate Shares. Value. Dividends. 250 £ s d 17,250 o o £ s d 250 £17,250 o o 229 II o £229 II o EXECUTORSHIP ACCOUNTS, 183 CONTRA. (7) Cr. 1892 May 25 June 8 By Stocks and Son . . 100 Shares at 68.. .. £6,800 Less commis- sion & duty 34 6 16 16 2 Shares. Value. Dividends. 100 150 • • £ s d 6,765 19 6 9,999 14 6 484 6 £ s d £6,765 19 6 „ Stocks and Son 150 Shares at 67. . . . £10,050 Less commis- sion and duty 50 5 6 £9.999 14 6 „ Capital Account— Balances transferred 1 229 II 250 £17,250 £229 II Dr. (8) 1892 Feb. 7 CASH IN THE HOUSE. To Capital Account £ s d £ s d 30 3 6 CONTRA. (8) Cr. 1892 Feb. 13 By Cash— transfer CB I £ s d • • £ s d 30 3 6 Dr. (9) UNION BANK OF ENGLAND. 1892 Feb. 7 To Capital Account £ s d 1892 April 30 CONTRA. By Cash— transfer (9) Cr. CB I £ s d £ s d 223 17 6 I' 184 lytECUTORSHIP ACCOUNTS. Dr. (10) HENRY GORDON. 1892 Feb. 7 Oct, 31 To Capital Account (Amount due £■750, estimated to produce as. in £) „ Capital Account- Balance transferred £ s d £ 75 s d 675 £750 Dr. (11) EQUITABLE SOCIETY. 1892 Feb. 7 To Capital Account, amount of life policy and bonus £ s d £ s d 12,550 o o Dr. (12) HOUSEHOLD GOODS, PICTURES, CHINA, &c. 1892 February 7 To Capital Account 2 £ s d • ■ £ s d 4,260 Dr. (13) 1892 February 7 "THE GABLES." To Capital Account £ s d £ s d 3.575 o o EXECUTORSHIP ACCOUNTS. 185 1892 July 12 By cash CONTRA. CB I (10) Cr. £ s d £ s d 750 o o £■750 o o 1892 April 7 CONTRA. CONTRA. (11) Cr. 1892 June I By cash CBI £ s d • • £ s A 12,550 ._ 1 (12) Cr. By Legacies Account— The property having been specifically bequeathed to Mrs. Jane Gray .. 23 £ s d £ s d 4,260 o o CONTRA. (13) Cr. 1892 April 7 By Legacies Account — The property having been specificallv bequeathed to Mrs. Jane Gray 23 £ s d £ s d 3.575 o o I 186 Dr. (14) March lo July 17 EXECUTORSHIP ACCOUNTS. DEBTS DUE AT DECEASE. 1892 March 10 >> » •• April 30 To Cash paid as under: Philip Smith • Edward Blake William Drake Henry Mead J. Johnson . . Inland Revenue H. Jenks . . S. Snow J.Hood .. G. Physick . . CB I £ s d £ s d 2 15 3 10 13 6 2 3 10 346 12 7 3 12 2 6 6 o I 5 24 o 9 o 8 o o o ;f68 8 6 Dr. (16) FUNERAL EXPENSES. 1892 March 10 1892 May 25 1892 June 8 1892 June 9 To Cash CBI £ s d ^ s d 42 9 o Dr. (16) STOCKS AND SON. To £10,000 Canada 3% at 96 . . Less Commission and Duty „ £5,000 Egyptian State Domain at 104 Less Commission and Duty „ 100 Shares, Bank of Japan, at 68 . . Less Commission and Duty To £5,000 Egyptian State Domain at 105 Less Commission and Duty „ £6,500 London and North Western Rail way Consolidated at 175 Less Commission and Duty •• £3.000 London and South Western Rail way Ordinary at 185 . . Z,«s Commission and Duty , 150 Shares, Bank of Japan, at 67 .. l,ess Commission and Duty „ Balance carried down . . To Cash £ s d 9,600 25 6 5,200 6 5 6 6,800 34 -' 5.250 O 656 £ s d 9.574 19 6 5.193 14 6 6,765 19 6 21.534 13 6 ".375 o o 56 18 o 5.550 o o 27 15 6 10,050 o 50 5 6 CB I £ £ 5.243 14 6 11,318 2 o 5.522 4 6 9,999' 14 11,071 6 6 43.155 I 6 11,071 6 EXECUTORSHIP ACCOUNTS. 