PART XXXIX. OF THE REFUNDING OF LEGACIES. Refund of legacy paid 316. When an executor has paid a legacy under the order under of a Judge, he is entitled to call upon the legatee to refund, in the event of the assets proving insufficient to pay all the legacies 1. Judge's orders. No refund if legacy 317. When an executor has voluntarily paid a legacy, he paid volun- cannot call upon a legatee to refund, in the event of the assets tarily. proving insufficient to pay all the legacies 2. Refund when become formance of condi 318. When the time prescribed by the Will for the performlegacy has ance of a condition has elapsed, without the condition having been performed, and the executor has thereupon, without fraud, due on per- distributed the assets; in such case, if further time has been allowed under the one hundred and twenty-fourth Section, for the performance of the condition, and the condition has been performed accordingly, the legacy cannot be claimed from the under sec- executor, but those to whom he has paid it are liable to refund the amount 3. tion within further time allowed tion 124. compel When each 319. When the executor has paid away the assets in legatee is legacies, and he is afterwards obliged to discharge a debt of which he had no previous notice, he is entitled to call upon each proportion. legatee to refund in proportion 4. lable to refund in Distribu tion of assets. 320. Where an executor or administrator has given such notices as would have been given by the High Court in an administration suit, for creditors and others to send in to 1 Act V of 1881, sec. 135. 2 Act V of 1881, sec. 136. See sec. 323 infra, all the legacies,' not 'all the debts;' see sec. 319. 3 Act V of 1881, sec. 137. 4 Act V of 1881, sec. 138. 5 See the Civil Procedure Code, secs. 213, 215, 215 A, and Sched. IV, nos. 105-107, 130, 131. him their claims against the estate of the deceased, he shall, at the expiration of the time therein named for sending in claims, be at liberty to distribute the assets, or any part thereof, in discharge of such lawful claims as he knows of, and shall not be liable for the assets so distributed to any person of whose claim he shall not have had notice at the time of such distribution; but nothing herein contained shall prejudice the right of Creditor any creditor or claimant to follow the assets, or any part there- may follow of, in the hands of the persons who may have received the same respectively 1. assets. 321. A creditor who has not received payment of his debt Creditor may call upon a legatee who has received payment of his may require legacy to refund, whether the assets of the testator's estate legatee to were or were not sufficient at the time of his death to pay both debts and legacies; and whether the payment of the legacy by the executor was voluntary or not 2. refund. who has 322. If the assets were sufficient to satisfy all the legacies When at the time of the testator's death, a legatee who has not legatee received payment of his legacy, or who has been compelled to not received payrefund under the last preceding section, cannot oblige one ment, &c. who has received payment in full to refund, whether the cannot legacy were paid to him with or without suit, although the paid in full assets have subsequently become deficient by the wasting of to refund. the executor 3. oblige one satisfied 323. If the assets were not sufficient to satisfy all the When unlegacies at the time of the testator's death, a legatee who has legatee not received payment of his legacy, must, before he can must first proceed call on a satisfied legatee to refund, first proceed against the against executor if he is solvent; but if the executor is insolvent or not liable to pay, the unsatisfied legatee can oblige each satisfied legatee to refund in proportion 1. 1 Act V of 1881, sec. 139, with slight changes. Compare in England 22 & 23 Vic. c. 35, sec. 29. Act V of 1881, sec. 140. Suits under this section must be brought within three years from the date of payment or distribution, see Act XV of 1877, sched. ii, art. 137, in the second volume of this work. 3 Act V of 1881, sec. 141. The distinction between the case put in this section and that put in sec. 323 is that here the second legatee has received no more than he was entitled to, and the executor is therefore the only person to be resorted to. Act V of 1881, sec. 142. Here the legatee who has received his legacy executor. Limit to 324. The refunding of one legatee to another shall not the refund- exceed the sum by which the satisfied legacy ought to have ing of one legatee to another. been reduced if the estate had been properly administered. Illustration. Refunding to be without interest. Payment of residue to resi duary legatee. A has bequeathed 240 rupees to B, 480 rupees to C, and 720 rupees to D. The assets are only 1,200 rupees, and if properly administered would give 200 rupees to B, 400 rupees to C, and 600 rupees to D. C and D have been paid their legacies in full, leaving nothing to B. B can oblige C to refund So rupees, and D to refund 120 rupees1. 