1 A s" -a 1 ■ 5 fl t- " 5] B 1 pj{ 9 o ^— — — ■ 2 1 r W Q — : 65 fl 5 Bll J 6 ^g| I 2 ==== : UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW LIBRARY THE LAW AND PRACTICE RELATING TO THE PASSING OE Executors' Accounts HIS HONOUR CHARLES HOWARD WIDDIFIELD Judge of the Surrogate Court of the County of Grey ; Author of " The Law of Costs in Canada ; "Words and Terms Judicially Defined Toronto : THE CARSWELL COMPANY, LIMITED 1916 London; SWEET „^ MAXWELL, LIMITED \ w Copyright: Canada, 1916, by The Carswell Co., Limited. q -I S-Ut> PR EFACE Since the Devolution of Estates Act the practice that formerly obtained in administration actions has become almost obsolete. With the passing of this form of action the growing practice of obtaining judi- cial approval of executors' and administrators' ac- counts by an audit in the Surrogate Court has become of much more importance. That no work, either English or Canadian, covers just the ground I have attempted in this volume is some reason for its appearance. No apology is necessary for the number of Ameri- can cases referred to, more especially in the chapters dealing with testamentary expenses and allowances to and the liabilities of executors and administrators. Much of the law in this respect is grounded on habits and customs of life, and, in many respects, our habits and customs assimilate more closely to those of Ameri- cans than to those of Britons. Apart from this the decisions of the American courts, more especially those of the Eastern and South-Eastern States, are deservedly held in high repute. I had hoped to be able to incorporate in the Appen- dix the now Surrogate Court Rules, but these appear to be do nearer promulgation now than a year ago. C. IT. "WlDDIFIELD. I )\von Sound, April, 1016. TABLE OF CONTENTS CHAPTER I. PAGE Jurisdiction of the Court 1 CHAPTER II. The Powers of :i Master CHAPTER Iir. Duty of Trust its to Keep Accounts 30 CHAPTER IV. Who Obliged to Pass Accounts 12 CHAPTER V. Who Entitled to an Account L' 1 CHAPTER VI. When an Audit Will lie Ordered L'T CHAPTER VII. Duty of an Executor — Realizing Assets L >s; CHAPTER VIII. What Constitute Assets :: 1 CHAPTER IX. What are not Assets -1." CHAPTER X. Advertising for Creditors -IS CHAPTER XI. Payment of 1 >ebts 51 CHAPTER XII. Funeral Expenses 56 CHAPTER XIII. Testamentary Expenses t'c CHAPTER XIV. Succession Duty 65 VI TABLE OF CONTENTS. CHAPTER XV. PAGE Taxes and Insurance 68 CHAPTER XVI. Household Expenses 72 CHAPTER XVII. Tombstone 74 CHAPTER XVIII. Repairs and Improvements 77 CHAPTER XIX. Miscellaneous Allowances 80 CHAPTER XX. Right of Retainer 85 CHAPTER XXI. Legacies and Annuities 87 Abatement of Legacies 91 Interest on Legacies • • . 95 CHAPTER XXII. Agents 190 CHAPTER XXIII. Liabilities of an Executor : Purchasing Estate Property 197 Profit out of Estate 199 Mixing Trust Funds 113 Miscellaneous 114 CHAPTER XXIV. Carrying on Business 116 CHAPTER XXV. Compounding Claims 122 CHAPTER XXVI. Investments by Trustees 126 CHAPTER XXVII. Interest 1^3 CHAPTER XXVIII. Executors' Costs 109 TABLE OF CONTENTS. \ii CHAPTER XXIX PAGE Solicitor-Executor " ]( ;- CHAPTEB XXX. Maintenance of Infants 1 - 1 CHAPTER XXXI. Belief of Trustees 170 CHAPTER XXXII. Protection and Indemnity 1S8 CHAPTER XXXIII. Capita] and Income 199 CHAPTER XXXIV. Compensation to Trustees 211 Generally oil Legacies in Lieu of Commission 213 By whom paid 21S Amount realized : How calculated 220 Amount of Compensation 221 Miscellaneous 009 CHAPTER XXXV. Practice on Audits 034 Evidence on Audits 237 Appeals 241 Costs of Audit 244 Payment into Court 247 CHAPTER XXXVI. Effect of Audit : Mistake or Fraud 240 CHAPTER XXXVII. The Residue 262 Appendix n-o INDEX OF CASES A. PAGE Abouloff v. Oppenheimer, 10 Q. B. I >. 295 257, 260 Abbott v. Parfitt, L. R. 6 Q. B. 346 120 Ackerman, Re (1891), L. R. 3 Ch. 212 86 Adams, Re (1903), 6 0. L. R. 697 266 Adamson v. Parker, 85 S. W. 239 247 Adkins Infants, Re (1915), 33 O. L. R. 110 175 Ainslie, Re Swinburn v. Ainslie, 30 Ch. D. 485 41 Albertson's Estate, 1 W. N. C. 188 26 Alexander, In re, 13 Ir. Ch. 137 33 Alexander, In re, 31 O. R. 167 243 Allam's Estate, 199 Pa. St. 573 US Allen v. Allen, 3 Dem. (N.Y.) 60 Allen v. Jarvis, L. R. 4 Ch. 616 161 Allfrey v. Allfrey, 1 Mac. & G. 93 250 Allhusen v. Whittel, 4 Eq. 295 271 Allsop, In re (1914), 1 Ch. 1 182, 183 Anderson v. Dougall, 15 Gr. 405 88, 91, 217 Appleton, Re, 52 L. T. 906 214 Appleton, Re, Barber v. Tebbit, 29 Ch. D. 893 214 Archer v. Severn, 13 Ont. R. 316 76, 191, 225 Archbishop of Canterbury v. Willis (1708). 1 Salk. 258 Ashborough v. Ashborough, 10 Gr. 305, 430 Ill, 172 Ashman, Re (1908), 15 O. L. R. 42 49, 50, 271 Aston, In re, 5 Whart. (Pa.) 228 230 Atcheson v. Mann, 9 P. R. 473 168 Attorney-General v. Comber, 2 S. & S. 93 21 Attorney-General v. Hooker, 2 P. Wms. 340 216 Attorney-General v. Eastlake, 11 Hare 205 23 Attorney-General v. Lee (1905), 9 O. L. R. 9 66 Attorney-General v. Newman, 31 Ont. R. 340 66 B. Bacon, Re, 62 L. J. Ch. 445 205 Bacon v. Bacon, 5 Ves. 331 1° * Bacon v. Clarke, 3 My. & Cr. 294 192 Badenach v. Inglis, 29 O. L. R. 165 258 Bagwell, Re, Anderson v. Henderson, 17 P. R. 100 8 Bailey v. Bristowe. 2 Robert 145 1 ' Bailey v. Gould, 4 Y. & C. Exch. 221 70 Baker, Re, 42 N. Y. App. Div. 370 Baker, Re, (1898) . 77 L. T. 712 1 sv Baker v. Courage (1910), 1 K. B. 65 256 Bald v. Thompson, 17 Gr. 154 23.^ Baldwin v. Thomas. 15 Gr. 119 !-" Ballentine's Estate, Myr. Prob. (Cal.) 86 Ranks v. Cartwright, 17 \v. R. 417 X INDEX OF CASES. PAGE Barber, In re, 12 N. Y. Supp. 538 83 Barber v. Tebbit, 29 Cb. D. 893 214 Bard's Estate, 13 Pa. Dist. 552 44-61 Baring, In re (1893), 1 Ch. 67 205 Barker, In re, 77 L. T. 712 178 Barker v. Barker, 1 Term R. 295 117 Barnes v. Rowley, 3 Ves. 305 88 Barrett, Re (1915) , 10 O. L. R. 337 22 Barrow v. Isaacs & Son, 1891, 1 Q. B. D. 420 255 Barrs v. Fewkes, 2 H. L. M. 232 271 Barry v. Brazil, 11 Gr. 253 79, 176 Bartolet's Appeal, 1 Walk. 77 233 Barwick, Re, 5 Ont. R. 710 128 Bates, In re (1907), 1 Cb. 22 150 Bath v. Standard Land Co. (1911), 1 Ch. 618 110 Batt, Re, Wright v. White, 9 P. R. 447 224 Battershall, Re, 10 O. W. R. 933 22, 95 Baucus v. Stover, 89 N. Y. 1 44, 221 Baxter v. Wadsworth, 67 L. J. O. B. 301 260 Bayley v. Bishop, 3 Swans. 482 88 Beamish v. Kaulbach, 3 S. C. R. 407 241 Beard, Re, 4 O. W. N. 720 12 Beaufoy's Estate, In re, 1 Sw. & G. 20 200 Becker v. Hammond, 12 Gr. 485 91 Beckworth v. Parish, 69 Ga. 569 21 Beddoe, In re, Cottam v. Beddoe ( 1893 ) , 1 Ch. 557 163, 164 Beecher v. Barber, 6 Dem. (N.Y.) 129 39 Belcher, Ex p., 1 Amb. 218 1° 3 Bell's Estate, In re, 145 Cal. 646; 79 P. 358 82 Bennett, In re, 11 C. L. Times 305 73 Bennett, In re (1896), 1 Ch. 778 201 Berkeley's Trusts, Re, 8 P. R. 193 202, 219, 223 Bertie v. Chesterfield, 9 Mod. 31 59 Bethel v. Abraham, 17 Eq. 24 128 Betty, In re (1899), 1 Ch. 821 71 Beverly, In re (1901), 1 Ch. 681 90 Bevis v. Boulton, 7 Gr. 39 78 Beyfus v. Lawley, 1903, A. C. 411 48 Biggar v. Dickson, 15 Gr. 233 213 Binkley v. Binkley, 15 Gr. 649 98, 177 Birch v. Birch, 1902, P. 130, 138 258 Berkholm v. Wardell, 42 N. J. Eq. 337 59 Birks v. Micklewait, 34 L. J. Ch. 364 160 Blain v. Terryberry, 12 Gr. 222 1 60 Blain Infants, In re, 14 P. R. 220 173 Blair v. Robinson, 108 Pa. St. 249 59 Blakeley v. Ingram, 9 C. L. Times 143 164 Blank Estate, Re, 5 Terr. L. R. 230 54 Blezard v. Whalley, 2 Eq. Rep. 776 77 Bliss v. Seaman, 165 111. 422 13 Blount v. O'Connor, 17 Ir. L. R. 620 189 Blue v. Marshall, 3 P. Wms. 381 123 i.\i)i;.\ OF casks. xi PAGE Blyth v. Fladgate, 63 L. T. 546 142 Boardman v. Jackson, 2 B. & B. 386 238 Bolster, Re (1905), 10 0. L. R. 591 .....63-67 Bolton v. C'urree (1895), 1 Ch. 544 196, 198 Bone v. Cook, McClel. 168 194 Booth and Merriam, Re, 1 O. W. N. 646 263 Boss v. Godsall, 1 Y. & C. C. C. 617 131 Bosworth, Re, Martin v. Lambe, 58 L. J. Ch. 432 11 Botherton v. Hellier, 2 Lee 131 14 Bouch v. Sproule, 12 A. C. 385 210 Bouverie v. Maxwell, 1 P. & D. 272 24 Bowlby, In re, Bowlby B. Bowlby (1904), 2 Ch. 685 98 Boynton v. Peterborough, 4 Cush. (Mass.) 467 38 Boy's Home v. Lewis, 4 Ont. R. 18 157, 217, 230 Bracken, Re, Doughty v. Townsom, 43 Ch. D. 1 50 Bradshaw v. Lancashire Ry. Co., L. R. 10 C. P. 189 37 Branham v. Com, 7 Marsh (Ky.) 190 82 Brantz v. Brantz, 52 Md. 686 81 Braun v. Braun, 14 Man. R. 346 119 Brazil, Re, Barry v. Brazil, 11 Gr. 253 176 Brewster, In re, 113 Mich. 561 221 Brice v. Wilson, 3 N. & M. 512 57 Brick's Estate, 15 Abbott's Prac. 12 5, 252 Bridge v. Brown, 2 Y. & C. 181 ' 172 Brier, Re, 26 Ch. D. 243 100, 107, 188 Brigstocke v. Brigstocke, 8 Ch. D. 357 207 Brinsden v. Williams (1894), 3 Ch. 185 161 Brintnell, In re, 81 N. Y. S. 250 42 Brogden, In re, 38 Ch. D. 571 29, 31 Bronson v. Bronson, 48 How. Pr. (N.Y.) 481 83 Brooke, Re, Brooke v. Brooke (1894), 2 Ch. 600 119 Brooke v. Lord Moysten, 2 D. J. & S. 373 258 Brown, Re, Brown v. Brown, 29 Ch. D. 889 128, 130 Brown v. Grandin, (N.J.) 13 A. H. Rep. 266 220 Brown v. McGee, 117 Wis. 389 64 Browne, Re, 5 O. W. N. 466 263 Broughton v. Broughton, 5 D. M. & G. 160 169 Bruere v. Pemberton, 12 Ves. 386 15S Brnnskill \. Caird, 16 Eq. 493 70 Bubb v. Yelverton, L. R. 13 Eq. 131 214 Budge v. Gummow, 42 L. J. Ch. 22 ; 139, 140 Buerhaus v. Saussure, 41 S. C. 457 221 Burden v. Burden, 1 Ves. & B. 170 121 Burdick v. Garrick, L. R. 5 Ch. 241 155 Burgess v. Burgess, 1 Coll. 367 214 Burgess v. Marriott, 3 Curt 424 24 Burke, In re (1908), 2 Ch. 248 127 Burritt v. Burritt, 27 Gr. 144; 29 Gr. 321 l:M. 152, 193 Burrows v. Walls, 5 D. M. & G. 233 1 90 Butler v. Freeman, 3 Atk. 58 177 Buxton v. Buxton, 1 Ny. & Cr. BO 151 Byrn v. Godfrey, I Ves. 5, 4 R. R. 155 40 Xll INDEX OF CASES. C. PAGE Caffrey v. Darby, 6 Ves. 488 132 Caldwell v. Cockshutt Plow Co. (1913), 30 O. L. R. 262 258 Callaghan v. Callaghan, 1 C. P. 348 73, 74 Candler v. Tillett, 22 Beav. 257 , 192, 193 Cameron, In re (1901), 2 O. L. R. 756 69, 204 Cameron, In re, Mason v. Cameron, 15 P. R. 272 49 Cameron, v. Bethune, 15 Gr. 486 213 Campbell v. Purdy, 5 Redf. Sar. (N.Y.) 434 26 Campbell v. Wardlaw, 8 A. C. 645 207, 208 Campbell v. White, 14 W. Va. 122 239 Campbell's Estate, In re, 24 Pa. Co. Ct. 480 58 Cann v. Cann, 51 L. T. 770 106 Cannan v. Reynolds, 5 El. & Bl. 301 255 Carley, In re, Thomas L. 4 S. L. R. 280 76 Carling Brewing Co. v. Black, 6 Ont. R. 441 50 Carpenter v. Wood, 10 Gr. 354 8 Carr v. Ingleby, 1 D. G. & Sm. 362 89 Carr's Estate, 24 Pa. Sup. Ct. 369 112 Carrey v. Bond, 12 L. J. Ch. 484 33 Carrol v. Cornet, 2 Marsh (Ky.) 204 43 Carrol v. Hughes, 5 Redf. 337 232 Carter v. Cutting, 5 Munf. (Va.) 223 54 Carter v. Sebright, 26 Beav. 377 201 Cartwright, Re, 41 Ch. D. 532 79 Castle v. Warland, 32 Beav. 660 107 Cassie, Re, 17 P. R. 402 163 Caswell Estate, Re, 1 P. L. R. 497, 20 W. L. R. 469 31 Catchside v. Ovington, 3 Burr. 192 Cate v. Cate, Ch. App. 43 S. W. 365 85 Central Bank, Re, 22 Ont. R. 247 226 Chalinder v. Herrington (1907), 1 Ch. 58 170 Challen v. Shipman, 4 Hare, 555 106 Chamberlain v. Clark, 9 A. R. 273 51 Chambers v. Goldwin, 11 Ves. 1 177 Chambers v. Minchen, 7 Ves. 193 194 Chambers v. Smith, 2 Coll. 742 163 Champagne, Re (1904), 4 O. L. R. 537 164 Chancellor, Re, 26 Ch. D. 42 120 Chapman, In re (1896) , 2 Ch. 763 31, 140, 151, 179 Chapman v. Brown (1902), 1 Ch. 785 186 Chappadelaine v. Dechenaux, 4 Cranch 306 250 Chappie, In re, 27 Ch. D. 584 170 Child v. Child, 20 Beav. 50 129 Chllds v. Jordon, 106 Mass. 321 39 Chillingworth v. Chambers (1896), 1 Ch. 685 198 Chisholm v. Bernard, 10 Gr. 479 31, 33, 81, 161, 229 Christie v. Clark, 27 U. C. R. 21 35 Chubb, In re, 32 C. L. J. 294 68 Church, Re (1906), 12 O. L. R. 18 218 Civil Engineers, Re, 19 Q. B. D. 610; 20 Q. B. D. 621 19. 20 INDKX OF CASKS. Xill PAGE Clack v. Holland, 19 Beav. 272 31 < 'laney v. Stephens, 92 Ala. 577 73 Clark, In re, 119 N. Y. 427 15 Clark v. Bellamy, 27 A. R. 435 106 Clark v. Clark, 9 A. C. 733 108 Clark v. Chamberlain, 1 Ont. R. 135, 9 A. R. 273 85 < lark v. Jamieson, 9 C. L. Times 97 243 Clarke, Re (1903), 6 O. L. R. 551 204 Clarke and T. G. & B. Ry., 18 0. L. R. 628 38 Clarkson v. Robinson (1900), 2 Ch. 722 170 Clayton's Case, 1 Ner. 572 118 Clegg v. Rowland, L. R. 3 Eq. 368 50 < Hemes v. Fox, 6 Colo. App. 377 60 Clemow, In re, Yeo v. Clemow (1900), 2 Ch. 182 63 Cleveland, In re (1902), 2 Ch. 350 105 Clough v. Bond, 3 My. & Cr. 490 132 < lough v. Dixon, 8 Sim. 594 103 Cockayne v. Harrison, L. R. 13 Eq. 432 209 Cocker v. Quayle, 1 Russ. & My. 535 131 Coffee v. Ruffln. 4 Coldw. (Tenn.) 487 54 Coffinberry v. Madden, 30 Ind. App. 360 46 Cogswell v. Concord Ry. Co., 68 N. H. 192 125 Collis v. Blackburn, 9 Ves. 470 177 Colquhoun, Re, 26 O. R. 104 266 Commercial Bank v. New Orleans, 17 La. Ann. 190 23 Compton v. Bloxham, 2 Coll. 201 214 Comstock v. Hadlyme, Ecc. Soc. 8 Conn. 254 232 Conduitt v. Sloane, 1 Coll. 285 285 Conger v. Attwood, 28 Ohio St. 134 74 Connolly v. Connor, 120 L. R. 304 9 Connolly v. Connolly, 17 Ir. Chy. Rep. 208 189 ( onsterdine v. Consterdine, 31 Beav. 330 130 Conway's Estate, 10 Pa. Dist. 509 76 Cook v. Noble, 12 Ont. R. 81 95 Cookes v. Cookes, 3 N. R. 97 240 Coppers Estate, 4 Phila. (Pa.) 378 36 Copplnger v. Gibbons, 3 J. & Lat. 397 208 Cornwall v. Deck, 2 Redf. (N.Y.) 87 71 ( 'orsellis, Re, 34 Ch. D. 675 Ill, 169 Courtier, 34 Ch. D. 136 205 Cowley v. Wellesley, 11 Eq. 656 203. 208 Cox v. Godsalve, 6 East. 604 39 Cox's Estate, 8 Mon. Co. Rep. (Pa.) 161 28 Cradock v. riper, 1 M. & G. 664 169 I raig v. First Presb. Church, 88 Pa. St. 48 18 Crane, Re (1908), 1 Cb. 379 100 (ran.' v. Craig, 11 P. R. 236 IT: 1 .. 17) Cranley v. Dixon. '_':: I! a\ . ,",71* 271 Crawley v. Crawley. 7 Sim. 427 271 ( rawshay v. Collins. 15 Ves. Jr. 227 36 Croggan v. Allan. 22 Ch. D. 103 20] Cross, Re. 20 Ch. D. 109 133 XIV INDEX OF CASES. PACK Crossitt's Estate, 211 Pa. St. 490 42 Crowter, Re, 10 Ont. R. 159 191 Crowther v. Cawthra, 1 Ont. 128 : 266 Croxon, In re (1915), 2 Ch. 290 90, 204 Cudney v. Cudney, 21 Gr. 163 73, 153 Cullen's Estate 8 Pa. Sup. Ct. 194 57 Cunnington v. Cunnington (1901), 2 O. L. R. 511 2, 5, 14, 234 Cursiter, Re, 9 Man. L. R. 433 226 Curry Re, 17 P. R. 379, 25 A. R. 267 9, 238 Cust, Re, 18 D. L. R. 647, 25 W. L. R. 716 64, 67 Cuthbert v. North American Life Assc. Co., 24 Ont. 511 88 D. Dacre, In re, Whitaker v. Dacre (1915), 2 Ch. 480 87, 233 Dagg v. Dagg, 25 Gr. 542 230 Daly, Re, Daly v. Brown, 39 S. C. R. 123 9, 108, 259 Dame Mary Wylie v. Montreal, 12 S. C. R. 384 19 Damouth v. Klock, 29 Mich. 289 15 Darby v. Toronto, 17 Ont. R. 554 168 Darston v. Earl of Oxford, 1 Eq. Ca. Ab. 10 238 Dashwood v. Magniac (1891), 3 Ch. 306 208 Davies and James Bay Ry., Re, 20 O. L. R. 534 38 Davies v. Nicholson, 2 DeG. & J. 693 115 Davies v. Spurling, Tarn. 199 250 Davis, Re, 57 L. T. 755 160 Davis v. Bush, 3 Younge, 341 92 Davenhill v. Fletcher, 1 Amb. 244 92 Davis v. Hutchings (1907), 1 Ch. 356 183, 186 Davis v. Lowden, 56 N. J. Eq. 126 74 Dawes v. Boyston, 9 Mass. 337 237 Dawson v. Massey, 1 B. & B. 230 157 Day v. Day, 1 D. & Sm. 261, 127 R. R. 92 91 De la Warr, Re, 16 Ch. D. 587 201 Denby, In re, 3 D. F. & J. 350 214 Deneff v. Helms, 42 Or. 161 47 Denison, Re, 24 Ont. R. 197 69, 203 I tenison v. Denison, 17 Gr. 306 215 Depew, Re, 19 N. Y. St. 902 230 De Pothonier (1900), 2 Ch. 529 102 Descrambles v. Tompkins, 4 Bro. C. C. 149 177 De Tessier, Re (1893) , 1 Ch. 153 79 Dick, In re, Lopes v. Hume (1891), 1 Ch. 423 135 Dick's Estate, 183 Pa. 647 160 Dingman, Re, 9 O. W. N. 272 162 District v. Columbia v. Bailey, 171 N. S. 161 125 Dilmar v. Boyle, 53 Ala. 169 28 Dive, In re (1909), 1 Ch. 328 139, 186 1 >oak v. Robinson, 12 New Br. 278 37 Docker v. Somes, 2 My. & K. 655, 39 R. R. 317 11° Dodds v. Tuke, 25 Ch. D. 617 166 Dolan v. McDermot, 3 L. R. Ch. 676 23 IXDKX or (ASKS. XV PACK Doll v. Cash, 61 N. J. Eq. 108 59 Doner v. Ross, 19 Gr. 229 51 Doody, Re, Fisher v. Doody (1893), 1 Ch. 129 169 I >orchester v. Epingham, Tarn. 279, 31 R. R. 97 106 Douglass, Re, 60 N. Y. App. Div. 64 230 Douglass v. Day, 28 Ohio St. 175 13 Dover v. Denne (1902), 3 O. L. R. 677 180, 183, 196, 263 Downs v. Collins, 6 Hare, 418 120 Drew v. Power, 1 Sch. & Leef. 182 250 Dowso v. Gorton, 1891, A. C. 190 120 Duncombe, Re, 3 O. L. R. 510 42 1 umford v. Weaver, 84 N. Y. 445 15 Duchess v. Kingston's Case, 2 Sm. L. C 257 Dunn, Matter of, 8 N. Y. St. Rep. 766 83 Dunnell v. Providence, 9 R. I. 1 15 Durling v. Neigh, 15 S. & R. (Pa.) 114 90 E. Earl Poulett v. Herbert. 1 Ves. Jr. 497 165 East v. East, 5 Hare 343 32 Eden v. Smyth, 5 Ves. 341, 5 R. R. 50 40 Edenburgh Life Assur. Co. v. Allen, 23 Gr. 230 S Edmunds v. Peake, 7 Beav. 239 106 Edwards, Re, 22 O. L. R. 367 42 Edwards v. Durgan, 19 Gr. 101 ; 173 Edwards v. Smith, 25 Gr. 159 272 Edwards v. Williams, 39 S. Car. 86 90 Edward's Succession, 34 La. Ann. 216 216,230 Egan v. Clark, 87 111. Rep. 246 32 Eglin v. Sanderson, 3 Giff. 434 165 Elgin Loan Co. v. National Trust Co. (1903), 7 O. L. R. 18 182 Elliott's Appeal, 60 Pa. St. 161 36 Elliot v. Lewis, 3 Edw. Ch. (Ky.) 40 83 Elliott v. Turner, 13 Sim. 477, 60 R. R. 381 189 Ellis, Re, 5 Ohio N. P. 207 42 Emeret's Estate, 2 Pars. Eq. Cas. (Pa.) 195 36 Ernes v. Ernes, 11 Gr. 325 S3 Evan's Estate, In re, 1 W. N. (1876) 205 157 Everad v. Warren, 2 Ch. Ca. 249 238 Ewart v. Gordon, 13 Gr. 40 127 Ewart v. Williams, 3 Eq. R. 476 240 Everts v. Everts, 62 Barb 83 Farewell v. Farewell, 22 O. R. 573 22 Farmer v. Dean, 32 Beav. 327. 138 R. R. 755 1"S Farmer's Loan & Savins Co., Re (1904), 3 O. W. R. S37 227 Fair v. Pearce, 3 Madd. 78 37 Parrel. Re (1906), 12 O. L R. 580 272 Fay. .Matter of. 37 Misc. (X.Y.) 532 IS XVI INDEX OF CASES. PAGE Fazakerley v. Culshaw, 19 W. R. 793 78 Fensom v. New Westminster, 5 B. C. R. 624 167 Fenwick v. Clarke, 6 L. T. N. L. 593 270 Fenwick v. Fenwick, 20 Gr. 331 175 Fernandez, In re, 119 C'al. 579 118 Fidelity Trust Co. v. Watkins, 19 Ky. L. R. 957 218 Field v. Peckett, 29 Beav. 576, 131 R. R. 721 72 Field v. Hitchcock, 14 Pick. 105 238 Fielder v. O'Hara, 14 Gr. 223 160 Fish, In re (1893), 2 Ch. 413 169 Fisher, Re, 7 O. W. N. 754 66 Fitzgerald v. Jervoise, 5 Madd. 25 207 Flanagan v. Nolan, 1 Moll. 84 164 Flanders v. D'Evelyn, 4 Ont. R. 704 89 Fleet v. Holmes, 2 Lee 101 25 Fleming, Re, 11 P. R. 272 222, 225 Fleming v. Buchanan, 3 D. M. & G. 976 47 Fletcher v. Walker, 3 Mad. 73, 18 R. R. 195 107, 114 Fletcher v. Hurd, 14 N. Y. Supp. 388 216 Flower v. Lloyd, 10 Ch. D. 327 260 Flower v. Lloyd (1877), 6 Ch. D. 302 255, 258 Flower v. Metropolitan, 27 Ch. D. 592 102 Foley v. Brocksnut, 119 Iowa 457 57, 58 Forbes v. Forbes, 23 O. L. R. 522 242 Fonseca v. Schultz, 7 Man. R. 464 168 Fortune, In re, Ir. R. 4 Eq. 351 272 Foster, In re, Lloyd v. Carr, 45 Ch. D. 627 210 Foster v. Elsley, 19 Ch. D. 518 .' 105 Foster v. Foster, 24 Ky. L. Rep. 1396 32 Fountaine v. Pellett, 1 Ves. Jr. 337 68 Fowler, In re, 16 Ch. D. 723 205 Frankfort v. Com, 82 S. W. Rep. 1008 23 Fraser v. Murdock, 6 A. C. 855 150 Freeh v. Graham, 10 Ir. Ch. R. 522 143 Freeborn v. Vandusen, 15 P. R. 264 216 Freeman v. Fairlie, 3 Mer. 43, 17 R. R. 7 10 Freeman v. Freeman, 4 Redf. Sur. 211 44, 233 Freeman, In re (1898), 1 Ch. 28 79 Fry v. Fry, 27 Beav. 146, 122 R. R. 354 70 Fry v. Tapson, 22 Ch. D. 727, 28 Ch. D. 268 105, 140, 143 Furniss, Re, 86 N. Y. App. Div. 96 60, 232 Fyler v. Fyler, 3 Beav. 550 131 G. Gabourie, Re, 13 Ont. R. 633 33, 152 Galbraith v. Duncombe, 28 Gr. 27 89 Gale v. Lutteral (1824), 2 Add. 234 2, 24, 25 Gardner, Re, 1892, 67 L. T. 552 96 Gardiner v. Callender, 12 Pick. 374 ?A Garland, Ex parte, 10 Ves. 119, 7 R. R. 352 I 17 Garner v. Moore, 24 L. J. Ch. 687 71 INDEX OF CASKS. XV] 1 PAGE Garrett v Noble, 6 Sim. 504 118 Gartshore v. Chalie, 10 Ves. 13 87 Gasquoine, In re (1894), 1 Ch. 470 194 Gaunt v. Tucker, 18 Ala. 27 236 George, In re, 5 Ch. D. 837 98 Gething v. Keighley, 9 Ch. D. 547 260 Gibbons, In ro, 31 Ont. R. 252 59 Gibbs v. Gibbs, 26 L. T. 865 271 Gibson v. Bott, 7 Ves. 89, 96 87, 207 Gibson v. Gardner (1907), 13 O. L. R. 521 5, 8, 262 Gilbert v. Lee, 13 W. R. 1012 165 Giles v. Dyson, 1 Stark N. P. 32, 18 R. R. 743 115, 172 Gill v. Attorney-General, Hardr. 314 190 Gilbertson v. Gilbertson, 34 Beav. 354 63 Gilroy v. Stephen, 30 W. R. 745 15.", Glynn, Re, 57 Minn. 21 64, 81 Godchere Estate, Re, 5 O. W. N. 625 229 Godfrey. In re, 23 Ch. D. 483 144 Godkin v. Watson, 5 O. W. N. 811, 9 O. W. N. 251 56, 113 Godson v. Good, 2 Marsh 300 115 Goodfellow v Rennie, 20 Gr. 425 173 Good's Estate, 150 Pa. St. 307 82 Gould v. Burritt, 11 Gr. 523 212 Graham, Re (1912), 25 O. L. R. 5 5 Graham v. Robson, 17 Gr. 318 213 Grant, Re, 52 L. J. Ch. 552 204, 271 Grant v. Great Western Ry., 7 C. P. 438 5 Grayburn v. Clarkson, L. R. 3 Ch. 605 30, 132 Greener's Estate, 2 W. N. Cas. 292 25 Greenwood, In re (1892), 2 Ch. 295 92 Gresham v. Price, 35 Beav. 47 164 Griffen, Re, 79 L. T. 442 54 Griffen, Re, 3 O. W. N. 759 228, 236, 245 Griffith v. Howes, 5 O. L. R. 533 42 Griffiths v. Anthony, 5 A. & E. 623 2. 3 Griffiths v. Hughes (1892), 3 Ch. 105 197 Griffiths v. Patterson, 20 Gr. 615 163 Grindley, In re. Clews v. Grindley (1898), 2 Ch. 593 181 Griswold v. Chandler, 5 N. H. 492 82 Groves v. Wright, 2 Kay & J. 347 209 Guarantee Trust Co.'s Appeal (Pa.), 9 Atl. Rep. 66 219 Gwynne, Re, 3 O. W. N. 1428 67 H. Hackman v. Black, 2 Lee 251 25 Hayden, In re, 1 Connolly (X.Y.) 454 230 Haines v. Hay, 169 111. 93 232 Hall. In re, 70 Vt. 458 !:'. 16 Hall. In re. ST L. T. X. S. 560 90 Halls Estate, 8 Pa. Dist. S 231 E.A. — B. + XY111 INDEX OF CASES. PAGE Hallett's Estate, 13 Ch. D. 696 113 Hallows v. Lloyd, 39 Ct. D. 691 28 Hamer v. Tilsley, Joh. 486 79 Hamilton's Estate, 29 N. S. R. 249 232 Hanimon v. Douglass, 5 Ves. Jr. 539 36 Hanbury v. Kirkland, 3 Sim. 265 194 Hancock v. Podmore, 1 B. & Ad. 260, 35 R. R. 287 57, 114 Hannum v. McRae, 17 P. R. 567, 18 P. R. 185 9, 237 Harbin v. Darby, 28 Beav. 325 161, 170 Harbeck. Re, 81 Hun. (N.Y.) 26 84, 106 Harris, Re (1915), 33 O. L. R. 23 263 Harris v. Harris, 29 Beav. 107 128, 129 Harrison, In re, 43 Cb. D. 55 205 Harrison, In re (1901), 2 O. L. R. 217 267 Harrison v. Harrison, 14 Gr. 586 109, 133 Harrison v. Harrison, 2 H. & M. 237 271 Harrison v. Patterson, 11 Gr. 105 170, 233 Harrison's Estate, 12 Pa. Co. Ct. 388 16 Harteman, Re, 73 C'al. 545 69 Harvey v. Oliver, 57 L. T. 239 161 Haughton v. Harrison, 2 Atk. 329 97 Havey, In re (1913), 29 O. L. R. 336 175 Hay's Estate, Re, 183 Pa. St. 296 216 Hayes v. Hayes, 20 Gr. 99 161 Haywood v. Kinsey, 12 Mod. 573 33. 115 Head v. Gould (1898), 2 Ch. 250 150 Hearle v. Greenbank, 3 Atk. 695 97 Heath v. Dendy, 1 Russ. 543 91 Heath v. Perry, 3 Atk. 101 97, 177 Heighington v. Grant, 5 M. & Cr. 258, 48 R. R. 297 Ill Heirs Hidding v. DeVillers Denyssen, 12 A. C. 624 29 Hellem v. Severs, 24 Gr. 320 91 Henderson, Re, 8 O. W. N. 31 243 Henderson Trust Co. v. Stuart, 108 Ky. 167 70 Henderson v. French, 5 N. & S. 406 2, 3 Henderson v. Mclver, 3 Mad. 275 106 Hengler, Re (1893) , 1 Ch. 586 202 Henley v. , 2 Ch. Ca. 245 260 Henning v. Maclean (1900), 2 O. L. R. 169 181, 182 Heron v. Moffatt, 7 P. R. 438 218, 233 Heugh v. Scard, 24 W. R. 51 164, 244 Hewitt v. Bronson, 5 Daly (N.Y.) 1 62 Hewitt v. Foster, 7 Beav. 348, 64 R. R. 98 12 Hibbert v. Cooke. 1 Sim. & St. 552 79 Higgins v. Higgins, 4 Hagg. 242 27 Hilton v. Guyot, 159 U. S. 113 261 Hindmarsh v. Southgate, 3 Russ. 324 15 Hinton v. Parker. 8 Mod. 168 2 Hobday v. Peters, 28 Beav. 603 71 Hoctor v. Lavery, 51 N. Y. A pp. Div. 74 76 Hodgkinson, Re (1895), 2 Ch. 190 162 Hoffman v. Hoffman, 22 Md. 60 42 INDEX OF CASKS. xix PAGE Holgate v. Haworl h, 17 Beav. 259 i 57 Holgate v. Shun, 27 Ch. D. Ill \\\ g Hollis, Re, 2 O. W. N. 1417 '.'.'.'.WW. 175 Holland, Re (1902), 3 O. L. R. 406 .63, 67, 87 Holmes, Re, 79 N. Y. App. Div. 264 4- Holstcum v. Rivers, 1 Ch. Ca. 127 239 Honeywood v. Honeywood, L. K. IS Bq. 309 208 Honsberger, Re, 10 Out. R. 521 154, 156, 165, 212, 213, 225, 244 Hood of Avalon v. Mackinnon (1909), 1 Ch. D. 476 256 Hoover v. Wilson, 24 A. R. 424 11 213 Hope's Case, 1891, A. C. 476 ' _ 66 Hopgood v. Parkin, L. R. 11 Eq. 74 132 Hopkinson v. Roe, 1 Beav. 180, 49 R. R. 335 105 Horlock v. Smith, 17 Beav. 572 201 Horlock v. Eschweiler, 11 O. L. R. 140 9 Horsford, Re, 27 App. Div. 427 (N.Y.) 85 Horton v. Brocklehurst, 20 Beav. 504 194 Hotchkeys, In re, 32 Ch. D. 408 77, 79, 80 Howard's Estate, 27 Pa. Co. Ct. 608 . ' 58 Howard v. Digby, 2 CI. & Fin. 634 46 Howarth, In re, L. R. 8 Ch. App. 418 172 Howe v. ( 'arlaw, 15 Ont. R. 697 172 Howe v. Earl of Dartmouth, 7 Ves. 137 199 Houghteling v. Stockbridge, 99 N. W. 759 112 Houghten, In re (1904), 1 Ch. 625 124 Houghten v. Franklin, 1 S. & S. 390 88 Howell, Re (1914), 2 Ch. 173 217 Howell v. Howell, 38 N. C. 522 272 Hovey v. Blakeman, 4 Ves. 596 194 Hoyles. In re (1912), 1 Ch. 67 209 Hudson v. Barratt, 61 P. 737 (Ind.) 15 Huggins v. Law, 14 A. R. 383 88 Hughes, Ex parte, 6 Ves. 617, 6 R. R. 1 78, 109 Hughes, Re Patrick (1909), 14 O. W. R. 630 228 Hunt. Re, S N. Y. App. Div. 159 26 Hunt v. Hunt, 2 Vern. 83 41 Hunter v. Young. 4 Exeh. Div. 256 Huntley, In re, 7 C. L. Times, 251 196 Huson v. Wallace, 1 Rich. Eq. (S. Car.) 1 37, 112 Hyslop, Re (1914), 3 Ch. 522 40 I. [ngersoll, Matter of , 6 Dem. (N.Y.) 184 83 Inglis v. Beatty, 2 A. R. 453 133. 155, 156, 212 Inverarthy v. Forfarshire (1904), 41 Sc. L. R. 434 17 [rwin, Re, 3 O. W. N. 937 200 Irwin v. Ironmonger, 3 R. fi My. 533 8S .Irwin v. Toronto General Trusts Co., 24 A. K. 1st 123 XX IXDEX OF CASES. J. PAGE Jacobs v. Beaver, 17 O. L. R. 502 261 J. H., Re (1911), 25 0. L. R. 132 128 James, Ex parte, 8 Ves. 353, 7 R. R. 56 108 Jenkins v. Jenkins, 76 L. T. Rep. 164 15 Jenkins v. Plombe, 6 Mod. 181 41, 107 Jennison v. Hapgood, 10 Pick. 77 v ... 60, 237 Jesse v. Lloyd, 48 L. T. N. S. 656 78 Job v. Job, 6 Ch. D. 562 41 Jobson v. Palmer (1893), 1 Ch. 71 107, 186 John's Estate, Re, 1 Chest. (Pa.) 281 231 Johnson, Re, W. N. (1886), 72 152 Johnson, Re, (1903), 5 O. L. R. 459 18 Johnson, Re, 15 Ch. D. 548 117 Johnson v. Baker, 2 C. & P. 207, 31 R. R. 663 61 Johnson v. Henagan, 11 S. Car. 93 81 Johnson v. Johnson, 14 Sim. 313 95 Johnson v. Newton, 11 Hare. 160 106 Johnson v. Telford, 3 Russ. 477 161 Johnston v. Barkley (1905), 10 O. L. R. 724 261 Jones, Re, 49 L. T. N. S. 91 155 Jones v. Foxall, 15 Beav. 388 159 Jones v. Lewis, 2 Ves. 240 41, 107 Jones v. Lewis, 3 DeG. & Sm. 471 144 Jones v. Mason, 39 Ch. D. 534 200 Jones v. Morrall, 2 Sm. N. S. 241 157 Jones v. Goodwin, 18 P. R. 174 242 K. Kay, In re, Mosley v. Kay (1897), 2 Ch. 518 185 Keene's Appeal, 60 Pa. St. 504 24 Kellaway v. Johnson, 5 Beav. 319 131 Kellens v. Kellens, 30 Gr. 472 10 Kelly v, Pratt, 83 N. Y. S. 636 109 Kelly v. Solari, 9 M. & W. 54 256 Kemp v. Burn, 4 Gift. 348 244 Kendrick, Re, 107 N. Y. 104 53 Kennedy v. Pingle, 27 Gr. 305 Ill, 212, 215 Kennedy v. Protestant Orphans' Home, 25 Ont. R. 235.. 67, 263, 272 Kenney v. Jackson, 1 Hagg. Ecc. 105 2 Kernochan, Re, 104 N. Y. 618 210 Kester v. Lyon, 40 W. Va. 161 231 Kilbee v. Sneyd, 2 Moll, 193 238 Kiernan, In re, 38 Misc. N. Y. 394 58 Killens v. Killens, 29 Gr. 472 10 King, The, v. Lovitt, 1 E. L. R. 513 66 King v. Hilton, 29 Gr. 381 188, 189 King v. King, 155 Mo. 406 74 Kinney, Re, 6 O. L. R. 459 22 Kirknian v. Booth, 11 Beav. 273, 83 R. R. 158 110, 118 IN'DKX OF CASES. X\i PAGE Kirkpatrick, Re, 10 P. R. 4 55 Knox v. Mackinnon, 13 A. C. 753 105, 129, 148, 193 Koepler's Estate, 4 Pa. Dist. 346 56 Kreisher, Re, 30 X. Y. App. Div. 313 26 L. Lacey, Ex parte, 6 Ves. 625, 6 R. R. 9 108 Lambert v. Rendle, 3 N. R. 247 122 Lamer v. Lamer, 118 Ga. 684 221 Land Credit Co. of Ireland, In re, 21 W. R. 135 50 Lansdowne v. Lansdowne, 1 J. & W. 522 79 Lane v. Dighton, Arab. 409 114 Langford v. Gascoyne, 11 Ves. 333 103 Langston v. Olli vant, G. Coop. 33 130 Law, Re (1915), 34 O. L. R. 222 248 Lawley, In re (1902), 2 Ch. 799 48, 95 Lawless v. Mansfield, 1 D. & "War. 557 250 Lawrence v. Bowie, 2 Ph. 140 166 Learoyd v. Whiteley, 12 A. C. 727 105, 138, 140, 144. 145, 151, 179 Leblond, Re, 7 O. W. N. 398 217 Leckie Estate, Re, 36 C. L. J. 136 169 Lee v. Lee, 6 Gill & J. (Md.) 316 84, 216, 230 Lees v. Sanderson, 4 Sim. 28 190 Leitch v. Molsons Bank, 27 Ont. R. 621 51 Leland v. Fulton, 1 Allen (Mass.) 531 44 Lewellen, Re, 37 Ch. D. 327 161 Lewis v. Doerle, 28 Ont. 412 22 Lewis v. Maddocks, 17 Ves. 57 114 Lewis v. Nobbs, 8 Ch. D. 591 129 Life Assurance of Scotland v. Walker, 24 Gr. 293 233 Lincoln v. Wright, 4 Beav. 427 272 Linnot v. Kenaday, 4 App. Div. D. C. 27 215 Linsley, In re ( 1904 ) . 2 Ch. 785 166 Linton's Succession, 31 La. Ann. 130 2 Liquidators v. Coleman, L. R. 6 H. L. 209 155 Liskeard Union v. Liskeard Waterworks. 7 Q. B. D. 505 23 Livingstone v. Livingstone (1912), 26 O. L. R. 246 13. 211 Lloyd, Re (1914), 31 O. L. R. 476 89, 175 Locher's Estate, In re, 18 Lane. Law. Rev. 6 26 Lodge v. Pritchard, 4 Giff. 294 166 Lonsdale v. Berchtoldt. 3 K. & J. 185 204 Loonies v. Sotherd, 1 S. & S. 458 63 Lopwell, Re. 6 Terr. L. R. 467 235 Lord de Clifford's Estate, In re (1900), 2 Ch. 707 182 Love. Re, 29 Ch. D. 348 166 Loveless v. Clarke, 24 Gr. 14 216 Lovell v. Gibson, 19 Gr. 280 111. Low v. Gemley. 18 S. C. R. 685 102 Low v. Guthrie (1909). A. < '. 278 Lucas v. Knox, 3 Ont. R. 453 73 Lucy v. Walrond, 3 Bing. X. C. 841 XX11 INDEX OF CASES. PAGE Lumbers v. Montgomery, 20 Man. R. 44 59 Lund v. Lund, 41 N. H. 355 60 Lupton v. White, 15 Ves. 432 241 Lusk v. Anderson, 1 Mete. (Ky.) 429 84 M. Maberlay, In re, 33 Ch. D. 455 131 Macdonald v. Balfour, 20 A. R. 404 162 Macdonald v. Irvine, 8 Ch. D. 101 210 Mack v. Mack, 33 C. L. J. 400 211 Mackay, In re (1911), 1 Ch. 300 181, 185 MacPherson and Toronto, Re, 26 Ont. R. 559 3S Maffet's Estate, 7 Kulp (Pa.) 153 83 Maitland v. Grissinger, 1 Woodrw. 294 39 M'Aloon v. M"Aloon (1900), 1 Ir. Lr. 367 119 Mangey v. Hungerford, 2 Eq. ('as. Abr. 156 46 Manning v. Robinson, 29 Ont. R. 483 63, 67 Mansel, Re, 54 L. J. Ch. 883 161 Mansfield, Re, 10 Misc. (N.Y.) 296 220 Manzer, Re, 42 N. B. R. 251 231 Mara v. Browne ( 1895 ) , 2 Ch. 94 198 Mariette, In re, 1915, 2 Ch. 284 20 Marsden v. Kent, 5 Ch. D. 598 151 Marsh v. Evans, 1 P. Wms. 668 95 Marsh v. Gilbert, 2 Redf. (N.Y.) 465 83 Martin v. Martin, L. R. 1 Eq. 369 100, 177 Mason Co. Justices v. Lee, 1 Mon. (Ky.) 247 220 .Matthews v. Studley, 17 App. Div. 303, 45 N. Y. 201 27 Maurer v. Bowman, 169 111. 586 16 Maxwell v. McCreery, 57 N. J. Eq. 287 15 Meander v. McCready, 1 Moll. 119 15o Medcalf v. Oshawa Lands Co., 5 O. W. N. 797 258 Medland, In re, 41 Ch. D. 476 151 Meeker v. Crawford, 5 Redf. (N.Y.) 450 81 Melland v. Gray, 2 Coll. 295 157 Menzies v. Ridley, 2 Gr. 544 75 Mercer, Re (1912), 26 O. L. R. 427 248 Merritfs Estate, Re, 35 App. T. W. 357; 54 N. Y. Supp. 955 25 Merritt v. Merritt, 161 N. Y. 634 85 Mickleburgh v. Parker, 17 Gr. 503 195 Midgley v. Midgley (1893), 3 Ch. 282 53, 115 Miller v. Crawford, 26 Abb. N. C. (N.Y.) 396 38 Miller v. Miller, 25 Gr. 224 96 Miller v. Miller, 13 Eq. 263 199 Miles v. Durnford, 2 Sim. (N.S.) 241 154 Mil I town v. Trench, 4 CI. & Fin. 276 204 Milne v. Moore, 24 Ont. R. 456 55 Mimico Pipe >.V Brich Co., Re, 26 Ont. R. 289 169 Montgomery, Re, Lumbers v. Montgomery, 20 Man. R. 44 59 Moody. In re (1895), 1 Ch. KH 177 Moore, Re, 9 O. W. N. 282 49 INDEX OF CASES. XXJH PAGE Moore v. Frond. 3 M. & Cr. 48 I 11 Moran Estate, Re, 38 C. L. J. 215 -■'■"■ Morice v. Bishop of Durham, 9 Ves. 399 23 Morley V. -Matthews, 14 Gr. 551 7!( Morrison, Re, 13 O. W. R. 767 130, 245 Mousley v. Carr, 4 Beav. 49 157 Mt. Herman Boy's School v. Gill, 145 Mass. 146 1" M ueller's Estate, Re, 190 Pa. 601 112 Mutt. ti. Re, 30 Ch. D. 534 205 Mullen, Re, 14 N. Y., 98 122 Munsie, Re, 10 P. R. 98 209 Murdy v. Burr (1901), 2 O. L. R. 310 13 Murphy's Estate, 30 Wash. 9 ~' s Myddleton v. Rushout, 1 Phill. 244 24 McAloon v. McAloon (1900), 1 Ir. R. 367 119 McAlpine, In re, 8 Ohio Dec. 654 167 McArthur v. Dudgeon, L. R. 15 Eq. 102 McCall v. Peachey, 3 Munf. (Va.) 288 43 McCarger v. McKinnon, 15 Gr. 361 33 McCarger v. McKinnon, 17 Gr. 521 34, 125, 161 McCarter v. McCarter, 7 Ont. R. 243 191 McCauley, Re, 28 O. R. 610 -- McCleland v. Bristowe, 9 Ind. App. 543 81 McClenaghan v. Perkins (1903), 5 O. L. R. 129 213. 214 Mc< oil. Re, McColl v. McColl, 8 P. R. 480 223 McDonald v. Davidson, 6 A. R. 320 231 McDonald v. McWhorter, 44 Misc. (N.Y.) 124 61 McDonald v. Trust & Guarantee Co., 1 O. W. N. 886 182 McEachren, Re (1905), 10 O. L. R. 499 266 McGill v. Court ice. 17 Gr. 321 I6 5 McGlinsey's Appeal, 14 S. & R. (Pa.) 64 61 McGougan v. Hall, 21 S. Car. 600 82 McGovern's Estate, 2 Northern L. R. 194 3o McHugh's Estate. 152 Pa. St. 422 62 Mclllroy v. Hatheway. 44 Mich. 399 15 Mclntyre, Re (1904), 7 O. L. R. 548, 9 O. L. R. 408. . . .73. 97. 99, 154. 177. 266 Mclntyre, Re (1906). 11 O. L. R. 136 * McKay. Re, Mosley v. McKay (1897), 2 Ch. 518 49, 181 McKaj v. McKay, 4 O. W. N. 300 6S McKeller v. Prangley, 25 Gr. 545 163 McKay. Ex parte. 1 B. & B. 405 1T:: Mrl.atchie. Re, 30 Ont. R. 179 196 McLennan v. Helps, 3 Ch. 193 McLennan v. Heward, 2 Gr. 128, 9 Gr. 178 13. 154, 222 M„M Trust, Re, 28 C. L. J. 502 103 McMillan v. McMillan. 21 Gr. 379 1". 212, 270 McMylor V. Lynch. 24 Ont. R. 639 '"'' McMyn, Re, 33 Ch. D. 575 McNeil, in re, 68 Pa. St. 412 McNeill Estate, Re (1911), 19 \v. L. R. (B.C.) 691 199 McNellie v. Acton. A D. M. & G. 765 11S McPhaden \. Bacon, i~> Gr. 591 XXIV INDEX OF CASES. N. PAGE Nash v. McKay, 15 Gr. 247 15 National Insurance Co. v. Egleson, 29 Gr. 406 237 National Trust Co. v. General Finance Co., 1905, A. C. 373.. 184, 186 Natt, In re, 37 Ch. D. 517 267 Neal v. Knox, 61 Me. 298 38 Nelson, In re, 14 Gr. 199 263 New v. Jones, 1 M. & G. 668 106 New London & B. Bank v. Brocklehurst, 21 Ch. D. 302 130 Newell v. West, 149 Mass. 520 83 Newton v. Bennett, 1 Bro. Ch. C. 361 158 Newton v. Sherry, 1 C. P. D. 246 49 Nichol, Re, 1 O. L. R. 213 242 Nichols, R, Hall v. Wildman (1913), 29 O. L. R. 206.. 30, 150, 152, 180, 187 Noble v. Cass, 2 Sim 343 37, 207 Norcott v. Gordon, 14 Sim. 258 91 Norton v. Frecker, 1 Atk. 526 52 Norton v. Norton, 94 Ala. 481 73 Xowell v. Nowell, 2 Me. 75 15 O. Oatway, In re (1903), 2 Ch. 356 114 O'Brain v. Wilson, 33 So. (Miss.) 946 47 Ogden, In re, 41 Misc. (N.Y.) 158 58 Oke v. Oke, 8 O. W. N. 180 4 Oldham v. Hand, 2 Ves. 259 260 O'Neill v. Lucas, 2 Keen 313 271 O'Reilly v. Kelly, 21 R. I. 151 61 Orr v. Newton, 2 Cox 274 31 Orrick v. Pratt, 34 Mo. 226 74 Ottawa & Grey Nuns, Re (1913), 29 O. L. R. 568 19 Ottawa Y. M. C. A. v. Ottawa (1910), 20 O. L. R. 567 17 Ottley v. Gilby, 8 Beav. 602, 68 R. R. 218 11 Ownsworth v. Vickers (1915) , 3 K. B. 267 203 Owen, In re, Frisby v. Owen, 66 L. T. 718 120 Owen v. Potter, 115 Mich. 556 112 Owthwaite, Re (1891), 3 Ch. 494 136 Oxley, In re (1914) , 1 Ch. 604 120 P. Pace v. Pace, 73 N. C. 119 15 Pache v. Oppenheim, 93 App. Div. N. Y. 221 59 Paice v. Canterbury, 14 Ves. 364 61 Palmer v. Emerson (1911), 1 Ch. 758 137, 146, 182 Paret v. N. Y. El. Ry., 60 N. Y. Supp. 441 37 Parry's Estate, 41 A. H. 384 60 Partington, Re Partington v. Allen, 57 L. T. 654 140, 142 Pass v. Dundass, 43 L. T. 665 193 INDEX OF CASES. XXV PAGE Paterson v. Lailey, 18 Gr. 13 133 Patterson Estate, Re, 24 Man. R. 217 W. 231 Patterson v. Hueston, 40 N. S. R 4 ['. 263 Paul v. Nettleford, 2 Add. Ecc. 287 ........14 234 Payne, Re, 54 L. T. 840 ' no Payne v. Evans, 13 Eq. 356 165 Peacock v. Colling, 54 L. J. Ch. 743 161 Pearce, Re (1909), 1 Ch. 819 100 Pearse v. Green, 1 J. & W. 133, 20 R. R. 258 .10 165 Pearson, Re, 51 L. T. N. S. 692 '.". ' 144 Pearson v. Pearson, 1 Sch. & Lef. 12 ..87 95 Pease v. Christman, 158 Md. 642 ' 76 Peek v. Derry, 37 Ch. D. 541, 14 A. C. 337. .... . ........ . . .... 140 Pennington v. Healey, 1 Compt. & M. 402 123 People v. Houghteling, 7 Cal. 348 39 People v. Salem, 20 Mich. 485 23 Perrins v. Bellamy (1899), 1 Ch. 797 181 Perry v. Meddowcroft, 4 Beav. 204 .29 64 Peterson v. Peterson, L. R. 3 Eq. Ill 270 Peyton v. Green, 1 Ch. Rep. 146 939 Phillips v. Beal, 32 Beav. 25 ?09 Phillips v. Bignell, 1 Phill. 259 .1 ~24 Phillips v. Richardson, 4 Marsh. 212 230 Phillipson v. Harvey, 2 Lee, 344 "95 Pickard v. Anderson, L. R. 13 Eq. 608 129 Pickering v. Thompson (1911), 24 O. L. R. 386 46 Pinckard v. Pinckard, 24 Ala. 250 go Pistor v. Dunbar, 1 Anstr. 107 joj" Pitt v. Pitt, 2 Cas. T. Lee 508 61 Pitt v. Woodham, 1 Hagg. 247 o 7 Pitts v. LaFountaine, 6 A. C. 482 163 Piatt v. Piatt, 42 Conn. 347 36 Playfair v. Cooper, 17 Beav. 187 "00 Plumb, In re, 27 Ont. R. 601 "10 Pollack, Re, 3 Redf. (N.Y.) 100 ......... "43 Powell v. Evans, 5 Ves. 844 .32, 116 Prentise, Re, 25 App. Div. (N.Y.) 209 "3" Preston v. Melville, 16 Sim. 163 '. . . . . . \ . . 210 Price v. Anderson, 15 Sim. 473 "10 Price v. Maxwell. 28 Pa. 231 '.WW. 21 Price v. Price, 42 L. T. N. S. 626 155 Price v. Strange, 6 Madd. 159 "67 Price v. Stokes, 11 Ves. 319 ' . ' 194 Pride v. Fooks. 2 Beav. 430 165 Prince v. Cooper, 17 Beav. 1S7 WWW. 204 Pringle v. Napanee, 43 U. C. R. 285 18 Prit tie's Trusts, Re, 12 O. W. R. 268 W. . . !lio, 222. 226 Pulling v. Great Eastern Ry., 9 Q. B. D. 110 '....' ":^7 Pullman v. Willets, 4 Dem. (N.Y.) 536 W........ 83 Prince. Re, 1898, 2 Ch. 225 63 e.a. — n. a XXV L INDEX OF CASES. Q. PAGE Quin, Matter of, 1 Connolly 381 81 R. R. v. Dickout, 24 Ont. T. 250 18 R. v. Wallingford Union, 10 A. & E. 259 24 Raby v. Redehalgh, 7 D. M. & G. 104 196 Rae v. Meek, 14 A. C. 569 104, 139, 148, 193 Raeder's Estate, 10 Pa. Dist. 282 25 Rainforth's Estate, In re, 83 N. Y. S. 57 42, 112 Randell, Re, 2 Connolly 29 36 Randell v. Burrows, 11 Gr. 364 11 Randell v. Russell, 3 Mer. 194 209 Rashleigh v. Master, 1 Ves. Jr. 201 166 Ratliff v. Davis, 38 Miss. 107 231 Rawlinson v. Scholes, 79 L. T. 350 54 Rawsthorne v. Rowley (1909), 1 Ch. 409 151 Reber's Estate, 143 Pa. St. 308 55 Receiver-General N. B. v. Hay ward, 35 N. B. R. 433 66 Redding, In re (1897), 1 Ch. 876 204, 206 Rees v. Fraser, 26 Gr. 233 98, 99 Reeves v. Brooks, 80 Ala. 26 74 Reeves v. Freeling, 2 Phill. 57 24 Reheden v. Wesley, 29 Beav. 213 106, 196 Reid v. Reid, 16 C. P. 247 125 Renwick, Re, Renwick v. Crooks, 14 P. R. 361 173 Revel v. Watkinson, 1 Ves. 93 200 Reynolds, Re, 124 N. Y. 388 61 Richardson, Re, 3 O. W. N. 1473 127 Richardson v. Richardson, 87 111. App. 354 52 Richmond, Re, 2 Pick. 567 56 Ridenbaugh v. Burnes, 14 Fed. Rep. 93 260 Ringwell, In re, 5 Ohio N. P. 496 51 Rispen, Re, 6 O. W. N. 669, 7 O. W. N. 507 93, 94 Ritchie v. Rees, 1 Add. 153 2, 14, 27 Robdard v. Cooke, 36 L. T. N. S. 504 192 Roberts, Re (1897), 76 L. T. 479 180 Robbins, Re, (1906) , 2 Ch. 648 88 Robbins, Re, 23 Gr. 162 125 Robbins v. Wolcott, 27 Conn. 234 81 Robinson, Re, 22 Ont. R. 438 96 Robinson v. dimming, 2 Atk. 410 239 Robson v. Jardine, 22 Gr. 420 56 Rocke v. Hart, 11 Ves. 61 159 Roofs Estate, 8 Pa. Dist. Rep. 223 25 Ross, In re, 29 Gr. 385 86 Ross, In re (1900), 1 Ch. 162 88 Ross v. The Queen, 32 Ont. R. 143 67 Rote v. Warren, 17 Ohio Cir. Ct. 342 216 IXOKX OF CASKS. XXVII PAGE Rowe v. Raper, 36 C. L. J. 1 59 Rownson, In re, Field v. White, 29 Ch. D. 363 52, 53, 86, 11 Roy v. Williams, 9 Ont. R. 534 215 Royds v. Royds, 14 Beav. 54 138 Rugs, In re, 3 N. Y. St. 224 44 Rundle, Re, 32 0. L. R. 312, 52 S. C. R. 114 173, 241 Russell, Re (1904), 8 0. L. R. 481 3, 4 Russell v. Hilton, 90 N. Y. App. Div. 178 113 Rutherford, Re, 34 O. L. R. 395 53 s. Salmon, In re, 42 Ch. D. 370 139, 149 Salmon v. Sladen, Perrog. M. T. 1792 24 Sanders, Re, 4 Misc. N. Y. 28 56 Sanderson, In re, 7 Ch. D. 176 220 Sanford Estate, Re, 18 Man. R. 413 222, 229 Sanford v. Porter, 16 A. R. 565 11 Sawyer v. Sawyer, 28 Ch. D. 595 133 Scadding, Re (1902), 4 O. L. R. 638 95, 96 Schaefer, Re, 65 N. Y. App. Div. 378 46 Schoolfield v. Rudd, 9 B. Mon. (Ky.) 294 40 Schultz"s Estate, Re, 57 N. Y. Supp. 952 25 Schweder's Estate, Re (1891), 3 Ch. 44 94 Scott v. Fox, 14 Md. 388 90 Scottish Equitable v. Beatty, 29 L. R. Ir. 290 50 Sculthorpe v. Burn, 12 Gr. 427 8 Sculthorpe v. Tipper, L. R. 13 Eq. 232 29, 152 Scurrah v. Scurrah, 2 Curt. 919 27 Seaman v. Evered, 2 Lev. 40 55, 115 Sebring v. Keith, 2 Hill 340 56 Second East Dulwich Bldg. Society, In re, 68 L. J. 196 186 Seidel's Estate, 2 Woodw. (Pa.) 259 39 Seivwright v. Lees, 1 Ont. R. 375 - 1 - Seton v. Dawson, 4 Ct. Sess. 2nd series 310 148 Shallcross v. Wright, 19 L. J. Ch. 443 115 Shambrook Estate, In re, 28 C. L. T. 575 66 Sharp, Re (1906), 1 Ch. 793 67 Sharp v. Lush, 10 Ch. D. 468 48. 62, 245 Shaw v. Cates (1909), 1 Ch. 389 139, 141, 145, 146, 148, 149, 187 Shaw v. Tackaberry (1913), 29 O. L. R. 490 4. 109, 254. 869 Sheppard, In re, 1911, 1 Ch. 50 102 Sheppard v. Harris, 1905, 2 Ch. 318 186 Sheriff v. Axe, 4 Russ. Ch. Cas. 33 m Shiphrook v. Hinchinbrook, 11 Ves. 352 194 Shrewsbury v. Shrewsbury, 18 Jur. 397 - 1 " 7 Shuttleworth v. Bristo, 12 W. R. 40 237 Silkstone ( o. v. Edey, 1900, 1 Ch. 167 156 Sills v. Warner. 27 O. T. R. 266 Simmons v. Bollard. 3 Mer. 547 55 Simpson v. Home, 28 Gr. 1 165, 211, 212 Simpson v. Welcome. 7:' Me. BOO iS XXV111 INDEX OF CASES. PAGE Sinclair, Re, Allen v. Sinclair, 1897, 1 Ch. 921 89 Sinclair v. Brown, 29 Ont. R. 370 268 Sinnott v. Kenady, 27 Wash. L. Rep. 82 59, 76 Skinner, In re, 1904, 1 Ch. 289 12, 165, 244 Slade v. Chaine, 1908, 1 Ch. 522 209 Slanning v. Style, 3 P. Wms. 339 46 Sleight v. Lawson, 3 K. & J. 292 240 Smale v. Graves, 19 L. J. Ch. 157 35 Smethurst v. Hastings, 30 Ch. D. 490 144 Smiley v. Smiley, 80 Mo. 40 260 Smith, Re, 75 N. Y. App. Div. 339 76 Smith, Re, 1 Misc. N. Y. 269 82 Smith, Re, 1896, 1 Ch. 71 129 Smith v. Beal, 25 Ont. R. 368 163 Smith v. Bonnistel, 13 Gr. 35 79 Smith v. Chambers, 2 Ph. 221 163 Smith v. Clarkson, 1904, 7 O. L. R. 460 262 Smith v. Cremer, 24 W. R. 51 H Smith v. Everett, 27 Beav. 446 36, 124 Smith v. Langford, 2 Beav. 362 HO Smith v. Mason, 1901, 1 O. L. R. 594 178, 179 Smith v. Price, 1 Lee, 569 25 Smith v. Roe, 11 Gr. 311 10, 11, 158, 159 Smith v. Rose, 24 Gr. 440. 75, 172 Smith v. Seaton, 17 Gr. 397 96 Smith v. Smith, 13 Gr. 81 121 Smith v. Smith, 23 Gr. 114 130, 133 Smith's Estate, Re, 81 N. Y. S. 1035 14 Smith's Trusts, Re, 4 Ont. R. 518 207 Snape, In re, 1915, 2 Ch. 179 68 Society Writers to Signet v. Comrs. Inland Rev. 14 Rett. 34.. 20 Soloman, In re, 1912, 1 Ch. 261 137, 138, 142, 146 Somerset, In re, 1894, 1 Ch. 231 141, 146, 148, 196 Sorrels v. Frantham, 48 Ark. 386 259 Soutter, In re, 105 N. Y. 514 238 Sovereign v. Freeman, 25 Gr. 525 160 Sovereign v. Sovereign, 15 Gr. 559 160, 190 Sparkes v. Rental, 22 Beav. 587 34 Sparks v. Perrin, 17 Gr. 519 98 Speight v. Gaunt, 22 Ch. 740, 9 A. C. 1 103, 137 Spencer's Case, Winch. 51 39 Spode v. Smith, 3 Russ. Ch. Cas. 511 H 5 Spratt v. Wilson, 19 Ont. R. 28 128, 129, 133, 154 Stacey v. Elph, 1 M. & K. 195, 36 R. R. 304 108 Stackpole v. Stackpole, 4 Dow 227 57 Stag v. Punter, 3 Atk. 119 114 St ahlschmidt v. Lett, 1 Sm. & G. 415 86 Stanton, Re, 41 Misc. N. Y. 278 80 Stark v. Hunton, 3 N. J. Eq. 300 34 State v. Wagers, 47 Mo. App. 431 90 Steger v. Frizzell, 2 Tenn. 369 61 Stephens v. Venables, 30 Beav. 625 91 INIH.X <>l (ASKS. XXIX PAGE Steret v. National Co., 10 App. Cas. (B.C.) 131 272 Stewart v. Fletcher, 16 Gr. 235, 18 Gr. 21 8, 116, 166, 175 Stewart v. Snyder, 30 Ont. R. 110, 27 A. R. 423 49, 50, 187 Stickney v. Sewell, 1 M. & < !r. 8 138, 140, 144 Stiles v. Guy, 11 Sim. 230, 80 R. R. 58 32, 116 Stinson v. Stinson, 8 P. R. 560 221 Stocken v. Dawson, 6 Beav. 371 121 Story v. Dunlap, 13 Gr. 375 162 Stott v. Lord, 31 L. J. Ch. 391 125 Stretton v. Ashmall, 3 Drew 9 l" (l Strickland v. Symons, 26 Ch. D. 245 119 Struthers v. Sudbury, 30 Ont. R. 116 - ' Stuart, In re, 1897, 2 Ch. 583 137, 143, 147, 180, 182, 187 Stubbs v. Stubbs, 4 Redf. N. Y. 170 69 Styles v. Guy, 1 Mac. & G. 422 32, 116, 192 Sudds, In re, .66 N. Y. Sur. 231 85 Sugden v. Crossland, 3 Sm. & G. 192 110 Sullivan v. Horner, 41 N. J. Eq. 299 59, 60 Sullivan v. Tuck, 1 Md. Ch. 65 84 Sullivan v. Winthorp, 1 Summ. (U.S.) 1 90 Sutton, In re, 1901, 2 Ch. 640 17 Sutton v. Sharp, 1 Russ. 146 157 Sutton v. Wilders, L. R. 12 Eq. 373 143 Swayzie, Re, 3 O. W. N. 621 59 Swart v. Gregory, 15 U. C. R. 335 292 T. Talbot v. Marshfield, 1868, L. R. Ch. App. 622 24 4 Tatham, Re, 1901, 2 O. L. R. 343 45 Taylor, Re, 1894, 1 Ch. 671 86 Taylor v. Gerst, Mosley, 99 158 Taylor v. Haygarth, 8 Jur. 135 165 Taylor v. Newton, 1 Lee 15 H Taylor v. Sheppard, 1 Y & C. 271 261 Taylor v. Tabrum, 6 Sim. 281 32 Taylor v. Taylor, L. R. 10 Eq. 477 54 Teaf s Estate, 7 Pa. Co. Ct. 463 < ;4 Tebbs v. Carpenter, 1 Madd. 290 116. 165, ill 1 Telford v. Morrison, 2 Add. Ecc. 319 Terrell v. Matthews, 1 Mac. & G. 433 194 TY> n. Matter of, 2 Redf. (N.Y.) 306 82 Tillie v. Springer, 21 Ont. R. 588 86 Titlon's Estate, 11 Pa. Co. Ct. 625 167 Thomas, Re. 1901. 2 O. L. R. 660 56 Tbompson v. Fairbairn, 11 P. R. 333 154, 225 Thompson v. Freeman, 15 Gr. 384 221 , 223 Thompson v. Thompson, 77 Ga. 692 69 Thompson v. Thompson, 9 Price 476 115 Thorne v. Allen, lit So. 1068, 20 Ky. L. R. 172S 218 Thornton v. Stokell, 1 Jur. X. S. 751 149 Thorpe, Re, 1891. 2 Ch. 361 11° XXX INDEX OF CASES. PAGE Thwaites v. Foreman, 1 Coll. C. C. 414 95 Tillie v. Springer, 21 Ont. R. 585 86 Tillott, In re, Lee v. Wilson, 1892, 1 Ch. 86 11 Titlow's Estate, 11 Pa. Co. Ct. 625 64 Tood v. Moorhouse, 19 Eq. 69 200 Toomey v. Tracey, 4 Ont. R. 711 96 Toronto Gen'l Trusts Co. and C. O. Ry., 6 O. W. R. 350 221 Torrance v. Chewitt, 12 Gr. 407 222 Towns-end v. Hunter, 3 C. L. Times, 310 9 Travers v. Townsend, 1 Moll. 496 164 Treasurer of Ontario v. Pattin, 22 O. L. R. 184 65 Treves v. Townsend, 1 Bro. Ch. C. 385 159 Trevor, In re, 1892, 2 Ch. 339 208 Truman v. Hurst, 1 T. R. 42 249 Tubbs, In re, 1915. 1 Ch. 540, 2 Ch. 137 206 Turnbull, In re, 1905, 1 Ch. 726 68 Turner, In re, 1897, 1 Ch. 536 178, 182, 186, 187 Turner v. Carney, 5 Beav. 575 239 Tuttle v. Robinson, 33 N. H. 104 60 Twigg's Estate, Re, 1892, 1 Ch. 579 267 U. I 'finer v. Lewis, 27 A. R. 249 51, 270 Union Bank v. Knapp, 3 Pick. 96 249 Union Trust v. Bensley, 12 O. W. R. 336, 1069 4 Upton v. Brown, 26 Ch. D. 588 201 1 rquhart v. King, 7 Ves. 225 216 I T . S. Express Co. v. Donahue, 14 Ont. R. 333 140 V. Vadala v. Lawes, 25 Q. B. D. 310 261 Vallambrosa Rubber Co. v. Inland Revenue, 1910, S. C. 519 202 Van Houten, Re, 18 N. Y. App. Div. 301 122 Vancott v. Reid, 3 U. C. R. 244 22 Vano v. Canadian Colored Mills Co., 21 O. L. R. 144 211 Vanston v. Thompson, 10 Gr. 542 160 Vernon, Re, 33 Ch. D. 402 132 Verrall, 1916, 1 Ch. 100 22 Vernon v. Vawdry, 2 Atk. 119 250 Very's Estate, 53 N. Y. Supp. 389 59 Viner v. Vaughan, 2 Beav. 466 208 Vyse v. Foster, L. R. 8 Ch. App. 309 78,158 W. \\ ;i- hter, Re, 16 Misc. N. Y. 137 Waddell Estate, Re, 35 N. S. R. 435... Waddy v. Hawkins, 4 Leigh (Va.), 458 tier, In re, 40 Misc. N. Y. 490 Wagner, In re, 1903, 6 O. L. R. 680 62 176 231 I i:i 266 I fiJDEX ol CASES. XXXI PAGE Waite v- Parkinson, 85 L. T. 456 lvl Walcott v. Lyons, 54 I v . T. N. S. 786 132 Walker, In re, 59 L. J. Ch. 386 141, 1 12 Walker v. Allen, 24 A. R. 336 -'j 1 ' Walker v. Wetherell, 6 Ves. 473 J 1? > Wall, Re, 42 Ch. Div. 510 -' Wall v. Wall, 15 Sim. 513 ln " Warren, Re, 32 W. R. 916 125 Washburn v. Wright, 31 0. L. R. 138 257 Watkins, Re, 12 B. C. R. 97 63, 67, 68 Watkins v. Romine, 106 Ind. 372 60 Watson's Appeal, 6 Pa. St. 505 -^ Watt, Re, 29 N. S. R. 100 -'- Weale v. Oliver, 17 Beav. 252 '" Weall, Re, Weall v. Andrews, 42 Ch. D. 674 104, 210 Webb v. Jones. 39 Ch. D. 660 130. 139 Wedderburn v. Wedderburn, 22 Beav. 84 36, 158 Wedmore, In re, 1907, 2 Ch. 277 [['- Weeks, Matter of, 5 Dem. (N.Y.) 194 3 * Weiss v. Dill. 3 My. & K. 26 1Q 5 Welles v. Cowles, 4 Conn. 182 Went worth v. Humphrey, 1886, 11 A. C. 619 266 West v. Moore, 8 East. 339 ;: ' West v. Smith. 8 How. (U.S.) 402 Wheelwright v. Wheelwright, 2 Redf. 501 Whichcote v. Lawrence, 3 Ves. 740 108 165 Whistler v. Newman, 4 Ves. 129 White, Re, 15 N. Y. St. 729 -^ While. In re, 13 Pa. Sup. Ct. 201 - While, in re, 1898, 1 Ch. 297. 2 Ch. 297 169. 233 White v. Jackson, 15 Beav. 191 164 - 244 Whiteley, In re, 33 Ch. D. 347 14 '' l6 J Whitmore v. Weld, 1 Vera. 326 14 Wiggen v. Sunt, 6 Mete. 194 • 69 Wightwlck v. Lord, 6 H. L. C. 217 «■ -°* Wilhanks v. Crosno, 112 111. App. 503 Wilding v. Sanderson. 1897, 2 Ch. 534 --[\ Wiles v. G-resham, 2 Drew 258 1 ^'- Wiley's Appeal. 8 W. & S. (Pa.) 244 Willard, Re, 139 Cal. 501 • JJ Williams. In re, 1902, 4 O. L. R. 504 169. 226, 230 Williams, In re, 27 Ont. R. 405 - Williams, In re, 22 A. R. 196 JJJ Williams v. Arkle, L. R. 7 H. L. 606 217 Williams v. Headland. 4 Gift". 505 55, 171 Williams v. Preston, 20 Ch. D. 672 Williams v. Petticrew, 62 Mo. 160 8 * Williamson v. Barbour, 1877, 9 Ch. D. 529 - a Willis v. Kebie, I Beav. 559, 19 R. R. 453 m Willis \. Willis. 20 Gr. 396 v ', Wilkins v. Hogg, 3 Gift. 116 1: ';; Wilson, In re. 16 P. R. 150 -'" XXXI 1 INDEX OF CASES. PAGE Wilson, Re, and Toronto G. T. Co., 13 O. L. R. 82. . . .5, 110, 251, 252 Wilson, Re, and Toronto G. T. Co., 15 O. L. Jt. 614 71, 253 Wilson v. Dalton, 22 Gr. 160 95 Wilson v. Randall, 37 Ala. 74 90 Wilson v. Wilson, 2 Keen 249 166 Winchlow v. Smith, 2 Lee 417 24 AVood, Re, 15 N. Y. St. 722 26 Wood v. Weightman, L. R. 13 Eq. 434 50 Wood v. Vanderburg, 6 Paige 277 75 Woodard v. W T oodard, 36 S. Car. 118 84 Woodbury, Re, 46 Misc. N. Y. 143 60 Woodhead v. Fallows, 2 C. & J. 481 114 Woodruff v. Attorney-General, 1908, A. C. 508 65 Woodruff v. McLennan, 14 A. R. 242 260 Woodside v. Logan, 15 Gr. 145 272 Worral v. Hand, Peake 74 35 Worts v. Worts, 18 Ont. R. 332 121, 128, 136 Wright v. Wright, 100 Tenn. 313 42 W rough ten v. Colquhoun, 1 D. G. & Sm. 357 89 Wyatt v. Palmer, 1899, 2 Q. B. 106 255 Wych v. Packington, 3 Bro. P. C. 46 260 Wylie v. Montreal, 12 S. C. R. 384 19 Wynch v. Wynch, 1 Cox 433 97 Y. Yates v. Compton, 2 P. Wms. 308 88 Young's Estate, 1 Pa. Co. Ct. 513 16 Young v. Estes, 59 Me. 441 74 Young v. Purvis, 11 Ont. R. 597 15 Young and Harston's Contract, Re, 31 Ch. D. 134 189 Z. Zimmerman v. Wilcox, 19 C. L. T. 337 32, 159, 176, 244. 172 ABBREVIATIONS A. L. Appeal Cases (1875-1890). A C. (1892) Appeal Cases (From 1891). A. & i: Idolphus & Ellis (1834-41). Ah. Eq. Ca. Equity Cases Abridged. Abbotl New fork Reports. Add. Ecc Vddam's Ecclesiastical Reports. Ala Uabama Reports. Allen Allen's Massachusetts Reports. Allen N. B Allen's New Brunswick Reports. Ainb Ambler's < Jhancery Reports. Anstr Anstruther's Exchequer Reports (1 (!•<>-,). A. It Ontario Appeal Reports (1877-1900). App. 1 >iv. Appellate Division. Aik Atkyn's Chancery Reports. Atl Atlantic Reporter. B. & Ad Barnwell & Adolphus (1831-4). B. & B Ball & Beatty's Irish Chy. Reports. B. C. R British Columbia Reports. Barb Barbour's Chancery Reports. New York. Beav Beaven's Rolls Court Reports (1839-66). Bro C. C Brown's Chancery Cases. ( '. & J Crompton & Jcr-vis (1831-2) . c. & M Crompton & Meeson (1833-5). C. M & R Crompton. Meeson & Roseoe (1834-7). C. P Upper Canada Common Pleas (1850-80). C, P. D Common Pleas Division (1875-80). C. & P Carrington & Payne (1823-41) . ( !al California Reports. ( 'as. t. Lee ( ases tempore Lee-Phillimore. Ch. App. Cas Chancery Appeal Cases (1865-70). Ch. Chain Chancery Chamber Reports, Ontario. < Jh. Div Law Reports, Chancery Division (1875-90) . Ch. D. ( ) Chancery Division. From 1890. c. F. .T Canada Law Journal. C. L. T Canada Law Times. ( 1. & Fin Clark & Finnelly's II. L. Cases (1831-40). Coll Collyer's Chancery Cases (1844-6). Colo. App Colorado Appeals. Connoly New York Surrogate Reports. Cooper Cooper's Chancery Reports (1846-8). Cox Cox's Chancery Reports (1874-90). Cr. & J Crompton & Jervis (1832). Cr. & M Crompton & Meeson (1833-4). Cr. & Ph Craig & Phillips (1846-8). Cranek ('ranch's U. S. Supreme • oiirt Reports. i ush Cushing's Massachusetts Reports. Curt Curtis' F. S. Circuit Court Reports. D. & S. Dr. & Sim. . Drewrv & Smale's Chy. Reports (1860-5). 1). & War. Drurj >.V Warren's Irish Chancery Reports. D. L R. ' Dominion Law Reports. Daly Daly's X. V. Common Fleas Reports. 1 i,e I decisions. D F & .1 DeGex, Fisher & Tones (1859-62). D & .1 DeGex & Jones (1857-60). M J & S DeGex, Jones & Smith (1862-5), Dow Dow's Eouse of Lords Cases (1813-18). Drew .Drewry's Chancery Reports (1852-9). F & V Upper Canada Error & Appeal Reports (1844-66) Fast ' East's Reports < 1810-12). Fdw C Edward's Chy. Reports. New \ oik. XXX1Y ABBREVIATIONS. Eq. Ab. Ca Equity Cases Abridged. Exch. D Exchequer Division Reports (1875-80). Exch. R, Canada Exchequer Reports. Ga Ccorgia Reports. G. Cooper <;. Cooper's Chv. Reports (1K10-1".). Giff Giffard's Chy. Reports (1858-65). Gil] Gill's Maryland Reports. Gill. & J. Gill & Johnson's Maryland Reports. Gr Grant's Chy. Reports (1849-81). II. L House of Lords Cases (1847-66) . II. & M Hemming & Miller's Chy. Reports (1862-5). llagg Haggard's Eeelesiastieal Reports. 1 [are .' Hare's Chy. Reports (1841-53) . 1 Ianhv Cases t. Hardwicke, by Lee. Hill Hill's Reports. South Carolina. How Howard's T\ S. Supreme Court Reports. Hun Hun's N. Y. Supreme Court Reports. Ill Illinois Reports. III. App Illinois Appeal Reports. I nd Indiana Reports. Ir L R Irish Law Reports (1879-93). Tr R. Eq Irish Reports. Equity (1866-78). j. & K. Johnson & Hemming (1859-62). [ <\: Lat Jones & LaTouehe's Trish Chancery Reports. j] & W. ' Jacob & Walker (1 Si 0-21 ) . joli Johnson's Chancery Reports (1858-60). K B (1915) ...Law Reports King's Bench Div. (From 1901). K' &"j Kay & Johnson (1854-8). Keen Keen's Rolls Court Reports (1836-9). Ky Kentucky Law Reports. Kulp Kulp's Legal Register (Penn.) . j j j Ch Law Journal Reports. Chancery. From 1831. L,.' R Law Reports (1866-1875). L R.' App Law Reports. Appeal Cases (1875-1890). L. It. C. P Law Reports. Common Pleas (1866-1875). L. It. C. P. I) Law Reports, Common Pleas Division. L. R. Ch Law Reports. Chancery Appeal Cases (1866-75). I.. R. Ch. D. Law Reports. Chancery Division (1875-91). L. R. Eq. Law Reports. Equity (186&75). L. R. Exch Law Reports. Exchequer (1866-75). 1 >: , Louisiana Reports. L a . Aim Louisiana Annual Reports. I Lee's Ecclesiastical Reports. ] j( .jjj1, Leigh's Virginia Reports. Lev. Levitnz's K. P>. Reports. I, T. . . . ' ' Eaw Times Reports . L T. X. S. . ' Law Times Reports New Series. From ISfJO. ;\1 & G "Manning & Granger (1840-5). Madd. ............ [Maddock's Chancery Reports (1815-22). Mac. & G. '. Macnaghten & Cordon (1845-51). Man. R. .'.!!!!!!!!! Manitoba Reports. Marsh '.Marshall's Kentucky Reports. Mass. Massachusetts Reports. \[,1 Maryland Reports. y\,.' Maine Reports. Mer. ".'.'.'.'.'.'.'.'.'.'.'.'.'. Merivah's Reports (1815-17). Mete Metcalfe's' Kentucky Reports. Mich Michigan Reports. Misc. Xew York Miscellaneous Reports. Mjss Mississippi Reports. Mo Missouri Reports. Mod Modern Reports. Moll Molloy's Irish Chancery Reports. Mon Monroe's Kentucky Reports. Mnslev Mosley's Chancery Reports. M IMI f' Munford's Virginia Reports. My. & K.V. '.'. V.'.V. .'Mylne & Keen (1832-35). ABBREVIATIONS. XXXV My- & Cr Mylne & Craig (1835-41) Myr. Prob Myrick's Probate Courl Reports, California. N. I!. K New Brunswick Reports. Y B. Eq. Ca New Brunswick, Equity Cases. N. C. , North Carolina Reports. N. II New Hampshire Reports. •\ ■' New .Jersey Reports. N. J. P>■ ( Oregon Reports. P. Probate, Pacific Reporter. P- R ; Ontario Practice Reports (1850-1900). P. Wms Peere Williams Chancery Reports. Pa. (Penn.) Pennsylvania Reports. Pa. Co. Ct Pennsylvania County Court Reports. Pa. Oist Pennsylvania District Court Reports. ''■''• '^ f Pennsylvania State Reports. Paige Paige's N. Y. Chancery Reports Pars. Eq. Ca Parson's Equity Cases (Pa.). Peake Peake's Nisi Prius Reports (17!)0-7). Phil! Phillimore's Ecclesiastical Reports. P*Ck Pickering's Massachusetts Reports. Q- B Queen's Bench Reports ( 1866-75) Q. B. 1) Queen's Bench Division (1875-1900). R. R Revised Reports. R. I Rhode Island Reports. Redf Redfield's N. Y. Surrogate Reports. Rett Rettie. Crawford & Melville's Scottish Sess. Cases. R ich . Eq Richardson's S. Car. Equity Reports Russ Russell's Chancery Reports (1823-9). T ^- & My Russell & Mylne (1829-31). .§• Q* •, South Carolina Reports. S. C. R Supreme Court of Canada Reports. s '' South Eastern Reporter. g. & It Sergeanl & Rawle's Penn. Reports. S. & S Simon & Stuart. g. W South Western Reporter. Sch. & Lef Schoales & Lefroy's Irish Chancery Reports. |c. L. It Scottish Paw Reporter. Sim Simon's Reports (1826-50). Stark. N. P Starkie's Nisi Prius Reports (1814-23). s '". L. C Smith's Leading Cases. Sm- & G Smale & Giffard's Reports (1852-7). So. Rep. (or So.) ...Southern Reporter. Sw Swanston's Chancery Reports (1818-9). Sumn Sumner's P. S. circuit Courl Reports. T. R 'rerm Reports. Dunford «N: Past. Tarn Tamlyn's Rolls ( ouit Reports (1829-30). Tenn Tennessee Reports. l '. C. It Upper Canada Queen's Bench (1844-81). 1 • s United States Reports. Vera Vernon's Chancery Reports. Va Virginia Reports. Yi's Yesev's Chancerv Reports. Yes. .Tr Vcscy Junior (1810-18). XXXVI ABBREVIATIONS. Ves. & B Vescy & Beanies (1812-14). Vt Vermont Reports. W. & S Watts & Sergeants Perm. Reports. W. L. R Western Law Reports. W. N Weekly Notes, London. \Y. It Weekly Reporter, London. W. Va. West Virginia Reports. Walk. Walker's Penn. Reports. Wash. Washington Reports. Whart Wharton's Penn. Reports. Woodw Woodward's Reports, Penn. Winch Winch's Common Pleas Reports. Y & C Younge & Collyer's Exch. Rep. (1836-42), Younge" Younge's Exch. Rep. (1830-2). Y & J Younge & Jervis, Exch. Rep. 1826-31). EXECUTORS' ACCOUNTS CHAPTEK I. Jurisdiction of the Court. The Surrogate Courts of the Province are invested with the authority and jurisdiction over executors and administrators, and the rendering by them of inven- tories and accounts, conferred in England on the Ordinary under 21 Henry VIII., ch. 5, except in so far as the same may have been revoke* 1 by subsequent legislation or rules. Kule 19 of the Surrogate Court Rules of 1892, as limited by the Law Courts Act, 1895, sec. 30 (now sec. 72 of the Surrogate Courts Act, R. S. 0. 1914, eli. 62), seems to bring the practice back to the practice under the ancient statute of Henry VIII. According to the modern practice under this statute neither the executor or administrator, in gen- eral cases, exhibited any inventory unless he was cited for that purpose at the instance of a party inter- ested: Williams on Executors, 9th ed., 841. In Phil- lips v. Bignell (1811), 1 Phill. 239, the practice is thus stated by Sir John Xichol : "The statute (21 Hen. VIII. eh. 5, see. 4), requires executors and adminis- trators to exhibit inventories as part of their duty, without any proceedings to call upon them to do so. The modern practice, however, is certainly not to ren- der an account unless it shall be called for; but the executor must remember that he has bound himself by his oath to render a just account when he is by law required. " It is not only the duty of the executor or adminis- trator to file an inventory and render an account when I-.A. 1 2 EXECUTORS ACCOUNTS. duly called upon to do so, but it has always been his privilege to do so voluntarily in any case in which he is liable to be called upon, and in order to exonerate himself from liability it is always a most prudent thing for him to do. See Kenney v. Jackson (1827), 1 Hagg. Ecc. 105. Not only is the executor or administrator himself liable to be called upon, but so also is his personal re- presentative, although not at the same time the repre- sentative of the first testator or intestate, upon a rea- sonable presumption being raised that any part of the effects of the first testator or intestate has travel- led into his hands: Ritchie v. Rees (1822), 1 Add. at p. 1").'). And this is so even where there is a surviving executor of the original testator. Gale v. Lutteral (1824), 2 Add. 234. It follows that being liable to be called upon, he may voluntarily undertake to render the inventory and account. Cunnington v. Cunnington (1901), 2 0. L. E. 511. But at this starting point of jurisdiction we are confronted with a conflict of authorities which re- mained unsettled up to the time when the jurisdiction of the Courts Christian in matters testamentary was transferred in 1857 to the Courts of Probate in Eng- land. And it is therefore no easy matter to define the jurisdiction of the Ordinary as exercised in and after the days of Henry VIII. in this particular. The older cases in the common law courts hold that an inventory may be falsified at the instance of a lega- tee, but not on the application of a creditor. That is stated in Hinton v. Parker (1723), 8 Mod. 168, and the reasons for the distinction are given by Holt, C.J., in Archbishop of Canterbury v. Willis (1708), 1 Salk. 251, and more fully at page 315. The same distinction is marked in Catchside v. Ovington (17(5(5), 3 Burr. 1922, and applied in a more modern case of Hender- son v. French (1816), 5 M. & S. 40G, but with the gen- eral intimation that the duties of the Ordinary in dealing with the inventory were merely ministerial. This case was followed in Griffiths v. Anthony (1835), .1 llirsDIC TloX OF THE COURT. 'A 5 A. & E. 623, which extended apparently the same restriction to the ease of a legatee. The case is loosely reported, and the point of the decision may be that there was an excess of jurisdiction in the recep- tion of viva rare evidence, as suggested by Williams in a note. But the whole situation was reviewed in a masterly judgment by a civilian of greal ability and learning, Sir John Nichol, in a case subsequent to Henderson v. French, in 1S24. which is, strangely, not at all referred to in Griffiths v. Anthony; Sir John Xichol maintaining that the duties of the Ordinary are not merely ministerial, but that objections to the inventory may be entertained, though adverse evi- dence ought not to be received so as to falsify the inventory, though it may be amended upon the con- i'ession or admission of the executor: Telford v. Mor- 'ison (1824), 2 Add. Ecc. 319. The reasons given for not proceeding upon adverse evidence are of some- what technical character, and may not prevail against the rule of court upon the Surrogate Judges of On tario in respect of assets at the time of the death come to the hands of the executor. Thus the law stood on the broad question of juris- diction down to 1904, when the question came before a Divisional Court in Re Russell (1904), 8 0. L. R, 481. Upon the passing of executors' accounts before the Surrogate Judge the residuary legatee objected that a certain sum of money, not included in the executors' inventory of assets of the estate, should have been included. The widow of the testator, who was one of (he executors, claimed the same as a gift from the testator in his lifetime. The Court held that the Surrogate .fudge had no jurisdiction to pass upon the question thus raised; that all he could do was to report that a claim was made that there was an- other asset, stating what it was. which he was unable to investigate, and could therefore only approve of the rest of the accounts submitted to him. Meredith. J., delivered a forcible dissenting judgment. 4 EXECUTORS ACCOUNTS. In consequence of the judgment in Re Russell the Surrogate Courts Act was amended by 5 Edw. VII., ch. 14, by adding the provisions now found in sub- sections 3 and 4 of section 71. As the Act now stands the Surrogate Judge has " jurisdiction to enter upon and make full inquiry and accounting of and concern- ing the -whole property which the deceased was pos- sessed of or entitled to, and the administration and disbursement thereof in as full and ample a manner as may be done in the Master's Office, and for such purpose, may take evidence and decide all disputed matters arising in such accounting subject to an appeal under section 34." See Oke v. Oke, 8 0. W. X. 180, 182. Although this language is very wide it was not intended that power should be given on an audit, or passing of accounts, to call in the creditors of the estate and adjudicate upon their claims, and, prac- tically, administer the estate. As the Act now stands a Surrogate Judge has no jurisdiction to call upon a creditor of the estate to prove his claim and to adjudicate upon such claim, and allow it or bar it. In re Mclntyre (1906), 11 0. L. R. 136. There is no difference between a payment to an- other creditor and a retainer by an executor to pay his own claim; and the Surrogate Judge has power to investigate the claims of an executor, as between the executor and the estate, and to adjudicate upon them. Shaw v. Tackaberry (1913), 29 0. L. R. 490; Union Trust Co. v. Bensley, 12 O. W. R. 336, 1069. Con. Rule (1913), 523 (formerly Con. Rule 642), • Iocs not apply to Surrogate Courts, but the Surrogate Judge, acting as the Surrogate Court, lias inherent jurisdiction to set aside an order which he has been induced to make by the fraud of the party who has obtained it, and also to set aside or vary an order which he has made by mistake, though not, however, to correct errors which he lias made in the judicial deter- mination of any question upon which he has actually passed. The acts of the Surrogate Judge in passing JURISDICTION OF TIIK COUBT. the accounts are those of the Court, and not of tin- Judge as persona dcsianafa. In re Wilson and Toronto General Trusts Corporation (1907), 13 0. L. R. 82. That the Surrogate Courts are not statutory courts having only those powers which are in terms conferred upon them by the Surrogate Courts Act, follows from the decision of the Court of Common Pleas in Grant v. Great Western By. Co. (1858), 7 C. P. 438, and that of the Court of Appeal in Cunnington v. Cunnington, 2 0. L. R. 511. See also Gibson v. Gardner (1906), 13 0. L. R, 521, and Brick's Estate (1862), 15 Abbott's Pine 12. Section (19 of the Surrogate Courts Act does not confer upon the Judge of the Surrogate Court power to adjudicate upon a claim to moneys of a deceased person upon an alleged donatio mortis causa. The " claim or demand "referred to in sub-section 1, when that sub-section is read in the light of sub-sections 4 and 5, is clearly a claim or demand against the estate by a creditor for payment of a money demand. The claim of a person seeking to establish a donatio mortis cansa, where something has to be done by the executor or administrator to perfect the title, such as indorsing a cheque, or giving a receipt to a bank for moneys in a savings bank account, is not only to have it de- clared that the property upon the death of the donor ceased to be part of his estate and became the property of the donee, but that the executor or administrator is a 1 rustee for the donee to make the gift effectual. BeGraham (1912), 25 0. L. R. 5. ft executors' accounts. CHAPTER II. The Powers of a Master. Although, as pointed out in Re Mclntyre, supra, sub-sections 3 and 4 of section 71 of the Surrogate Courts Act were not intended to make an audit of trustees' accounts an administration of the estate, the powers of the Surrogate Judge have been consid- erably extended by these provisions. The powers of a Master on a reference, and the practice there- under, are defined by the Consolidated Rules of 1913, and are as follows: 410. Under an order of reference, the Master shall have power : . (a) To take the accounts with rests or other- wise ; (b) To take account of money, rents and profits received or which, but for wilful neglect or default, might have been received; (c) To set occupation rent; {(1) To take into account necessary repairs, and lasting improvements, and costs and other expenses properly incurred otherwise or claimed to be so; (e) To make all just allowances; (/') To report special circumstances; (g) And generally, in taking the accounts, to inquire, adjudge, and report as to all mat- ters relating thereto, as fully as if the same had been specifically referred. 411. The Master may cause parties to he ex- amined, and to produce hooks, papers and writings, as lie thinks fit, and may determine what books, papers and writings are to he produced, and when and how long they are to he left in his office; or THE POWERS OF A MASTKK. < in case he does not deem it necessary thai such books and papers or writings should be Left or deposited in his office, he may give directions for the inspection thereof by the parties requiring the same, at such time and in such manner as lie deems expedient. 417. Where an account is to be taken, the accounting party, unless the Master otherwise dir- ects, shall bring- in the same in debit and credit form, verified by affidavit. The items on each side of the account shall be numbered consecutively, and the account shall be referred to by the affidavit as an exhibit, and shall not be annexed thereto. 418. The Master may direct that in taking ac- counts, the books of account, in which the accounts required to be taken have been kept, or any of them, be taken as prima facie evidence of the truth of the matters therein contained. 419. Before proceeding to the hearing and de- termining of the reference, the Master may appoint a day for the purpose of entering into the accounts and inquiries, and may direct the production and inspection of vouchers, and if deemed proper the cross-examination of the accounting party on his affidavit, with a view to ascertaining what is admit- ted and what is contested between the parties. 420. A party seeking to charge an accounting party beyond what he lias in his account admitted to have received, shall give notice thereof t<> the accounting party, stating as far as he is able the amount sought to be charged and the particulars thereof in a short and succinct manner. The Mas- ter may dired any party who seeks to falsify an account to deliver particulars of the item objected to. The particulars shall refer to the item by number. The last rule, providing for a surcharge ami falsi- fication of the accounts, is one not generally acted upon on an audit of accounts in the Surrogate Court. 8 executors' accounts. but it is often of great value in narrowing the issue in case of disputed accounts. A surcharge is shewing an omission for which there ought to be a credit; a falsification is shewing an item on the debit side of the account to be either wholly false or in some part erroneous. In ScuWiorpe v. Bum (1866), 12 Gr. 427, it was held that by the General Order of 1853 the Master had been given a greater discretion as to the conduct of references before him than that given to the Mas- ters of the English Court of Chancery. And in Carpen- ter v. Wood (1863), 10 Gr. 354, it was held that the General Order applied to all cases where accounts were directed to be taken before the Master. The settled practice appears now to be in England, as it has long been established here under the General Orders (now Con. Kules 409 and 411), that under a judgment or order to account the Master may inquire into, adjudge and report upon settled accounts — and this whether the judgment is by consent or otherwise, and whether the matter is referred to in the pleadings or not. That convenient practice is firmly grounded by the Court of Appeal in Holgate v. Sliutt (1884), 27 Ch. D. Ill, 28 Ch. Div. Ill, and Edinburgh Life As- surance Co. v. Allen (1876), 23 Gr. 230, and has been recently approved of in Gibson v. Gardner (1907), 13 0. L. E. 521. On a reference to a Master he always had power to go into the dealings between the executrix and her husband (the testator) before his death, and decide whether she was entitled to be paid for her services. In re Bagwell, Anderson v. Henderson, 17 P. R. 100. In Stewart v. Fletcher, 18 Gr. 21, it was held that the Master, under the ordinary administration decree in respect of the testator's estate, had power to take an account of timber cut by the executrix on the land devised to minor children, contrary to the provisions of the will. An executor sold real estate by auction for $800. On passing the accounts the Probate Judge (New I III. POWERS OF A MASTER. 9 Brunswick) found that the property was really sold to the executor, and that the value of the property was $1,800. Held, that the Probate Court had no jurisdic- tion to set aside the sale, but it had power to charge t ho executor with the additional $1,000. Re Daly, Dal/i v. Brown, 39 S. C. R. 123. A subpoena may issue, as of course, to secure the attendance of a witness before the Master. Hannum v. McRae, 17 P. R. 567; 18 P. R. 185. A Master may make an order for the issue of a commission to take the evidence of witnesses out of the jurisdiction. Hor- lock v. Eschweiler, 11 O. L. R. 140; Toivnsend v. Hun- ter, 3 C. L. Times 310. But he cannot make such an order ex parte. McLennan v. Helps, 3 Chy. Ch. 193. I le cannot order a witness or a party out of the juris- diction, to come within the jurisdiction to be examined as a witness. Connolly v. Connor, 12 O. L. R. 304. A party who is to be cross-examined on liis affida- vit is entitled to notice of the items on which he is to be cross-examined, lie Lord, L. R. 2 Eq. 605; Re ( 'urry, 17 P. R. 379. It is not sufficient to inform him that all the items except one are objected to. Mr Art Inn v. Dudgeon, L. R. 15 Eq. 102. Under Rule 417 the affidavit verifying the account and the production of the vouchers is prima facie evidence sufficient to warrant a Master in passing the accounts, and where voluminous accounts have been passed under this Rule, the pointing out of one or two items as objectionable was held insufficient to warrant the re-opening of the account. In re Curry, 17 P. R. 379; 25 A. R. 267. 10 executors' accounts. CHAPTER III. Duty to Keep Proper Accounts. It is the bounden duty of an executor, or other trustee, to keep clear and distinct accounts of the property which he is bound to administer. If, there- fore, he chooses to mix the accounts of the estate with his own accounts, he cannot thereby protect himself from accounting, and from producing the original books in which any part of the accounts may be in- serted. It is a more difficult question, as between an executor bound to produce, and his partner in trade: but if the partners have permitted him to mix the accounts, it seems they cannot afterwards object to the production ; clearly they cannot do so, in a case where the executor admits having lent to his firm part of the trust property, and that the firm has been dealing with it. Freeman v. Fairlie, 3 Mer. 43, 17 R. R. 7. It is the first duty of an accounting party, whether an agent, an executor, an administrator or guardian (for in this respect they are all in the same situa- tion) to be constantly readv with his accounts. Pearse v. Green, 1 J. & W. 133, 20 R. R. 258. In Killins v. Killins, 29 Gr. 472, the administratrix was disallowed her costs up to the hearing where she had not kept proper books of account of matters per- taining to the estate, although no loss had resulted therefrom. Proudfoot, V.C., said: " I think that this negligence in not keeping accounts, and where the mat- ters of the estate are left to rest to some extent in her memory, and on scattered memoranda, is suffi- cient to justify the institution of the suit, and there- Pore that the defendant (the administratrix) must pay the eosts to tlie hearing." See also Smith v. Roe, 11 Gr. 311. lint where the accounts are in fact accurate, the form <>f them will not subjed the trustee to liability DUTY TO KEEP PROPER ACCOUNTS. 