Instances where it has been held that shall be enjoyed in permanent property (d). But if it appear from the context of the will that the testator intended that the tenant for life should enjoy the property in specie, such indication of intention takes the case out of the general rule. Whether such an intention sufficiently appears is frequently a difficult question. A direction out of leaseholds, &c. the rents to renew leaseholds and keep houses in repair (e); a trust to sell the property on the decease of the tenant for life (f), or only in a given event (g); a direction not to sell without the consent of all parties (h), and a power to trustees to retain any portion of the testator's property in the same state in which the same shall be at his death, or to sell and convert the same (i), have been held sufficient evidence of the testator's intention that leaseholds should or specie. A bequest of rents to tenant for life, whether sufficient to entitle him to enjoy in specie. might be enjoyed in specie. In some cases, again, where the gift of the residue has been distinguished by a mention of particular parts of the testator's property, or where the property has been pointed to specifically in the gift over, a similar intention has been inferred as to the property so specified (k). In Pickup v. Atkinson (1) it was held that a bequest of the rents, profits, dividends, and interests of the residue in general terms to the tenant for life, was not of itself sufficient to entitle him to enjoy leaseholds in specie, but in other cases the contrary seems to have been decided (m). Harris v. Poyner, 1 Drew. 174; Simpson v. Leicester, 4 Jur. N. S. 1269. (7) 4 Hare, 624. (m) Goodenough v. Tremamondo, 2 Beav. 512; Crowe v. Crisford, 17 Beav. 509; Wearing v. Wearing, 23 Beav. 99. And see generally on this subject, in addition to the cases already cited, Sutherland v. Cooke, 1 Col. C. C. 498; Mills v. Mills, 7 Sim. 501; Morgan v. Morgan, 14 Beav. 72; Hood v. Clapham, 19 Beav. 90; Hubbard v. Young, 10 Beav. 203; Thornton v. Ellis, 15 Beav. 193; Jebb v. Tugwell, 20 Beav. 84; Skirving v. Williams, 24 Beav. 275; Chambers v. Chambers, conversion The rule as to conversion applies not only to Rule as to perishable and wearing out property in the strict applies to all sense of the term, but also to all property not con- estate not sisting of investments authorized by the will or by consisting of law. the personal authorized investments. Executors are allowed a year from the testator's Liability of executors who death for the realizing of his property, and the con- neglect to version of such part as ought to be converted. If they neglect this duty they are liable for any loss which may arise. convert. tenant for life derman. Ås between tenant for life and remainderman their Mode of adjusting respective rights in the testator's residuary estate are accounts as follows:-The tenant for life is entitled, as from the between day of the testator's death, to the whole income and remainderived from such part of the testator's estate as is properly invested (o), but as to such part of the estate as is not so invested he is entitled to an annual sum equal to the interest of so much 3 per cent. stock(p) as would have been purchased with the unconverted property if such conversion had been made at the end of the year, and the excess of income accruing from the unconverted property is to be deemed corpus (q). The following exception has, however, been made, viz., that if the property is so circumstanced as that it is producing a large annual income, and is secure, but cannot be immediately converted without a loss to the estate, then a value in money will be set upon it, and the tenant for life will be allowed 4 per cent. on such 15 Sim. 183; Boys v. Boys, 28 Beav. 436; Vachell v. Roberts, 32 Beav. 140. (0) Angerstein v. Martin, T. & R. 232; Hewitt v. Morris, T. & R. 241; Taylor v. Clark, 1 Hare, 161. (p) It is probable that the remaining 3 per cent. stock will be redeemed by Government shortly. When this happens, it is apprehended that 2 or 2 per cent. stock will be substituted for 3 per cent. stock for the purpose of the above rule. (q) Dimes v. Scott, 4 Russ. 195; Taylor v. Clark, 1 Hare, 161; Mor gan v. Morgan, 14 Beav. 72; Brown Application of rule to reversionary property. Tenant for life not entitled to of funds applied in payment of legacies. value from the testator's death, the excess of income beyond 4 per cent. being treated as corpus (r). The rule as to conversion is to be applied for the benefit of as well as against the tenant for life, and consequently extends to any part of the testator's estate which may be reversionary. If executors in the exercise of their discretion think that a loss will arise by a conversion of reversionary property, and consequently wait until it falls into possession, their doing so will not be allowed to prejudice the tenant for life, and the Court will direct a value to be set upon such reversion at the end of the first year, and will give to the tenant for life the difference between the fund actually received and the value of the reversion as so ascertained (8). It will be borne in mind that the tenant for life of a interim income residue is entitled to the income of such residue only, and not to the income which may accrue on such part of the testator's estate as is applied in payment of legacies during the period which may intervene between the death of the testator and the actual payment of such legacies. Thus, in a case where a testator gave £16,000 in legacies, and then gave the residue of his personal estate to his wife for life with