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ple, it has been held that when a testator directs a certain amount to “be set apart out of” a designated property, for each of his children as he attains majority, and his widow to continue during her life to have the use of the remainder or the income of the remainder after each portion is successively set apart, the legacies to the children are demonstrative and not specific, and if the fund prove insufficient the shares must be made up from the body of the estate. 84
8 660. The Same Subject: Sources From Which They May Be
Directed to Be Paid.
The fact that a bequest is to a trustee is immaterial in determining whether or not a legacy is demonstrative, the other features of such a legacy being present.85 A legacy may be demonstrative although the amount of money bequeathed may be payable in notes or bonds at the option of the executor named in the will.86 It may be made payable out of proceeds to be derived from a policy of life insurance, and will be paid out of the general assets of the estate if the insurance is not collected. 87 It may be directed to be paid from the sale of an estate
lar fund mentioned. A specific legacy is adeemed or lost by the extinguishment of the specific thing or failure of the particular fund bequeathed, while a demonstrative legacy is still payable out of the general assets if the fund specially mentioned fails. — Stil. phen, Appeal of, 100 Me. 146, 4 Ann. Cas. 158, 60 Atl. 888..
84 Bradford v. Brinley, 145 Mass. 81, 13 N. E. 1.
86 Matter of Union Trust Co.,
97 Misc. Rep. (N. Y.) 581, 161 N. Y. Supp. 954.
86 Harper v. Bibb, 47 Ala. 547.
A bequest, "to T. I. I give one thousand dollars in the Union Savings Bank," preceded by spe. cific bequests and followed by a bequest of "all I have invested in
or in banks, not otherwise disposed of,” is a demonstrative legacy.-Bowen v. Dorrance, 12 R. I. 269.
87 Byrne v. Hume, 86 Mich. 546, 49 N. W. 576.
which the testator had contracted to purchase, and will be satisfied out of the general assets if the contract can not be applied.88 A legacy of a certain amount, being the proceeds of named property, is demonstrative.S9 A bequest of a certain sum invested in stocks, the interest being payable to the legatee for life,also a bequest of a fixed amount to the widow, in lieu of dower, "which may be invested in bank stock,” naming two banks, “and in bonds,"91 are demonstrative.
$ 661. Annuities Defined.
The term “annuity" has been variously defined, but the definitions, although differing in form, are substantially alike in meaning.
“In general terms, an annuity is a yearly payment of 88 Fowler v. Willoughby, 2 Sim. money which I have in bank to & S. 354, 4 L, J. Ch. 72.
pay off the mortgages against my A legacy to trustees to create,
said house and lot as soon after out of proceeds from the sale of
my death as possible,” is a demontestator's real and personal estate,
strative legacy to the extent of
the money required for the pay. a fund of $25,000 to be paid to the
ment of mortgages. - Matter of trustees of the Mississippi State
Bedford, 67 Misc. Rep. (N. Y.) 38, Charity Hospital, was not in.
124 N. Y. Supp. 619. tended by the testator to be a
90 Johnson v. Conover, 54 N. J. specific legacy, but a demonstra
Eq. 333, 35 Atl. 291. tive legacy to be paid out of the
Though a testator provide a general assets of the estate of the
fund to furnish an income for his decedent, if necessary, and is not widow, further providing that a adeemed because of the partial certain sum shall be paid each failure of the particular fund from year and that sufficient securities which it is to come.—Hailey V. shall be selected to secure it, the McLaurin's Estate, 112 Miss. 705, selection of the securities in the 73 So. 727.
first instance does not make the 89 Harrison V. Denny, 113 Md. legacy specific.---Merriam v. Mer. 509, 77 Atl. 837.
riam, 80 Minn, 254, 83 N. W. 162. A gift to infant children, coupled 91 In re Hodgman's Estate, 140 with the direction, “and from the N. Y. 421, 35 N. E. 660.
a certain sum of money granted to another in fee, for life or for years."92 An essential element of an annuity is the certainty of the amount to be paid, and it is immaterial if the periods for the payments are yearly or are distributed throughout the year.93 It is a gift of a sum certain, not the interest of a fixed or certain sum of money.®4 It may be given conditionally and the title may be perfected by performance of the condition.95 An annuity may arise in different ways, but when created by will it may be comprehended within the term “legacy,''06 Un
'92 Kearney V. Cruikshank, 117 94 Moore v. Downey, 83 N. J. N. Y. 95, 22 N. E. 580. See, also, Eq. 428, 91 Atl. 116. Coke Litt., 144 b; 2 Bl. Co. *40; A bequest to trustees to pay the Peck v. Kinney, 143 Fed. 76, 74 testator's wife "annually in quar. C. C. A. 270, reversing 128 Fed. terly payments during her natural 313; Turrentine V. Perkins, 46 life, an amount equal to one-half Ala. 631; Henry v. Henderson, 81 the net income” from his estate, Miss. 743, 63 L. R. A, 616, 33 So. which consisted of both realty and 960; Pearson V. Chace, 10 R. I. personalty, is not an annuity.455.
