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60 & 61 Vict. c. 65, s. 4.

Liability for duty.

Interpretation.

Commence

ment of act.

The expression "personal representative" is defined by sect. 24, sub-s. 2, as meaning "executor or administrator." But if the section is to be applied to the case of intestacy, it will be necessary to construe the words "residuary estate" as referring to the surplus of the intestate's assets after payment of his debts.

It should be further noticed that the section does not deal with an appropriation by trustees, or an appropriation to a settled share where unborn persons are or may be interested.

5. Nothing in this part of this act shall affect any duty payable in respect of real estate or impose on real estate any other duty than is now payable in respect thereof.

See Re Palmer, Palmer v. Rose-Innes, 1900, W. N. 9, quoted ante, p. 422.

PART IV.
Miscellaneous.

24. (1.) All hereditaments, corporeal and incorporeal, shall be deemed land within the meaning of the principal act and this act, except that nothing in this act shall render compulsory the registration of the title to an incorporeal hereditament, or to mines or minerals apart from the surface, or to a lease having less than forty years to run or two lives yet to fall in, or to an undivided share in land, or to freeholds intermixed and indistinguishable from lands of other tenure, or to corporeal hereditaments parcel of a manor, and included in a sale of the manor as such.

(2.) In this act the expression "personal representative " means an executor or administrator.

25. This act shall come into operation on the first day of January one thousand eight hundred and ninety-eight.

26. This act may be cited as the Land Transfer Act, 1897, Short title and and shall be construed as one with the principal act, and that act and this act may be cited together as the Land Transfer Acts, 1875 and 1897.

construction.

17 & 18 Vict. c. 113, s. 1.

Heir or devisee of real

estate not to

VII. THE REAL ESTATE CHARGES ACTS, 1854, 1867,
AND 1877.

THE REAL ESTATE CHARGES ACT, 1854.

17 & 18 VICT. c. 113.

An Act to amend the Law relating to the Administration of the
Estates of Deceased Persons.
[11th August, 1854.]
Whereas it is expedient that the law whereunder the real and
personal assets of deceased persons are administered should be

amended: be it enacted as follows:

1. When any person shall, after the thirty-first day of December, one thousand eight hundred and fifty-four, die seised

gage out of

of or entitled to any estate or interest in any land or other 17 & 18 Vict. hereditaments which shall at the time of his death be charged c. 113, s. 1. with the payment of any sum or sums of money by way of claim paymortgage, and such person shall not, by his will or deed or other ment of mortdocument, have signified any contrary or other intention, the personal heir or devisee to whom such land or hereditaments shall descend assets. or be devised shall not be entitled to have the mortgage debt discharged or satisfied out of the personal estate or any other real estate of such person, but the land or hereditaments so charged shall, as between the different persons claiming through or under the deceased person, be primarily liable to the payment of all mortgage debts with which the same shall be charged, every part thereof, according to its value, bearing a proportionate part of the mortgage debts charged on the whole thereof; provided always, that nothing herein contained shall affect or diminish any right of the mortgagee on such lands or hereditaments to obtain full payment or satisfaction of his mortgage debt either out of the personal estate of the person so dying as aforesaid or otherwise: provided also, that nothing herein contained shall Not to affect affect the rights of any person claiming under or by virtue of any will, deed, or document already made or to be made before the first day of January, one thousand eight hundred and fiftyfive.

2. This act shall not extend to Scotland.

rights claimed

under any
will, &c. before

1st January,

1855.

Extent of act.

The rule previous to the above act was, that the personal estate of Previous law the deceased debtor was the primary fund to pay off a mortgage, unless as to the payan intention was shown to throw the debt on the mortgaged estate. The ment of mortobject of the act was to make the mortgaged estate the primary fund, gage debts. unless an intention can be shown to throw the debt on the personalty (Goodwin v. Lee, 1 K. & J. 378; Swainson v. Swainson, 6 D. M. & G. 652). For the previous law as to the exoneration of estates from mortgage debts contracted, or adopted, by the owner, and also as to the acts which amounted to an adoption of a mortgage debt, see further, Ancaster v. Mayer (1 White & Tudor, L. C. Eq.) The present act does not impose any personal liability on the devisee (Syer v. Gladstone, 30 Ch. D. 616). The act does not apply to specific bequests of personal estate (Re Bourne, Bequests of Martin v. Martin, 1893, 1 Ch. 191). And in the case of specific bequests personal of chattels which are subject to charges, a distinction has been taken estate. between charges created by the testator and charges incident to the chattel, such as calls on shares or the rent of leaseholds. In the first case the specific legatee is entitled to have the legacy freed from the charge, in the second case he is not so entitled (Bothamley v. Sherson, 20 Eq. 316; see Lewis v. Lewis, 13 Eq. 227). In one case it was held that the legatee of incumbered stock was not entitled to have the incumbrance paid off out of real estate charged with debts (Re Butler, Le Bas v. Herbert, 1894, 3 Ch. 250). In the case of bequests of shares not fully paid, any call made before the testator's death but remaining unpaid at that time, must be borne by the residuary estate, and calls made after the death by the legatee (Armstrong v. Burnet, 20 Beav. 424; Addams v. Ferick, 26 Beav. 384; Day v. Day, 1 Dr. & Sm. 261). So in bequests of leaseholds, the rent up to the testator's death must be borne by the residuary estate, and after that time by the specific legatee (Hawkins v. Hawkins, 13 Ch. Div. 470). See Re Betty, Betty v. A.-G. (1899, 1 Ch. 821); Re Gjers, Cooper v. Gjers (1899, 2 Ch. 54), and cases there referred to. Compare the case of

