of rents and profits-Charge on corpus-Gift of policy moneys charged by testator in his lifetime--Exoneration by specific devisees of real estate-Contri- bution-Marshalling-Payment of mortgages.

A gift by will of " all moneys stock and funds which I shall die possessed of is specific in the absence of anything in the context showing that "money" is intended to mean "personal estate."

A direction to a life tenant to pay certain legacies out of the rents and profits of the estate of which he was made life tenant was held not to charge the legacies on the corpus of the estate.

Where there is in a will a general direction to pay debts, and the general personal estate of the testator not specifically bequeathed is insufficient for

16 CLR 2

payment of his debts, a specific legatee of property charged by the testator in his lifetime with the payment of a sum of money is entitled to exoneration by the specific devisees of real estate in respect of payment of the incum

In re Butler; Le Bas v. Herbert, (1894) 3 Ch., 250, not followed.

A testator by his will after directing payment of his debts and funeral and testamentary expenses as soon as could conveniently be done, and giving certain household property to his wife absolutely, gave and bequeathed "all moneys stock and funds which I shall die possessed of and all moneys pay. able under two policies of assurance on his life "and all benefit derivable therefrom" to his wife " upon trust to pay and apply the same as in manner provided." He then gave certain house property to his wife for life "sub- ject always that she remains single not otherwise as hereinafter is provided and also subject to the payment out of the rent and income thereof of all interest moneys costs and charges, taxes &. which shall be or become due by virtue of two mortgages existing over different portions of the house property, and also subject to his wife keeping all the house property in repair. He also declared that this devise was subject to, and he directed his wife to pay, certain legacies out of the rents and profits of the house property, or out of the moneys he should die possessed of or the policy moneys. He further declared that the devise should be subject to his wife giving up all her right to certain allotments of land which he had transferred to her, and that she should sell those allotments as soon as convenient upon trust to pay and apply the proceeds together with the balance of moneys remaining after payment" of the legacies in paying off the mortgage debt on the house property "any money remaining thereafter" he gave absolutely to his wife. On the death or re-marriage of his…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Ramsay v Lowther

Details

AGLC: Ramsay v Lowther [1912] HCA 68
Case: [1912] HCA 68
Decision Date: 21 October 1912

CaseChat Overview and Summary

The case of Ramsay v. Lowther involved an appeal from the Supreme Court of New South Wales concerning the construction of a will. The testator, Edward Lowther, bequeathed various assets, including money, stock, funds, and life insurance policy moneys, to his wife, Fanny Lowther, upon trust. He also devised real estate to her for life, subject to certain conditions, including the payment of interest on existing mortgages and specific legacies out of the rents and profits. The dispute arose from the interpretation of these provisions and the allocation of the testator's debts and legacies among the beneficiaries.

The primary legal issues before the court were: (1) whether the gift of "all moneys stock and funds which I shall die possessed of" was a specific or residuary bequest; (2) whether the devise of the house property to the widow was subject to her paying the principal of the mortgage debts out of its rent and income; (3) whether the legacies were charged on the corpus of the estate; (4) the extent to which the widow was obligated to apply the rents and profits of the house property towards the payment of legacies and mortgage principal; (5) how the income from certain transferred allotments should be applied; and (6) whether the widow was entitled to exoneration from the real estate in respect of mortgage debts on the life policies.

The High Court held that the gift of "all moneys stock and funds which I shall die possessed of" was specific, not residuary. It further determined that the devise of the house property to the widow was not subject to her paying the principal of the mortgage debts from its rent and income, but rather only the interest. The court clarified that the legacies were not charged on the corpus of the estate. The widow was directed to apply the rents and profits of the house property first to the payment of legacies, thereby preserving the testator's moneys and policy moneys for mortgage payments. The income from the transferred allotments was to be applied in reduction of the mortgage principal, with interest to be paid from the house property's income. Crucially, the widow was entitled to exoneration from the real estate devised by the will concerning the mortgage debt on the life policies. The court also found that an indenture entered into by the widow and other beneficiaries did not alter the beneficiaries' rights inter se regarding the mortgage debts.

Orders