tablishment is asked, is demandable as of right by the heir; for he can be disinherited only by the verdict of a jury.

Assuming the right of a personal or real representative to be established, there is an equity for administering the assets of the testator or intestate, originating in the inefficacy of the ordinary tribunals.5 [250]

In exercising the jurisdiction to administer assets, all such assets as would be recognized at law are termed legal assets, and are administered in conformity with legal rules, by giving priority to debts in order of degree, as follows, viz.: 1. Debts due to the crown by record or specialty, which have priority over all other debts, as well of a prior as of a subsequent date; 2. Certain specific debts which are by particular statutes to be preferred; 3. Debts by judgment or decree, and immediately after them debts by recognizance of statute; 4. Debts by specialty; but if the bond or covenant be merely voluntary, it will have priority over legacies only, and will be postponed to simple contract debts bona fide owing for valuable consideration; 5. Debts on simple contract, as on bills or notes and agreements not under seal, on verbal promises, and on promises implied by law." [252]

There are also other assets, recognized in equity alone, which are termed equitable assets, and are distributed among the creditors pari passu, without regard to the quality of their debts."

Legal assets may be defined as "those portions of the property of a deceased person of which his executor or heir may gain possession, and in respect whereof he may be made chargeable, by the process of the ordinary tribunals, and without the necessity of equitable interference." They consist, first, of the personal estate, to which the executor or administrator is entitled by virtue of his office; and secondly, of the real estate descended or devised, except where the devise is for payment of debts; a devise of this latter kind rendering the estate equitable instead of legal assets. [253]

The common law rule as to the liability of real estate restricted such liability within a narrow compass. The leasehold estates of the debtor were included in his personalty, and were of course liable for all the debts. But his freeholds were only liable for debts by specialty, expressly

5. In this country this jurisdiction is usually exercised by the Courts of Probate, Orphans' Courts, or Surrogate Courts, which for this purpose are vested with the jurisdiction formerly exercised by the English Ecclesiastical Courts and the Court of Chancery. In some of the states, how

ever, the jurisdiction in equity still

exists.

6. See the statutes of the several states as to the order of priority in this country.

7. The distinction between legal and equitable assets is of no practical importance in this country; all assets are practically legal.

naming the heirs; and if the descent were broken by a devise, or if the heir aliened before action brought, there was no proceeding at law or in equity by which that realty could be affected.8

In addition to the two kinds of legal assets, the personal and the real, already mentioned, there is also a third kind, which though not obtainable without the intervention of equity, and therefore not in strictness legal assets, is yet, when obtained, to be administered as such, viz., property held by a trustee for the testator. [254] For although the benefit of the trust, if resisted, cannot be enforced without equitable aid, yet the analogy of law will regulate the application of the fund.

Equitable assets may be defined as those portions of the property which by the ordinary rules of law are exempt from debts, but which the testator has voluntarily charged as assets, or which, being non-existent at law, have been created in equity.

Equitable assets of the first class consist of real estate devised for or charged with the payment of debts. If a testator devises land for payment of his debts or subject to a charge for such payment, the devise operates to destroy the original liability, and to subject the land to a new liability by way of trust. [255] The same rule does not apply to a bequest of personalty, for such a bequest is a mere nullity as against creditors, and does not affect the common law liability.

Equitable assets of the second class consist of interests either in personal or real estate which, being non-existent at law, have been created In equity; and the principal assets of this class are equities of redemption. So long as the right of redemption exists at law, it is not divested of the character of legal assets. If, after forfeiture, a reversion remains, to which the equity of redemption is incident, such equity will follow the character of the reversion, and will still constitute legal assets. If, after forfeiture, there is no reversion, as, for example, when a fee simple is mortgaged in fee, a different rule prevails; for there is nothing left in the mortgagor which can be assets at law, and the new interest is a mere creation of equity. [256] It has therefore been determined, notwithstanding some doubts on the point, that such interests be equitable assets.

Where an estate consists of both legal and equitable assets, the rule is, that if any creditor has obtained part payment out of the legal assets by insisting on his preference, he shall receive no payment out of the equitable assets, until the creditors, not entitled to such preference, have first received an equal proportion of their debts. [257]

The manner of administration in equity is on a bill filed, either by creditors or by legatees, praying to have the accounts taken and the property administered; or if no creditor or legatee is willing to sue, then by the executor

8. This injustice has been remedied by statute both in England and in

this country. See the statutes for details.

tablishment is asked, is demandable as of right by the heir; for he can be disinherited only by the verdict of a jury.