11 for costs, unless the confusion has been designed, or has bees such as to necessitate proceedings by action or otherwise. McMillan v. McMillan, 21 Gr. p. 379. And an executor who discharges his duty honestly, but owing to want of business training keeps his ac- counts loosely mid inaccurately, will not be deprived of his costs. Hoover v. Wilson, 24 A. R. 424. In this case the Court points out that the executor was well known to the testator, whose agent he had been for seven years before the testator's death. It is doubt- ful if the judgment would have been as favourable to the trustee had he been an administrator, or other volunteer trustee. See also Smith v. Cremer, 24 W. R. 51. It is the further duty of the trustee at all reason- able times, at the request of the cestui que trust . or other beneficiary, to give full and accurate informa- tion as to the amount and state of the trust property; and permit him, or his solicitor, to inspect the accounts and vouchers and other documents relating to the • ■state Sanford v. Porter, 16 A. R. 565. But a trustee is not bound to render accounts on demand — only to have them ready for inspection. Smith v. Roe, 11 Gr. at page 323. If the beneficiary requires a copy of the accounts or documents he must pay the necessary expense himself, for it is not fair that such costs should be saddled on the estate, and the trustee is not bound to incur the expense person- ally. Ottley v. Gilby, 8 Beav. 602, 68 R. R. 218. The rule is the same where one of the executors is a soli- citor. Re Bosworth, Martin v. Lambe, 58 L. J. Ch. 432. In Randall v. Burrows, 11 Gr. 364, Mowat, VA '.. held thai it was the duty of a trustee to render his accounts within a reasonable time after demand. InreTillott,Leev. Wilson (1S!»l , ).1 Ch. 86, Chitty, J., said: " A trustee is bound to give his cestui que trust proper information as to the investment of the trust estate, and where the trust estate is invested on mortgages, it is not sufficient for the trustee merely to say, ' I have invested the trust money on a mort- 12 executors' accounts. gage,' but he must produce the mortgage deeds, so that the cestui que trust may thereby ascertain that the trustee's statement is correct, that the trust estate is so invested. The general rule, then, is what I have stated, that the trustee must give information to his cestui que I rust as to the investment of the trust estate." The neglect or refusal of a trustee to give proper information, or to keep proper accounts, may deprive him of his costs when the accounts are being passed, and in some cases may even subject him to the pay- ment of costs. See under " Costs of the Audit." An executor who refuses to give an account, or to pass his accounts when called upon to do so, may be removed from his trust. Re Beaird, 4 0. W. N. 720. In a case where proceedings for administration wore rendered necessary by the gross and indefensible neglect of trustees to deliver accounts, Farwell, J., ordered the defaulting trustees to pay all the costs, including the costs of taking and vouching the ac- counts. He also held that the rule laid down in Heivett v. Foster, 7 Beav. 348, 64 R. R. 98, that trustees are always allowed their costs, does not represent the modern practice. In re Skinner (1904), 1 Ch. 289. CHAPTER IV. Who Obliged to Pass Accounts. Surrogate Court Rule No. 19 provides that execu- tors and administrators shall within a period of eigh- teen months after grant made, and sooner if the Judge shall so direct, pass their accounts. This Rule is now virtually abrogated by section 72 of the Surrogate Courts Act, which provides: Wllo OBLIGED TO PASS ACCOUNTS. Id (1) Neither an executor nor an administrator shall be required by any Court to render an account of the property of the deceased, otherwise than by an inventory thereof, at the instance or on be- half of some person interested in such property or of a creditor of the deceased, nor shall such execu- tor or administrator he otherwise compellable to account before any Judge. (2) This section shall apply notwithstanding any provision to the contrary of any bond or secur- ity heretofore given by the executor or administra- tor. In Murdy v. Burr (1901), 2 0. L. R. 310, it was held that the Judge of a Surrogate Court had no power to pass the accounts of the guardian of an infant ap- pointed by such Court. Section 71 of the Surrogate Courts Act now provides for the audit of such accounts, and the decision is now of no effect. It was formerly held that an executor who was also a trustee under the will, could not be required to pass his accounts in the Surrogate Court of his deal- ings as trustee as distinct from his dealings as execu- tor. This is also now provided for in section 70 of the Act. But " trustee " in this Act, and in section (i7 of the Trustee Act, applies only to an express trustee. For instance, the position of a surviving partner im- poses certain obligations and duties which are in their nature fiduciary; but it is not every one who is sub- jected to these obligations and rest raints who can claim to be a trustee and entitled to the privileges of a trus- tee. Livingstone \. Livingstone (1912), i } (i ( >. L. R. 246. The representatives of a deceased administrator may be compelled to account at the instance of an administrator de bonis non. McLennan v. Heward, 9 Gr. 17S. But an administrator de bonis non cannot compel the representatives or sureties of a predeces- sor, whose office terminated by death. to account with him. Bliss v. Seaman, 165 lli. 422; Douglass v. Day, 28 Ohio St. 175. Bu1 see Jones v. PFooJen, 49 S. E. 915. 14 executors' accounts. In Bitehie v. Bees (1822), 1 Add. Ece, 158, it was held that the representatives of a deceased adminis- trator with the will annexed, although not at the same time those of the first testator, were liable to be called upon for an account, upon a reasonable presumption being raised that any part of the effects of the first testator had reached their hands. And this without administration de bonis non being granted. So the executors of a deceased executor are com- pellable to pass the accounts of the estate of the ori- ginal testator. Gale v. Latter ell (1824), 2 Add. Ecc. 234. An attorney who takes administration in the name of another may be called upon to pass his accounts at the instance of the latter. Bailey v. Bristowe, 2 Robert, 145. So an administrator durante minoritate, although his administration has expired. Taylor v. X art on, 1 Lee, 15. A cessate or secondary administrator may call upon the original administrator to pass the accounts. Boiherton v. Hellier, 2 Lee, 131. One of two executors may be called upon to pass his accounts at the instance of a co-executor who is also a residuary legatee. Paul v. Nettle ford, 2 Add. Ecc. 237. There seems to be no reason why one of two or more executors might not submit his own dealings with the estate for approval, independently of the other or others. Per MacLennan, J. A., in Cinni'nif/ton v. Curmington (1901), 2 (). L. R. p. 516. But separate accountings by different executors should not be en- couraged. In re Smith's Estate, 81 X. V. S. 1035. An executor who is a minor cannot be compelled to account. The interference of an infant named as an executor is spoken of in some cases as a wrong; but the weight of authority is against his being liable to account. In Whitmore v. Weld, 1 Vern. 326, a testator appointed an infant son to he executor upon coming of age. The Lord Keeper said that he could not, until he became of age, commit a devastavit. WHO OBLIGED TO PASS ACCOUNTS. 15 In Hindmarsh. v. Southgate, 5 Russ. .*!24, tetters of administration were granted to the widow, irregularly, she being under age. The Idlers were recalled, and after she became of age were again granted to her regularly. In directing an account the Court distin- guished between what came to her hands before, and what after she beeame of age. These eases were fol- lowed iii Nash v. McKay, L5 Gr. 247, and it was held thai the executor having been a minor his estate was not liable to account for the estate come to his hands. The same rule applies to an infant executor de son tort. Young v. Purvis, 11 Out. R. 597. The fact that the executrix is entitled to the whole estate for her life does not excuse her from failure to ascertain the amount of the estate by an accounting that will fix the charges against her and the allowances to her, and settle between all parties in interest just what corpus the life-tenant is to be responsible for. Maxwell v. McCreery, 57 X. J. Eq. 287. hi Kansas it was held that the Probate Court has 1 lower to compel an executor who has resigned, been removed, or whose letters have heen revoked, to pass his accounts. Hudson v. Barratt, 61 P. 737. So an administrator whose appointment lias been revoked because of the discovery of a will may be required to account. Jenkins v. Jenkins, 7(i Law T. Rep. 164. Sureties on the bond of an administrator cannot compel an accounting by their principal. Bunnell v. Providence, 9 R. T. 189; Mclllroy v. Hatheway, 44 Mich. 399. An executor de son tort may be compelled to ac- count. Damouth v. Klock, 29 Mich. 289; Pace v. Pace, 7: ( ) X. C. llf>: so an executor or administrator who re- signs or has been removed from office. Diinford V Weaver, 84 X. V. 44."). Where an executor or administrator dies without having passed his accounts, it is for his own represen- tatives, and not for the administrator de bonis non, to settle the accounts of the deceased representative. •Yon-dl v. Nowell, 2 Me. 7."); In re Clark, 11!) X. V. 427. 16 executors' accounts. Although an executor may be entirely relieved from his obligation to account by the terms of the will (Maurer v. Bowman, 169 111. 586), he is not so relieved merely because the will gives him absolute discretion as to the management of the estate (Harrison's Es- tate, 12 Pa. Co. Ct. 388), or allows him a specific time in which to settle the same. Young's Estate, 1 Pa. Co. Ct. 513. By The Charities Accounting Act, 1915, eh. 23, 5 Geo. V., where under the terms of a will or any instru- ment in writing any property, or any right or interest therein or the proceeds thereof, are given to or vested in any person as executor or trustee for any religious, educational, charitable or public purpose, he is re- quired to give notice thereof to the Attorney-General and to the Official Guardian, and to the person, if any, designated in the will or instrument as the beneficiary under the bequest or gift, or as the person to receive the same from the executor or trustee. The Act applies to wills executed before the pass ing of the Act as. well as to wills subsequently exe- cuted. The notice above referred to, in the case of a gift by will, is to be given within one month after the death of the testator, and shall state the nature of the property coming into the possession or under the control of the executor and shall be accompanied by an attested copy of the will. Whenever required to do so by the Attorney-den eral or the Official Guardian the executor shall submit the accounts of his dealings with the property coming to his hand to be passed and examined and audited by the Judge of the Surrogate Court of the county or district in which he resides or in which probate was granted. If the executor refuses or neglects to comply with the provisions of the Act, or misapplies or mis- appropriates any such property, or fails to apply it in the manner directed by the will, the Attorney- General or the Official Guardian may apply to a Judge in Chambers for an order against the executor as set out in section 6 of the Act. WHO OBLIGED TO PASS ACCOUNTS. 17 Section 7 authorizes the Lieutenant-Governor in Council to make rales respecting practice and proce- dure upon passing the accounts of an executor under the Act, and the tariff of \\'c< to he applicable thereto. Except as otherwise provided by the Rules t he prac- tice and procedure of the Supreme Court, and of the Surrogate Courts, shall respectively apply t«o pro- ceedings under the Act. It will be noticed that the Act applies where any property or any right or interest therein, or the pro- ceeds thereof, are given to or for any (1) religious purpose, (2) educational purpose, (3) charitable pur- pose, or (4) public purpose. In Ottawa V. M. C. A. v. City of Ottawa (1910), 20 0. L. R. 567, the meaning of the word " purposes " was discussed. By the plaintiff's incorporating Ad their buildings were exempt from taxation " so long as the same are occupied by and used for the purposes of the association." It was urged that " purposes " was synonymous with the word " object " used in the preamble of the Act. Riddell, J., said: " The words ' object ' and ' purpose ' are not etymologically or otherwise synonymous, and they are not terms of art. J see no reason for holding that the phrase ' for the purposes' means the same as ' in furtherance of the object ' or ' for the work.' There is no case that I can find which restricts the meaning of ' purposes;' while such cases as Inverarity v. County Council of Forfar- shire (1904), 41 Sc. L. R. 434, affirmed in Dom. Pro,-. (1906), A. C. 354, shew how far the meaning of the word may extend. In re Sutton ( L901 ), 2 Ch. 640, may also be Looked at. In the ordinary acceptation of the words, anything done for or by a corporation in the interest of the corporation is done for the purposes of the corporation; and I do not think that the mean- ing here is any more restricted." Religious Purposes, — A building for the >es>ions of a Sunday-school and religious lectures is for " reli- I.A. 1' 18 executors' accouxts. gious purposes " although occasionally used for fairs and other benevolent purposes. Craig v. First Presb. Chinch, 88 Pa. St. 48. Within an exemption law a young men's Christian association was held not to be a religious corporation. Matter of Fag, 37 Misc. (X.Y.) 532. TVIkui religious books or reading are spoken of, those which tend to promote the religion taught by the Christian dispensation must be considered as referred to, unless the meaning is so limited by associated words or circumstances as to shew the writer had reference to some other mode of worship. Simpson v. Welcome, 72 Me. 500, 39 Am. Rep. 349. An examination of the English law will be found to establish that Christianity in general, and not simply the tenets of particular sects, is a part of the Common Law of England. Pr ingle v. Napanee, 43 TJ. C. R. 285. In Reg. v. Dickout, 24 0. R. 250, the Court held that the Church of Latter Day Saints is a " religious denomination " within the meaning of sec. 2 (a) of the Marriage Act. " The statute does not say ' Christian ' but ' religious. ' If it said ' Christian ' it would exclude Jews. The fundamental law of the Province makes no distinction between churches or denominations." A bequest of a sum of money to be paid to NT. "W. for the use of a named church, the sum to be expended by him in the best manner calculated to advance the principles of the church, was held to be a good chari- table bequest for the advancement of religion. Re Johnson (1903), 5 O. L. R. 459. Educational Purposes. — A statute exempted pro- perly \\ Public Purposes.— " Public " and " general " are sometimes used as synonymous. Public is applied strictly to that which concerns all the citizens and every member of the State; while general includes a lesser, though still a larger portion of the community: I Greenl. Ev. L28. In the law of taxation, eminent domain, etc., this is a term of classification to distin- guish the objects for which, according to settled usage, the government is to provide, from those which, by the like usage, are left to private interest, inclination, or liberality. People v. Salem, 20 Mich. 485. The word " public," as used in this connection, refers to the purposes and intent of the trust as being for the benefit of the public in general, or of some object so general and indefinite in its character as to be deemed of common benefit, and not to the method of its execution. Paving, lighting, widening and improving streets in a town are public purposes. Atty.-Genl. v. East lake, II Hare 205 ; 90 K. R. 648. To build barracks would be a public purpose, but not charitable. Per Jessel, arg. Dolan v. McDermot, 3 L. R. Ch. G7G. A charter of a water company was granted in con- sideration of water to be supplied by the company for public purposes. It was held that water supplied for the Mayor's office, city hall, etc., was not water sup- plied for public purposes. The Court held that by the term public purposes, as thus used, was meant for the universal public and not for only a portion of it. Commercial Bank v. New Orleans, 17 La. Ann. 190. In Frankfort v. Com. (Ky. l!)l)4), 82 S. W. Rep. 1008, it Mas held that the term " for public purposes " meant the same as ll for governmental purposes." By a special Act the defendant company was bound to supply water for domestic purposes at a minimum rate, which should not include a supply i^\' water for baths, wash-houses or public purposes. Held, that the supply of wate/ to the guardians of a workhouse was not a supply for " public purposes." Liskeard Union \. Liskeard Waterworks Co.. 7 Q. B. I). 505. 24 executors' accounts. A hospital carried on by two medical practitioners, and used chiefly by patients paying fees, though to some extent by indigent persons, and in receipt of a government grant, was held to be a public hospital. Struthers v. Sudbury, 30 0. R. 116; 27 A. R. 217. The maintenance of the poor is a public purpose. B. v. Wall in gfovd Union, 10 A. & E. 259. CHAPTER V. Who Entitled to ax Account. By section 72 of the Surrogate Courts Act neither an administrator nor an executor shall be required by any court to render an account of the property of the deceased, otherwise than by an inventory thereof, unless at the instance or on behalf of some person interested in such property or of a creditor of the deceased. The personal representative of a residuary legatee lias sufficient interest within this section to demand an account. Winchlow v. Smith, 1 Lee, 417. So the next of kin as being entitled in distribution. Bouverie v. Maxwell, 1 P. & D. 272. The appearance of an interest is sufficient : Phillips v. Bignell, 1 Phill. 241; Gale v. Luttrell, 2 Add. Ecc. 236; or a probable or contingent interest: Salter v. Sladen, Perrog. M. T. 1792; Myddleton v. Rushout, 1 I 'hi II. 244; lice res v. Freeling, 2 Phill. 57; Burgess v. Marriott, •*! Curl. 424. But in Keene's Appeal, 60 Pa. St. .")i)4, it was held that a bare possibility under a will, depending on the death of the first taker without issue, is not a sufficient interest. A creditor who sweats to certain sums due from the deceased to him is entitled to an account, although WHO ENTITLED TO AX ACCOUNT. 25 his debt is contested. Smith v. Price, 1 Lee, 569; Hack- man v. Black, 2 Lee, 251. So it has been held thai a creditor of a legatee or heir, who has attached his interest, may by virtue of such attachment, cite the executor or administrator to an account: Raeder's Estate, 10 Pa. Dist. 282; but a judgmenl creditor of a legatee who has not attached his interest cannot demand an accounting. Greener's Estate, 2 "YYkly. Notes Cas. (Pa.) 292. An assignee in bankruptcy was held entitled to an account notwithstanding that the Statute of Limita- tions was set up as a defence. Phillipson v. Harvey, 2 Lee, 344. So where the alleged debt is rounded on a bond the validity of which is disputed. Gale v. Lut- trell, 2 Add. Ecc. 234. But where the executor or administrator admits sufficient assets to pay all the creditors' claims, or the specific legacies, and interest thereon and the costs of the action to recover the same, the Court may, in its discretion, refuse an order to bring in the accounts. Fleet v. Holmes, 2 Lee, 101. In New York it was held that an undertaker who holds a claim for funeral expenses cannot maintain a petition for a compulsory accounting by an executor or administrator, since he is not a person interested in the estate, and is not a creditor of the estate. His claim is primarily against the executor or administra- tor or the person to whom he gave credit. Re Shultz's Estate, 57 X. Y. Supp. 952. In Re Merrill's Estate, 35 App. Div. 337, 54 X. Y. Supp. !);>;>, it was held that the Surrogate properly denied a petition for an order requiring an executor to account where an appeal was pending from a judg- menl recovered by the petitioner against the executor, and he had no other interest in the estate. In Root's Estate, 8 Pa. Dist. Rep. 223, it was held that an accounting will not be granted against execu- tors after the estate has been distributed under a family settlement by which all parties released the 26 executors' accounts. executors, at the instance of an execution creditor of one of the devisees. An order to compel an audit was refused on an application at the instance of an attaching creditor of a legatee whose legacy was contingent on his attaining thirty years of age, and then to be paid if, in the judg- ment and discretion of the executors, he " shall have acquired such habits of industry and business qualifi- cations as will render it prudent to trust " him with it. In re Looker's Estate (Pa.), 18 Lane. Law Kev. 6. A legatee in remainder may require an executor to pass his accounts. In re Albertson's Estate, 1 W. N. C. 188. One named in a will as a cestui que trust in a clause which is void under the statute against perpetuities, is not an " interested person " entitled to compel an account. Re Wood, 15 N. Y. St. 722. But a remainderman whose rights in the estate are vested is so interested therein as to be entitled to apply to compel an executor to account, even though the owner of the life estate be living and be entitled to make a similar application. Re Hunt, 8 N. Y. App. Div. 159; Campbell v. Purdy, 5 Redf. Sur. (N.Y.) 434. A surviving executor may compel the executors of a deceased co-trustee to account. Re Kreisher, 30 N. Y. App. Div. 313. A citation order is the proper proceeding for com- pelling an executor or administrator to bring in and pass his accounts. The order is obtained on filing the necessary affidavits shewing the facts entitling the applicant to have the accounts passed. The Surrogate Judge then issues a citation to the executors or ad- ministrator to bring in and pass the accounts. WIII.N AUDIT ORDERED. -< s CHAPTER VI. When Audit Ordered. Neither the Surrogate Courts Act nor the Trustee Act fixes any time within which a trustee must pass his accounts, or places any limitation on the time within which an interested party can demand an accounting. In ordinary cases the trustee must have had sufficient time, having regard to the nature of the estate and the difficulties in realizing it, to get in the assets. As a legacy, bequeathed generally, is not pay- able until the expiration of a year from the death of the testator, such a legatee can not, without shewing special circumstances, demand an accounting until after the expiration of the year. In many cases where there has been a great lapse of time between the death of the testator and the time of citation, the Court has refused the order. In Ritchie v. Rees, 1 Add. Ecc. 144, it was held that the lapse of forty-five years afforded a reasonable pre- sumption that the estate had been fully administered. In Pitt v. Woodham, 1 Hagg. 247, where twenty- four years had elapsed after the death of the intestate, and eleven years after the youngest child attained his majority, the Court refused an application for admin- istration and account, where facts were shewn from which it might fairly be presumed that the applicant had received his distributive slrare of the estate. In Scurrdh v. Scurrah, 2 Curt. 919, an application to compel an administrator to exhibit an inventory after the laps.- of eighteen years was refused. See also Higgins v. Higgifis, 4 llagg. 242. In New York it was held that an executor will not be compelled to account within twelve months after his appointment unless special circumstances are shewn, and special reasons given therefor. Mufti ■ v. Studley, 17 App. Div. 303, 45 X. V. Supp. '201. 28 EXECUTORS ACCOUNTS. An executor must have a reasonable time to collect and pay over rents before the Court will compel an accounting. Cox 's Estate, 8 Mon. Co. Rep. (P.) 161. In Ditmar v. Bogle, 53 Ala. 169, it was held that, after the lapse of seven years from the grant of admin- istration, a final settlement should not be deferred at the instance of the administrator, because of out- standing debts or unsettled accounts. CHAPTER VII. Duty of ax Executor — Realizing Assets. The first duty of a trustee, whether an executor, an administrator or a guardian, is to acquaint himself, as soon as possible, with the nature and circumstances of the trust property; to make a complete inventory thereof; to obtain, where possible, the possession or control of the trust property to himself, and, subject to the provisions of the will, get in the trust money invested on insufficient or hazardous security. Under- hill on Trusts, 4th ed., 250. Persons who become trustees are bound to inquire of what the trust property consists and look into the trust documents and papers to ascertain the condition of the estate. Hallows v. Lloyd, 39 Ch. D. 691. " Within a convenient time after the testator's death, or the grant of administration, the executor or administrator lias a right to enter the house of the deceased in order to remove the goods of the deceased; provided he do so without violence; as, it* the door be open, or at least the key be in the door; and, although the door of the entrance into the hall and parlour be open, he cannol therefore justify the forcing the door of any chamber, to take the goods contained in it; but is empowered to take those only which are in such hi TV 01 AN EXECUTOB — REALIZING ASSETS. '-J looms as are unlocked, or in the door of which he shall find the key. He also has the righl to take the deeds and other writings relative to the personal estate out of a chest in the house if it be unlocked, or the key be in it; but he lias no right to break open even a chest. It' he cannot take possession of the effects without force, he must desist, and resort to his action. On the other hand, if the executor or administrator, on his part, be remiss in removing the goods within a reason- able time the heir may distrain them da mage feasant." Wins. Exors., 9th ed., 796. An executor's discretion is not that of an absolute owner; it is limited by the duty of bringing the assets into a proper state of investment within a reasonable time, and the onus is upon the trustee to shew that he acted hoini fide and exercised a reasonable discretion. In re Brogden, 38 Ch. 1). p. 571. In deciding whether a reasonable discretion was exercised or not, the Court will look into all the cir- cumstances of the case, such as the nature of the investments, the confidence the testator had in the investments, the efforts made by the executor to realize, the state of the market, and of course as an important ingredient, the length of time which has elapsed since the testator's death. The rule in England is. that if the executor fails within a reasonable time to convert investments which require conversion, the end of a year is, in the absence of circumstances pointing to a different date, to be taken as the time for ascertaining the value which he ought to have got. The Heirs Hiddingh v. De Villii i - Denyssen, L2 A. C. 624. It is the duty of an executor to get in all the testa- tor's estate, whether it is specifically bequeathed or otherwise; and the expenses incurred in doing so must be paid out of the general estate. /'< rry v. Meddoiv- croft, 4 Beav. 204. In Sculthorpe v. Tipper, L. R. 13 Eq. 232, a testator gave his estate to trustees upon trust to sell immedi- ately after his decease, or so soon thereafter as to 30 executors' accounts. them might seem proper. The personal estate com- prised shares in a limited banking company, which was of high standing and repute at the time of the testa- tor's death. The trustees retained these shares for twenty-seven months, when the bank suspended pay- ment and there was a heavy loss. Malms, V.C., said: ' ' It was in my opinion, the duty of the trustees to sell within a reasonable time, and I am unable to fix any other time than that which is settled by the case of Graijburn v. Clarkson, L. R. 3 Ch. 605, which is within one year after the testator's death. It is true the words were different in that case; there the direction was to ' convert the estate with all convenient speed.' Here the direction is to sell ' immediately or so soon as the trustees shall think fit to do so.' " In the judg- ment it is pointed out that in the case of shares in an unlimited company the duty to sell as soon as possible is always urgent. A somewhat similar case was recently before our own Courts, and many of the earlier cases are dis- cussed in the judgments, and the effect of section 37 of the Trustee Act is considered. There a testator died leaving shares in the Ontario Bank. The estate was given to executors ' ' upon trust to invest the proceeds thereof in such manner as they shall deem most advis- able." The executors retained these shares for four years and there was a big loss. It was held that the will authorized the retention of the shares, and that the executors acted in good faith, and their decision to retain the shares was an honest exercise of the discretion given by the will; and their abstaining from selling, hoping for a better price, was fairly justified. After the expiration of the four years the stock was reduced by one-half, but the executors continued to hold it for many years without an attempt to realize <»ii it, and the Court hold the executors liable, following Sculthorpe v. Tipper. Re Nicholls, Hall v. Wildman (1913), 29 O. L. R. 206. Notwithstanding a clause in a will declaring that the trustees may postpone the sale and conversion of DUTY OF AN EXECUTOR — REALIZING ASSETS. 31 any part of the estate so long as they may deem proper, it is their duty to sell and convert into money as soon as they reasonably can to realize a fund which would be immediately distributable in cash, using- the power of postponement to obtain a better return, but not for mere purposes of accumulation where there is no direction tor accumulation in the will. Re Casivell Estate, 1 1). L. R. 497, 20 W. L. R. 469. While the Court will not exact more from trustees than such conduct as a prudent man would pursue in the management of his own business, yet it requires from them full explanations of all their dealings, and the causes why outstanding assets were not collected, or property of the estate had disappeared; and a trustee who cannot satisfactorily account for the one or the other will be chargeable with them. Chisholm v. Bernard, 10 Gr. 479. Generally speaking, it is the duty of executors to get in debts due to the estate ; but it is not a necessary part of their duty to realize mortgage securities of their testator not wanted for the payment of funeral and testamentary expenses, and debts and pecuniary legacies. Orr v. Newton, 2 Cox 274; In re Chapman (1896), 2 Ch. 763. It is the duty of trustees to press for payment of the trust funds owing to them, and if they are not paid within a reasonable time to enforce payment by legal proceedings. And it is especially their duty to take action promptly, if by the terms of the trust, payment has been deferred to the expiration of a specified time. The only excuse for not taking action to enforce pay- ment is a well founded belief on the part of the trustees that such action would be fruitless : and the burden of proving the grounds of such belief is on the trustees. In re Brogden, 38 Ch. D. 546. In Clack v. Holland, 1!) Beav.272, Lord Romily gees a step further, and says, if the trustee " has taken no steps at all to obtain payment, but it appears that if he had done so, they would have been, or there is 32 executors' accounts. reasonable ground for believing they would have been ineffectual, then he is exonerated from all liability. ' ' But when it is shewn that a debt was owing to the deceased and formed part of the assets of the estate, the executor or administrator will be charged with the amount unless he shews that the debtor was insolvent ; but until that is proved, the law assumes the fact to be the other way. Stiles v. Guy, 16 Sim. 230, 30 E, E. 58; Zimmerman v. Wilcox, 35 C. L. J. 691, 19 C. L. T. 337. Compare East v. East, 5 Hare. 348, where the con- trary seems to have been assumed. AVhere trustees were directed to sell an estate as soon as convenient after the testator's death, and offered it for sale by auction, and an offer was made of £6,600, and refused by the desire of one of the parties interested, and some time afterwards the trustees sold it for £3,000, the Court charged them with the loss. Taylor v. Tabrum, 6 Sim. 281 ; 38 E. E. 115. An executor is not called upon to waste the estate in attempts to collect bad debts, or where it is clear a perfect defence exists, but he must act in the utmost good faith to the estate. Egan v. Clark, 87 111. Eep. 246. Where an executor receives money in his trust capacity from a person who is indebted to the estate, and also indebted to the executor personally, the law will apply the payment to the debt due to the estate. In re While, 13 Pa. Sup. Ct. 201. Where a part of the assets of the estate consisted of a note, the maker of which was insolvent, but the indorser was solvent, and the executor granted the indorser an extension of time and the note was lost to the estate, the executor was charged with the amount. Foster v. Foster, 24 Ky. Law Rep. L396. Executors ought not, without great reason, to per- mit money to remain upon personal security longer than is absolutely necessary. Powell v. Evans, 5 Ves. S44. DUTY Or AX EXECUTOR REALIZING ASSETS. 66 If by unduly delaying to bring an action the execu ton or administrator lias enabled a debtor of the deceased to avail himself of the Statute of Limitation.-, the executor or administrator will be personally liable. Haywood v. Kinsei}, L2 Mod. 573. Where the testator had loaned money to his solici- tor on a promissory note, and the maker was in good circumstances at the time of the testator's death, but died two years afterwards insolvent, it was held thai it was the duty of the executor to call in the amount due on the note, and, it' necessary, to take legal pro- ceedings for the recovery of the amount due on the note, and the loss must fall on the executors. Carrey v. Bond, VI L.J. Ch.484. And it makes no difference that the executor can realize a larger rate of interest for the estate by allow- ing the note to remain outstanding. Re Gabourie, 15 ( ). R, 635. The difficulty of collecting arrears of rent does not excuse executors Tor not collecting them, without some evidence that in fact they could not have been re- covered. In re Alexander, 13 Ir. Ch. R. 137; Chisholm v. Bernard, 10 (ir. 47!). In considering whether evidence is sufficient to re- lieve an executor in respect of uncollected debts, the laps.- ..I' time and the smallness of the debt are proper to he taken into account. McCarger v. McKinnon, 17 (Jr. 525. A delay of ten months, which resulted in the loss of a debt, was held to require explanation. Mc- Carger v. McKinnon, 15 (ir. 361. Delay in selling lands, which by the will are sale- able for the payment of debts, will render the executors liable for rents and profits. Ernes v. Kims, 11 (ir. 325. Tart (if a testator's estate consisted of a note of 6100, made by five persons as joint makers. The inter- est on this note was paid for several years, by whom did not appear. The executor then took a new note for the amount, on which nothing was subsequently paid, and it became barred by the Statute of Limitations. r. \. — :; 34 executors' accounts. It was held that the taking of the new note was equiva- lent to payment of the first note, and the executor was charged with the amount thereof. Sparkes v. Rested, 22 Beav. 587, 111 R. R. 496. It has been held that an executor or administrator, instead of receiving payment in money, may in the exercise of good faith and due prudence, settle with the debtor by accepting other security or property. McCarger v. McKinnon, 17 Gr. 525 ; Gardiner v. Cal- lender, 12 Pick. (Mass.) 374; Stark v. Hunton, 3 N. J. Eq. 300. CHAPTER VIII. What Constitute Assets. In this connection it may be proper to consider what are, and what are not, assets of the estate for which an executor or administrator is chargeable. The general rule is thus stated in Touchstone : " All those goods and chattels, actions and commo- dities, which were of the deceased in right of action or possession as his own, and so continued until the time of his death, and which after his death the execu- tor or administrator doth get into his hands as duly belonging to him in the right of his executorship or administratorship, and all such things as do come to the executor or administrator in lieu or by reason of that, and nothing else, shall be said to be assets in the hands of the executor or administrator to make hi in chargeable to a creditor or legatee." In an accurate and legal sense, all the personal property of the deceased which is of a saleable nature, and may be converted into ready money, is deemed assets. Bui the word is not confined to such property; for all other property of the deceased which is charge- able with his debts or legacies, and is applicable to WHAT CONSTITUTE ASS] ■>■) thai purpose, is, in a Large sense, assets. 1 Story Eq. J nr. 531. But property never vested in the deceased may be assets, in the hands of the executor or administrator. Thus, it' a lease is made to one for life with remainder to his executor for years, such remainder will be assets in the hands of the executor, though it were never in the deceased. Wins. Exors. 1519. Money received by an executor for the good-will of a public house is assets in his hands. Worral v. Hand, Peake 74. So where an administratrix sold the good- will of the intestate's business as a surgeon, it was held that although she was not bound to sell such good- will, yet having done so the proceeds were assets for which she must account. Christie v. Chirk, '27 U. C. R. 21. The testator was a surgeon-dentist at the time of his death. His widow, one of the executors of the will, entered into an agreement with one P. whereby she sold him the testator's instruments at a fixed sum and the furniture at a valuation. The agreement further provided that P. was to pay the widow £100 a year for five years for the good-will of the business; and she agreed to give her personal services to enable P. to retain the testator.'s practice. P. said he relied on the personal exertions of the widow, and if these were not given he should resist payment of the annuity. In an administration action the Master refused to charge the widow with this 6500. On appeal the Court held that either the whole or a pari of the sum must be consid- ered assets of the estate, and it was referred back to the Master to ascertain and report what portion of the £500 was attributable to the personal exertions of the widow under the agreement. Smale v. Graves, L9 L. J. Ch. 157; 14 Jur. 662. In McGovem's Estate, 2 CTortham L. R. (Pa.) 1!>4. it was held that the good-will of a liquor business did nOl constitute assets of the owner's estate, where he had no business at the time of his death, but simply 36 executors' accounts. a claim to the return of his business after a certain debt, for which it was pledged, had been paid. The good-will of an inn is local and does not exist independently of the building in which it is carried on, and therefore where a husband kept an inn in a house owned by his wife, and she continued it after his death, the good-will was held not to be assets of his estate. Elliot's Appeal, 60 Pa. St. 161. But if a deceased innkeeper had a leasehold in the building, the good-will of the leasehold is assets in the hands of the administrator, and he is chargeable with a price offered for such good-will and refused. Wiley's Appeal, 6 W. & S. (Pa.) 244; CoppeVs Estate. 4Phila. (Pa.) 378. If an executor or administrator carries on the busi- ness of the deceased without authority, he is charge- able with the value of the good-will as a part of the assets. Re Randall, 2 Connolly (N.Y.) 29; Emeret's Estate, 2 Pars. Eq. Cas. (Pa.)' 195. It was formerly a disputed question whether the good-will of a business conducted by a commercial partnership survives, on the death of a member of the firm, to the survivors, or whether the interest of the deceased partner therein was assets of his estate; but it is now generally held that the deceased partner's interest is assets, unless the partnership articles or agreement provides otherwise. In Hammond v. Douglass, 5 Yes. .1 r. 539, it was held that in the ease of commercial partnerships the good- will survives to the survivors ; but the propriety of that decision was doubted by Lord Khlon in Crairsliay v. < 'ollins, r> \'<'s. Jr. 227 ; and in Wedderburn v. Wedder- burn, 22 Beav. 84, it was held that the good-will of a partnership business did not survive to the surviving partners on the death of a partner unless it was so provided by the partnership agreement. See also Smith v. Everett, 27 Beav. 446. And see Piatt v. Piatt, 42 Conn. .'!47, where it was held that the good-will of the business, if continued, is to be valued in estimat- ing the deceased's interest. WHAT CO.\S'NT|-Ti; ASSF.TS. Partnerships between professional persons stand on a different footing, and the good-will, on the death of one of the partners, survives to the surviving part- ner or partners. And this is the ease though the de- ceased partner may have paid a large sum on entering into the partnership. Farr v. Pearce, '■> Madd. 78. A aote payable to the deceased k> or his heirs," belongs to the personal representatives, and is assets. Book v. Robinson, L2 New Bruns. 27$. JuBradshaw v. Lancashire By. Co., in C. P. 189, it was held that where a passenger on a railway was injured by an accident, in consequence of which he afterwards died, his executrix could recover for breach of contract against the railway company the damages to his personal estate arising, before his death, from medical expenses and losses occasioned by his inability to attend to his business. But in Pulling v. Great East- ern Ry. Co., 9 Q. B. 1). 110, it was held that such recovery could not be had where the deceased was injured by being struck by a locomotive at a railway • tossing, since the injury in such case did not involve a breach of contract, but was tortious. In Noble v. Cass, 2 Sim. 343, 29 R. R. 115, there was a devise to trustees and their heirs during the life of A. in trust for A., and after her decease to B. Dur- ing A.'s lifetime the trustees recovered damages for I) reach of covenants in a lease granted by the testa- tor in his lifetime and still subsisting. It was held that these damages belonged to the life-tenant and not to the inheritance. A claim for injury to the rental value of land dur- um- the lifetime of the owner is personal and vests in the executor or administrator. Paret v. New York E! By., 60 X. V. Sup. Ct. 441. An administrator obtained in his own name a re- newal of a charter for a ferry owned by the deceased, and it was held he was hound to account for the value thereof as assets of the estate. Euson v. Wallace 1 Rish, Eq. (S. Car.) 1. ,'kS executors accounts. Rents accruing due during the lifetime of the owner of the demised premises go to his personal represen- tatives as assets of the estate. And, in the absence of any testamentary disposition, rents of real estate which accrue after the death of the owner, pass to the devisee of the real estate and are not assets in the hands of the executor. By the Apportionment Act (R. S. 0. ch. 156) rent is now considered as accruing from day to day, and is apportionable accordingly. Rent payable in advance accrues at the time speci- fied for its payment, and on the death of the lessor after that time, and within the period for which the rent is reserved, it passes to the lessor's personal re- presentatives. Re Weeks, 5 Dem. (N.Y.), 194; Miller v. Crawford, 26 Abb. N. Cas. (N. Y. Supreme Ct.) 396. As between the personal representatives and the devisees, compensation awarded for land taken for public purposes is personal property and belongs to the executor or administrator, if the land was taken before the testator's death; but if it was taken after his death it is real estate and passes to the devisee. Welles v. Coivles, 4 Conn. 182; Neat v. Knox, 61 Me. 298; Boynton v. Peterborough, 4 Cush. (Mass.) 467. Where land is expropriated by a municipal corpor- ation under authority of the Municipal Act, such land is " taken " from the date of the passing of the by- law of expropriation. Re MacPherson and Toronto, 26 0. R. 559; .Re Davies and James Bay By. Co. (1910), 20 0. L. R. 534. Where lands are taken for railway purposes they are " taken " from the date of the warrant of possession, and not from the time the owner knows lie has to give up the land. Re Clarice and T. ({.<('■ 11. By. Co. (1!)()!)), 18 O. L. R. (528. As against the heirs the personal representatives are entitled to the crops growing on the lands of the deceased at the time of his death. But crops growing on lands devised by the testator pass to the devisees as against the personal representatives. The authori- ties are all agreed that this is the rule, but they do not WHA'J CONSTITUTE ASSETS. 39 seem to be able to accounl for the difference between the right of the persona] representative as against the heir and as against the devisee. Spencer's Case, Winch. 51; Cox v. Godsalve, 6 East, 604; West v. Moore,8 East, 339. The presumption thai crops pass to the devisee may be rebutted by the words of the will that shew an intent that the crops should pass to the personal repre- sentative. Tims, where the testator gave his land to A., and to his executors all his stock on the farm, with the implements of husbandry, and all his other per- sonal estate, to pay debts and legacies, it was held that the gift of the stock upon the farm carried the standing crops. West v. Moore, supra. Arrears of military bounty payable by the United States to a volunteer who died in the service, were held to be payable to his personal representatives as part of his estate, and not to his relatives. Seidel's Estate, 2 AVoodw. (Pa.) 259. So also arrears of payment due a soldier at the time of his death. Maitland v. Gris- singer, 1 AVoodw. 294. The persons to whom pensions are payable are gen- erally regulated by the pension laws, and arrears due at the pensioner's death are payable to his family, and are not assets of the estate. If, however, pension moneys have been received by the pensioner in Ins lifetime and deposited by him in a bank or loaned to a third person, they are assets of his estate. Beecher v. Barber, is to give the widow (or children where there is no widow) a parliamentary title to the exempted goods. Of course the executor or administrator has no right to sell the exemptions for payment of funeral sets applicable to payment. The widow, or children, would be entitled to have the assets marshalled \'or payment of these debts so as to relieve the exemptions. The righl to select exempted chattels is. by section 7, given to the debtor. '• his widow or family ": ai.d the right to claim $100 in lieu of the tools and imple- ments of trade is a righi given to the debtor person- ally: and the distinction may well have been inten- 46 executors' accounts. tional. The general exemptions which may be selected are articles used not alone by the debtor, but also by his family. The tools of the debtor's trade are given to him personally, but are not generally of value to the widow. Pickering v. Thompson (1911), 24 0. L. R. 386. Those gifts of money by the husband to the wife for clothes, or to purchase ornaments, or for her separ- ate expenditure, which are usually called pin-money, are not assets of the estate. For an elaborate state- ment of the law as to pin-money see Howard v. Digby, 2 CI. & Fin. 634, 37 R. R. 276. Somewhat analogous to pin-money are the profits made by the wife from the sale of butter, eggs, poul- try, fruit, etc., where the husband allows the wife to dispose of such produce. Where a wife had, from such savings, made a loan to her husband, it was held she was entitled to prove a claim against his estate for the amount, there being no deficiency of assets to pay debts. Shinning v. Style, 3 P. "Wins. 339. So the savings of a wife out of her allowance for housekeeping belong to the wife and not to the hus- band's estate. Man gey v. JIungerford, 2 Eq. Cas. Abr. L56. The wearing apparel of a married woman is pre- sumed to belong to her husband, in the absence of evi- dence to the contrary, and need not be accounted for by her executor. In re Hall, 70 VI. 458. In Coffinberry v. Madden, 30 hid. App. 360, it was held that a watch, chain and charm, a ring and a diamond stud, worth ^oOD, were not within the moaning of a statute provid- ing that wearing apparel of the deceased should not be considered as assets. Money voted to executors as officers of a corpora- tion in which the estate was Largely interested, and the testator an officer ai the time of his death, as extra compensation for their services as such officers, in accordance with a usage of Ion-- standing, was held not to be assets of the estate. Re Schaefer, 65 X. Y. App. Div. 378, reversing 34 Misc. :!4. WHAT ARE NOT ASSETS. 47 Aii executor is not chargeable with assets which never conic to his hands and of which he has no know ledge. O'Brain v. Wilson, :>>:'> So. (.Miss.) !)46. Property disposed of by tin- deceased by a valid gift mortis causa is not assets of the estate to which the executor is entitled. Deneff v. Helms, 4l> Or. 161; unless such property is required for payment of debts of the deceased. Section 57 of The Trustee Act provides that " pro- perty over which a deceased person had a power of appointment, which he might have exercised for his own benefit without the assent of any other person, shall be assets for the payment of his debts Avhere the same is appointed by his will; and, under an exe- cution against the personal representatives of such deceased person, such assets may be seized and sold after the deceased person's own property has been exhausted." This is but a re-statement of the law as laid down in Fleming v. Buchanan (1853), 3 D. M. & (J. 976, 98 R. R. 401, where it was held that freehold estates over which a testator has a general power of appointment, and which he appoints by his will, are assets for the payment of his debts, but are only applicable for that purpose after all the testator's own propertv has been previously so applied. Property appointed by will under a general power is assets for the payment of debts of the appointor, and is not regarded as the property of the donor of the power distributable by the donee' thereof. In such •■' case lh '' property is treated as assets of the testator exercising the power, and the assets so appointed are regarded as property bequeathed by him. Where. therefore, the donee of a general testamentary power " r appointment over a fund borrowed money, and as security covenanted with the lender that he would make a will appointing that the Loan should he a firs! charge on the fund, and made a will accordingly, it v. held ,,l;1 < the lender was not entitled to priority as 48 executors' accounts. regards the fund over the appointor's general credi- tors. Beyfus v. Lauiey (1903), A. C. 411, affirming In re Lawley (1902), 2 Ch. 797. The power must, of course, be exercised ; but, pro- vided the power is exercised, the estate becomes assets. CHAPTER X. Advertising for Creditors. Having collected the assets of the deceased, one of the first and principal duties of the executor or administrator is the payment of the debts and lia- bilities of the deceased. What is the proper perform- ance of the duties of an executor or administrator in this respect! It is ascertaining the debts and liabi- lities due or owing by the deceased's estate, the pay- ment of such debts and liabilities, and the legal and proper distribution of the estate among the persons entitled. Per Jessel, M.R., Sharp v. Lush, 10 Ch D. 468. Much of the learning in the English text books on the order of administration of assets is of no import- ance here, owing to the fact that priority among dif- ferent classes of debts lias long been abolished in Ontario. See section 53 of The Trustee Act. But because the deceased must be decently and properly buried, and because the executor or administrator is personally liable for the costs of and incidental to the proper administration of the estate, these expenses are ;i lirst charge upon the moneys come to the hands of the persona] representative. Before the debts or legacies are paid, or, in cases of intestacy, before any distribution is made, the execu- tor or adminisl rator should see that the proper adver- tisement for creditors' claims is published. Section 56 ADVERTISING FOB CREDITORS. 49 of The Trustee Act provides for the personal repre- sentative giving " such or the like notices " as would have been directed to be given by tin- Supreme Court in an administration suit, and for distribution of the assets among the persons entitled thereto, and for the protection of the personal representative acting pur- suant to such advertisement. " In my opinion a prudent and reasonable executor ought to advertise for creditors as soon as possible after the testator's death, and when he has notice of any claim, prima facie, lie ought not to proceed to pay the legatees without making- due provision for all the claims of which lie has had notice." Romer, J. In re McKay, Mosley v. McKay (1897), 2 Ch. 518. The advertisement should, as far as possible, fol- low the words of the Act. Besides calling for claims against the estate, it should state that the effect of non-compliance with it will be the exclusion of persons failing to comply therewith from participation in tlie estate to be divided. A notice stating that " Par- ties having claims against the estate are also required to tile the same by said date," is not sufficient. Stewart v. Snyder, 30 Out. R. 110, 27 A. R. 423. A form of advertisement will he found in the Appendix. An advertisement under section 56 of The Trustee Act. calling upon ''creditors and others " to send in their claims against the estate, is broad enough to cover next of kill: and the statute is applicable to claims for distributive shares of the assets, as well as to claims for debts and demands in the nature of debts. Re Ashman (1908), 15 0. L. R. 42; Newton v. Sherry, 1 (\ I'. 1). 246; Re Moore,9 ( >. W. X. 282. In England it is the practice to insert the adver- tisement in the London Gazette in addition to a news- paper having a local circulation, and in Wood v. Weightman, L. R. L3 Eq. 434, it was held that the exe- cutors were not entitled to the protection of the statute where this was not done. 'Phis is not. however, the practice in Ontario, and in Re Cameron. Mason v. 50 executors' accounts. ( 'ameron, 15 P. R. 272, Boyd, C, held it was not neces- sary to advertise in the Ontario Gazette, " as few persons see or read the Gazette." See also Re Ash- man (1908), 15 0. L. R. 44. In a subsequent case Street, J., said the notice should be ' ' published in the localities where claimants against the estate resided, or else in the Ontario Gaz- ette if their residence were unknown." Stewart v. Snyder, 30 Ont. R. 110. As far as this relates to the necessity of publication in the Gazette it would seem to be a mere dictum, as the case went off on the insufficiency of the advertisement. Where there is a probability of the deceased having creditors to whom notice in a local paper would be of no value, for in- stance in the case of a merchant, it might be prudent to advertise in the Gazette in addition to a local paper. Not less than three insertions, generally four, are ordered, and a month's notice should be given from the first publication and the time fixed for distribu- tion. In re Bracken, Doughty v. Toivnson, 43 Ch. D. 1. Three weeks notice was considered too short a time. Wood v. Weightman, supra. An advertisement for creditors' claims does not exonerate an executor or administrator if he had actual notice of a claim before distribution, even though the creditor has not filed a claim in response to a notice asking him to do so. Tire Carting Brewing Co. v. Black, 6 Ont. R. 441; Scottish Equitable v. Beatty, 29 L. R. Ir. 290; In re Land Credit Co. of Ireland v. Ireland, 2] W. R. 135. Under the similar English Statute it was held that an executor who had distributed the assets of his tes- tator after issuing advertisements and taking the steps pointed out by the Act, had the same protection as if he had administered the estate under a decree of the Court; and if he should have retained any legacies as trustee after appropriating them for the benefit of the cestui que trust, he will no longer be under any liability qua executor. Clegg v. Rowland, L. R. 3 Eq. 368; Hunter v. Young, 4 Exch. Div. 250. PAYMENT OF DEBTS. 51 Where an executor has properly advertised for creditors, and has sufficient to pay all claims of which lie has notice, and pays them iii full, but another credi tor subsequently appears whose claim added to the others would have created a deficiency, the executor is protected. The unpaid creditor's only remedy is to compel the other creditors to refund rateably the amount which they received in excess of the amount which would have been payable to them had all the claims been known to the executor. Leitch v. Molsons Bank, 27 Out. E. 621 ; Boner v. Ross, 19 Gr. 229; Cham- berlain v. Clark, 9 A. R. 273. The advertisement for creditors must be in the English language. The Legislature of Xew Jersev required that notice of all judicial sales be advertised in a German newspaper. The Chancellor held that notwithstanding this Act, the advertisement must be printed in English, quoting from 4 and 6 Geo. II., which provides that all judicial proceedings after 1733 shall be published in the English language °7 C L J. 492. In re Ringwall, 5 Ohio X. P. 49(5. it was held that the advertisement must be printed in the English lan- guage although the deceased was a German and nearly all his business transactions had been made with Ger- mans. And see the remarks of MacLennan, J.A., in I finer v. Lewis, -27 A. R. p. 249. CHAPTER XI. Payment of Debts. A creditor of an estate cannot be prejudicially affected by the terms of a will. His rights are fixed and determined by the law and no1 in any manner con trolled by the will of his debtor. A creditor's rights 52 executors' accounts. to be paid out of the assets of his debtor's estate does not depend upon testamentary provisions, but is secured by the law, and is the same and none other, both in testate and intestate estates. Both the executor and administrator take the property of the deceased person precisely as it was left at the time of decease, whether such condition is the result of the operation of law or the act of the party himself. Richard son v. Richardson, 87 111. App. 354. The duty of an executor or administrator is, after paying the funeral expenses and collecting the assets, to pay the just debts and satisfy the just claims against the testator's estate. But it is clearly his duty not to waste an estate not his own, which he is administering for the benefit of others, in satisfying demands which are equally untenable in law and in equity. Per Bowen, L.J., in In re Rownson, Field v. White, 29 Ch. D. 363. Section 52 (1) of The Trustee Act provides that "A personal representative may pay or allow any < Lebt or claim on any evidence that he thinks sufficient. ' ' Sub-sec. (2) deals with the power of such representa- tive to compromise claims, and will be dealt with here- after. Notwithstanding the broad language of the above section a personal representative has not an absolute power to pay every claim presented, and must use ordinary common sense, and exercise a reasonable discretion in the consideration of claims made against the estate. In Re Williams, 27 Out. Ii. 405, the execu- tors had paid a note of the testator for $2,000, al- though they knew the note was made without consider- ation and was a gift by the testator to the payee, and therefore not legally enforceable. The Judge of the Surrogate Court held the note was a " claim," and the executors were protected under the statute; but a Divisional Court reversed the judgment and held the statute did not authorize the payment, " for they had evidence before them rebutting the prima facie pre- sumption arising from the signature of the testator, and they had no further evidence to sustain the claim." PAYMENT OF DEBTS. Do Aii executor or administrator may pay a bona fide claim againsl the estate although the Statute of Limi- tations would be a valid defence, but he would commil a devastavit if he paid a debl to a creditor who is pre- vented from enforcing it by the Statute of Frauds. And for the same reason an executor or administrator cannol retain as such a debt due to himself. There is this difference between a ease under the Statute of 1, imitations and a case under the Statute of Fraud.-. The Statute of Limitations docs not destroy the debt but only the remedy, and it has been held that an execu- tor may waive that defence in the case of a debt which existed and appears to he well founded. Norton v. Frecker, 1 Atk. 526. But a parol contract within the Statute of Frauds, though not void to all intents and purposes as a valid agreement, is incapable of being enforced in an action either directly or indirectly. And if you have a contract which is not capable of being enforced either at law or in equity it does not create a debt or liability against the estate of the de- ceased. In re Rownson, Field v. White, 2!) Ch. I). 358. The privilege given to a personal representative of paying statute barred debts is an anomaly and ought not to be extended, and in Midgley v. Midgley (1893), 3 Ch. 282, the Court held that an executor could not pay such a debt after it had been judicially declared by a court of competent jurisdiction that it was barred by the statute. And where a creditor brings an action to recover a debt, to which the Statute of Limitations might he a bar, the beneficiaries of the estate have a right to insist upon the statute as a defence thereto. />< Rutherford, 9 ( ». W. \. 32, 34 0. L. R. 395. In the American courts the general rule is that a creditor whose claim is not barred by the Statute of Limitations is entitled to interpose the statute against claims which are barred. where the assets are not sufficient to pay all in full. I' Kendrich, 107 X. Y. 104. An executor will not he allowed for the payment of a debt of the testator which appears on its Pace to 54 executors' accounts. be illegal, e.g., to have been given for money lost at gaming. Carter v. Cutting, 5 Mnnf. (Va.) 223. But notes given by the deceased for gaming debts and paid by the executor without knowledge on his part at the time of payment of the illegal consideration, will be allowed. Coffee v. Buffi a, 4 Coldw. (Tenn.) 487. Although section 12 of The Evidence Act requires some corroborative evidence to support an action against the estate of a deceased person, if an executor or administrator is satisfied that the claim is just and proper it may be allowed without such corroboration. RawUnson v. Scholes, 79 L. T. 350; In re Griff en, 79 L. T. 442. On an audit of an executor's accounts the Judge is not bound to disallow payments made by the executor because there was no corroboration in support of the creditor's claim. The responsibility for payment falls upon the executor; he must use care and judgment in considering the claims presented to him, and if he does so fairly and honestly, and in the interest of the estate, lie will, on passing his accounts, be allowed such as he thought fit to pay. Re Blank Estate, 5 Terr. L. R. 230. With respect to contingent debts and liabilities, a question of great importance formerly arose; namely, whether an executor can safely make payments of legacies or deliver over a residue where there is an outstanding covenant of the testator which has never yet been broken, and which may not be broken here- after. The question was discussed in several early cases, and the result seems to lie that an executor, with notice of even a possible liability, cannot safely make payment of legacies or distribute the residue. If he does he will have to answer to the claim of the credi- tor whose contingent claim has ripened into a certain claim. Thus in Taylor v. Taylor, L. R. 10 Eq. 477, it was held thai where executors of a shareholder in a joint stock company, which was a going concern at the time of the testator's death, paid a legacy without pro- viding for any contingent liability in respect of the PAYMENT OF DEBTS. 55 shares, they were liable to pay tin- amount of the legacy in satisfaction of calls thereafter made. Where such contingent liabilities exist the executor is entitled to retain sufficient assets to meet them, or to be indemnified against them. Simmons v. Bollard, 3 Mer. 547. In Williams v. Headland 4 Gift". 505, 141 R. R. 302, in an administration suit, the executors claimed to retain a part of the residue as an indemnity against possible liability in respect of unregistered mining shares. The Court refused the claim, but re- quired the residuary legatee to undertake to answer such liability. The liabilities of an executor or administrator in respect of covenants in leases, and in conveyances, is provided for in sections 34 and 35 of The Trustee Act. Creditors of the deceased domiciled abroad are entitled to be paid pari passu with the local creditors. Milne v. Moore, 24 Out. R. 456. It is the duty of an executor to pay interest bear- ing debts as early as possible, and he may be liable if he does not do so unless he can shew that the assets were insufficient to pay the debts immediately. Sea- man v. Everard, 2 Lev. 40. So if an executor may save the penalty of a bond by payment of a less sum than that specified in the condition, or by other performance of -the condition, and he neglect to do so. ii will he a devastavit in him if he have assets. 1 Saund. :::;:;. Generally speaking interesl is not allowable where from the nature of the claim filed againsl the estate no interest is due; and the claims of creditors with whom settlement is made in the ordinary course of ad- ministration are usually dealt with on the footing they occupied in this respect at the death of the deceased. Claims bearing interest by their terms should he paid with interest accruing before and after the deceased's death, according to their tenor: hut interest is n«U usually allowed .m unliquidated claims. />< Kirkpat- rick, K) P. RA;Reber's Estate, L43 Pa. St. 308. Where the estate is insolvent interesl is ao\ computed beyond 56 EXECUTORS ACCOUNTS. the death of the deceased. Koepler's Estate, 4 Pa. Dist. 346. Where an executor is in funds, a debt due to him- self must be considered as paid and can no longer draw interest. Sebring v. Keith, 2 Hill (S.C.) 340. But lie cannot be prevented from charging interest up to the time of final settlement where he has no right to retain any part of the assets in payment of his claim until it lias been allowed by the Court on a final accounting. Re Saunders, 4 Misc. (N.Y.) 28. He cannot, however, prolong the running of interest on his claim by delay- ing the settlement of the estate, and he will be allowed interest only for the period within which, by the exer- cise of due diligence, he might have settled the estate. In re Richmond, 2 Pick. (Mass.) 567. Where the testator's son was directed to pay the debts and to pay the widow $150 per year during her life, and the real estate was devised to the same son, it was held that the effect of this was to charge the payment of both the debts and annuity upon the land so devised to the son. Re Thomas (1901), 2 0. L. R, 660. He received the fund out of which the payment was to be made. Robsonw Jardine, 22 Gr. 420, 425. Where an executor or administrator pays debts in full the presumption arises that he had sufficient assets to pay all the debts of the estate. Godkin v. Watson, 9 O. W. X. 251. CHAPTER XII. Funeral Expenses. Funeral expenses, says Lord Coke, according to the degree and quality of the deceased, are to be allowed of the goods of the deceased, before any debt or duly whatever. But an executor or administrator is not justified in incurring such as are extravagant, even II XI'.KAL EXPENSES. •>' as it respects the Legatees or next of kin entitled in dis- tribution. 3 Inst. 202. NTor, as againsl creditors, is he warranted in spending more than thai which is abso- lutely necessary. In strictness, says Lord Holt, no funeral expenses are allowed in the case of an insolvent estate except for the coffin, ringing the bell, and the fees of the parson, clerk and bearers; but not for the pall or ornaments. Stackpole v. Stackpole, 4 Dow. 227. The rule appears to be, that the executor is entitled to be allowed reasonable expenses according to the testator's condition in life; and if he exceeds those he is to take the chances of the estate turning out insol- vent. No precise sum can be fixed to govern executors in all cases. It must obviously vary in every instance, not only with the station in life of each particular testator, but also with the price of the requisite articles at the particular place. Wins. Exors. 838; Hancock v. Podmore, 1 B. & Ad. 260. An executor who gives no order for the funeral of his testator, is liable only to the extent of the expenses of a funeral suitable to the rank and circumstances of the testator. Brice v. Wilson, 3 X. £ M. 512; 40 R. R. 461. l>nt if he sanctions an expensive funeral lie is liable for the expense. Lucy v. Walrond, '-\ Bing. X. C. 841, 43 R. R. 815. This means that as between the undertaker and the executor the executor is liable. The sum paid by the executor may still be questioned on an audit of the accounts. Only such sums will lie allowed for funeral ex- penses, costs of cemetery lot, erection of a monument, etc.. as will bear a just, fair and reasonable propor- tion to the amount of the estate of the deceased and his station in life. Undertakers assume the risk of the estate proving insolvent, in which case, as againsl creditors, they will be held strictly to the requirements of the rule. Cullen's Estate, 8 Pa. Sup. Ct. 494. In Foley \. Brocksmit, 119 Iowa, 4.~>7. the estate amounted to $.~>.0»H>. and the executors spent $526 for 58 executors' accounts. funeral expenses. The Court refused to allow more than $150. In Matter of Kiernan (Surrogate Court) 38 Misc. (X.Y.) 394, an outlay of $490 for a casket and box out of an estate of six or seven thousand dollars, was held unreasonable, and the administrator was only allowed $175 therefor. In Matter of Ogden, 41 Misc. (N.Y.) 158, a charge of $495 was allowed out of a personal estate of about $40,000. In Howard's Estate, 27 Pa. Co. Ct. 608, out of an estate of $2,800, $800 was allowed, there being no known heirs or unpaid creditors, the funeral being- large and the necessary expenses considerable. Where the estate was $2,842, and the next of kin not near relatives, the Court refused to disturb an allowance of $200 for undertaker's fees, in addition to $58 for a burial lot and church services, and $30 for carriages. In re Campbell's Estate, 24 Pa. Co. Ct. 480. Where the deceased had no relatives in the city where he had lived, and for a number of years had been janitor in railroad offices, and his associates were generally labouring men, and his estate less than $5,000, an allowance of $455 to the undertaker for funeral expenses charged at $526, was held to be ex- cessive. Foley v. Broeksmit, 93 N. W. 344. An administrator paying doctor's bills and fun- eral expenses of an adult child of the intestate cannot be allowed therefor out of the estate, though the child was an invalid and lived with the intestate's family. He may have a charge on the child's distributive share of the estate, but it is not funeral expenses of the estate. In re Murphy's Estate, 30 Wash. 9, 70 P. 109. The Law casts upon a husband the duty of burying his wife, bn1 lie is entitled to retain the sums expended in her funeral out of her separate estate as against creditors. In re McMyn, 33 Ch. D. 575. This case was not followed in Manitoba, where it was held that a husband cannot recover from his wife's estate moneys disbursed for the expense of her funeral unless she FUNERAL EXPENSES. 59 has charged them by will upon her estate, or iinl< there is some statute making them a charge apoD her separate estate, Re Montgomery, Lumbers v. Mont- gomery, 20 Man. R. 44, 17 W. L. B. 77. But in Re Gibbons, 31 0. R. 252, Rose, J., followed Re McMyn. He said: " I see no reason why, when a married woman dies seized of separate estate, that estate should not be charged with the burthen of her funeral expenses, as well as where a man dies leaving an estate." This is the law in New York. PacJie v. Oppenheim, 93 App. Div. 221; Re Very's Estate, 53 X. Y. Supp. 289 ; and in New Jersey : Doll v. ( 'ash, 61 X. J. Eq. 108. Where the wife has no separate estate the estate of her husband is liable for her funeral expenses, though at the time of her death she is living apart from him and has separate maintenance. Bertie v. Chesterfield, !> Mod. 31. Tn Indiana it was held that the funeral expenses of a deceased minor are not a charge against the infant's estate where he leaves a father able to pay them. Roue v. Raper, 3(1 C. L. J. 1. See also Blair v. Robinson, 108 Pa. St. 249; Sullivan v. Homer, 41 X. J. Eq. 299. Where the parent has no estate the estate of the infant is liable for its funeral expenses. Funeral expenses are not maintenance. Where a widow was given a certain yearly sum for mainten- ance, it was held her funeral expenses must be paid out of her own estate and not out of that of her hus- band, lie Swayzie, 3 (>. W. X. 621. Expenses \"v a cemetery lot and a monument v held net to be funeral expenses within the meaning of a statute limiting funeral expenses to $300. Sin- nott v. Kenady, 27 Wash. L. Rep. 82, 14 App. D. C. 1. This decision appears t<> have been based on the stat- ute mentioned. Apart from the statute, the decisions in other States of the Union are to the contrary. In Birkholm v. Wardell, 42 X. .1. Eq. 337, it was held that the cost of a burial lot is allowable as an item of 60 executors' accounts. funeral expense, if reasonable in amount, regard being had to all the circumstances. In ('lanes v. Fox, 6 Colo. App. 377, it was said: " The right to purchase a lot in which to bury a de- ceased person rests on very similar principles to those which control the administrator's right to pay funeral charges and the expenses which are immediately atten- dant after the death and burial." "Where the testator had in his lifetime purchased a burial lot, credit for the expense of a lot in another place was not allowed. Matter of Woodbury (Surro- gate Court), 40 Misc. X. Y. 143. In Tuttle v. Robinson, 33 X. II. 104, and Barclay's Estate, 11 Phila. (Pa.) 123, the cost of improving a burial lot was not allowed. But in Allen v. Allen, 3 Deni. (N.Y.) it was held that where the burial place had become undesirable, an administrator should be allowed credit for the reasonable expense of disinter- ring the body of the deceased and reburying it in an- other place. But not where the place of burial was suit- able and had been selected by the deceased. Watkins v. Romine, 106 Ind. 378. And in Matter of Furniss, 86 N. Y. App. Div. 96, a credit of $50 expended by execu- tors for the perpetual care of the cemetery lot in which the deceased was buried was allowed. A reasonable amount for services and expenses in- curred in transporting the body of the deceased from a foreign country, where he died, is properly payable out of the estate". Be Parry's Estate, 41 Atl. R. 384. An allowance of $650 for funeral expenses incurred in the transportation of the bodies of the deceased and his wife from Texas to New York, and their burial, was held not an unreasonable allowance. Sullivan v. Har- rier, 41 X. .1. Eq. 2f)f). And in Jennison v. Hapyood, 10 Pick. (Mass.) 77, tin' travelling expenses of the family going to the place where the deceased was stricken with his last illness, were allowed. An executor or administrator will not be allowed for his personal expenses, or for his time, in attending the funeral. Lund v. Lund, 41 X. II. 355; nor Tor the FUNERAL EXPENSES. 