money by leases for lives or years at the old rent, the intention to confine the charge to annual rents is beyond all doubt (q).

CHAP. XLV.

fines for renewal

Provisions for the renewal of leases out of the rents As to raising and profits often give rise to the point under considera- of leases. tion. In such cases, if the terms of renewal are such that the fine may be called for suddenly, so as to render the raising of it out of the annual rents impossible or inconvenient, a strong argument is afforded for holding the words to authorize a sale or mortgage. Indeed, this construction prevailed in a modern case, in spite of some expressions in the context rather strongly pointing the other way.

Expenses of to be paid out

renewed lease

of rents and

profits.

Thus, in the case of Allan v. Backhouse (r), where the testator, after devising certain leasehold estates, held upon bishop's leases for lives, and all other his real estate, to certain uses, directed the renewal of the leaseholds, and that the expenses should be raised out of the rents and profits of the leasehold premises, or of any part of the freehold estates; and he declared that the renewed leases should be held upon the same trusts as were declared of the freehold and copyhold estates, to the end that they might be enjoyed therewith so long as might be; Sir Thomas Sale decreed. Plumer, V. C., held, that, as the purpose for which the money was to be raised out of the rents and profits might require it suddenly (for the lessor could not be expected to wait for the gradual payment out of the rents), and as there was nothing in the will to give to these words the abridged sense of annual rents and profits, except the purpose to preserve the estate entire (which his

(q) Ivy v. Gilbert, 2 P. W. 63; S. C. Pre. Ch. 583. See also Ridout

v. Earl of Plymouth, 2 Atk. 104.
(r) 2 Ves. & Bea. 65.

CHAP. XLV.

Honor thought warranted the sacrificing of part for the preservation of the remainder), the money might be raised by sale or mortgage (s).

543

CHAPTER XLVI.

ADMINISTRATION OF ASSETS, EXONERATION OF DEVISED
LANDS, EXEMPTION OF PERSONALTY, MARSHALLING OF
ASSETS, &c.

able to credi

I. WHERE a testator possessed of property of various What funds likinds dies indebted, having disposed of his estate among tors. different persons, or not having made such disposition, it often becomes material to consider the order, and sometimes the proportions and mode, in which the several subjects of property are applicable to the liquidation of the debts; for every description of property is (we have seen) now constituted assets (a).

And the same question may arise in regard to pecu- As to legacies. niary legacies, where the testator has thrown them upon the land or some specific fund, either which would not be liable or not exclusively liable to them; for otherwise they are payable out of but one fund, namely, the general personal estate (6).

Under a trust for the payment of debts, they are paid,

(a) Vide ante, p. 510.

(b) Greaves v. Powell, 2 Vern. 248. The distinction taken in

VOL. II.

NN

Walker v. Meager, 2 P. W. 550,
has long been overruled.

CHAP. XLVI. not in the order of their legal priority (c), but according to the rule of a Court of equity, which, regarding

Creditors admitted pari passu under trusts and charges.

66

equality as equity," places the creditors of every class on an equal footing; and this rule is now established to apply, in opposition to the old doctrine, to mere charges, by which the descent is not broken (d), and to devises in trust for the payment of debts, though made to the same persons as are constituted executors (e). In all such cases, therefore, specialty and simple contract creditors come in pari passu; and it is held that specialty creditors, claiming the benefit of such a trust or charge, must admit the simple contract creditors to an equal participation even of the personal estate (f), as equity will not allow a creditor to share in the equitable assets, or, in other words, in that portion of the property which is distributable according to the maxims of a Court of equity, without relinquishing his legal priority in regard to that portion of the property which constitutes legal assets. It is clear, however, that a trust to pay, or a charge of debts, does not make simple contract debts carry interest (g), or revive a debt which has been barred by the statute of limitations (h); though

(c) As to the legal order of paying debts, see Williams's Law of Executors, vol. 2, p. 719; Ram on Assets, 1.

(d) Burt v. Thomas, cit. 7 Ves. 323; Batson v. Lindegreen, 2 B. C. C. 94; Bailey v. Ekins, 7 Ves. 319, overruling Freemoult v. Dedire, 1 P. W. 430; Plunkett v. Penson, 2 Atk. 290.

(e) Newton v. Bennet, 1 B. C. C. 135, and cases cited Id. 138, 140, n. See also Prowse v. Abingdon, 1 Atk. 484; Lewin v. Okeley, 2 Atk. 50, overruling Girling v. Lee, 1 Vern. 63, and several other early cases.

(f) Wride v. Clarke, 1 Dick. 382; Degg v. Degg, 2 P. W. 412; Haslewood v. Pope, 3 P. W. 323; Morrice v. Bank of England, Cas. temp. Talb. 220; 2 B. P. C. Toml. ed. 465; 3 Swanst. 573, S. C. See also Sheppard v. Kent, 2 Vern. 435; S. C. 1 Eq. Ca. Ab. 142, pl. 6.

(g) Lloyd v. Williams, 2 Atk. 110; Barwell v. Barker, 2 Ves. sen. 343; Earl of Bath v. Earl of Bradford, Id. 587; Shirley v. Earl Ferrers, 1 B. C. C. 41.

(h) See Burke v. Jones, 2 Ves. & Bea. 275.

the contrary of both these propositions has been heretofore maintained (i).

And in Tait v. Lord Northwick (k), Lord Loughborough

held that a direction to pay such debts as the testator should at the time of his death owe by mortgage, bond, or other specialty, or by simple contract or otherwise however, and all interest thereof, was confined, in respect of the interest, to debts which carried interest.

But it should be observed, that property which the testator has not subjected to debts, is not distributable as equitable assets, merely because it is an object of equitable jurisdiction, as trust estates and equities of redemption, which can only be reached through the intervention of a Court of equity (7).

creditor to take

its proper

It may be further premised, in stating the order in Right of the which the several funds liable to debts are to be applied, property out of that this rule regulates the administration of the assets order. only among the testator's own representatives, devisees and legatees, and does not affect the right of the creditors themselves to resort in the first instance to all or any of the funds to which their claim extends, though, as we shall presently see, equity takes effectual steps to prevent the established order of application from being eventually deranged by the capricious exercise of this right.

It should also be stated, that property over which the testator has a general power of appointment only (and in which he takes no transmissible interest in default of appointment), is assets for the payment of creditors, pro

(i) Carr v. Countess of Burlington, 1 P. W. 228; Blakeway v. Earl of Strafford, 2 P. W. 373; S. C. 6 B. P. C. Toml. ed. 630.

(k) 4 Ves. 816.

(1) Sharpe v. Earl of Scarborough, 4 Ves. 558, overruling case of Sir Charles Cox's creditors, 3 P. W. 342; Hartwell v. Chitters, Amb. 308.

Effect of exercising power of appointment.