187 CONTRA. (14) Cr. 1892 February 7 1892 Feb. 7 1892 May 25 1892 June 8 By Capital Account:— Philip Smith, grocer Edward Blake, butcher . . William Drake, fishmonger . . Henry Mead, baker 1. Johnson, taxes nland Revenue, carriage duty H. Jenks, cook S. Snow, housemaid J. Hood, coachman G. Physick, doctor £ s d 2 15 3 10 13 6 2 3 10 346 12 7 9 3 12 o 268 600 I 5 o 24 o o £ s d £68 8 6 CONTRA. (16) Cr. By Capital Account — A. Black . , £ s d £ s d 2 •• 42 9 CONTRA. (16) By £5.000 Corporation of London 3% at loi. . Duty .. £7.500 India 3^% Stock at 106 Duty >• £4.065 London, Tilbury, and Southend Railway 4% Preference Stock at 123 Stamp and Fee and Duty „ Cash 17 18 19 I £ s d 5,050 o o 6 7.952 o o 6 By £20,000 Corporation of London 3% at qoi Duty /_ ^^ ,, £14,000 Consols at 97. Duty ., £9.000 India 3^% Stock at 107* . . Duty . . 4.999 19 o 25 16 7 £ s d 5.050 o 6 7,952 o 6 5,025 15 7 3,506 16 II 17 20 18 £ 19,900 o o 6 21,534 13 6 13,580 o o 6 9,675 o o 6 1892 June 8 By Balance brought down 19,900 o 6 13,580 o 6 9.675 o 6 £ .. £ 188 EXECUTORSHIP ACCOUNTS. I>r. (17) CORPORATION OF 1892 May 25 To Stocks and Son £5,000 Bonds at loi .. £5,05000 Duty.. .. 6 June 8 Oct. 31 1892 Nov. I £5,050 o 6 ,1 Stocks and Son £20,000 Bonds at99i ., £19,90000 Duty . . 6 16 £19,900 o 6 „ Dividends and Interest Account— Balance trans- ferred To Balance brought down 16 Bonds. £ s d Value. Dividends. £ s d 5,000 o o 5,050 o 6 20,000 o 0; 19,900 6 £ s d 27 365 12 6 £25,000 o o £24,950 I o £365 12 6 £25,000 o £24,950 I Dr. (18) INDIA ^% STOCK. 1892 May 25 June 8 To Stocks and Son £7,500 Stock at 106 .. £7,952 o o Duty . . 6 16 £7,952 o 6 „ Stocks and Son £9,000 Stock atio7i •■ £9.675 o o Duty . . 6 Stock. £ s d 7,500 o o 16 Oct. 31 1892 Nov. I £9.675 o 6 „ Dividends and Interest Account— Balance trans- ferred To Balance brought down 27 Value. £ s d 7 952 o 6 9,000 o o 9.675 o 6 Dividends, £ s d £16,500 o o £17,627 I o 233 5 o £233 5 o £13,669 18 2 £14,627 I o EXECUTOESHIP ACCOUNTS. 189 LONDON 3% BONDS. (17) Cr. 1892 Oct. 5 1892 June 5 July 5 Oct. 5 .. 31 By Cash — Half-year's Divi- dend, less tax „ Balance carried down . '. CB I Dividends. 365 12 6 £25,000 o o £24,950 I o £365 12 6 CONTRA. (18) Cr. By Transfer to folio .. Stock held in Trust on behalf of Anne Cleves. „ Cash— One quarter's Divi- dend, less tax „ Cash— One quarter's Divi- dend, less tax M Balance carried down 25 CB I Stock. £ s d 2,830 I 10 Value. £ s d 3,000 o o Dividends. 13,669 18 2 14,627 I o £ s d 116 12 6 116 £2 6 £16,500 o o £17,627 I o £233 5 I 190 1892 May 25 Oct. 31 1892 Nov. I EXECUTORSHIP ACCOUNTS. Dr, (19) LONDON TILBURY AND SOUTHEND To Stocks and Son 3^4.065 Stock at 123 • . £4.999 19 o Stamps, &c. 25 16 7 £5.025 15 7 16 Stock. £ s d 4,065 o o Value. £ s d 5.025 15 7 Dividends. £ s d „ Dividends and Interest Account — Balance transferred To Balance brought down 27 /■4,o65 o o 4,065 o o £5.025 15 7 5.025 15 7 79 5 4 £79 5 4 EXECUTOllSHIP ACCOUNTS. RAILWAY 4% PREFERENCE STOCK. 1892 July 30 Oct. 31 By Cash— Dividend for half- year, less tax ,, Balance, carried down CB I Stock. £ s d 4.065 o o 191 (19) Cr. Value. £ s d 5.025 15 7 Dividends. £ s d 79 5 4 £4,065 o o £5,025 15 7 £yg 5 4 i^-' Dr. (20) 2f CONSOLIDATED STOCK. To Stocks and Son £UflbO Stock at 97 £18,580 Duty 6 16 Stock. Value. Dividends. 1892 June 8 £ 8 d 14,000 £ 8 d 13,580 6 £ 8 d £13,580 6 October 31 „ Dividends and In- terest Account — Balance trans- ferred To Balance brought down 27 • • • • 187 13 8 18U2 £14,000 £13,580 6 £187 13 8 Nov. 1 £14,000 £13,580 6 Dr. (21) UNION BANK OP ENGLAND. 