Moore v. Downey, 83 N. J. Eq. 428, An annuity at common law was 91 Atl. 116. a yearly sum charged on the per- 95 In re Mayall, 29 Me. 474. son of the grantor. Nothing else 96 Heatherington v. Lewenberg, was an annuity. When the annual 61 Miss. 372. payment was charged on land it A clause in a will directing a was a rent charge.--In re Kohler, devisee of lands to pay an 96 Misc. Rep. 433, 160 N. Y. Supp. nuity for a period of years to a 669. See, also, Routt v. Newman, person named therein constitutes 253 Ill, 185, 97 N. E. 208.
a legacy for the benefit of such a 93 Peck v. Kinney, 74 C. C. A. person.-Matthews V. Studley, 17 270, 143 Fed. 76. See, also, Hicks App. Div. 303, 45 N. Y. Supp. 201; v. Ross, L. R. 14 Eq. 141; Rad- affirmed in 161 N. Y. 633; Degraw burn v. Jervis, 3 Beav. 450; Bates v. Clason, 11 Paige (N. Y.) 136. V. Barry, 125 Mass. 83, 28 Am. Where an annuity is given by Rep. 207; Cummings v. Cum- will and charged by the testator mings, 146 Mass. 501, 16 N. E. 401; upon the real and personal estate, Ex parte McComb, 4 Bradf. it is an absolute legacy, the pay. (N. Y.) 151; In re Pierce's Estate, ment of which may be enforced in 56 Wis. 560, 14 N. W. 588.
equity by the legatee, and is not
less the provisions of the will show an intention to the contrary. Thus, if it is to be paid in fixed installments for a limited period, not to exceed the life of the beneficiary, it can not be an absolute legacy for a certain amount since the legatee may die, but is contingent upon his surviving the date of the last payment. 97
It has long been the settled law of England that the gift of an annuity must be regarded as a legacy of the definite sum required to purchase the annuity.98 This rule is followed in some of these United States, and has its most frequent application in cases of bequests to be laid out in the purchase of annuities.99
8 662. Annuity and Gift of Income Distinguished.
The question sometimes arises as to whether a provision in a will shall be construed as a gift of income dependent on the production of such income, or as a technical annuity. The intention of the testator mainly controls. This question of construction becomes important because, if the provisions of the will be construed as an annuity, the amount must be paid annually whether the corpus of the fund be diminished or not, but if it be a gift of income only, the corpus of the fund must be kept intact. An annuity differs from a legacy of the income a property held in trust for the N. Y. Supp. 27; Matter of Cole's legatee.-Dixon v. Helena Society, Estate, 219 N. Y. 435, 114 N. E. (Okla.) 166 Pac. 114.
785; In re Beck's Appeal, 46 Pa. 97 Bates v. Barry, 125 Mass. 83, St. 527. 28 Am. Rep. 207.
1 Gaskin v. Rogers, L. R. 2 Eg. 98 Barnes v. Rowley, 3 Ves. Jun. 284; Sibley v. Perry, 7 Ves. Jun. 305; Matter of Brunning, L R. 522. (1909) 1 Ch. 276.
2 Whitson v. Whitson, 53 N. Y. 99 Parker v. Cobe, 208 Mags. 260, 479; In re Von Keller's Estate, 21 Ann. Cas. 1100, 33 L, R. A. 28 Misc. Rep. 600, 59 N. Y. Supp. (N. S.) 978, 94 N. E. 476; Reid v. 1079; affirmed in 47 App. Div. 625, Brown, 54 Misc. Rep. 481, 106 62 N. Y. Supp. 1150 (wherein the
from certain property to be paid to the beneficiary during his life, since the latter consists only of the profit to be earned, less the necessary expenses, and is uncertain in amount, whereas with an annuity the sum is fixed and unconditional. Where a testator gives a legatee the income from certain property, although payable annually, it is not an annuity, but an ordinary legacy of greater or less amount according to the net earnings of the fund from which it is to be satisfied.
Where a trust is created for the payment of the income to beneficiaries, they are entitled to the entire net earnings from the fund set aside for that purpose, but court construed the provision as a over, no interest is due till the gift of income); In re Kohler, 96 end of two years. It is only the Misc. Rep. 433, 160 N. Y. Supp. interest of the legacy; and till the 669; Homer v. Landis, 95 Md. 320,
legacy is payable there is no fund 52 Atl. 494 (wherein the provision
to produce interest." — Quoted
with approval in Bartlett v. Slater, was construed as a gift of in
53 Conn. 102, 55 Am. Rep. 73, 22 come).
Atl. 678. 3 Peck v. Kinney, 74 C. C. A.
Where the will directed that all 270, 143 Fed. 76, reversing 128
the testator's property be sold, Fed. 313; Booth V. Ammerman,
and the proceeds invested by the 4 Bradf. (N. Y.) 129; Matter of
executors and trustees, and that Gurnee, 84 Misc. Rep. (N. Y.) 324,
one-third of the income therefrom 147 N. Y. Supp. 396; Whitson v. be paid to the testator's widow Whitson, 53 N. Y. 479; Pearson during her life, semi-annually, the v. Chace, 10 R. I. 455.
remainder of the income to be Compare: In re Flickwir's Es- paid to the testator's children dur. tate, 136 Pa. St. 374, 381, 20 Atl. ing life in fixed portions, the in. 518; In re Ritter's Estate, 148 Pa. come of the widow during life is St. 577, 24 Atl. 120.
to be regarded as interest and not Lord Eldon, in Gibson v. Bott, as an annuity, and such part of 7 Ves. Jun. 96, says: "If an an- the income as accrued after the nuity is given, the first payment last payment until her death beis payable at the end of the year longs to her estate.—Brombacher from the death; but if a legacy is v. Berking, 56 N. J. Eq. 251, 39 given for life, with the remainder Atl. 134.