61 sums paid to an organization, of which the deceased was a member, for parading at the funeral, where it did not appear that such organization required any payment tor parading on such occasions. Mailer of Retinoids, 124 X. Y. 388; nor for the costs of a por- trait of the deceased painted after his death. McGlin- sey's Appeal, 14 S. & R. (Pa.) 64. But religious cere- monies, when in accordance with the faith of the de- ceased and the custom of the family, are proper, and the expenses of them, it' reasonable, will be allowed. 11 Am. &Eng. Ency. L265. On the same principle a reasonable sum expended for flowers is a proper charge against the estate. O'Reilly v. Kelly, 22 R. I. 151; 84 Am. St: Rep. 833. A suit of clothes for burial was allowed in Steger v. Friszel, 2 Tenn. 369. Carriage hire Tor the funeral, if reasonable, is proper. McDonald v. McWhorter, 44 Miss. 124. The cost of a dinner may be allowed where neces- sary for friends and relatives coming from a distance; but not otherwise where the credit is objected to, though customary at country funerals. Hard's Estate, 13 Pa. Dist. 552. ' One of the frequent items of disbursements in the accounts of executors and administrators is that of merchants' accounts for mourning goods for the widow and children of the deceased. En Johnson v. Baker, 2 C. & P. 207, 31 R. R. 663, it was held that the costs of mourning goods is not funeral expenses and cannot be claimed against the estate by the executor if lie gives the order for it. In Voice v. Canterbury, 14 Ves. :!i>4, a payment for mourning rings was allowed, but this appears to have been because of the discretion given by the will to the executors. On the other hand, in /'/'// v. Pitt, 2 ('as. temp. Lee. 508, Sir George Lee allowed a widow for her mourning in her account, as administratrix, in the Ecclesiastical ( Jourt. The American cases favour reasonable payments for mourning. " Mourning apparel for the family is :62 executors' accounts. generally allowed as an item of the funeral expenses, because custom requires mourning to be worn at fun- erals as a mark of proper respect for the dead, and providing such apparel may be considered as a neces- sary part of the preparation for the funeral, but there are cases to the contrary." 11 Am. & Eng. Ency. of Law, 1264. ' ' The wearing of suitable mourning apparel is com- monly regarded not only as proper, but almost indis- pensable mark of affection and evidence of grief; the distribution of a decedent's estate among his next of kin without providing therefrom for the usual and conventional ceremonies in memory of the dead would seem not only parsimonious, but utterly repugnant to one's conception of justice and propriety." Matter of Wachter, 16 Misc. Rep. (N.Y. Surrogate) 137. Charges for mere kindly offices, or for use of one's house for funeral services, if by a relative, are looked upon with disfavour. Hewitt v. Bronson, 5 Daly ( X.Y.) 1 ; McHugh's Estate, 152 Pa. St. 422. CHAPTER XIII. Testamentary Expenses. Testamentary expenses, Administration expenses and Executorship expenses are synonymous terms. " I cannot distinguish between ' executorship ex- penses ' and k testamentary expenses.' As I under- stand the words ' executorship expenses,' they are the expenses incident to the proper performance of the duty of the executor in the same way as testamentary expenses are, neither more or less." .Per Jessel, M.R., Sharp v. Lush, 10 Ch. J). 470. The term " executorship expenses " in a will means expenses incident to the proper performance of the TESTAMENTARY EXPENSES. 63 duty of an executor, and includes costs incurred In executors in obtaining the advice of solicitors and coun- sel as to the distribution of their testator's estate; also the costs of the executors and other parties in an action, whether instituted by the executors themselves, or by the beneficiary, lor the administration of the estate; also the testator's funeral expenses; also ex- penses incurred by the executors for the protection of specific legacies, e.g., for warehousing furniture speci- fically bequeathed pending the distribution of the assets, and payments by the executors in discharge of debts Jailing due from the testator's estate after his death, e.g., rent due after the testator's death for a house of which he was tenant from vear to year. T\ ms. Exors. 851. The term may be extended to expenses of adminis- tration under an intestacy. In re Clemow, Yeo v de- mon- (1900), 2 Ch. 182. These expenses are a first charge upon the estate, whether the estate is adminis- tered in or out of the Court. Loonies v. Stolierd 1 S & S. 458. ' , Testamentary expenses do not include succession duties. Such duties are neither debts of the deceased, nor testamentary expenses. Re Bolster (1905) 10 o' L. R. 591 ; Re Holland (1902), 3 O. L. R. 406; Manning v. Robinson, 29 Out. R. 483; Re Wathins, 12 B. C. R. 97. The plaintiff's costs of unsuccessfully impeaching the validity of a will are not " testamentary expenses." In Re Prince, Godwin v. Prince ( L898), 2 Ch. 225. But the costs of executors in defending such an action, and the costs of proving awill in solemn form, come within tli*' term. ll>. The costs of a special ease to obtain the opinion of the Courl "ii the true construction of the will were held 11,11 to be testamentary expenses within a provision of the will directing such expenses to be paid ou1 of a specific fund. Gilbertson v. Gilbertson, 34 Beav. 354, 14. » \l. R. 545. Bui testamentary expenses include costs incurred in administration proceedings Penny v Penny (1879), 11 Ch. D. 440. And where a testator 64 executors' accounts. directs that a particular fund is to be charged with the payment of his testamentary expenses that fund must bear the costs of an administration action. Miles v. Harrison, L. E. 9 Ch. 316, 323. The costs of raising a fund, including counsel fees, auctioneer's charges, commissions, etc., fall upon the fund and are not chargeable as costs of administration. leaf's Estate, 7 Pa. Co. Ct. 463. A direction in a will for payment of " testamen- tary expenses " out of the estate is not sufficient to entitle a specific devisee to be relieved at the expense of the estate of payment of any succession duty to which the devise to him is subject. Re Cust, 18 D. L. R. 647, 29 \Y. L. R. 716. It is the duty of executors to get in property speci- fically bequeathed at the expense of the general estate. In Perry v. Meddowcroft, 4 Beav. 197, 55 R. R, 49, the executors had incurred expenses in getting in some costs due to the testator, these costs having been speci- fically bequeathed. Lord Langdale, M.R., said: " I consider it part of the duty of executors to get in all the testator's estate, whether specifically bequeathed or otherwise, and 1 know of no instance in which the expenses have not been paid out of the general estate as joart of the expenses of administration." A claim of an administrator whose appointment had been revoked, for reimbursement of moneys expended and services rendered in good faith pursuant to his appointment, were allowed as a part of the expenses of administration in Brown v. McGee, 117 \Yis. 389. Credit will not be allowed to an executor for expen- ditures made in connection with a contest over a will which is still pending, as the liability for such costs cannot be fixed until the contest is determined. Tit- loiv's Estate, 11 Pa. Co. Ct. 625. The expenses of an heir, incurred after an adminis- trator is appointed, in hunting up other heirs or next of kin, are not testamentary expenses. In re Glynn, 57 Mum. 21. SUCCESSION DUTY. 15 CHAPTEE XIV. Succession Duty. If the estate of the deceased is liable to succession duty the personal representatives must ascertain and pay this duly before the payment of legacies or dis i ribution. The Succession Duty Act, and the Rules and Regulations made thereunder, will be found in the Ap pendix hereto. In Woodruff v. Attorney-General for Ontario (1908), A. C. 508, the Privy Council held that it is ultra vires of the Legislature of any province to tax property not within the province. " The powers of the Provincial Legislature being strictly limited to • direct taxation within the province,' any attempt to levy a tax on property locally situated outside the pro- vince is beyond their competence." In this case the property in dispute consisted of a quantity of deben- tures of municipal corporations in the United States, which a testator (a resident of Ontario) had always left in the possession of his agents in the United States. Where the assets are debts the situs of such assets is not always an easy question to determine. In 7 / 1 a- surer of Ontario v. Pattin (1910), 22 0. L. R. 184, the deceased resided in Windsor, Ontario, and at the time of his decease had a number of mortgages upon real estate in Michigan, executed by mortgagors who were residents of Michigan. At the time of his death the mortgage dee. is were in the possession of the de ceased in Windsor. It was held that, by the artificial rule of law, these mortgages were bona notabilia in Ontario, and as such were comprised in the properties held by the personal representatives upon his applica- tion for letters in Ontario. Had the mortgage deeds been located in Michigan at the time of the testator's i . \. — 5 66 executors' accounts. death it is quite probable the rule laid down in the Woodruff Case would have prevailed. In Hope's Case (1891), A. C. 476, it was held that the locality of a specialty debt is attributable to the place where the deed is found at the time of the credi- tor's death ; and it was said that the locality of a simple contract debt is attributable to the place of residence of the debtor. A mortgage debt being a specialty debt comes within the rule laid down in Hope's Case. See also Re Fisher, 7 0. W. N. 754, where a testator died in Ontario, having mortgages on property in British Columbia. At his death the mortgage deeds were in Toronto. His estate was called upon to pay succession duty in British Columbia, but it was held this did not relieve the estate from paying duty in Ontario. Property which can only be administered within Ontario is properly situated within the province. At- torney-General v. Newman, 31 Ont. R. 340. Life insurance, payable by the policy to the de- ceased's wife, forms a part of the " aggregate value ' of the estate for determining the amount of the suc- cession duty, although the amount of the insurance money is itself exempt from dut}^. In re Shambrook Estate (1908), 44 C. L. J. 461; 28 C. L. T. 575. In establishing the " aggregate value " of the pro- perty for succession duty purposes, the debts due by the deceased should be deducted. Receiver-General of New Brunswick v. Hay ward, 35 N. B. R. 453. The case of Attorney-General for Ontario v. Lee (1905), 9 0. L. R. 9, is no longer applicable. Section 4 of the Act pro- vides that an allowance shall be made " for reasonable funeral expenses, debts and encumbrances and Surro- gate Court fees (not including solicitor's charges)" in determining the dutiable value of the property. Money on deposit in a branch of a bank in the pro- vince where the deceased resided is liable to succession duty, although the head office of the bank is out of the province. Th e King v. Lovitt, 1 E. L. R. 513. In England there is a definite meaning attached to the expression " legacy duty "; but in Ontario there is SUCCESSION DUTY. 67 only the one inheritance tax. The statute calls this ' succession duly." It is a duly imposed upon all pro- perty devolving upon death; and it is a tax which has to be borne by the legatee, unless the will contains some provision casting the burden upon the residuary estate. Where a testatrix, domiciled in Ontario, and speaking with reference to a bequest within Ontario, directs that it shall be free from " legacy duty," this means succes- sion duty, which is the only legacy dutv known to Ontario law. In re Gwynne, 3 (). W. X. L428. Succession duty does not come within the description either of a debt or a part of the testamentary expenses. It cannot he a debt of the testator, for it does not arise as a liability until after his death. It is not testamen- tary expenses, because it is not payable upon the -rant of probate or administration. A special direction in a will to pay the testator's debts does not operate to make the duty a charge on the residue. Re Bolster (1905), 10 0. L. E. 591; Re Holland (1902), 3 0. L. E, 40G; Re Oust, 29 W. L. E. TIG. Succession duty on the amount of the legacies and the value of the real estate devised, is properly de- ducted from the legacies or payable by the devisees, and should not be paid out of the residue, and the per- sonal representatives have no discretion to pay such duty out of the residue. Kenndy v. Protestant Or- phans Home, 25 Ont. E. 235; Manning v. Robinson, 29 Out. E. 483; Ross v. The Queen, :V2 Out. E. 143; Re Watkins, VI B. C. E. 97; Re Sharp (1906), 1 Ch. 793. A testator possesses the general power to relieve the legatees and devisees from the payment of SUCCes sion duty by throwing it on the residue of the estate, where it is sufficient to make payment, hut an inten- tion that a devise or bequest shall lie " free " of the tax as between the estate and the legatee or devisee must clearly appear. A mere declaration that it is to he clear of all charges or incumbrances or other legal demands is net sufficient. Dos Pasos on the Law of Collateral Inheritance. 210. 68 executors' accounts. In New Brunswick it was held that legacies given to executors in lieu of commission were not liable to succession duty. In re Chubb, 32 C. L. J. 294. But it would appear such legacies would be liable to pay duty in Ontario. See sec. 4 (d). In a very recent case it was held, following In re Turnbul (1905), 1 Ch. 726, that where a legacy is given " free of all duty," that the legacy duty was payable out of the general estate, but that the operation of the gift must be determined with reference to the duties imposed in respect of the iegacy at the date of the death of the testator, and ought not to be extended to duties created or imposed by the legislature subsequent to that date. In re Snape, Elam v. Phillips (1915), 2 Ch. 179. CHAPTER XV. Taxes axd Insurance. The taxes upon any land are a special lien on the land in priority to any other incumbrances. Sec. 94, The Assessment Act. In British Columbia it was held that where a testator allowed municipal taxes to accumulate on cer- tain lands and then devised these lands, and by his will directed his executors to pay his debts out of a certain fund, that these arrears were payable out of the fund; that to allow taxes to fall into arrears does not charge the land by way of mortgage so as to bring it within i he operation of Locke King's Act (sec sec. 38, ch. 120. R. S. o. L914). Re Wathins, 12 B. C. R. 97. This is not 1 he law in ( Ontario. I n Mackay v. Mackay, 4 ( ). \Y. X. 300, the Court held the devisees took the land with the burden of the accumulation of taxes. The report o!' tin' case <\nc< not clearly shew the Tacts, but they were the same as in Re Watkins. taxis AND [NSUBANCE. 69 The person entitled to possession is the person to pay the taxes yearly chargeable on the property, and the fund oui of which the taxes are ordinarily payable is the rents of the land. Fountaine v. Pellett, 1 Ves. Jr. 337. The charge of taxes is one of the things which should be paid by the tenant for life, so as to protect the property for the remainderman. As between him and the remainderman the Court will not allow him to receive rents from part of the property, while he allows taxes to accumulate on another part. Re Denison, 24 Ont. E. 197. See also In re Cameron (1901), 2 0. L. K, 756. And see post, under Life- Tenant and Remainderman. The legal presumption is that personal property belonging to the estate is, during the settlement of the estate, at the place where the deceased died. As between the administrator or executor and those beneficially entitled to the estate, it is taxable in the hands of the former so long as the estate is in process of settlement and before distribution; but when there is no further need of an administrator or executor, and the distributee or beneficiary can legally demand his share, the property is no longer taxable to the persona] representative. 27 Am. & Eng. Ency. 653. If an executor neglects to pay taxes which it is his duty to pay, he is responsible for any loss that may result Prom his neglect. Re Harteman, 73 Cal. 545; Stubbs v. sinhhsA Redf. (N.Y.), 170; hut the duty to pay taxes and the corresponding liability for neglect to do so. depends on whether the executor has. or ought to have, money with which to do it. Thompson v. Thomp- son. 77 Ga. 692. A testator appointed his wife executor and devised to her the use of his dwelling house for life, directing that it should he kepi in repair out of his estate. It was held she was not entitled to charge the estate for taxes assessed on the house when in her possession under the will. Wiggen v. Sivett. 6 Mete-. (Ky.), 194. 70 executors' accounts. Section 23 of The Trustee Act gives a trustee power to insure any buildings of the trust estate and to pay the premiums for such insurance out of the income without the consent of the person entitled to the income. The section does not apply to any property which a trustee is bound forthwith to convey absolutely to any beneficiary upon being requested to do so. Prior to this enactment a trustee could not insure the trust property without the consent of the tenant for life. Lewin on Trusts, 8th ed. 580. It has been held that a trustee is not bound to insure the trust property, and not chargeable with neglect in case of a loss by fire. Bailey v. Gould, 4 Y. & C. Ex. 221; Fry v. Fry, 27 Beav. 146; 122 R. R. 354. The American authorities seem to hold that the failure to keep trust property insured is not consistent with ordinary care in the management of the trust estate, and that the trustee is bound to take this pre- caution against loss. Having regard to the almost universal practice among business men, in our day, this would seem to be the prudent rule. The trend of modern English text writers is more in accordance with the American decisions than with the older English cases. In Beven on Negligence, it is said: — "The question seems really to turn on what, in the existing state of opinion, and with reference to contemporary modes of life, is the reasonable thing to do ; and what- ever may have been the case in the year 1840, it would be a hard saying at the present day, and with the immensely diminished rate of insurance, to affirm that a prudent business man would not insure his prop- erty," p. 1490. In Henderson Trust Co. v. Stuart , 108 Ky. 167, it is said that a failure to insure is not necessarily such negligence as, in case of loss, will render the personal representative liable for its value, but the liability for such failure is a question to be determined from the facts of each particular case; the cost of insurance, value of the property, its liability to destruction by TAXES AND IXSI'ltAXCK. j 1 fire, and whether or not the representative has monev in his hands that could be used for the purpose, are the cardinal elements to be considered. Where the property is already insured the failure of the executor to lake out a vacancy permit on its becoming unoccu- pied is such negligence in the care of the properly as will make him liable for the injury resulting therefrom. Trustees who Tailed to keep alive policies of life insurance have been held liable to the beneficiaries. Garner v. Moore, 24 L.J. Ch. 687; but only if they have funds in hand, or can procure funds to pay the premiums. Hobday v. Peters, 28 Bear. 603, 126 R. E. 262. A trustee insuring trust property and receiving rebates from the insurance company with whom he effects the risk, has no right to appropriate these rebates to his own use; and this notwithstanding that t he estate is not charged with more than it would have I ia< I to pay it' the rebates had not been allowed to the trustee. In re Wilson and Toronto General Trusts Corporation (1908), 15 0. L. R. 614. Premiums paid for insurance on personal property will be allowed as a disbursement for the protection and preservation of the estate. Comwell v. Deck 2 Redf. (X.Y.), 87. "I do not think the tenant for life is bound to keep the furniture insured; in point of fact she lias no interest in the furniture except to us,- it. If she does nol insure the furniture and it be burnt, she can no longer enjoy it; but I think she, as executrix and trustee, ought to insure it at the expense and for the benefit of the estate: that is because the furniture belongs, subject to the tenancy for life, to the estate." Per North. .!., In re Betty (1899), 1 Ch. 821 829 72 executors' accounts. CHAPTER XVI. Household Expenses. Executors must be allowed a reasonable time for breaking up the testator's domestic establishment and discharging- his servants. In Field v. Peclcett, 29 Bear. o76; 131 R. R. 721, the matter was discussed by the Master of the Rolls. In that case the testator left a large estate and had twenty-one servants. The house- hold establishment Avas continued for two months and an expense of 402 pounds incurred. Sir John Romilly said: "With reference to the housekeeping it is a very trifling matter, and I will mention to what extent I think it is to be allowed. There can be no question that some little time must be allowed to executors to look about them and to consider what is to be done. An executor is not, the moment he hears that his testator is dead, to discharge all the servants, by giving them a month's wages, but he must be allowed some reasonable time for that purpose, and the only question really is, whether it was necessary to keep them there for two months, because, before that time, and prob- ably in the course of a fortnight or three weeks, he would have known how many servants were required, and their board would not have been the same, though their wages might have been. The expense of house- keeping for the two months was a considerable amount, and it' all the servants were not really required, he might have discharged those who were not required upon giving them a month's wages, and have thus saved the expense of their board." In the event the whole sum was allowed the executors. hi this connection it may be proper to refer to the widow's right to quarantine, which is thus.stated in an old authority: — "Quarantine is where a man dyeth seized of a manor-place and other lands, whereof the wife oughl to be endowed; then the woman may abide HOTSKHOLl) KXI'KXSES. i '■', in the manor place and there live <>i' the store and profits thereof the space of forty days, within which time her dower shall he assigned." In re Bennett, 1 1 ('. L. T. 305. See also see. 2 of The Dower Act. It is a right to reside in the dwelling house con- currently with the heir, and to receive her reasonable maintenance during forty days after her husband's death ; but she is not entitled to possess any portion of tin 1 premises beyond the dwelling house. Callaghan v. Callaghan, 1 C. P. 348. Quarantine is not merely a personal right. The widow is entitled to have a reasonable and proper attendance and companionship. But if the widow marry within the forty days she loses her quarantine. Lucas v. Knox, 3 0. K. 453. But she cannot assign her right. Norton v. Norton, 94 Ala. 481: and her privi- lege dies with her. ( 'lancy v. Stephens, 92 Ala. o77. On the administration of an estate the widow claimed to be relieved from accounting for certain quantities of wheat, potatoes, pork, apples, pickles, preserves and firewood — all of the value of $31.58 used by her for her maintenance on the farm of the testator during the forty days, and it was held she was not chargeable therewith. Re Bennett, supra. Where a farm was devised to the widow for life, and at the time of the testator's death a quantity of grain was sown in the ground, it was held that the widow and not the executors was entitled to the crops. Cudney \. Cudney, _1 Gr. 153. In dealing with the question of assets, ante, it was pointed out that the widow has a statutory title to her husband's exemptions; and under Funeral Expenses the decisions relating to the expenses incurred for mourning are considered. Where a w Ldow is entitled to dower out of the lands of her deceased husband the personal representative has power to compromise the same for a cash sum under section ol' of The Trustee Act. Re Mclntyre (1904), 7 0. 1.. R. 548. 74 executors' accounts. In general, the right extends only to the house and land of which the widow is dowable. Callahan v. Nel- son, 128 Ala. 671; and in which the deceased died at the time of his death. King v. King, 155 Mo. 406 ; but it is not necessary that the widow should have resided in the mansion-house at the time of her husband's death, King v. King, supra. Where a portion of a building was rented as a store and the remainder occu- pied as a dwelling, it was held the widow was not entitled to remain in possession of the rented portion. Davis v. Lowden, 56 N. J. Eq. 126. Nor does the privi- lege extend to mortgaged premises as against the claim of the mortgagee. Young v. Estes, 59 Me. 441. It has been held that if the executor or administra- tor rents the premises which is subject to the widow's quarantine, she is entitled to the rents and profits for the period she is entitled to the occupation thereof. Reeves v. Brooks, 80 Ala. 26; Orrich v. Pratt, 34 Mo. 226; Conger v. Attwood, 28 Ohio St. 134. CHAPTER XVII. Tombstone. "Upon the general question whether an executor procuring a gravestone or slab to the memory of his testator, suitable to his degree and estate, can charge the same against his estate, I do not think there can be much doubt. The charges attending a funeral are allowed to an executor (except as against creditors) even where the expenses are considerable, provided they are suitable to the degree and estate of the deceased, and they are allowed, not as being necessary, but because they are so suitable. They are sanctioned as customary marks of respect, as proper to be allowed, because they are so; and it does appear to me that the TOMBSTONE. i ■) principle upon which such expenses are allowed applies with still more force and with better reason to an expense incurred, if not immoderate, tor a permanent memorial of the deceased. Xot only is it usual and considered a proper mark of respect, and its omission in some decree a reproach to survivors, but it is useful as marking the place of burial and as furnishing evi- dence of pedigree. But if it be proper and usual, that I conceive is sufficient to authorize an executor in incurring the expense, and therefore in being allowed for it out of the estate. In Roger's Ecclesiastical Law, citing 3 Inst. 102, it is said 'concerning the building or erection of tombs, sepulchres or monuments for the deceased in church, chancel, common chapel, or church- yard, it is lawful, for it is the last act of charity that can be done for the deceased;' and in 2nd Comyn's Digest, under the head 'tomb, monument, etc..' it is said, 'So an heir or executor may erect or set up a tombstone or other monument in a convenient place within the church or churchyard, for the honour of his ancestor there buried:' " Per Spragge, C, Menzies v. Ridley, 2 Gr. 544. "The remaining item is the charge for a grave- stone. No creditors intervene. Such an expense was allowed in Menzies v. Ridley, as a charge attending a funeral, not as necessary, but as suitable, as a custom- ary mark of respect, and proper to be allowed, because it is so. The whole reasoning in that case proceeds on the ground of their being properly funeral expen- s, and not merely charges against the estate, which will be allowed to an executor in passing his accounts. See Wood v. Vanderburg, 6 Paige R. 277, 288." Per Proudfoot, V. C., Smith v. Rose, 24 Gr. 440. A testator provided for "a suitable tablet" over his grave "nol to exceed $1,500," and also for tablets or stones over the graves of his deceased wives, with no limit as to the costs of these. He died worth $200,000, and the executors removed the remains of the deceased's three wives to the same burial place as that of the testator and built one monument in respect of 76 executors' accounts. the whole four at a cost of $3,000. Held, not an im- proper expenditure. Archer v. Severn, 13 0. R. 316. In Sinnott v. Kenaday, 14 App. Cas. 1 (D.C.), $575 for a tombstone out of an estate of $36,000 going to collateral heirs was upheld as reasonable. In Conivay's Estate, 10 Pa. Dist. 509, $700 out of an estate of $25,000 going to collateral heirs, was held not to be an extravagant allowance. But $1,050 for a monument and the expenses inci- dental thereto, where the value of the estate was only $2,500, Avas held to be unreasonable. Matter of Smith, 75 X. Y. App. Div. 339 ; 78 N. Y. S. 130. By the will the executor was directed to erect cer- tain tombstones over the graves of the deceased and certain members of his family. He also made several bequests of specific legacies. To have carried out the direction as to the tombstones would have exhausted the estate and left an insufficient amount to pay the legacies. Held, that as the direction to erect the tomb- stones if carried out would probably exhaust the estate and prevent the executor paying any legacies, and as none of the next of kin insisted on such direction being carried out, the executor might disregard such direc- tion. In re Thomas L. Carley, deceased, 4 S. L. R. 280. In two American Courts it has been held that where the widow of the deceased ordered and paid for a tombstone, if the claim is reasonable and one which the administrator could have contracted, she was en- titled to be subrogated to the right against the estate of the person who furnished the monument. Pease v. Christman, 158 Ind. 642; Hoctor v. Lavery, 51 X. Y. App. Div. 74 : REPAIRS AND IMPROVEMENTS. | i CHAPTER XVIII. Repairs and Improvements. It is difficult to say just how far an executor or administrator is justified in expending money in repairs to the trust property. Unless there is express provision in the will it is clear he is not justified in making extensive repairs without the direction of the Court. He is hound to see that trust premises do noi fall into decay for want of repair. But when the property has fallen into bad repair, the question will of course arise whether it is worth while to do the repairs. Where it is a question between a tenant for life and remainderman, the latter is not entitled to throw the burthen of the repairs on the tenant for life by paying for them out of the rents. In re Hotchkys, 32 Ch. D. 408. Where trustees were authorized to make repairs to the dwelling house it was held they were to keep it in habitable state, but not to make ornamental repairs. Maclaren v. Stainton, cited Lewin on Trusts, 8th ed.. 576. And a power to repair does not give authority to rebuild. Bleazard v. Whalley, 2 Eq. Rep. 1093. Where the mansion-house burned down and the trustee applied a Large sum, in addition to the insur- ance monies, in restoring it, the Court held it had no power to order a sale or mortgage to recoup the trustee: but it appearing that the estate had benefited to the full amount of certain funds in Court, which had arisen from a sale of a part of the settled estate-. Kay, J., sanctioned the application of those funds towards recouping the trustee, on the ground that the trustee having bona fide expended money for building on the estate, under a reasonable expectation that the Court would sanction the expenditure, and having improved the estate to the full amount of the funds in 78 executors' accounts. Court, might be recouped the amount so expended. Jesse v. Lloyd, 48 L. T. N. S. 656. If the trust be to make repairs out of rents, and the trustees borrow money to make the repairs, and then repay themselves out of the rents, they will not be allowed the interest on the money borrowed, for the trust was to apply the rents after they had accrued. Fasakerley v. Culshaw, 19 W. R. 793. That it is not always safe to anticipate the protec- tion of the Court in making expenditures is shewn by Vyse v. Foster, L. R. 8 Ch. App. 309. There the testa- tor devised his estate upon trust for sale. His execu- tors were advised that a few acres might be sold more advantageously if their value was developed by build- ing a villa thereon. They accordingly built one at a cost of £1,600. On passing the accounts, Bacon, V.C., disallowed the expenditure, but on appeal it was held that, as the executors had, in the bona fide exercise of their judgment, expended this sum in improving the estate, they could, at most, only be disallowed the amount of loss (if any) occasioned to the estate by the expenditure. In an earlier case a trustee was allowed for sub- stantial improvements if the property sold for the original price, plus the costs of improvements. In Ex p. Hughes, 6 Yes. 617; 6 R. R. 1. In Bevis v. Boulton, 7 Gr. 39, it was held that where a trustee expends his money, and thereby increases the value of the estate, it would be inequitable to wrest it Prom him without re-paying the expenditure by which the estate has been substantially improved. The widow of an intestate obtained letters of administration and remained in possession of the farm. Prom the rents and profits she spent a considerable sum in improvements on the farm. Spragge, V. C. : "The only point debated at the hearing was the plain- tiff's claim for improvements. For the claim Bevis v. Boulton was cited: but that case, and the cases upon the authority of which it was decided, were cases in which the question was, niton what terms the Court REPAIRS AM) IMI'KOVK.MKXTs. 7i) would deprive parlies defendants of Hie land upon wlm ' 1 ' ,n, '. v h ad made improvements, j,, favour of an equity established by the plaintiff, and are not author- ities for a direct claim for improvements in the shape in which il is made by the bill." And the widow was not allowed for the improvements. Barrv v Brazill 11 Gr. 253. An executrix, who had an annuity charged on the income of the testator's real and personal estate, ex- pended money in good faith in improving the real estate, and in other unauthorized ways, and was in consequence found indebted to the estate. It was held that the expenditure in improvements should be allowed in reduction of her indebtedness, so far as the expenditure had enhanced the value of the estate and benefited those interested in it. Morley v. Matthews, 14 Gr. 551. See also Smith v. Bonnisteel, 1.'] Gr. at p' 35, where the same limited relief was given. A tenant for life is not liable to repair, whether he be without impeachment of waste, or impeachable for waste. Lansdowne v. Lansdowne, i J. & W 522- Re Cartwright, 41 Ch. D. 532. On the other hand, 'the life-tenant is not entitled to have repairs done at the expense of the estate. Brunskill v. Caird, L. K. 16 Eq 493; nor is he entitled to a charge on the estate for re- pairs done by himself. Earner v. Tilsey, Joh. 486. And it makes no difference from what cause the repairs are made accessary, or whether they are rendered neces- sary during the life tenancy or by dilapidations exist- ing at the time the life tenant comes to his estate Hibbert v. Cooke, 1 Sim. & St. 552: Re De Teissier (1893), 1 Ch. L53. Wl "' n tlu ' estate is managed by trusters, ordinary currenl repairs are paid out of income; hut if substan- tia] repairs are necessary for the preservation of the Property, the Court will, on the application of the trustees, allow the cosl to be raised out of capital. Re Hotchkys, 32 Ch. D. 408, 415. In In re Freman (1898), 1 Ch. 28, trustees applied to the Court to determine how the costs of repairs 80 executors' accounts. ought to be borne, the property being an estate occu- pied by a life tenant. North, J., said : ' ' Then there is the question, what is to be done about the repairs? "What was pointed out in In re Hotchkys as the right thing to be done is the right thing to be done here. The property ought to be kept in repair. As was pointed out there, it must be done by an equitable arrangement between the tenant for life and remain- derman. I think the right thing to do in this case is this : That the money required for the repairs should be borne by capital : but of course the tenant for life will have to keep down the interest upon that capital. If the money is taken out of other personal estate, the tenant for life will get so much less income, because this investment will not produce income. If, on the other hand, the money is borrowed on mortgage for the purpose from some outside lender, the interest on the mortgage will have to be kept down by the income and the tenant for life will have his or her income reduced by the provision which will have to be made to keep down the interest on the mortgage. ' ' CHAPTER XIX. Miscellaneous Allowances. No rule can be laid down which will catalogue or classify the various kinds of expenditures which will be allowed an executor or administrator. Much will depend upon the nature of the estate and upon the character of the services for which the charge is made. Re Willard, L39 Cal. 501. Those actual and necessary expenses for which an executor must be reimbursed are those which arc contracted in good faith and with reasonable judgment, whether with or without the advice of counsel. Re Stanton, 41 Misc. (N.Y.) 278. MISCELLANEOUS ALLOWANCES. 81 ( Mi the other hand credit will not be allowed for any disbursements unless they are necessary or proper to protect the estate or carry out the provisions of the will. Johnson v. Henagan, 11 S. Car. 93. On this prin- ciple credit will not be allowed for the costs of remov- ing and renovating the tombstone of the deceased's parents. Brcmtz v. Brants, 52 Md. 686; or for disburse- ments on account of an appeal which was not for the protection or benefit of the estate, but which was prose- cuted by the administrator for his own benefit and to relieve himself from accounting for funds in his hands. McCleland v. Bristoiv, 9 Ind. App. 543. If expenses have been unnecessarily incurred, credit will not be refused for that reason alone. The right to credit in such cases depends on the good faitli and pru- dence of the executor, and the burden is on him to shew that he had good reason to believe at the time that the expenditures for which he claims credit were necessary for the benefit of the estate. Bobbins v. Wolcott, 27 Conn. 234. In Chisholm v. Bernard, 10 Gr. 479, a retaining fee paid to a solicitor was allowed, as it was not, in the circumstances of the case, an unreasonable disburse- ment for the executors to make in view of the trouble in administering the estate. In re Quin, 1 Connoly (N.Y.), 381, it was held that where executors refused a reasonable price tor land which they were directed by the will to sell, instead of selling it to the highest bidder as they should have done, they were not entitled to credit for the expenses of offering it Tor sale a second time, or for insurance and taxes accruing after the time when it was first offered for sale. Expenses incurred by one of the next of kin in hunting up the others, though at the suggestion of the administrator, are aol for the benefit of the estate, and therefore are not allowable as an expense of adminis- tration, In re Glynn, 57 Minn. 21 ; so too, fees paid by an executor to a survevor for designating the lines 82 executors' accounts. between parcels of land devised by metes and bounds will not be allowed. That is something that interests the devisees alone. McGougan v. Hall, 21 S. Car. 600. In California it was held that an administrator was not entitled to an allowance for expenditures in having an examination made of a mine, in which the estate held stock, for the purpose of ascertaining its value. In re Bell's Estate, 79 P. 358, 145 Cal. 646; nor was he entitled to - an allowance for money paid to a detective to watch the executors, who had been removed at his suit, because they had not turned over all the papers and he believed them dishonest. lb. The fact that the administrator is interested in the estate does not affect his right to credit for money necessarily expended in looking after the interest of the estate. Williams v. Pettier ew, 62 Mo. 460. But the costs of insuring individual property of the executor which is security for a debt due from him to the estate, cannot be allowed as an item of administration expense. Good's Estate, 150 Pa. St. 307. An administrator was allowed the cost of keeping a horse which could not be sold. Branham v. Com., 7 Marsh (Ky.), 190. But the expense of maintaining the deceased's favorite horse as long as he lived, such expense not being provided for by the will, was dis- allowed, though it was the request of the testator. Matter of Teijn, 2 Redf. (N.Y.) 306. Credit will be allowed for payments made to an auctioneer for his services in selling the property of the estate. Pinckard v. Pinckard, 24 Ala. 250: and to a broker in cases of sale requiring unusual exertion. Ballentine's Instate, Myr. Prob. (Cal.) 86. But not for money expended by the executor or administrator for ardenl spirits used at an auction sale of the goods of the deceased, though it was shewn to lie customary to furnish spirits on such occasions. Griswold v. Chand- ler, 5 \. 11.492. The proper expenses for necessary advertisements will be allowed the oxeeutor or administrator. Be Smith, 1 Misc. (N. Y. Suit. Ct.) 269. MISCELLANEOUS ALLOWANCES. 83 I" New York it was held thai where an executor removes from the State after undertaking the duties ol ins office, and afterwards comes into the Stat.- on the business of the estate, he is nol entitled to credit for the t'.tyell,,,- expenses so incurred. Marsh v. Gilbert 2 Redf. 466 ^ZePunn, 8 N.Y.St. Rep. 766 ; Re Ingersoll, 6 Dem. 184. Bui in Emts v. Everts, 62 Barb. (N V ) it was held thai travelling expenses, including hoard, should be aUowed to a non-resident executor who necessarily came into the State to prove the will. An executor is entitled to credit for travelling expenses necessarily incurred in taking a journey to be examined as a witness in a suit brought by him to fore- close a mortgage held by the estate. Elliot v Lewis 3Edw. Ch. (N.Y.) 40. Unnecessary travelling expenses, as where nothing could he accomplished by the journey which could not have been done by correspondence, will not be allowed In re Barber, 1:2 X. Y. Supp. 538. Livery hills, when necessarily incurred and reason- able m amount, will be allowed as travelling expenses Re Ingersoll, supra. But the use of the' executor's horse and wagon will not be allowed for, because sound policy forbids that he should make any profit out of his dealings with the estate, and he would be subject to the temptation of making more frequent journeys than are necessary if he were paid for the use of his horse. Pullman v. Willets, 4 Dem. (N.Y.) 536. Office rent has been allowed as an expense of administration where ii was jusl and equitable, and Hi-' circumstances of the estate were such as to require it. Newell v. West, 14!) Mass. 520; Bronson v Bron- ;:"'• 4S How. Pr. (N.Y.) 481. In Maffet's Estate, 7 Klll l>- (Pa.) 1..:;, it was held proper for executors to em Ploy a superintendent and furnish him with an office, where the estate was large and was composed of lands, coal mines and stocks. The hire of a safe deposit bos in which to store the papers of the estate is an expense incident to the per- formance of the duty of an executor to care for the 84 executors' accounts. property of the deceased. Hart son v. Eldon, 58 N.J. Eq. 478." In Meeker v. Crawford, 5 Redf. (N.Y.) 450, the estate amounted to more than a million dollars, in- vested in various securities, and it was held that the employment of a clerk at $600 a year was calculated to be beneficial to the estate, and that the amount paid should be allowed as a reasonable charge. But the fact that the executors are busy men and have not as much time to give to the management of the estate as other individuals, cannot be permitted to affect the rule that executors must perform, within reasonable limits, the actual manual labour requisite to the due execution of the trust ; nor can such rule be affected by the fact that the executors in employing a book-keeper and fixing his compensation acted precisely as they would have done in the management of their own affairs. Re Harbeck, 81 Hun. (N.Y.) 26. An executor, in finishing the growing crops of the deceased, is not personally bound to discharge the duties of an overseer, but he may employ and pay out of the assets in his hands the necessary costs of an overseer as may be necessary for the completion and preservation of the crops. Lee v. Lee, 6 Gill & J. (Md.) 316; Sal 1 1 ran v. Tuck, 1 Md. Ch. 65. Vindication of the deceased's character is not a matter in regard to which the administrator may employ counsel at the expense of the estate. Woodard v. Woodard, .'!(» S. Car. 118. Nor will allowance be made for fees paid to counsel to prosecute a person charged with the murder of the deceased. Luslc v. Anderson, 1 Mete. (Ky.) 429. Executors were allowed the amount paid by them on a mortgage on which the testator was not personally liable, notwithstanding that the property was finally lost to the estate and it received no benefits from the payments, where al the lime of the payments it was held under an executory contract of sale, and the exe- cutors were justified in believing that the purchaser would fulfil his covenant, in which case the payments BIGHT OF RETAINER. 85 would have benefited the estate. Re Horsford, 27 App. Div. 427, 50 X. V. Supp. 550. An executor retained in his hands funds thai be might have distributed among the legatees. On the accounting it was contended he was not entitled to credit for income taxes paid on such funds. The Court, however, allowed the payments since it was presumed the funds would have been assessed to the legatees in their hands. In re Sudds, 66 X. V. S. 231. If a testamentary scheme of distribution involves the keeping- of numerous complicated accounts, and extending over a considerable period, the administra- tor will be allowed the expense of a bookkeeper. Merritt v. Merritt, 161 X. Y. 634. Money expended by a successful party in an action as to who should administer the estate camiot be allowed as a charge against the estate, as such action is personal between the two litigants. Cate v. Cate (Ch. App.), 43 S. W. 365. CHAPTER XX. Right of Retainer. In England an executor may pay one of several creditors of equal degree in preference to the others. So it is his privilege to retain for his own debt due to him from the deceased, in preference to all other credi- tors of equal degree. Tliis is usually referred to as an executor's right of retainer. By section 53 of our Trustee Act, in case of deficiency of assets, all debts are to rank pari passu, including debts to the personal representative of the deceased. \n Clark v. Chamber- lain, 1 O. R. L35; 9 A. R. 27:'.. it was held that the effect of this section is to disable an executor from giving a preference to one creditor ^vw another, so that if he 86 executors' accounts. pays one in full, the presumption is that he has suffi- cient funds to pay all the creditors in full. In Willis v. Willis, 20 Gr. 396, the executor had paid out more than had come to his hands, and claimed to be reimbursed, but it was held that he could not by paying off creditors create a demand in his own favour that would give him a right of retainer in priority to other creditors, and that he was only entitled to be paid pro rata. See also Re Ross, 29 Gr. 385. As an executor or administrator is not bound to set up the Statute of Limitations as a defence, it should seem that he may retain a debt due to himself though it may be more than six years old. Stahlschmidt v. Lett, 1 Sm. & G. 415 ; In re Ackerman, L. K. (1891), 3 Ch. 212. But as against an executor claiming as a creditor, another creditor has the right to set up the Statute of Limitations. Re Ross, 29 Gr. p. 391. An executor or administrator cannot, however, retain a debt due to himself if it is such as he is pre- vented from enforcing by reason of the Statute of Frauds. Re Roivnson, 29 Ch. D. 358. The phrase "right of retainer" is sometimes used to denote the right which an executor or administrator has of retaining out of the share of a beneficiary a debt due by such beneficiary to the estate. This right is not one of "set-off" or "retainer" in the proper sense of these terms, but it is, viewed from the side of the bene- ficiary, his right to receive payment of the legacy, hav- ing regard to the amount of the debt due the testator's estate; and viewed on the side of the executor, his right to be paid out of the fund in hand. Tillie v. Springer, 21 o. R. 585, 588. This right does not depend on the right of prefer- ence, and therefore lias not been abolished by the pro- visions oi* The Trustee Act. The Devolution of Estates Ad has rather enlarged it so that the executor ••an retain out of the proceeds of land. Tillie v. Springer, supra. Whether it would apply to the case of a specific devise is doubtful. In England it lias been held not to apply. See Re Taylor, 1894, 1 Ch. 671. In LEGA< II.S ami ANN CITIES. 87 Ontario the doubl arises on the effect of The Devolution of Instates Act, which vests all the estate in the execu- tor or administrator, and in this resped is different from the English law. In the converse case, the benefit taken by a default- ing executor under a will can be retained to make good his default, whether that benefit came to him by ori- ginal or derivative title. A testator appointed D. one of his executors, and gave a legacy of £2,000 to D.'s wife. The wife died without having been paid her legacy, and I), was her sole executor and legatee. On D.'s death it was found he had appropriated £215 of the testator's estate. It was held the surviving executor was entitled to retain the £215 from the wife's legacy. In re Dacre, Whitaker v. Dacre (1915), 2 Ch. 480. ' CHAPTER XXI. Legacies and Annuities. For the convenience of the executor, in order that he may ascertain the debts and assets of- the testator, he has one year from the death of the testator in which to pay legacies. An executor cannot be compelled to pay a legacy before the expiration of the year, notwith standing a direction in the will that payment should be made sooner. There is, however, no rule which pre- vents an executor, if he thinks proper, paying legacies or handing over the residue within the period of one year. Pearson v. Pearson, 1 Sch. & Lef. 12; Gartshore v. Chalie, 10 Ves. 13; Re Holland (1902), ;; O. L. H. 406. A bequesl of an annuity, unless otherwise directed, commences from the death of the testator, and the first payment is paid at the end of the year from the testator's death. Gibson v. Bott, 7 Ves. 89. 96. 88 EXECUTORS ACCOUNTS. Where the annuity is payable monthly, the first payment is made at the end of a month after the tes- tator's death. Houghton v. Franklin, 1 S. & S. 390. But where an annuity was directed to be paid quarterly, the first payment to be made within eighteen months after the testator's death, it was held the an- nuity did not commence till fifteen months from the death of the testator. Irvin v. Ironmonger, 2 R. & My. 531. Where the will directs an annuity to be purchased, the annuitant has a right to take its value in cash, in- stead of the annual sum, and should he die before the annuity is purchased his legal representatives are entitled to the sum which at his death would have pur- chased the annuity. In re Ross (1900), 1 Ch. 162; Re Robbins (1906), 2 Ch. 648. This is on the ground that the annuity is in the nature of a legacy and becomes vested at the death of the testator, and the subsequent death of the annuitant is immaterial. Bagleg v. Bishop, !) Ves. 6; Yates v. Campion, 2 P. Wins. 308; Barnes v. Bowleg, 3 Ves. 305. Where the testator directed his executors to invest in good securities such sum as would pay a certain annuity, and the income of the fund was insufficient to pay the annuity, it was held that the annuitant was entitled to be paid the deficiency out of the corpus or capital. Anderson v. Dougall, 15 Gr. 405. Under the Apportionment Act (R. S. O. 1914, ch. 156), moneys payable as annuities are considered as accruing from day to day and are apportioned in re- spect of time accordingly. Sec. 4. And see Cuthbert v. North American Life Assurance Co., 24 O. R. 511. A statutory guardian is entitled to the possession of all the property in which the infant is interested, and for which by law, or express contract, or other provision, no other custody has been provided. Such a guardian is entitled to receive legacies given to infant legatees, and presently payable, and the receipt of flic guardian is a good discharge to the executor. Hug- gins v. Law, 14 A. R. 383. LEGACIES AX I) ANNUITIES. 89 But where the legacies are not to be paid to the infants until they attain their majority the rule does not apply, because thai is a cleat- indication thai the executor was the party intended by the testator to act as trustee for the infants until they attained that age. lb. 385; Galbraith v. Buncombe, 28 (Jr. 27. A guardian appointed by a foreign Court lias no right to receive such legacies, even though the infants are residing within the jurisdiction of the country where the guardian is appointed. In such case the money should he paid into Court and not to the foreign guardian. Flanders v. D' Evelyn, 4 ( ). R. 704; Re Lloyd (1914), 31 0. L. R. 476. In re Sinclair. Allan v. Sinclair (1897), 1 Ch. 921, the question to be determined was, what are the rights of an annuitant in the case of a deficiency of assets to meet the annuity. In Seton on Judgments, 5th ed., 1384, it is laid down: "Where assets are deficient an annuity should be valued, and abate proportionately, and the apportionment belongs to the annuitant abso- lutely; Wrought on v. Colquhoun, 1 D. G. & Sm. 357, unless given subject to condition: Carr v. Ingleby, 1 D. G. & Sm. 362." In the present case the annuity in question was given to the annuitant for life "or until the annuitant should do or suffer some act or thing whereby, or by means whereof , the said annuity, or any part thereof, if belonging to him absolutely, would become vested in or payable to some other person or persons, whichever should be the shorter period." The fund out of which the annuity was payable was defi- cient, and the annuity had been valued, and the amount of the valuation was represented by a sum in Court. The annuitant applied for payment out of the fund to him. Kekewich, J., with some hesitation made the order, refusing to follow Carr v. Ingleby, supra. It is to be noted thai although the annuity was given until the happening of the evenl above mentioned, yet there was no gift oxer, and the covenantor's estate could have no claim on the fund. These circumstances appear to have weighed with the Court. 90 executors' accounts. AVhere an annuity is charged upon both income and capital, and the income for any one year is insufficient to pay the annuity for that year, the capital cannot afterwards be recouped for the deficiency out of the surplus income of any subsequent year. In re Croxon, Ferrers v. Croxton, (1915), 2 Ch. 290. It is not necessary in all cases that pecuniary legacies or distributive shares should be paid in cash. Any mode of payment may be adopted with the consent of the legatee or heir. This is the general rule in regard to what constitutes payment. Thus the invest- ment of money in the name of a legatee has been held a payment of the legacy, pro tanto, so as to vest the title in him and pass to him the right to the accruing interest. Sullivan v. Winthrop, 1 Sumn. (U.S.) 1. So, too, a credit on a distributive share of the price of property purchased by the distributee at the adminis- trator's sale is a valid payment. Wilson v. Randall, 37 Ala. 74: In re Beverley .(1901), 1 Ch. 681: Re Hall, 87 L. T. X. S. 560, \Y. N. (1902) 208, reversed on other grounds (1903), 2 Ch. 226. On the other hand it has been held that a distribu- tive share was not paid merely by purchasing a bank draft for the amount and sending it to the party entitled, who proceeded with due diligence to collect it, but the bank failed in the meantime and the draft was not paid. State v. Wagers, 47 Mo. App. 431 ; or by the deposit of the amount of the share in a hank without notice to or the assent of the party entitled. Scot I v. Fox, 14 Md. 388. In Burling v. Neigh, L5 S. & R. (Pa.) 114, it was held thai the personal responsibility of the executor was not substituted for that of the estate by the giving (.!' the executor's notes for the legacy and the execution of a receipt for the notes as in full of all demands againsl the estate "when paid." And the individual note of an administrator to the guardian of an infant for the amount of the infant's distributive share, payable to the guardian individu- ally, cannot lie claimed as a payment of such share. Edwards v. Williams, 39 S. Car." 86. LEGACIES AND ANNUITIES. '• • 1 Where a testator takes shares in a company and specifically bequeaths such shares before they are frilly paid up, any payments remaining due at or becoming due after his death, which arc necessary to constitute him a complete shareholder, must be borne by his general estate; but if he was a complete shareholder at the time of his death, payment of calls made after- wards must be borne by the specific legatee. Day v. Bay, 1 Dr. & Sm. 261, 127 R. E. 92. Where an executor receives notice that a legatee has charged his legacy in favour of a stranger, or lias assigned it for value, the executor is bound to with- hold all further payments to the legatee, unless made with the consent of the mortgagee or assignee of the legacy. All rights of set-off and adjustment of equi- ties between the executor already existing at the date of the notice have priority over the charge or assign- ment, and may properly be deducted from the amount of the legacy; but the executor can create no new charge or right of set-off after that time. Stephens v. V enables, 30 Beav. 625, 132 R. R. 442. Abatement of Legacies. If the estate is insufficient to pay the debts and all the legacies in full, the general legacies must abate in equal proportions. If there are specific and general legacies, generally speaking, nothing shall in such cases be abated from the specific legacies. Where a legacy is given to an executor expressly as a compensation for his trouble, and there is a defi- ciency of assets, such a legacy does not abate with legacies which are mere bounties, even though the legacy somewhat exceeds what the executor would otherwise be entitled to demand. Anderson v. Dougall, i:» Gr. 40."); Hellem v. Severs, 24 Gr. 320. So a legacy given to a widow for the relinquishment of her dower. Heath v. Bendy, 1 Buss. 543; Norcott v. Gordon, 14 Sim. 258; Becker v. Hammond, L2 Gr. 485. The widow is treated as a purchaser of the legacy in giving up her dowel', but that is hardly satisfactory as 92 executors' accounts. a reason. There is really no other. In re Wedmore (1907), 2 Ch. 277 ; Davies v. Bush, 3 Younge, 341. See however the judgment of Middleton, J., in Re Bispin, post, where he says it is based upon the doctrine of election. But the right or interest must be subsisting at the time of the testator's death, and if there is no dower to be satisfied, the legacy will abate. Davenhill v. Fletcher, 1 Amb. 244; Davies v. Bush, supra: In re Greenwood (1892), 2 Ch. 295. In both Williams and Theobald it is stated that legacies given in payment of debts do not abate with legacies given to mere volunteers. In the recent case of In re Wedmore, supra, Kekewich, J., seems to doubt that the cases relied on by these learned authors extend the rule to debts, and expressly decides that it did not extend to an ascertained debt. ' ' I have already referred to the case of Davies v. Bush as the only one that purports to extend it, but when you look into that decision it does not go so far. Lord Lyndhurst does not decide the point, and he expresses the opinion in language which entirely relieves me from treating it as a binding authority here. There the legacy was given in release of a right of account. There had been an account between the testator and a legatee, and the Court was satisfied that it was not worth while taking the account because nothing was due to the legatee, whose case fell through for that reason; and the Lord Chief Baron says : 'If no debt was due, and the release was required merely for the sake of peace, then, un- questionably, the legatee cannot be treated as a pur- chaser.' That is exactly on the same lines as the deci- sion of Chitty, J., in In re Greenwood. And he goes on : 'If any debt were really due, then I am inclined to think that the present comes within the principle of those cases which have been decided.' He does not decide that it was; he only expresses an indication of his opinion. TTow can I bring a ease of this kind within the rule .' This is a legacy in satisfaction of an ascer- tained debt. There is no doubt that in one sense the LEGACIES AND ANNUITIES. !).'} legatee may be considered a purchaser, [f he elects to take under the will, he gives up the debt and takes the legacy, but still it is not at all like the case of a legatee taking a legacy in lien of a righl to dower out of Land. We know precisely what the debt was— it was el,000. We also know precisely what the legacy was— it was £3,000, payable to the same person; but it seems to my mind impossible to apply to that state of circum- stances the considerations which apply to a case of dower. The legatee elects to take the larger sum and gives up the debt, and taking the larger sum the legatee takes it by way of bounty. She says, in effect, 'Rather than insist upon my covenant I will accept the testa- tor's bounty.' I cannot see myself how legacies accepted in that way differ in any way from other gen- eral legacies which are mere bounties. In saying that I have practically decided a by-point which must not be overlooked, as it Avas argued, namely, that the legatee must be considered to have taken the £1,000 as debt and £2,000 only as bounty; but that distinction cannot be upheld. The debt was gone in exchange for the legacy, and the legatee takes the whole £3,000 as a legacy. The result is, no doubt, that she loses some- thing out of the debt of £1,000. She might have avoided that by electing to claim against the will, but she claims under the will, and she takes the whole legacy subject to the usual rules of administration which affect all legacies." The same point came before our own Courts recently in Re Rispin (1914), 6 0. W. X. 669. The testator gave a number of pecuniary legacies, one being a legacy of $1,500 to Dr. T.. who had been attend- ing him during his last illness. This legacy was to be taken in satisfaction of the doctor's bill against the testator, which amounted to $300. The estate proved insufficient to pay all the legacies in full. The Surro- gate Judge declined to follow In re W( dmore, deeming it to be in conflict with the principles enunciated in a number of earlier cases. On appeal, Middleton, J., reversed the judgment of the Surrogate Judge. "With 94 executors' accounts. all respect to those who entertain the contrary view, the decision in question commends itself to me. The law by which a legacy to a widow in lieu of dower is entitled to priority is now too well settled to admit of question. It is in truth based upon the doctrine of election. The testator desiring to dispose of property which is not his, namely, his wife's dower interest, in effect offers her a price which he is willing to pay for it. Before those claiming under his will can take a benefit under his will which deals with this proper ty sought to be purchased from the widow, they must pay the price. "This has no application whatever to the case of a creditor. The testator is not purchasing anything from him ; and, although his failure to rank as a credi- tor may benefit the legatees, it cannot be said that any assets pass from him to the testator or his estate. He takes the legacy by the bounty of the testator. The testator has chosen to limit his bounty by directing that it is conditional upon the creditor waiving his claim as creditor. The bounty is so much the less, because part of the money received in truth repre- sents a debt. The creditor should have the right, and no doubt has the right, to decline to receive the legacy upon these terms. He could then assert his claim, but I can conceive no foundation for the statement that because a debt, which may be trivial in amount, has to be forgiven as a condition of the receipt of the legacy, the legatee, therefore, acquires priority." Re Rispin was affirmed 7 0. W. X. 507. Riddell, J., delivering the judgment of the full Court, said it was suggested that probably the right decision would be to allow the appellant the amount of his bill in full and let him share pro rata for the balance; but that course is negatived in In re Wedmore. Near relationship, or that a man is morally bound to provide for his widow and children, does not of itself give to such a legatee priority over mere strang- ers, if 11i<' estate is insufficient to pay all the legacies in full. Re Schweder's Estate (1891 ), 3 Ch. 44. LEGACIES AND ANNUITIES. 95 A pecuniary legacy and a provision for mainten- ance abate rateably. Cook v. Noble, L2 0. R. 81. So a pecuniary legacy and an annuity not payable oul of corpus. Wilson v. Dalton, 22 (Jr. 160. A preferential legatee, even though the legatee be considered a purchaser, is not entitled to payment until after all the debts are satisfied. Re Lawley (1902), 2 Ch. 799, 808. Prima facie, all genera] bequests are upon an equal footing, and those who claim priority of payment in full, in case of deficiency of assets, must positively and clearly establish that it was the intention of the testa- tot- that the bequests should not abate rateably. This is in substance the test supplied by Knight-Bruce, V.C., in Thwaites v. Foreman, 1 Coll. C. C. 414. In re Battershall, 10 0. W. R. 933, the testator gave a num- ber of specific legacies, and added: "The above lega- cies to be paid in full one year after my decease." He then gave other specific legacies without any direction as to payment. Boyd, C, held that this indicated a clear intention that the preceding legacies should not a hate. "The words 'in full' cannot be explained away, and express a manifest intention to provide for the payment in full of these legacies." See Marsh v. Evans, 1 P. Wms. 668 - r Johnson v. Johnson 14 Sim 313. I \ti;i;kst ox LEGACIES. It is a general rule that interest is not payable on a legacy, whether vested or not. until it is actually due and payable; interest is given for delay in payment EeScadding (1902), 40. L. R. p. 638. A legacy bequeathed generally, without assigning any tune for payment, hears interesl only from a year after the death of the testator, though the fund out of which it is to he paid is yielding interest. And it' the executor has assets, pecuniary legacies bear interest lrom tll(1 expiration of the year, although the ass< have not been productive. Pearson v. Pearson, 1 Sch. & Let'. 10; Toomey v. Tracey, 4 0. R. p. 711. 96 executors' accounts. A legacy to a person in his capacity of executor is not due unless lie accepts the office and duties of an executor. If the legatee should be an infant, as he cannot accept office until he is of age, it follows that a legacy to an infant as executor does not carry interest until he is twenty-one. Re Gardner (1892), 67 L. T. 552. Legacies were given to grandchildren when they attained twenty-one, but subject to a widow's life inter- est. Both the grandchildren attained the age of twenty-one before the death of the widow and it was held that the legatees were entitled to interest only from the death of the widow, because until her death the legacy was not payable. Be Scadding (1902), 4 0. L. R. 632. Where a legacy was directed to be paid out of the proceeds of land which was to be sold at any time within two years after the death of the testator, and the land was not sold within the two years, it was held the legacy bore interest from the expiration of the two years. If the land had been sold before the two years, interest would have run from the date of the sale. Re Robinson, McDonnell v. Robinson, 22 0. R. 438; M'Mylor v. Lynch, 24 0. R. 639. But where the whole estate is to be converted into money, the proceeds invested and such investments continued until the whole property is realized; and from and out of the fund so realized and invested cer- tain legacies are to be paid, the legatees are not en- titled to interest until the whole is realized. But the period is not to be extended beyond the time when the realization might, with due diligence, be effected. S n/ /Hi v. Sen I on, 17 (Jr. 397. A testator gave legacies to his daughters "to be paid in seven years from the date hereof." He lived more than seven years after the date of the will. It was held the legatees were only entitled to interest as in an ordinary case Miller v. Miller, 2.") Gr. 224. And sec lie Scadding. ante. LEGACIES AXD ANNUITIES. !)7 An exception to the rule that interest is not payable <"' a legacy until the legacy is due and payable, is in the case of a legacy given to an infant child of the testator and no other means of maintenance is pro- Tided. A testator bequeathed to his two infant sons $4 000 each, contingent upon their attaining 25 years of a°-e- the only other provision for them was a gift to each^ a share of the residuary estate. Held, that these lega- cies carried interest from the deatli of the testator. ^Mclvtyre (1904), 7 0. I, E. 548; (1905), 9 O. L. R. 408. G he well settled rule is thai whore a legacy is given to a minor by a parent or by a person in loco parentis payable at a future period, if no other pro vision is made for maintenance, interest will be allowe< I tor that purpose even though by the terms of the will the legacy is contingent on the legatee Living to the period which is mentioned for the payment of the legacy." lb. 412, per Moss, C. J. O. In EaugUon v. 1 1 unison, 2 Atk. 329, Lord Hard- mcke stated the rule, "If a legacy is left upon no con- dition but to be paid at the age of 21, and not given over, it is a legacy vested and transmissible; but still no interest can be demanded unless in the case of a child who had no other maintenance or provision for a parent is bound by nature to support a child » Again he stated it in Heath v. Perry 3 \tk Ml and ... Hearle v..GreenbanJc } 3 Atk. 716. In the latter ease he observes, -But in all these cases the ground the Court goes on is giving interest by way of main- tenance." ^ d ^ inasmuch as the testatrix had allotted maintenance for her daughter l, ' ,,, , ,, 1 \ hr S en era] funds of her personal estate there ': uuUl be no allowance of interest on a contingent legacy to the daughter. So in Wynchy. Wynch, 1 Cox 433, Lord Kenyon, f ; R > sai 5 J1 [sverj clear thai when a father gives ;l l + e Sfy to a child, whether il be a nested legacy, or not. ,t will carry mteresl Prom the death of the testa- K.A.— 7 98 executors' accounts. tor, as a maintenance for the child; but this will be only where no other fund is provided for such maintenance ; for it is equally clear, that when other funds are pro- vided for the maintenance, then if the legacy be pay- able at a future day, it shall not carry interest, until the day of payment comes, as in the case of a legacy to a perfect stranger." Nearly 90 years later the rule and exceptions were compendiously- stated by James, L. J., In re George, 5 Ch. D. 837. He said: "But the rule of law is well established that a contingent legacy does not carry interest while it is in suspense, except in the case of a legacy by a parent or one standing in loco parentis to the legatee ; and that exception is subject to another exception, that the rule giving interest to the child does not take effect Avhen the testator has provided another fund for his maintenance, so that the income of the legacy is supposed not to be required for the purpose." In Binldeij v. Binkley, 15 Gr. 649, Spragge, V.C., said: "It is clear law that a legacy given by a parent to an infant child, payable upon coming of age, or upon that event or marriage, the will being silent as to interest upon the legacy, stands upon a different footing from a legacy to a stranger, the latter not cariying interest; while in the case of a legacy to a child, the child is entitled to maintenance to the extent, if necessary, of interest upon the legacy — this is a general rule — it is otherwise when other provision is made by the will for the maintenance of the infant." To the same effect, Mowat, V.C., in Sparks v. Perrin, 17 Gr. 519, and Proudfoot, V.C., in Bees v. Fraser, 26 Gr. 233. In the recent case of In re Bowlby, Bowlby v. Bowlby (1904), 2 Ch. 685, the question to what extent is a child, to whom a legacy payable in futuro or con- tingent is given, entitled to the interest which the legacy bears or carries — whether to the whole interest as such or only to so much as may be necessary for maintenance — was fully discussed in argument and LEGACIES A \D AW CITIES. 99 considered I by the Court of Appeal. Although \<>ughan Williams, L.J, argued strongly that the effect oi gmng nil erest at alJ wag t() ( , ntjt|(i ^ .^.^ to the whole, the conclusion of the Court was that by ,,M> Practice of the Court, the infant is only allowed so much as is necessary for maintenance, thus affirming ill- view expressed by Spragge, V.C., in BinkUy v. BinMey, supra, that a child is entitled to maintenance to the extent, if necessary, of the interest upon the But where there is in the will an express provision tor maintenance from some other source and the amount is specified, the legacy will not bear interest t«>r the purposes of maintenance even though the pro- vision made should he deemed insufficient for the pur- pose. This is upon the principle that as interest is aUowed in other cases because it will not he assumed that the father intended no maintenance, there is no ground for the assumption where a provision is mad,- Re Mclntyre, 9 0. L. E. p. 413. So where the amount of the maintenance is specified that is m general the limit. Simpson on Infants. 2nd e< I .)l)4. W here there is a general provision for maintenance and no amount specified there seems to be no absolute bar to recourse, if necessary, to interest upon the con- tingenl legacy. Much less should there be where there is no express provision of any kind. The amount of th " allowance in such cases must he governed by a consideration of the other circumstances, and a due regard to such other sources or funds as may he properly resorted to for maintenance. Re Mclntyre, p K an infant has other property of his own sufficient tor hie maintenance, he can have no righl to interest apon a contingent legacy. Rees v. Fraser, 26 Gr 233 fothis case the legatee was a grandson of the testator! He was bom m the testator's house and resided there until the testator's death, and afterwards with his 100 executors' accounts. grandmother. The Court held that the testator in- tended to put himself in loco parentis, in reference to the father 's duty of making provision for the child. The exception to the rule does not extend to a pro - vision for an adult child. Wall v. Wall, 15 Sim. 513 ; or a wife. Re Crane (1908), 1 Ch. 379. Nor does it apply where in the case of a bequest by a person who does not stand to the legatee in the relation of a parent. Martin v. Martin, L. R. 1 Eq. 369. A parent is bound to provide for the maintenance of his children, and the Court infers that for that purpose he meant to give interest, though he has not expressly said so. The costs and expenses of taking care of a specific legacy before such legacy is assented to, are payable out of the specific legacy, or bv the specific legatee. Re Pearce (1909), 1 Ch. 819. CHAPTER XXII. Agents. Section 22 of The Trustee Act is as follows : 22. — (1) A trustee may appoint a solicitor to be his agent to receive and give a discharge for any money or valuable consideration or property receiv- able by the trustee under the trust. (2) A trustee may appoint a banker or solicitor to be his agent to receive and give a discharge for any money payable to the trustee under or by virtue of a policy of assurance or otherwise. (3) A trustee shall not be charged with a breach of trust by reason only of his having made or con- curred in making any such appointment. (4) Nothing in this section shall exempt a trustee from any liability which he would have incurred if AGENTS. 