17 & 18 Vict. the specific devise of a reversion, where the testator had entered into c. 113, s. 1. covenants in the lease on which the reversion was expectant. The residue bore the burden of such a covenant where it was not incident to the relation of landlord and tenant (Eccles v. Mills, 1898, A. C. 360); the devisee, where it was so incident (Mansel v. Norton, 22 Ch. Div. 769). Compare also the case where a testator who had contracted for the erection of buildings on his freehold land died before the completion of the buildings, and the cost fell on the general personal estate (Re Day, Sprake v. Day, 1898, 2 Ch. 510).

Land, &c. within the act.

Charge by way of mortgage within the acts.

The above act was held not to apply to leaseholds (Solomon v. Solomon, 12 W. R. 540; Gael v. Fenwick, 22 W. R. 211; Re Wormsley, Hill v. Wormsley, 4 Ch. D. 665). In the case, however, of persons dying since 31st December, 1877, the act has been rendered applicable to leaseholds by the Real Estate Charges Act, 1877, post, p. 434 (Re Kershaw, Drake v. Kershaw, 37 Ch. D. 674). The act applies to copyholds (Piper v. Piper, 1 J. & H. 91). Where freeholds were settled by deed upon trusts for conversion, a share in the produce, which was under the terms of the deed taken as personal estate, was not an "interest in land" within the act (Lewis v. Lewis, 13 Eq. 218; see Re Bennett, Clarke v. White, 1899, 1 Ch. 316). Where an interest in land is given by a testator, with the option of retaining it in specie, or of having it converted, if the person elect to take without conversion, the act applies; but if he takes it as converted, the act does not apply (13 Eq. 227). The act was held not to apply to the gift by will of an option to purchase land at a fixed price (Given v. Massey, 31 L. R. Ir. 126).

Where freeholds and leaseholds were settled in the same way, different parts being subject to different charges, the beneficiaries took the aggregate estate, subject to the aggregate burden, the general personal estate being exonerated (Re Kensington, Longford v. Kensington, 1902, 1 Ch. 203; see Frewen v. Law Society, 1896, 2 Ch. 511).

66

The act only applies where a property is specifically charged (Dunlop v. Dunlop, 21 Ch. Div. 590; see Hepworth v. Hill, 30 Beav. 476). It would seem that a banker's general lien is not within the act (Dunlop v. Dunlop, sup., 592). A general charge on real estate by a testator, in aid of his personal estate, is not within the act, until the amount has, in the administration of the estate, been accurately defined, and the devisee has expressly taken the estate, subject to such ascertained charge (Hepworth v. Hill, 30 Beav. 476). An equitable mortgage by deposit and memorandum is within the act (Pembroke v. Friend, 1 J. & H. 132); even where the memorandum expressed that the deposit was made as collateral security for the repayment of a sum borrowed upon a promissory note (Coleby v. Coleby, 2 Eq. 803). Even without a memorandum such a mortgage is within the act (Davis v. Davis, 24 W. R. 962). In Ireland a judgment mortgage is within the act (Nesbitt v. Lawder, 17 L. R. Ir. 553). In the case of persons dying after 31st December, 1877, see the words in the Real Estate Charges Act, 1877 (post, p. 435), or any other equitable charge." Where land is made a security for a debt by any instrument which gives the creditor an equitable interest in the land, such instrument is within the last-mentioned words (Re Sharland, Kemp v. Rozey, 74 L. T. 664). The charge under the Judgments Act, 1838, s. 13 (post, p. 489), arising by virtue of a delivery in execution under a judgment, is within the same words (Re Anthony, Authony v. Anthony, 1892, 1 Ch. 450); but not in the case of land of which the debtor is tenant in tail Vendor's lien. (S. C., 1893, 3 Ch. 498). A lien for unpaid purchase-money was held not to be a charge by way of mortgage within the act (Hood v. Hood, 5 W. R. 74; Barnwell v. Ironmonger, 1 Dr. & Sm. 260; see Day v. Day, 14 W. R. 261). The word "mortgage was afterwards extended so as to include a lien for unpaid purchase-money upon lands or hereditaments purchased by a testator (Real Estate Charges Act, 1867, s. 2, post, p. 434). But the last-mentioned section did not apply where the purchaser died intestate (Harding v. Harding, 13 Eq. 493). See now Real Estate Charges Act, 1877, post, p. 434. Money payable under a building agreement was held

