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

§ 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.se 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

which the testator had contracted to purchase, and will be satisfied out of the general assets if the contract can not be applied.ss A legacy of a certain amount, being the proceeds of named property, is demonstrative.99 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," 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. & S. 354, 4 L. J. Ch. 72.

A legacy to trustees to create, out of proceeds from the sale of testator's real and personal estate, a fund of $25,000 to be paid to the trustees of the Mississippi State Charity Hospital, was not intended by the testator to be a specific legacy, but a demonstrative legacy to be paid out of the general assets of the estate of the decedent, if necessary, and is not adeemed because of the partial failure of the particular fund from which it is to come.-Hailey v. McLaurin's Estate, 112 Miss. 705, 73 So. 727.

89 Harrison v. Denny, 113 Md. 509, 77 Atl. 837.

A gift to infant children, coupled with the direction, "and from the

money which I have in bank to pay off the mortgages against my said house and lot as soon after my death as possible," is a demonstrative legacy to the extent of the money required for the payment of mortgages. — Matter of Bedford, 67 Misc. Rep. (N. Y.) 38, 124 N. Y. Supp. 619.

90 Johnson v. Conover, 54 N. J. Eq. 333, 35 Atl. 291.

Though a testator provide a fund to furnish an income for his widow, further providing that a certain sum shall be paid each year and that sufficient securities shall be selected to secure it, the selection of the securities in the first instance does not make the legacy specific.-Merriam v. Merriam, 80 Minn. 254, 83 N. W. 162.

91 In re Hodgman's Estate, 140 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. 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, "96 un

less the provisions of the will show an intention to the contrary. Thus, if it is to be paid in fixed installments for 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

§ 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 legatee.-Dixon v. Helena Society, (Okla.) 166 Pac. 114.

97 Bates v. Barry, 125 Mass. 83, 28 Am. Rep. 207.

98 Barnes v. Rowley, 3 Ves. Jun. 305; Matter of Brunning, L. R. (1909) 1 Ch. 276.

99 Parker v. Cobe, 208 Mass. 260, 21 Ann. Cas. 1100, 33 L. R. A. (N. S.) 978, 94 N. E. 476; Reid v. Brown, 54 Misc. Rep. 481, 106

N. Y. Supp. 27; Matter of Cole's
Estate, 219 N. Y. 435, 114 N. E.
785; In re Beck's Appeal, 46 Pa.
St. 527.

1 Gaskin v. Rogers, L. R. 2 Eq. 284; Sibley v. Perry, 7 Ves. Jun. 522.

2 Whitson v. Whitson, 53 N. Y. 479; In re Von Keller's Estate, 28 Misc. Rep. 600, 59 N. Y. Supp. 1079; affirmed in 47 App. Div. 625, 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.3

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 gift of income); In re Kohler, 96 Misc. Rep. 433, 160 N. Y. Supp. 669; Homer v. Landis, 95 Md. 320, 52 Atl. 494 (wherein the provision was construed as a gift of income).

3 Peck v. Kinney, 74 C. C. A. 270, 143 Fed. 76, reversing 128 Fed. 313; Booth v. Ammerman, 4 Bradf. (N. Y.) 129; Matter of Gurnee, 84 Misc. Rep. (N. Y.) 324, 147 N. Y. Supp. 396; Whitson v. Whitson, 53 N. Y. 479; Pearson v. Chace, 10 R. I. 455.

Compare: In re Flickwir's Estate, 136 Pa. St. 374, 381, 20 Atl. 518; In re Ritter's Estate, 148 Pa. St. 577, 24 Atl. 120.

Lord Eldon, in Gibson v. Bott, 7 Ves. Jun. 96, says: "If an annuity is given, the first payment is payable at the end of the year from the death; but if a legacy is given for life, with the remainder

Where the will directed that all the testator's property be sold, and the proceeds invested by the executors and trustees, and that one-third of the income therefrom be paid to the testator's widow during her life, semi-annually, the remainder of the income to be paid to the testator's children during life in fixed portions, the income of the widow during life is to be regarded as interest and not as an annuity, and such part of the income as accrued after the last payment until her death belongs to her estate.-Brombacher v. Berking, 56 N. J. Eq. 251, 39 Atl. 134.