325. The refunding shall in all cases 2 be without interest 3. 326. The surplus or residue of the deceased's property after payment of debts and legacies, shall be paid to the residuary legatee when any has been appointed by the Will in full has received more than he 1 Act V of 1881, sec. 143. 2 even when a legacy has been erroneously paid to a legatee who has no farther property in the estate. But in England see Gittins v. Steele, I Swanst. 200, per Lord Eldon. 3 Act V of 1881, sec. 144. PART XL. OF THE LIABILITY OF AN EXECUTOR OR ADMINISTRATOR FOR DEVASTATION. 327. When an executor or administrator misapplies the Liability estate of the deceased, or subjects it to loss or damage, he is of executor liable to make good the loss or damage so occasioned. Illustrations. (a) The executor pays out of the estate an unfounded claim1. He is liable to make good the loss. (b) The deceased had a valuable lease renewable by notice, which the executor neglects to give at the proper time. The executor is liable to make good the loss. (c) The deceased had a lease of less value than the rent payable for it, but terminable on notice at a particular time. The executor neglects to give the notice. He is liable to make good the loss 2. or administrator for devasta tion. 328. When an executor or administrator occasions a loss Neglect to the estate by neglecting to get in any part of the property to get in of the deceased, he is liable to make good the amount. 1 i. e. a claim which the executor is not bound to satisfy, e. g. a claim on a bond ex turpi causa, or a claim for the schooling, feeding, or clothing of the children of the deceased subsequently to his death. Wms. Exors. 1809. Act V of 1881, sec. 146. Other illustrations are: (d) The executor applies part of the assets to the satisfaction of his own debt to a third party; (e) he collusively sells the testator's goods at an undervalue; (f) he misapplies the assets in undue expenses at the funeral; (g) he pays debts out of their legal order to the prejudice of such as are superior, and of which he had notice; (h) he assents to or pays a legacy when there is not enough for VOL. I. I i the creditors; (i) he surrenders the part of deceased's property. Illustrations. (a) The executor absolutely releases a debt due to the deceased from a solvent person, or compounds with a debtor who is able to pay in full. The executor is liable to make good the amount'. (b) The executor neglects to sue for a debt till the debtor is able to plead the Act for the limitation of suits, and the debt is thereby lost to the estate. The executor is liable to make good the amount 2. 1 Otherwise if the release or composition appear to be for the benefit of the estate, Wms. Exors. 1807, 1808. But in India executors have not as such any express power to release or compound such as is given in England by 23 & 24 Vic. c. 145, sec. 30. 2 Act V of 1881, sec. 147. Other illustrations are:-- (c) The executor neglects to call in the money due on a bond to the testator, and the obligor becomes insolvent and no dividend is made on the insolvency; (d) an executor leaves an unascertained residue in his co-executor's hands, who becomes insolvent; (e) he enables a co-executor to receive money and does not enforce a debt due from him to the estate; (f) for more than a year after the testator's death he allows part of the assets to lie unproductive in the hands of a banker who fails; (g) he negligently omits to sell certain shares of the testator which were at a premium at the time of his death, but which subsequently fell to a discount. In each of these cases the executor is liable. If the testator have been in a partnership business the executor should wind it up as soon as possible. See Erp. Garland, 10 Ves. 119, per Lord Eldon, and 2 Lindley, Partnp., 4th ed., 1060. If he carries it on he becomes personally liable to third parties as if he were a partner in his own right; and whether he is entitled to be indemnified out of the assets of the deceased depends on whether he has acted pursuant to the will of the deceased, or the directions of those beneficially interested in his estate, Lindley, ubi supra. As to the liability of an executer for a devastavit by his co-executor, see Wms. Exors. 1828-1835, and compare the Indian Trusts Act, II of 1882, sec. 26, infra. |