to be in the nature of unpaid purchase-money, which after the death of 17 & 18 Vict. the person liable to pay was primarily payable under these acts out of the c. 113, s. 1. building land (Re Kidd, Brooman v. Withall, 1894, 3 Ch. 558). See also Re Cockroft, Broadbent v. Groves (24 Ch. D. 94).

The act only applies "as between the different persons claiming As between through or under the deceased person" (sce Re Anthony, Anthony v. persons claimAnthony, 1893, 3 Ch. 501). Accordingly, it did not affect the case where ing through one partner gave a charge on his separate real estate to secure a joint deceased. partnership debt, and at the time of his death the joint assets were sufficient to answer the joint debts (Re Ritson, Ritson v. Ritson, 1899, 1 Ch. 128). It applied, however, where the personal estate went to the Crown for want of next of kin, the Crown taking exonerated from mortgage debts (Dacre v. Patrickson, 1 Dr. & Sm. 191).

A will, executed before 1855, is "a will already made," within the Proviso in proviso, though republished after 1st January, 1855 (Rolfe v. Perry, 3 the act. D. J. & S. 481). The proviso was held not to apply to the case of an heir, where the intestate, before 1855, had executed a mortgage, reserving the equity of redemption to himself and his heirs (Piper v. Piper, 1 J. & H. 91). Nor where the personal estate had been bequeathed by a will made before 1855 (Power v. Power, 8 Ir. Ch. R. 340). The heir of a testator, taking by descent an estate which had been the subject of a lapsed devise in a will made prior to 1855, was held to take cum onere, inasmuch as he was not a person claiming "under or by virtue of a will" within the meaning of the proviso (Nelson v. Page, 7 Eq. 25).

With regard to a contrary intention within the act, it was laid down Contrary inthat each case must rest on its own circumstances (Rolfe v. Perry, 3 D. J. tention within & S. 486). See Eno v. Tatham (3 D. J. & S. 443), where Turner, L. J., the act. disapproved of the dicta of Lord Campbell in Woolstencroft v. Woolstencroft (2 D. F. & J. 350); Mellish v. Vallins (2 J. & H. 199); Smith v. Smith (3 Giff. 263). A contrary intention was collected from a will prior to tho mortgage, the mortgage itself and a contemporaneous deed (Re Campbell, Campbell v. Campbell, 1893, 2 Ch. 206). So where A. granted a Scotch estate to his son under the burden of the payment of a mortgage debt, secured upon land belonging to A. in England, and A. died, domiciled in England, having by his will appointed executors, directed payment of his debts, and devised the mortgaged estate to his son; the mortgage debt was held properly payable out of the Scotch estate, and the English land and the general personalty were exonerated therefrom (Smith v. Moreton, 37 L. J. Ch. 6; 1867, W. N. 251). Regard must be had, in the case of persons dying after 1867, to the Real Estate Charges Act, 1867 (post, p. 433), and in the case of persons dying after 31st December, 1877, to the Real Estate Charges Act, 1877 (post, p. 434), in determining the question whether an intention has been expressed to exclude the operation of the act.

In the case of persons dying before 1868, the following distinctions Cases as to were laid down. Where a testator directed his debts to be paid out of persons dying some particular fund or property out of which, according to the rule before 1868. established by the statute, they would not be primarily payable, he was taken to signify an intention to exclude the statutory rule: but when he merely directed his debts to be paid, or to be paid out of his estate generally, he did not signify an intention to exclude that rule (per Romilly, M. R., Brownson v. Lawrance, 6 Eq. 5; see Maxwell v. Hyslop, 4 Eq. 413).

The following provisions were held not sufficient to exclude the act. Expressions A direction that all just debts be paid as soon as may be " (Pembroke v. not excluding Friend, 1 J. & H. 132; Coote v. Lowndes, 10 Eq. 376). A direction that the act. all a testator's just debts should be paid out of his estate (Brownson v. Lawrance, 6 Eq. 1), or by his executors out of his estate (Woolstencroft v. Woolstencroft, 2 D. F. & J. 347), or out of his personal estate (Rowson v. Harrison, 31 Beav. 207).

