SECTION IX. Of the release of debts by legacies: and herewith of the effect of appointing a debtor or a creditor to be executor. 1. Of a legacy by a creditor to his debtor. Where a creditor bequeaths a legacy to his debtor, and either does not notice the debt, or mentions it in such a manner as to leave his intention doubtful, and after his death the securities for the debt, if any exist, are found uncanceled among the testator's property, the courts of equity do not consider the legacy to the debtor as necessarily, or even prima facie, a release or extinguishment of the debt,48 but require evidence clearly expressive of the intention to release (d): And if such intention does not appear clearly expressed or implied on 48. A legacy to a debtor of the exact amount of his debt is not a release. Cole v. Covington, 86 N. C. 295. So, a legacy to a debtor whose securities are found among testator's papers uncanceled. Sorrelle v. Sorrelle, 5 Ala. 245. So, of a debt afterward contracted, Brokaw v. Hudson, 12 C. E. Gr. 135; (but not one already incurred as security, but not paid by testator until after the date of his will, Hobart v. Stone, 10 Pick. 215). So, in a gift to or against an insolvent debtor, Snyder v. Warbasse, 3 Stock. 463. A devise to a debtor is not a charge of the debt ipso facto upon the land. La Foy v. La Foy, 16 Stew. (N. J.) 206. Where a legacy to a son who died after testator, goes to his daughter, notes of the legatee (shown to have been advances) are released and will be deducted from the legacy, but other evidences of debt (not shown to be advances) remain available only against the estate of the original legatee. Wallace v. Dubois, 65 Md. 153. A legacy to testator's daughter is no satisfaction of the debt of her husband (for a smaller amount). Clarke v. Bogardus, 2 Edw. 387; S. C. 12 Wend. 67. Sometimes the debt is expressly saved. Thus, "obligations of any kind to be first deducted" will include notes and receipts for advancements. Hill v. Bloom, 14 Stew. (N. J.) 276. So, a legacy "inclusive of his note" means deducting the note and paying the bal ance. Estate of Pepper, 1 Pa. Dist. R. 148. But, contra, legacies "exclusive of any indebtedness due to me." Baldwin v. Sheldon, 48 Mich. 580. On the other hand, a contrary intention will not be inferred by an express condition attached to another gift that that legatee shall first pay his debt to testator. Blacker v. Booth, 114 Mass. 24. Where the legacy is "the amount of his indebtedness to me, which now amounts to $8500," it will include only the legatee's individual debt of $8565, and not another joint debt of A. and B. for $1000. Heaton v. Merchant, 8 Stew. (N. J.) 561. And where the will directs deduction of the legatee's debts, and provides that the testator's books of account shall be conclusive evidence of the fact and amount," interest is chargeable, although not shown on the books. Outealt v. Appleby, 9 Stew. (N. J.) 73. (d) Wilmot v. Woodhouse, 4 Bro. C. C. 226. Jeffs v. Wood, 2 P. Wms. 132. See also Hyde v. Neate, 15 Sim. 554, for an example of a will where the language is sufficient to show that the testator intended to remit the debts of the legatees, as well as to give them their legacies. the face of the will, evidence from other sources will be admitted (e).49 Prima facie a bequest to a debtor of the debts due from him means *the debts due from him severally, and does not include debts due from a firm of which he is a member (ƒ). Where a testator recites that a legatee is indebted in a certain sum, that recital binds the legatee, except in case of a clear mistake of figures (g). It must be observed, that if the testator expressly bequeaths the debt to his debtor, this being no more than a release by will, operates only as a legacy; and the debt is assets, therefore, subject to the payment of the testator's debts (h). Retainer and set Where a legatee is indebted to the testator, the executor may retain the legacy,50 either in part or full satisfaction of the debt, by way of set-off (i). And it has been held, that in a suit by a legatee to obtain payment of the legacy out of the assets of the testator, in a due course of administration, the executor may retain so much of the (e) Eden v. Smyth, 5 Ves. 341. It is dangerous to extend the doctrine of this case: Chester v. Urwick, 23 Beav. 404. 49. Dougherty v. Rogers, 119 Ind. 254; Wallace v. Dubois, 65 Md. 153. Such as the testimony of the scrivener. Zeigler v. Eckert, 6 Pa. St. 13. When the testator takes a note from his son-inlaw, and his will directs that it be deducted as an advancement to his deceased daughter from the share to be taken by their daughter and should go to her father if she died without issue, it will amount to a bequest in satisfaction of the note, and equity will decree its cancellation. Bacon v. Gassett, 13 Allen 334. (f) Ex parte Kirk, Re Bennett, 5 C. D. 800. (g) Robinson v. Bransby, 6 Madd. 348. See also Re Aird's Estate, 12 C. D. 291. This case is stated in the head note to Re Taylor's Estate, 22 (i) Jeffs v. Wood, 2 P. Wms. 130. Smith v. Smith, 3 Giff. 263. So where the legatee is a bankrupt member of a firm indebted to the testator: ibid. So a off of a legacy, in due from the claiming through respect of a debt legatee, or party the legatee: C. D. 495, not to have been followed, but it seems from the judgment of the C. A. that Re Taylor's Estate turned on a question of construction unaffected by Re Aird's Estate. (h) Rider v. Wager, 2 P. Wms. 331, 332. Ante, pp. *1029, *1030. 