Assuming the right of a personal or real representative to be established, there is an equity for administering the assets of the testator or intestate, originating in the inefficacy of the ordinary tribunals." [250]

In exercising the jurisdiction to administer assets, all such assets as would be recognized at law are termed legal assets, and are administered in conformity with legal rules, by giving priority to debts in order of degree, as follows, viz.: 1. Debts due to the crown by record or specialty, which have priority over all other debts, as well of a prior as of a subsequent date; 2. Certain specific debts which are by particular statutes to be preferred; 3. Debts by judgment or decree, and immediately after them debts by recognizance of statute; 4. Debts by specialty; but if the bond or covenant be merely voluntary, it will have priority over legacies only, and will be postponed to simple contract debts bona fide owing for valuable consideration; 5. Debts on simple contract, as on bills or notes and agreements not under seal, on verbal promises, and on promises implied by law.6 [252]

There are also other assets, recognized in equity alone, which are termed equitable assets, and are distributed among the creditors pari passu, without regard to the quality of their debts.7

Legal assets may be defined as 'those portions of the property of a deceased person of which his executor or heir may gain possession, and in respect whereof he may be made chargeable, by the process of the ordinary tribunals, and without the necessity of equitable interference." They consist, first, of the personal estate, to which the executor or administrator is entitled by virtue of his office; and secondly, of the real estate descended or devised, except where the devise is for payment of debts; a devise of this latter kind rendering the estate equitable instead of legal assets. [253]

The common law rule as to the liability of real estate restricted such liability within a narrow compass. The leasehold estates of the debtor were included in his personalty, and were of course liable for all the debts. But his freeholds were only liable for debts by specialty, expressly

5. In this country this jurisdiction is usually exercised by the Courts of Probate, Orphans' Courts, or Surrogate Courts, which for this purpose are vested with the jurisdiction formerly exercised by the English Ecclesiastical Courts and the Court of Chancery. In some of the states, how

ever, the jurisdiction in equity still

exists.

6. See the statutes of the several states as to the order of priority in this country.

7. The distinction between legal and equitable assets is of no practical importance in this country; all assets are practically legal.

naming the heirs; and if the descent were broken by a devise, or if the heir aliened before action brought, there was no proceeding at law or in equity by which that realty could be affected.8

In addition to the two kinds of legal assets, the personal and the real, already mentioned, there is also a third kind, which though not obtainable without the intervention of equity, and therefore not in strictness legal assets, is yet, when obtained, to be administered as such, viz., property held by a trustee for the testator. [254] For although the benefit of the trust, if resisted, cannot be enforced without equitable aid, yet the analogy of law will regulate the application of the fund.

Equitable assets may be defined as those portions of the property which by the ordinary rules of law are exempt from debts, but which the testator has voluntarily charged as assets, or which, being non-existent at law, have been created in equity.

Equitable assets of the first class consist of real estate devised for or charged with the payment of debts. If a testator devises land for payment of his debts or subject to a charge for such payment, the devise operates to destroy the original liability, and to subject the land to a new liability by way of trust. [255] The same rule does not apply to a bequest of personalty, for such a bequest is a mere nullity as against creditors, and does not affect the common law liability.

Equitable assets of the second class consist of interests either in personal or real estate which, being non-existent at law, have been created in equity; and the principal assets of this class are equities of redemption. So long as the right of redemption exists at law, it is not divested of the character of legal assets. If, after forfeiture, a reversion remains, to which the equity of redemption is incident, such equity will follow the character of the reversion, and will still constitute legal assets. If, after forfeiture, there is no reversion, as, for example, when a fee simple is mortgaged in fee, a different rule prevails; for there is nothing left in the mortgagor which can be assets at law, and the new interest is a mere creation of equity. [256] It has therefore been determined, notwithstanding some doubts on the point, that such interests be equitable assets.

Where an estate consists of both legal and equitable assets, the rule is, that if any creditor has obtained part payment out of the legal assets by insisting on his preference, he shall receive no payment out of the equitable assets, until the creditors, not entitled to such preference, have first received an equal proportion of their debts. [257]

The manner of administration in equity is on a bill filed, either by creditors or by legatees, praying to have the accounts taken and the property administered; or if no creditor or legatee is willing to sue, then by the executor

8. This injustice has been remedied this country. See the statutes for deby statute both in England and in tails.

himself, who can only obtain complete exoneration by having his accounts passed in chancery, and is therefore entitled to insist on its being done. The more usual course is that of a bill by one or more creditors on behalf of all." [258] The decree on such a bill is for a general account of the debts and for an account and application of the personal assets. If the personal estate should prove insufficient, a decree will be made against the realty.

A legatee may file a bill for his single legacy, or on behalf of all the legatees for payment of all. But he cannot in either case have a preference over the rest.1

Immediately on the executor's answer being obtained, the balance which he admits to be in his hands is secured by payment into court. [259] A receiver of the outstanding personalty, and of the rents and profits of the real estate, is appointed if the circumstances render it necessary. And as soon as the cause can be brought to a hearing, a decree is made for taking the accounts.

The decree is not confined to the payment by the plaintiff, but directs a general account and administration, under which all creditors and legatees may claim. And, therefore, if separate proceedings be afterwards carried on, the assets will be protected by the court from that needless expense by injunction or order, as the case may require.

When the assets have been secured and their administration has been undertaken by the court, the next step is their distribution. The method adopted for this purpose is, to refer it to the master to take an account of the personal estate not specifically bequeathed, either got in by the executor or still outstanding, and of the funeral and testamentary expenses, debts and legacies; and to direct payment of the expenses and debts in a course of administration, and afterwards of the legacies. [261]

In order to ascertain who the creditors are, a direction is given for publishing advertisements in those quarters where they are most likely to be found. [262] The same course is pursued where a distribution is to be made among next of

9. McKay v. Green, 3 John. Ch. 55.

1. See Pritchard v. Hicks, 1 Paige Ch. 270.