The following provisions were sufficient to exclude the act. A bequest Expressions of all personal estate to trustees with a direction to pay debts, where one excluding the

act.

17 & 18 Vict. c. 113, s. 1.

Incidence of debt as between different properties

in same

mortgage.

of the trustees was a devisee of the mortgaged property (Smith v. Smith, 3 Giff. 263). A bequest of a testator's personal estate to trustees upon trust to pay thereout all his debts, funeral and testamentary expenses (Moore v. Moore, 1 D. J. & S. 602; Porcher v. Wilson, 12 W. R. 1001). A bequest of personalty, "subject to the payment thereout of all the testator's just debts" (Mellish v. Vallins, 2 J. & H. 194; Eno v. Tatham, 3 D. J. & S. 443). A gift of residue of real and personal estate to trustees upon trust for sale, the moneys arising therefrom to be held upon trust in the first place to pay funeral and testamentary expenses, and debts (Newman v. Wilson, 31 Beav. 33; Maxwell v. Hyslop, 4 Eq. 407; L. R. 4 H. L. 506; Stone v. Parker, 1 Dr. & Sm. 212; Greated v. Greated, 26 Beav. 621). A devise of the mortgaged estate for sale and payment of legacies followed by a devise of residue of real and personal estate with a direction that any mortgages, debts or incumbrances, specifically affecting any parts of the testatrix's residuary real or personal estate, be exclusively borne by and paid out of the premises specifically charged therewith and subject thereto, that all her debts, &c., be paid out of her said residuary real and personal estate (Allen v. Allen, 30 Beav. 395). See, further, the notes, pp. 433, 434, post.

As between different portions of an estate comprised in one mortgage which are devised to different persons, the act, in the absence of a contrary intention, applies and compels the devisees to contribute rateably (Newmarch v. Storr, 9 Ch. Div. 17; which see as to meaning of words "or any other real estate of such person"). It has been also held that as between different freehold estates comprised in the same mortgage, the mortgage debt was borne rateably although one estate was specifically devised, and the other passed under a residuary devise (Gibbins v. Eyden, 7 Eq. 375; Sackville v. Smyth, 17 Eq. 153; see Re Smith, Hannington v. True, 33 Ch. D. 195). Where freeholds and leaseholds were mortgaged together, and the mortgagor died intestate, it was held, as between his heir and administrator, that the freeholds and leaseholds must bear the burden rateably (Evans v. Wyatt, 31 Beav. 217). And where freeholds and a policy were mortgaged together and the mortgagor's will declared different trusts of real and personal estate, the mortgage debt was borne rateably (Trestrail v. Mason, 7 Ch. D. 655; Leonino v. Leonino, 10 Ch. D. 460). An intention, however, may be expressed upon the mortgage documents that one property shall be the primary security (Bute v. Cunynghame, 2 Russ. 299; see 10 Ch. D. 465). Such an intention was found on the documents in Lipscombe v. Lipscombe (7 Eq. 501); De Rochfort v. Dawes (12 Eq. 540). The words for further and better securing' were sufficient for the purpose (Stringer v. Harper, 26 Beav. 33); but not the words "collateral security" (Athill v. Athill, 16 Ch. Div. 211; Williams v. Early, 16 Ch. D. 214, n.).

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Contribution. As to the apportionment of a mortgage debt between several estates comprised in the same mortgage, see Fisher on Mortgages; Story, Eq. Jur. sects. 484, 1233 b.

Order in which funds

are applicable

where statutory rule excluded.

Marshalling.

As to the order in which funds are to be applied in payment of a mortgage debt, where the statutory rule has been excluded by the expression of a contrary intention, see the observations of M. R., in Allen v. Allen (30 Beav. 395); and the argument in Smith v. Moreton (37 L. J. Ch. 6); see also Fisher on Mortgages. It may be the result of a testator's words that a mortgaged estate is to be exonerated only so far as his personalty extends; and that there is no right to go upon the other real estate (Rodhouse v. Mold, 13 W. R. 854).

Where the mortgage debts of a testator are (under a direction in his will) primarily payable out of his personal estate, the devisees of a mortgaged estate are not entitled to have the mortgage debt satisfied out of the personal estate until the pecuniary and specific legatees and annuitants are satisfied; the pecuniary legatees and annuitants being entitled to have the assets marshalled, so that any payments in respect of the mortgage debt out of the personal estate would have to be recouped by the mortgaged estate (Porcher v. Wilson, 14 W. R. 1011; see Re Smith, S. v. S., 1899, 1

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