50. Such debt, if larger than the legacy, is a complete answer to a petition for the payment of the legacy. Matter of Charlick, 11 Abb. N. C. 56; Smith v. Murray, 1 Dem. 34; Strong v. Bass, 35 Pa. St. 333. And it may be set off, although it was contracted after the will was made, Brokaw v. Hudson, 12 C. E. Gr. 135; or was the debt of a firm of which the legatee was the sole surviving partner, Ferris v. Burrows, 34 Hun 104; or grew out of payments by the testator as security for the legatee, Koons v. Mellett, 121 Ind. 585; and by the executor on a judgment recovered against him on a liability of the testator retainer will be allowed to one executor, out of a legacy to his co-executor, in respect of a devastavit by the latter: Sims v. Doughty, 5 Ves. 243. [*1171] legacy as is sufficient to satisfy a debt due from the legatee to the testator, although the remedy for such debt was, at the time of the death of the testator, barred by the Statute of Limitations (k). as such surety, Stieff v. Collins, 65 Md. 69. If the legacy is an undivided share of the residue, the legatee's debt will of course be deducted entirely from that share. Chase v. Davis, 65 Me. 102; Estate of Piper, 11 Phila. 141. The legatee's notes are available as a set-off, although he was also appointed executor and had charged off the notes as worthless in his account. Henry v. Fiske, 11 R. I. 318. So, though the testator had executed, but never delivered, a release which was found with the evidences of the debt among his papers. Brunn v. Shuett, 59 Wis. 260. Equity will first set off the unsecured debt if the debt exceeds the legacy and is partly secured and partly unsecured. Sleeper v. Kelley, 65 N. H. 206. But where the will directs all indebtedness to be deducted, and refers to "a partial list," it will not prevent a suit by the legatee to charge testator's estate for damages in wrongfully releasing collateral held by him. Whittemore v. Hamilton, 51 Conn. 153. In setting off the legatee's debt the interest on it is to be reckoned up to (k) Courtenay v. Williams, 3 Hare, 589. Rose v. Gould, 15 Beav. 189. Coates v. Coates, 33 Beav. 249. Campbell v. Graham, 1 Russ. & M. 453. See the remark of Knight Bruce, V.-C., in Harvey v. Palmer, 4 De G. & Sm. 427. So an administrator is entitled to set off against the share of one of the next of kin the whole of a debt of which part has become barred by the Statute of Limitations. Re Cordwell's Estate, L. R. 20 Eq. 644. Legatees who were also next of kin of the testator, brought an action against the executor seeking a revocation of the probate, but failed, the testator's death only, Dickerson . Stokes, 4 Dem. 219; though the legacy may be a remainder payable only after the death of the life tenant. Smith e. Yancey, 81 Va. 88. But see Bowen . Evans, 70 Ia. 368. In some states the legatee's debt may be set off, although barred at testator's death by the Statute of Limitations, the statute in such case barring an action for the remainder, but raising no presumption of payment. Matter of Bogart, 28 Hun 466; Rogers . Murdock, 45 Hun 30. The barred debt is available as a set-off against a legacy, but not as against a devise of land. Estate of Covin, 20 S. C. 471. So, where the will directed the legatees "to account for what they owe me." Teague v. Teague,74 N. C. 612. But in Massachusetts, a debt barred by the Statute of Limitations cannot be set off unless that is clearly intended in the will, Allen €. Edwards, 136 Mass. 138; the statute providing for set off of "debts due." P. S. c. 136, § 22. So, in Tennessee, as against a distributive share. Richardson . Keel, 9 Lea 74. So, in Maine also, and and were ordered to pay the executor's costs of the action. While the action was pending some of the plaintiffs assigned and others mortgaged their shares whether under the will or on an intestacy. Afterward the legatees commenced an action against the executor in the Chancery Division for the administration of the estate. It was held that the executor was entitled to set off the costs in the probate suit against the legacies, notwithstanding the assignments and encumbrances. Re Knapman, 18 C. D. 300. *It may be observed, that the term "set-off" is somewhat inaccurately used in cases of this kind. The proper use of that expression seems applicable only to the mutual demand of debtor and creditor. A right of this nature is rather a right to pay out of the fund in hand, than a right to set off. And such right of payment can only arise where there is a right to receive the debt so to be paid; and the legacy or fund so to be applied in payment of the debt must be payable by the person entitled to receive the debt (7). Accordingly, in an attaching creditor of the legatee may raise the objection. Holt v. Libby, 80 Me. 329. This is true also in Pennsylvania, although the debt is barred by the Statute of Limitations at the time of distribution, but not at testator's death. Estate of Light, 136 Pa. St. 211. The set-off of the legatee's debt is available against a bona fide assignee of the legacy, Estate of Dull, 137 Pa. St. 116; or a