Demonstrative Legacies: Sections 150 - 151

Demonstrative Legacy Defined

• When a testator bequeaths a specific sum of money or a certain quantity of a commodity and refers to a particular fund or stock as the primary source for payment, the legacy is termed demonstrative.
• Explanation: The difference between a specific legacy and a demonstrative legacy lies in the nature of the bequest. A specific legacy involves giving specified property to the legatee, whereas a demonstrative legacy is directed to be paid from specified property.

Illustration:

• (iii) A bequeaths to B: "10,000 rupees out of my estate at Ramnagar," or charges it on his estate at Ramnagar: "10,000 rupees, being my share of the capital embarked in a certain business." Each of these bequests is demonstrative.

Order of Payment When Legacy Directed to Be Paid Out of Fund Subject to Specific Legacy

• Definition: When a portion of a fund is specifically bequeathed and a legacy is directed to be paid from the same fund, the order of payment is as follows:
• 1. The portion specifically bequeathed is paid first to the legatee.
• 2. The demonstrative legacy is then paid from the residue of the fund.
• 3. If the residue is insufficient, the demonstrative legacy is paid from the general assets of the testator.

Illustration:

• A bequeaths to B 1,000 rupees, being part of a debt due to him from W. He also bequeaths to C 1,000 rupees to be paid out of the debt due to him from W.
• The debt due to A from W is only 1,500 rupees. Of these 1,500 rupees, 1,000 rupees will be paid to B, and the remaining 500 rupees will be used to pay part of C's legacy.

Ademption Explained

• When a specific bequest is no longer in the possession of the testator at the time of death, or has been transformed into a different type of property, the legacy is considered adeemed. This means it cannot be fulfilled because the item has been removed from the will's scope.
• Illustrations: If A bequeaths various items such as a diamond ring, gold chain, bale of wool, piece of cloth, or household goods, and then sells, gives away, converts, or relocates these items before death, each legacy is adeemed.

Non-ademption of Demonstrative Legacy

• A demonstrative legacy is not considered adeemed if the property it is charged against in the will does not exist at the time of the testator's death or has been changed into a different type of property. In such cases, the legacy will be paid from the general assets of the testator.

Ademption of Specific Bequest of Right to Receive Something from Third Party

• If the specific bequest involves the right to receive something of value from a third party, and the testator receives it themselves, the bequest is considered adeemed.
• Illustrations: Examples include bequests of debts owed by C, money in the hands of D, money due on a bond from E, or a mortgage on a factory. If these debts are extinguished during A's lifetime, the legacies are adeemed.