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

LEGACIES IN SATISFACTION OF DEBT.

Sometimes it happens that legacies, instead of being purely such, are mere satisfactions of debt; and on this point, as on the two preceding, the intention of the testator is the guide of judgment. In general, the legacy of a debtor to his creditor, when the bequest is equal in amount to the debt, or greater, is considered as a payment of the obligation. But many circumstances may occur to obviate this construction, as if the legacy be left conditionally; for a man has no right to take an uncertain advantage as a recompense for a certain claim. Nor when the advantage is postponed whilst the claim is present; as when the legacy is to be paid at a future period, while the debt is due immediately on the death of the testator, though the postponement be for ever so short a period. Nor unless the legacy be in every way equal in advantage to the debt. Nor when an express injunction is laid on the executor for the payment of debts. Nor if the debt be contracted after the date of the will, for then the satisfaction of it by the legacy could not have been contemplated. Nor when the amount of the debt is open and uncertain, as when there has been a running account between the testator and legatee, which is unclosed at the death of the former, for then he could not positively know of the debt.

In this instance, however, as in others, the law is favourable in its construction of kindly intentions, and parol evidence is accordingly admissible to refute the construction unfavourable to the legatee’s interests. But, just as well as considerate, it decrees that a legacy shall be considered as satisfaction of a debt in all cases where there is a deficiency of assets.

On the contrary part, in order to secure the interests of both parties, it is held that a legacy left to a debtor is to be considered as a complete or partial satisfaction of his claim, for he is conceived to have goods in hand for the payment of so much of the amount of his debt. Through the influence of the same principle, money or goods delivered or lent to a legatee, are considered as a pro tanto payment of his claim. Should the debt itself be bequeathed, it is a pure legacy, if there are sufficient assets to satisfy all the other debts; but if not, then this debt is considered as part of the assets, and the legatee would share the benefit in proportion.