101 this Act had not been passed, in case lie permits any such money, valuable consideration, or property to remain in the hands or under the control of the hanker or solicitor for a period longer than is reasonably necessary to enable the banker or solicitor to pay or transfer the same to the trustee. (5) This section shall apply only where the money or valuable consideration or property was or is re- ceived on or after the 4th day of May, 1891. This is similar to section 17 of The Trustee Ad. 1893. In England the appointment of the solicitor is sufficiently made by entrusting him with a deed con- taining a receipt. In Ontario it may be evidenced in any manner shewing an appointment. "in re Brier, 36 Ch. D. 243, L. C. Selborne said this section does not substantially alter the law as it was administered by Courts of Equity, but gives it the authority and force of statute law, and throws the onus probandi on those who seek to charge an executor or trustee with loss arising from the default of an agent when the propriety of employing an agent has been established. In order to bring into operation sub-section (4) the circumstances must be such that the trustee either knew or ought to have known of the receipt of the money by the banker or solicitor. Two executors were told by their solicitor that a mortgage, forming part of the trust property, would shortly be paid off and the money placed to the joint credit of the executors at a bank: and they accordingly sent the solicitor an executed reconveyance of the mortgaged property, which contained the usual receipt of the mortgage money. The solicitor then proceeded, on the mort- gagor's behalf, to sell the mortgaged property off in lots, and he from time to time received the purchase money of the lots, which lie ultimately misappro- priated. In the meantime one of the executors had died, and it was sought to make the survivor liable. About Pour months elapsed between the time of the delivery of the <\in->\ and the discovery of the misappro- 102 executors' accounts. priation. Parker, J., said the authority given to the solicitor was a continuing- one intended to be acted on when the transaction was ripe for completion-- that the defendant was justified in expecting that it might be completed any day and not withdrawing the author- ity by withdrawing the deed from the solicitor's custody, and that being unaware of the solicitor's mis- conduct, he acted neither unreasonably or dishonestly in believing what he was told by the solicitor, and ought not to be held liable for a breach of trust be- cause he was deceived by a man whom he had no reason to distrust. In re Slieppard (1911), 1 Ch. 50. . It will be noticed that sub-section (1) does not authorize a trustee to appoint anyone to receive and give a discharge for any money or valuable consider- ation or property receivable by the trustee under the trust, except a solicitor. In Flower v. Metropolitan Board of Works, 27 Ch. D. 592, it was held that one of several trustees cannot in general be authorized by his co-trustees to receive trust moneys and give a good receipt. This decision appears to still hold good, though it may be that when one of the trustees is a solicitor he may be appointed agent under sub-section Where trustees are expressly authorized to retain or invest in securities payable to bearer, with coupons attached, they may deal with them in the way usual with prudent men of business, and may deposit such securities in thou- joint names with the estate bankers. But such securities should not be allowed to remain in the hands of the solicitors for the trustees. It is no part of a solicitor's duty to cut off the coupons and colled them, while that is the duty of a hanker, hi re Be Pothonier (1900), 2 Ch. 529. An executor who employs a solicitor as agent is bound to supervise his management of the matters entrusted to him and to take all due precautions, and cannol escape liability for the misappropriation of irnst funds committed by such agent, although lie was of excellent standing prior to the misappropriation. Low v. Gemley, 18 S. C. K. 685. AGENTS. L03 [f trust property be pu1 within the control of per sons who ought not to be entrusted with it, and a loss is thereby sustained, the executor will be liable to make it good, however unexpected the result, and however free such conduct may have been from any improper motive. Necessity, which includes the regular course of business in administering the property, will exoner- ate him. But If without such necessity, he is instru- mental in giving to the person who makes default, he will be liable, although such person be a co-executor. Clough v. Dixon, 8 Sim. 594; Langford v. Gascoyne, 1 1 Ves. 333. Where a trustee, a solicitor, allowed a confidential clerk and cashier of the firm of solicitors, of which he was a member, to receive occasionally in the trustee's absence, moneys payable to the estate, and give receipts for the same, and the clerk embezzled the same. McDougall, Sur. Judge, held the trustee was not liable to make good the loss to the estate. Re McM — Trust, 28C.L.J.502. The general doctrine, as laid down in the cases, is that a trustee is only bound to conduct the business of the estate in the ordinary and usual way in which similar business is conducted by mankind in their own transactions. "It never could be reasonable to make a trustee adopt further and better precautions than an ordinary prudent man of business would adopt, or to conduct the business in any other way." Re Speight v. Gaunt, 22 Ch. D. 740; 9 A. C. 1. In Ex /hi rte Belchu r, 1 Anib. 218, Lord Eardwicke said that where trustees act by other hands, either from necessity or conformably to the common usage <>f mankind, they are not answerable for losses, and Jessel, M.K., commenting on this passage in Re Speight v. (in mil. supra, says-. "Now, what is meant by either from necessity or conformably to the com- mon usage of mankind I It means that in tin 1 ordinary course of business t ransactions an agenl is employed." Me instances the case of the appointment of a rent collector to collect rent, though the trustee mighl 10-i executors' accounts. collect them in person ; but he does not do so because it is the common usage of mankind to employ an agent to do so; he also instances the employment of stock- brokers to buy or sell stock. Then, as to the moral necessity from the usage of mankind, he quotes approv- ingly Lord Hardwicke's definition of this expression as being the case of a trustee acting as prudently for the trust as for himself and according to the usage of business. Lord Hardwicke gives as instances the case of a trustee appointing the payment of rents to a banker in good credit who subsequently fails and the money is lost — there would be no liability on the part of the trustee; so also the appointment of stewards and agents. And he points out that none of these instances may properly fall under the head of cases of necessity, but there is no liability because the trustees acted in the usual method of business. Jessel, M.B., further cites the case of Bacon v. Bacon, 5 Yes. 331, where it was held an executor was not liable for the loss of money transmitted to an attorney, avIio was a co-executor, to pay debts, and who had misappropriated the money ; and Lord Loughbor- ough there lays down the rule that if the business was transacted in the ordinary manner, unless there was some circumstance of suspicion, the allowance of the payment was fair. Suppose he had paid the money to liis own clerk, and the clerk had run away, he puts as being within the same principle of protection. And the Master of the Rolls sums up the effect of Bacon v. Bacon as being that when you must necessarily employ an agent, or where you might reasonably in the ordin- ary course of business employ an agent, and you use due diligence in the selection of your agent, you are not liable for the consequences. En Be Weall, Weall v. . 1 ndrews, 42 Ch. I ). (178, Keke- wich, J., says: "A trustee is bound to exercise discre- tion in the choice of agents, but so long as he selects persons properly qualified he cannot be made respon- sible for their intelligence or their honesty; he does nol in any sense guarantee the performance of their AGENTS. L05 duties." It would not, of course, be a proper exercise of discretion to employ an agent whose honesty is open to question. Because a man is imprudent in the management of his own affairs it does not follow that he will escape liability, as a trustee, by being imprudent in the trust matters committed to his care. In Rae v. Meek. 14 A. C. 569, Lord Herschell, speaking of Learoyd v. Whiteley, 12 A. C. 727, and Knox v. MacKinnon, 13 A. C. 753, said : " I think these cases establish that the law requires of a trustee the same degree of diligence that a man of ordinary prudence would exercise in the management of his own affairs;" and this test may now be regarded as established. Generally speaking, executors are not allowed to employ an agent to perform those duties which, by accepting the office of executors, they have taken upon themselves; but there may be very special circum- stances in which it may be thought fit to allow them such expenses as they may have incurred in the em- ployment of agents. Weiss v. Dill, 3 My. & K. 26; 41 R. R. 2 ; Hopkinson v. Roe, 1 Beav. 180 ; 49 R. R, 335. Trustees are entitled to choose the solicitor and banker they employ. In re Cleveland (1902), 2 Ch. 350; and it is said they are not bound to regard the direction of their testator in this respect. Fost< r v. Elsley, 1!) Ch. D. 518. And see Fry v. Tapson, 28 Ch. D. 268. B. was solicitor for the testator, and continued t<> ad for the execntors. By the will the executors were directed to invest $5,000 for the widow. The testator had told the executors that B. had invested this $5,000, and after the testator's death B. told the execntors he had invested this sum on mortgages. B. died, and it was then discovered thai the mortgages never existed — that he had probably done away with the $5,000 be- fore the testator's death. The executors, relying on the statement made 1 to them by B., distributed the bal- ance of the estate. In an action by the widow against the executors it failed on the defence of the Limitation- 106 executors' accounts. Act (now eh. 75, sec. 47, R. S. 0. 1914), but Moss, J.A., said that B. was not the agent of the executors so as to render them responsible for his fraudulent acts, which were done neither by their authority, nor with their privity, nor for their benefit. Clark v. Bell amy, 27 A. R. 435, 442. Executors may employ an accountant where their accounts are of a complicated nature, and the occasion is one in which, according to the usage of business, a prudent man, acting for himself, would employ such a person. New v. Jones, 1 M. & G. 668; Henderson v. M'lver, 3 Mad. 275. But of course executors are not entitled to have their books of account kept by an accountant merely in order to save themselves trouble. Re Harbecl; 81 Hun. (N.Y.) 26. In Edmunds v. Peake, 7 Beav. 239, it was held that executors may, where that is the ordinary business usage, allow an auctioneer who is selling the trust property, to receive the deposit money ; but they must not allow it to remain in the auctioneer's hands for an unreasonable time. Executors should deposit trust moneys in a bank pending investment, and Avill not be liable for the failure of the bank, unless the money is left there for an unreasonable time. Johnson v. X etc ton, 11 Hare. 160. Where executors deposited monies with the same nerson the testator entrusted his money with, though not bankers, they were held not liable for loss. Dorchester v. Effingham, Tarn. 279; 31 R. R. 97. Bui if executors unnecessarily leave trust moneys in a hank when they ought to have invested them, and the bank fails, they will be liable. Challen v. Shipman, 4 Hare, 555; Rehderi v. Wesley, 29 Beav. 213. Jn one case it was held that moneys should not he left on deposit for more than six months without investment. Gam v. Cann, 51 L. T. 770. Thi^ must, however, depend on the circumstances of each particular case; the amount of cash on hand, amount required for dis- tribution, the period of distribution, etc. LIABILITIES OP AX EXECUTOR. L07 Executors may employ a solicitor or debt collector in collecting debts owing to the estate, where such is the usual course of business, or where the collection ••an be done better by adopting this course; and if money is lost by reason of the collector's insolvency, the executors are prima facie not responsible. R e Brier, 26 Ch. 1). 238. If an executor deposits trust funds in a bank to his own account, and mixes it with his own funds, and the bank fails, the executor is liable to make good the loss. Fletcher v. Walker, 3 Mad. 73; 18 R. R. 195. An executor will not be liable it' the trust property be stolen, provided lie has taken reasonable care of it. even though the thief be his own servant, if, on the facts proved, it appears that the executor was justified in deputing the custody of the property to such servant. Jones v. Lewis, 2 Ves. 240; Job v.' Job. 6 Ch. 1). 563; Jobson v. Palmer (1893), 1 Ch. 71. Where executors sent money to their solicitor to obtain probate they were held not responsible there- for, but were held liable for money sent to him prem- aturely to pay legacy duty. Castle v. Warland 32 Beav. 660. CHAPTER XX III. Liap.ii.itiks ok ax Executor. Purchasing Estate Property. There is no principle of equity more firmly estab- lished than that which forbids a trustee, no matter ll,,u ,llr trusl is created. Prom making a profit out of the trust estate. And to this end. a trustee who is selling is absolutely and entirely disabled from pur- chasing the trust property, whether the purchase be made in his own name or in the name of another. whether the sale be mad.- by himself as a sin°-le 108 EXECUTORS ' ACCOUNTS. trustee or with the sanction of his colleagues. Ex p. James, 8 Ves. 353; 7 R. R. 56; WhicJicote v. Lawrence. 3 Ves. 740. The rule does not apply to a person named as a trustee who has disclaimed without having acted in the trust. Stacey v. Elpli, 1 M. & K. 195 ; 36 R. R. 304 ; nor to a person named as trustee who has never accepted the trust. Clark v. Clark, 9 A. C. 733. Nor does it apply where there is an express power, in the document creating the trust, to purchase; or where the purchase is made with the leave of a competent Court. Farmer v. Dean, 32 Beav. 327 ; 138 R. R. 755. It follows from the foregoing that wherever an executor or administrator has so dealt with the trust property, he will, if the transaction is allowed to stand, be chargeable with the actual value of the* property he has purchased. At one time it was said that to invalidate such a purchase it was necessary to shew that the trustee had gained some advantage in the transaction, but in Ex p. James, supra, Lord Eldon repudiated such a doctrine, and however fair the transaction it may be set aside. By an arrangement between the executors one of them took goods of the estate at the price of $515, after the same had been valued by appraisers at $733. The Court ordered the executors to be charged with $733 and interest thereon. Cudney v. Cudney, 21 (Jr. 153. An executor cannot buy the debts for his own benefit. Ex p. Lacey, 6 Ves. 625 ; 6 R. R. 9. An executor sold property of the estate for $800 to his wife. On passing the accounts the Judge of Pro- late (New Brunswick) found as a fact that the property was worth $1,800, and ordered the executor to account for the difference, and the judgment was affirmed l>v the Supreme Court of Canada. Re Daly, Daly v. Brown, 39 S. C. E. 122. As a lease of an estate is a sale of a partial interest in it, the trustees cannol demise it to one of themselves. If a trustee accepts a lease he is bound to pay the rent; or he may, at the option of the cestui (pie trust, be LIABILITIES OF AX EXECUTOB. L09 made to account for the profits. Ex p. Huqhes G Ves 617, 6B.ll. 1. It makes no difference thai the sale is by public auction and the highest bid obtained, if the pro] erty is bought in by the trustee or by an agent for the trustee. Shaw v. Tackaberry (1915), 29 0. L. R. 490. It is a settled rule that a trustee or agent, author- ized to make a purchase for his cestui que trust or principal, cannot make the purchase from himself without disclosing the fact. Such transactions are so dangerous that they are wholly forbidden, and are not merely declared void where damage has arisen from them, or fraud is mixed up with them. Thus whore an agent was authorized to invest in bank stocks, and appropriated some of his own shares to his principal and rendered an account as if he had purchased thes< shares for her, she was held entitled, many years after- wards on the fact coming to her knowledge, to repudi- ate the transaction. Harrison v. Harrison, 14 (Jr. 586. Where an executor, having assets in his hands sufficient to pay unpaid taxes on lands of the estate, permitted the lands to be sold for taxes and bid them in and took the deed thereof in his own name, he was held guilty of fraud. Kelly v. /'raft, 83 \. Y. S. 636. In case of a purchase by a partner of the executor, Willi partnership funds, the executor is liable lor the fun amount of Hi,, profits resulting from the purchase, and not merely for his share of the profits. IVilbauks v. Crosno, 112 111. App. 503. For a full collection of authorities on "Trustee as Purchaser of Trust Estate," see 3 C. L. Times. 415. Profit <>>(/ of the Estate. Analogous to the rule which prevents a trustee from purchasing trusl property, is that which compels an executor or administrator to account for all profits made by or out of the estate. Whenever a trustee violates his duty, and deals with the trust estate for his own behalf." the rule is 110 executors' accounts. that he shall account to the cestui que trust for all the gain which he has made. All the losses are charged to the wrongdoer, while no profit can ever accrue to him. Per Lord Brougham, Docker v. Somes, 2 My. & K. 655; 39 E. E. 317. In Sugden v. Crossland, 3 Sin. & G. 192 ; 107 R. R. 73, it was held that an executor who retired from his trust in consideration of a money payment to enable another to be appointed in his place, was bound to account to the estate for the sum so paid. "Where a trustee invested trust funds on mortgage, and the mortgagor devised the equity of redemption to the " mortgagee," it was held that, though the mort- gagor did not know the mortgagee was trustee, yet the devise belonged to the trust, and not to the trustee beneficially. Re Payne, 54 L. T. 840. An executor and trustee, who acted as auctioneer in the sale of the trust property, was held not en- titled to charge a commission on the sale. Kirkman v. Booth, 11 Beav. 273; 83 R. R. 158. But a company acting as executor can recover a sum paid to one of its directors as an auctioneer. Bath v. Standard Land Co. (1911), 1 Ch. 618. In an administration action, the solicitors for the executors were paid their costs, and by reason of some agreement between the solicitors and one of the execu- tors, they paid this executor half the profit costs. North, J., held he had no power on the motion then before him to compel the executor to repay the money, but said: "If an action is brought by the other execu- tor, or by some one beneficially interested in the • •state, for an account of the profit received by the executor, I do not see what answer he would have to it." In re Thorpe (1891), 2 Ch. 361. So where executors received commissions or re- bates in respect of insurance on properties belonging to the estate, these were held to be assets of the estate. hi re Wilson and The Toronto General Trusts Corpor- ation (1906), 13 O. L. R. i). 86. See also Be Prittie Trusts, 12 0. W. E. p. 268. LIABILITIES OF. AH EXECUTOR. Ill So an executor, who is one of a banking firm, can- not charge the ordinary hunker's commission against the testator's estate. Heighington v. Grant, 5 .M. cV Cr. 258, 48 K. R. 297. Nfor is an agent, who is appointed executor of his principal, entitled to charge commissions on business done subsequently to the testator's death. Sheriff v. Axe, 4 Russ. Ch. Cas. 33. But where a hotel-keeper directed his business to be carried on by his executors, who were brewers and spirit merchants, who had been in the hsfbit of supply- ing the deceased in his lifetime, and continued to sup- ply after his death, the Court refused to hold the executors were entitled to the cost prices only, but directed an enquiry as to the necessity of the supplies and the market prices. The M. R. said that he could not suppose that the testator, who had himself directed his business to be carried on by these defendants. expected they would be deprived of the usual fair profit. Smith v. Langford, 2 Beay. 362; 50 R. R. 207. Where a will provides for payment of commission, charges or other profits, the executor will be allowed the usual charges. Where there was such a proyision m the will, a land surveyor, who was a trustee, was allowed his charges. Willis v. Kibble, 1 Beav. 559; 49 R. R, 453. So where a trust is before the Court, and the trustee has, before accepting the trust, expressly stipulated for such remuneration. Moore v. Froud, 3 M. & Cr. 48. But in such cases the trustees will he strictly limited to the charges indicated by the settlor Re Corsellis, 34 Ch. ]). (175. See post, as to the costs oi a solicitor-trustee. ^ Where executors improperly dealt with a portion "I the trust funds by allowing ne of their number to retain it in his hands at a low rate of interest, the Court refused them their costs of an actio,, prior to decree. Ashbough v. Ashbough, in Gr. 430. \nd executors may be deprived of their costs, in such a ease, though not guilty of any wilful misconduct Kennedy v. Pingle, 27 Gr. 305. 112 executors' accounts. The widow and executrix of a saloon-keeper was charged with the value of the good- will and remainder of the term of a license, where she obtained a renewal of the license in her individual capacity, and continued to keep the saloon open. Mueller's Estate, 190 Pa. 601. So where an administrator obtained in his own name a renewal of a charter for a ferry owned by the deceased, it was held he was bound to account for the value thereof as assets of the estate. Huson v. Wallace, 1 Rich. Eq. (S. Car.) 1. Profits made by an executor in speculating in claims against the estate must be charged against him as assets. In re Rainforth's Estate, 83 N. Y. S. 57. An incidental benefit derived by an executor as a stockholder of a corporation, from the sale of assets of the estate to a syndicate which such corporation helped to form, does not make him liable to account to the estate for the profits ultimately derived from the purchase of such assets. Given v. Potter, 115 Mich. 556. Where part of the assets of an estate consisted of stock in a corporation which had a plant that was an unpromising investment, and the executor induced another corporation to buy the plant, it was held he was guilty of no wrong in personally taking stock in the purchasing corporation to the amount necessary to buy the plant, and selling it at figures realizing him a considerable interest on the investment, the trans- action being in good faith and promotive of the interest of the estate. Houghteling v. Stoclxbridge, 99 N. W. 759, 11 Detroit Leg. N. 100. Whenever a trustee charged with the duty of invest- ing money belonging to and for the benefit of another, invests it in such a way as to make it possible for him to profit by the investment individually, he makes himself personally liable for any loss which may occur l>v reason of such investment. Carr's Estate, 24 Pa. Sup. Ct. 369. In New York it was held that there may be cireu in- stances under which it would be wise and prudent for LIABILITIES OF AM EXECUTOR. lj;; executors to employ one of their number to perform non-executona] duties to the estate, and payment for such services may be allowed. Russell v. Hilton 80 V 5 • App. Div. 178. So the employment by a., execu- tor ol a member of his family to perform services for the estate, where such services, if rendered by a dis- interested person, would pass without question,^ iav be sanctioned; but such a course is always open to sus- picion and merits investigation. Re Wagner, 40 Misc. Mixing Trust Funds. If an executor deposits estate money to his own bank account, and mixes it with his own money, and alterwards draws out sums by cheques in the ordinary manner, the rule in Clayton's Case, 1 Mer. 572, attrib- uting the first drawings out to the first deposits in does not apply ; and the executor must be taken to have drawn out his own money in preference to the trust money. The rule in Clapton's Case may apply if the contest is between two cestuis que trust whose money the executor has mixed with his own. In re Hallett's Estate, 13 Ch. D. 696. The judgment of Jessel, M.I I. m tins case, contains an elaborate review of the cases shewing the extent to which trust funds can be followed where there has been a mixing of funds. See also bodkin v. II a I, son, 5 0. W. X. 811. It is equally dear that in a case where funds have been mixed, when any of the money draw,, out has been invested, and the investment remains in the name '"' U]uli ' v the control of the trustee, the rest of the bal- ance being afterwards dissipated by him, 1... cannot maintain that the Investment represents his own money alone, and that what remains has been spent and ;'«•';' ao longer be traced and recovered, was the monev belonging to the ..state. 1„ other words, when the private money of the trustee and the monev of the estate have he,,, mixed in the same banking account, K.A.— S 114 executors' accounts. from which various payments have from time to time been made, then, in order to determine to whom any remaining* balance or any investment that may have been paid for out of the account ought to be deemed to belong, the executor must be debited with all the sums that have been withdrawn and applied to his own use so as to be no longer recoverable, and the trust money in like manner be debited with any sums taken out and duly invested in the name of the executor. In re Odin-ay (1903), 2 Ch. 356. If a trustee, partly with his own money and partly with the trust funds, purchases property and it can- not be predicated of any particular part of the prop- erty that it was purchased with the trust money, yet the cestui que trust has a lien upon the whole for the amount that has been misemployed. Lane v. Digliton, Amb. 409; Leivis v. Haddocks, 17 Yes. 48, 7 R. R. 10. If an executor deposits trust funds in a bank to his own account, and mixes it with his own funds, and the bank fails, the executor is liable to make good the loss. Fletcher v. Walker, 3 Mad. 73; 18 R. R. 195. Miscellaneous. An executor or administrator may commit a devas- tavit in many other ways; not only by an abuse of his powers, but also by negligence in exercising his powers, and wrongful administration. In Doe d. Woodhead v. Fallows, 2 C. & J. 481, it was held that an administratrix who applied the assets of the estate in satisfaction of her own debt, was liable. An executor or administrator will also incur liabil- ity by misapplying the assets in undue funeral expenses. Stag v. Punter, 3 Atk. 119; Hancock v. Podmore, 1 B. & A. 260; 35 R. R. 287. Where an executor, believing the assets were amply sufficient for the payment of the testator's debts, per- mitted specific Legatees to retain or possess themselves of the articles bequeathed to them, they were held liable lor the value thereof on a deficiencv of assets. LIABILITIES OF AX EXECUTOK. 115 Spode v. Smith, 3 Russ. Chy. Cas. 511; Davies v. Nicholson, 2 DeG. & J. 693; 119 R. R. 300. in such a case the executor or administrator would be protected if he had given the proper notice under section 56 of The Trustee Act. And see In re Kay, Mosley v. Kay (1897), 2 Ch. 518, under "Honestly and Reasonably." An executor is guilty of a devastavit who surrend- ers, or otherwise fails to preserve the residue of a term, where the land is of greater yearly value than the rent. Thompson v. Thompson, !) Price, 476. Or applies the assets in payment of a claim which he is not bound to satisfy, e.g., if he makes disburse- ments in the schooling or clothing of the children of the deceased without authority under the will or from the Court. Giles v. Dyson, 1 Stark X. P. C. 32; L8 R. R. 743. Or by paying a sum in fulfilment of a merely moral obligation where there is no legal liability. Shallcross v. Wright, 19 L. J. Chy. 443; Godson v. Good, 2 .Marsh 300. But this does not apply where the claim could be defeated only by setting up the Statute of Limitations as a defence. Re Rownson, 29 Ch. D. 358. But he is liable if he pays a statute-barred debt a Itci- a judicial decision that the debt is not recover- able. Midgley v. Midgley (1893), 3 Ch. 282. Or if he pays a creditor who is prevented from enforcing his claim by the Statute of Frauds. /;/ re Uownson, supra. Where an executor or administrator, having ample assets on hand to discharge all liabilities of the estate, delays paying interest-bearing debts, he is liable. Seaman v. Everad, 2 Lev. 40. So if he may save the penalty of a bond by payment of the less sum specified in the condition, or by the performance of the condi- tion, and aeglecl to do so. 1 Saund. 333a. Or by delay in bringing an action, where the delay has enabled the debtor to successfully defend the action by pleading the Statute of Limitations. Hay ward v. Kinsey, 12 Mod. 57:;. Where there has been delay in collecting debts, and the debtors have become bankrupt, the executor is 116 executors' accounts. liable for the amount lost to the estate. Powell v. Evans, 5 Yes. 839; Tebbs v. Carpenter, 1 Madd. 290; 16 R. R. 224. And executors were held chargeable with neglect in allowing assets to remain outstanding in an im- proper state of investment, notwithstanding that the will contained the usual indemnity clause. Stiles v. Ouy, 1 M. & G. 422; 80 R. R. 58. An executor or administrator will be personally responsible if he lends money of the estate upon prom- issory notes or other personal security. See further under "Investments." A testator devised his farm to his minor children and directed that his executors should rent the same; that no timber should be cut except for use on the premises : and that the executors should have full power to carry the will into effect. The widow was one of the executors, and she cut and sold a large quantity of timber. The Court held that the provisions of the will imposed a duty on the executors as trustees to see that no timber was taken except for the use of the premises, and that they were jointly liable. Stewart v. Fletcher, 18 Gr. 21. CHAPTER XXIV, Carrying ox Btsiness. One of the perplexing questions thai often con- fronts an executor is that of liis right or obligation to carry on the trade or business of the testator. His duty, as well as his liability, will vary with the circum- stances. II' the will gives no authority to carry on the business, then, as is hereafter pointed out, his power is very limited, [f the will gives such authority, then much depends on the limit of the power so given. If the business of the testator was a partnership business CARRYING <)X BUSINESS. 117 then the authority may depend not only on the power given by the will, I mt upon the provisions of the part- nership articles. The general principle is that a trade is not trans- missible, hut is put an end to by the death of the trader, and an administrator (or executor, where the \\\\\ gives no authority to carry on the business of the deceased) has no legal authority to carry on the busi- ness without the direction of the Court. Barker v. Barker, 1 T. R. 295. If he does so he must account for all profits made in continuing the business, and if it proves a losing concern he will be personally respon- sible for the debts contracted in the business since the death of the deceased. Ex p. Garland, 10 Ves. 119; 7 R. R. 352; Re Johnson, 15 Cli. D. 548. But this means that an executor or administrator is not to buy or sell. There are many cases where executors not only may, but are bound to continue the business to a certain extent: Thus if a party contracts for himself and his executors to build a house, and dies, the executors must go on, and they will be liable in damages for not completing the work. So, if a parly engages for himself alone to build a house, and having procured all the necessary material, it should seem that his executors oughl to complete the work, and not dispose of the material at a loss to the estate. So if the deceased lias partially completed a work, his representatives are not bound to sacrifice the property by selling it in an Lmperfecl state. Wins. Kxrs. 1689. If the contract is personal to the testator or intes- tate the executor or administrator is not bound to complete the contract. For instance, if the deceased undertook to write a book, and died before completing it, his representatives are discharged from the con- tract.' If the business of the deceased is of such a nature as to justify his executor or administrator in continu- ing the same for a reasonable time, it' this should be requisite for the purpose of selling the business as a going concern, or otherwise, the trustee will not be 118 executors' accounts. charged with any loss in employing the assets in so continuing the business, if they act bona fide, and according to the best of their judgment, Garrett v. Noble, 6 Sim. 504; 38 R. R. 166. So in the case of a farmer. If he die before the crop is harvested, the executor or administrator must reap and harvest the crop. But if he die before any crop is sown the executor or administrator would not be justified, except under exceptional circumstances, in carrying on the usual farming operations. And he is justified in feeding and caring for the live stock of the deceased until it can be advantageously sold, and this will not be considered a carrying on of the busi- ness. In re Fernandez, 119 Cal. 579. In some jurisdictions it is held the executor has a sound discretion as to completing contracts of the deceased and will not be charged with loss if he acts reasonably. Allam's Estate, 199 Pa. St. 573. "I think it is a rule without exception, that, to authorize executors to carry on a trade, or to permit it to be carried on with the property of a testator held by them in trust, there ought to be the most distinct and positive authority and direction given by the will itself for that purpose. " Per Langdale, M.R., Kirkman v. Booth, 11 Beav. 273; 83 R. R. 158. A direction in the will that the testator's trade shall be carried on does not of itself authorize the employment in the trade of more of the testator's property than was employed in it at his decease; nor docs such a direction, coupled with a direction that the testator's debts shall be paid, authorize a mort- gage of his real estate not employed at his death in the trade, for the purpose of carrying it on. If the executors find the}' have not the means of carrying on the trade according to the directions contained in the will, they should apply to the Court for directions to know what they are to do in the administration of the estate. McNellie v. Acton, 4 I). M. & G. 756; 102 R. R. 360. CARRYING OX BUSINESS. 11!) But where in addition to a direction to carry on I lie trade, the testator lias specifically appropriated other assets for that purpose ; the trustee, though personally liable for the debts which lie contracts in the course of the business, has a right to be paid out of these specific assets, and the trade creditors are not to be dis- appointed in payment so far as the assets so appro- priated are concerned. But the creditors' right can- not extend beyond that, either in administration or bankruptcy. Strickland v. Symo)is (1884), 26 Ch. D. 245. Where an administrator continued to carry on the business of the intestate, maintaining the family out of the receipts, and in administration proceedings it was found the assets were not sufficient to pay all the debts, it was held that the creditors in respect of the goods supplied for the business were not entitled to prove against the estate in priority to creditors of the deceased or otherwise. M'Aloon v. M'Aloon (1900), 1 Ir. E, 367. So a person supplying goods to an executor for the purpose of carrying on the testator's business for the benefit of the estate, under authority given by the will, has no right of recovery against the estate, but he may sue the executor, and he has also the right to be sub- rogated to any right of indemnity which the executor has against the estate. Braun v. Brawn (1902). 14 Man. E. 154(5. See also Lovell v. Gibson, 19 (ir. 280, where it was held that the assets of a deceased person were not liable Tor debts incurred by an executor or administrator in carrying on the trade or business of the deceased. In re Brooke, Brooke v. Brooke (1894), 2 Ch. 600, Kekewich, J., held that where trustees improperly carry on the trade or business of the deceased, and the creditors of the deceased stand by and allow this to be done, they must be treated as assenting to the wrong- ful conduct of the trustee, and if there is a conflict be- tween the original creditors o\' the deceased and the creditors of the business, the former must suffer. This 120 executors' accounts. judgment was overruled, on this point, in In re Oxley (1914), 1 Ch. 604, and it was held that merely standing by with knowledge that the business was being so carried on and abstaining from interference with it were not of themselves sufficient to bind the original creditors of the testator by the acts of the executors. If a testator's business is carried on by his execu- tors, in accordance with the provisions of the will, the executors are entitled to a general indemnity out of the estate as against all persons claiming under the will. But they have not the same right as against creditors of the testator, except where they properly carry on the business for a reasonable time to enable them to sell it as a going concern. Dowse v. Gorton, 1891, A. C. 190; Re Chancellor, 26 Ch. D. 42. The profits made from continuing the testator's business are as much assets of the estate as those which were in the testator's possession at the time of his death, and the creditors of the testator have a right to resort to such after acquired assets, even at the expense of the executors. Abbott v. Parfitt, L. R. 6 Q. B. 346; Doicse v. Gorton, supra. An executor properly continuing the business in pursuance of the provisions of the will, is entitled to be paid his costs and expenses in priority to the debts incurred by him in carrying on the business. In re Owen, Frisby v. Owen, 66 L. T. 718. The executors or administrators of a deceased partner cannot be compelled to become a partner personally, even where by the articles of partnership the partners covenant that they and their executors and administrators will continue as partners for a cer- tain time, though the covenant is binding on the estate of the deceased partner in the hands of such executors or administrators. Downs v. Collins, 6 Hare, 41S; 77 R. R. 171. A testator's directions to carry on business with his surviving partners, does not authorize the executors to embark any new capital in the business. "All that a will, which directs the testator's business to be CARRYING ON BUSINESS. ] J ] carried on, authorizes the executors to do, is, to con- tinue in it so much of the testator's estate as may be embarked in it at the time of his death." Smith v Smith, 13 Gr. 81. The testator was a part nee in a firm of distillers. By Ins will he authorized his executors to continue the business for one year alter his death. A few months after his death the surviving partner and the execu- tors formed a joint stock company and the interest of the estate in the business was valued and put in as so much stock, and remained therein for seven years. Held, this was a breach of trust under the terms of the will. Worts v. Worts, 18 0. R. 332. A surviving partner, who is also the executor of the deceased, is not entitled to an allowance for carrying on the business after his partner's death, for the bene- fit of the estate. Stocken v. Dawson, (J Beav. 371; (i:; R. R. 116. In one case he was allowed expenses actu- ally incurred under an erroneous conception that he was sole proprietor by purchase from his co-executor, but which purchase was set aside as a breach of trust, though bona fide. Burden v. Burden, 1 Yes. & B nu- ll' R. R. 210. In Ontario, the work of an executor in such a posi- tion might be taken into consideration in fixing his compensation for his care, pains and trouble. In England, no such compensation is paid an executor unless provided for by the will. A testator directed that his business should be carried on by one E.P. The executors, from the eon Hdence tints rep,. sed in E. I'. by the t< stator, permitted him to get in the outstanding debts due to the estate. E. P. did not pay over the amounts collected and it was held the executors were liable. A direction to carry on business could not be extended to the collec- tion of debts. Pistor v. Dunbar. 1 Anstr 107- 3 R R old. ' ' ' An authority to the executors or executor acting under the will to carry on the testator's business, if they should see fit, does not authorize an administrator 122 executors' accounts. with the will annexed to carry on the business. Lam- bert v. Rendle, 3 N. R. 247 ; 143 R. R. 891. The rule that an executor is liable for all profits made in carrying on the testator's business is subject to some limitation where the executor is also the resi- duary legatee, or the business has been specifically bequeathed to him. In such a case the executor is liable only for the actual value of the assets and not for the profits. In re Mullon, 14 X. Y. 98; Be Van 11 out en, 18 X. Y. App. Div. 301. CHAPTER XXV. Compounding Claims. Section 52 of The Trustee Act is as follows : — 52. — (1) A personal representative may pay or allow any debt or claim on any evidence that he thinks sufficient. (2) A personal representative, or two or more trustees acting together, or a sole acting trustee, where by the instrument, if any, creating the trust, a sole trustee is authorized to execute the trusts and powers 1 hereof may, if and as he or they may think fit, accept any composition or any security real or personal, for any debt or for any property, real or personal, claimed, and may allow any time for payment for any debt, and may compromise, compound, abandon, submit to arbi- tration or otherwise settle any debt, account, claim or iliing whatever relating to the testator's or intestate's • state or to the trust, and for any of these purposes may enter into, give, execute, and do such agreements, instruments of composition or arrangement, releases, oi- other tilings as to him or them seem expedient with- out being responsible for any loss occasioned by any ad <>r tiling done by him or them in good faith. COMPOUNDING CLAIMS. l-ld Sub-section (1) lias been deali with under the head ing of "Payment of Debts." Section 52 is founded on the English Act known as Lord Cranworth's Act, which is now embodied in sec- tion 21 of The Trust Act, 1893. The English Act provides that the section applies only if and as far as a contrary intention is not expressed in the instrument creating the trust. Even before the passing of this Ad a trustee was allowed to compound or release debts where H appeared to have been for the benefit of the trust estate. For instance, where a tenant was in arrears for rent, and became insolvent, and to regain posses- sion the executor released the arrears, and paid a sum to obtain possession. Blue v. Mar shall, .'! l\ Wins. 381. An administrator obtained judgment against a debtor, who being in gaol, petitioned to be discharged under The Insolvent Act. The debtor offered less than the costs incurred in the action, and the Court held the administrator was not chargeable with the debt. Pennington v. Medley, 1 Compt. & M. 402. And in In re Houghton (1904), 1 Cli. p. 625, it is said that the statutory authority really adds nothing to the common law powers of executors. In Irwin v. Toronto General Trusts Company, 24 A. R. 484, it was held that an administrator had no power to compromise a claim for dower by conveying to the widow another property, a portion of the intes- tate's real estate. The judgment appears to proceed on the ground that at that time an administrator was not within the Act. In 1899 the Acl was amended so as to include administrators. In Re Mclntyre (1904), 7 0. L. R. 548, a widow claimed dower out of Lands of her deceased husband which he. in his lifetime, had contracted to sell for $2,000. The executors, desiring to complete the sale, compromised the claim by paying the widow s.'!!>n. and Street, .1., said the section seemed sufficient to cover what they did and to justify their action. There was an appeal on another point, but as to the power of the executors to compromise the claim 124 executors' accounts. for dower, the judgment of Street, J., was not ques- tioned. There may be a compromise of a claim against an estate although, in the result, the party making the claim gets all he demands. In In re Houghton (1904), 1 Ch. 622, the defendant and the widow of the testator were joint executors. Before probate was granted the widow took from the testator's safe securities valued at £1,180, claiming that these securities, or the moneys represented by them, were her property. Subse- quently the widow produced receipts shewing beyond question that £820 belonged to her, and the defendant did not press the balance of the claim. The question was whether the defendant could compromise this claim by allowing it in full. Kekewich, J., said : " I use the word compromise advisedly. No doubt there was no give and take. Esther Houghton had all she claimed, and in that sense there was no compromise. On the other hand she had possession of the securities ; they could only be got from her by discussion, and perhaps litigation. It was entirely for those repre- senting the estate to say whether there should be liti- gation, with delay and costs, or whether the claim should be acceded to. That is a compromise. Very little was given up, but there was a reason for the transaction, when the possibility of litigation and its consequences are considered. I think therefore that, if honest, it was a compromise." This case is also an authority for the proposition that it is competent for an executor, in a proper case, to compromise a claim by his co-executor against the estate; but it was there said: "The position, however, is a delicate one, and an executor in that position would do well to apply to the Court for directions as to whether he is at liberty to make the compromise." It is said that one of several executors may com- promise a claim although the others dissent, and in the absence of fraud, the settlement will be binding. Smith v. Everett, 27 Beav. 44(5; hut if the effect of the compromise is to relieve an executor from a liability COMPOUNDING CLAIMS. [25 to the estate, which he is under jointly with the credi- tor, the compromise is a fraud on the estate and not binding. Stott v. Lord, 3] L. .J. Ch. 391. An executor may compromise the claim of a legatee Re Warren, 32 \V. \i. 916. A claim was made against an estate tor $1,000. There was no evidence to corroborate the claimant's account and the executors refused to pay it. After negotiations and attempts at settlement, the executors paid $250 in lull, and it was held the executors had a right to make such a compromise. Re Robbins -i:\ Gr 162. But where trustees accepted $250 in discharge of a debt of $:!()(), and gave no evidence to explain the reason of this, it was held, that, in the absence of such evidence, the Master was righl in charging the trus- tees with the loss. There must he some reason shewn for the compromise. Baldwin v. Thomas, 15 Gr. 11!>. Executors, in the exercise of a prudent discretion, may accept real estate in payment of a debt (.win- to the estate. M<( 'arger v. McKinnon, 17 (ir. 525. An executor or administrator may. as such, refer to arbitration causes of action which arose in the life- time of the testator, so as to hind the estate, and with- out making himself personally responsible. Reid v. Reid,16 C. P. 247. The power of an administrator to submit to arbitration is said to he based upon the fact that he has power to prosecute or defend suits. Cogswell v. Concord Ry.Co., in \\ ]|. 192. In District <>i Columbia \. Bailey, 171 X. S. 161, it is said the power arose by reason of the full dominion which the law gives to an executor or administrator over the assets, and the full discretion which is vested in him for the settlement and liquidation of all claims due to and from the estate. 126 executors' accounts. CHAPTER XXVI. Investments by Trustees. In recent years the authority of trustees to make investments from trust funds has been materially enlarged, and now executors are allowed, apart from the directions of the will or deed of trust, a consider- able choice of investments which formerly the Courts would not approve of. The provisions relating to investments by trustees are now contained in sections 28-34 of The Trustee Act (R. S. 0. 1914, Chap. 121), and these should be carefully considered by executors who may be called upon to invest trust funds. Section 28.— (1) A trustee having money in his hands, which it is his duty, or which it is in his dis- cretion, to invest at interest, may invest the same in the stock, debentures or securities of the Dominion of Canada, or of Ontario or of any of the other Provinces of Canada or in debentures or securities the payment of which is guaranteed by the Dominion of Canada or by Ontario or by any of the other Provinces of Can- ada or in the debentures of any municipal corporation in Ontario, including debentures issued for public school purposes, or in securities which are a first charge on land held in fee simple in Ontario, Manitoba, Saskatchewan or Alberta, provided that such invest- ments are in other respects reasonable and proper. (2) Subject to the proviso in sub-section 1 any money already invested in any such stock, debentures <>r securities shall be deemed to have been lawfully and properly invested. By 4 Geo. A', ch. 21, sec. 28, the above section was extended so as to include securities which are a first charge on land in British Columbia; and by Geo. V., ch. 20, sec 15, the following words were added to sub- section 1 : "or he may entrust the same to a trust com- pany incorporated under the laws of Ontario to invest [INVESTMENTS BY TRUSTEES. L27 as his agent in any of the above-mentioned securities in the manner contemplated by sub-section 2 of section 17 of The Loan and Trust Corporations Act." In this Act the word "trustee" includes an execu- tor, administrator and a trustee however appointed and several joint trustees. Sec. 2 (r). Section 28 corresponded with section 1 of the Eng- lish Act, The Trustee Act, 1893, except that the latter provides that "a trustee may, unless expressly forbid- den by the instrument (if any) creating the trust, invest any funds," etc. It will* he noticed the Ontario Act gives the trustee power to invest funds "which it is his duty, or which it is in his discretion," to invest. In re Burke (1908), 2 Ch. 248, it was held that a discre- tion to keep trust funds and invest them in one par- ticular way does not "expressly forbid" investment in any of the investments authorized by the Act. In that case the will provided: "My trustees shall keep my trust estate and invest the same on deposit with*' a named bank at interest. There seems to be no reason for thinking the Ontario Act would receive a narrower construction. In Re Richardson, 3 0. W. X. 1473, 5 D. L. R. 449, the will directed "my executor to deposit the procee of such sale in some chartered bank and keep such pn i ceeds so deposited until M.R. shall have attained the age of twenty-one years." The executors filed a peti- tion asking, inter alia, permission to disregard the pro- vision of the will and invest the monev instead of pav- ing it into a bank. Riddell, J., held that where no dis- cretion is given to the executor the Act does not apply —thai here the executor had no discretion— and that if he disregarded the express direction of the will he made himself responsible for any less. In a case before the A.-t was passed it was held that where a testator authorized his trustees to invest in "public securities" this did not authorize an invest- ment m municipal debentures. Ewart v. Gordon, i:; Grr. 4(). 128 executors' accounts. Although the range of trust investments has been greatly extended, the Court still scrutinizes, with con- siderable jealousy, any direction to invest in securities not authorized by the legislature. Thus where a settlor empowers his trustees to invest the trust funds "at their discretion," it seems to be the better opinion that the discretion of the trustees is limited to a dis- cretion as to which of the several forms of security authorized by law they shall invest in, and does not give them power to invest in securities not so author- ized; such, for instance, as ordinary railway stock. Beth ell v. Abraham, 17 Eq. 24; Be Brown, Brown v. Brown, 29 Ch. D. 889. And indeed the word " invest " seems to point to a loan, and not to an employment in a trading speculation, as also does a direction to place out at interest, or on security. Worts v. Worts, 18 0. R. 332; Harris v. Harris, 29 Beav. 107; Underbill on Trusts, 4th ed. 326; Spratt v. Wilson, infra. Where a settlement authorized the trustees to ''invest" in real estate, this was held to authorize an actual purchase of real estate. "So far as the word 'invest' is concerned, in connection with money, I am satisfied it may well apply to the cause of a purchase of land as distinguished from a mortgage of land. It has been of long and familiar use in this sense." Be liar trick, 5 0. R. 710. In re J. H. (1911), 25 0. L. R. 132, executors were empowered to invest "in such reasonably safe income- producing securities as — they may approve without rendering themselves liable for any loss." The testa- tor had stock in banks and insurance companies. Riddel], J., held that by "securities" the testator meant stocks similar to the stocks the testator held at the date of his death. He points out, however, that power was intended to be given to invest in securities beyond those given by the Act; otherwise there would have been no need for giving the executors indemnity. In the absence of clear and express direction, even where trustees have a discretion, they cannot, without a breach of trust, lend trust funds on personal secur- [INVESTMENTS BY TRUSTEES. L29 ny, or personal property, or invest it on trade secur- ity, e.g., in the shares of a public company. Child v. ( hild, 20 Beav. 50; Harris v. Harris, 29 Beav. L07. * Cte rule is well settled, where moneys are left by testamentary instrument to I..- invested* at the discre- tion oi an executor or trustee, that he is to invest in such securities as are sanctioned by the Court. The general discretion so given does not warrant invest- menl m persona] securities, and it would be disregard- ing fixed standards of decision to lav it down thai such a discretion can be exercised otherwise than by law." Per Boyd, C, Spratt v. Wilson, 19 0. R. 28. In the last named case the executors were directed to mvesl m such securities as they should think fit, and apply the interest for the maintenance of the infants until their majority. Instead of investing the funds the executors deposited them in a savings bank at 3% per cent., and the Court held they did not conform to their duty, and were liable for the difference between the rate earned and legal interest. A power to invest on such good security as the trustee may think fit will not justify an investment on personal security; or in securities in which it is not usual for a prudent man to invest. Knox v. MacKin- non, 13 A. C. 753; and where there is a power to invest on personal security it must he exercised with greal caution. Pickard v. Anderson (1872), L. R. 13 Eq. 608. A power to invest in such securities as the trustee "shall think fit" means "shall honestly think fit." ft< Smith, Smith v. Thompson (1896), i Ch. 71. In an able article in 9 C. L. T. 77 on Trust Invest- ments, by R. S. Cassels, K.C., it is said: "The chief rule to be deduced from the cases is that, without the clearesl and most express authority in the instrument creating the trust, the trustees eannol safely make investments upon securities of a persona] or possibly speculative character. Even power to invest upon 'any securities' is not sufficient to .justify the trustee in accept in- personal securities. Lewis v. Nobbs, - Ch. D. 591 : and wide discretionary powers as to invest E.A. — 9 130 executors' accounts. ment do not authorize an investment upon speculative securities. Burritt v. Burritt, 27 Gr. 144; Smith v. Smith, 23 Gr. 114; New London & Brazilian Bank v. BrocMebarik, 21 Ch. D. 302; Stretton v. Ashmall, 3 Drew, 9; Re Brown, 29 Ch. D. 889. In the last case there was power to invest in such modes as trustees should in their uncontrolled discretion think fit; yet a bona fide investment in the bonds of a foreign gov- ernment was directed to be realized as soon as possible. Where there is a power to invest upon personal secur- ities it is most strictly construed. Thus in Langston v. Ollivant, Gr. Coop. 33, executors had power to place out funds upon such real or personal security as should be thought good and sufficient. The executors lent to a man in trade, the husband of the cestui que trust, £500 of the trust funds upon his bond, at the same time lending him £600 of their own money. At this time the man was in good credit, but he afterwards failed and a loss occurred. The trustees were held liable for the loss on the ground that the transaction was not really an investment but merely an accommo- dation loan. Instances of a similar nature might be multiplied, but the cases can be readily referred to in the text books. ' ' Strict compliance with the provisions of an invest- ment clause is in all cases necessary. Thus in Webb v. Jonas, 39 Ch. D. 660, trustees were held liable where the trust deed authorized them to invest "in their or his names or name" on "real securities," and they invested in a contributory mortgage of freeholds, the Court being of opinion that it was of the very essence of the investment clause that the security should be in the name of the trustees alone. An analogous decision is that of Consterdine v. Consterdine, 31 Beav. 330; 135 R. R. 451. In that case three trustees were appointed with an absolute discretion to sell and invest. It was held they were not .justified in investing in the shares of a company in which only one trustee could be registered as owner, and where, therefore, there might be danger of loss through want of joint control. INVESTMENTS BY TRUSTEES. 131 Wliai may be a perfectly justifiable investment at one time may at another under different circumstances ^ an entirely ^justifiable one. In Re Maberlay, 33 un. V 4oo, trustees were given certain funds upon trust to invest them in freehold land in Ireland. It was held that owing to the then unsettled condition of that country it would be a breach of trust, notwith- standing this direction, to invest funds there So in Boss vGodsall, 1 Y. & C. C. C. 617 ; 57 R. P, 473, 1 rus- tees under a marriage settlement were empowered and required at the request of the wife to advance part of the funds to the husband on the security of his bond. ine husband became insolvent, and the wife then Required the trustees to make a loan to him. It was held there was such a change in circumstances that the clause was inapplicable and that the trustees were justified m refusing to make the loan. Upon the con- verse question, whether a trustee is justified in mak- ing investments upon securities that are proper e - m consequence of statutory authorization, at the time the investment is made, but were not proper at the tune the trust was created, there has, in England, been some conflict of authority. Our statute, however prob- ably removes any difficulty of this kind. Where an improper investment is made the trustee is liable tor all subsequent consequences, however un- expected, or however remotely connected with the original breach of trust. In Kellaway v. Johnson, 5 t$eav. olJ, there was an unauthorized sale and invest- ment, and the trustees were held liable for a subse- quent loss, the root and cause of the loss bene- tie- original unauthorized sale, [n Fyler v. Fyler, 3 Beav •>•><>. trustees obtaining an unauthorized but ample security were held Hable for a future loss traceable to ™ 1 ™ e £ > ror « '" Cocker v. Quayle, 1 Russ. & Uv •'•;•>•• '/r ll - ll> - 275 ' trustees had power to lend on bond with the consent in writing of a certain person. They Jen1 with oral eons,. nt and without taking a bond The borrower subsequently became bankrupt and a loss occurred. It was held that as the original loan was 132 executors' accounts. made in an unauthorized way they were liable for all future loss, though in the result the position would have been exactly the same. Had they complied, in making the loan, with the terms of the trust deed, a bond debt and a simple contract debt would have been in the same position in the bankruptcy proceedings. And it is laid down in CI o ugh v. Bond, 3 My. & Cr. 490, 45 E. E. 314, that where a line of duty is not strictly pursued and loss is eventually sustained, the trustees are liable, however unexpected the result, however un- likely to arise, and however free from improper motive their conduct may have been. So in Grayburn v. Clarkson, L. E. 3 Ch. 605, it is said that where there is a breach of trust the trustee is liable for all conse- quences, though they do not develop themselves until long afterwards. And in Caffrey v. Darby, 6 Ves. 488, it was held that trustees are responsible for all loss if they are once guilty of a breach of trust, no matter what the cause of the immediate loss may be. They would not be relieved even if the actual and immediate cause of the loss were accidental. Even if the loss is caused by the negligence of his legal adviser the trustee is not excused. Hopgood v. Parkin, L. E. 11 Eq. 74. It is no answer to the claim upon trustees to make good a loss incurred in respect of one fund to say that owing to their care and foresight a great improvement has taken place in another fund, nor can they be allowed to set off such improvement against the loss. Wiles v. Gresliam, 2 Drew. 258. Nor is the fact that the quantum of interest of an attacking cestui que trust is very small, any ground for allowing the trustee to escape liability. Walcott v. Lyons, 54 L. T. N. S. 786. Sometimes a trustee who has made an improper investment seeks to escape liability by shewing acquies- cence on the part of the cestui que trust. This defence, however, is a difficult one to support successfully. The cestui que trust is entitled to place reliance on the trustee, and is not bound to make enquiries unless something is done to excite his suspicion. Re Vernon, 33 Ch. D. 402. Where acquiescence is set up as a bar it [INVESTMENTS BY TRUSTEES. loo must be shewn that the cestui que trust was sui juris and acquainted with the tacts: Sawyer v. Sawyer, 28 Ch. I). 595; Spratt v. Wilson, 19 0. R. 28; and the in- tention to waive rights by the cestui que I rust must be clear. Re Cross, 20 Ch. I). 109. The cestui que I rust is not estopped from objecting to the account of the trust fund on the ground of acquiescence merely be- cause he does not dispute its correctness while his interests are reversionary, especially where he is not in full possession of the facts. Inglis v. Beaty, 2 A. R. 453; Smith v. Smith, 23 Gr. 114. ' Where a trustee is authorized to invest in either of two specified modes, and by mistake he invests in neither, the measure of his liability is the loss arising from his not having invested in the less beneficial of the authorized modes. Pater son \..Lailey, 18 Gr. 13. Where a cestui que trust is of full age and compe- tent to act for himself, and gives his sanction to an unauthorized investment, he cannot afterwards seek to make the trustee liable. Under these circumstances there is no duty cast on the trustee to advise against such an investment. Harrison v. Harrison, 14 Gr. 586. Sec. 29. — (1) A trustee may deposit money with .any of the societies or companies hereinafter men- tioned, or may invest* any money which it is his duty, or which it is in his discretion, to invest at interest, in terminable debentures or debenture stock of any such society or company, provided that such deposit or investment is in other respects reasonable and proper, and that the debentures are registered, and are trans- ferable only on the hooks of the society or company in his name as trustee for the particular trust estate for which they are held, and that tin 1 deposit account in the society's or company's ledger is in the name of the trustee for the particular trust (state for which it is held and the deposit receipt or pass hook is not transferable by endorsement or otherwise: (a) Any incorporated society or company author- ised to lend money upon mortgages on real 134 executors' accounts. estate, or for that purpose and other purposes, having a capitalized, fixed, paid up and perm- anent stock not liable to be withdrawn there- from of not less than $400,000; and a reserve fund of not less than 25 per cent, of its paid-up capital, and the stock of which has a market value of not less than 7 per cent, premium ; or (b) Any society or company heretofore incorpor- ated under Chapter 164 of the Revised Statutes of Ontario, 1877, or any Act incorporated therewith, or under Chapter 169 of the Revised Statutes of Ontario, 1887, having a capitalized, fixed, paid up, and permanent stock not liable to be withdrawn therefrom of not less than $200,000, and a reserve fund of not less than 15 per cent, of its paid-up capital, and the stock of which has a market value of not less than 7 per cent, premium. (2) Clause (a) shall not apply to any society or company which has not the approval of the Lieutenant- Governor in Council as one coining within the pro- visions of that clause, and as one in the debentures or debenture stock of which trustees may invest or with which they may deposit money. (3) Such approval shall not be given with respect to any society or company which does not appear to have kept strictly within its legal powers as to borrow- ing and investing. (4) An Order-in-Council made under the authority of sub-section 2 may at any time be revoked. The following is a list of Loan Corporations approved by Order-in-Council in the debentures of which trustees may make investments: British Mortgage Loan Company of Ontario. Canada Landed and National Investment Company, Limited. Crown Savings and Loan Company. Canada Permanent Mortgage Corporation. INVESTMENTS BY TRUSTEES. L35 Central Canada Loan and Savings Company. East Lambton Fanners Loan and Savings Com- pany. Gnelph and Ontario Loan and Savings Society. Great West Permanent Loan Company. Hamilton Provident and Loan Society. Huron and Erie Loan and Savings Company. Industrial Mortgage and Savings Company of Sarnia. London Canadian Loan and Agency Company. Landed Banking and Loan Company, Hamilton. Lambton Loan and Investment Company. Land Security Company. London Loan and Savings Company of Canada. Midland Loan and Savings Company. Ontario Loan and Debenture Company. Oxford Permanent Loan and Savings Society. Royal Loan and Savings Company. Southern Loan and Savings Company. Toronto Savings and Loan Company. Toronto Mortgage Company. Victoria Loan and Savings Company, Lindsay. The Chapters referred to in the sub-section (b) are the Acts respecting Building Societies. Sec. 30. A trustee may from time to time vary or transpose any securities in which money in his hands is invested, whether under the authority of this Act or otherwise, into or for any other securities of any nature authorized by this Act. The English Act, after specifying the authorized investments, adds: "and may also from time to time vary any such investments." Jn Re Dick, Lopes v. Hume (1891), 1 Ch. 423; 1S92 A. C. 112, it was held that these words are not confined to investments made under the power given by the Act, but extend to any investment, whenever made, whether before or after the death of the testator, upon any such stocks, funds or securities as are mentioned in the section. 136 EXECUTORS ' ACCOUNTS. In lie Oivthicaite (1891), 3 Ch. 494, it was held that the power given to invest trust funds in any of the stocks therein mentioned, does not extend to authoriz- ing trustees to set apart or appropriate any of sucli stocks to answer a particular purpose, as, for instance, to provide for an annuity given by a will, so as to facilitate the distribution of the rest of the testator's estate. It was suggested that the same result might be arrived at by the exercise of the power to vary investments, but Kekewich, J., said: "If I am right in regard to the inability of the trustees to appropriate under the powers of the Act, I doubt whether they could first invest in a stock expressly authorized by the will and appropriate that for the annuity, and then, under the power of variation given by the Act, reinvest in a stock authorized by the Act. However, it is unnecessary for me to decide that question now." The Court has no jurisdiction to sanction an agree- ment by which executors propose to concur in convert- ing into a limited company a business in which the testator was a partner, where, by the terms of the agreement, the testator's share in the business will be exchanged for shares and debentures which the execu- tors are not authorized by the will to hold. "In sub- stance it amounts to one of two things : either it is a sale of an investment of the proceeds in unauthorized securities, or it is an exchange of property of the testator for other property which the trustees are not authorized to hold." In re Morrison (1901), 1 Ch. 701. And see Worts v. Worts, 18 Ont. R. 332. Sec. 31. A trustee lending money upon the security of any property upon which he may lawfully lend shall not be chargeable with breach of trust by reason only of the proportion borne by the amount of the loan to the value of the property at the time when the loan was made, if it appears to the Court that in making the loan the trustee was acting upon a report as to the value of the property made by a person whom the trustee reasonably believed to be a competent valuator, instructed and employed independently of any owner INVESTMENTS BY TRUSTEES. 137 of the property, whether such valuator carried on business in the locality where the property is situate or elsewhere, and the amount of the loan does not exceed one-hall' of the value of the property as stated in the report and that it was made under the advice of the valuator expressed in the report. This section corresponds with section 8 (1) of the English Act, except that the latter permits a loan up to two-thirds, where our Act limits it to one-half of the value as stated in the report. The English Act requires the report to be made by "an able and practical sur- veyor and valuer," where our Act speaks of "a com- petent valuator." In other respects there is no difference. In In re Solomon (1912), 1 Ch. "261, Warrington, J., said: "It has been recognized in several cases, and amongst them I will only mention the case of In re Stuart (1897), 2 Ch. 583/ before Stirling, J., that this provision of the Trustee Act . . . was intended to relieve trustees from a burden previously cast upon them by the Court, and which the Legislature con- ceived w T as too heavy a burden to be cast upon them, in other words that the Act was intended to be a relieving Act, and as such Act, it ought to be construed liberally in favour of the persons whom it is sought to relieve and adopting in effect what was said bv Jessel, M.R., in In re Speight (1883), 22 Ch. D. 727, V 746, I think the Court ought not to be astute to find means of exclud- Lng trustees from the relief which the Legislature has thought ought to be extended to them." In Palmer v. Emerson (1911), 1 Ch. 758, it was held that the section being a relieving one, it does not im- pose a statutory obligation upon trustees to take a valuation, and the neglect to do so docs not exclude them from the benevolent operation o\' section 3 of The Judicial Trustee Act, L896, corresponding with sec. 37 of our Trustee Act. But prima facie, the requirements of The Trustee Act constitute a standard bv which reasonable conduct 138 executors' accounts. is to be judged, although non-compliance with these requirements is not necessarily a fatal obstacle to an application for relief ; it is also a matter for consider- ation whether the trustee would have acted in the same way if he had been lending money of his own. In re Stuart, supra. Notwithstanding that this section authorizes a loan to the extent of one-half of the value as stated in the report of the valuator, trustees are not authorized in lending to that extent on unproductive or speculative property. Where the property is exclusively or mainly used for -the purposes of trade, no prudent investor can be in a position to judge of the amount of margin necessary to make a loan for a term of years reasonably secure, until he has ascertained not only its present market price, but its intrinsic value apart from those trading considerations which give it a speculative and, it may be, a temporary value. Learoyd v. Wkiteley (1887), 12 A. C. 727. Before the Act it was held that trustees should not lend as much as one-half on buildings used in trade. Stichney v. Sewell (1835), 1 M. & Cr. 8; 43 E. R. 129; or for manufacturing purposes. Royds v. Royds, (1851),, 14 Beav. 54; 92 R. R. 18. ' ' It has undoubtedly become the practice of valuers, thinking they are thereby complying with the require ments of the Act, to advise practically in every case that trustees may safely advance two-thirds of the value, and that practice appears to be based on the fact that, so far as the liabilities of the trustees are concerned, the Act makes no distinction between one kind of property and another ; it only requires that they shall not advance more than two-thirds part of the value of the property. That, I think, is a mistake. It is the duty of the valuer to consider not only the value of the property, but the proportion which, in Ills (.pinion, as an expert and a practical man, the trustee would in each particular case, be justified in advanc- ing." In re Soloman (1912), 1 Ch. p. 261. In this case il was held that it is not improper for trustees to lend INVESTMENTS HY TRUSTEES. L39 on property let on weekly tenancies, but the amount which they may safely lend on such properties must depend on the circumstances of each particular case. Trustees may lend on unfinished buildings if due security is taken for their completion, but the build bags should be of the character which experience shews will be constantly let in the neighbourhood, and not buildings of an experimental character. Ilae v. Meek (1889), 14 A. C. 558. Where a loan was made on cottage property in a town, the value of which depended on shifting circum- stances, Fry, L.J., said the fact that at the time of the mortgage some of the houses were unfinished and unlet strongly corroborated the view that the investmenl was improvident. In re Salmon, 42 Ch. D. p. 370. In Shaw v. Cates (1909), 1 Ch. p. 396, Parker, J., said: "I am not prepared to lay down any general rule that trustees ought not to invest on the security of newly erected houses in a residential neighbourhood or on houses which are not quite completed, though these circumstances may, and indeed ought, to be taken into account in determining the amount which may properly be so invested." Where a trustee was directed to invest the trust funds "in his own name or under his legal control," and lie invested it in a contributory mortgage, this was held to be a breach of trust, and not protected by the Act. In re Dire (1909), 1 Ch. 328. Trustees not' hav- ing any power expressly given them, are bound to invest on a mortgage where they have the entire con- trol in their own hands, and where they can exercise their own discretion for the benefit of their cestui que trust, and not where they are bound to consult others. or where, if they do consult others, they are bound to act for others as well as for themselves. It robs them of that control which is an essential part of the pro- priety of the security. Webb v. Jonas, 39 Ch. D. 660. InBtidgev. GummoWyte L. J.Ch. 22, L. R. 7 Ch.719, it was held that, in the circumstances of that case, that a loan on hotel property was not a proper investment. 