1892 May 25 To Cash repaid , . Interest to date c^ I £ s d 3,500 o o 42 3 10 £ s d 3.542 3 10 CONTRA. (2 0) Cr. 1892 July 5 Oct. 5 „ 81 By Caeh— Quarter's divi- dend, less tax „ Cash— Quarter's divi- dend, less tax „ Balance carried down CB 1 CB 1 Stock. £ 8 d 14,000 Value. £ s d 13,5S6* 6 Dividends. £1J,000 £la,5fcO 6 fad 93 16 10 93 16 10 £187 13 8 LOAN ACCOUNT. (21) Cr. 1892 Feb. 13 Oct. 31 By Cash advanced „ Testamentary and Executorship Ex- penses Account— Interest transferred 22 s d • • 3.500 42 s d 3 10 £ 3.542 3 10 I 192 EXECUTORSHIP ACCOUNTS. Dr. (22) TESTAMENTARY AND EXECUTORSHIP EXPENSES. 1892 April 7 Sept. 30 To Cash, for Probate Duty „ Do. Robert and Clive — Valuers' fees „ Do. Watt and Tyler- Costs „ Union Bank of England- Balance ot interest trans- ferred CB I CB I 21 £ s d £ s d a .244 39 76 15 42 3 10 £2 ,401 18 ID Dr. (23) LEGACIES. 1892 June 5 Oct. 31 July 26 April 7 To Anne Cleves' Trust Account ,, Cash paid William Brown .. „ Ditto, Thomas White „ Cash paid Home for Incurables „ Cash paid Hood „ "The Gables "Account .. 24 OBI „ Household Goods, Pictures, &c. Account CB I 13 12 £ s d £ s d 3,000 o o 100 o o 100 o o 50 • 25 3.575 o 4,260 £ 11,110 Dr. (24) ANNE CLEVES' 1892 June 5 July 5 Oct. 6 .. 31 CB I It 1) H »l Capital. Income. To Cash .. Ditto „ Ditto „ Balance carried down £ s d • • • • • • 3,000 £ s d 38 15 10 24 2 10 24 2 10 £3,000 £87 I 6 EXECUTORSHIP ACCOUNTS. 193 CONTRA. 1892 Oct. 31 By Capital Account- Balance transferred (22) Cr. £ s d £ s ,1 2,401 18 10 £2,401 18 10 1892 April 8 CONTRA. By Capital Account for Legacies, as under — Anne Cleves William Brown .'. ',\ Thomas White Alfred Greene (renounced) Home for Incurables Hood „ Jane Gray, for leasehold property „ Jane Gray, for Household 'Good's Pictures, &c., specifically bequeathed (23) Cr. £ s d 3,000 100 100 • • 50 25 3.575 4.260 £ s d £11,110 o o TRUST ACCOUNT. 1892 June 5 July Oct. 5 5 1892 Nov. I By Legacies-amount directed to be held in trust on behalf of Anne Cleves, in- vested in £2,830 IS. lod. India 3*% otock . , . , „ Interest and Dividend Account—* * 4% on £3,000 from 7th February to date „ guarter s Dividend on Stock separately invested ^ ' >, Quarter's Dividend on Stock separatel'v invested ... *- / By Balance brought down 23 27 25 25 (24) Cr. Capital. s d 3,000 o o Income. £ s d • • 38 15 10 • • 24 2 10 • • 24 2 10 £3.000 £87 I 6 3.000 194 EXECUTORSHIP ACCOUNTS. EXECUTORSHIP ACCOUNTS. 195 Or. (26) INDIA 3i% STOCK— TEUST ACCOUNT i8g2 June 5 July 5 October 5 1892 Nov. I To Stock to be held in trust in respect of the devise to Anne Cleves „ Anne Cleves' Trust Account Dividend transferred . . „ Anne Cleves' Trust Account Dividend transferred . . To Balance brought down Stock. Value. Dividends. £ s d £ sd £ s d 18 2,830 I 10 3,000 24 • • • • 24 2 10 24 • • • • 24 2 10 {■2,830 I 10 £3,000 =f48 5 8 2,830 I 10 3,000 xi^i. v/x. An^xh UJ-iJiVJ^ a. (2 5) Cr. 1892 July 5 October 5 31 By Cash— I Quarter's Dividend less Tax „ Cash-i Quarter's Dividend less Tax M Balance carried down .' \ en I ft Stock. Value. Dividends. £ s d • • • • 2,830 I 10 £ s d • • • • 3,000 £ s d 24 2 10 24 2 10 £2,830 I 10 £3.000 £48 5 8 Dr. (26) 1892 Jure 6 Julv 26 Oct. 31 LEGACY DUTY. To Cash for Duty on Legacies as follows— Anne Cleves Home for Incurables Hood William Brown Thomas White CB 1 £ s d 5 2 10 10 10 £ a d 90 7 10 20 £117 10 1892 Oct. 31 CONTRA. By Cnpifal Account- Balance transferred (26) Cr. 117 10 £117 10 !: Br. (27) DIVIDENDS AND INTEREST. 