8 CHAPTER II. OF CERTAIN KINDS OF INCORPOREAL HEREDITAMENTS. CH. 2, s. 1. An annuity defined and distinguished from a charge. SECTION I. Of Annuities. PART I. T. 2, AN annuity, in the widest sense of the term, is a right to a yearly sum not payable as interest, and chargeable both upon real and personal estate, or either upon real or personal estate of the grantor or testator who created the annuity, or upon his person only (a). But an annuity specifically so called, as distinguished from a rent charge, is a right to a yearly sum not payable as interest, and chargeable only upon the person or personal estate of the grantor or testator by whom it is created; as, if a grant is made of the sum of 201. a year, without expressing out of what it shall issue, no land at all shall be charged with it, but it is a mere personal annuity (b). And a rent charge, as distinguished from an annuity, is a right to a yearly sum not payable as interest, and chargeable only on the real estate of the grantor or testator. If the person or the personal estate, as well as the real estate, is made liable, as both most commonly are, then the annual payment is frequently, if not generally, called an annuity, and is personal estate. In such a case the grantee must elect between his remedies (c). 15. Ways of creating There are several ways of giving annuities by will. Thus, (a) See 2 Bl. Com. 40, 41; 2 Jarm. & Byth. by Sweet, 1, 2, 3, 5. (b) 2 Bl. Com. 40; 2 Jarm. & Byth. by Sweet, 1; Co. Litt. 144 b. (c) 2 Jarm. & Byth, by Sweet, 2, 3; Co. Litt. 219, 144 b; Parsons v. Parsons, L. R. 8 Eq. 260. CH. 2, s. 1. annuities by one way is to give an annuity generally, or out of the PARTI. T. general personal estate. A second way is to direct a certain sum to be appropriated and set apart, and the will. income thereof paid to the annuitant; or a sufficient sum to be appropriated and set apart to pay an annuity of a certain amount; and to direct that after the death of the annuitant, or subject to the payment of such annuity, such sum shall form part of the testator's residuary personal estate. In neither of these ways is any money sunk in providing for the annuity; the fund which produces the annuity remains after the annuity has ceased by the death of the annuitant or otherwise. But there are two ways of giving an annuity by sinking money in the purchase thereof. The first is, to give a definite sum of money to trustees, with a direction to them to lay it out in the purchase of an annuity. The second is, to direct trustees or executors to lay out so much money as will suffice to purchase an annuity of a certain amount. In the one case, the sum given determines the amount of the annuity. In the other, the annuity specified determines the amount of the sum to be expended. 16. ment. In the absence of any indication to the contrary, annuities Commencecreated by will, commence from the death of the testator, and the first payment becomes due at the end of a year from that event (a). 17. interests a annuity may be limited, A personal annuity, that is, an annuity not charged on For what lands, but only secured by grant, bond, or covenant, or personal bequeathed by will, may be limited to a person and his heirs in fee simple, or as a fee conditional, or to a person and his heirs pur autre vie (b), or to a person for his own life or for a term of years. Such an annuity in fee is a personal inheritance, which passes under a general bequest of the personal estate of the annuitant (c). 18. (a) 2 Rop. Leg. by White, 1245; 11 Jarm. & Byth. by Sweet, 470. (b) 2 Jarm. & Byth. by Sweet, 13. PART I. T. 2, testator's death, and though the money with which it was CH. 2, s. 1. to be purchased is to be raised by a sale of real estate after the death of a tenant for life who survived the annuitant (a). 24. The principle upon which the Court has acted in thus frustrating what was doubtless in most of these cases the design of the testator, is this: that the testator has dedicated a certain sum for the benefit of the annuitant; that he takes a vested interest therein at the moment of the testator's death; and that it would be useless to enforce the purchase of an annuity when the annuitant could sell it immediately after it was purchased. 25. It should be held that no such right to the price or value can exist, where either it is expressly excluded, or there is a gift over in a particular event. See Power v. Hayne, L. R. 8 Eq. 262, and Hatton v. May, L. R. 3 Ch. D. 148, in which V.-C. Malins declined to follow V.-C. Kindersley's decision in Day v. Day, 1 Drew. 569. But in Hunt-Foulston v. Furber, L. R. 3 Ch. D. 285, V.