140 executors' accounts. b ' The value of a hotel is necessarily of a very specula- tive character, and may, like the property in Stickney v. Sewall, 1 My. & Cr. 8, arise from accident." Such property is probably more speculative in Ontario than in England. See also as to hotel property, In re Partington, Partington v. Allen, 57 L. T. 654, where a loan on hotel property proved disastrous and the trustees were held liable. Where a trustee, in making a loan seeks the pro- tection of the Act, section 31 requires that he acted upon the report of a person whom the trustee (1) reas- onably believed to be a competent valuator: (2) that the valuator was instructed and employed independ- ently of any owner of the property: (3) that the loan does not exceed one-half of the value of the property as stated in the report : and (4) that it was made under the advice of the valuator expressed in the report. (1) It will be noticed that the section dispenses with the necessity of employing a valuator carrying on business in the locality where the property is situ- ate or elsewhere. But the fact that a valuator has no local knowledge is a circumstance to be considered on the question of the trustees' reasonable belief in the valuator's competency. Bicknell & Kappele, Prac. State. 403. See also Budge v. Gummoiv, L. R. 7 Ch. 719 ; Fry v Tapson, 28 Ch. I). 279. A reasonable belief would be a belief formed by the mind of a reasonable man— a belief founded on reason. U. S. Express Co. v. Donahue, 14 0. R. 333. See also Peek v. Berry ( 1887), 37 Ch. D. 541; 14 A. C. 337. In re Chapman (1896), 2 Ch. 763, Lindley, L.J., said: "It is true that the trustees did not consult pro- fessional surveyors or valuers; but there was nothing special in the nature of the property, as there was in Learayd v. Whiteley, 33 Ch. D. 347; 12 A. C. 727, to render the assistance of an expert really necessary for the guidance of a prudent man. A man need not be a special surveyor or vainer to form a trustworthy opinion of the value of ordinary agricultural land, and the law is not so stringent as to compel us to say that IXVKST.Mi;: NTS BY TRUSTEES. 141 the trustees were guilty of dereliction of duty in tiol seeking advice from such a person." This, however, was a case of trustees retaining securities authorized by their trust, and the statement, so far as it relates to investments made by the trustees themselves, can be considered only as dicta. The words "believed to be," in section 31, do not govern the words "instructed and employed inde- pendently of any owner of the property;" and there fore, in order to entitle a trustee lending money on the security of property, to the protection of the statute, he must be able to shew that the valuator on whose report he acted was in fact so instructed and employed. In re Somerset (1894),] Ch. 231 ; /« re WaUcer,59LJ. Ch. 386. (2) Prior to The Trustee Act the duties of trustee- investing trust money were well known. They were entitled to rely on expert advice as to the value of the property, but if they did so, it was their duty to see that the expert was properly instructed — that he knew for whom and with what object he was advising, and that he was acting independently of the mortgagor, these being precautions which a prudent man of busi- ness might reasonably he expected to take in the con- duct of his own affairs. Having thus been advised as to value, they had themselves to determine, and could not delegate it to a third party (even an expert) to determine, what amount they could prudently advance on the security in question. Shaw v. Cates (1909), 1 Ch. 389. Where a valuator was selected by a firm of solici- tors who acted for the mortgagor, and his fee was paid by the mortgagor, it was held the valuator was nol instructed and employed and acting independently of the mortgagor. Shaw v. Cafes, supra. "What is meant by 'instructed and employed inde- pendently of any owner of the property*! 1 think it means this: that the relation existing between em- ployer and employed must exist as between the trus- tees and the valuer, and between them only— that the 142 EXECUTORS ' ACCOUNTS. valuer must be entitled to look for his remuneration to the person who employs him, and, on the other hand, must be responsible to that person only for the due performance of his duty as valuer. When you have that he is responsible and employed independently of the owner. I do not think it is incumbent on the trustee to enquire into all the previous business transactions of the valuer and to find out whether he has at any time recently or long before advised or acted for the mort- gagor;" Per Warrington, J., In re Soloman (1912), 1 Ch. p. 281. A trustee is not entitled to the protection of the Act unless the report or valuation which ultimately proves insufficient, was made upon his own instructions and directed to the particular investment. Nor is the trustee entitled to such protection unless the invest- ment which has proved deficient, was a proper invest- ment at the time in all respects other than value. In re Walker, 59 L. J. Ch. 386; 62 L. T. 449. See also Blyth v. Fladgate, 63 L. T. 546, (1891) 1 Ch. 337. In In re Partington, 57 L. T. 654, trustees loaned money on hotel property and cottages and houses which were principally let at weekly rents. Valuers were employed and the particulars of the several properties as furnished by the mortgagors, were submitted to them, but the trustees did not make enquiries for the purpose of verifying the statements as to the value, income, etc. In their instructions to the valuers, they told them the mortgagees were trustees, but they did not tell them, according to the rule laid down for trustees in lending on the security of house property, that they did not desire to lend more than one-half of the value. Neither did they call the attention of the valuers to circumstances which might affect the value. They also omitted to instruct the valuers to ascertain whether the particulars were correct, or what were the outgoings or average amount of repairs. It was held that the investment was improper and the valuers not properly instructed. The selection of a valuator should not be left to the solicitors employed by the trustees. It is not the part [NVESTMENTS MY TRUSTEES. 143 of the ordinary business of a solicitor to choose a valuator for trustees intending to invest trust money on mortgage. If asked to name a valuator the ordin- ary course is for the solicitor to submit a name or names to the trustees, and to tell them everything which the solicitor knows to guide their choice, but to leave the choice to them. Where trustees did not exer- cise their own judgment as to the choice of a valuer, hut accepted the suggestion of their solicitors that a city surveyor who had introduced the security to them, and was in fact the agent of the mortgagor with a pecuniary interest in the completion of the loan, should value the property, it was held the trustees were liable for a loss on the loan, and it was no defence that they had acted on the advice of their solicitors. Fry v. Tapson, 28 Ch. D. 268; In re Stuart (1897), 2 Ch. 583. Before The Trustee Act it was held that if trustees lent money on mortgage and employed the same solicitor as the mortgagor, they were bound to take the utmost precaution; if they trusted implicitly in the solicitor, however high his reputation, they were responsible for any loss occasioned by his fraud, and the indemnity clause usually inserted in the trust deed did not protect them. Sutton v. Wilders, L. R. 12 Eq. 373; Freeh v. Graham, 10 Ir. Ch. R, 522. (3) Whether a trustee is liable for Lending more than one-half the value of the property as stated in the valuator's report, does not appear to have been expressly decided. In England, before the passing of The Trustee Act, certain well-defined rules, limiting the amount to be advanced on mortgage, had obtained. For instance, it was laid down thai in the case of ordinary agricultural land the loan should not exceed two-thirds of the value, whereas in cases where the suhject of the security derived its value from buildings on the land, or its use for trade purposes, the margin ought not to he less than one-half. But it was held these were not hard and fast limits up to which trustee- would invariably In 4 safe, and beyond which they could never sat'elv lend, hut as indicating the lowest margin 144 executors' accounts. which in ordinary circumstances a careful investor of trust funds ought to accept. Learoyd v. Whiteley, 12 A. C. 727. AVliere land was valued at £7,000, and a trustee loaned £400 more than the two-thirds, Bacon, V.C., refused to hold him liable. In re Godfrey, 23 Ch. D. 483. In a subsequent case the same Judge said: " There is one clear, homely, intelligible, but inflexible rule which has never been departed from in times ancient or modern, viz., that a trustee is bound to act in the execution of his trust as a prudent man would in deal- ing with his own property. Applying that rule to the present ease, can it be said that any prudent man, having to invest nearly £7,000 upon leasehold property with a view to present income, would venture his money to the extent of more than one-half the estim- ated value of the property, when the property con- sisted of houses recently built, unoccupied, not wholly finished, producing no fixed certain rents, etc." And the trustees were ordered to make good the loss. Smethurst v. Hastings, 30 Ch. D. 490. And where trustees loaned less than one-half on the security of a freehold brickfield, with buildings, machinery, etc., and there was a loss, the trustees were made liable because the value of the proper! y depended mainly on the success of a speculative and fluctuating business, a business largely dependent on the energy and solvency of those working it. Learoyd v. Whiteley, 32 Ch. B. 196; 12 A. C. 727. See also SticJcney v. Sewell and Fry v. Tapson, supra. But where trustees slightly exceeded the amount, but acted honestly and as prudent men would have done in dealing with their own funds, they were pro- tected by the Court and allowed their costs. Jones v. Levis, .*! DeG. & Sin. 471 ; Re Godfrey, supra; Re Pear- son,51 L. T. X. S. 692. ''I dissent entirely from the position taken up by some of the defendants' expert witnesses, that once they have ascertained the value of the property they nic, whatever its nature and whatever method of vain- INVESTMENTS i;v TRUSTEES. 14T, ation they have adopted, at least prima facie justified m advising an advance of two-thirds of its value buch a position in my ..pinion defeats the object of the section by making what the Legislature lias recognized as the standard of the minim u m protection which a prudent man wHI require into a standard of the normal risk which, whatever the nature of the property a prudent man will be prepared to run; and it deprives the expert advice on which the trustee is to rely as to the margin of protection to be required of all its value It is true now as it was before the Act that the max- imum sum which a prudent man can be advised to lend upon a mortgage depends on the nature of the property and upon all the circumstances of the case It the property is liable to deteriorate or is specially subject to fluctuations in value, or depends for its value on circumstances the continual existence of winch is precarious, a prudent man will now, as much as before the Act, require a larger margin for his pro- tection than he would in the ease of property attended by no such disadvantages, and an expert who does his duty will take this into consideration." Parker J Shaw v. Cates (1909), 1 Ch. pp. 398, 399. The object of trustees must ever be to make a Permanenl investment, that is, one which will be mam tame( l for a considerable period, and which will not only during that period yield the stipulated income, "', Wl " ultimately and whenever required, realize the Mill sum advanced. In Learoyd v. Whiteley, 12 \ C <•>-. the Lord Chancellor dwells on the importance of securing the capita] sum. but did not intend to place 111 the background (he importance also of securing the mcomfe, which may he. and often is as essential to the AU ' llnn ' ol ,h <' remainderman as h is to thai of the te * an1 for life. Trustees, therefore, musl regard any ' advice given to them respecting value Prom this double point oi view, and cannot he absolved from liability for oss arising m a particular transaction by shewing that their advance was within the allowed limits as E.A.— 10 1-46 executors' accounts. regards capital, if they were exceeded as regards income, and the income was insufficient to pay the stipulated interest. In re Somerset (1894), 1 Ch. p. 247. There is no fixed rule that in all cases, where a por- tion of the mortgaged premises is utilized for business purposes, trustees would be guilty of a breach of trust in advancing more than one-half the value of the property; but if the mortgaged premises and the business are so inseparable that the discontinuance of the business may result in depreciation of the prem- ises, trustees ought not to advance more than one-half. If the security is really a business plus the premises upon which it is carried on, trustees are well advised to have nothing to do with it. Palmer v. Emerson (1911), 1 Ch. 758. (4) Since the Act a trustee has been, and is, justi- fied in acting on expert advice, not only as to the value. of the property, but also as to the amount he may properly advance thereon, provided the advice be given in such manner, and by such person, as is con- templated in the section, and that, whatever be the nature of the property, the amount advanced is not more than two-thirds (in Ontario one-half) of its value. The principle involved seems to be that within the limits of what is often called the "two-thirds" rule a prudent man may, as to the amount which can properly be advanced on any proposed security, whether the property be agricultural land or houses or buildings used for trade purposes, rely on expert advice obtained with certain precautions, it being of course assumed that in giving the advice the expert will consider all the circumstances of the case, includ- ing the nature of the property, and will not advise a larger advance than under all the circumstances can prudently be made. Shaw v. Cates, snpra. This was followed in In re Solomon (1912), 1 Ch. 2C)\, where the trustees were charged with not having themselves made any inquiries as to the details regard- ini;- the nature of the property, the amount of the out- t INVESTMENTS BY TRUSTEES. 147 goings, etc. Warrington, J., said: "Now with refer- ence to that matter, I think that, before the Act, it would have been the duty of the trustees to satisfy themselves as regards all those matters, and, as 1 have already said, it is hardly contended that, but for the Act, they would not, in these respects, have been guilty of negligence, the consequences of which might have been visited upon them. But since the Act, 1 think the trustees are in a very different position, and that they are justified now, as Parker, J., said in Shaw v. Cedes, in assuming that the valuer, whose duty it is to advise them, will satisfy himself of the facts which are necessary in order to enable him to make a proper valuation, and that the trustees arc therefore relieved from that part of the burden which was cast upon them by the Court before the Act was passed." The valuator's report should state the value of the property, and not merely the sum the trustees are entitled to advance on the property. If a portion of the value is made up of buildings, the value of the land and buildings should be stated separately; and if the value includes any sum for plant, machinery, good- will, etc., these should be specifically mentioned and full particulars given. /;/ re Stuart (1897), 1 Ch. 583; In re WHteley, 33 Ch. D. 347. Where the proposed security consists of house property, or other buildings, the report should shew the average rentals or other income, and all the out- goings, including taxes, insurance, probable repairs, etc. The section clearly indicates that the report is to be in writing, and not a mere verbal statement. It has been held in cases of trustees acting under trust deeds containing indemnity clauses as wide as the provisions of this Act. that such indemnity clauses afford no protection to trustees, who from motives laudable in themselves act in plain violation of the duty which they owe to the individuals beneficially interested in the funds which they administer. They do not protect against positive breaches of duty. 148 executors' accounts. Seton v. Dawson, 4 Ct. Sess. 2nd series, 310; Knox v. MacKinnon, 13 A. C. p. 765; Rae v. Meek, 14 A. C. 558. How far trustees, investing trust funds on mort- gages on real estate, can rely on the personal character or means of the mortgagor, seems open to question, in In re Somerset, 1894, 1 Ch. at p. 247, Kekewich, J., said : "On the question how far, if at all, trustees may prop- erly rely on the position of the borrower, there is, as far as I am aware, no authority. Men of ordinary care and prudence managing their own affairs would, no doubt, take this into consideration, and, in the mercantile world, it is frequently treated as equally important with the value of the security. It is im- possible, I think, to exclude it from the consideration of trustees, who are bound to have regard to all the circumstances connected with any proposed advance on security, and it would not be difficult to put cases in which the solvency or insolvency of the borrower would properly influence them in making an advance somewhat in excess of the limits generally allowed, or declining the transaction altogether; but where the object is to make a permanent investment of trust money on mortgage on real estate it seems to me wrong- to advance a sum largely in excess of what is otherwise right, because it is believed that the borrower is now, and it is anticipated that he will remain, capable of paying the principal and interest, or such part thereof as cannot be realized from the security. ' ' In Shaw v. Cates, supra, where the loan was mad* 1 on house properties, some only partly finished, Parker, J., seems to have thought it was an element to be taken into consideration. Pie says: "On the other hand, at the date of the mortgage he was, or at any rate was reputed to be, a man of substance, able to undertake, and from time to time undertaking, large contracts, and not financially dependenl on borrowed moneys." In In re Solomon, supra, it was contended that the trustees failed to take into consideration the person- ality of the mortgagor, and Warrington, J., expresses the opinion that that was a question for the valuer to determine upon, and that since the Act the trustees [INVESTMENTS B"S TRUSTEES. 149 me entitled to assume thai the valuer has considered the personal equation in arriving at the value. See. 32. Where a trustee has improperly advanced money on a mortgage security which would, at the time of the investment, have been a proper investment in all respects for a less sum than was actually ad- vanced the security shall be deemed an authorized investment for such less sum, and the trustee shall only he liable to make good the sum advanced in excess thereof with interest. Corresponds with section 9 of the English Act. See Shaw v. Cafes (1909), 1 Ch. 389. This section points to an investment which would have been proper in all other respects, except as to the amount advanced. Such an investment stands on an entirely different footing from an investment of an unauthorized description, which the cestui que trust must either accept or reject. In re Salmon, Priest v. TJppleby, 42 Ch. D. 351. If the cestui que trust ratify an unauthorized in- vestment it becomes a part of the trust estate and tin? trustee will be exonerated; if he reject it he may asserl a lien upon it for the trust money invested therein, and after realization compel the trustee to make good the deficiency. Thornton v. Stokill, 1 Jur. X. S. 751. The mode of enforcing liability Por a deficiency on an insufficient security depends on the circumstances of the particular case. In some cases justice will be done by realizing the security and making the trust*'" pay the deficiency; but in some cases it may be right to make him pay at once the whole sum improperly invested, and let him take the benefit of the security. In re Salmon, Priest v. Uppleby, supra. The rule of equity that trustees who have caused a loss by investing trust funds on an unauthorized security cannot be required by the cestui que trust to make good the loss without having the security trans- ferred to themselves, does not apply where the cestui que trust is an infant, and by reason iA' his infancy cannot make the transfer: lie being entitled to have the 150 EXECUTORS ' ACCOUNTS. trust fund made good by the trustees notwithstanding the security cannot be transferred. Head v. Gould, 1898, 2 Ch. 250. Sec. 33. Sections 31 and 32 shall apply to transfers of existing securities as well as to new securities, and to investments made as well before as on and after the 4th day of May, 1891, unless some action or other proceeding was pending with reference thereto at thai date. 4th May, 1891, was the date "The Trustee Act, 1891," was assented to. Sec. 34. A trustee shall not be chargeable with a breach of trust by reason only of his continuing to hold an investment which has ceased to be an investment authorized by the instrument of trust or by the general law, and this provision shall apply to cases arising either before or after the passing of this Act. Same as the English Act, as amended by the Trustee Amendment Act, 1894. There appears to be no reported decision where this section has been under discussion. In Re Nicliolls, Hall v. Wildman post, Latchford, J., said the section had no application to that case, and, on appeal the point was not raised or discussed. There are, however, many cases where executors have been authorized by the will to retain investments, and it has been held that such authority is not absolute protection Avhere they have not acted prudently or reasonably. A general power to retain stocks in which the testator has already invested, does not differ in its scope from a general power to invest in these stocks. What the trustees can do in one case by making a new, they can effect in the other by retaining the old, investment. Fraser v. Murdoch, 6 A. C. 855, 877. And a direction in a will, or other trust instrument, to re- lain investments, places them in the list of authorized investments. In re Bales (1907), 1 Ch. 22. A mortgage security is unlike an ordinary instru- ment, inasmuch as it consists of a debt which can be enforced by action, and also of a security which can INVESTMENTS BY TRUSTEES. 151 be realized by sale or foreclosure. A trustee of a mortgage security is, therefore, liable for loss sus- tained by his wilful default in not obtaining payment in either of these ways. But a trustee is not a surety, nor is he an insurer; he is only liable for some wrong done by himself, and loss of trust money is not pei se proof of such wrong. In re Chapman (1896), 2 Cii. 1>. 774. There is no rule of law which compels the Court to hold that an honest trustee is compelled to make good loss sustained by retaining an authorized security in a falling market, if he did so honestly and prudently, and in the belief that it was the best course to take in the interest of all parties. Trustees acting honestly, with ordinary prudence and within the limits of their trust, are not liable for mere errors of judgment. Any loss sustained by the trust estate under such circumstances falls upon and must be borne by the owners of the property — i.e., the cest-us que trust — and cannot be thrown by them on their trustees, who have done no wrong, though the result may prove that they might possibly have done better. Learoycl v. Whiteley, 33 Ch. D. 347; 12 A. C. 727, is a clear authority to this effect; so are Buxton v. Buxton, 1 My. & Cr. 80; 43 K. R. 138; and Marsden v. Kent, 5 Ch. D. 598. In re Chapman, supra, p. 77(i. See also Rawsthorne v. Rowley, (1909), 1 Ch. 409. In In re Med land, 41 Ch. I). 47(1, the testator em- powered his trustees to continue certain investments as long as they should see tit, with an indemnity against liability if they continued the same in the same state of investment as at the time of the testator's death. There were three mortgages on real estate, the value of which had much depreciated. North, .1.. held that where the value of the mortgaged property had fallen so that there was not a margin of one-third, it is not the absolute duty of the trustees at once to call in the mortgages, but they have a discretion which they must exercise as practical men with a die- regard to all the 152 executors' accounts. circumstances of the case, such as the position and solvency of the mortgagor. In Re Nicholls, Rail v. Wildmcm (1913), 29 0. L. R. 206, the testator died in 1878, giving his estate to exe- cutors "upon trust to invest the proceeds thereof in such manner as they shall deem most advisable." Part of the estate consisted of 125 shares of Ontario Bank stock of the par value of $5,000. In 1882 the par value was reduced one-half, and in 1896 by one-third, and later on an order was made to wind up the bank, and a claim made against the estate for double liability. The executors took no steps to realize upon the stock. The Court held that the power to invest given in this will was equivalent to a power to retain such securities as they might invest in ; that the executors acted in good faith, and their discretion to retain the shares was an honest exercise of the discretion given by the will, and they were fairly justified in not selling from 1878 to 1882, but they had not acted reasonably in not selling or endeavouring to sell, after 1882, and were liable to make good the loss to the estate, viz., the par value of the stock after the first reduction. Where absolute discretion is given to the executors they are not bound by the ordinary rule, and although where the discretion is to be actively exercised it must be honestly and intelligently exercised, yet, where there is a discretion to remain supine, culpable negli- gence or dishonesty must be shewn to render the trustee liable. SciiUhorpe v. Tipper, L. R. 13 Eq. 232. But see Re Johnson, W. N. (1886), 72, where it seems to be recognized that, even in such a case, reasonable discretion must be exercised. The mere fact that the investment was one made by the testator himself is no reason for the executor delaying to take proper steps to secure the money. If there is a danger of loss the executor must exercise prudence and watchfulness to prevent loss. Burritt v. Burritt, 27 (Jr. 14:5. In Re Gabourie, 13 O. R. 635, the testator at his death held a promissory note against W. bearing a INTEREST CHARGING EXECUTORS Willi. L53 high rate of interest. Instead of calling in the assets, as directed by the will, the executor retained the note, and renewed it, honestly believing that W. was good for the amount, and that it was in the interest <>i* the estate. W. failed, and the Chancellor held this was a plain breach oi* trust and that executor was liable, but credited him with the interest received beyond the legal rate. See "Realizing Assets." CHAPTER XXVII. IXTEREST ChARGINU EXECUTORS WITH. There are two grounds on which an executor or administrator may be charged with interest : 1st. That he has been guilty of negligence in omitting to invest money for the benefit of the estate; 2nd. That he him- self has made use of the money, or has committed some other misfeasance, to his own profit and advantage. With respect to neglect on the part of an executor in not investing balances, it must be observed that it frequently may be necessary and justifiable for an executor to keep large sums in his hands to answer the exigency of the testator's affairs, especially in the course of the first year after the decease of the testa- tor: in which case such necessity is so fully acknow- ledged, that according to the ordinary course of the Court, the fund is not considered distributable until nt'ter that time. But if the executor keeps money dead in his hands without any apparent reason or necessity. then it becomes negligence and a breach of trust, anil the Court will charge the executor with interest. Wins, on Exors. 1750. In cases of simple neglect to invest, in order to give a claim for interest there must be a clear case of im- proper retention of balances to a considerable or sub- 154 executors' accounts. stantial amount. In Miles v. Durnford, 2 Sim. (X.S.) 241; 89 E. R. 274, the balance amounted to £96, and the Court refused to charge the executor with interest. In McLennan v. Heivard, 9 Gr. 178, $400 was consid- ered a reasonable sum for this purpose. In Thompson v. Fairbairn, 11 P. R. 333, after an administration order appears to have been made, the executors re- tained $1,100 in their hands to meet claims against the estate, and were not called upon to pay it into Court. It was held the amount was not unreasonable, and that the executors were not chargeable with interest in respect of it. Under the changed conditions of the present time, when banks are so readily available and willing to pay interest on current balances, there is no reason why bank interest should not be earned on all balances in the hands of trustees, notwithstanding these decisions. Where the will contains no trust to invest, and the money is subject to distribution at any time, executors are justified in depositing moneys in a bank, and will be charged with bank interest only. Re Mclntyre (1904), 7 O. L. R. 548. But where moneys are left by will to be invested at the discretion of the executor, he does not conform to his duty by depositing the funds in a savings bank: and his neglect to invest exposes him to pay the legal rate of interest for the money. Where the beneficiaries are infants the acquiescence of their guardian, not being for their benefit, does not bind them. Spratt v. Wilson, 19 O. R. 28. In Be Honsberger (1885), 10 O. R. 521, the Master had charged executors with interest at 6 per cent, per annum, with annual rests upon moneys belonging to the estate in their hands. On appeal, Boyd, C, said: "The more modern rules developed in the English Courts relating to the award of interest against execu- tors and trustees appear to proceed upon these main lines: (1) When the money is kept in the executors' hands without sufficient excuse, the offense is deemed an act of negligence, and the usual Court rate of inter- INTEREST — CHARGING EXECUTORS Willi. L55 est will be charged at four per cent. (2) When the executors are not only negligent but commit an act of misfeasance by expending the funds for their own benefit or in any other way using them, the higher rate of five per cent, will be charged. (3) If the act of misfeasance is of such a character as to lead to the conclusion that more than this rate of interest has been made out of the money, as for instance, if it is employed in ordinary trade or in speculation, the beneficiaries will be allowed the option of either having an account of the profits or having the interest taken with rests. Burdick v. Garrick, L. R. 5 Ch. 241; Liquidators of Imperial, etc., Association v. Coleman, L. R. 6 H. L. 209. The latest English rules of decision were in effect adopted by our Court of Appeal in Inglis v. Beaty, 2 A. R. 453, and the result has been to modify some of the earlier decisions on questions of interest in the reports. It is very distinctly laid down that the punitive element in awarding interest is now to be dis- carded and the compensatory principle is declared to be that which governs. Grilroy v. Stephen, 30 W. R. 745 ; Re Jones, 49 L. T. X. S. 91 ; Price v. Price, 42 L. T. X. S. 626. "The gradation recognized in English practice* may, however, be approximated here in some such way as this: by charging an executor who negligently re- tains funds which he should have paid over or made productive for the estate at the statutory rate of six per cent.; by charging him who has broken his trust by using the moneys for his own purposes (though not in trade or speculation) at such a rate of interest as is the then current value of money; and by charging him who makes gain out of his trust by embarking the money in speculation or trading adventures, with the profits or with compound interest, as the case may be. "The evidence in this case shews that the executors not only kept considerable and constantly increasing balances in their hands from year to year, but also allowed the acting executor to use that money as he pleased. It was not employed in trade nor was it 156 executors' accouxts. proved that any profit was made out of it. There is, however, no special evidence to shew what were the current rates of interest during this period ; it appears that the notes and mortgages held by the executors bore interest for the most part at six per cent. If any evidence had been given that money was worth more than this, I should have charged the executors at the higher rate, but at present I see no safe ground on which to place the interest at more than six per cent, yearly. Some of the earlier authorities might have warranted the Master in aAvarding compound interest, but I think that such a charge is opposed to the spirit of the decision in Inglis v. Beaty, supra, and could only be upheld as being in the nature of a penalty imposed on the executors. ' ' Since Re Honsberger was decided the legal rate of interest has been reduced to five per cent, except as to liabilities existing at, or prior to, 7th July, 1900. E. S. C. ch. 120, sec. 3. In a case coining within the third branch of the rule laid down in Re Honsberger, where an executor is charged with profits, it is not the course of the Court to charge him also with interest on such profits. Silk- stone & Haigh Moor Coal Co. v. Edeg (1900), 1 Ch. 167, a case of setting aside a sale by the trustee of trust property to himself, the trustee being charged with rents and profits, but not with interest thereon. Inglis v. Beaty, 2 A. E. 453, contains an elaborate •review of the authorities. It is there laid down that the principle upon which the Court acts in charging executors with interest is not that of punishment, but of compensating the cestui que trust , and depriving the trustee of the advantage he has wrongfully obtained; that an executor will not necessarily be charged with compound interest in all cases, except those in which there is neglect to invest; that where an executor retains a portion of the trust money under an honest belief that it is his own he will be charged with simple interest only unless lie has used the money in trade. Moss, C.J.A., delivering the judgment of the Court, INTEREST— CHARGING EXECUTORS WITH. L57 said: "The cases J have cited from our own Court effectually dispose of the contention that the charge of compound interest depends upon a mere rule of prac- tice: The Court is to be govern. m| by the English decisions, with due regard to the circumstances of the country. The rule is one of law, as contradistinguished from one of practice, just as much as is the principle upon which damages should be assessed in an action at common law." In Boys' Home of Hamilton v. Lewis, 4 0. R. L8, Boyd, C, said: "The next ground of appeal is on the question of interest. By the usual course of the Court, interest is not chargeable against an executor till after the end of the first year. Prima facie, the fund is then distributable, and if he keeps moneys thereafter in his hands without reason he will be charged with interest. The pendency of an adminis- tration suit {Holgate v. Haworth, 17 Bear. 259; 99 R. R. 147), the retention of the moneys though the executor has not used the fund in business {Dawson \. Massey, 1 B. & B. 230), the withholding on the ground of uncertainty as to claims upon the fund, or as to who is entitled to it, and giving notice to beneficiaries who abstain from asking for an appropriation or an invest- ing of the money {Melland v. Gray, 2 (/oil. 295; 70 R. R. 229; Mousley v. Carr, 4 Beav. 4!); 55 R. R. 13), readi- ness and willingness to pay, but inability to do so till it should be ascertained by decree of the Court win, are the parties entitled (Sutton v. Sharp, 1 Russ. 146) : none of these exempt the executor from paying inter ,,st '"i moneys which he has kept unproductive to the beneficiaries. In Re Evans Estate, Evans v. Evans, I W . \. L876, p. 205, administrators who claimed to !>.■ beneficially entitled to funds in their own hands and failed for want of evidence, were charged with interest. In cases of improper retention of balances the Court awards interest, when the sums are of a considerable or substantial amount. Jones v. .1/, rrall, 2 Sim. X. s. 241. There is no good reason for not charging the executors with interest in this case upon the residue 158 executors' accounts. in their hands after the time when it was distributable. As the residuary estate was ascertained or got in from time to time it became money in their hands held for the use of residuary legatees. The annual rate of interest should be charged upon it from the time it might properly have been distributed or appropriated down to the time of its actual payment, or if not yet paid, down to the present time." But an executor retaining money in his hands under a bona fide, though mistaken belief, that it is his own, may be exonerated altogether from payment of inter- est. Bruere v. Pemberton, 12 Ves. 386 : or he may be ordered to pay simple interest. Inglis v. Beaty, supra. But in Meander v. McCready, 1 Moll. 119, the executor was charged where he retained a balance under a fair misapprehension of his right to it. In Taylor v. Gerst, Mosely, 99, it was said that if money placed out at interest be called in by an execu- tor without any cause, he shall pay interest for it. But in Newton v. Bennett, 1 Bro. Ch. C. 361, Lord Thurlow said that an executor had an honest discretion to call in a debt bearing interest, if he thought the same in hazard. See also sec. 30 of The Trustee Act, and Smith v. Roe, 11 Gr. 311. If an executor has employed trust money in trade or in speculation, the cestui que trust has the option of taking either interest or the profits Avhich have arisen from the trade or speculation : Wedderburn v. Wedder- huni, 22 Beav. 100; but lie must elect to take either the profits for the Avhole period, or the interest for the whole period. In Vyse v. Foster, L. R. 8 Ch. 309, a case in which a daughter of the testator, a beneficiary under the will, was asking for an account of profits, having been credited with interest at 5 per cent, on lier share of trust moneys, which consisted of the .-iscertained share of the testator left in breach of 1 ! ust in the business in which he had been a partner, James, L.J., says: "It has been distinctly laid down that a plaintiff cannot claim both interest and profits in respect of the money employed in trade, but must INTEREST- CHARGING EXECUTORS WITH. L59 elect between them, and it might be a grave question whether the plaintiff must not either adopt or repudi- ate the terms on which the successive partnerships wmc willing to hold he,- money. If she repudiate the arrangement, it might be considered that she would have to elect between interest and that share onlv of t be profits made in respect of her capital which actually came into the hands of her trustees, as appears to have been held in Jones v. Foocall, 15 Beav. 388. The appli- cation, however, of that rule as to election between interest and profits to the case of an actual loan by a trustee m breach of trust to himself and others, would, we think, require very full consideration before the Court came to a final decision on it. ' ' An executor, who, being a trader, mixes the trust moneys with his own in his bank account, and uses this fmid for business purposes, must be considered as having employed the money for his own profit and will be charged accordingly. Treves v. Toxvnshend, 1 Bro. Ch. C. 385; Roche v. Hart, 11 Yes. 61. Where the Master charged a trustee with legal interest on yearly balances, on appeal, Moss, J.A., held that in view of the manner in which the trustee dealt with the estate, keeping no accounts and making no endeavour to keep separate the plaintiff's money, but making use of all that came to her hands and dealing with it and treating it as her own, the Master was justified m holding her to account on the footing of interest, at the legal rate, upon the yearly balances in her hands. Zimmerman v. Willcox, 35 C. L. J. 688. Where trust money has been loaned to one of the executors, the executors will be charged with the highest rate of interest that could have been obtained tor the money. Smith v. Roe, 11 Gr. 311. The widow of the intestate married again and allowed her husband to use the moneys of the estate m her hands. The Master charged her witli interesl at ten per cent., but the Court reduced it to simple interest. ,t not being shewn that mere could have been 160 executors' accounts. realized on investment. Fielder v. O'Hara, 14 Gr. 223. In Sovereign v. Sovereign, 15 Gr. 559, it was held that executors may be charged with interest as well as principal in respect of sums lost through their mis- conduct, though the principal never reached their hands. Vanston v. Thompson, 10 Gr. 542, and B lain v. Terryberry, 12 Gr. 222, were not acted upon. Executors paid a legatee certain sums on account, and, on a further demand for payment, denied having funds sufficient to pay the balance. On taking the accounts many years afterwards it was found the executors had sufficient funds for the purpose, and they were ordered to pay the legatee the accrued inter- est on the legacy. Sovereign v. Freeman, 25 Gr. 525. An executor who transfers funds of the estate from a bank where they are bearing interest to his own bank where they do not draw interest will be charged with the amount of interest lost by the trans- fer, but he is not answerable for profits. Dick's Estate, 183 Pa. G47. CHAPTER XXVIII. Executors' Costs. '•Nothing ought, I think, to be adhered to more sacredly than the general principle, which is that a trustee or executor having done his duty, having faith- fully accounted, and having brought forward the (stale committed to his charge, should not be deprived of his costs upon light grounds." Per Lord Westbury, Birks v. Micklewait, 34 L. J. Ch. 364. The following have been held to be included in costs, charges and expenses: Costs of proceedings by an administrator against a defaulting solicitor, taken bona fide for the benefit of the estate. Re Davis, 57 EXECUTORS COSTS. L61 L. T. 755; the costs of an action properly defended by a trustee. Re Llewellin, 37 Ch. 1). p. 327; costs of a sale properly made by trustees under a power. Re Mansel, 54 L. J. Ch. 883; costs of former trustees paid to the executors of the survivor in consideration of his paying over the trust proper! v. Harvey v. Oliver 57 L. T. 239. An executor on passing his accounts is not entitled without question to sums paid by him to his solicitor for costs; and the bill, although not submitted to a regular taxation, can be moderated by the Judge by disallowing such items as are irregular or excessive. Johnson v. Telford, 3 Kuss. 477, 27 R. R. 116; Allen v. J arris, L. R. 4 Ch. 616; McCargar v. McKinnon, 17 Gr. 525. And an executor will not be allowed the charges of his solicitor for doing things which the executor ought strictly to do himself, such as attend- ances to pay premiums on policies, attending at the bank to make transfers, attendances on valuators, auctioneers, legatees and creditors. Harbin v. Darby 28 Beav. 325, 126 R. R. 150. Where costs have been bona fide paid to a solicitor be cannot be made to refund them if it turns out that the executor cannot get them out of the estate. Re Blundell, 58 L. T. 933; Brinsden v. Williams (1894), 3 Ch. 185. Pees paid to counsel for legal advice, on matters affecting the estate, is a proper allowance to an executor. Hayes v. Hayes, 29 Gr. p. 99; so too a retaining fee paid to solicitors in a proper case. ( 'hisholm v. Barnard, 10 (Jr. 47!). W herein an action between a trustee and his cestui que trust the Court, in the judgmenl drawn up, makes "no order as to the costs of the action," such adjudi- cation is final, and the trustee cannol afterwards retain his costs of the proceedings out of the trust estate, ''"idlev. p..i.. said; -it seems to me that this is a com- 1,10,1 f orm of order perfectly familiar to us all. and it means that the Judge, having had his attention called E.A.- 11 1()2 executors' accounts. to the matter, and being asked to make an order for the payment of the costs, declines to do so. It is not the same as if lie had said nothing; and the effect is that each nmst pay his own costs." Re Hodgkhison (1895), 2 Ch. 190. In Story v. Dunlup, 13 Gr. 375, Mowat, V.C., seems to have gone a step further and held that where the executor seeks to retain such costs out of the estate the judgment or order in the action should contain a reservation to that effect. It will be noticed that in Re Hodfilxinson, Lindley, L.J., said: "it does not mean the same as if he had said nothing." In Story v. Dunlap an executrix appealed against a Master's report, and being successful in part only, the appeal was allowed without costs, and there was no reserva- tion of costs as against the estate. On further direc- tions the Court refused to order the costs payable out of the estate, the V.C. saying: "If I made the order now asked for I would be giving costs which another Judge of co-ordinate authority has refused to give." It will be noticed that, in this case, all the proceedings were in the same action. The very recent case of Re Dingman, 9 0. W. N. 272, requires careful consideration when considering the effect of the foregoing cases. It was an appeal from the Judge of a Surrogate Court under section 34 of the Surrogate Courts Act. The appellant had brought an action against the executor and recovered $1,000 and costs. As far as the report o| the case shews the judgment in that action made no reference to the execu- tor's costs by reservation or otherwise. On the audit <>f the executor's accounts the Surrogate Court Judge allowed the executor his costs o| defending the action as well as the costs paid to the plaintiff, and it was in r.espept of these items that the appellant complained. Riddell, .J., delivering the judgment upon appeal, >5aid it was one of the disadvantages of an executor's posi- tion that if he defend an action brought against him pS such executor and fail, he may be forced to pay the costs out of his own pocket: Macdonald v. Balfour executors' costs. 16."} (1893), 20 A. R. 4Q4; but he is entitled to be allowed all reasonable expenses which have been iiieurred in the management of the estate, and these include the costs of an action reasonably defended. Of course; he could not be allowed the costs of improperly defend- ing an action: Chambers v. Smith (1846), 2 Coll. 742; Smit% v. Chamhrrs (1847), 2 Ph. 221; but to disentitle him there must be something proved to shew the un- reasonableness; and nothing was established here. (Reference to in Re lleddoe. infra; hi re Love, post.) "The fact that there was no provision in the judgment in the action for the executor's costs was nihil ad rem. It is doubtful whether a direction in the judgment that the executor's costs should be paid out of the estate would be valid: see sec. 19 of The Surrogate Courts Act— but, in any case, these are not costs in the action. When allowed by the Surrogate Court Judge, they are allowed as 'charges and expenses.' " In lie Williams, 22 A. R. 196, the administrators for the deceased assignee for creditors defended in good faith an action brought by his successor in the trust to recover damages for breach of trust by the intestate. They were unsuccessful, and had to pay the costs ol* the plaintiff's solicitor and of their own solicitor. They were held entitled to credit for these costs in passing their accounts. "Where it is plain that a dispute can be settled only by litigation it is not necessary for a trustee to ask the advice ,»|' the Court before defending. See also Griffith v. Patterson. I'll Grr. 618; Mch'eller v. Pranaleij. 25 (Jr. 5^5. Kxecutors were given tin- costs of opposing an un- successful appeal, out of the estate, in the. event of their not being able to make them out of the appellant. Be Cassie, 17 P. \X. 402. The general rule is thai in the absence of miscon- duct a trustee shall be recouped his costs, charges and expenses out of the trust estate, even in cases of unsuc- cessful litigation. Smith v. Heal. 25 Out. R. 368; Pitts v. La Fontaine, (i A. C. 4S2 : and even if the trustee pro- ••"eds without the sanction of the Court, yet the costs 164 EXECUTORS ' ACCOUNTS. will be allowed out of the estate if it appears that the defence or action would have been authorized had prior application been made. In re Beddoe, Cottam v. Beddoe (1893), 1 Ch. p. 557. This rule presupposes a fund in the trustee's hands out of which costs could be paid. Where an executor, without direct authority or obtaining indemnity, brought an action to recover a sum of money alleged to be due to the testator, and the action was dismissed with costs, the personal estate being insufficient to pay the costs of the defendant, it was held that the executor could not resort to specifically devised estate. In re Champagne (1904), 7 0. L. E. 537. The rule that a trustee's costs are payable as be- tween solicitor and client is not confined to cases where he is brought into Court against his will. Bldkeley v. Ingram (9 C. L. Times, 143). An executor has a right to have his accounts taken in Court, and the mere neglect, as distinguished from pertinacious refusal, to render his accounts, is not sufficient to deprive him of his costs. White v. Jack- son, 15 Beav. 191, 92 R. R. 379; Gresham v. Price. 35 Beav. 47, 147 R. R. 16; ReugJi v. Scard, 24 W. R. 51. Sec ante under tk Duty to Keep Proper Accounts." The mere fact of executors being charged with interest on balances in their hands, or any mere negli- gence, is not of itself a sufficient ground for visiting them with the costs of an action, or even refusing them costs. Flanagan v. Nolan, 1 Moll. 84; Travers v. Townsend, 1 Moll. 496; and an executor who has not been guilty of dishonesty, and who lias made good to the estate the deficiency arising from an improper investment made by him, will not be ordered to pay costs. Peacock v. ( 'oiling, 54 L. J. Ch. 743; Re White- ley, 33 Ch. D. 347. But if the executors' accounts are falsified, or they have been guilty of gross or wilful negligence, or have acted from fraudulent or interested motives, they arc generally ordered to pay costs, or so much of it as has been occasioned by their misconduct; or may be dis- EXECUTORS' COSTS. L65 allowed their costs. Tebbs v. Carpenter, 1 Mad. 290, 16 R. R. 124; Gilbert v. Lee, 13 W. R. 1012. If the inquiry has been occasioned by the executor not keeping accounts, he must pay the costs. Pearse v. Green, 1 J. & \V. 135, 20 R, R, 258; or he may be refused costs. Payne v. Evans, 18 Eq. 356. Where the action would have been necessary inde- pendently of an alleged breach of trust, and the execu- tor a necessary party, he may be allowed his general costs, though he may have to pay the costs occasioned by the breach. Pride v. FooJcs,2 Beav. 430, 50 R. R. 227; Tebbs v. Carpenter, supra. But Avhere the sole object of the action is to make the executors answer- able for a breach of trust, and the judgment is against them, it will be, almost invariably, with costs. Earl Poulett v. Herbert, 1 Yes. Jr. 497; Whistler v. Newman, 4 Ves. 129. If, however, the action has enabled the Court to administer the estate, or the audit has re- sulted in a proper passing of the executors' accounts, the executors may be allowed their costs, less the costs directly attributable to their conduct. Taylor v. Hay- garth, 8 Jur. 135; In re Honsberr/er, 10 Out. R. 54. If executors by their unfounded claims, or by their supineness, negligence or misconduct, occasion an ad- ministration suit to be brought, they prima facie sub- ject themselves to liability for the general costs of it, McGill v. Courtice, 17 (Jr. 271; see also Simpson v. Home, 28 Gr. 1, where an executor was refused costs down to the decree and ordered to pay the subsequent costs. Where administration proceedings were rendered necessary by gross and indefensible neglect of the trustees to deliver accounts, they were ordered to pay all the costs of taking the accounts. In re Skinn r (1904), 1 Ch. 289; Eglin v. Sanderson, 3 (liff. 434, 133 R. H. 15(5. Where rents were allowed to fall in arrear in eon- sequence of disputes between the trustees, the Court, made them pay the costs o\ a suit by the tenant for life 166 executors' accounts. for payment of the income. Wilson v. Wils'dh, 2 Keen, 249, 44 R. R, 238. In an administration action executors were charged with so much of the expenses of the reference as was incurred in the Master's office in establishing charges which they disputed. Steu-art v. Fletcher, 18 Gr. 21. Where executors are brought into Court to deter- mine the rights in a fund, or otherwise, they will be allowed their costs, although they make a claim, if it is merely bv way of submission. Rashleu/li v. Master, 1 Ves. Jr. 201. As between executors and creditors, the executors are entitled to their full costs, charges and expenses out of the estate in priority to the payment of debts, although the estate is insolvent, unless they improperly deny assets. Lodge v. Pritchard, 4 (Jiff. 294, 141 R, R, 213; Dodds v. Tube, 25 tin. I). 617. Where two or more executors are implicated in a breach of trust, the Court, in making an order for costs, will not distinguish between the relative degrees of culpability. Laurence v. Boule, 2 Ph. 140, 78 R. R. 54. But a solicitor-trustee to whom the management of the trust has been left as the acting trustee, is liable to indemnify his co-trustee against the costs of an action caused bv his negligent conduct. In re lAhsl'ey (1904), 2 Ch. 785. Where executors are allowed costs out of the estate such costs are allowed in the ordinary way, i.e., as between solicitor and client, unless it is established that they have been guilty of some misconduct which would justify the Judge in depriving them of costs. And this rule applies frKere the executors are entitled to two sets of costs, as in Re Love, 29 Ch. D. 348, where one executor brought an action against his co-executor for administration, no misconduct being alleged against the defendant. An executor is not entitled to credit for services Tendered by a solicitor in advising him concerning his right to compensation, because such service is for the SoUCIToK-KXKcrToK. [$J personal benefit of the exebtltbr and n,,t For the estate In re McA/pm, S Ohio | ),.<.. (!r>4. Credit will not 1)( allowed a personal representative for expenditures made in connection with a contest over the will which is still pending, a- liability for such expenditure cannot he fixed until the contest is determ- ined. TUlok's Estate, 1 1 Pa. Co. Ct. 625. See further under "Practice on Audit." CHAPTER XXIX. SoLlCITOR-ExECrToi;. Section 67 (4) of The Trustee Act provides as iollows: — W here a barrister or solicitor is a trustee. guardian or personal representative, and (ias rendered necessary professional services to the estate, regard may he had in making the aiibwance to such circumstances, and the allowance shall be increased by such amount as may be deemed fair and reasonable in respert of such services. THfe "allowance" here referred to is the compen- sation to which a guardian or personal representative ls ,,,ltlllt ''l to" for his care, pains and trouble, and his time expended in and about the estate. Although the statute says that regard M&& be had to these envinn- stances, the word "may" is here used to uive an authority and not a discretion. Feusoni v New We/ v. Toronto, 17 0. R. 554. Mr. Holmested, in his Ontario Judicature Act, says : Having regard to the provisions of The Trustee Act and The Solicitors Act above referred to, it would seem to be clear that the former rules prohibiting solicitor trustees, or mortgagees, from recovering profit costs from their cestuis que trust or mortgagors are, in effect, abrogated, and this right to remuneration being now recognized by statute, the quantum will be the ordinary taxable charges. There is, however, a broad distinction between the provisions of section 68 of The Solicitors Act and section 67 (4) of The Trustee Act. A solicitor mort- gagee is "entitled to receive the same charges and remuneration as he would be entitled to receive if such mortgage had been made to a person not a solicitor. ' ' In other words, in the case of a solicitor mortgagee, as far as costs are concerned, the solicitor is entitled to recover his charges as if the relation of solicitor and mortgagor did not exist. Such costs and charges can be taxed under The Solicitors Act the same as any other bill of costs. In the case of a solicitor trustee, the solicitor does not recover for professional services as in the case of solicitor and client. His fees would appear not to be subject to the provisions for taxation found in The Solicitors Act. All The Trustee Act does is to enable the Surrogate Court Judge to have regard to the necessary professional services the executor has given to the estate and increase the allowance by a fair and reasonable amount for such services. In ascer- taining what "may be deemed fair and reasonable in respect of such services," there appears to be no other guide than the tariff allowed to solicitors for similar services. Section 67 (4) of The Trustee Act came into force on 12th June, 1903 (3 Edw. VII., ch. 7, sec, 27). The law before this enactment is concisely stated in In re SOLICITOR-EXECUTOR. 169 Williams (1902), 4 0. L. R. 501, as f ollows :— " The gen- eral rule is that a trustee-solicitor is not entitled to charge the estate with any professional services, for to allow him to do so would be to violate the rule that a trustee is not to be placed in a position where his duty and his interest conflict. An exception, however, which is not to be extended, has been established by the deci- sion of Lord Cottingham in CradocJc v. Piper (1850), 1 .M. & Gr. 664, under which a solicitor-trustee who brings or defends proceedings in Court for himself and his co-trustee is entitled to recover profit costs and therefore to charge such costs to the estate, but such costs are not to be increased by the fact that he is himself a party beyond what they would have been had he acted for his co-trustee only. This exception is not to be extended to proceedings to professional services rendered to the estate out of Court : see In re Corsellis, Laivton v. Elwes (1887), 34 Ch. D. 675; Broughton v. BrougKton, 5 D. M. & G. 160; Re Doodu. Fisher v. Doodu (1893), 1 Ch. 129, 138, 139, 141; Re Mimico Pipe d- Brick Mfg. Co., 26 O. R. 289; Lewin on Trusts. 10 ed." See also In re Lecltie Estate, 36 C. L. J. 136. In England, when a solicitor is named as executor, it is usual to insert a clause in the will empowering him to charge for his professional services. In Re Fish (1893), 2 Ch. 413, where the will contained such a provision, it was held that the executors could not settle the amount payable out of the estate for such services to one of themselves, so as to bind the cestui que trust and preclude his right of taxation. Where the parties are sui juris there is nothing to prevent them agreeing on the amount to be retained by the executors as compensation; but the Court would view such an agreement with suspicion where a portion of the allowance consists of claims for professional services, where the cestui que trust has no independent professional advice. In Re White (1898), 1 Ch. 297, an executor was empowered by the will to charge for his professional services. The estate proved insolvent and it was held 170 EXECUTOKS' ACCOUNTS. his right to charge for his services was in the nature of a legacy, and could not be asserted in competition with creditors. In Ontario, the remuneration being by way of extra allowance for care, pains and trouble, it would be a preferential lien. Harrison v. Patterson, 11 Gr. 105. A solicitor-executor is entitled to charge only for services strictly professional, and not for matters which an executor ought to have done without the inter- vention of a solicitor, such as attendance to pay premiums on policies, attending at the bank to make transfers, attendances on proctors, auctioneers, lega- tees and creditors. "When a solicitor is appointed an executor the Court must necessarily make a distinction between those things which properly belong to his office of executor, and those which relate to his char- acter of solicitor. Harbin v. Darby, 28 Beav. 325; 12b' R. R. 150; In re Chappie, 27 4. 1265. In England the power of applying the interest of a legacy to tin 1 maintenance of an infant is now prin- 172 executors' accouxts. cipally regulated by The Conveyancing and Law of Property Act, 1881, which repealed section 26 of Lord Cranworth's Act. There is no corresponding Act in Ontario. As a general rule the Court will not allow mainten- ance to an infant during the lifetime of the infant's father, if the father is able to support the infant. The father's ability must be understood in the sense of ability to maintain and educate according to the for- tune and expectations of the infant, and the infant's needs must be considered with reference to the same standard of fortune and expectation. When maintenance is allowed for an infant, it includes ordinary medical attendance, but not the expense of an unusual or protracted illness. Smith v. Rose, 24 Gr. 438; Howe v. Carlaw, 15 0. R. 697. Unless the estate is exceptionally large nothing in the shape of expenditure for luxuries will be allowed. Bridge v. Brown, 2 Y. & C. 181 ; Zimmerman v. Wilcox, 35 C. L. J. 688. As against creditors an administrator cannot be allowed for disbursements in schooling, feeding or clothing of the intestate's children subsequently to his decease. Giles v. Dyson, 1 Starkie 32 ; 18 R. R. 743. The Court will permit the use of the corpus of an infant's estate, or so much of it as may be necessary, where the doing so is for the benefit of the infant; and it will do so where it is proper for past as well as for future maintenance. In re Howarth, L. R. 8 Ch. App. 418; Ashbrough v. Ashbrough, 10 (Jr. 430. "There is no doubt that the Court has power to employ the corpus of an infant's estate for his main- tenance ; and that the Court exercises this power when- ever that course is shewn, to the satisfaction of the Court, to be more for the infant's benefit, than to pre- serve the property intact until the infant comes of age; and it is the modern doctrine, that payments made by trustees or executors out of the corpus without the previous sanction of the Court are to be allowed Avhere the Court considers the payments reasonable and MAINTENANCE OF [NFANTS. 1 JS proper; and such allowances may be made whether the payments were for advancement or maintenance, though payments by way of advancement are more readily allowed than payments by way of mainten- ance. In all cases payments made without previous authority are made at the risk of the parties; and the allowance afterwards is for the discretion of the Court in view of all the circumstances." Edwards v. Durgan, 19 Gr. 101. This was approved of in Goodfellow v. Rannie, 20 Gr. 425, as a general exposition of the law. But in Edwards v. Burgan, where a farmer gave to his widow all his goods and chattels absolutely, an annuity, and the use of his real estate during widowhood, and she married again and then claimed to be paid for past maintenance of the infants out of the corpus of the estate devised to them, Mowat, Y.C., refused to allow the claim. See also In re Renwick, Renwick v. ( 'rooks, 14 P. R. 361; Re Blain Infants. 14 P. R. 220. But the Court does not sanction the employment of the corpus of an infant's estate for maintenance unless satisfied that such a course is more beneficial to the infant than that of preserving his property intact until he comes of age. Goodfellow v. Rannie, 20 Gr. 425. The rule is stated even more strongly by Boyd, C, in Crane v. Craig, 11 P. B. 236, where he says: "It is a primary rule that the principal of the infants' estate is not to be encroached upon, unless for unavoidable reasons falling little short of necessity. Walker v. Wetherell (1801), 6 Ves. 473: E.r />. Mch'cif (1810), 1 B. & B. 405." These cases were approved of and followed in the recent case of Re Rundle (1014). 32 0. L. K\ ;;r_\ There an orphan boy became entitled at the age of nineteen to his mother's estate, of the value of about $9,000. A trust company was appointed guardian of the boy's estate, and during the two years of his min- ority expended on his behalf for board, education, medical fees, travelling expenses, and paid to him For clothing, pocket-money and other expenses, su 174 executors' accounts. amounting in the aggregate to $1,100 more than the income of his estate. On the audit of the guardian's accounts the Surrogate Judge allowed these disburse- ments, but on appeal, Mulock. C.J., delivering the judgment of the Court, said: "Had the company made application to the Court for sanction to such expendi- ture out of the capital, previous to its being made, and had frankly informed the Court as to the infant's situation in life, and other circumstances that should be considered, such sanction would, 1 think, have been refused, except to the extent of a reasonable allowance whilst the infant was at college. The company, how- ever, made the expenditures without previous sanction and at their own risk. A large portion thereof was not necessary or in the infant's interests, but on the contrary, proved hurtful and should not be approved of by the Court. It would be reasonable to sanction payment to the infant during the time that he was at St." Andrew's College to the extent of $100. With this exception, there should be no encroachment on the capital in respect of the various sums allowed or paid by the company to the infant for maintenance ; and to this extent the appeal is allowed." Affirmed 52 S. C. R. 407. In Crane v. Craig, 11 P. R. 236, the intestate left a widow and five children from 3 to 12 years old, and personal estate only, of which the infants' share would aggregate $11,500. The Master allowed the widow $9,504 for five years past maintenance, but on appeal, lioyd, C, reduced this to $(>,()()(). The mother had em- ployed a resident governess at $400 a year, had spent $48 a year on music lessons, and $500 a year for cloth- ing. The Chancellor said: "Not questioning the pro- priety of these things it' they could be defrayed out of the yearly income of the infants' estate, I think the Court should, in the interest of the infants, proceed upon the basis of a more economic expenditure when the capital has to be reduced." Where two daughters aged 18 and 1(5 were entitled t<> $1,700 and $1,900 respectively, and were living with MA1XTKXAXCK OF 1X1 AXIS. 17-") their mother, who had no moans of her own, the Court authorize*! a n encroachment upon the corpus of the estate, each being "old enough tp appreciate the folly of !«'< hieing their small means more than reasonably can he avoided.-' Meredith, C..J. C.I\, said: "It is, of course, one of the first and highest duties of a guard- ian to provide for the maintenance and education of his wards, in a manner befitting their condition in life, limited, of course, by the means at his command available for the purpose, and as much of it as may 'be needed for the purpose it is his duty to apply to it. In strictness, he ought not to encroach upon the prin- cipal without the authorization of the Court; but if he do, he may be reimbursed in passing his accounts; in effect that which the Court would have authorized beforehand may he subsequently ratified: the result being that the guardian takes the risk in not getting authorization beforehand. The expenditure should he for that only which is reasonably needed: and it is not needed when otherwise provided: or can, and should he, earned bv the infant.'' He Atkins Infants (19115), S3 O. L. E. ilO. In Re Havey (191:',), 29 0. L. R. 336, two infants were entitled to $500, their deceased father's share of life insurance; and upon their mother's application, she was appointed trustee of this sum, and it was ordered that the whole of it should be paid to her, on her undertaking to apply it for their maintenance and benefit. The Court lias a discretion to make an order for payment of infants' money for past maintenance, but such an order will be made onlv in exceptional cases. AY I/nllls. '2 <>. W. X. 1447: /,Y 'Lh,,„l. 31 O. L. \l. 47(1; Fittwivl- v. Feiurick. 20 (jr. :>S1 ; Shifdit v. I-'ldcLr. Hi (Jr. L\T>. A testator bequeathed to his grandson his farm, implements, etc.. and provided that until tin 1 grandson attained the age of i2 1 years the executors should keep, control and manage the farm, and expend the net revenue arising therefrom in the management and 176 executors' accounts. cultivation of the land, without accounting to the grandson or anyone else for such revenue. The grand- son applied to have an allowance made to him for his support and education. The application was dismissed on the ground that the testator having directed the surplus to be used in the improvement of the farm, the money could not be diverted to another purpose. Re Estate Wad dell (1902), 35 N. S. K. 435. The plaintiff Avas two years old when her father died in March, 1877. Her mother, the defendant, was appointed administratrix and guardian. The plaintiff continued to live with her mother until 1895, when she married. In an administration action the Master allowed defendant for the daughter's maintenance, $60 a year until the plaintiff was twelve years old, $75 a year for the next four years, and $35 a year for the following four years, or $1,040 in all. The plaintiff did the work usually done by a girl of her age living upon a farm w T ith her parents, and for several years there was no hired female assistant, all the women's work being done by the defendant and the plaintiff. The defendant kept no account of her disbursements. On appeal by the defendant it was held that, having regard to the fact that the parties were living together on a farm for the greater part of the time Avhere the chief outlay would be for clothing and pocket money, and to the facts that the plaintiff attended the public school free of expense, and that the outlay for school books was trifling, the finding of the Master could not be interfered with upon the evidence, although he might well have allowed a larger sum. The Master dis- allowed $125, the cost of an organ which the defendant alleged was bought for the plaintiff when she was eight years old. Held, that for an eight-year-old daughter of a deceased farmer, living on the farm with her mother and step-father, an organ costing $125 was not a necessity. Zimmerman v. Wilcox, 35 C. L. J. 688. /;/ re Brazil, Barry v. Brazil, 11 Gr. 253, the widow of the deceased was appointed administratrix. She got in the personal estate and remained in occupation of MAINTENANCE OF INFANTS. ] , , the farm, maintaining the infant heirs, to whom qo guardian had been appointed. H was held thai the personal estate and proceeds or profits of the real estate must be applied first in payment of debts, and then to reimburse the administratrix for sums spent in the infants' maintenance. It lias long been settled that interest as a means of maintenance is payable out of the general residue, upon a legacy which is merely contingent, when the legatee is an infant child of the testator, and no other main- tenance is provided. The cases establishing this are numerous and uniform. Heath v. Perry, 3 Atk. 101; ( 'hambers v. Goldwin, 11 Yes. 1, 8 E. R. Gl ; Martin v. Martin, L. E. 1, Eq. S69;BinMey v. Binhley, 15 Gr. 649. But where the testator is not the parent of, or one standing in loco parentis to, the legatee, the general principle, is thai payment may be made for mainten- ance out of the income of a legacy only where the legacy is vested in possession: Collis v. Blackburn, !» Ves. 470: not when it is vested and payable in futuro: Des- crumbles v. Tompkins, 4 Bro. C. C. 149; nor where it is contingent: Butler v. Freemen, I! Atk. 58. In Re Mclntyre (1904), 7 0. L. E. 548, two infants were given a legacy of $4,000 each, contingent upon them attaining 25 years of age, and one-tenth of the residuary estate. It was contended that the infants were not entitled to interest on the pecuniary legacies — that the gift to them of a share in the residue of the estate took the case oul of the rule of construction above stated, as being a provision for their mainten ance. Street, -I.. said: "No authority was cited in support of this contention, and the case of In re Moody (1895), 1 Ch. 101, is a strong authority againsl it. The question is not whether the infant i> entitled to some other fund, either under or apart from the will, which mighl he made available for the maintenance of the infant dining minority, but whether upon the face of the will the testator has shewn a clear intention that the inlant shall look for maintenance to some particular 178 executors' accounts. fund other than his legacy. If he has not, then the presumption of an intention that he should have inter- est on his legacy by way of maintenance at once arises." And the executors Avere directed to apply the income of each legacy for the benefit of the infants during minority to the extent required for their main- tenance. See further as to interest on legacies for maintenance, under "Legacies and Annuities." CHAPTER XXXI. Relief of Trustees. Section 37 of The Trustee Act provides for the relief of trustees committing a technical breach of trust. Under this section of the Act where it appears to the Court that a trustee is or may be personally liable for any breach of trust, whenever the transaction alleged or found to be a breach of trust occurred, but has acted honestly and reasonably, and ought fairly to be excused for the breach of trust, and for omitting to obtain the directions of the Court in the matter in which he committed such breach, the Court may relieve the trustee either wholly or partly from personal liability for the same. This is a reproduction of section 3 (1) of the Judicial Trustees Act, 1896 (England), and the deci- sions under that Act are applicable to our Act. This Act was passed to afford greater protection to trustees, was made retrospective, and was "meant to be acted upon freely and fairly in the exercise of judicial discretion." In re Turner, (1807), 1 Ch. 536. It is not sufficient that the trustee acts honestly, he must also act reasonably. In re Barker, 77 L. T. 712; and the question of reasonableness is where most of the difficulty is encountered. In Smith v. Mason (1901), RELIEF or TRUSTEES. 