18£2 June 5 October 81 To Anne Cleves — Trnst Account, Intereet to date of setting aside securities „ Jane Gray, Income Account — Balance transferred 24 2S £ 8 d £ s d 88 15 10 1,273 7 11 £1.812 3 9 , 1892 October 81 CONTRA. By Balances transferrer! — ^°Sto?k *^"*^ North-Western Railway London *knd South-Western Railway tock •' Corporation of London Bonds India 3*% Stock London, Tilbury, and Southend Rail- way Stock . , Consols * '\ Capital Accounts- Adjustment of Interest accrued to date 01 death (2 7) Cr. £ s d £ s d 5 111 17 7 6 17 18 50 6 3G5 12 6 233 5 19 20 79 5 4 187 13 8 1,028 1 2 284 3 8 £1.312 3 9 196 EXECUTOKSHIP ACCOUNTS. EXECUTORSHIP ACCOUNTS. 197 Dr. (28) JANE GRAY. INCOME ACCOUNT. (28) Cr. 1892 Feb. 14 May 18 July I Oct. 31 To Cash, advanced „ do. do. „ do. do. „ do. balance due CM I £ s d £ s d 200 200 150 723 7 " 1.273 7 IX 1892 Oct. 31 By Dividends and Interest Account- Balance transferred 27 £ s d £ s d 1.273 7 II Dr. (29 BALANCE SHEET. 1st NOVEMBER, 1892. (2 9) Cr. Liabilities. Tj Anne Cleves— Trust Account. „ Capital Account £ s d £ B d 8,000 01,173 11 1 £04,173 11 1 Assets. By £2 830 Is. lOd. India 8§% Stock, Investment on behalf of Anne Cleves „ Investments — £25,000 Corporation of London 3% Bonds U,Gm 18s. 2d. India 3^% Stock . . "=> ' ' £4,005 London, Tilbury, and Southend Rail- way 4% Preference Stock .. .. I yuiii Jei4,000 2} Consolidated Stock . . .. I v^'l^^ ^V}\^^ ^*°^ '•^^^ investment in West Middlesex Waterworks Debentures) i- s d £ 3 d 3,000 24,950 1 14,027 1 Agreed— Jane Gray. Annk Cleveb. 2st November, 1S9'4. 5,02.-i 15 2,900 13 61,173 11 1 04,173 11 1 ••» ■ 1 • • • « • ■ a • • • • • • ••• • • • 9 »' • • • a • • • • t t • • > ■ J • J i , a a a a a a a a a a . o a • => i » * » 9 e • • • • a a * • a • • • a a t a a 1 a • a • e a a a ife COLUMBIA UNIVERSITY LIBRARIES This book is due on the date indicated below, or at the expiration of a definite period after the date of borrowing, as provided by the rules of the Library or by special ar- rangement with the Librarian in charge. DATE BORROWED DATE DUE DATE BORROWED DATE DUE -IS for ,1 the - com- CSS(II40)MI00 * I t D430.156 HVhinney, Frederick Executorship accoimts. 'WB'r • />d~i w^? i NEH MAY 31994 ! ERRATA. From the print of this Lecture appearing in the London Students' Transactions for 1888, the heading " Part VL" was omitted, and this error has been repeated in the present work. The omission occurs on page 1 11, and should head the paragraph com- mencing " Having thus now dealt," &c. Page 141, 15th line from bottom, should read " the benefit of the remaindermar " D430.156 Whinney, Frederick ExecutorshiD accounts W57 Vl/d"7 i NEH HAY 031994 ! « « * « GEE & CO., PRINTERS AND PUBLISHERS. BANKRUPTCY. Price 5s, net. By T. M. Stevens, M.A., D.C.L., Barrister-at-Law. A demand has arisen for a short work on the above, which, whilst treating the subject from a legal point of view, will still be of use mainly to Chartered Accountants and others. The general outlines of the subject, i.e., the text of the Acts, as modified by leading cases, is what is wanted, and what this work has endeavoured to give. BOOKKEEPING FOR ACCOUNTANT STUDENTS. Complete, with Index, los. 6d. net. By Lawrence R. Dicksee, F.C.A. (of the firm of Sellars, Dicksee & Co.) 