CHARGES.

See AGRICULTURAL HOLDINGS-LAND IMPROVEMENT

ACTS.

CHARGES BY WILL.

A charge by will of debts and legacies may not only be created expressly but by implication; thus, as regards debts, a general direction by a testator that his debts shall be paid, charges them on the real estate (c); but not where after such general direction the testator has specified a particular fund for the purpose (d); nor where the direction is that the debts are to be paid by the executors, they not being devisees of the estate (e). If they are such devisees there is a charge on the real estate devised to them (ƒ).

Again, as regards legacies, when they are given and followed by a gift of the residue of the testator's real and personal estate in a mass, the testator's real estate is thereby charged with the payment of such legacies (g), and the same principle applies where the legacies are followed by a gift of real and personal estate "not otherwise disposed of" (h).

On the other hand, a charge of legacies in such terms as "on all the real estate" of the testator, does not, primâ facie, charge lands specifically devised (i), but a charge of debts and legacies in similar terms does so as regards both debts and legacies (k).

A charge of legacies on real estate charges thereon any annuities given by the will (7).

A purchaser from an heir-at-law or devisee need not

concern himself as to the existence of debts, legacies, or annuities unless they are expressly or impliedly charged upon the land. Where a testator charges his real estate and devises it upon trusts which provide for the payment of debts and legacies, no difficulty arises, as trustees have, by Lord St. Leonards' Act, power to give receipts for any purchase or mortgage money (l), and Lord Cranworth's Act (m) subsequently gave trustees power to give receipts for any trust money payable under instruments coming into operation on or after the 28th August, 1860, and the Conveyancing Act, 1881 (n), applying to all trusts whenever created, provided that the receipt in writing of any trustees or trustee for any money, securities, or other personal property or effects payable, transferable, or deliverable to them or him under any trust or power should be a sufficient discharge for the same, and should effectually exonerate the person paying, transferring, or delivering the same from seeing to the application or being answerable for any loss or misapplication thereof.

But the payment of debts and legacies is frequently charged by testators upon their real estate while they devise such real estate upon uses or trusts which do not expressly provide for the raising of the sums so charged. The difficulties of dealing with land so charged have to a large extent been overcome by the provisions of Lord St. Leonards' Act. It will be convenient in the first place to consider that statute and afterwards the cases which will occasionally arise that are not covered by it. It provides that where, by a will coming into operation on or after the 13th August, 1859, a testator charges real estate with the payment of debts or any specific legacy or sum, and devises the estate so charged to trustees for the whole of his estate or interest, and makes no express provision for raising the debts, legacy, or sum, the devisees in trust may sell or mortgage (0), as also may any person taking the estate so charged by survivorship, descent, or devise (2), or failing any

(I) 22 & 23 Vict. c. 35, s. 23. (m) 23 & 24 Vict. c. 145, s. 29. (n) 44 & 45 Vict. c. 41, s. 36, continued by the Trustee Act, 1893 (56

J.

& 57 Vict. c. 53), s. 20.

(0) Lord St. Leonards' Act (22 & 23 Vict. c. 35), ss. 14, 16. (p) Ibid. s. 15.

E

such devise by the testator of the whole of his estate or interest so charged, his executors may sell or mortgage (p), and purchasers and mortgagees are not bound to inquire whether the powers are being duly and correctly exercised (q). A purchaser or mortgagee is not bound to see to the application of purchase or mortgage money, and even before the Conveyancing Act, 1881 (r), the trustees or executors could give the purchaser or mortgagee a good receipt unless the contrary was expressly provided (s).

The Act does not extend to a beneficial "devise to any person or persons in fee or in tail, or for the testator's whole estate and interest charged with debts or legacies" (t). The meaning of this is that where a testator has devised his whole estate and interest directly to or in trust for A., or A. and B., or any number of persons as tenants in common, or as joint tenants in fee or in tail, so that the devisee or devisees could themselves mortgage the property, then neither the executors nor the trustees are to have the power; but where the estate is devised by way of settlement, so that there is not any individual or any number of individuals able to make a title, then that is a case to which the statute is intended to apply (u).

The cases where a testator has charged his land with the payment of debts, legacies, or annuities, and has not made any express provision for raising them, but which are not provided for by Lord St. Leonards' Act, are:

(1) Where the testator died before 13th August, 1859. (2) Where the land charged is devised to one or more persons beneficially in fee or in tail or for the testator's whole estate and interest.