179 1 0. L. R. 594, Boyd, C, said that the nearest approach to a working rule is found in the judgment of Lopes, J .. in In re Chapman, Cocks v. Chapman (1896), 2 Ch. at 1>I>. 777, where he says: "It is very easy to be wise after the event; but in order to exercise a fair judg- ment with regard to the conduct of trustees at a par- ticular time, we must place ourselves in the 'position they occupied at that time, and determine for our- selves what, having regard to the opinion prevalent at that time, would have been considered the prudent course for them to have adopted." In the same case Lindley, L.J., said: "Trustees acting honestly, with ordinary prudence and within the limits of their trust, are not liable for mere error of judgment." In Learoyd v. Whiteley (1887), 12 A. C. 732, the duty of trustees is said to be to use ordinary care and caution, and they must be supposed to possess ordin- ary care and prudence. The trustee does not entitle himself to relief by proving that he has acted reason- ably and honestly. He must shew that under all the circumstances he ought fairly to be excused for his breach of trust. In cases since the Act the Judges have invariably refused to interpret "reasonably," saying that the course of conduct pursued in each individual case would have to be pronounced upon as it came up. The Court, no doubt, has to be satisfied by sufficient and proper evidence that the trustee has acted reasonably as well as honestly, but that has been by giving evi- dence of what was done by him, what enquiries he made, the condition of affairs contemporaneously, and other matters to enable the Court to put itself in the situation of the trustee at the time. Smith v. Mason, supra. In this case it was held that the Act dees not render competent as evidence the opinions of bankers or other financial men as to whether the trustee so acted in the course he lias taken or omitted to take in respect of collecting a debt due the estate. The gen- eral rule of evidence still applies that mere personal 180 executors' accounts. belief or opinion is not evidence, and the test of reason- ableness is that exhibited by the ordinary business man or the man of ordinary sense, knowledge and prudence in the conduct of his own affairs. Whether a trustee has acted reasonably must be determined in the light of all the surrounding circum- stances, not as they would appear in the eyes of lawyers and Judges, but as they would appear in the eyes of ordinary prudent business men, and if he acted under such circumstances, as they so appeared, as a majority of ordinary prudent men would have acted under the like circumstances, he ought to be held to have acted "reasonably as a trustee." Dover v. Denne (1902), 3 0. L. R. p. 677. The rule is, that where the Court finds that the trustee has acted both honestly and reasonably, there is then a case for the Court to consider whether the trustee ought fairly to be excused for the breach of trust, looking at all the circumstances. Re Niclwlls, Hall v. Wildman (1913), 29 0. L. R, 206. The burden lies upon the trustee to shew that he has acted reasonably. Re Stuart (1897), 2 Ch. 583, 590. In the following cases the Court granted relief When Relief Granted. In the following ca Where an executor of a solicitor believing, and on grounds that justified that belief although erroneous, that the deceased had no right of action against a client personally for costs incurred in certain administration proceedings, took no steps to recover such costs. Re Roberts (1897), 76 L. T. 479. An executor paid an immediate legacy of £300 for maintenance to the widow, and allowed her to receive the income from the estate. The assets amounted to £22,000, and the only known debt was one of £100. Six months alter the death of the testator an action for an account of moneys received by the testator as plain- tiff's agent was commenced and the estate was found indebted to the plaintiff in £26,000. The executor was RELIEF OF TRUSTEES. 181 relieved as to the £300 legacy and the income paid up to the issue of the writ, but not as to sums paid there- after. In re Kay, Mosley v. Kay (1897), 2 Ch. 518. A testator gave his estate to executors upon trust '•to maintain the same and every part thereof in the like mode of investment." Part of the estate was a promissory note for £166 payable on demand. The executors, believing the debtor to be a man of good credit, neither called in nor applied to the Court for directions as to this debt, and the debtor died insolvent 18 months after the testator. Held, that, having re- gard to the terms of the will and the amount of the debt, the executors might reasonably have thought they were not hound to call in the debt or apply for direc- tions. In re Grindey, Clews v. Grindey (1898), 2 Ch. 593. Where the trustee has acted honestly the terms of the will may be looked at to judge of the reasonableness of his conduct. If an ordinary business man might reasonably entertain a particular view of the con- struction of the will, and the action of the trustee would have been justified if that view had been the true one, the trustee cannot be said to have acted unreasonably merely because this view of the construction is wrong. hi re Mackay (1911), 1 Ch. 300; Kenning v. Maclean (1900), 2 O. L. R. 169 post, So where trustees erroneously assuming they had I tower to sell, sold leaseholds and thereby diminished the income of the plaintiff, though the sale would have been a proper one had the trustees in fact possessed a power of sale. Perrins v. Bellamy (189!)), 1 Ch. 797. So where trustees, acting on the advice of solicitors, invested on mortgage without an actual valuation, but at a value calculated at a rate at which adjacent property had sold for by auction in a previous year, they were relieved except to the extent of the excess over two-thirds of the actual value. Waite v. Parkin- son (1901), So L. T. 456. Bui see Re Stuart (1897). 2 Ch. 583, post. 182 executors' accounts. Under The Trustee Act the advice of competent counsel and the opinion of the Court, even if erroneous, may afford sufficient protection to the honest trustee. Elgin Loan Co. v. National Trust Co. (1903), 7 0. L. R. p. 18. And see In re AUsop (1914), 1 Ch. 1 post. In one case it was said that the test is ''Did the trustees act as an ordinary prudent man would have done in regard to his own business!" McDonald v. Trusts and Guarantee Co., 1 0. W. N. 886; In re Turner (1897), 1 Ch. 536; In re Stuart (1897), 2 Ch. 583. But the fact that he has acted with equal foolishness in both cases will not justify relief under the Statute. In re Lord de Clifford's Estate (1900), 2 Ch. 707. Sec. 31 of the Act is a relieving section, and does not impose a statutory obligation upon trustees to take a valuation, and the neglect to do so does not exclude them from the benevolent operation of section 37. Palmer v. Emerson (1911), 1 Ch. 758. Money was advanced by executors to their solicitors to pay necessary debts and disbursements, and for other administration purposes, in reliance on the soli- citors' statements that these sums were required for these purposes, and the solicitors did not apply all the moneys received in such payments. The Court found the executors had acted honestly and reasonably and ought fairly to be excused for making the payments in reliance on the solicitors' statements. In re Lord de Clifford's Estate (1900), 2 Ch. 707. So executors acting honestly and reasonably, upon a mistaken construction of a will, where the trial Judge took the same view of it as they did, were relieved. Ilenning v. Maclean (1901), 2 O. L. R. 169. One of three executors Avas a solicitor, and the will provided that in the administration and management of the estate he should be entitled to professional remuneration. The testator had perfect confidence in the solicitor, who up to the time of his death was reputed to be a person of integrity and wealthy. The whole management of the estate was left to the solici- tor, and at his death it was found he had, without the RELIEF OF TRUS1 EES. L83 knowledge of his co-executors, misappropriated moneys of the estate, and that his own estate was in- solvent. The evidence shewed that it was the inten- tion of the testator that the solicitor should continue to manage the estate after his death just as he had managed it in the testator's lifetime, and this inten- tion was communicated by the testator to the executor Denne. Held, that the executor Denne acted honestly and reasonably and was relieved. Dover v. Dome (1902), 3 0. L. R. 664. Section 37 of The Trustee Act is not confined to cases where the breach of trust arises from some exeeu- tive or administrative blunder, but may extend to cases where money is paid to a person not entitled according to the true construction of the will. Thus in In re J II sop (1914), 1 Ch. 1, the trustees acting upon the erroneous advice of their solicitor as to the effect of the will, paid the income to a person not entitled. Warrington, J., took the view that relief ought to be confined to cases where there has been an error merely of administration, and ought not to be extended to a case where money due to one person has been wrong- fully paid over to another. The Court of Appeal re- versed this judgment. Cozens-Hardy, M.E., said: "I can see no ground for narrowing or limiting the appli- cation of the wide words of the section. 'Any breach of trust' are emphatic words. The statute was obvi- ously designed to protect honest trustees, and ought not to lie construed in a narrow sense. I shrink from holding that, where trustees have divided an estate between A. and 15. after taking competent advice that A. and B. are alone entitled, they cannot plead this section in answer to a subsequent claim by C. So to hold would be to render the relief given by the section almost nugatory. There have, however, been several authorities to which it is necessary to refer. Keke- wich, J., in Paris v. Hut chin gs (1907), 1 Ch. 365, says: 'If a trustee has. without any default of his own, em- ployed a defaulting agent, whom he believed to be a competent man, to do certain work. and. whether com- 184 executors' accounts. petent or not, the agent turns out to be fraudulent and gets the trustee into a scrape, the trustee cannot shelter himself behind that. Why ought he to be let off ? A trustee who employs an agent must, according to the ordinary rules of law, be responsible for the acts of the agent. I do not believe it was the intention of the Legislature that he should be let off that. This case occurs to me : A question arises on the construc- tion of a will whether, on a gift to nephews and nieces, the nephews and nieces of the wife as well as of the testator are intended to be included. The trustee takes the opinion of eminent counsel, and is advised that the class is restricted to the nephews and nieces of the testator. No doubt he might take the opinion of the Court, and perhaps be held liable for omitting to take it ; but does the taking of the opinion of eminent counsel save him from any liability if, in the event, it be de- termined that the nephews and nieces of the wife, on the proper construction, are included in the gift! I cannot conceive that the Act was intended to apply to a case of that sort. ' With great respect I am unable to accept this view. The decision upon the facts of that particular case may have been right, but the gen- eral principles thus laid down cannot, I think, be sup- ported. It is somewhat strange that Kekewich, J., in support of his view referred to a case in the Privy Council of National Trustees Co. of Australia v. Gen- eral Finance Co. (1905), A. C. 373, which turned upon a section of a Colonial Act corresponding with the section now under discussion. There a company, whose business it was to act as trustees for reward, divided an estate wrongly upon the advice of their solicitor. It was first held that the advice of the soli- citor was not a defence to the action, and the Court then proceeded to consider all the circumstances and in the exercise of their discretion declined to relieve the trustees. In my opinion that case is an authority that the Court has jurisdiction to relieve when pay- ment has been made to a wrong person, although the Court declined to exercise that jurisdiction, otherwise RELIEF OK TBTJSTEES. 185 the inquiry into the circumstances would have been irrelevant. In In re Kay (1897), 2 Ch. 518, Romer, J., took a wider view and held that executors, who had paid beneficiaries certain sums which an unpaid credi- tor sought to make them liable for, were entitled to be relieved. It is true thai this was not a question of the construction of a written document, but it was in some respects stronger, for the creditor had a claim prior to any of the beneficiaries. Parker, J., in In re Maria// (1911), 1 Ch. 307, used language which I respectfully desire to adopt: 'If an ordinary business man might reasonably entertain a particular view of the con- struction of the instrument and the action of the trustee would have been justified if that view had been the true one, that trustee cannot be said to have acted unreasonably merely because this view of the con- struction of the instrument is wrong. Even where a trustee has distributed an estate on an erroneous con- struction of a will he has been relieved under the Act.' It may be that there is no reported case in which this has been done, but in the opinion of all the members of the Court this may be done in a proper case. Warrington, J., held that the Act has no application where a trustee has misconceived his duty and paid moneys to a person not entitled. With great respect I think he was wrong in this. The jurisdiction is from its very width one which must be exercised with great caution. It certainly is not enough for a trustee to say 'I thought A.B. entitled and I paid him accord- ingly.' He cannot be considered to have acted reason ably if he has neglected to obtain skilled advice. In considering what is reasonable, regard must be had to the estate of which he is trustee. In a large estate it may be only reasonable that he should consult counsel of the first rank or apply by originating summons tor ,l "' direction of the Court, whereas it would not bo reasonable to insist upon all this where the estate is small." In the following cases the Com! refused to grant relief: 186 executors' accounts. Where loans were made on unauthorized securities. Chapman v. Browne (1902), 1 Ch. 785; In re Dive (1909), 1 Ch. 328; In re Turner (1897), 1 Ch. 536. Where trustees paid the share of a beneficiary to their solicitor in reliance upon his statement that he was the assignee of the share and without calling upon him to prove his title. The solicitor had an assign- ment, but it created a prior charge which would have been discovered if they had examined the deed of assignment. Davis v. Hatchings (1907), 1 Ch. 356. Trustees, under the advice of their solicitors, paid two-thirds of a fund to the children, when in fact the whole fund was the property of the husband. The fact that such payment was made through the bad advice of the solicitors was held no defence. And where the trustees had made no attempt to replace the fund in whole or in part, nor explained the reason for their abstention, the Court refused relief. "It is very ma- terial circumstance that the appellants are a limited joint stock company, formed for the purpose of earn- ing profits for their shareholders ; part of their busi- ness is to act as trustees and executors ; and they are paid for their services in so acting by a commission which the law of the Colony authorizes them to retain out of the trust funds administered by them, in addi- tion to their costs. . . . Without saying that the remedial provisions of the section should never be applied to a trustee in the position of the appellants, their Lordships think it is a circumstance to be taken into account." National Trust Co. of Australasia v. General Finance Co. of Australasia (1905), A. C. 373. But the liability of a trustee would appear not to be increased by the fact that he is paid for his services. Jobson v. Palmer (1893), 1 Ch. 71; Shepherd v. Harris (1905), 2 Cli. at p. 318. In the matter of investments, prima facie the pro- visions of The Trustee Act (sections 28-32) constitute a standard by which reasonable conduct is to be judged, although non-compliance with these requirements is BELIEF OF TRUSTEES. 1 8 i not necessarily a fatal obstacle to an application for relief. A trustee in lending money on mortgage secur- ity, should not act upon the opinion of his solicitor alone in a question of the value of the security, nor on the opinion of a valuer who acts for the mortgagor alone; and where this was done the Court refused relief. In re Stuart (1897), 2 Ch. 583; Shaw v. Calr, (1909), ICh. 389. So where executors distributed the assets without proper advertisement for creditors' claims the Court refused relief. "I think it would be most dangerous to hold that an executor acted reasonably and ought fairly to be excused, if he distributed the assets among the beneficiaries without taking the steps always taken by the Court and by careful executors, to give an opportunity to creditors and others having claims on the estate to bring forward their claims." Stewart v. Smjcler, 30 0. K. 110, 27 A. E. 423. A trustee who does nothing, accepts without en- quiry what is said by his co-executor, and is satisfied with any explanation given by him, does not ad "honestly" within the meaning of the Act. hi r< Second East Dulwich Building Society, 68 L. J. Ch. 196. Even though the co-executor is a solicitor and has been nominated by the testator. Re Turner (1897) 1 Ch. 536. A testator died in 1878 owing 12.3 shares of Ontario Bank stock of the par value of $5,000. The executors had power "to invest the proceeds in such manner as they shall deem most advisable." In 1882 the par vain.' of the slock was reduced by one-half; in L896 it was further reduced, and subsequently an order was made for the winding up of the bank. The Court held that ihe will authorized the retention of the shares as an investment, but the executors had not acted reason- ably in urn selling after ISS2. Re Nicholls Hal! v Wildman (1913), 29 O. L. R. 206. An executrix without consulting n solicitor, but on the advice of a commission agent who had been a 188 executors' accounts. friend and adviser of her deceased husband, postponed for fourteen years the sale of some shares instead of selling them within the year after the testator r s death. Her conduct was held not reasonable and relief was refused. Re Baker (1898), 77 L. T. 712 v CHAPTER XXXII. Protection and Indemnity. Sections 35 and 36 of The Trustee Act limit the extent of the liability of trustees in certain cases, and deserve attention. Section 35 is as follows : 35. A trustee shall be chargeable only for money and securities actually received by him, notwithstand- ing his signing any receipt for the sake of conformity, and shall be answerable and accountable only for his own acts, receipts, neglects or defaults, and not for those of any other trustee, nor for any banker, broker or other person with whom any trust money or securi- ties may be deposited, nor for the insufficiency or deficiency of any securities, nor for any other loss, unless the same happens through his own wilful de- fault ; and may reimburse himself or pay or discharge out of the trust property all expenses incurred in or about the execution of his trust or powers. This section is from Lord St. Leonard's Act, and is now embodied in sec. 24 of the English Trustee Act, 1893. It adds little or nothing to the security of a trustee, as before the Act the provisions of this section wore virtually implied. King v. Hilton, 29 Gr. 381, 384. The effed of the section seems to be to shift the onus of proof. If a case comes prim a facie within this sec- tion, the onus is thrown on the person attacking the trustee to shew that he is liable. Re Brier, 26 Ch. 1). 238. PROTECTION A.ND I X DEM X ITY. L89 Iii most of the cases it will be found that the result hinged on whether ' k wilful default " was proved. If wilful default on the part of the trustee is once shewn. and loss has happened to the estate by reason of such default, the section affords no protection. In several cases "wilful default" lias been defined. Thus in Elliott v. Turner, L3 Sim. 477, 60 R. R. 381, it was said that neglect or default may have been wilful though it may have been unintentional and have arisen from t'orgetfulness. Wilful means — not arising from ex- ternal circumstances over which there is no control— and therefore the default may be wilful, although merely passive. And in Connelly v. Council//. 17 Ir. Ch. R. 208, it is said that mere negligence or imprud- ence may be wilful default. It does not imply deliber- ate or intentional default. In Blount v. O'Connor, 17 Ir. L. R. 620, it is said that wilful default is improper failure to realize assets, and that mere loss without negligence would not be wilful default. "Default is purely a relative term, just like negli- gence. It means nothing more, nothing less, than not doing what is reasonable under the circumstances not doing something which you ought to do, having regard to the relations which you occupy towards the other persons interested in the transaction. The other word which it is sought to define is 'wilful.' That is a word of familiar use in every branch of law, and although in some branches of the law it may have a special meaning, it generally, as used in courts of law. implies nothing blameablc. but merely that the person of whose action or default the expression is used, is a free agent, and that what has been done arises from the spontaneous action of his will. It amounts to nothing more than this, that he knows what he is doing, and intends to do what he is doing, and is a free agent." Bowen, L.J., /// re Young and Harston's Contract, ill Ch. D. 174. In King v. Hilton, 29 (ir. 381, II. and C. were executors. II. took upon himself the actual manage ment of the estate with the knowledge and consenl of, 190 executors' accounts. but not under any express agreement with, C. H. applied a sum of money to his own use, without C's knowledge. The will contained an indemnity clause to the effect of sec. 35. It was held that C. was not liable for the sum appropriated by H. An executor is not liable for a loss under these circumstances, provided he has not intentionally or otherwise contributed to it; the testator's misplaced confidence as to one shall not prejudice the other. He is not responsible for the assets come to the hands of his co-executor. If indeed he does any act, for instance, handing over the assets in his hands to his co-executor, who then misapplies them, he will be generally respons- ible for them, just as if he had handed them over to a stranger. But if he is merely passive, by not obstruct- ing his co-executor from getting the assets into his possession, he is not responsible. If by agreement among the executors, one is to manage one part of the estate, and the other another part, each is answerable for the whole. Here each receives a part by agree- ment with the other ; and it is the same as if both had received. Gill v. The Attorney-General, Hardr. 314. And so where all join in the sale of a testator's goods, and one was allowed to receive the money, the others were liable. Btirrous v. Walls, 5 D. M. & Gk 233, 104 R. E. 95. And where several took out administration to an intestate, and united in appointing one to be the acting administrator, and directed the debtors to pay their debts to him, and he became insolvent, the others were made liable for the loss to the estate. Lees v. Sanderson, 4 Sim. 28. In all these cases there was an active intermeddling with the estate, and the defaulter had been enabled to receive the assets by their agree- ment for that purpose. If having the means of knowledge by the exercise of ordinary vigilance, one executor stands by and per- mits a breach of trust to be committed by a co- executor, he is liable. Sovereign v. Sovereian, 15 (Jr. 5.-)!). PROTECTION AND INDEMNITY. L91 Iii McCarter \. McCarter, 7 0. R. 24:5, the will con- tained an mdemnity clause providing ''that each of the executors should be responsible for his or her act- only, and irresponsible for any loss unless through wilful neglect or default." The three executors sold real estate, and C, one of the executors, who was entitled to the annual income of the proceeds, took the most active part in the management of the estate, and employed a solicitor who received the purchase money. Both of the other executors lived at a distance, but they were aware of the employment of the solicitor and that the purchase money was in his hands. The money remained in the solicitor's hands several years, when lie absconded and there was a loss to the estate of $1,060. Boyd, C, held all three executors liable. The co-executors knew the money was in the hands, or under the control of their co-trustee to be invested, and they allowed it to remain for years without any inquiry or any assurance that the trust Avas being properly administered. This was wilful neglect and default which they would not have been guilty of in the management of their own affairs. McCarter v. McCarter was discussed and dis- tinguished in Be Crowter, 10 0. R. 159, where all the executors in some degree acted in their executorial capacity, but by tacit consent one of them took the active management of the estate and received the pro- ceeds of a sale of land. IT., one of the executors, joined in the conveyance for conformity, but did not receive any of the purchase money, and did not know there was any balance in the hands of the active execu tor after paying debts, etc. It was held that II. was not guilty of wilful default and not liable. Archer v. Severn, 13 0. T\. 316, was before the same Judge (Ferguson, J.), who heard Re Crowter, and when the latter decision was pressed upon him he said : "In that case I was somewhat troubled by authorities as to the rule where one executor has enabled another person wrongfully to get money." Tn Archer v. Severn one of two executors used a portion of the personal 192 executors' accounts. estate in his own business. His co-executor knew of this and took no steps to have the personal estate placed in better custody and invested according to the directions contained in the will. He was held to have acquiesced in the acts of the other executor and jointly liable. So in Bacon v. Clarke, 3 My. & Cr. 294, a trus- tee was held liable for loss when he had allowed trust money to remain in the hands of his firm, though there was a provision protecting him, except in case of wilful default or neglect. In Robdard v. Cooke, 36 L. T. N. S. 504, 2,5 W. R. 555, the will contained a clause providing that the trustees should be responsible only for such moneys as they should actually receive, and not for any involuntary loss of any part of the trust funds. Two trustees received certain funds which were duly de- posited and credited to the trust account. One trustee was, however, given power to draw upon this account, and drew and misapplied a considerable sum. It was held that the clause in the will did not relieve the co- trustee as the loss was not involuntary but had arisen from his giving the defaulting trustee improper power. In McPhaden v. Bacon, 13 Gr. 591, S., one of two executors was indebted to the estate on a mortgage given to the testator. B., the other executor, was aware of this, but allowed S. to retain the mortgage deed and took no steps to compel payment, and S. executed a discharge of his own mortgage and registered it. B.'s duty was to secure the asset, and to realize it, and not leave it with his co-executor, whose duty and interest were in direct conflict, and not having done this he was liable. See also Candler v. Tillett, 22 Beav, 257; 111 R. R. 361, where the facts, and the result, were somewhat similar. It is the duty of executors to keep a cheek on each other's conduct, and an executor is chargeable will) neglect in allowing a part of the estate to remain out- standing in an improper state of. investment, whether the party in whose hands it is outstanding is a co- executor or a stranger. In Styles v. Guy, 1 Mac. & (i. PKOTECTION AND INDEMNITY. (.93 422, 84 R. R. Ill, two of three executors know there were unsettled accounts between the testator and the third executor, and they had reason to believe thai the latter was indebted in a considerable sum to the estate bul they took no effectual steps to compel him to account and pay or secure the balance. Several years after the death of the testator this executor became insolvent and the other executors were unable to prove that an earlier attempt to recover the money Mould have been fruitless, and were held liable for "the loss to the estate. A special indemnity clause will often protect an executor from liability for the acts of his co-executor. but it will not protect him from liability for a breach o± his duty. Knox v. McKinnon, 13 A. C. 753; Rae v Meefc, 14 A. C. 558; Burritt v. Burritt, 27 Or.' 143, 29 Gr. 321. In the last case the testator expressed 'the fullest confidence in C. and directed the other executors to be guided entirely by the judgment of C. as to the sale disposal and re-investment of certain securities and declared that his trustees should not be respon- sible for loss occasioned thereby. Held, this did not authorize the re-investment of moneys in foreign securities. I" WiVkins v. Hogg, 3 Giff. 116, the clause was that ; any trustee who shall pay to his co-trustee, or shall do or concur in any act enabling his co-trustee to receive any moneys, shall not be obliged to see to the application thereof; nor shall such trustee be subse- quently rendered responsible by an express notice or intimation of the actual misapplication of the -am,. moneys." One trustee misapplied moneys whirl, his co-trustee had enabled him to receive, but it was held he was saved from liability, though otherwise his negligence would have rendered him responsible This case was followed in Pass v. Dundas 41) 1 T 665 In Candler v. Tillett, 22 Beav. 257, 111 R. R. 351, it was held that [f an executor does an act which enables Us co-trustee to obtain sole possession of money be- longing to the (>state, and the money is afterwards" mis- e.a.— ir, 194: EXECUTORS ' ACCOUNTS. applied by the co-executor, both are liable for the loss. But this proposition must be read "who unnecessarily does an act," and such an act is not "unnecessary" if it is done in the regular course of business in admin- istering the property. In re Gasquoine (1894), 1 Or 470. In II anbury v. Kirkland, 3 Sim. 265, 30 R. R. 165, two trustees gave to a third trustee a power of attorney to sell certain stock, and he sold the stock and mis- applied the proceeds. They were held liable though there was a provision in the trust deed that the trus- tees should be chargeable only with moneys they respectively actually received, and that one or more of them should not be answerable or accountable for the other or others of them or for involuntary losses. See also Bone v. Cook, McClel. 168, 28 R. R. 697. In Terrell v. Matthews, 1 Mac. & G. 433, 84 R, R, 1 20, it is said that if money be required for the pay- ment of debts or legacies, one executor is safe in join- ing in the sale of stock or other property, and per- mitting another executor to receive the proceeds for that purpose, as in Hovey v. Plakeman, 4 Ves. 596; but if he joins in such sales when the money is not required, and ho had not reasonable grounds for be- lieving that it was not so required, lie is liable for the money so received by his co-executor. Chambers v. Minchen, 7 Yes. 193 ; 6 R. R. Ill ; Shipbrook v. Hinchin* brook, 1 1 Ves. 252, 8 R. R. 138 ; Price v. Stokes, 1 1 Ves. 319,8 R. R. 164. An executor who sanctions or adopts improper accounts rendered to the beneficiaries by a defaulting co-executor becomes responsible for the statements therein contained. Notion v. Brocklehurst, 29 Beav. 50-1, KM R. R. 683. In this case the accounts were pre- pared by L., one of the executors, and they repre- sented that one-third of the net income had been re- ceived by the executors and invested by them. The truth was the money had been allowed to remain in the hands of L. until lie became bankrupt. The defendant (the other executor) had nothing to do with making up PROTECTION ANIi IXOKUXITY. 190 the accounts, and the moneys never came to his posses- sion, but he was present at meetings when the accounts were presented and discussed, and defended the accounts. It is to be noted that the defendant's liabil- ity is not placed on the ground of wilful default or anything of that description; but on the ground that the accounts was an admission by the executors to their cestui* que trust that they had sums of money in their hands which they ought to have had, and that these sums were retained by them for investment. Mickleburgh v. Parley, 17 Gr. 503, is an important case because of the common practice, in Ontario, of one of several executors doing all the active work of administration without any supervision whatever by his co-executors. A. and B. were joint trustees, and had trust money to their joint credit. A., the "acting- trustee," from time to time brought cheques to B. already signed by A. for the signature of B. B. made no inquiry as to how the funds were to be applied, and A. misapplied them. It was held that B. was liable— that the general rule applied, that trustees must account for the proper application of money in their hands. It was also held that it was no defence on behalf of B. that he only became trustee at the request of the cestui que trust, and on the representation that his name only was wanted, and that A. would do all the business. "It is not uncommon to hear one of several trustees spoken of as the acting trustee, but the Court knows no such distinction; all who accept the office are, in the eyes of the law. acting trustees ": p. 506. M. and L. were executors, M. having been the testa- tor's solicitor, and continuing to act as solicitor for himself and his co-trustee. M. represented to L. that he bad made a loan on satisfactory security, and L. joined in signing a cheque payable to the order of the alleged mortgagor. M. forged the signature o\' the payee and absconded. Rose. .5., reversed the judgment of the Master-in-Ordinary, and held that L. was nol liable. The testator had by appointing M. as an execu- tor shewn that he trusted him as a proper person to 196 executors' accounts. act in a fiduciary capacity, and, semble, L. had also a right to trust him. Re McLatchie, 30 0. K. 179. See also Dover v. Denne (1892), 3 0. L. E. 664, and other cases cited under "Honestly and Reasonably. " Where one of two executors resides abroad he is justified in delegating to his co-executor the right to receive money owing to the estate. In re II u nf let/, 7 C. L. Times, 251. Notwithstanding the provision of section 35 as to depositing trust moneys in a bank, this does not pro- tect an executor who deposits such moneys as an in- vestment and not as a deposit. Relulen v. Wesley, 29 Beav. 213, 131 R. R. 530. 36. — (1) Where a trustee commits a breach of trust, at the instigation or request or with the consent in writing of a beneficiary, the Supreme Court may make such order as to the Court seems just for im- pounding all or any part of the interest of the benefi- ciary in the trust estate by way of indemnity to the trustee or person claiming through him. (2) This section shall apply notwithstanding that the beneficiary is a married woman entitled to her separate use and restrained from anticipation. This section corresponds with section 45 of The Trustee Act, 1893. It appears to embody what was formerly the rule in equity. In the earlier cases the Court held that the limit of the impounding was the advantage derived by the beneficiary who instigated the breach of trust. Ra by v. Bidehalgh, 7 D. M. & (I. 104, 109 R. R. 46. And in In re Somerset (1894), 1 Ch. 231, Davey, L.J., said he could not find any words in the section which have the effect of directing the Court to exercise the statutory jurisdiction on principles different from those on which it acted before the statute : p. 275. In Bolton v. Curre (1895), 1 Ch. 544, Romer, J., said tliis section was intended to enlarge the power of the Court as to indemnifying trustees, so as to give greater relief to trustees, and was not intended and did not operate to curtail the previously existing rights and PROTECTION" AND INDEMNITY. 19*3 remedies of trustees, or alter the law except by giving greater power to the Court. The words "in writing" do not govern or apply to all the three antecedents. They apply only to "eon- sent," and not to "instigation" or "request." Where a trustee for a married woman, a tenant for life restrained from anticipation, advanced part of the capital to her upon her verbal request and statement that the money was needed to prevent her home from being sold, it was held that the trustee, upon making good to the estate the money so advanced, ought to be indemnified out of the income payable to his cestui que trust. Griffiths v. Hughes (1892), 3 Ch. 105; In re Somerset (1894), 1 Ch. p. 265. The discretion which the section confers upon the Court of ordering that the interest of the beneficiary be impounded by way of indemnity, ought to be exer- cised in cases where both the trustee and the instigating beneficiary were aware of the facts which constitute the breach of trust. Griffiths v. Hughes, supra. In In re Somerset, supra, an investment of trust funds on mortgage of property of insufficient value was made by the trustees at the instigation and request and with the consent in writing of the tenant for life, but it did not appear that he intended to be a party to any breach of trust, or to an investment without proper inquiry, and in effect he left it to the trustees to de- termine whether the investment was a proper one for the amount to be advanced. It was held the trustees were not entitled to the benefit of this section. Lindley, L.J., said: "In order to bring a case within this sec tion the cestui que trust must instigate, or request, or consent in writing to some act or omission which is in itself a breach of trust, and not to sonic act or emission which only becomes a breach of trusl by reason of want of care on the part of the trustees. If a cestui que trust instigates, requests, or consents in writing to an investment not in terms authorized by the power of investment, lie clearly falls within the section; and in such case his ignorance or forgetfulness of the terms 198 executors' accounts. of the power would not, I think, protect him — at all event, not unless lie could give some good reason why it should, e.g., that it was caused by the trustee. But if all that a cestui que trust does is to instigate, request, or consent in writing to an investment which is author- ized by the terms of the power, the case is, I think, very different. He has a right to expect that the trustees will act with proper care in making the investment, and if they do not they cannot throw the consequences on him unless they can shew that he instigated, requested, or consented in writing to their non-performance of their duty in this respect " : p. 265. To the same effect are the remarks of A. L. Smith, L.J., at p. 270. The discretion now given to the Court is a judicial discretion, and a trustee ought not to be allowed to deliberately commit a breach of trust at the request or with the consent of a beneficiary in the hope and expectation that the Court will afterwards assist him. Bolton v. Curre (1895), 1 Ch. 544. A trustee, who at the time a breach of trust is committed, merely declines an offer to take a mortgage of the beneficiary's interest by way of security for the breach of trust, does not per se waive or abandon his equity. lb. The Court is not bound to impound the interest of the cestui que trust, and will not do so if it would be unjust. Mara v. Browne (1895), 2 Ch. p. 94 — reversed but on another ground (1896), 1 Ch. 199. It is the duty of trustees to make balances in their hands productive: and a trustee allowing trust money to remain in a bank will be charged interest thereon : but a cestui que trust cannot make a trustee liable for losses occasioned by a breach of trust which he has authorized and consented to. ChiUinqwortli v. Cham- bers (1896), 1 Ch. 685. Where trustees settled their accounts and paid all the beneficiaries except H., whose share was withheld pending his accounting for moneys of the estate in his hands, and was kept for some years lying in a bank without interest, the trustees were ordered, on the CAPITAL AND IXCo.M E. L99 application of H., to bring the moneys into Court with- out interest. If the trustees were wrong in no1 plac- ing the moneys where they would produce interest. thev had acted honestly and ought fairly to be excused. Be McNeill Estate (1911), 19 W. L. R 691 (B.C.). CHAPTER XXXIII. Capital and Income. Where a will contains a trust for the benefit of several persons in succession, and the trust property is of a wasting nature, or is a future reversionary interest, the trustee must convert the property into property of a permanent and immediately profitable character, unless: (1) the will contains a direction or implication to the contrary; or, (2) the will confers a discretion on the trustee to postpone such conversion, which he bona fide and impartially exercises: or, (3) the property in question is specifically settled. This is known as the rule in Howe v. Earl of Bart- mouth (7 Ves. 137, 6 R. R. 96), and is only a corollary of the principle that a trustee must act impartially between the beneficiaries. For if wasting property, like leaseholds and terminable annuities, were to be retained, the tenant for life would profit at the expense of the remainderman: and if reversionary property were not converted, the remainderman would profit at the expense of the tenant for life. A power to retain any portion of the testator's property in the same state in which it should be at his decease, or to sell and convert the same as the trustee shall think fit, takes the case out of the rule. Gray v. Siggers, If) Ch. D. 74: so too a devise to trustees upon trust to sell "when in their discretion thev should deem it advisable." Miller v. Miller, 13 Eq. 263. Nor does 200 executors' accounts. the rule apply where wasting property is given speci- fically, in the strict sense of the term. In re Beaufoy's Estate, 1 Sm. & G. 20, 96 R. R. 300. In Underhill on Trusts, the duty of a trustee in re- lation to the payment of outgoings out of corpus and income respectively, is thus summarized: "Subject to the directions of the settlement, and of particular statutes— (a) The corpus bears capital charges, and the income bears the interest on them : (b) The income bears current expenses incident to the possessory ownership of property except the costs of repairs : (c) Where repairs are necessary, or fines become payable for the renewal of leases, application should be made by the trustees to the Court, which will give directions for the raising of money to pay for them in such a way as to distribute the burden equitably be- tween income and corpus. (d) All costs incident to the protection of the trust property, including legal proceedings, are borne by the corpus, unless they relate exclusively to the tenant for life." Capital charges which must be borne by the corpus includes an annuity charged on the land. In such a case the annuity must be valued, and the tenant for life pays an amount equal to the interest on the valuation at five per cent, per annum. Jones v. Mason, 39 Ch. ]). f>34. AVhere the gift is of an annuity, and the disposition of the estate is subject thereto, the charge is upon the corpus. On the other hand, if the gift is of an annuity payable out of income only, the corpus is not charged. Be Irwin, 3 O. W. N. 937. Arrears of interest on incumbrances, accrued in the lifetime of the testator, are a charge on the corpus, the life-tenant merely paying the interest on them. Revel v. Watkinson, 1 Ves. 93; Play fair v. Cooper, 17 Beav. 187, 99 R. R. 90. Calls on shares, which form a part of the trust estate, are payable out of corpus. Todd v. Moo re ho use, 19Eq.69. CAPITAL AM) INCOME. 20] « AVhere settled residue comprised capital left in a business, the expenses of a yearly audit and stock- taking which had been stipulated for by the testator, where held to be payable out of capital. Lindley, L..J.. said that an expense of this kind is a part of the costs. charges and expenses properly incurred by the execu- tor in the performance of his duty— that it is for the benefit of the whole estate and should, not be thrown wholly on the tenant for life— it is not in the nature of an annual outgoing, i.e., some payment which must be made to secure the income of the property. In re Bennett (1896), 1 Ch. 778. The practical effect of throwing this expense on the whole estate was that the tenant for life lost the income of the sums so expended. The costs of appointing new trustees come out of the capital. Carter v. Sebright, 26 Beav. p. : 1 >77. 122 R. R. p. 147. The costs of investing trust funds are parable out of capital. Horlock v. Smith, 17 Beav. 572, 99 R. R 294. Costs incurred by a tenant for life in proceeding- taken for the protection of the settled estate have been allowed by the Court out of capital. Re Be la Warr, 16 Ch. D. 587 : but not costs of proceedings in respect of his life interest, or for his sole benefit. Croqaan v. Allen, 22 Ch. D. 101. Where a business is vested in trustees for successive tenants for life and remaindermen, the net losses in one year's trading, must under ordinary circumstances. be made good out of the profits of subsequent years, and not out of capital. Upton v. Brown, 26 Ch. 1). 588! But this rule does not apply where there is no direction to carry on the business, but it is merely carried oil temporarily until it can be sold profitably. In such cases the annual loss or profit ought to be apportioned between capital and income, by calculating the sum which, put out at interest at five per cent, per annum on the day when the business ought to have been sold. if it could have been, and accumulated at compound interest, with rests, would together with such interest 202 executors' accounts. » and accumulations, be equivalent at the end of each year to the amount of the loss or profit sustained or made during that year, and then charging the sum so ascertained against, or crediting it to, capital, and charging the rest of the loss against, or crediting the rest of the profit to, income. Re Hengler (189?>), 1 Ch. 586. In re Berkeley's Trusts, 8 P. R. 193, the income on a $72,000 estate was payable to the widow for life, and on her death to children. On an interim application to fix the executors' compensation it was contended, for the children, that for the present (at least) the income should bear all the burden of compensation. For the widow it was contended that the true principle was to pay the compensation, or the chief part, out of the corpus, and that in this way the burden would fall in the proper proportion on the tenant for life and re- maindermen, as the income would be reduced in the same relative proportion as the corpus. Blake, V.C., allowed $400 for taking over the trust estate, obtaining proper transfers, opening books, determining invest- ments, etc. ; and a further sum of $50 per annum for general supervision of the estate, payment of taxes, insurance, etc. "These sums, amounting in all to $1,000, must be borne by the corpus of the estate, as they represent charges for the preservation of the es- tate itself. ' ' On $20,000 of income received the execu- tors were allowed 4 per cent, payable out of income : and it was suggested that in the future it would not be unreasonable if the trustees charged against the income $240, and against the corpus $150, annually, for commission. The costs of the application were ordered to be borne half by the corpus and half by the income. The rule appears to be that ordinary outgoings of a recurring nature must be borne by the tenant for life in the absence of any provision in the will shewing a contrary intention. In Vallambrosa Rubber Co. v. Inland Revenue, 1910, S. C. 519, the Lord President said : "I do not say that this consideration is absolutely CAPITAL AND [NCOME. 203 final and determinative, Imt in a rough way I think it is not a bad criterion of what is capital expenditure as against what is income expenditure — to say thai capital expenditure is anything that is going to be spent once and for all, and income expenditure is a thing that is going to recur every year." In a very recent case the Judge, referring to this observation, said: "I take it, and indeed both sides agree, that no stress is there laid upon the words 'every year:' the real test is between expenditure which is made to meet a continuous demand, as opposed to an expenditure which is made once for all." Ounsworth v. Vickers (1915), 3 K. B. 267, 273. The costs of preparing and rendering a succession duty account in respect of the life-tenant's interest under a will, are payable out of income. Cowley v. Wellesley, 1 Eq. 656. The charge of taxes is one of the things which should be paid by the tenant for life so as to protect the property for the remainderman. As between him and the remainderman the Court will not allow him to receive rents from part of the property while he allows taxes to accumulate in another part. Be Denison, 24 0. B. 197. A testator directed his executors to invest $50,000 and pay the income to his widow for life. The estate consisted of income-producing securities of $30,000, and a large amount of unproductive lands. Street, J., held the executors were bound to reserve sufficient pro- ductive assets to secure sufficient income to pay the taxes and the other necessary expenses, and the widow was entitled to a first charge on these lands for the income taken to pay taxes, and to the balance of the income from the productive assets, and to have the principal producing such balance set aside towards the fund of $50,000 ultimately to be made up as the lands were sold according to the following rules :- As lands were sold the proceeds to be apportioned between capital and income by ascertaining the sum which put out at interest at five per cent, per annum 204 executors' accounts. at the expiration of one year from testator's death, and accumulated at compound interest with rests, would, with accumulations, have produced at the day of receipt, the amount actually received from the sale of the lands : the sum so ascertained to be treated as capital, and added to the sum therefore set apart towards the $50,000: and the residue to be treated as income and paid over to the widow. In re Cameron (1901), 2 O. L. E. 756; Re Clarke (1903), 6 O. L. E. 551. A tenant for life is not obliged to pay any part of the principal of incumbrances on the life estate; but he is liable, as between himself and the remainderman, to keep down the interest on all incumbrances out of the rents and profits of the estate. When an estate is settled subject to a charge of legacies, any interest pay- able on the legacies is payable out of income. Milltown v. Trench, 4 CI. & F. 276. Where trustees are directed to insure the trust property against loss or damage by fire, the premiums must be borne by income. Re Redding (1897), 1 Ch. 876 : unless the property is unproductive and incapable of beneficial enjoyment by the tenant for life. Lons- dale v. BercUoldi, 3 K. &*J. 185, 112 E. E. 97. Where a settled estate is charged by the settlement with a life annuity, the tenant for life must keep down the instalments out of income, and is not entitled to have an annuity purchased out of capital to satisfy it: Re Grant, 52 L. J. Ch. 552 : but if the income is insuffi- cient, so that there are arrears at the annuitant's death, the life tenant is only bound to keep down the interest on arrears. Prince v. Cooper, 17 Beav. 187. Where an annuity is charged on both the income and corpus of a residuary estate it is payable primarily out of the income : but if the income is insufficient in any one year to pay the annuity and the deficiency is paid out of the corpus, the tenant for life cannot be called upon to pay such deficiency out of the surplus income of anv subsequent, voar. In re Croxon, Ferrers v. Croxton, 1915, 2 Ch. 290. i'M'ITAL AXD INCOME. 205 Where, however, an estate is settled by will charged with life annuities which the testator was personally liable to pay, the annuities must be capitalized, and the capitalized value treated as a charge on the inheri- tance. Re Mutfet, 39 Ch. 1). 534: the life-tenant being only bound to keep down the interest on the capitalized value. Re II unison, 43 Ch. D. 55; Re Bacon, 62 L. J. Ch. 445: and if the life-tenant pays any instalments of the annuities he is entitled to a charge for the amount. Re Harrison, and Be Bacon, supra. A tenant for life is not bound to repair unless he is under some obligation to do so by the terms of the will. In Re Courtier. 34 Ch. D. 136, a'testator gave his wife certain leasehold properties for life. At his death the leaseholds were in a had state of repair, and the widow declined to remedy their condition. The remainder- man applied for an order to compel the widow to repair so as to satisfy the covenants in the leases and avoid a forfeiture. Fry, L.J., said: "I am unable to find any principle or rule of law which throws any obligations on her to do this: and as there is an entire want of authority in its favour it is clear there is no obligation." Cotton, L. J., said: "There is no rule of law that the tenant for life is bound to do repairs ou1 of the rents and profits." The Court points out that in In re Fouler. Ki Ch. D. 723, no question was decided between tenant for life and remainderman. There leaseholds were vested in trustees on behalf of a tenant for life and remainderman, and the Court held it was the duty of the trustees to keep the property free from the risk of forfeiture by breach of the covenants in the lease, and they were entitled to have the rents-applied for this purpose. lain re Baring ( 1 893 ) , 1 Ch. D.p. 67, Kekewich, J., said: "We very nearly come to this, that the Court of Appeal did not think In re Fouler properly decided. They do not say so in terms, but they alleged that it did not intend to decide the question between tenant for life and remainderman.' ' Tn the last case the facts were the same as in In re Courtier, and Kekewich, .1.. 206 executors' accounts. said: "I should have thought if I had not been in- structed by the case to which I have been referred (In re Courtier), that she, being tenant for life, ought to keep down these periodical payments which were neces- sary to her occupation, not because of any liability im- posed by express words, and not by any other rule of law than that expressed by the maxim: Qui seutit commodum sent ire debet et onus.' " And although he reluctantly followed In re Courtier he intimated that it was the duty of the trustees, having the money in their hands, to pay the costs of repairs, insurance, etc. In In re Redding (1897), 1 Ch. 876, the testator directed his executors to manage his estate, and to retain certain leaseholds and let them on lease, and pay the income derived therefrom to his wife for life. It was held, on the construction of the will, that the "income derived" from the leaseholds meant the net income, i.e., the amount of the rents after deducting all proper outgoings, and that consequently the life- tenant must bear the expense of the proper outgoings in respect of ground-rent, rates, taxes, insurance and other outgoings on the property. In the judgment, Stirling, J., drssents from the view taken of In re Courtier by the Court in In re Baring. He points out that in the former case the only question for decision was whether the tenant for life was bound to discharge the liabilities in respect of repairs to property which had accrued at the death of the testator. Somewhat similar is the recent case of In re Tubbs (1915), 1 Ch. 540. A testator devised his real estate upon trust to permit his wife to receive the rents, profits and income thereof during her life. The Avill empowered the trustees to "manage the said estate," and to pay the "costs of management" out of the rents and profits. In 1913 the trustees expended £1,100 in having the estate surveyed and in having repair notices served on tenants. The estate comprised 650 houses and the yearly rents were £2,100. It was held the liability of the trustees formed part of their ex- penses in managing the estate, and, having regard to CAPITAL AND IXco.Mi;. 207 the terms of the will they must be paid by the tenant for life out of income. This was approved of by the Court of Appeal (1915), 2 Ch. 137. S. devised lands to H. for life and, after her life, to her children. H. petitioned the Court claiming to be allowed for expenditures for needed repairs and last- ing improvements on two houses, and for $100 paid to a tenant for improvement's made by him under a prom- ise of the testator that he should be paid for them. Boyd, C, held that H. might be reimbursed the $100. that being a debt due by the testator: but that neither this or the other expenditures could be a charge on the land. "The repairs of a tenant for life, however sub- stantial and lasting, are his own voluntary act, and do not arise from any obligations, and he cannot charge the inheritance with them." Be Smith's Trusts 4 O. R. 518. Where real estate is given to a tenant for life and is sold by the trustees under a power of sale, the pro- ceeds are capital which must be invested, the life- tenant being entitled to the income onlv. Shrewsbury v. Shrewsbury, 18 Jur. 397, 97 R. R. 868. Where specific property is settled by will, without any trust for conversion, the life-tenant is entitled to the income actually produced during his lifetime, whether the property be permanent, as in the case of real estate, or of a wasting nature such as leasehold- Gibson v. Bott, 7 Yes. 89, 6 R. R. 87. A trust for sale of real estate and settlement of the proceeds entitles the life-tenant to the rents until sale. Fitzgerald v. Jervoise, 5 Madd. 1*5. 21 R. R. 268. The life-tenant of a settled estate takes all casual profits which accrue during the time of Ids tenancy for life. Brigstoche v. Brigstoche (1878), 8 Ch. D. 357," 36::. Tims ho is entitled to all annual produce, such as fruit and hay: Campbell v. Wardlaw, S A. C. 645: rent, whether payable quarterly or at Longer intervals: Bngstocke v. Brigstoche, supra; damages recovered from tenants for breach of covenants: Noble v. Cass, 2 Sim. 343, 29 R. R. 115; compensation for waiver of 208 EXECUTORS ' ACCOUNTS. restrictive covenants, if imposed on grants by the trustees, though not if imposed on grants by the settlor. Cowley v. Wellesley, 1 Eq. 656. A tenant for life has no right to take the substance of the estate, by opening mines or clay pits : but he has a right to continue the working of mines and clay pits where the author of the gift has personally done it and such mines or pits had not been abandoned: and for this reason, that the author of the gift has made them part of the profits of the land. Viner v. Vaughan, 2 Beav. 466, 50 E. R. 245. So in Ireland it was held that a tenant may have a right to cut and sell turf when bog, or where there is no other mode of enjoying the bog which it appears that the grantor intended should be enjoyed. Coppinger v. Gubbins, 3 J. & Lat. 397. The latter part of the proposition furnishes the tests to be applied. It must be shewn, in the first place, that the grantor intended this particular portion of the subject-matter to be enjoyed. Next, it must be proved that there is no other reasonable mode of enjoying it than by treating the produce of it as fruits and profits of the estate. It is not waste to consume a portion of the inheritance, when the portion in question is evi- dently intended to be enjoyed, and cannot reasonably be enjoyed otherwise than through such consumption. For instance, a devise of a stone quarry to a tenant for life would be valueless if the devisee could not quarry stone. A tenant for life has a right to cut trees in the ordinary course of good forestry, and, apart from custom, this is not waste. And the proceeds of a sale arising from periodical cuttings, after deducting the expenses of replanting, are payable to the tenant for life. Dashwood v. Magniac (1891), 3 Ch. 306. In re Trevor-Batye's Settlement (1912), 2 Ch. 339. But apart from this a tenant for life cannot cut timber. Honey ivood v. Honey wood, L. R. 18 Eq. 309. Except as hereinbefore mentioned minerals stand in a similar position to timber, inasmuch as being im- bedded in the soil, they form part of the inheritance. Campbell v. Wardlaw,'s A. C. 645, 649. CAPITAL AND IXCOME. 209 A gift for life of things qua ipso usa consumunter, as grain and wine, if specific, is an absolute gift of the' property : but if residuary, the things must be sold and the interest of the proceeds paid to the legatee for life Randall v. Russell, 3 Meriv. 194. Farming stock and implements of husbandry are not things qua ipso usa consumunter within this rule, and the life-tenant is only entitled to their use. Groves v. Wright, 2 Kay & j . 347; Cockayne v. Harrison, L. R. 13 Eq. 432. A wine merchant gave all his property to his wife for life and it was held she took absolutely the wine which the testator had for his private use, but a life interest only in that kept for the purpose of trade. Phillips v. Beat, 32 Beav. 25, 138 R. R. 616. Where a will creates a life estate in chattels, the executor is discharged when he hands over such chat- tels to the tenant for life. The tenant for life, and not the executor, then becomes liable for them to the per- son entitled in remainder. Re Munsie, 10 P R 98 The old practice of the Court of Chancerv was to re- quire the tenant for life to give security for the pro- tection of the remainderman, but such security is not now required, unless a case of danger is shewii. Con- duct v. Soane, 1 Coll. 285. Where a trustee has invested in unauthorized in- vestments, and the tenant for life has thereby received a larger income, but the capital is intact, the persons entitled m remainder cannot recover from the life tenant the excess of income which has been paid, to him And this rule applies where the same person is trustee and tenant for life and has himself retained the excess of income. In re Hoytes (1912), 1 Ch 67 So where a trustee uses a part of the capital in his own business and realizes profits in excess of the interest tliat would have been made on the money, these profits are^nconie and not capital. Slade v. Chaine (1908), Dividends on stock or shares are presumed to be paid out of current profits, and a life-tenant is entitled E.A. — 14 210 executors' accounts. to all such dividends. Price v. Anderson, 15 Sim. 473, 74 R. R. 124. But dividends declared before the death of the testator are capital. Re Kernoclian, 104 N. Y. 618. The life-tenant is also entitled to any bonus de- clared out of current profits. Preston v. Melville, 16 Sim. 163, 80 R. R. 45. But where the company has the power either of distributing the profits as dividends or of converting them into capital, and the company validly exercises its power, such exercise of its power is binding on all persons interested under the testator, and consequently what is paid by the company as dividends goes to the tenant for life, and what is paid by the company to the shareholders as capital, or appropriated as an increase of the capital stock, enures to the benefit of those in- terested in the capital. Bouch v. Sproule, 12 A. C. 385. Bonuses declared by a life insurance company on a jmlicy are capital. Macdonald v. Irvine, 8 Ch. D. 101. Where a loss occurs in trust funds, the income of which is payable to a life-tenant, the loss should be apportioned between the life-tenant and remainderman by adding the amount actually realized from the secur- ity to the amount of interest theretofore received by the tenant for life and dividing the whole sum between the latter and the remainderman in the proportion in which they would have been entitled to share if the security had been paid in full, the tenant for life giving credit for the amounts already received, less income tax. In re Foster, Lloyd v. Carr, 45 Ch. D. 629 : followed in In re Plumb, 27 Ont. R. 601. As to trustees charging against income costs which ought to be borne by capital, see In re Weall, 42 Ch. D. 674. COMPENSATION TO TRUSTEES. 211 CHAPTER XXXIV. Compensation to Trustees. (1) Generally. (2) Legacies in lien of Commission. (3) By whom Paid. (4) Amount Realized: How Calculated. (5) Amount of Compensation. (6) Miscellaneous. In England the rule is that executors and adminis- trators cannot charge anything for their services. This is upon the principle of equity, that a trustee cannot profit by his trust. In Ontario the rule was first relaxed in favour of executors and administrators by 22 Vic. ch. 93, sec. 47. This provision is now found in section 67 of The Trustee Act, and has been extended to guardians, and trustees other than personal repre- sentatives. The section does not apply where the allow- ance is fixed by the instrument creating the trust. Although a next friend is, in some respects, in the same position as a trustee, this section does not cover his case, and he is not entitled to compensation or remuneration. Vano v. Canadian Colored Mills Co. (1910), 21 0. L. R. 144. The section applies only to express trustees : and, semble, a partner is not a trustee at all. Livingstone v. Livingstone (1912), 26 0. L. R. 246, 32 0. L. R. 440; Mack v. Mack, 33 C. L. J. 400. The right to compensation is a statutory one, of which an executor or administrator should not be de- prived unless there be serious misconduct or misman- agement. Simpson v. Home. 28 Gr. p. 9. "I do not know that it has ever been determined that where the accounts are in fact accurate, that the form of them has ever subjected executors to liability, unless the confusion has been designed, or lias been such as to 212 executors' accounts. necessitate a suit." McMillan v. McMillan, 21 Gr. p. 379, per Proudfoot, V.C. There is nothing in the statute rendering it neces- sary to hold that an executor who does not do his duty properly, has a right to the same compensation as an executor whose conduct is free from blame. But the fact that an executor has retained money in his hands unemployed, while it makes him liable for interest thereon, is no ground for depriving him of his com- mission. Gould v. Burritt, 11 Gr. 523. In Kennedy v. Tingle, 27 Gr. 305, one executor had used $200 of estate money in his own business, and the other had taken a mortgage of $900 in his own name without any declaration of trust. The Court, while refusing them their costs of an administration action, allowed them compensation. See also Inglis v. Beatty, 2 A. K. 453, and Re Honsberger, 10 Ont. R. 521. In Sievwright v. Leys, 1 Ont. R. 375, on an appeal from a Master allowing compensation, Proudfoot, V.C, said: "The reason for objection to the commission is because the defendant has been found in debt to the estate, and that some items of overcharge have been proved against him. The statute does not compel the Court in every case, no matter how flagrant the mis- conduct, to allow the compensation. ... I think the course of decision has been that an executor or trustee will be allowed his commission though he may have so managed the estate as to justify the appoint- ment of a receiver, and to be deprived of and even made to pay costs. There may be cases of such excep- tional misconduct as to induce the Court to deprive him of a commission. I do not mean to bind the hands of the Court in such a case. See also the remarks of Spragge, C, in Simpson v. Home, 28 Gr. 1. ' I must, in this case, reiterate my opinion that the principle stated in Tebbs v. Carpenter, 1 Nad. 290, is the sound one: and certainly there is less hardship in applying it in this country, where an executor doing his duty to the estate he represents, is allowed a fair compen- sation for his pains and trouble : a compensation which COMPENSATION" TO TRUSTEES. ZL6 he is not deprived of unless there be serious miscon- duct or mismanagement on his part.' And Simpson v. Home was a case where the dealing of the executor was not only careless but perverse." The taking of administration proceedings does not deprive executors of their functions, or even suspend them, and a reasonable allowance should be made for moneys received pendente lite. Re Honsberger, 10 Ont. R. 521. But where an administration action is pending it is improper for a Surrogate Judge to fix the compensation, and his allowance will be disre- garded. Biggar v. Dickson, 15 Gr. 233; Cameron v. Bethune, 15 Gr. 486. An executor who discharges his duty honestly, but owing to want of business training keeps his accounts loosely and inaccurately is entitled to compensation, but the amount in such a case should not be relatively large. If an executor takes no care or pains whatever, or so little that the trust estate receives no benefit, or if the care and pains have been employed not for the advantage of the trust but dishonestly and for the trustee's own benefit, then there may be a proper case for disallowance. Hoover v. Wilson, 24 A. R. 424. This was approved of in McClenaglian v. Perkins (1903), 5 0. L. R. 129, where it is said the effect of all the decisions on the statute is that an executor or trustee is not to be deprived of compensation for actual and beneficial services, though he may also have been guilty of neglects and defaults more or less grave: p. 139. In Graham v. Robson, 17 Gr. 318, an executor was deprived of his compensation where he unnecessarily sold real estate to pay debts and legacies, there being- more than enough money available for these purposes apart from the proceeds of the sale. (2) Legacies in Lien of Compensation. Where a legacy is given to an executor named in the will the presumption is that it was intended as compensation, and it is on him to shew something in 214 executors' accounts. the nature of the legacy, or other circumstances arising on the will, to rebut that presumption. The fact that legacies are left to other executors of unequal amount is not sufficient to rebut the presumption. Be Apple- ton, 52 L. T. 906, 29 Ch. D. 893. The presumption is rebutted if it appears, either from the language of the bequest, or from the fair construction of the whole will, that the bequest to the person who is named as executor, is given to him inde- pendently of that character. Where a testator appointed his "friend" P. his executor, and gave him a legacy "as a remembrance," and P. did not act as executor, it was held he was entitled to the legacy without proving the will. Bubb v. Yelverton, L. R. 13 Eq. 131. So in Burgess v. Burgess, 1 Coll. 367, 66 R. R. 98, a legacy given to executors "asa great mark of respect" for them, was held not to be revoked by a codicil appointing other executors in their room, and giving a legacy of equal amount to the newly appointed executors in similar language. A legacy "to my friend J. S., banker's clerk and one of the executors of this my will," was held not to be conditional on the acceptance of the office of execu- tor. In re Denby, 3 D. F. & J. 350, 130 R. R. 166. In McClenaghan v. Perkins (1903), 5 0. L. R. 129, there was a devise of land "unto my brother George Washington Perkins . . . free from all incum- brances," with a direction that a mortgage on the land should be paid out of the personal estate. Maclennan, J.A., said: "Now taking this will as a whole, I think the presumption that the devise was intended as compensation to the executor is rebutted. In Compton v. Bloxham, 2 Coll. 201, it was held by Knight Bruce, then Vice-Chancellor, that the circum- stances that the testator did not name Charles Blox- ham in his will without calling him his brother, re- butted the presumption that the bequests made to him were made in his character of executor ; and that case was referred to without disapproval in Be Applet on, Barber v. Tebbit, 29 Ch. D. 893. Here the gift is 'to COMPENSATION TO TRUSTEES. 