remainders over, and all his estate was in Consols at his death, it was held that the income which accrued after the testator's death and before the payment of the legacies on so much of the fund as was applied in payment of such legacies did not belong to the tenant for life, but formed part of the corpus of the residue (t); and in another case it was held that where a testator bequeaths legacies, and gives his residue to a tenant for life, with remainder over, executors, though as between themselves and the persons interested in the residue they are at liberty to have recourse to any funds they please in order to pay debts and legacies, yet will be treated by the Court in adjusting accounts between the tenant for life and remainder (r) Gibson v. Bott, 7 Ves. 89; Gellatly, ubi suprà. (8) Wilkinson v. Duncan, 23 Beav. 469. (t) Holgate v. Jennings, 24 Beav. 623. man, as having paid the debts and legacies not out of capital only, but with such portion of the capital as together with the income of that portion for one year was sufficient for the purpose (u). application In order to prevent any question arising out of the Direction as to doctrine above discussed, every will by which a residue of income is given upon trusts for sale and conversion, should ex- desirable. pressly authorize the trustee to postpone such sale and conversion, and should direct that the rents and income arising from the unconverted property shall, from the testator's death, go to the same persons and in the same manner as the income of the proceeds of the conversion thereof would be applicable if such conversion had been made (x). Under such a direction executors may carry on a testator's business for a reasonable time after his death with a view to sell it as a going concern, and the profits arising therefrom will belong to the tenant for life as income (y). moneys arising sold. If real estate is directed to be sold, and the proceeds Destination of of sale are absolutely bequeathed, the property from from land that time acquires the character of personalty, and in directed to be the event of the death of the beneficiary before a sale, the proceeds would belong to his personal representatives. On the other hand, moneys which are directed to be laid out in the purchase of land, from the creation of the trust assume the character of real estate, and devolve as such on the real representatives of the beneficiary, whether he dies before the conversion or afterwards. At any time before conversion, the beneficiary, Election to if sui juris and absolutely entitled, may elect to take take estate. the property directed to be converted in its actual state; and such election will be implied from his acts, e.g., if, in the case of land directed to be sold, he grants a lease of it (2), or receives the rent of it for some years after the time for sale (a). (u) Allhusen v. Whittell, L. R. 4 Eq. 295; Lambert v. Lambert, L. R. 16 Eq. 320. The rule established in the first case applies to real estate. Marshall v. Crowther, 2 Ch. D. 199. (x) See Wrey v. Smith, 14 Sim. 202; Scholfield v. Redfern, 2 Drew. & Sm. 173. (y) In re Chancellor, W. N. 1884, p. 50. (z) Crabtree v. Bramble, 3 Atk. 680; Mutlow v. Bigg, 1 Ch. D. 385. (a) Re Gordon, 6 C. D. 531 Holder v. Lofts, cited 30 C. D. 656. Trusts raised by words of When real estate is directed to be converted, and the whole of the proceeds of sale are not absolutely disposed of, or the disposition thereof wholly or partially fails by lapse or otherwise, a question sometimes arises as to the relative rights of the heir-at-law and the personal representatives of the testator. It is clear that the heir is not disinherited by the direction to convert, unless the whole beneficial interest in the proceeds of sale is in the event absolutely disposed of; so far, therefore, as the beneficial interest is either directly or indirectly undisposed of, or becomes so by subsequent events, the undisposed of interest belongs to the heir, and not to the next of kin (b); but if after the failure of the disposition the heir dies, his personal representatives and not his heir are entitled to the undisposed of proceeds (c). The principle is clear the trust for conversion is created for the benefit of the legatees, and not for the next of kin, so that there is no ground for depriving the heir-at-law of the undisposed of interest, simply because, under the trust for the particular purposes of the will, a sale may have taken place. In Taylor v. Taylor (d), a testator directed his real estate to be sold, and the proceeds to go as his personal estate, and he bequeathed all the residue of his personal estate (including the proceeds of sale) on trusts for his children equally; one of the children died, and it was held that that child's lapsed share in the proceeds should go to the heir-at-law of the testator. IX. In what cases precatory words create a trust. A testator not uncommonly associates an absolute recommenda- gift or devise with words of "recommendation," "hope," "request," or other terms of a precatory character, which raise the important question whether tion, &c. (b) Eyre v. Marsden, 2 Keen, 574; 1 Jarm. on Wills, 4th ed. pp. 619 et seq. If, however, real estate is settled by deed upon trust to sell for certain specified purposes, and any of those purposes fail, then, whether the trust for sale is to arise in the lifetime of the settlor, or not until after his decease, the property to that extent results to the settlor in personalty from the moment the deed is executed. Clarke v. Franklin, 4 K. & J. 257. (c) Wilson v. Coles, 28 Beav. 215. (d) 3 De G. M. & G. 190. |