(3) Where the testator has not devised the land charged to any trustee or trustees for his whole estate and interest therein, and there is no executor (x).

(p) 22 & 23 Vict. c. 35, s. 16. (a) Ibid. s. 17.

(r) 44 & 45 Vict. c. 41, s. 36, continued by 56 & 57 Vict. c. 53, s. 20. (s) 22 & 23 Vict. c. 35, s. 23

(t) Ibid, s. 18.

(u) Re Wilson, Pennington v. Payne, 54 L. T. 600; 34 W. R. 512, per Kay, J.

(x) Re Clay and Tetley, 16 Ch. D. 3; 50 L. J. Ch. 164; 43 L. T. 402; 29 W. R. 5.

(1) With regard to a charge of debts, it may now be safely assumed that all the debts of a testator who died before the 13th August, 1859, have been duly satisfied, or have become statute-barred. Where, however, it is thought necessary, an inquiry as to the testator's debts may be made so as to throw on the vendor the responsibility of stating that he has heard of no debts of the testator still remaining unpaid.

(2) Where there is a charge of debts generally, the purchaser from a beneficial devisee in fee or in tail is not bound to see to their payment, for "a charge is a devise of the estate in substance and effect pro tanto upon trust to pay the debts" (y). The case is, however, different where specified debts are charged upon the property, and it is then incumbent on the purchaser from such a devisee to satisfy himself that such debts have been paid, or to see that they are paid out of the purchase-money (≈).

(3) Where the testator has not devised his estate to any trustee or trustees for his whole estate and interest, or to any person in fee or in tail, or for the testator's whole estate and interest, and there is no executor, unless the testator died sufficiently long ago to raise a presumption that his debts. have been satisfied, it would appear to be impossible to make a title without the aid of the Court.

Where legacies or annuities are charged upon land, a purchaser must, in all these cases not provided for by Lord St. Leonards' Act, insist upon the concurrence of the legatees (a), and the same observation applies to specific or scheduled debts (z). Where debts as well as legacies are charged on the real estate, it is said that no further concurrence is necessary than where the lands are charged with debts alone, but where debts and annuities are charged upon property, it has always been the custom of conveyancers to treat annuitants as incumbrancers notwithstanding the charge of debts; and until it has been expressly decided that in such a case a purchaser is exonerated from inquiring into

(y) Bailey v. Ekins, 7 Ves. jun.

319.

(z) Lloyd v. Balwin, 1 Ves. sen. 173.

(a) Re Rebbeck, Bennett v. Rebbeck, 63 L. J. Ch. 596; 71 L. T. 74; 42 W. R. 473; 8 R. 376.

the payment of legacies and annuities, he would be well advised to require proof of payment of legacies as well as of annuities.

When annuities are charged upon land and the purchaser is buying the land subject thereto, a receipt for all the payments of the annuities which have been made during the previous six years should strictly be required, but it is not the practice, unless any doubt exist, to call for more than the last receipt, and in any case proof of the payments which have been made prior to the previous six years may be dispensed with (c). Where an annuitant has died, the purchaser should require the same proof of the payment of the annuity up to the death of the annuitant, and a receipt for the payment of succession and estate duties.

Whenever the receipt for the payment of a legacy or a receipt for the payment of any of the first four yearly payments of an annuity is required, the purchaser should consider whether legacy duty is payable in respect of such legacy or annuity, and, if so, should insist upon a receipt properly stamped as required by the Legacy Duty Act, 1796 (d).

When an annuitant concurs in a sale, the purchaser should insist upon such succession duty as will become payable on the decease of the annuitant being commuted or otherwise provided for.

Where there is a tenant for life, the provisions of the Settled Land Act, 1882, must be borne in mind (e), whereby the consent of the tenant for life is necessary to the exercise of any power exercisable for any purpose provided for by the Act. It is prudent to require such consent, although, even in the case of a sale to raise charges, it is doubtful whether it is strictly necessary.

Where a legal personal representative sells or mortgages leaseholds or (when the testator or intestate has died after 1897) freeholds, the purchaser is in no case bound to see to the payment of debts, legacies, or annuities.

(e) 45 & 46 Vict. c. 38, s. 56 (2).

(e) 37 & 38 Vict. c. 57, s. 42.

(d) 36 Geo. 3, c. 52.