215 my brother George Washington Perkins,' and I think that is an indication of the testator's motive for the gift sufficient, having regard to the other parts of the will, to rebut the general presumption. ' ' That the legatee is described in the will as the testator's "wife and executrix" does not of itself indicate that the legacy was given by way of compen- sation and is to be taken in lieu of commission. Lin- nott v. Kenaday, 14 App. D. C. 27, 27 Wash. L. R, 82. In Denison v. Denison, 17 Gr. 306, it was held that where a legacy is given to executors as compensation for their trouble, they are at liberty to claim a further sum under the statute if the legacy is not sufficient compensation. In this case the words of the will were "that each of my executors shall be paid the full sum of one hundred pounds out of my estate to see my will fully carried out. ' ' In Kennedy v. Pingle, 27 Gr. 305, where executors were given $40 "in remuneration for their trouble," the Master allowed $440 by way of compensation in addition to the legacy. Spragge, C, who decided Denison v. Denison, held they were not entitled to both, and disalloAved the amount of the legacy. In Roy v. Williams, 9 Ont. R, 534, the words of the will were : "I hereby authorize and direct my executors to retain for their own use and benefit the sum of $200 each in lieu of all charges for their services." The executors claimed an additional sum. Boyd, C, said: "Out of deference to Denison v. Denison, I have had doubts as to the proper manner of disposing of this case; but my conclusion is adverse to the executor's claim. Denison 's case may have been properly de- cided as it was when it was, in 1870, but I should hesi- tate now to follow it, even in a case where the language of the will was identical with the will there under con- sideration. Here the testator's language is very pre- cise. It was thought that as the language used in the Denison will did not import that "compensation" was thereby intended no such doubtful meaning can be attached to the clause I have quoted. In 1874 the 216 executors' accounts. Legislature passed an Act relating to the compensation of trustees and executors [now sec. 67 (5) of The Trustee Act] in which the principle is laid down that the Court is not to fix the allowance where the testator has himself provided what it shall be. That is a most reasonable rule, and one of general application, one in- deed to which the Court should give effect without requiring a parliamentary declaration as to its pro- priety. ' ' This is the rule followed in the American Courts. Re Hay's Estate, 183 Pa. 296; Fletcher v. Kurd, 14 N. Y. Supp. 388; Rote v. Warren, 17 Ohio Cir. Ct. 342. But the limitation of compensation fixed by the will does not apply to a trustee afterwards appointed by the Court, at the instance of the beneficiaries, in place of an original trustee appointed by the testator; and the principle laid down in Roy v. Williams is not to be extended to such a state of facts. Freeborn v. Van- dusen, 15 P. E. 264. Where a legacy is given to one of two executors as compensation, the other executor is entitled to only his proper proportion of the regular commission. Edward's Succession, 34 La. Ann. 216; Lee v. Lee, 6 Gill & J. (Ind.) 316. A legacy by way of compensation precludes any presumption that the executor is entitled beneficially to the undisposed of residue. Loveless v. Clarke, 24 Gr. 14. Section 58 of The Trustee Act now provides that the executor shall be considered a trustee of the residue not expressly disposed of for the next of kin "unless it appears by the will that the executor was intended to take such residue beneficially." The sec- tion does not prejudice any right in respect of such residue where there is no next of kin. See sub-see. (2). Before this enactment, it was the rule at law, from the earliest period, that the whole personal estate devolved on the executor ; and if, after payment of the funeral expenses, testamentary charges, debts and legacies, there should be any surplus, it would vest in him beneficially. Attorney-General v. Hooker, 2 P. Wms. 340; Urquhart v. King, 7 Ves. 225. COMPENSATION TO TRUSTEES. 217 If the residue is given by the will to the executor, the Court must decide the effect of the gift upon the construction of the will, and upon general principles applicable to that construction, just as before the statute it would have construed a similar gift of real estate. The statute therefore has, of necessity, no application Avhere there is an express gift of residue. The statute was intended to apply only in those cases where the rule or presumption of law could be held to operate, and where an express gift of residue is found, the meaning of that residuary bequest must be ascertained by the ordinary rule of construction. Williams v. ArMe, L. E, 7 EL L. 606, 616. This was followed in Boys' Home v. Leivis, 4 Ont. R. 18, where it was held that a bequest of a share of the residuary estate to executors was a gift to them per- sonally and not as trustees. It was further held that it was not to be inferred that the bequest was given in lieu of compensation, as in the case of a legacy of a definite sum, but it was one of the elements to be taken into consideration in dealing with the question of the amount of compensation. Where a bequest is given to an executor for com- pensation, and is followed by a bequest of residue to him qua executor " to be at his discretion," he is a trustee of the residue for the next of kin. Re Hon ell (1914), 2 Ch. 173. In case of a deficiency of assets a legacy by way of compensation does not abate with other legacies, even though it exceeds the amount the executor would be entitled to under the Statute. Anderson v. Dour/all. 15 Gr. 405; and it bears interest at the expiration of a year from the testator's death. lb. per Spragge, V.C., on appeal, 14 Dec. 1870. In re Leblond, 7 0. W. X. 398, the testatrix had used a printed form of will, whereby she gave her property to her mother as trustee and appointed her executrix. The space following, in which it was in- tended the whole operative part of the will should be written, was left blank, and no beneficiarv was named. 218 executors' accounts. The mother claimed that the will indicated she should take the property not only as trustee bnt as beneficiary. Middleton, J., held that it could not be inferred from the fact that the mother was named as trustee and executrix that she should take beneficially. Where the executor's compensation is fixed by the will the Surrogate Judge cannot reduce the amount. Heron v. Mo fait, 7 P. R. 438. A provision in a will that the executrix shall main- tain herself out of the income of the fund while she is managing the same for the support and education of the testator's children during minority, for whom she is also to act as guardian, does not deprive her of the usual compensation allowed executors. Thome v. Allen, 49 S. W. 1068, 20 Ky. L. R. 1728. In Fidelity Trust Co. v. Watkins, 19 Ky. L. R. 957, it was held that a provision of a will requiring that the executors make no charge for distributing the legacies does not disentitle them to a reasonable com- pensation for services necessarily rendered. (3) By Whom Paid. It is well settled that the expenses and compensa- tion of executors in clearing, dealing with and gener- ally administering the assets of an estate, are to be borne by the aggregate of the estate, and this necessar- ily so in order that the residue may be ascertained from time to time according to the nature of the assets, some of which may call for considerable time and trouble in order to handle them or realize them satis- factorily. But where the estate has been cleared, and the residue ascertained, any subsequent compensation payable for the investment of the ascertained share of a beneficiary not presently payable, must be borne by that share. Such share is no longer property of the executors to be administered, but has reached its des- tination, though it may not, owing to the terms of the will, or for other reasons, have been actually paid into the hands of the beneficiary. Re Church (190G), 12 0. L. R. 18. COMPENSATION TO TEUSTEES. 219 In re Berkeley's Trusts, 8 P. R. 193, the income on a $72,000 estate was payable to the widow for life, and on her deatli to her children. On an interim appli- cation to fix the compensation, for the children it was contended that for the present, at least, the income should bear all the burden of the compensation. For the widow it was contended that the true principle was to pay the compensation, or the chief pari thereof, out of the corpus, and that in this way the burden would fall in the proper proportion on the tenant for life and remainderman, as the income would be reduced in the same relative proportion as the corpus. Blake, V.C., allowed $400, for taking over the trusl estate, obtain- ing proper transfers, opening books, determining investments, etc. ; and a further sum of $50 per year for general supervision of the estate, payment of taxes, insurance, etc. "These sums, amounting in all to $1,000, must be borne by the corpus of the estate, as they represent charges for the preservation of the estate itself." On $20,000 of income received the executors were allowed 4 per cent, payable out of the income. "I think in the future it would not be considered unreasonable if the trustees charged against the income $240, and against the corpus $150 annually, for commission." The costs of the application were ordered to be borne one-half by the corpus and one-half by the income. As between annuitants and specific or pecuniary legatees, and residuary legatees, the compensation to executors falls upon the residuary legatees /'• Mclntyre (1904), 7 O. L. R. p. 556. For services rendered by way of collecting and paying over the income, the compensation is a first charge upon the income, and is properly deducted Prom it. In fact, for a trustee under such circum- stances to charge his commissions upon the corpus of the trusl fund, thereby necessarily decreasing the fund, would be inconsistent with his duty of preserving un- diminished the trust capital. Guarantee Trust Co '* Appeal i Pa.), 9 Ail. Rep. 66. 220 executors' accounts. A trustee is not allowed, where there is a remainder after a life estate, to receive out of the corpus of the fund, charges for his services which should have been deducted from the income, unless both estates are owned by the same parties. Broivn v. Grandin (N.J.), 13 Atl. Rep. 266. Where a testatrix separated her estate into two parts, bequeathing her personalty to one class of per- sons and disposing of her realty to another, and one executor solely administered the former and another the latter, and rendered separate accounts, it was held that each class of beneficiaries should bear the expenses of the accounting in regard to the funds in which they were interested, and the executors should have com- missions on the fund each represented. Re Mansfield, 10 Misc. (N.Y.) 296. In Mason Co. Justices v. Lee, 1 Mon. (Ky.) 247, it was held that the expenses and compensation of an executor for managing and selling real estate devised to be sold for the education and advancement of children ought to be paid out of the proceeds of the lands. (4) Amount Realized : How Calculated. AVhere the real estate of the deceased is subject to an incumbrance by way of mortgage, and it is sold subject to the mortgage, it is a common practice to shew the whole purchase money as a receipt, and the amount of the mortgage indebtedness as a disburse- ment. But the receipts and disbursements cannot be so swollen to increase the amount of compensation. In In re Sanderson, 7 Ch. T). 176, Jessel, M.R., said: "When the Court administers the estate of a testator which is subject to a mortgage, that is, an estate in which lie lias only the equity of redemption, what is administered is not the whole of the estate, but only that which the testator had, namely, the equity of redemption, though in ease of a sale being directed the mortgagee may come in and concur, and so get paid. Supposing a man has a property worth £2,000, and he COMPENSATION TO TRUSTEES. 221 mortgages it for £1,500, all lie can get on a sale Is £500, for the remainder belongs to the mortgagee. If, then, the action were brought for the administration of his estate how could it be said that his interest in the mortgaged property was more than ho could get, namely, the £500?'' This is the rule in the American Courts: Baucus v. Stover, 24 Hun (X.Y.) 109; Buer- haus v. Saussure, 41 S. C. 457. Con. Eule 653 provides that in administration cases "a commission on the amount realized" shall be allowed solicitors in lieu of taxed costs. In re McColl, McColl v. McColl, 8 P. K. 480, land was subject to a mortgage, and the mortgagee refused to consent to a sale free from the mortgage. Blake, V.C., held that the Master was right in allowing commission only on the actual value of the intestate in the land, that being the amount realized. He said that had the mortgage consented to a sale free from the mortgage, then the commission would have been estimated on the fall amount. Where the executor carries on the business of the deceased under the direction of the will, he is not entitled to a commission on the gross receipts realized or the necessary disbursements made by him while conducting the business, but the proper compensa- tion is a reasonable allowance for the time and labour bestowed in carrying on the business. Lamar v. Lamar, 118 Ga. 684; In re Brewster, 113 Mich. 5iil ; Thompson v. Freeman, 15 Gr. 384. As a general rule the executor or administrator is entitled to a commission for paying oxer legacies and distributive shares as well as debts. West V. Smill*. 8 How. (U.S.) 402. (5) Amount of Compensation. The allowance to be made in all cases is. what is fair and reasonable Tor the executor's care, pains and trouble, and his time expended in or about the estate. Tn Re Toronto General Trusts and Central Ontario /?//.. (i O. W. R. 350, Teetzel, J., said the proper things 222 executors' accounts. to be considered in fixing the remuneration of trustees are: (1) The magnitude of the trust; (2) The care and responsibility springing there- from ; (3) The time occupied in performing its duties; (4) The skill and ability displayed ; (5) The success Avhich has attended its adminis- tration. This was cited with approval by Britton, J., in Re Prittie's Trusts, 12 0. W. R. 264, and approved of in Manitoba in Re Sanford Estate, 18 Man. K. 413. "The statute has fixed no standard by which the rate of compensation is to be measured, and this im- ports that each case is to be dealt with on its merits, according to the sound discretion of the Judge, who is to regard the care, pains and trouble, and time be- stowed and expended by the claimant. Nor have the courts laid down any inflexible rule in this regard. While a percentage has been usually awarded as a convenient means of compensating a class of services which do not admit of accurate valuation, yet the adoption of any hard and fast commission (such as five per cent.), would defeat the intention of the statute. . . . Five per cent, may be a reasonable allowance in many cases, but where the estate is large and the services rendered are of short duration and involving no very serious responsibility such a rate may be excessive." Boyd, C, Re Fleming, 11 P. R. 42(5. In the absence of such standard we can only exam- ine the decisions. I have placed them in chronological order. McLennan v. Heward (1862), 9 (Jr. 178. 5 per cent, allowed on all moneys received and paid over and 2% per cent, on moneys received and not paid over. The report is not clear as to the amount of the estate, time occupied or labour involved. Torrance v. ( 'hewett (1866), 12 Gr. 407. 4 per cent, allowed on all transfers of slocks and all moneys paid COMPENSATION TO TRUSTEES. --•> in and collected. The report does no1 give sufficient facts to be of much assistance. Thompson v. Freeman (1868), 15 Gr. 384. The receipts were $298,930 and disbursements $286,798. The Master allowed the same as in McLennan v. Heward. A large portion of the receipts and dis- bursements appear to have been from mortgage invest- ments and reinvestments extending over a period of years. It was held the commission was too large and it was referred back to the Master. It was pointed out that although 5 per cent, may not be too large a com- mission where the sums collected are small, it is too large when the amounts are large. It was also held that where executors convey lands to the beneficiaries they should not be conmpensated by way of commis- sion, but by a lump sum. As to compensation for investment, see Re Berkeley's Trusts, infra. Denison v. Denison (1870), 17 Gr. 306. $1,500 allowed one executor and $1,500 to the other two jointly. All the report says is, "there was not only a large estate, but one requiring care, judgment and circumspection in its management." Re Berkeley's Trusts (1879), 8 P. R. 193. The capital amounted to $72,000, and the administration of the estate covered 14 years. The income was payable to the widow for life and on her death to the children. On an interim application by trustees to fix their re- muneration, Blake, V.C., held: (1) that on trustees assuming the trust estate, a commission is not to be allowed to them for merely taking the same over, as they may hold it but for a day, or they may, holding it longer, so deal with it as to disentitle them to any commission whatever; but that trustees properly deal- ing with the estate, and handing it over on the determ- ination of the trust, are entitled to one commission for the receipt and proper application of the estate: (2) that trustees are not entitled to commission for the investment or reinvestment of the funds of the estate, as such a mode of remuneration encourages a contin- ued changing of the investments, which may he most 224 executors' accounts. injurious to the estate; (3) that the trustees are en- titled to a commission on the receipt and payment of the income of the estate, and to the reasonable com- pensation for looking after the estate ; (4) that it is not unreasonable to make some allowance for services not covered by the commission awarded. The trustees were allowed $400 for four times taking over the estate as they became entitled to it, examining securities, opening books, determining in- vestments, etc; and $50 a year for the general super- vision of the estate, paying taxes, insurance, etc. They were also allowed 4 per cent, commission on receipts of income. Stinson v. Stinson (1881), 8 P. R. 560. An executor may be allowed a lump sum as his remuneration for the care and management of real estate, if there is evidence to enable the Court reasonably to see the services rendered and to make a proper allowance therefor. He is not limited to a commission on that part of the estate which has become personal property. The responsibility and difficulty of managing a trust estate consisting of stocks and mortgages, are far less than that consisting of unproductive real estate where the receipts may be very small. Re Batt, Wright v. White (1883), 9 P. R. 447. The receipts were $9,404 and disbursements $8,228. These amounts included, on both sides, a sum of $3,238, repre- senting securities in the hands of the residuary devisee and charged to her, and with which the executors never intermeddled. The Master allowed $400, being about 5 per cent, on total receipts, including the $3,238. On appeal, Proudfoot, J., considered the re- tention of this sum involved a personal risk to the executors, and necessitated a calculation as to assets and liabilities, for which it was not unreasonable to compensate them; and $400, being about 2Vj per cent. upon the receipts, and 2M> per cent, upon the disbursements, was not excessive. The report does not shew the labour involved or the time spent in the COMPENSATION TO TRUSTEES. 225 administration of the estate. See Thompson v. Fair- bairn, supra. In re Honsberger (1885), 10 0. R. 521. The Master allowed the executors commission on moneys paid in pending administration proceedings, and on sums charged them for interest upon balances in their hands. The Court refused to interfere. Thompson v. Fairbaim (1886), 11 P. R. 333. In this case all the work of collecting and paying over was done after the administration order was made, and was done under the advice of solicitors, and in the more important matters, under the direction of the Master. The receipts were $29,000 and disbursements $5,000. An item of $4,684 on each side of the account, consisted of a mortgage transferred to the plaintiff. The plaintiff's solicitor collected $2,400 and made a payment of $10,000 for which he was personally liable. The Master allowed $1,193. On appeal, Boyd, C, re- duced this to $400, because the administration pro- ceedings reduced the executor's responsibility to a vanishing point. Nothing was allowed in respect of the $4,684. 1 per cent, was allowed on the $2,400 and $10,000, 2% per cent, on balance of collections, and 5 per cent, on actual disbursements. Re Fleming (1886), 11 P. R. 272. The Master allowed 5 per cent, on $32,000, receipts from mortgage investments, and 1 per cent, on $79,000, on debentures and specific securities. Ferguson, J., increased this by allowing 3 1 - per cent, on the whole estate. On appeal, the Divisional Court restored the judgment of the Master, holding that it' he was wrong lie erred on the side of liberality. Little actual work appears to have been done by the executors, that being Left to the solicitors. Archer v. Severn (1886), L3 O. R. 316. The per- sonal estate not specifically bequeathed amounted to $41,818, and the rents and profits come to the hands of the executors, $4,052. They expended $25,100 and $3,816. The accounts shewed 300 items (>n one side and E.A. — 15 226 executors' accounts. 400 on the other, and there had been considerable labour, care and trouble in the management of the estate. Held, that 5 per cent, on the total receipts was not an excessive compensation, although about $17,000 remained in the hands of the executors with which they were chargeable. Re Prittie Trusts (1889), 13 P. R. 19. Trustees exchanged an investment for stock in a land company. Held, that a commission on the value of the stock was not a proper method of remuneration, but they should be allowed a sum for their trouble in making the ex- change. The trustees paid an agent for collecting- rents. The collections were in large and small sums extending over several years, and involved care and attention on the part of the trustees. It was held they were justified in employing agents to make these col- lections, and were entitled to 2 1 /- per cent, upon the rents collected. In Re Central Bank (1892), 22 O. R, 247. This was the case of a claim of a liquidator of a bank. He was allowed 2 1 /4 per cent, on moneys actually collected. On appeal, he was allowed 1% per cent, on a sum of $231,000 consisting of amounts adjusted or set off, owing to the trouble in preparation of accounts, etc. Re Cursiter (1894), 9 M. L. R. 433. 4 per cent, was allowed on the amount received and disbursed, and 2 per cent, on the amount received and still remaining on hand, subject to a further allowance to be made when the estate should be wound up. In re Williams (1902), 4 O. L. R. 501. Trustees had from 1891 to 1902 taken care of an estate of $60,000, received payments of principal and re-invested them, and collected $39,700 of interest, being an average rate of about 6 per cent, per annum. Held, following Re Berkeley's Trusts, supra, that an allowance of $100 a year should be allowed them for taking care of the estate and making re-investments in addition to 5 per cent, for collection and payment over of the interest. Re Mclntyre (1904), 7 O. L. R. 548. The adminis- trators took over about $60,000 of property, consisting COMPENSATION TO TRUSTEE^. 227 of mortgages, notes, farm property and furniture. They distributed $29,000 and set apart $31,000 for pay- ment of annuities, legacies not matured, etc. They collected about $6,500 of interest. The administration to date had extended over a period of a little more than four years. The estate was not an easy one to deal with owing to conflicting interpretations of the rights of beneficiaries under the will, the nature of the trusts, their number and complications, etc. Street, J., allowed the administrators 2% per cent, upon such portion of the corpus of the estate as they had taken over and distributed, the same amount to be allowed on the balance of the corpus as it was distributed from time to time. He allowed 5 per cent, on interest collected, and $100 a year, in addition, for the first two years, and $75 a year for the last two years for management of the estate and services not covered by the other charges, including the care and preservation of the estate. "All these charges are to be made against the residue of the estate, as the legatees and annuitants for whom the investments are made are entitled to receive the provisions made for them in the will without deduction." Re Farmers Loan and Savings Co. (1904), 3 O. W. R. 837. Falconbridge, C.J.: " The practice in respect of trustees' remuneration is, I think, well settled. It appears to be clear upon the authorities that a trustee (or a person in the position of a trustee I, is entitled to a commission upon the corpus which conies into his hands and upon the corpus which is finally distributed by him, but that such commission should be paid when the distribution of the corpus takes place from time to time, and that the trustee is further entitled to a reasonable annual allowance for care and management, and that the Court may, instead of fixing the remuneration by way of percentage, allow one lump sum to include and cover the percentages upon the receipts and disbursements of the corpus, and the allowance for the care and management of the estate. The usual commission allowed is 5 per cent.. 228 executors' accounts. exclusive of the annual allowance for care and man- agement, but each case . . . must depend upon its own circumstances. ' ' Re Patrick Hughes (1909), 14 0. W. R. 630. In this case the accounting covered a period of eight years. The estate consisted of store premises in Toronto, and an undivided half-interest in two leasehold properties. The trustees had realized on a sale of the freehold $31,816, and on one-half of the leasehold properties $2,500. $28,000 had been received from revenue, about $10,000 of which had been collected by a trust com- pany, being paid therefor a commission of 5 per cent. The receipts from revenue were distributed as re- ceived, but the corpus could not be divided until the death of the testator's widow, which had not yet hap- pened. On these facts it was held that the trustees were entitled to 2% per cent, on the revenue receipts except the $10,000, on which the commission should be 1 per cent; and 2% per cent, on all disbursements of revenue. It was further held that no commission should be allowed on the conversion into cash of the real estate, but an allowance of $200 to cover their trouble in making the sales. They were allowed, in addition, a yearly sum of $75 for taking care of the estate and making investments. It was pointed out that on the distribution of the corpus the trustees would be entitled to a further allowance. Re Griff en (1912), 3 O. W. N. 759, 1049. The estate was $100,000, consisting of cash on hand, life insurance, stocks, and household furniture. There were pecun- iary legacies to fifty-three persons, and six charities. The assets were in Ontario, Quebec and Manitoba, and the executors had to adjust succession duties with each Province. The Surrogate Judge allowed $3,000 for care, pains and trouble. On appeal, Middleton, J., thought 1 per cent, a liberal commission and reduced the commission to $1,000. On appeal to the Divisional Court the judgment of the Surrogate Judge was re- stored. Mulock, C.J., delivering the judgment of the Court said : "I am unable to reach the conclusion that COMPENSATION TO TRUSTEES. 229 the learned Surrogate Court Judge allowed an excess- ive amount. On the contrary, I am of opinion that, if he erred at all, it was not in allowing a Larger sum. I have not overlooked the circumstance that the estate consisted largely of shares in companies which, it was argued, were readily convertible; but shares in com- . panies are liable to fluctuation in value, and a loss accruing to the estate because of their falling in value might, under some circumstances, render executors liable therefor, although exercising what they con- sidered good judgment. Such a risk on their part should not be overlooked when compensation for their services is being fixed." The case is a good illustration of opposing conclu- sions drawn by different judges from the same set of facts. Re Godchere Estate (1913), 5 0. W. N. 625. The real and personal estate realized $21,234, and there was paid out thereof $3,560. The Surrogate Judge allowed the administrators $625, and, on appeal, Latch ford, J., said he could not see that he had erred. The report does not shew the time or labour involved. In re San ford Estate, 18 Man. R. 413, the duties of the executors were to realize on real estate in Manitoba and transmit the proceeds to Ontario Executors. It took nine years to complete the work, which had been done with faithfulness and success. The amount real- ized was over $300,000. R., who had the chief manage- ment of the work, had been paid $19,500 on account. The Court gave R„ in addition, 2 per cent, of the gross amount realized, and the other two executors together, 2 per cent. It was also held that R. was not entitled to commission as a real estate agent on sales made by him personally, although he might have employed another agent at the expense of the estate to perform such services. (6) Miscellaneous: In no case will an executor lie entitled to allowance for sen-vices performed by an agent, and which were so performed by him gratu- itously. Chisholm v. Bernard, 10 Gr. 479. 230 EXECUTOKS ACCOUNTS. As a general rule an executor should not be allowed a commission on sums which he has not realized, and which he is chargeable with in consequence of his neglect or other misconduct. Bald v. Thompson, 17 Gr. 154. But see Dagg v. Dagg, 25 Gr. 542, where commis- sion was allowed on such sums. "Where an executor is a residuary legatee no com- mission should be allowed on the share of the residue which he takes under the residuary clause in the will. Boys' Home v. Lewis, 4 Out. R. 18. The commission may be apportioned among the executors according to the work done and time ex- pended by them. In re Williams (1902), 4 0. L. R. 504; Re Fleming, 11 P. R. 272. Where there are two or more executors or adminis- trators of an estate, they are usually entitled only to the recompense or commission payable to a single representative. Phillips v. Richardson, 4 Marsh (Ky.) 212 ; In re Aston, 5 Whart. (Pa.) 228. And it has been held that where one of two executors is not entitled to a commission because he is a legatee, the other executor is entitled to only one-half of the regular commission. Edward's Succession, 34 La. Ann. 216; Lee v. Lee, 6 Gill & J. (Md.) 316. Where an estate is administered by successive per- sonal representatives, the compensation allowed should be apportioned among them according to the services rendered, and the compensation of one will not be increased because his predecessors received no com- pensation for their services. Re Depeiv, 19 N. Y. St. 902; Linton's Succession, 31 La. Ann. 130. Personal representatives who resign or are re- moved may be allowed a sum commensurate with the services they have performed, if beneficial to the estate. Re Douglass, 60 N. Y. App. Div. 64 ; but where they resign for their own convenience after having rendered very little service to the estate, it was held they were not entitled to any compensation. In re Ilayden, 1 Connoly, Sur. (N.Y.) 454. COMPENSATION' TO TRUSTEES. 231 In fixing the amount of compensation to be allowed an executor or administrator the reasonable efforts made by him to collect worthless debts should be taken into consideration. John's Estate, 1 Chest. (Pa.) 281; Kester v. Lyon, 40 W. Va. 161. Where a testator directed that his executor should "be handsomely paid for his services," it was held that only the usual commission would be allowed him unless there had been extraordinary trouble. Waddy v. Hawkins, 4 Leigh (Va.) 458. So an agreement to pay an executor a "fair compensation" is a mere promise to pay what may be allowed by the Court. Ratliff v. Davis, 38 Miss 107. What is a proper compensation is a matter of opin- ion, and even if, in granting the allowance, the Court below may have erred on the side of liberality, that alone is not a sufficient reason for reversing his judg- ment. McDonald v. Davidson, 6 A. R. 320. Part of a testator's estate consisted of a dry goods business, which was carried on by his executors for nearly a year before it was sold en bloc, one executor doing practically all the work. Upon passing the accounts the Probate Judge allowed a commission of 4 r 2 per cent, upon the whole estate to the executor who carried on the business, and a commission of one-sixth per cent, to the other. No commission was allowed upon sales made in carrying on the business. Upon appeal the Court refused to interfere with the Judge's discretion in apportioning the commission. Re Manzer, 42 X. B. R. 257. An executor was held entitled to the ordinary com- mission on an estate where he exercised an effective supervision over the business, although he left the details to a clerk. Hall's Estate, 8 Pa. Dist. R. 8. A Surrogate Court on the passing of an executor's accounts should not, under ordinary circumstances, fix in advance the compensation of an executor-trustee for the future work to Be performed in getting in and distributing the unrealized pari of the estate. R< Patterson Estate, 24 Man. R. 217. 28 W. L. R. 177. 232 executors' accounts. An administrator is not entitled to commission on a fund held by his intestate as a trust fund. Haines v. Hay, 169 111. 93. An administrator with the will annexed, who under- takes the administration of the estate of the original testator and that of his residuary legatee as one under an agreement that he shall be allowed a certain com- mission upon the original estate in full for his services in both estates, is not entitled to an additional com- mission because a formal accounting in the estate of the residuary legatee is subsequently had. Re Hamil- ton's Estate, 29 N. S. R. 249. Executors were held entitled to compensation on the income of the estate received and paid out by them for a reasonable time after the death of the testator's widow, at which time they were directed to distribute the estate, where an immediate distribution would have resulted in a serious loss, and the retention of large sums of money by the executors during the time the property remained in their hands was required for the pavment of taxes and other expenses. Re Prentise, 25 App. Div. 209, 49 N. Y. Supp. 353. It has been held that the validity of an administra- tor's appointment cannot be questioned on the account- ing, and where he has rendered services as adminis- trator he is entitled to his expenses and compensation. Carroll v. Hughes, 5 Redf. Sur. (N.Y.) 337. Nor will the fact that the will under which an executor is ap- pointed and acts is afterwards found invalid, deprive him of his right to compensation for services rendered in good faith. Comstock v. Hadlyme, Ecc. Soc. 8 Conn. 254. Personal representatives have no right to appro- priate assets of the estate for payment of their right to commissions until an allowance is made by the Court; but they are entitled to retain in their hands a sufficient fund to cover a reasonable commission to be awarded on a settlement of their accounts. Re Fumiss,S6 N. Y. App. Div. 96; Wheelwright v. Wheel- wright, 2 Redf. Sur. (N.Y.) 501. COMPENSATION TO TRUSTEES. 233 Aii executor was instructed in the will to rent a farm- belonging to the estate, and it was held lie was not entitled to compensation for services performed in managing the farm himself. Ihirtolet's Appeal, 1 Walk. (Pa.) 77. The indebtedness of an insolvent executor or administrator to the estate constitutes assets of the estate and will be applied in discharge of any compen- sation allowed him. Freeman v. Freeman, 4 Redt'. (N.Y.) 211. In re Dacre, Whitaker v. Dacre (1915), 2 Ch. 480. The compensation to which an executor or admin- istrator is entitled is treated by the Court as a lien or charge upon the estate, and the cestui que trust, or his assign, cannot compel a conveyance or transfer of the trust property without first satisfying the trustee's just demands. The compensation is in the same categorv asanv other expenses incurred by him. Life Assurance of Scotland v. Walker, 24 Gr. 293. Where an estate was insolvent the Court held that the executor was entitled to his allowance for compen- sation in preference to all the creditors. It is allowed for his services, and is therefore part of the expenses incurred in administering the estate, and, as such, is one of the primary charges before payment of debts. Harrison v. Patterson, 11 Gr. 105. And an executor is entitled to retain his compen- sation from time to time out of moneys received, with- out waiting for the completion of his trust duties. Herron v. Moffat, 7 P. R. 439. But where he does not retain his compensation from time to time he is not entitled to interest on sums which he might have deducted. Re Moran Estate, 38 C. L. J. 21,"). A solicitor executor is not entitled to profit costs if the estate proves insolvent, even though the will con- tains the usual clause empowering him to charge for work done. *In re White (1898), 1 Ch. 297. 2 Ch. 217. See further under "Solicitor-Trustee." 234 EXECUTOES' ACCOUNTS. CHAPTER XXXV. Practice on Audit. The accounts of a trustee may be passed before the Judge of a Surrogate Court of a county in which a trustee or a co-trustee is resident, or in which any part of the trust estate is situated: but in the case of a trustee under a will the accounts must be passed in the Surrogate Court from which probate was granted. Sec. 25, The Trustee Act. One of two executors may be called upon to pass his accounts at the instance of a co-executor who is also a residuary legatee. Paid v. Nettleford, 2 Add. Ecc. 237. And there seems to be no reason why one of two or more executors might not submit his own dealings with the estate for approval, independently of the other or others. Cunnington v. Cunnington (1901), 2 0. L. E. p. 516. Con. Rule 417 provides as follows: "Where an account is to be taken, the accounting party, unless the Master otherwise directs, shall bring in the same in debit and credit form, verified by affidavit. The items on each side of the account shall be numbered con- secutively, and the account shall be referred to by the affidavit as an exhibit, and shall not be annexed thereto." By Surrogate Rule 19 (a), Con. Rule 417 is applic- able to the auditing of an executor's and admin- istrator's account in the Surrogate Court. The vouchers for disbursements should be numbered to correspond with the items of disbursements. In some counties the practice is to deposit the vouchers with the Registrar when filing the petition and accounts, to enable the parties interested in the estate to examine them. This appears to be the practice in the Master's Office in England in administration actions, but is not generally followed in Ontario. No doubt the Surrogate PRACTICE ON A.UDIT. •i:]:> Judge has authority to order them to be so deposited in any case where required. The account of receipts should shew the names of the parties from whom received: on what account re- ceived witlusufficient detail to make each item explan- atory; and the amount received. The disbursement account should shew to whom the money was paid: on what account paid, with sufficient detail to make the item explanatory : and the amount paid. The accounts should shew the actual date of receipt and payment. Where during the administration of the estate there have been investments made by the trustees on mortgages or other securities, such investments should not appear as disbursements, but the income from these investments should appear as receipts. It is always advisable to have such investments appear in a separate account. This enables the Court to trace the administration of the assets, and to fix the allowance to the trustees for their care, pains and trouble in admin- istering the estate. Where, by the terms of the will, or trust deed, the in- come of the estate is payable specifically, the receipts on income account should be shewn apart from the receipts on capital account. The better practice is to prepare a separate account shewing the receipts and disbursements on income account. With the accounts must be filed the petition of the trustee. This should shew all the Tacts entitling the petitioner to an audit of the accounts. It should shew. by schedule, or otherwise, all the estate undisposed of or unadministered, and the reasons why it has not been administered. It should give the names and residences of all the persons interested in the estate, distinguish- ing between adults and infants. If there are infants their respective ages should lie shewn, if possible. Re Lopwell, (i Terr. L. \l. 4r all the property of the deceased which has conic into his hands wherever found or by whatever means collected: and the inventory of the estate constitutes the basis or starting point for such accounting. Jamison v. Hapgood, 1<> Pick (Mass.) 77: Dunes v. Boyston, !> Mass. 337; Ella's Appeal, 68 X. II. 35. An inventory is not. however, conclusive as to the assets for which an executor or administrator is accountable. 238 executors' accounts. but he may be compelled to account for assets not in- ventoried or credited by him. Field v. Hitchcock, 14 Pick. 405. It is only as to property which an executor or administrator is entitled to receive in his represen- tative capacity that an account should be taken, and if he receives money or property to which he is not entitled in his representative capacity he cannot be required to account therefor. In re Soutter, 105 X. Y. 514; Watson's Appeal, 6 Pa. St. 505. The affidavits of the executors or administrators verifying the accounts, and the production of the vouchers, is prima facie evidence to warrant the Judge in passing the accounts, and where voluminous accounts have been passed the pointing out of one or two objectionable items was held insufficient to re-open the account. In re Curry, 17 P. E. 379, 25 A. E. 267. Should any item occur which cannot, at the mo- ment, be satisfactorily explained, or the voucher for it produced, it is marked as a queried item for further inquiry; and if the accounting party does not after- wards attend and support the queried items, or obtain further time to do so, such items will be disallowed. Dan. dry. Pr. 6th. ed. 1051. In taking the accounts the Judge may direct that the books of account in which the accounts required to be taken have been kept, or any of them, be taken as prima facie evidence of the truth of the matters therein contained. Con. Eule 418. Where the evidence produced to charge an accounting party consists of entries in books kept by the party himself, the party has a right to make use of entries in the same books in support of his payments. Darston v. Earl of Oxford, 1 Eq. Ca. Ab. 10. The books must be adopted alto- gether or rejected in toto. Kilbee v. Sneyd, 2 Moll. 193. So when an account furnished by a party before action instituted, is produced to charge him with the items on the debit side, he is entitled to resort to the credil side in support of his items of disbursements. Boardman v. Jackson, 2 B. & B. 386. Every sum of $8.00 and under is allowed without a voucher upon the oath of the executor. Everard v. PRACTICE ON A t " I > II . 239 Warren, 2 Ch. Ca. 249; bul his oath must be positive and not on belief only. Robinson v. dimming, 2 Atk. 410: and it would seem that the aggregate of such items should not exceed $400 in amount. Bennett's, M. 0. 86. If receipts or vouchers have been lost, or accidentally destroyed, secondary evidence will be let in. lb. On a 1 > 1 1 1 to surcharge and falsify an administra- tor's former settlement, vouchers that could not be produced, were presumed to have existed, after a long lapse of time. Campbell v. White, 14 W. Va. 122. Where an executor who had paid out money on account of expenses of administration produces a voucher shewing the nature of the disbursement, and stating facts which, if true, shew the same to have been teasonable and necessary for the good of the estate, a presumption is raised in favour of the correctness of the charge which must be opposed by affirmative evi- dence on the part of one contesting the claim for credit. Re White, 15 N. Y. St. 729. But nothing will be allowed in the account under the name of general expenses; the particulars must be mentioned. So also, where a party discharges him- self, upon his oath, of sums under $8, he must give particulars of the payment, to whom paid, for what purpose, and when paid. Dan. Ch. Pr. 1053. Where the account is of long standing it seems that the Court will sometimes permit the accounting party to discharge himself, upon oath, by reason of the loss of vouchers. Thus where the account in question was of twenty years' standing, it was ordered that the defendant should prove his account by his own oath, so far as he could not prove it by books or cancelled bonds. Peyton v. Green, 1 (Mi. Rep. 146; and a similar direction was given where tin 1 account was of fourteen years' standing. Holstcum v. Rivers, 1 Ch. Ca. 127: Turner v. Carney, 5 Beav. 515. In a suit to administer the estate of a testator who had died in Jamaica in 1S2o, an account was directed against the surviving executor and the representatives 240 executors' accounts. of a deceased executor. In taking the account (in 1857) the books of account, which were proved to have been recorded in the Jamaica Court, were allowed to be taken as prima facie evidence of the matters therein contained, under 15 & 16 Vic. eh. 86, which was similar to our Rule 418. Sleight v. Laivson, 3 K. & J. 292, 112 R. R. 155. A testator died in 1834 and his trustee kept the trust accounts open to be inspected by the cestuis que trust, who all lived together and in communication. In 1855 an examination of the books was made on be- half of two of them. The Court allowed the books to be taken as prima facie evidence of the accounts up to the time of that examination. Banks v. Carticright, 17 AY. R. 417. Books of account, kept by a trustee and her agent, were tendered as evidence of disbursements made on behalf of the trust estate. As the trustee could not produce strict vouchers the chief clerk admitted the books as evidence, and a motion to vary the certificate was refused. Cookes v. Cookes, 3 N. R. 97. The power given to the Master under Con. Rule 418 is not to be exercised until he is satisfied that the means of obtaining the ordinary legal evidence has been substantially exhausted. Euart v. Williams, 3 Eq. R. 476, 7 DeGL & M. 68. There are many cases in which the Court directs the account to be taken with the admission of certain documents, or testimonies, not having the character of legal evidence. Thus where the parties have been permitted, for a long course of years, to deal with property as their own, considering themselves under no obligation to keep accounts as if there was any adverse interest, having no reason to believe the property belonged to another, though it would not follow that, being unable to give an accurate account, they should keep the property, yet the account would be directed, not according to the strict course, but in such a manner as, under all the circumstances, would PRACTICE OX AUDIT. 24] be fit. Dan. Ch. Pr. 1052, citing Lupton v. White, 15 Yes. 432, 44.5. Appeals. Section 37 (d) of The Supreme Court Act provides for an appeal "from any judgment on appeal in a case or proceeding instituted in any Court of Probate in any Province of Canada other than the Province of Quebec, unless the matter in controversy does not exceed five hundred dollars." This sub-section was enacted in consequence of the judgment mBeamish v. Kaulbaeh, 3 S. C. E. 407, which held that the Court of Probate in Nova Scotia was not a Superior Court and, therefore, an appeal did not lie in the Supreme Court of Canada from a judgment of the Supreme Court of Nova Scotia in a matter or con troversy originating in the Probate Court. In In re Bundle, 52 S. C. E. 114, it was held that the term "Court of Probate" denotes any Court exercising a general probate jurisdiction, and that under the terms of said section 37 (d) an appeal lies to the Supreme Court of Canada from a judgment of the Supreme Court of Ontario in a case originating on the audit of accounts in a Surrogate Court. (See 1!< Bundle, 32 0. L. E. 312). Section 34 of The Surrogate Courts Act provides as follows : 34 -~ (!) Any person who deems himself aggrieved by an order, determination or judgment of a Surrogate Court, in any matter or cause, may appeal therefrom to a Divisional Court. (2) No such appeal shall lie unless the value of the property to be affected by such order, determination or judgment exceeds $200. _ (3) The practice and procedure upon and in rela- tion to an appeal shall be the -same as is provided by The County Courts Act as to appeals from the Countv Court. E.A.— ig 242 executors' accounts. (4) A motion for a new trial after a trial by jury under section 28 shall be deemed an appeal and shall be made to a Divisional Court. (5) An appeal shall also lie from any order, deci- sion or determination of a Judge of a Surrogate Court, on the taking of accounts in like manner as from the report of a Master under a reference directed by the Supreme Court, and the practice and procedure, upon and in relation to the appeal, shall be the same as upon an appeal from such a report. (6) Sub-sections 2 and 3 shall not apply to the appeal provided for by sub-section 5. Immediately an order is made removing a matter from a Surrogate Court to the Supreme Court it ceases to be a matter in the Surrogate Court, and an appeal from the order under this section cannot be enter- tained. Thereafter the practice of the Supreme Court of Ontario is to be followed. Justin v. Goodwin, IS P. E. 174; Forbes v. Forbes, 23 0. L. K. p. 522. Where the Surrogate Judge has no jurisdiction to adjudicate upon a claim, but by consent of the claimant and the executor he does adjudicate thereon, there is no appeal under this section, but there may be under The Arbitration Act. Re Graham (1912), 25 0. L. R. 5. An order was made by the Judge of a Surrogate Court, requiring the plaintiffs in an issue directed to l)e tried in the Surrogate Court to give security in the sum o!' $120. On appeal from this order it was urged that as the amount involved in the order was less than $200, there was no appeal. The Court held the objec- tion was untenable — that sub-section 2 was not in- tended to refer to a sum of money mentioned in an order as security for costs, but to property belonging to or in question in connection with the estate itself. Forbes v. Forbes (1911), 23 O. L. K. 518. In Be Nichol (1901 ), 1 O. I,. B. 213, it was held that an appeal to a Divisional Court from an order of a Surrogate Court was not properly lodged if security had not been given and an affidavit of the value of the property affected filed as required by rule 57 of the PRACTICE "X AUDIT. 24.' J Surrogate Court rules of L892. Now ao Becurity for costs is required od appeals from County Courts', and no security would appear to be necessarv on an appeal from a Surrogate Court. On p. 136 of Holmested's Judicature Act, there is a foot-note by the Learned author as follows:— "I am informed by Air. Justice Middleton that it has been ruled in the Appellate Division that the effect of the provision of The Surro- gate Courts Act as to appeals is to abrogate the Surro- gate Court Kules on that subject, hut I have been unable to find the ease in which that ruling was made." All appeals from a Surrogate Court, except as to a decision, order or determination under sub-section 5, are to the Appellate Division of the Supreme Court.' Notwithstanding the judgment in Re Alexander, \)\ O. E. 167, where it was held that an appeal lav to a Divisional Court from an order of a Surrogate Court Judge allowing compensation to an executor, it would appear that such appeals are more properly made to a single Judge. An appeal from a •Master's report is to a single Judge, and the Appellate Division has no power to hear such an appeal. Clarke v. Jamieson, 9 C. L. T. 97; not even by consent In re Wilson, 16 P. B. 150. Appeals from orders on passing accounts have been heard without objection by the Divisional Courts, also by a single Judge. Tn a recent case there was an' appeal as to the amount allowed executors as compen- sation, and the appeal came on before Middleton J in Single Court. It was objected that the appeal should have been to an Appellate Division, hut .Mr. Justice Middleton held that it was competent Tor a single Judge to hear the appeal. Re Henderson, 8 0. YV. X. 31, Mr. ffolmested, speaking of appeals under sub-sec 5 says: "Presumably, in order to comply with the-. Bules, the certificate or order of the Judge appealed f rom should be filed in the Surrogate Court, and notice oi hlmg served ( ,„ the opposite party, and seven clear days notice of the appeal must then he served on the respondent within on,, month from the date of service 244 executors' accounts. of the notice of filing. The appeal in this case is to a Judge of the High Court Division in the Weekly Court, and it would seem that an appeal would lie from his decision to the Appellate Division under the Judicature Act, sec. 26, unless precluded by Jud. Act, sec. 25 ": p. 135. Cost of Audit. It is by no means a matter of course that the costs of taking and auditing the accounts are paid out of the estate. As a general rule the costs are so paid, but they are discretionary with the Judge, and it is impossible to lay down any rule when the usual course will be departed from. In Heugh v. Scard, 33 L. T. 659, Jessel, M.E., said : " In certain cases of mere neglect or refusal to furnish accounts, when the neglect is very gross or the refusal wholly indefensible, I re- serve to myself the right of making the executor or trustee pay the costs of litigation caused by his neglect or refusal." This was approved of in the recent case of In re Simmer, Cooper v. Skinner (1904), 1 Ch. 289. Where trustees had refused information and an account of the property to the parties who were inter- ested in the estate, the trustees were ordered to pay the costs of an administration action up to the hearing, and each partv his own costs of the subsequent pro- ceedings. Talbot v. Marshfield (1868), L. E. Chy. App. 622 ; Kemp v. Burn, 4 Giff . 348. But the mere fact that an executor neglected to render accounts when asked, is not of itself sufficient to make him liable to costs. White v. Jackson, 15 Beav. 191, 92 E. E. 379. If the costs have been increased by the failure of the executor to keep reasonably accurate entries or accounts of his dealings with the estate, or by inquiries into his improper dealings with and application of the trust estate and funds, these should be deducted from his costs. In re Honsberger, 10 0. E. 521 ; Zimmerman v. Wilcox, 35 C. L. J. 688. The Surrogate Judge is sometimes embarrassed by a number of interested parties, in the same interest, appearing on the audit and asking for costs out of the PRACTICE OX AUDIT. 245 estate. The practice was laid down very clearly by Jessell, M.R., in Sharp v. Lush, 10 Ch. D. 468, in a clear cut judgment which deserves to be copied verbatim : "As to the costs of attending the proceedings in Chambers, there ought to be no mistake about the prac- tice, as it is a matter of the greatest importance. If I were to accede to this application I should waste half of the estates which are administered before me in this Court. "The law stands in this way, that any persons inter- ested who ought to be served can, under the general practice, attend, as of course, the proceedings ; but that does not entitle them to the costs of attending. That is determined by the Judge in Chambers, who, under a general order (see Con. Rule 406), decides what parties interested in the estate shall attend the taking of the accounts at the costs of the estate ; that is the subject of a special application. I cannot prevent any body attending the proceedings; if there were fifty people I could not prevent them instructing fifty soli- citors to attend all the proceedings; bnt if they did, they would not only pay their own costs where I found forty-eight of them unnecessary, but I should make them pay the extra costs occasioned by attending un- necessarily. That has always been the practice in my Chambers since 1 have had the honour of sitting here. "I do not believe these numerous attendances in Chambers on taking the accounts, and so on. are of the slightest use. According to my experience, when you have one respectable solicitor taking the account* adversely on one side, and you have an equally respectable solicitor attending on the other side, the attendance of all other solicitors and clerks is so much money wasted. •'As a rale, I give leave to one solicitor to attend on one side and one solicitor on the other. When the residuary legatee conies in, what 1 do is this: T let one solicitor take the accounts for the residuary legatee on the one side, and one solicitor take the accounts for 246 EXECUTORS ' ACCOUNTS. the executors on the other. In the present case, as neither Mr. Ince's clients nor Mr. Davey's clients ob- tained special leave to attend the proceedings in Chambers, and as I am not satisfied their attendances were necessary, I shall not give them the costs of these attendances." Sec. 79 of the Surrogate Court Act provides that the Board of County Judges may prescribe a tariff of fees and costs to be taken by the registrars and the officers of the Surrogate Courts, and to be allowed to solicitors and counsel practising therein for duties and services in respect of proceedings in such Courts, and to wit- nesses therein, and no other fees or costs than those so authorized shall be taken or allowed to such registrars, officers, solicitors, counsel and witnesses. The tariff of fees so prescribed will be found in the appendix. In Re Morrison, 13 0. W. R. 767, the Surrogate Judge himself taxed the costs of the solicitors accord- ing to the tariff, "except that I allowed certain items not covered by the tariff, and which under the circum- stances of this case, could not have been contemplated by the tariff, but in respect to which certain allow- ances were properly made to the solicitor. " On appeal, Riddel], J., said : "I do not quarrel with the statement of the learned Judge that the amounts allowed are reasonable; but I think that the costs in the Surrogate Court must be those found in the tariffs. . . . \'<>1 only is there the negative prohibition against the allowance of anything which is not in the tariffs, but there is the positive prohibition in the statute. A tax- ation which admittedly contains "items not covered by the tariff" cannot stand. The appeal upon this ground must be allowed, and the bill complained of referred back to be taxed by the registrar in strict accordance with the tariff." A Surrogate Court Judge allowed, by fiat, a counsel fee to the executors of $100, and $50 to counsel for the residuary legatee. On appeal, Middleton, J., said the maximum counsel fee was limited by the Rules and could not be exceeded, following Re Morrison, Re Griffen, 3 0. W. N. 759. PRACTICE OX AUDIT. 241 The late Master in Ordinary, Thomas Hodgins, K.C., refused to tax to a liquidator the premiums paid to a guaranty company, whore such liquidator was required to give security under the provisions of the Winding-up Act. This practice has not been followed in the Surrogate Courts of Ontario on the passing of administrators' accounts: and, where an administra- te i- lias furnished security in the shape of a bond of a guarantee company, it is usual to allow him the pre- mium paid the company. If the administrator neglects, for an unreasonable time, to pass his accounts so as to relieve the guaranty company, lie should not be allowed for premiums paid after the date when he should have had an audit. Such an expense was disallowed by an Arkansas Court. See Adamson v. Parker, 85 s". W. 239. It will be noticed that the new tariff provides that the fees, in cases of an important nature, may be in- creased by the Judge, but such increase shall be subject to approval by a Judge of the Supreme Court of Ontario upon a report from the Judge. Where the receipts exceed $100,000, the fees shall be such as the Judge deems fair and proper subject to the approval of a Judge of the Supreme Court. To secure uniform- ity, until further direction is given, such applications are to be heard by Mr. Justice Middleton. To secure approval the certificate of the Surrogate Court Judge and all papers necessary to enable the matter to be dealt with, should be forwarded to him at Osgoode 1 Call, with return postage. Payment into Court. Where on the passing of the final accounts by the Judge of a Surrogate Court, there is in the hands of the accounting party any money belonging to an infant, or to a lunatic or person of unsound mind, or to a per- son whose address is unknown, the accounting party is required to pay the money int.. the Supreme Court to the credit of the person who is entitled to it. The accountant is to be furnished with a certified copy of 248 executors' accounts. the order, and the person paying the money in is en- titled to deduct $5.00 for his cost. For the purpose of payment in and out of Court, the order should state when the infants interested in the estate will attain their majorities. Sec. 38, The Trustee Act. See Form of Order in Appendix. A Surrogate Court has no right to the custody of the property of an infant or lunatic ; and the Judge of a Surrogate Court has no jurisdiction to order pay- ment of an infant's money into that Court. Re Mercer (1912), 26 0. L. R. 427. L., a resident of Chicago, died there, and his widow was appointed general administratrix of his estate. A small portion of his estate consisted of personality in Ontario, of which a trust company was appointed administrator. This company administered the Ontario assets, and had a balance of $774, on hand, which was claimed by the widow as general adminis- tratrix. The Official Guardian, on behalf of the infant heir, contended that the moneys realized in Ontario, or a portion of them, should be paid into Court. Britton, J., held that the passing of the accounts by the Ontario administrator was not the "passing of the final accounts" referred to in section 38 (2) of The Trustee Act. It is in fact only a collection by the Ontario administrator for the home administratrix, to enable the latter to pass the accounts and make final distribution, and the order went for pavment to the administratrix. Re Law (1915), 34 0. L. R. 222. EFFECT OF AUDIT — MISTAKE OB FRAUD. 249 CHAPTER XXXVI. Effect of Audit — Mistake or Fraud. Most of the learning in the English cases deal with the law and practice in re-opening stated or settled accounts. A stated account is an agreement between parties who have had previous transactions of a mone- tary character, that all items of the accounts represent- ing such transactions are true and that the balance struck is correct, together with a promise, express or implied, for the payment of such balance. Abbott's Trial Ev. 458. Lord Mansfield, C.J., in Trueman v. Hurst, 1 T. R. 42, said: "What is an account stated? It is an agreement by both parties that all the articles are true. ' ' See also Union Bank v. Knap.p, 3 Pick. 96. When the balance admitted upon a stated account is paid, the account is deemed a settled account. Storey Eq. PI. 798. In dealing with executors' accounts, settled accounts are accounts rendered by an executor to his cestuis que trust, or to residuary lega- tees, upon their releasing him of his accountability to them, and approved and accepted by the cestuis que trust or legatees. The rule in equity has always been that stated or settled accounts cannot be opened or corrected except on the ground of fraud, mistake, omission, accident or undue advantage, and the burden is on the party seek- ing to impeach the account to prove the existence of such fraud, mistake or the like. Even where these elements are shewn to exist, the courts will not readily set aside a settlement or statement presumably made by the parties after an examination of the state of their mutual dealings; and where the error or other taint does not affect the whole transaction, they will only allow the account to be surcharged or falsified. 1 A. & E. Ency. 461. 250 executors' accounts. Where accounts were impeached the rule was that an establishment of one mistake was sufficient to induce the Court to give a decree entitling the party to sur- charge or falsify an account. Lawless v. Mansfield, 1 D. & War. 557; Davies v. Spurting, Tarn. 199; Gething v. Keighley (1878), 9 Ch. D. 547. This pro- ceeded on the principle that if an account stated or settled be proved to be fraudulent there is nothing on which it can stand; the transaction itself is void: then, if the transaction is void, there is no question that can remain about an account partially settled, or settled so far as error may not be proved. Allfrey v. AUfrey, 1 Mac. & G. p. 93, 84 K. R 20. In Vernon v. Vawdry, 2 Atk. 119, it is said that "if there are only mistakes and omissions in a stated account, the party objecting shall be allowed no more than to surcharge and falsify. But if it is apparent to the Court that there has been fraud and imposition, the decree must be that the whole shall be opened, not- withstanding it was a stated account of twenty-three years' standing, and he who was guilty of the fraud was dead." In Chapped elaine v. Dechenaux, 4 Cranch. (U.S.) 306, .Marshall, C.J., said: "No practice could be more dangerous than that of opening accounts which the parties themselves have adjusted, on suggestion sup- ported by doubtful or by only probable testimony. But if palpable errors be shewn, errors which cannot be misunderstood, the settlement must so far be con- sidered as made upon an absolute mistake or imposi- tion, and ought not to bo obligatory on the injured party or his representatives, because such items cannot he supposed to have received his assent." The same principle is stated bv Lord Redosdalo in Drew v. Power, 1 Scli. & Let'. 182: "One rule material to ob- serve in all cases of account is, that where there has been a settlement of accounts, either the account has been signed or a security taken upon the footing of the account, a Court of equity does not open that trans- action and throw it again between the parties as if no EFFECT OF AUDIT- -MISTAKE OB FRAUD. 25] such transaction had happened, unless the evidence which is produced (and that evidence founded on charges in the bill) shews the whole transaction to be so iniquitous that it ought not to be brought forward at all to effect the parties so to he bound. If the account impeached he a settled account, or if an instrument has been executed upon the fool of it, the Court expects that the errors should he specified in a hill and proved as specified; otherwise it would he easy to overthrow the fairest account and those settled in the most solemn manner, when there happens to he any complication in their nature." In Williamson v. Barbour, f) Ch. I). 529, the Master of the Rolls said that if the accounts shew errors of sufficient number and sufficient magnitude they may be re-opened although fraud is not shewn, and whether they are errors caused by mistake, or errors caused by fraud, the Court has a right to re-open the account-, lie also points out that a less amount of error will justify the Court in opening the accounts where the accounting party occupies a fiduciary position than in cases where persons do not occupy that position. An elaborate investigation of the powers of the prerogative Court and the diocesan courts in England was made by Mr. Justice Daly in Re Bricks Estate. 15 Abbott's Prac. 12. lie there cites a large number of cases in support of his statement that though these courts "were not courts of record and never had the broad general powers to review and correct their pro- ceedings possessed by courts of that high character, still, as indispensable to the administration of justice. they had and exercised, ... to a certain limited extent, the right of revoking acts done by them, as where a decree is obtained by collusion or fraud. . . . The whole may be summed up briefly in the statement that they may undo what has been done through fraud or upon the supposition that they had jurisdiction. . . . or correct mistakes, the result of oversight or accident." In /;/ re Wilson and Toronto (, Trusts ( 'orporation,13 0. I,. R. 82, Meredith, CI., said 252 executors' accounts. that these conclusions of the learned Judge are fully supported by the adjudged cases to which he refers. It is further to be observed that the Surrogate Courts of this Province are now courts of record; R. S. 0. 1914, ch. 62, sec. 3, and therefore possess the broad powers to review and correct their own proceed- ings spoken of by Mr. Justice Daly as being possessed by courts of record. A surrogate Judge acting as the Surrogate Court has inherent jurisdiction to set aside an order which he has been induced to make by fraud of the applicant, and also to set aside or vary an order which he has made by mistake, though not to correct errors made in the judicial determination by him of any question; thus it was held he had jurisdiction to vacate an order made by himself upon the taking of executors' accounts and re-open the accounts and further investigate them without reference to the order made. In re Wilson and Toronto G. T. Co., supra. The acts of the Surro- gate Judge in passing the accounts of executors are those of the Court and not of the Judge as persona deslgnafa. lb. In the last mentioned case the Surrogate Court Judge had passed the executors' accounts in January, 1905, and in February, 1906, the Avife of the testator presented to the Judge of the Surrogate Court a peti- tion alleging that she had since discovered that the executors had bought mining stock with trust funds, that they had charged interest on overdrawn balances, that they had sold estate property without consulting her, had spent large sums in unnecessary and expen- sive litigation, etc., and asked to have the order va- cated and the accounts re-opened. It will be noticed that neither fraud or mistake was charged, and counsel for the petitioner argued that the Surrogate Judge had power to open the accounts on such allegations " other- wisp the petitioner would have had to bring an action in the High Court with the onus on her to prove mis- take or fraud." The Surrogate Judge did re-open up the accounts to a limited extent and a Divisional Court held he had jurisdiction to do so. EFFECT OF AUDIT — MISTAKE OR FRAUD. 253 Section 71 (1) of The Surrogate Courts Act is as follows: — "Where an executor, administrator, trustee, under a will of which he is an executor, or a guardian, has filed in the proper Surrogate Court an account of his dealings with the estate, and the Judge has ap- proved thereof, in whole or in part, if he is subse- quently required to pass his accounts in the Supreme Court, such approval, except so far as mistake or fraud is shewn, shall be binding upon any person who was notified of the proceedings taken before the Surrogate Judge, or who was present or represented thereat, and upon every one claiming under such person." It is only so far as mistake or fraud is shewn, and not where mistake or fraud is shewn, that the binding effect of the approval is taken away: and the language of the section plainly indicates that it was not intended that the whole account should be opened up, but that the account should be opened up so as to remove from it anything which, owing to fraud or mistake, had not been charged or had been allowed to the executor, administrator or guardian. In re Wilson and Toronto G. T. Co., 15 0. L. E. p. 616. The judgment in the last mentioned case was the aftermath of the same case reported in 13 0. L. 17. supra, and Meredith, C.J., said: "It is unnecessary to determine whether, if this exception to the binding nature of the accounts had not been contained in the section, and the order approving the accounts were to be treated as a judgment or decision of the Surrogate Court, upon the case made by the appellant, as to the two matters as to which she has succeeded in shewing that the accounts were incorrect she would be entitled to have the accounts taken de )i<>ro, but, as at present advised, I do not think she would be entitled to that relief, but only to have the accounts corrected in those respects in which it is shewn that they are incorrect. The principle applicable to the opening of an ordinary stated account, and the consequences of such an account being opened, do not, I think, apply to an account taken by the Court in the presence of the 254 EXECl'TOES' ACCOUNTS. parties where the persons to whom the accounting is being made are brought before the Court for the pur- pose of enabling them to challenge, if they will, the correctness of the account." The effect of this section is not to abridge the in- herent jurisdiction or power of a Surrogate Judge to re-open accounts upon which he has already passed. It would seem, however, to limit the jurisdiction of the Supreme Court to re-open such accounts "except so far as mistake or fraud is shewn." What is meant by the words "if he is subsequently required to pass his accounts in the Supreme Court?" Does this limit the right to re-open the accounts where, an audit being had, an administration order is subsequently made and a reference ordered?. In Shaw v. Tackaberry (1913), 29 0. L. R. 490, the sole beneficiary, alleging that one of the executors had himself become the real purchaser of a part of the trust estate at an undervalue, brought an independent action in the Supreme Court and suc- ceeded, and a reference was directed as to profits and rents. It is not easy to see how, in that case, the action could have been framed so as to open up matters decided on the audit without asking for a new account, either in form or substance. But is this what is meanl by "pass his accounts," in section 71 (1) ? On p. 498 Riddell, J., speaking of the defence afforded by this section, says: "The defence under the statute may stand or fall with the main defence — if there was no mistake or fraud in the defendant asserting that the land had been properly sold, realizing $2,200 only, it may be that the statute applies." In refusing to open up items of an account which have been adjudicated upon the statute gives effect to the old maxim of law: Nemo debet bis vexari pro una et eadem causa." If an action be brought and the merits of the question be discussed between the parties and a final judgment obtained by either, the partis arc concluded and cannot canvass the same in another action. A judgment obtained by fraud could always be set aside by means of an action analogous to the former EFFECT OF AUDIT- M ISTAKE OE FRAUD. 255 Chancery suit to set aside a decree obtained by fraud. Wyatt v. Palmer (1899), 2 Q. B. L06; Flower v. £%d (1877), 6 Ch. J). 297. And the Court could set aside a judgment on the ground of mistake as well as fraud, hut the application must be made within a reasonable time. Cannan v. Reynolds, 5 El. & Bl. 301, 103 R. B. 491. A mistake is some unintentional act, omission or error arising from ignorance, surprise, imposition or misplaced confidence. 1 Story Eq. Jur. 110. That result of ignorance of law or fact which has misled a pei-son to commit that which, if he had not been in error, he would not have done. Jeremy Eq. Jur. 358. A mistake exists where a person, under some erroneous conviction of law or fact, does or omits to do some act which, but for the erroneous conviction, he would not have done or omitted. It may arise either from unconsciousness, ignorance, forgetfulness, imposition, or misplaced confidence. Bispham's Eq. 185. A mistake may be a mistake consisting of ignorance or forg-etf ulness of a material fact, or arising out of the belief in the existence of the subject matter of a transaction where it has ceased to exist, or of some fact which forms the basics of the transaction which is not true. Beyond this, however, it is impossible to give a complete definition of mistake as the courts have always refrained from attempting to do so. 21 Hals bury 2. In Barrow v. Isaacs & Sou (1891). 1 Q. B. D. 420, Lord Esher, M.R., said: "I can find no definition of what 'mistake' is; but if you treat mistake in its ordin- ary sense in the English language, is mere forgetful- ness a mistake? Can you, in English, say. 