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Every form that can possibly be required finds a place, and the list comprises those requisite in — I. Formation of Company. II. Proceedings of Directors. III. General Meetings. IV. Share Certifi- cates and Notices. V. Share Warrants to Bearer. VI. Share Register, VII. Transfer of Shares. VIII. Debentures. IX. Dividends and Debenture Interest. X. Stock E.\change Quotation. XI. Books of Account. XII. Office Books. XIII. Liquidation and Reconstruction. XIV. Notices by Advertisement. XV. Table of Stamp Duties. COMPARATIVE DEPRECIATION TABLES. Price IS. net. By Lawrence R. Dicksee, F.C.A. (of the firm of Sellars, Dicksee & Co.), Author of "Auditing," "Bookkeeping for Accountant Students," &c. ERRORS IN BALANCING. Price is. net. A Concise Hand-book dealing with the more usual causes of differences in Trial Balances and the method of their Detection. Based on Articles which have appeared in The Accountant.* 34 MOORGATE STREET, LONDON, E.G. ( ACCOUNTANCY BOOKS EXECUTORSHIP ACCOUNTS. 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For Use in the Offices of Chartered Accountants. PARTNERSHIP ACCOUNTS. Price 25. 6d. net. By Percy Child, A.C.A. The principal headings and sub-headings of the work are— The Parol Agreement-The Agreement by Deed-The Partnership Act and the Deed-The Opening of Partnership Accounts-The Partnership Transactions- The Dissolution— An explanation of Partnership terms. It is confidently anticipated that this work will be found equally useful to the practising member as to the student. ^ J- " ••" «-"c PRACTICAL BOOKKEEPING, THE ELEMENTS OF. Price IS. 6rf. net. By T. E. Streeter. For Use in Schools. STUDENT S GUIDE TO ACCOUNTANCY, THE. Price 2S. 6d. net. The object of this work is twofold, viz. :-(a) To place impartially heiore Parents and Guardians the prospects offered by Accountancy as a profession, and the best ^r^S^o °n "T'l"^ ^'l entrance thereto. (6) To point out to the Student the means of employing the time during his articles to the best advantage, with a view not only to passing the various Examinations with credit, but also to obtaining a thorough and pracical acquaintance with the various branches of the profession. Both these ma ters are very fully dealt with in clear and untechnical language, and it is believed that the work will be found of the greatest practical value to 111 Those for whomTtls TRUSTEES IN BANKRUPTCY, LIQUIDATORS ^^^p^^^^^^^^S' THE LAW OF. Prict5s fet^ By W. R. WiLLSON, B.A.Oxon.. and of the Middle Temple, Barrister-at-Law TnTft succinct statement of the law on those subjects as established by the latest Statutes and Decisions, written analytically for Students with a view to the Examinations of the Institute and Society of A ccountants AUTHORS' WORKS PRINTED AND PUBLISHED F'^^p 1 1 1944 END OF TITLE