The hand-book of the law of legacies / containing a statement of the nature of legacies, and the accidents to which they are subjects; together with the rights of legatees, and the causes and manner of the ademption, cumulation, and abatement of their bequests

by Anonymous

EQUITABLE ASSETS.

According to the usual legal phraseology, the difference between legal and equitable assets is this; “legal assets are such as constitute the fund for the payment of debts, according to their legal priority; whereas, equitable assets are those which can be reached only by the aid of a court of equity, and are subject to distribution on equitable principles, according to which, as equity favours equality, they are to be divided pari passu among all the creditors.” This is a very important distinction, and of great consideration in the payment of debts, and it has accordingly been fully set out in the Hand-Book for the instruction of Executors and Administrators. There the difference is as to the distribution of equitable assets, but here we have to regard their attainment. The difference between the different species of legacies will be shown hereafter, but in this place we may look upon them in one light, and consider that there is both sufficient to pay the debts and satisfy the legacies, if the assets are all got in, and properly distributed. With respect to the debts, the legal assets are applicable in a certain order, while the equitable assets are equally shared among the creditors. But with respect to the legacies, saving the instance first alluded to, of specific legacies which are to be noticed hereafter, the assets, whether legal or equitable, are all distributed equally, that is, in full, if sufficient to satisfy in full, or in proportionate equality, according to the amounts of the legacies, and the means to pay them. Our business, therefore, here is to show what the executor is entitled to, and what he ought to obtain in order that the legatees may not suffer from his negligence.

The executor enters, then, fully into the equitable title of the testator, in respect of personal property, and this whether it accrues before or after his death. Thus, if an individual shall have contracted to deliver certain goods to the testator on a certain day, and the day does not arrive till after his death, and they are delivered to his executor, they will constitute assets in his hands, and should the individual who has covenanted to deliver them fail in his duty, the damages that shall be recovered in consequence will be equally available to the creditors or legatees. So, also, if any party has covenanted to grant a lease of certain land by a particular day, and the testator dies before the day, the executor is entitled to the lease, or to compensation in the way of damages in lieu of the lease. To such an extent, indeed, does this run, that in the case of Husband v. Pollard, where a father held a lease of the church, renewable every seven years, and he assigned it to his son in trust for himself for life, remainder in trust for the son, himself, his executors, administrators, and assigns, and the father covenanted to renew the lease every seven years as long as he should live; and the son died; and the father failed to renew the lease within the seven years; and the executor of the son filed a bill to compel him to renew; it was decided that he ought to do so, and he was compelled accordingly; and this lease became assets in the hands of the executors at the father’s death.

If a defendant in execution at the testator’s suit escape after the testator’s death, the executor shall recover damages for the escape, they will form assets; so also are goods replevied after the death of a testator. If a testator die possessed of a term for years in an advowson, the term rests in the executors, and, in the event of their being disturbed, any damages they may recover in consequence will be equally available, as also any other property recovered by a suit in equity. But when a cause of action accrued before the testator’s death, neither cause nor damages are to be considered assets until the proceeds are, by execution or otherwise, reduced into possession. Neither is the balance of an account stated with the executor to be so considered until paid. If, however, they be recovered and released by the executor, he will still be responsible for them, for the release is tantamount to an acknowledgment of receipt.

Should the cause of action accrue after the testator’s death, both the action and the damages become assets immediately, unless the breach of engagement affect the realty, in which case they belong to the heir. At the death of a joint merchant, all his interest in his choses in action, or things coming, though not yet come, to hand, through legal or equitable suit, and whether, therefore, they be legal or equitable assets, devolve, according to the amount of the testator’s interest in them, to the executor.