'I forgot.' and is that the same thing as saying ' I was mistaken V I think not. Both these questions depend on something happening in the mind of the person, and you have t<> see what it is that happens in his mind. If he mereh forgets, he does not assume that one state of things exists whereas some other state of things exists; it is a mere passive state of mind ; he has forgotten — he 256 executors' accounts. has not thought that one thing was in existence, whereas something else was in existence. I should say that mere forgetf illness is not mistake at all in ordin- ary language. I cannot find any decision in Courts of Equity which has ever stated that mere forgetful- ness is mistake against which equity will relieve." It would appear that these remarks were not con- curred in by Lopes and Kay, L. JJ., the other members of the Court, and in Hood of Avalon v. Machinnon (1909), 1 Ch. D. 476, Eve, J., after quoting the above citation, said: "With the greatest possible respect to Lord Esher, I do not quite follow that. It seems to me that when a person has forgotten the existence of a pre-existing fact, and assumes that such fact did not exist, he is labouring under a mistake, and he acts on the footing that the fact did not pre-exist ; and, ventur- ing to criticize the language of Lord Esher, I should have thought that a man makes a mistake in forgetting an existing fact quite as much as he does in assuming a state of things to exist which does not in fact exist." See also Kelly v. Solari, 9 M. & W. 54, 60 E. E. 666; Baker v. Courage (1910), 1 K. B. p. 65. Eelief will not be granted on the ground of mistake if the mistake is one of law as distinguished from one of fact. The distinction between mistakes of law and mistakes of fact has never been clearly defined by the courts, but it may be taken that to exclude the right to relief the mistake must be one of general law, such, for example, as the legal interpretation of a contract. Wilding v. Sanderson (1897), 2 Ch. 534. Thus the above rule does not apply to ignorance of a private right, although the private right is the result of a matter of law, or depends upon rules of law ap- plied to the construction of legal instruments ; nor does it apply to ignorance of a right which depends upon questions of mixed law and fact, and a statement of fact which involves a conclusion of law is still a state • ment of fact and not a statement of law, while mistake as to the law of a foreign country which is clearly, in one sense, a mistake of law, is held in this country to be a mistake of fact. 21 Halsburv, 4. EFFECT OF AUDIT — MISTAKE OR FRAUD. 257 Fraud, in the sense of a Court of Equity, properly includes all acts, omissions and concealments which involve a breach of legal or equitable duty, trust, or confidence justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken of another. 1 Story Eq. Jur. 187. Fraud, in the contemplation of a civil Court of Justice, may be said to include properly all acts, omis- sions and concealments which involve a breach of legal or equitable duty, trust or confidence, justly reposed, and are injurious to another, or by which an undue advantage is taken of another. All surprise, trick, cunning, dissembling and other unfair way that is used to cheat anyone is considered as fraud. Fraud in all cases implies a wilful act on the part of any one, where- by another is sought to be deprived, by illegal or inequitable means, of what he is entitled to. Kerr on Fraud, 1. Fraud is not mistake or error in interpreting a con- tract ; fraud is something dishonest and morally wrong, and much mischief is done as well as pain inflicted by its use where "illegality" and "illegal" are the really appropriate expressions. Washburn v. Wright, 31. 0. L. R. 138, where it was held that the word "•fraud" in sec. 3 of The Master and Servant Act means some- thing more than mere mistake or an erroneous mode of interpreting the contract. In Duchess of Kingston's Case, 2 Sm. L. C, it is said that "fraud is an extrinsic, collateral act, which vitiates the most solemn proceedings of Courts of Justice. Lord Coke says it avoids all judicial acts." DeGrey, C.J., in that case said: "Like all other acts of the highest judicial authority, it is impeachable from without; although it is not permitted to shew that the Court was mistaken, it may he shewn that they were misled." Lord Coleridge. (\ J., in Abouloff v. Oppen- heimer, 10 Q. B. D. 295, said he believed that the prin- ciple has never been either better or more tersely and neatly stated than it was in the foregoing passages. K.A. 17 258 executors' accounts. To set aside a judgment of fraud it is not sufficient for the plaintiff to allege fraud. It is the duty of the Court to receive such evidence, pro and con, as is material to the question whether there really has been, since the former judgment, a new discovery of some- thing material to disturb the former judgment, and the plaintiff must shew a reasonable possibility of the alleged fraud being established, a mere general allega- tion of fraud, without particulars, cannot avail. Boswell v. Coahs, 6 R. 167; Birch v. Birch (1902), P. 130, 138. "It is not too much to require any one Avho intends to charge another with fraud ... to take the responsibilitv of making that charge in plain terms." Caldwell v. Cockshutt Plow Co. (1913), 30 0- L. R. p. 262, citing Low v. Guthrie (1909), A. C. 278, and Badenach v. Inglis (1913). 29 O. L. R. 165; and the person making the charge is confined to the particular fraud charged. Medcalf v. Oshawa Lands and Invest- ments (1914), 5 O. W. N. 797; Washburn v. Wright, supra. There must be a distinct and positive issue presented by the party seeking to set aside a judgment for fraud. It is not sufficient for the plaintiff to say to the defendant "You obtained that judgment by fraud." He must state in what the fraud consisted. "You bribed the witnesses, you bribed my solicitor, you bribed my counsel, you committed some fraud or other of that kind, and I ask to have the judgment set aside on the ground of fraud." Per James, L.J., Flower v. Lloyd (1877), 6 Ch. D. p. 302. And see Walling ford v. Mutual Society, 5 A. C. 685, 701. In Brooke v. Lord Moyston, 2 D. J. & S. 373, 139 R. R. 134, a compromise was grounded on the supposed insufficiency of real estate to pay certain legacies. It appeared that at the time of the inquiry as to the com- promise being for the benefit of one of the legatees, an infant, a document relative to the valuation of the estate rendering it doubtful whether the valuation, which throughout the inquiry was treated as correct, was not based on erroneous principles, so as to give an EFFECT OF AUDIT — MISTAKE OR FRAUD. 259 under value, was in the possession of the owners of the estate, but was not laid before the Master. The com- promise was set aside. Turner, L.J., treated this as fraud, "meaning by fraud not moral fraud, but what in the eye of the Court is considered as amounting to fraud." This decision was subsequently reversed, L. R. IT. L. 304, but the reversal did not affect the law as laid down here. One of two executors induced his agent to purchase a part of the trust estate at an auction sale for $2,200, and then re-sold the land at a profit, accounting on the audit only for the sum at which the land was bid in. ' ' The representing to the Surrogate Court that $2,200 had been received as the sale price of the land was either a mistake or fraud on the part of the defendant ; and, assuming that the Surrogate Court Judge had jurisdiction to pass upon the items, such a decision was not binding." Shaw v. Tachaberry (1913), 29 0. L, R. 490. See also Re Dahj, Daly v. Brown, 39 S. C. R. 122. Where a solicitor puts in a fraudulent defence for his client, without the client's knowledge, making ad- missions on which judgment was obtained against the client, it was held this was fraud for which the Court would relieve. Williamson v. Preston, 20 Ch. D. 672. A final settlement will not be interfered with on account of mere irregularities unless they are suffi- ciently gross to raise the presumption of fraud; nor are mere illegal allowances unless obtained by fraud, ground for impeaching or setting aside a final settle- ment. 18 C. Y. C. 1198. It is fraud for an administrator to obtain an allow- ance to himself for the whole amount o( a claim assigned to him by a former administrator of the deceased without deducting the amount for which his assignor is indebted to the estate, lie should setoff one debt against the other and take credit only for the difference. Sorrels v. Frantham, 4S Ark. 386. The wilful omission or concealment o\' assets consti- tutes fraud for which a settlement mav be set aside. 260 EXECUTORS ACCOUNTS. Ridenbaugh v. Burnes, 14 Fed. Rep. 93; Smiley v. Smiley, 80 Mo. 44; 7% re MciVei/, 68 Pa. St. 412. If a guardian buys up the incumbrances upon an infant's lands for less than the amount due, it is fraud if he charge the estate more than he actually paid. Henley v. 2 Ch. Ca. 245. So a guardian settling accounts as soon as infants come of age, and retain- ing a gratuity, was set aside. Oldham v. Hand, 2 Ves. 259. See also Wych v. Packington, 3 Bro. P. C. 46. And a solicitor dealing with an infant is governed by the same principles which apply to a guardian and his ward. Revett v. Harvey, 1S.&S. 502, 24 R. R. 219. In some of the cases it seems to have been assumed that mere perjury or falsification of evidence does not amount to that fraud which is sufficient to set aside a judgment, Flower v. Lloyd, 10 Ch. D. 327 ; Baxter v. Wadsworth, 67 L. J. Q. B. 301 ; Woodruff v. McLennan, 14 A. R. 242. In Kerr on Fraud it is said: "To set aside a judgment on the ground of fraud, actual posi- tive fraud must be shewn. There must be on the part of the person chargeable with it the mains animus, the mala mens putting itself in motion, and acting, in order to take an undue advantage for the purpose of actually and knowingly committing a fraud. The fraud must he a fraud which can be explained and defined upon the face of the judgment. Mere irregularity, or even perjury, is not the kind of fraud which will authorize the Court to set aside a judgment ": p. 365. But the better opinion would seem to be that if the perjury was that of the party to the action who obtained the judgment, or of a witness on behalf of such party, made with the knowledge of the party, such perjury amounts to fraud. In Abouloff v. Oppenheimer, 10 Q. B. D. 295, in an action in a foreign Court, a claim was made 1 for the value of certain goods. The plaintiff in that action knowingly misrepresented to the Court that the goods were not then in his possession. This was held to bo fraud. EFFECT OF AUDIT — MISTAKE OR FRAUD. 261 In Vadala v. Lawes, 25 Q. B. U. 310, in an action on a foreign judgment, the alleged fraud consisted of the plaintiff placing before the Italian Court bills of ex- change which he alleged to be commercial bills, when in truth and in I'act he knew them to be nothing of the sort, but bills for gambling transactions. Held to be fraud. These cases were followed by a Divisional Court in Johnston v. Barkley (1905), 10 0. L. R. 724, in prefer- ence to Woodruff' v. McLennan. Street, J., delivering the principal judgment of the Court, said: "In coining to my conclusions I follow Abonloff v. Oppenheimer and Vadala v. Laices, which draw no distinction be- tween the fraud which consists in presenting perjured evidence to the Court, and that which is collateral to the merits of the case. This distinction is recognized by the Supreme Court of the United States in the case of Hilton v. Gwyoi, 159 U. S. 113, and by our own Court of Appeal in Woodruff v. McLennan, but the House of Lords does not seem to have had the question presented to it as yet. Meantime there is no doubt that the wide doctrine which appears to be the result of the English and American cases at present, impairs to a very considerable extent the finality of all judg- ments." But a party to an action cannot try over again the very question which was in issue in the original action. Where it is merely a question whether the plaintiff's witnesses or the defendant's witnesses were telling the truth at the trial or inquiry the Court will not re-open the judgment. See per Cxarrow, J. A., Jacobs v. Bearer, u 0. L. R. 502. It is clear that the fact that since the adjudication a party has discovered the existence of evidence which might have established his contention will not amount to fraud. Taylor v. Sheppard, 1 Y. & C. 271. Where a plaintiff brings an action against an execu- tor or other trustee to which section 71 of the Surro- gate Courts Act applies, and seeks to re-open items m the accounts approved of by the Surrogate Court 262 executors' accounts. Judge without alleging fraud or mistake, the action will be stayed as frivolous and vexatious, and an abuse of the process of the Court. In the exercise of its dis- cretion the Court may allow the action to proceed upon security for costs being given. Smith v. Clarkson (1904)," 7 0. L. E. 460. An executor duly passed his accounts before the proper Surrogate Court Judge in the presence of the solicitor for the plaintiff, a beneficiary. Subsequently the plaintiff brought an action in the High Court, and without any pleadings being delivered, an order was made, by consent, for the removal of the executor and the appointment of a trust company in his place, and for the passing of the accounts, adopting the common form of the order for such purposes. It was held that, on the taking of the accounts in the Master's office the accounts taken and passed by the Surrogate Court Judge were under section 71, no mistake or fraud being shewn, binding on the plaintiff, for notwithstanding such consent the judgment must be construed as if made in invitum, and the usual rules of law and pro- cedure, statutory and otherwise, applied thereto. Gibson v. Gardner (1907), 13 0. L. R. 521. CHAPTER XXXVII. The Residue. Section 58 of The Trustee Act provides as follows: (1) Where a person dies having by will ap- pointed an executor, such executor, in respect of any residue not expressly disposed of, shall be deemed to be a trustee for the person, if any, who would be entitled to the estate under The Devolu- tion of Estates Act in case of an intestacy, unless THE RESIDUE. 263 it appears by the will that the executor was in- tended to take such residue beneficially. (2) Nothing in this section shall prejudice any right in respect of any residue not expressly dis- posed of to which, if this Act had not been passed, an executor would have been entitled where there is not any person who would be entitled to the testator's estate under The Devolution of Estates Act. On the passing of accounts, all debts and charges having been paid and the residue ascertained, the executors become trustees of the testator's estate, and their liability must be determined on that footing. Dover v. Denne (1902), 3 0. L. E. p. 689. And as soon as debts have been paid an administrator holds the estate in trust to convert and divide among those en- titled under the statute to distribution, in precisely the same way that an executor holds an estate in trust under a will when he is directed to convert and dis- tribute among several residuarv legatees. Re Harris, 7 0. W. X. p. 598 (1915), 33 0. L. R. 83. The "residue" of the estate means the estate which remains after payment of the debts, funeral and testa- mentary expenses, and the costs of an administration suit, but not succession duty. Kennedy v. Protestant Orphans Home, 25 0. R. 235. A gift of residue "to the amount of $800" was held to be a gift of $800 only. Re Browne, 5 O. W. N. 46(5; In re Nelson, 14 (Jr. L99. The term " residuary legatee " prima facie means the person taking what the law calls the residue of the personal estate; but it is a term which must be fashioned and moulded by the context. But the use of the word "legatee" instead of the more appropriate word "devisee" will not prevent real estate passing under a residuary clause where the intention of the testator, to be gathered from the whole will, was that real estate should pass. Re Booth and Merriam, 1 0. W. X. MS-, Patterson v. II nest on, 40 X. S. R. 4. When the executor has paid all the debts, the fun- eral and testamentary expenses, and all the legacies, ho 264 executors' accounts. must in the last place pay over the surplus or residue of the personal estate to the residuary legatee, if any such be nominated. The residuary legatee has a right to insist that the executor, before the end of the first year after the testator's death, shall, if possible, con- vert all the assets into money and pay the funeral and testamentary expenses, debts and legacies, and hand over the clear residue to the residuary legatee. Wight- wick v. Lord, 6 H. L. C. 217, 108 E. E. 76. A residuary legatee is entitled to whatever may fall into the residue after the making of the will by lapse, invalid disposi- tion, or other accident, or by acquirement subsequent to the date of the will. The distribution of the residue of intestate estates is governed by sections 29, 30 and 31 of The Devolution of Estates Act, which are as follows: — 29. — (1) The real and personal property whether separate or otherwise, of a married woman in respect of which she dies intestate, shall be distributed as follows: One-third to her hus- band if she leaves issue, and one-half if she leaves no issue, and subject thereto shall devolve as if her husband had predeceased her. (2) A husband, who, if this Act had not been passed, would be entitled to an interest as tenant by the curtesy in real property of his wife, may by deed or instrument in writing executed, and attested by at least one witness, and delivered to the personal representative, if any, or if there be none, deposited in the office of the Surrogate Clerk at Toronto, within six months after his wife's death, elect to take such interest in the real and personal property of his wife as he would have taken if this Act had not been passed, in which case the husband's interest therein shall be ascertained in all respects as if this Act had not been passed, and he shall be entitled to no further interest thereunder. 30. Except as in this Act is otherwise provided the personal property of a person dying intestate THE RESIDUE. 265 shall bo distributed as follows, that is to say: one-third to the wife of the intestate and all the residue by equal portions among the children of the intestate and such persons as legally represent such children in case any one of them have died in his lifetime, and if there are no children or any legal representatives of them then one-half of the personal property shall be allotted to the wife, and the residue thereof shall be distributed equally to every of the next of kindred of the intestate who are of equal degree and those who legally represent them, and for the purpose of this section the father and the mother and the brothers and sisters of the intestate shall be deemed of equal degree; but there shall be no representation ad- mitted among collaterals after brother's and sister's children, and if there is no wife then all such personal property shall be distributed equally among the children, and if there is no child then to the next of kindred in equal degree of or unto the intestate and their legal representatives and in no other manner. 31. If, after the death of a father, any of his children die intestate, without wife or children in the lifetime of the mother, every brother and sister and the representatives of them shall have an equal share with her, anything in section 30 to the contrary notwithstanding. Section 27 provides that an illegitimate child or relative shall not share under any of the provision® of the Act, and that a person born out of matrimony shall not become legitimate by the subsequent marriage of his parents. The Devolution of Estates Act, passed in Ontario in 1886, makes a change amounting to a new rule in the law as to succession to real estate of persons dying intestate, and declares generally that land shall be distributed as personal property among the next of kin of a person dying intestate. It is sufficiently plain that the provisions of the Statute of Distributions, as 266 EXECUTORS ACCOUNTS. to personal estate, are to regulate the distribution of land. The same comprehensive change had been made in many of the Australasian Colonies before this, and the result of such legislation had been construed to the effect above indicated by the Privy Council in Went- worth v. Humphrey, 1886, 11 A. C. 619. In the distribution under this Act of the real and personal property of an intestate, brothers and sisters of the half-blood share equally with those of the whole blood. In re Wagner (1903), 6 0. L. R. 680. And where the next of kin were cousins, some of whom were the children of the intestate's father's half brother, and one of whom was the niece both of his father and mother, it was held that all the cousins took equally— that those of the double blood took no more than the others. Re Adams (1903), 6 0. L. E. 697. J. M. died intestate. Her father and mother were both dead and her nearest relatives were children of the father's sister, and grandchildren of the mother's brothers and sisters. Falconbridge, C.J. : " I am of the opinion that there is no representation of collaterals of this class, and that the two daughters of the deceased sister of the intestate's father take all to the exclusion of the grandchildren of the deceased brothers and sisters of the intestate's mother." Re McEachem (1905), 10 O. L. R.499. An intestate left nephews and nieces, and children of a nephew who predeceased the intestate. It was held that the provision in The Statute of Distributions (now in section 30 of The Devolution of Estates Act) that "there shall be no representation admitted among collaterals after brother's and sister's children," ex- cluded the children of the deceased nephew. Croivther v. Cauthra, 1 O. R. 128. Where brothers and sisters are entitled to share on an intestacy, the children of a deceased brother or sister are entitled to share per stirpes. Walker v. Allen, 24 A. R. 336, overruling Re Colquhoun, 26 O. R, 104. THE RESIDUE. 267 Under The Statute of Distributions the division of personal estate of an intestate is always to be per stirpes. The intestate had a son and daughter both of whom predeceased her. The son left three children and the daughter one child. Held, the four grand- children took per stirpes, and not per capita. In re Xatt, 37 Ch. D. 517. This rule seems to be doubted in Williams on Executors, but for the present, the point may be said to be settled in favour of a division per stirpes when all the children are dead leaving descend- ants. Armour on Devolution, 253. Where some of the children of the intestate are living and some are dead leaving issue, no question arises : The estate is divided into as many portions as there are living children and the deceased children who have left issue— each living child takes one share, and the descendants of each deceased child take the share which their ancestor, the child, would have taken if he had survived. Armour, 258. Lineal descendants to the remotest degree are en- titled to take as representing children. But it is strictly confined to descendants. Where an intestate's son died leaving a widow and child, and then the in- testate died, the widow took nothing, the child taking the whole of his father's share. Price v. Strange, 6 Madd. 159, 22 E. E. 266, 268. Section 12 of The Devolution of Estates Act pro- vides that the real and personal property of every man dying intestate and leaving a widow but no issue shall, where the net value of the property does not exceed $1,000, belong to the widow absolutely and exclusively. Where the net value exceeds $1,000, the widow is entitled to a preferential share of $1,000 with interest at four per cent, per annum until payment. The provision of $1,000 for the widow is in addition to her share in the residue of the estate. This section does not apply where there is a partial intestacy: In re Harrison (1901), 2 O. L. B. 217. where a testator failed to dispose of his residuary estate. See also Re Twigg's Estate (1892). 1 Ch. 579.' But, in 268 EXECUTOES ACCOUNTS. a case within the section, the widow is entitled to the $1,000 out of the estate in Ontario, notwithstanding that she receives other benefits under the laws of an- other country out of her husband's estate in that country. Sinclair v. Brown, 29 0. R. 370. The following table shews how the estate of an intestate, dying since 1st July, 1886, is distributable : — If the intestate die leav- ing: Wife only. Wife and child or children. No wife or child. Child, children or their re- presentatives. Children by two wives. No child, children or their representatives. Child and grandchildren of deceased child. Husband only. Husband and child or children. Father and mother. Father, mother, brother and sister. Mother and brother and sister. Wife, mother, brothers, sisters and nephews or nieces. Wife and father. His personal representatives take as follows: $1,000 under sec. 12 as above. Of the residue one-half to wife and one- half to next of kin in equal degree to the intestate, or their legal represen- tatives : or if no next of kin to the Crown. One-third to wife, residue to child or children; if children dead then to their legal representatives, i.e., their lineal descendants per stirpes. Re Natt, supra. All to next of kin and their legal representatives per stirpes. All to such child or children, or to their representatives per stirpes. Equally to all. All to next of kin in equal degree to intestate. Half to child, and half to grand- children who take per stirpes. Half to him and half as if he had predeceased his wife. One-third to husband and two-thirds to child or children. Equally to both. Equally to all. Equally to all. ,151,000 to wife, one-half of balance to wife, and residue to mother, bro- thers, sisters, nephews and nieces — the nephews and nieces taking per stirpes. $1,000 to wife and residue to wife and father equally. THE RESIDUE. 269 Wife, mother, and nieces. Wife, brothers, sisters and mother. Mother only. Wife and mother. Brother or sister of whole blood and brother or sister of half blood. Posthumous child and mother. Posthumous child and child born in lifetime of intestate. Father's father and moth- er's mother. Uncle's or aunt's children, and brother's or sister's grandchildren. Grandmother, uncle or aunt. Two aunts, nephews and niece. Uncle and deceased's uncle's child. Uncle by mother's side and deceased uncle's or aunt's child. Nephew by brother and nephew by half sister. Brothers or sisters and nephews or nieces. Nephews by deceased bro- ther and nephews by de- ceased's sister. Nephews and nieces, and children of deceased nephew. Brother and grandfather. Brother's grandson and sister's son. Brother and wife. Wife, mother and brother. nephews $1,000 to wife. One-half of residue to wife, one-fourth to mother, and one-fourth to nephews and nieces. $1,000 to wife. Half of residue to wife (sec. 30), and one-half to bro- thers, sisters and mother equally. The whole. $1,000 to wife and the residue equally to both. Equally. Equally. Equally. Equally. Equally. All to grandmother. Equally. All to uncle. All to uncle. Equally per capita. Equally. The nephews or nieces take per stirpes. Walker v. Allan, supra. Equally per capita. All to nephews and nieces. Crow- ther v. Cathra, supra. All to brother. All to sister's son. $1,000 to wife — residue equally. $1,000 to wife — residue equally. 270 EXECUTORS ACCOUNTS. Wife, mother and children $1,000 to wife and one-half of resi- of deceased brothers. due; one-fourth of residue to mother and one-fourth to children per stirpes. Wife, brother and children $1,000 to wife and residue divided of deceased brother. one-half to wife, one-fourth to brother and one-fourth to children per stirpes. Brother and children of a One-half to brother and one-half to deceased brother. children per stirpes. Grandfather and brother. All to brother. Grandchildren of deceased All to children. Re McEachren. brothers of intestate's supra. mother, and children of de- ceased sister of intestate's father. If one of the residuary legatees has received only his share, the subsequent wasting of the assets by the executors will not entitle the other residuary legatees to call upon him to refund. The case, however, is materially altered if the executor has dissipated a por- tion of the assets before any residuary legatees call upon him to account ; and it would seem that the rule ought to be that what is available at that time should be equally divisible among the whole of the residuary legatees, i.e., an equal distribution should be made of the estate as it stood at the time of the payment to the residuary legatees. Peterson v. Peterson, L. R. 3 Eq. Ill; McMillan v. McMillan, 21 Gr. 369. Fenwick v. Clarke, 6 L. T. N. S. 593, is not adverse to this view. In that case there were several pecuniary legacies, some absolutely, others to tenants for life with re- mainders over — the assets were sufficient for all. The executors paid the absolute legacies and deposited a sum of money in a bank, awaiting an investment. The bank failed, and the executors were not held respon- sible, nor the paid legatees bound to refund. The payment to them, when made, was rightful. In Uffner v. Lewis, 27 A. R. 242, the executors made efforts to discover the whereabouts of certain persons entitled to share in the residue, and failing to discover these persons, they distributed the residue among the others. The Court held that the executors had not made reasonable efforts to discover the legatees, and THE RESIDUE. 271 in the absence of such efforts the persons who had shared in the residue must refund for the benefit of the persons whose claims were ignored. See however, Re Ashman (1908), 15 0. L. R. 42, where Riddell, J., held that executors were entitled to distribute the estate where a proper advertisement for creditors "and others" had been duly published. Annuities given by the will are payable out of the income of residue if no other source is specified. Re Grant, 52 L. J. Ch. 552. A fund directed to be set apart to answer ordinary life annuities is residue so far as not required ; so that the life^tenant of residue is entitled to surplus income set free by the death of an annuitant. Gibbs v. Gibbs, 26 L. T. 865. Any fund merely required to answer contingent liabilities is in the meantime treated as residue. Hence the life-tenant of residue is entitled to the immediate income of a fund set apart to answer reversionary life annuities. Cranley v. Dixon, 23 Beav. 512 ; or contin- gent legacies. Allhusen v. Whittel, 4 Eq. 295. Where the interest of a legacy is directed to bo accumulated beyond the period allowed by law, the interest accruing after that period on both legacy and accumulations forms part of the capital of residue. Crawley v. Crawley, 7 Sim. 427, 40 R. E. 170; O'Neill v. Lucas, 2 Keen 313, 53 R. R. 72. In Williams v. Headland, 4 GifT. 505, 141 R. R, 302, in an administration suit, the executors claimed to retain part of the residue as an indemnity against possible liability in respect of unregistered mining shares. The Court refused the claim, but required the residuary legatees to undertake to answer such liability. A gift of residue to an executor to enable him to ca rry into effect the purposes of the will does not give him any beneficial interest in the residue, and intrinsic evidence of intention to benefit the executor is not admissible. Bans v. Fewkes, 2 H. & M. 232, 144 R. R. 33. In Harrison v. Harrison, 2 IT. & M. 237, 144 R. R. 137, it was held the executors took beneficiallv. 272 executors' accounts. Where the residue has been once ascertained it should he distributed, or, if the provisions of the will so require, invested. If this is not done and one execu- tor allows the other to retain the ascertained residue in his hands and he becomes insolvent, both are liable as for a breach of trust. Lincoln v. Wright, 4 Beav. 427, 55 R. R. 132. A residuary disposition of all the residue of an estate consisting of money, promissory notes, vehicles and implements, was held to carry land, a devise of which had lapsed, not with standing a gift to another of all real and personal estate. Re Farrell (1906), 12 0. L. R. 580. Where land is devised for life, a residuary devise of all the real estate passes the reversion in the land. Swart v. Gregory, 15 IT. C. R. 335. And where an annuity is given for life a residuary bequest carries the capital. Re Watt, 29 N. S. R. 100. Where a residuary bequest directs the residue to be ''divided pro rata amongst the legatees," previously named in the will, they share the residue in proportion to the respective amounts of their prior legacies. Kennedy v. Protestant Orphans' Home, 25 O. R. 235. An annuitant is a legatee and entitled to share in such a distribution. Woodside v. Logan, 15 Gr. 145. But "legatee" may be given a more restricted meaning according to the context. Edwards v. Smith, 25 Gr. 159. An executor or administrator may require a receipt or a release as a condition precedent to the payment of the amount due on a legacy or distributive share. Sterett v. National Co., 10 App. Cas. (D.C.) 131; In re Fortune, Ir. R. 4 Eq. 351. But he cannot require the legatee or heir to pay the costs of such release. In re Fortune, supra. So a legatee for life may be required as a condition precedent to the executor's assenting to or delivering the legacy to him, to sign an inventory of the chattels admitting their receipt, and that he is entitled to them onlv for life, after which thev belong to the remainder- man. Howell v. Howell, 38 N. C. 522. APPENDIX Forms. Petition to Pass Accounts. Affidavit Verifying Accounts. Appointment to Pass Accounts. Order on Passing Accounts. Notice to Creditors. Surrogate Court Tariff— Solicitors. Tariff of Fees to Registrars. Tariff of Fees to Judges. Forms. Note.— The following forms of Petition, Appointment and Order were framed by the writer for use in the County of Grey. They will be found much more convenient than the old forms com- monly used. It will be noticed that the dis- tinction between the proceeds of real and personal estate is done away with. PETITION TO PASS ACCOUNTS. In the Surrogate Court of the Countv of In the Estate of late of the of in the County of , > Deceased. To the Judge of the Surrogate Court of the County of E.A.— 18 274 executors' accounts. The Petition of Sheweth : — 1. That the said died on or about the day of A.D. 19 , and on the day of A.D. 19 , your Petitioner duly appointed the of the said deceased by the Surrogate Court. 2. That your Petitioner ha brought in and filed with the Registrar of this Court a full and true account of administration of the said estate, shewing all the personal property, money , estate and effects, and the real estate and the proceeds thereof, which have come into hands or possession, or into the hands or possession of any other person or person for , with a full and correct account of all dis- bursements made in the course of the administration of the said estate. 3. That your Petitioner ha administered the estate of the said deceased to the best of ability so far as the same can be administered at the present time. 4. That your Petitioner ha not heretofore been ordered or allowed, by this Court, or any other Court of competent jurisdiction, any compensation for care, pains and trouble and time expended in and about the estate of the deceased, and in administering, disposing of and settling the affairs of the said estate. 5. That your Petitioner know of no creditors of the estate of the said deceased having unsettled claims against the said estate which your Petitioner con- sider valid, except 6. That the only j>ortion of the estate of the said deceased which remains unadministered at the present time is set forth in detail in the Schedule "A" hereto, and the reasons for the non-administration thereof are also set forth in the said Schedule. APPENDIX. 2 i 5 7. That the only persons interested in the estate of the said deceased, or in the administration thereof, to- gether with their proper Post Office addresses respect- ively, so far as known to your Petitioner , are set forth in the first and second parts of Schedule "B" hereto, and they are all of the full age of twenty-one years except those whose names are set forth in the second part of the said Schedule "B." 8. Your Petitioner therefore pray that the said accounts may be audited, taken and passed by and before this Honourable Court, and that may be allowed a fair and reasonable compensation for care, pains and trouble and time expended in and about the said estate, and in administering, disposing of and settling the affairs of the said estate. Dated the day of 19 . Schedule " A. " Shewing the Estate of the Deceased remaining undis- posed of, and the reasons why it is undisposed of. Schedule "B." Part I. — Shewing the adult parties interested in the estate. Names. Post Office Addresses. Part 2. — Shewing the infants interested in the estate. Names. Post Office Addresses. 276 executors' accounts. In the Surrogate Court of the County of In the Estate of I of the of in the County of make oath and say : — 1. That I am the Petitioner within named, and have read or heard read the within Petition, and the statements therein made are true. 2. That the account now shewn to me and marked "A" '*sets forth a true and correct account of all the personal estate, and the proceeds of the real estate, which have Come into the hands of the Petitioner , or into the hands of any other person or persons on behalf, and also the names of the parties from whom the same have been received, and the dates at which the same were received, to the best of my knowledge and belief. 3. That the account now produced and shewn to me and marked "B" sets forth a true and correct account of all the disbursements and payments made by the Petitioner , or on account of the said estate, and the purpose for which such payments were made, to the best of my knowledge and belief. Sworn, etc. APPOINTMENT TO PASS ACCOUNTS. In the Surrogate Court of the County of In the Estate of late of the of in the County of , , Deceased. UPON BEADING THE PETITION of of the said deceased, and the Petitioner having brought in and deposited with the Kegistrar of this APPENDIX. 277 Court the accounts of receipts and expenditures in respect of the said estate, I hereby appoint day, the day of A.D. 19 , at o'clock in the noon, at my Chambers in the Court House in the Town of , Ontario, as the time and place for the purpose of examining-, auditing and passing the said accounts, and to fix the compensation (if any) to be allowed to the Petitioner for care, pains and trouble and time expended in and about the said estate, and in administering and settling the same. AND I DO ORDER that all persons who are or may be interested in the said estate attend at the said time and place ; and, except so far as mistake or fraud is shewn, my approval of the Petitioner's dealings with the said estate will be binding upon any person who is notified of these proceedings, or who is j> r esent or represented thereat, and upon any one claiming under such person. AND I DO ORDER that a copy of this order and appointment at least days before the day so appointed be served on the following persons, namely : Where a copy of this appointment is to be served on the Official Guardian, the Inspector of Prisons and Public Charities, or the Solicitor to the Treasury, a copy of the accounts must be served therewith. Dated the day of A.D. 19 Surrogate Judge. Note. — The accounts of the said Petitioner may be examined by the parties interested therein, or their solicitors, at the office of the Registrar of the Court in the said Court House. 278 EXECUTOKS' ACCOUNTS. ORDER ON PASSING ACCOUNTS. In the Surrogate Court of the County of In the Estate of late of the of in the County of , , Deceased. UPON BEADING THE PETITION of of the said deceased, and the affidavits and accounts brought in and filed with the Registrar of this Court, I did by my appointment of the day of 19 , require that all persons interested in the estate of the said deceased should attend at my Chambers in the Court House in the Town of on the day 19 , at which time and place I would proceed to audit and pass the said accounts and fix the compensation to be allowed to the Petitioner for care, pains, trouble and time expended in and about the said estate : AND having on the day of 19 , proceeded to examine, audit and pass the said accounts pursuant to the said appointment in the presence of (no one appearing for the other parties interested in the said estate although duly served with a copy of the said appointment as by affidavit filed duly appears) I FIND AND DECLARE that the total amount of the estate and effects of the said deceased which came into the hands of the Petitioner amounts to the sum of $ : and that the Petitioner ha properly paid out and disbursed in the due course of administration of the said estate the sum of $ AND I do hereby in pursuance of the prayer of the said Petitioner order and allow the Petitioner the sum of $ as a fair and reasonable allow- APPENDIX. 279 ance for the care, pains and trouble and time expended in and about the administration of the said estate. AND I do order that the costs of taking, auditing and passing the said accounts amounting to the sum of $ as taxed by the Eegistrar of this Court, be allowed to the Petitioner ; and having deducted the amounts so disbursed and expended, and the com- pensation allowed and costs taxed, from the amount come to the hands of the Petitioner as aforesaid, I find there remains in the hands of the Petitioner the sum of $ (If the estate has not been fully administered the unadministered estate may be set out here, or by reference to the Petition or by .schedule.) If infants are interested in the estate, add: AND I FIND AND DECLARE that A.B. and CD. are infants under the age of 21 years and are entitled to share in the said residue, and that they will respectively attain the age of twenty-one years as f ollows :— The said A.B. on the day of A.D. 19 , and the said CD. on the day of A.D. 19 AND I FIND that the said A.B. is entitled to $ of the said residue, and the said CD. is entitled to $ thereof; and I order that the Petitioner do pay the said sums into the Supreme Court of Ontario to the credit of the said infants respectively pursuant to section 38 of The Trustee Act. Dated at the day of 19 Surrogate Judge of said County. (The Petition, Appointment and Order should be endorsed, and should shew the name of the solicitor by whom filed or taken out.) 280 executors' accounts. NOTICE TO CREDITORS. In the Matter of the Estate of A.B. late of the of in the County of (occupation), Deceased. NOTICE is hereby given pursuant to section 56 of The Trustee Act (R. S. 0. 1914, Chapter 121) that all credi- tors and others having claims or demands against the estate of the said A.B., who died on or about the day of 19 , are required on or before the day of , 19 , to send by post pre- paid, or deliver, to CD. (name and address) the execu- tor of the last will and testament of the said deceased (or the administrator of the estate of the said de- ceased) their Christian names and surnames, addresses and descriptions, the full particulars of their claims, a statement of their accounts, and the nature of the securities (if any) held by them. AND take notice that after such last mentioned date the said executor (or administrator) will proceed to distribute the assets of the said deceased among the parties entitled thereto, having regard only to the claims of which he shall then have notice, and that the said executor will not be liable for the said assets or any part thereof to any person or persons of whose claims notice shall not have been received by him at the time of such distribution. X. Y. Solicitor for the said executor. Dated the day of 19 APPENDIX. 281 SURROGATE COURT TARIFF. Fees and Costs to Solicitors and Counsel. The following shall be the tariff of fees and costs to be allowed in respect of proceedings in the Surrogate Courts in non-contentious cases to Solicitors and Counsel, viz. : 1. Drawing all necessary papers and proofs to lead grant and obtaining order for probate or letters of administration, in ordinary cases, and taking out same. (a) When the value of the property de- volving is $1,000 or under $10 00 (b) Over $1,000 and not exceeding $5,000. . 15 00 ( c ) Over $5,000 and not exceeding $10,000 . . 20 00 (d) Over $10,000 and not exceeding $20,000 30 00 (e) Over $20,000 and not exceeding $50,000 50 00 (/) Over $50,000 and not exceeding $100,000 75 00 (g) Over $100,000 100 00 2. In cases of temporary administration. . 10 00 (a) On application to revoke any grant ... 10 00 (To be increased in the discretion of the Juclge in cases of a special or important na- ture, subject to approval by a Judge of the Supreme Court upon a report from the Judge.) 3. For obtaining Letters of Guardianship 10 00 (To be increased in the discretion of the Judge in cases of a special or important na- ture, subject to approval by a Judge of the Supreme Court upon a report from the Judge.) 4. Drawing the necessary affidavits, inven- tories and schedules under the Succession Duty Act :— (a) Short form, where the aggregate value of the propertv does not exceed $5,000 ' 5 00 282 executors' accounts. (b) Above $5,000, where no duty is payable $10 00 (To be increased in the discretion of the Judge in cases of a special nature, subject to approval by a Judge of the Supreme Court upon a report from the Judge.) (c) Where duty is payable, in addition to the foregoing fees for preparing proofs for succession duty, for all services settling with the Solicitor to the Treasury the amount of duty payable and attending to payment or to securing payment (by bond or otherwise) of same 20 00 (To be increased in the discretion of the Judge in cases of a special nature, subject to approval by a Judge of the Supreme Court upon a report from the Judge.) 5. On preparing petition, affidavits, ac- counts and all other necessary papers and ser- vices in auditing and passing of accounts of an executor, administrator, guardian or trustee, and including the fixing of the remuneration ©f such executor, administrator, guardian or trustee. (a) Where the receipts do not exceed $2,000 25 00 (b) Where the receipts exceed $2,000, but do not exceed $5,000 30 00 (c) Where the receipts exceed $5,000, but do not exceed $10,000 40 00 (rl) Where the receipts exceed $10,000, but do not exceed $20,000 50 00 (e) Where the receipts exceed $20,000, but do not exceed $50,000 75 00 (/) "Where the receipts exceed $50,000, but do not exceed $100,000 100 00 (Any of the preceding fees, in cases of an important nature, may be increased by the Judge, but such increase shall be subject to approval by a Judge of the Supreme Court upon a report from the Judge.) APPENDIX. 283 (Where the receipts exceed $100,000, the fees shall be such as the Judge deems fair and proper. His order allowing the same shall be subject to approval by a Judge of the Supreme Court upon a report from the Judge.) (3. To solicitors for other parties (includ- ing the official guardian) properly attending on audit of accounts a fee may be allowed in the discretion of the Judge not exceeding in the whole one-half of the above amounts and subject to increase with approval of a Judge of the Supreme Court upon report from the Judge. 7. In all contentious cases and proceedings not hereinbefore provided for, the same fees and disbursements as are provided for pro- ceedings in the County Court, so far as the same may be applicable, may be charged and allowed on taxation. 8. In addition to the foregoing fees and costs, there shall be allowed all proper dis- bursements made by the solicitor in connection witli the foregoing matters. 9. Where it has been proved to the satis- faction of the Judge that proceedings have been taken by solicitors out of Court to ex- pedite proceedings, save costs, or compromise actions or disputes, a fee may be allowed therefor in the discretion of the Judge. FEES TO REGISTRARS. —ITEM Number: 1. For services rendered under Section <-'». ss. 1 and :) of The Surrogate Courts An. 1910, where the value of the property does not exoeed * 400 (See thai section) 284 executors' accounts. 2. Receiving and examining papers and entering application $1 00 3. Every necessary notice to Surrogate Clerk 25 4. Return of each grant to Surrogate Clerk ' 25 5. Receiving and entering certificate of Surrogate Clerk 25 6. Recording every bond with affidavits of justification and execution 1 00 7. Recording each additional separate affidavit of justification or execution if more than one of each, per folio 10 8. (a) On every grant of letters probate or letters of administration or guardianship where the personal property devolving is under $1,000 1 00 (b) $1,000 and under $2,000 2 00 (c) And for every additional $1,000 or fraction thereof (not exceeding in the whole $20.00) 50 9. Submitting papers with Registrar's report thereon to Judge to lead grant 50 10. Recording grants or other instruments or letters of guardianship, per folio 10 11. For preparing probate or letters of administration, issued under seal of the Court, each instrument 75 12. Ditto, if grant is special 1 00 13. For preparing letters of guardianship 1 00 14. Transcript of will, per folio 10 15. Certified copy will (including certifi- cate), per folio 10 16. Drawing special orders or other papers when directed by the Judge 50 If exceeding 3 folios, per folio on the excess 10 1 7. Taking every affidavit or administering oath to a witness 20 APPENDIX. 285 18. Attending and entering every order or minute $0 50 19. Every summons or order and every instrument or other process under seal, not otherwise provided for, if prepared by the Registrar, per folio, including fee for sealing. 20 20. Search for original will or instrument and inspection, or for general search into proceedings 30 21. Every other search 20 22. Every necessary certificate granted by Registrar 50 23. Exemplification under seal 1 00 If exceeding 5 folios, per folio in excess 10 24. For every office or other copy or ex- tract of a minute, order, decree or other docu- ment filed or deposited in the office of the Registrar or of any evidence or depositions whether such copy or extract be made by the Registrar or by any other person searching the original, per folio 10 25. For receiving for deposit the will of a living person for safe-keeping, including giv- ing a deposit receipt and keeping a record of the deposit 1 00 26. Issuing every subpoena 50 27. Every necessary letter 25 28. Every necessary filing 10 29. Receiving, examining and entering every petition or application for audit or pass- ing of accounts or contestation of claim 50 30. Attending audit, or contestation of claim, or at the trial of any issue or matter, when Registrar attends 1 00 31. Filing vouchers, if directed by the Judge or required by any party to be filed. each 10 Not exceeding in all 1 00 286 executors' accounts. 32. Entering order if required to be entered $0 50 33. Taxing costs and granting certificate . . 1 00 34. Keoeiving, entering and filing caveat or contestation of grant 50 35. Notice to Surrogate Clerk of caveat or of contestation of grant and entering same . . 50 36. Posting and other necessary disburse- ments to be added in all cases. FEES PAYABLE TO THE JUDGE (K. S. 0. p. 774.) On every grant of probate or administration : Where the property devolving does not ex- ceed $1,200 $2 00 Where the property devolving exceeds $1,200 but does not exceed $3,000 3 00 Where the property devolving exceeds $3,000 but does not exceed $4,000 4 00 And for every additional $1,000, or fraction thereof, the additional sum of 1 00 On every appointment of a guardian 2 00 On every order of appointment 50 On every special attendance or attendance to grant probate or administration or upon an appointment when an audit is adjourned. . 1 00 On every audit where the total amount of the accounts to be audited does not exceed $1,000 1 00 per hour, but not to exceed $2.00 on any day. On every audit where such total exceeds $1,000, but is under $10,000 1 00 per hour, but not to exceed $5.00 on any day. On everv audit where such total is or exceeds $10,000, but is under $50,000 1 50 per hour, but not to exceed $6.00 on any day. APPENDIX. liS"] On every audit where such total is or exceeds $50,000 $2 00 per hour, but not to exceed $10.00 on any day. For every day's sittings in contentious or dis- puted cases, similar fees to those allowed in cases of audit. In cases of estates of small value, or where the estate consists wholly of insurance moneys and cloth- ing, for the fees of the Registrar and Judge, see sec- tion 73 of The Surrogate Courts Act. The Judges and Registrars of the several Surro- gate Courts and solicitors practising therein shall be entitled to take for the performance of duties and services under The Succession Duty Act, similar fees to those payable to them for the like services under and by virtue of The Surrogate Courts Act and the Surrogate Court Rules. Sec. 20 Succession Dutv Act. INDEX ABATEMENT OF LEGACIES: See Legacies. ACCOUNTS OF EXECUTORS. Form of accounts, 234, 235. Books of account as evidence, 6, 238. Vouchers when dispensed with, 238, 239. Duly of trustees to keep proper accounts, 10. To be ready with accounts, 10. To give information as to, 11, 244. To allow inspection of, 11, 12. Not bound to furnish copies of, 11. Failure to keep accounts as affects costs, 10. Inaccurate accounts as affects costs, 10. Who obliged to pass accounts, 12. Trustees as distinct from executors, 13. Representatives of deceased trustee, 1, 13, 14, 15. Attorney for another, 14. Cessate administrator, 14. One of two executors, 14. Executor being sole legatee, 15. Executor resigned or removed, 15. Executor de son tort, 15. A minor executor not obliged to pass accounts, 14, 15. Nor an executor relieved by terms of will, 16. Who entitled to an account, 24. Any one interested in estate, 24. What amounts to an interest, 24. Creditor of legatee or heir, when, 25, 26. Not a creditor of the executor, 25. Where estate has been distributed, 25. Remainderman, 26. When audit ordered, 27. Practice to compel an audit, 26. ADMINISTRATION EXPENSES: See Testamentary Expenses. ADVERTISING FOR CREDITORS. Duty of trustee as to, 48. What advertisement must contain, 49. Form of advertisement, 280. Publication of, what required, 49, 50. Must be in English language, 51. When protection to trustees, 50. Liability when no advertisement, 187. AGENTS. Section 22 of Trustee Act considered, 100. When confined to solicitor-agent, 100, 102. Evidence of appointment, 101. E.A.— 19 290 INDEX. AGENTS — Continued. Limit of agent's authority, 102, 105. Prudence required as to selection of, 102, 104. When not liable for fraud of, 104. Accountant, when may be employed, 106. Collector, when may be employed. "Necessity or usage of mankind," 103, 104. Failure of banker, 106. Not liable if trust property stolen by, 103. Nor for misappropriation by solicitor, 104, 105, 182. Collector making default, 105, 107. AGGREGATE VALUE: See Succession Duty. ALLOWANCES. When good faith and judgment exercised, 80. Unnecessary disbursements, 81, 82. Retaining fee, 81. Expenses of sale, 81, 82. Costs of advertising, 82. Costs of auctioneer, 82. Travelling expenses, 83. Livery bills, 83. Office rent, 83. Clerk or book-keeper, 84. Workmen, 84. See Funeral Expenses: Testamentary Expenses: Tomb- stone: Household Expenses: Repairs and Im- provements. ANNUITIES. When payable, 87. From what source payable, 87. Annuitant entitled to cash value of, 88. Apportionment of, 88. Payable to infants, 89. When deficiency of assets, 89. APPROVED LOAN COMPANIES: List of, 134. ASSETS. What are — general rule, 34. Goodwill, 35, 36, 37. Damages from breach of contract, 37. Rents, 38. Compensation awarded, 38. Crops, 38, 39. Life insurance, when, 41, 42. Bounties and pensions, 39. Incomplete gifts, 40. Profits made out of estate, 42. Carrying on business, profits from, 120. Timber, 41., Debts owing by heir or legatee, 42. Debts owing by executor, 42, 43, 44. Wearing apparel, 42. Specifically bequeathed chattels, 43. 1XDKX. t 29] ASSETS — Continued. Property appointed, 47. Wliat are not assets. Trust moneys, 39. Exemptions, 45. Pin-money, 46. Wife's savings, 46. . Donatio mortis causa, 47. Realizing assets: Duty of trustees, 28. Household goods, 28, 29. Discretion as to realizing, 29, 30, 31. Reasonable time allowed for, 29. What is a reasonable time, 29, 30. Retaining shares in falling market. 30. 81. Mortgage securities, 31. Unsecured debts, 31, 32. Bad or doubtful debts, 31, 32, 115, 116. Accepting security for debt, 33, 34. Rents, 33, 38. Lost or stolen assets, 41. Trustee using to pay his own debt, 109. Receiving secret commissions, 110, 111. ARBITRATION: Submitting claims to, 125. ASSIGNMENT OF LEGACY. Payment after notice of, 91. AUCTIONEER. Costs of employing, 82. Receiving deposit on sale, 106. When executor, not entitled to be paid fees, 110. AUDIT OF ACCOUNTS: See Passing Accounts. BANK. Depositing money in not investment, 154. Failure of, liability of executor, 106. BOND: Duty of executor to save penalty, 115. BOOK-KEEPER: When may be employed, 84. BOPNTIES: See Assets. BURIAL PLOT. Expenses of purchase of, 57. Expenses of repairs, 60. CALLS ON STOCK: By whom payable. 200. CAPITAL AND INCOME. Rule in Howe v. Earl of Dartmouth. U»!<. General rule as to bearing burdens, 200. Compensation to executors, how apportioned. 202. Repairs, how borne. 202, 203. When real estate converted. 207. Insurance. 204. Interest, 204. Dividends. 209, 210. Bonuses. 21c Taxes. 203. Incumbrances. 204. Annuities, 204. 205. 292 index. CAPITAL AND INCOME— Continued. Loss in fund, how borne, 210. Casual profits are income, 207. See Tenants for Life and Remainderman. CARRYING ON BUSINESS. General principles governing, 116. Completing deceased's contracts, 117, 118. Should be distinct authority for, 118. What assets may be employed in, 118, 119. Rights of creditors, 119. Profits of, assets of estate, 120, 122. Partnership business, 120, 121. Expenses of executor, 121. CEMETERY LOT: See Funeral Expenses. CHARITIES ACCOUNTING ACT. Requirements of as to passing accounts, 16. " Purposes," meaning of, 17. Religious purposes, 17. Educational purposes, 18. Charitable purposes, 20. Public purposes, 23. CLERK: When costs of allowed, 84. COLLECTOR. When costs of will be allowed, 105, 107. Making default, liability of executor, 105. COMPENSATION OF TRUSTEES. Who entitled to, 211. ' Misconduct as affecting rights to, 211, 212, 213. When accounts inaccurate, 213. When information refused, 11. Not keeping accounts, 10. Effect of administration action on, 213. Legacy to executor in lieu of compensation, 213, When presumption rebutted, 214. Cannot claim further sum, 215. Judge cannot reduce amount, 218. When legacy to one of two executors, 216. Executor not entitled to residue, 217. Does not abate with general legacies, 217. By whom paid, 218. As between capital and income, 219. How calculated: Mortgaged property, 220, 221. Is a preferential claim, 233. Amount of — general rule, 221. Decisions as to amount allowed, 222. Where executor residuary legatee, 230. Apportionment of compensation, 230. Should not be paid in advance, 231. Not allowed for carrying on business, 231, 233. May be set-off against executor's debt, 44. See Solicitor-Executor. COMPENSATION AWARDED: See Assets. INDEX. 293 COMPOUNDING CLAIMS. Scope of sec. 52 of the Trustee Act, 123. Executors' discretion, 123. Widow's claim for dower, 123. ( 'laims against co-executor, 124. Consent of one executor only, 124, 125. Where no corrohoration, 125. What amounts to a compromise, 124. Submitting claims to arbitration, 125. See Payment of Debts. CONTRIBUTORY MORTGAGE: Investment in not allowed, 139. CORROBORATIVE EVIDENCE: See Compounding Claims: Debts. COSTS. General rule, 160. What included in executors' costs, 160. What allowed as, 160, 161. Moderation of solicitors' bills, 161. "No order as to costs," meaning of, 161, 162. Of litigation, rule as to costs of, 163. Failure to keep accounts, 10. Negligence as affecting right to, 164, 165. Audit of accounts, costs of, 244. Solicitor and client costs, 164, 166. Of proceedings for benefit of individuals, 166. See Solicitor-Executor. Tariff of costs — Registrars', 281. Solicitors' and counsel, 284. Judges', 286. CREDITORS. Advertising for claims of, 48. Form of advertisement, 280. Duty of trustees to, 48. CROPS: When assets — See Assets. When they pass to devisee, 38. When presumption rebutted, 39. DAMAGES: When assets— See Assets. DEBTS. Generally, 51. Payment of, evidence required. 52. Statute barred debts. 53. Who entitled to insist on statute, 53. Corroborative evidence. 54. Contingent liabilities, 54. Interesl bearing debts, 55. Incomplete gifts. 40. Discretion in paying: See Compounding claims. Doubtful debts, realizing on. 31, 32. Owing by executor or administrator. 56. Owing by heir or legatee, 56. Presumption from payment of debt. DEPOSITING TRUST FINOS. List of approved Loan Companies. 134. In bank not an investment, 154. 294 INDEX. DESCENT: Table of, 268. DEVOLUTION OF ESTATES ACT: See Residue. DONATIO MORTIS CAUSA. Claim of, jurisdiction to determine, 5. When assets of estate — See Assets. DOWER. Legacy in lieu of, 91. Compromising widow's claim to, 123. DUTIES OF EXECUTORS. To keep proper accounts — See Accounts. To advertise for creditors — See Advertising for creditors. To select proper agents — See Agents. Realizing assets — See Assets. Distribution of estate — See Residue. Maintenance of infants — See Infants. See Repairs and Improvements; Insurance; Investments; Legacies; Payment of Debts; Succession Duties. EDUCATIONAL PURPOSES: What are, 18. EFFECT OF AUDIT— See Mistake and Fraud. EVIDENCE ON AUDIT— See Practice. EXEMPTIONS— See Assets. FALSIFYING ACCOUNTS— See Practice. FINALITY OF AUDIT— See Mistake or Fraud. FLOWERS: As funeral expenses, 61. FORMS. Notice to creditors, 280. Petition to pass accounts, 273. Affidavit verifying petition, 276. Order on passing accounts, 278. Appointment to pass accounts, 276. FRAUD — See Mistake or Fraud. FUNERAL EXPENSES. Must be reasonable, 56, 57, 114. What, are reasonable expenses, 57, 58. Cemetery lot, 59, 60. Flowers, 61. Dinners for guests, 61. Mourning apparel, 61, 62. Burial expenses of wife, 58, 59. of child, 59. Travelling expenses, 60. Not maintenance, 59. See Tombstone. GIFTS: Incomplete, assets of estate, 40. GOODWILL— See Assets. HONESTLY AND REASONABLY— See Relief of Trustees. HOTEL PROPERTY— See Investments. HOUSEHOLD EXPENSES. Liability of executor after death, 72. Discharging servants, 72. Widow's subsistence — See Quarantine. IMPROVEMENTS— See Repairs and Improvements. INDEX. 295 INFANTS. -Maintenance of, 97, 98, 171. When father living, 172. What included in maintenance, 172. As against creditors, 172, When corpus may be used for, 172. Past maintenance, 173, 174, 175. Interest on legacy for, 97. No allowance for luxuries, 176. Where testator not in loco parentis, 100. Annuity payable to infant, 89. INCOME— See Capital and Income. INS TRANCE. Power of trustee to insure, 70. Duty to insure, 70, 71. As between life-tenant and remainderman, 71. See Assets. INTEREST. Charging executors with, 153, 198. Neglect to invest balances, 153. Compound interest, 155, 156. Retaining funds under mistake, 157, 158. Using trust funds in trade, 155, 158. Mixing estate with private funds, 159. Not paying legacies when due, 160. Not paying interest bearing debts, 55. Calling in interest bearing investments, 158. Loaning money to one of executors, 159. On sums lost through misconduct, 160. See Legacies. INVESTMENTS. Realizing investments, 28. Falling securities, 30, 31, 187. Doubtful debts, 31, 115, 116. Unsecured debts, 31, 32. Sec. 28 of the Trustee Act, application of. 126. Limit of trustee's discretion, 127. "Invest," " Securities," meaning of, 128. On personal security forbidden, 128, 129. Where trustee given a discretion, 12!'. Liability for improper investments, 130, 131. Acquiescence of cestui que trust, 132. Debentures, sec. 29 Trustee Act, 133. Approved loan companies, list of, 134. May vary or transpose investments, 135. Mortgages, amount to be invested on, 136, 138. Valuation for, how made, 138. Depositing money in bank, 154. Unproductive or speculative property, 138, 144. Unfinished buildings, 139. Properly used lor business purposes, 138, 146, 144. Hoiri property, 139, 140. 296 INDEX. INVESTMENTS— Co?; tin ued. Contributory mortgages, 139. Competent valuator, when required, 140. Need not be local man, 140. Must be properly instructed, 141. What amounts to proper instruction, 141, 142. Must be selected by trustee, 142, 143. Report of, what should contain, 147. Lending more than one-half on mortgages, 143. Interests of all parties considered, Ratification by cestui que trust, 132, 133, Personal character of mortgagor, 148. Continuing proper investments, 150, 151, 152. Permanent investments the first object, 145. Investment clauses must be strictly complied with, 130. Measure of liability where two modes of investment, 133. Depositing money in bank not investment, 154. JURISDICTION OF SURROGATE COURTS. History of, 1. Same as in Master's Office on audit, 4. Does not extend to administration of estate, 4. Nor to claim of donatio mortis causa, 5. Setting aside orders for mistake or fraud, 4. Powers of Master defined, 6. Surcharge and falsification, 7, 8. May inquire into settled accounts, 8. Not limited by statutory powers, 4. LEGACIES. Must bear succession duty, 67. Unless contrary intention shewn by will, 67. What amounts to a contrary intention, 68. When payable, 87. To infants — right of guardian to receive, 88, 89. Payment of otherwise than in cash, 90. What amounts to payment, 90. Gift of stock not fully paid up, 91. Payment of after notice of assignment, 91. Abatement of — general rule, 91, 95. When given as compensation to executor, 91. In payment of a debt, 92, 93, 94. To widow for dower, 91. To be " paid in full," 95. Interest on — general rule, 95. Legacy to executor, 96. Legacies to infants — See Maintenance. Contingent legacies, 96. LIABILITIES OF TRUSTEES. Selling estate at less than value, 108, 109. Not keeping proper accounts, 10. Refusing inspection of accounts, 11, 12. Retaining falling securities, 30, 31. Not realizing assets, 28. INDEX. LIABILITIES OF TRUSTEES— Continued. Not advertising for creditors' claims, 187. Purchasing trust property, 107, 114. Using trust funds, 109. Mixing trust funds, 113. Improper expenditures, 114, 115. Allowing interest to accumulate, 109, 115. For funeral expenses, 57. Wife's funeral expenses, 58, 59. Doctor's bills, 58. Mourning Goods, 61, 62. Testamentary expenses, 62, 64. Succession duties, 65. Household expenses, 72. Taxes, 69, 109. Insurance of trust property, 70, 71. Tombstone, 74, 76. Repairs and improvements, 77, 78. Failure of bankers, 101. Fraud of agents, 102, 103. Carrying on business, 116. LIFE INSURANCE: See Assets. LIFE TENANT: See Tenant for Life and Remainderman. LIVERY BILLS. When allowed to executor, 83. Not allowed for use of his own horse, 83. LOAN COMPANIES. . List of approved for investments, 134. MAINTENANCE OF INFANTS: See Infants. MASTER. Surrogate Judge has same powers on audit, 4. Powers of a Master defined, 6. Larger than in England, 8. Limit of authority on an audit. 4, 5. See Practice. MISTAKE OR FRAUD. Stated and settled accounts, 249 Rule in Equity as to opening, 249. What errors sufficient to re-open, 250, 251. Court has inherent jurisdiction where fraud. 251, 252. Sec. 71 of Sur. Ct. Act, application of 253. " Mistake." meaning of, 254, 255. May consist in forgetfulness, 255, 256. Mistake of law, 256. "Fraud," meaning of, 257. Must be charged in plain terms, 258. May consist in concealing evidence. 258, In purchasing trust property. 259. In secret profits, 259, 26 In concealing assets, 259. Perjury may amount to fraud. 260. But not discoverv of new evidence. 261. 297 298 INDEX. MONUMENT. Costs of, allowed to executor, 74, 75. Amount allowed for, 75, 76. Costs of removing or renovating, 60. MORTGAGES: See Investments. MOURNING APPAREL. Allowed as funeral expenses, 61, 62. OFFICE RENT. When expenses of allowed, 83. PASSING ACCOUNTS. Jurisdiction of Court as to, 1. Does not extend to administration of estate, 4. Inherent powers of the Court, 4, 251, 252. Same powers as a Master, 6. May inquire into settled accounts, 8, 249. May set aside orders for mistake or fraud, 4. May direct books of account as evidence, 6. Examine parties and witnesses, 6. Surcharge and falsification, 7, 8. See Accounts. PAYMENT OF DEBTS. Discretion of executor, 52. Evidence required before paying, 52. Statute barred debts, 53. Defence of Statute of Frauds, 53. Contingent liabilities, 54, 55. Interest bearing debts, 55. Compromising claims, 123. Arbitration, submitting claims to, 125. Funeral expenses, 56. Wife's funeral expenses, 58, 59. Cemetery lot, 57. Costs of monument, 74, 75. Mourning goods, 61, 62. PENSIONS: When assets of estate, 39. PETITION TO PASS ACCOUNTS. What petition should contain, 236. Affidavit verifying petition, 276. Form of petition, 273. PIN MONEY: Not assets of estate, 46. PRACTICE PASSING ACCOUNTS. Where to be passed, 234. One executor may pass his accounts, 234. Form of accounts, 234, 235. Investments, how shewn, 235. Petition for, what should contain, 236. Form of, 273. Appointment for, form of, 274, 236. Parties to be served, 236. Time appointed for, 236, 237. Evidence on audit, 237. Securing witness, 237. ixi.kx. 299 PRACTICE PASSING ACCOUNTS— Continued. Evidence — Vouchers, 238. Books of account, 5, 238. Disbursements under $8, 238, 239. Accounts of long standing, 239. When strict rules of evidence not applied, 240. Appeals, to Supreme Court of Canada, 241. Section 34 Surrogate Court Act, 241. To a single Judge, 243. No security required, 242. Certificate of Sur. Court Judge to be filed, 243. Seven days notice of appeal, 243. Costs of audit, discretion of Judge, 244. Occasioned by executor, 244. Different solicitors appearing, 244, 245. Tariff items cannot be exceeded, 246. Unless approved by Judge of Sup. Court, 247. How approval obtained, 247. Tariff of Solicitors' costs, 281. Of Registrar's costs, 284. Of Judge's costs, 286. Payment into Court of infants' shares, 247. Evidence required for, 248. Surcharging and falsifying accounts, 7, 8. When audit will be ordered, 27. Practice to compel an audit, 26. PROTECTION AND INDEMNITY. Sections 35 and 36 of The Trustee Act, 188. None where wilful default, 188. What amounts to wilful default, 189. When executor liable for acts of co-executor, 189, 190. Executor adopting acts of co-executor, 191, 192, 194. Special indemnity clauses, 193. When they do not protect executor, 193. Breach committed at request of cestui que trust, 19(i. Default of " acting trustee," 195. PURCHASE OF TRUST ESTATE: See Liabilities of Trustees. PURPOSES: See Charities Accounting Act. QUARANTINE: Meaning of widow's, 72. What included in, 73, 74. Not a mere personal right, 73. Cannot be assigned, 74. REALIZING ASSETS: See Assets. RELIEF OF TRUSTEES. Section 37 of The Trustee Act considered. 178. "Honestly and reasonably." meaning of, ITS. 179. What is evidence of, 179, 180. Cases where relief granted, 180. Retaining investments, 181. Doubtful construction of power, 181. Acting on solicitor's advice. 182, 183. Default of solicitor. 182. Trusting co-executor, 182. Default of agent employed, 184. 300 INDEX. RELIEF OF TRUSTEES— Continued. Cases where relief refused. Loans on unauthorized securities, 186. Payments to wrong persons, 186. Not advertising for creditors, 187. Retaining stock in falling market, 187. See Protection and Indemnity. RELEASE; Executor entitled to on payment of legacy, 272. RELIGIOUS PURPOSES: What are, 17. REMAINDERMAN: Entitled to have accounts passed, 26. See Capital and Income. RENTS: See Assets. REPAIRS AND IMPROVEMENTS. Authority of executor to make, 77. Repairs out of rents, 78. When Court will sanction costs of, 77, 78. Where value of estate increased by, 78, 79. As between life-tenant and remainderman, 79. Current repairs out of income, 79. RESIDUE OF ESTATE. Executor trustee for the parties entitled, 262. What residue consists of, 263. When ascertained should be distributed, 263, 272. How distributed, statutory provisions, 264. Effect of Devolution of Estates Act, 265. Widow's special claim where no issue, 267. When executor entitled to residue, 271. Table of descent in cases of intestacy, 268. Where not sufficient to pay legatees in full, 270. Whereabouts of parties entitled unknown, 279. Pro rata division in case of deficiency, 272. RETAINER. No right to prefer a creditor in Ontario, 85. Executor retaining Statute barred debt due himself, 86. Retaining debt due by heir or legatee, 86, 87. RETAINING FEE: Allowed to executor, 81. SALE: Expenses of allowed executor, 81, 82. Expenses of auctioneer, 82. SECURITIES: See Investments. SOLICITOR-EXECUTOR. Professional services of, 167. Effect of sec. 67 (4) of Trustee Act, 168. Services must be strictly professional, 170. Costs of where estate proves insolvent, 170. SPECIFIC BEQUESTS. Assets of the estate, 43. Expenses of getting in, how borne, 64, 100. SPECULATIVE PROPERTY: See Investments. STATUTE BARRED DEBTS. Executor paying, 53. What entitled to set up Statute as defence, 53. Executor retaining his own debt, 86. INDIA. STOCKS: Loans on, 133. SUCCESSION DUTY. Not testamentary expenses, 63. Liability of executor for, 65. What estate liable to pay, 65. Insurance monies, 66. '• Aggregate value," 66. Legacies bear their own duties, 67. When relieved from paying the duty, 67, 68. SURCHARGING ACCOUNTS: See Practice. TAXES. By whom to be borne, 68, 69. On personal property, 69, 85. Neglect of trustee to pay, 69, 109. TENANT FOR LIFE AND REMAINDERMAN. Rule in Howe v. Earl of Dartmouth, 199. Payments out of corpus, 200. Annuities charged on land, 200. Arrears of interest on incumbrances, 200. Calls on shares, 200. Costs of yearly audit, 201. Costs of appointing new trustee, 201. Costs of investing funds, 201. Costs of protecting .estate, 201. Carrying on business, 201. Proportion of executor's compensation, 202. Repairs, 205, 206. Payments out of income, taxes, 203. Ordinary outgoings, 203. Interest on incumbrances, 204. Insurance premiums, 204. Life annuities, 204, 205. Repairs, when, 205. Life-tenant .entitled to all casual profits, 207. To income from settled estates, 207. No right to substance of estate, 208. When he may cut timber, 208. Entitled to consumable chattels, 209. Dividends from stocks, 209, 210. TESTAMENTARY EXPENSES, 62. Do not include succession duties, 63. Include costs of administration, 63. Not costs for opinion of Court, 63- Costs of getting in specific bequests, 64. Where appointment revoked, 64. TIMBER. Right to cut timber. 208. When ii forms assets of estate. 41. TRUST MONEY: Not assets— See Ass. 'is. TOMBSTONE. Costs of allowed to executor. 74, 75. \ mount allowed, 7". 76. Costa of removing or renovating, 60. 'Si)2 INDEX. TRAVELLING EXPENSES. Of executor when allowed, 83. Not allowed for attending funeral, 60. Where he uses his own horse, 83. UNFINISHED BUILDINGS. Power of executor to complete contracts, 116, 117. Loans on, see Investments. UNPRODUCTIVE PROPERTY: See Investments. VALUATOR. "When required in making investments, 140. Need not be a local man, 140. Nor an expert in certain cases, 140. When trustee may rely on report of, 141. Must be selected by the trustee, 142, 143. Must be properly instructed, 141. What amounts to proper instruction, 141, 142. Duty of in making valuation, 147. Report of, what it should contain, 147. WEARING APPAREL: See Assets. WIDOW. Right to quarantine, 72. Pin money, 46. Exemptions, 45. Dower, compromising claim to, 123. $1,000 when no issue, 267. Wife's savings not assets of the estate, 46. Legacy in lieu of dower, abatement of, 91, 92. WILFUL DEFAULT. What amounts to, 189. UC SOUTHERN REGIONAL LIBRARY FACILITY AA 000 825 576