-C. Hall held that the exclusion of the right to the price or value was not effected by express words of exclusion or by a gift over, where the trustees are directed to buy an annuity in the name of the annuitant, and the trust ends there, though a proviso excluding the right to the price or value is added, with a direction that on a sale the annuity should cease and form part of the residue. It is lamentable that judges should think it their duty thus needlessly to frustrate the plainly expressed and wise intention of a testator. 26. It may be proper to suggest that when a testator is (a) 1 Rop. Leg. by White, 640; 11 Jarm. & Byth. by Sweet, 468; 1 Jarm. Wills, 2nd ed. 326; Yates v. Compton, 2 P. W. 308; Barnes v. Rowley, 3 Ves. 305; Bayley v. Bishop, 9 Ves. 6; Palmer v. Craw ford, 3 Swans. 482; Dawson v. Hearn, 1 Russ. & M. 606; Woodmeston v. Walker, 2 Russ. & M. 197; Ford v. Battley, 17 Beav. 303; Re Browne's Will, 27 Beav. 324. CH. 2, s. 1. desirous that a sum of money should be laid out in the PARTI. T. 2, purchase of an annuity at a future time, he should be asked what would be his wish in the event of the intended annuitant dying before that time-whether he would wish the principal to form part of the intended annuitant's personal estate, or whether he would wish it to sink into the residue, or to lapse for the benefit of the heir, in case it is to be raised out of the proceeds of real estate, or to go over to any other person. A testator desirous that an annuity should be purchased, should also be asked whether he wishes the intended annuitant to have the option of taking the price or value of the annuity, instead of the annuity itself. And if the testator does not intend, as in almost every case he would not intend to give any such option, there should be a clause in restraint of alienation or anticipation, so worded as to make the annuity expressly determinable on alienation or anticipation. A clause merely excluding the option of taking the price or value would be inoperative (a). 27. annuity is the corpus Where a testator, in giving an annuity, manifests an Whether an intention that the fund which is to produce the annuity charge on shall continue in its integrity during the life of the a fund. annuitant, and in that state shall go over to another person or persons, otherwise than as residuary legatee or legatees, after the death of the annuitant, there, in case the fund is not sufficient to produce the annuity, the annuitant is not entitled to have the deficiency made up out of the corpus of the fund (b). 28. But where a testator manifests an intention that the annuitant shall take the full amount of the annuity at all (a) Stokes v. Cheek, 28 Beav. 598. (b) Baker v. Baker, 6 Ho. of Lords,616, reversing decision of the Courts below, 20 Beav. 548; 7 D. M. & G. 681; Hindle v. Taylor, 20 Beav. 109: Addecott v. Addecott,29 PART I. T. 2, testator's death, and though the money with which it was CH. 2, s. 1. to be purchased is to be raised by a sale of real estate after the death of a tenant for life who survived the annuitant (a). 24. The principle upon which the Court has acted in thus frustrating what was doubtless in most of these cases the design of the testator, is this: that the testator has dedicated a certain sum for the benefit of the annuitant; that he takes a vested interest therein at the moment of the testator's death; and that it would be useless to enforce the purchase of an annuity when the annuitant could sell it immediately after it was purchased. 25. It should be held that no such right to the price or value can exist, where either it is expressly excluded, or there is a gift over in a particular event. See Power v. Hayne, L. R. 8 Eq. 262, and Hatton v. May, L. R. 3 Ch. D. 148, in which V.-C. Malins declined to follow V.-C. Kindersley's decision in Day v. Day, 1 Drew. 569. But in Hunt-Foulston v. Furber, L. R. 3 Ch. D. 285, V.-C. Hall held that the exclusion of the right to the price or value was not effected by express words of exclusion or by a gift over, where the trustees are directed to buy an annuity in the name of the annuitant, and the trust ends there, though a proviso excluding the right to the price or value is added, with a direction that on a sale the annuity should cease and form part of the residue. It is lamentable that judges should think it their duty thus needlessly to frustrate the plainly expressed and wise intention of a testator. 26. It may (a) 1 Rop. Leg. by White, 640; 11 Jarm. & Byth. by Sweet, 468; 1 Jarm. Wills, 2nd ed. 326; Yates v. Compton, 2 P. W. 308; Barnes v. Rowley, 3 Ves. 305; Bayley v. Bishop, 9 Ves. 6; Palmer v. Craw ford, 3 Swans. 482; Dawson v. Hearn, 1 Russ. & M. 606; Woodmeston v. Walker, 2 Russ. & M. 197; Ford v. Battley, 17 Beav. 303; Re Browne's Will, 27 Beav. 324. |