creditor of the legatee, Armour . Kendall, 15 R. I. 193; Strong 7. Bass, 35 Pa. St. 333; Nickerson v. Chase, 122 Mass. 296; and creates an equitable lien upon the legacy prior to that of a judgment creditor of the legatee. Irvine v. Palmer, 91 Tenn. 463. It is also available against his children, taking simply as his next of kin on his death before distribution, Matter of Bogart, 28 Hun 466; or against the debtors, descendants, taking the legacy under the statute, which saves lapse of legacy in favor of descendants or other legatees, Denise v. Denise, 10 Stew. (N. J.) 163; disapproving Carson . Carson, 1 Met. 300, as unsound in its main premises" because it held the set-off to be founded upon equities wholly extrinsic, and having no connection with the Will," whereas "the law of the land constitutes a part of every Will," Van Fleet, V.-C. But in a like case in Wallace v. Dubois, 65 Md. 153, the court distinguished between debts shown to have been created by way of advancement (as to which set-off was allowed) and other debts, which were left to their remedy against the estate of the original legatee. And in a legacy to A. and her children, "the debts of the husband to be deducted from any legatee's share," A.'s share only, and not the children's shares, will be subject to the debt of A.'s husband; Cannon e. Apperson, 14 Lea 553. In Jennings v. Barry, 5 Dem. 531, however, the set-off of A.'s debtor was allowed against the issue of A., who were substituted by the terms of the will on A.'s death before the life tenant, A.'s legacy being held to have vested in him (subject to divest on his death before the prior life estate ended) and so become subject to the set-off of his debt. (1) Cherry v. Boultbee, 4 M. & Cr. 442, 447, per Lord Cottenham, and see Re Briant, 39 C. D. 471, 479. Re Akerman, [1891] 3 Ch. 212, 219. In the case of Re Akerman (ubi sup.), Kekewich, J., says: "The principle to be found laid down in Cherry v. Boultbee (ubi sup.), and also in Courtenay v. Williams (3 Hare, 589), and, no doubt, if search were made, in many other cases, is that a person who owes an estate money, that is to say, who is bound to increase the general mass of the estate by a contribution of his own, cannot claim an aliquot share given to him out of that mass, without first making the contribution which completes it. Nothing is in truth retained by the representative of the estate: [*1172] Cherry v. Boultbee (m), Thomas Boultbee was indebted to Catherine Boultbee, his sister, in the sum of 1,8787. He became bankrupt, and shortly after his bankruptcy, Catherine made her will, whereby she gave legacies of 500l. and 2,000l. to her executors, in trust to pay the interest thereof, (as to the 500l. after the decease of her mother,) to Thomas Boultbee for his life, without power of anticipation, and free from his debts; and after *his decease to pay the principal to such persons as he should appoint, and in default of appointment to his executors and administrators, for his and their own use and benefit: The testatrix did not prove her debt under her brother's commission: He died without having obtained his certificate, and without having attempted to make any appointment: Lord Langdale, M. R., held (overruling the case of Ex parte Mann (n), before Sir J. Leach), that the executors of the testatrix had no right to set off the debt due from Thomas Boultbee to the testatrix against the legacies, but that the assignee of Thomas Boultbee was entitled to so much of the legacies as the assets were sufficient to pay: And this decision was confirmed by Lord Cottenham on appeal: And his lordship observed, that the bankruptcy of the debtor having taken place in the lifetime of the testatrix, her executors never were entitled to receive from the assignees more than the dividends of the debt; and as the bankrupt never obtained his certificate, he was never entitled to receive the legacy: consequently there never was a time at which the same person was entitled to receive the legacy and liable to pay the entire debt; and therefore the right of retaining a sufficient sum out of the legacy to pay the debt could never have vested in anyone; though the assignees would have been bound to allow the amount of any dividend on the debt, if it had been proved (o).- *It will be seen that in this case the claim for the legacy arose after the bankruptcy, at a time nothing is in strict language set off; but the contributor is paid by holding in his hand a part of the mass, which, if the mass were completed, he would receive back," p. 219. (m) 2 Keen, 319; affirmed on appeal, 4 M. & Cr. 442. (n) Mont. & M'Arth. 210. (0) Cherry v. Boultbee, 4 M. & Cr. 442, 448. These observations were regarded by Shadwell, V.-C., in Bell v. Bell, 17 Sim. 127, as decisive of a case where one of the creditors of an in solvent died intestate, leaving the insolvent one of his next of kin : The debtor had, in the lifetime of the intestate, taken the benefit of the act, and had been discharged, having entered the debt in question in his schedule and the V.-C. held, that the administrators of the creditor were not entitled to retain the debt out of the insolvent's distributive share of the creditor's estate. Cherry . Boultbee has been twice followed by Hall, V.-C., in Re Hodgson, 9 C. D. 673, and Re |