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Administration of Assets

estate, property, real, creditors and claim

ADMINISTRATION OF ASSETS of deceased persons was an old and exclusive jurisdiction of the Court of Chancery. It is now within the function of the Chancery Division (q.v.) of the High Court of Justice ; and up to certain limits is within the jurisdiction of the County Courts. A County Court has jurisdiction in all administration actions, in which the personal or real, or personal and real, estate against or for an account or administration of which the demand may be made, shall not exceed in amount or value the sum of £500. In all cases, therefore, within this rule, proceedings should be instituted in a County Court. By this means time and expense will be saved. An administration action arises out of the right of any person having a claim against a particular property, or against its owner, to have a discovery and account of the property liable to meet his claim. When such property is discovered, he has the further right to have the property secured until his claim has been ascertained and established, when such claim must be justly satisfied thereout. Three classes of persons may commence proceedings for administration. (1) Creditors; (2) persons beneficially interested in the estate, such as heirs, next-of-kin, and legatees ; or (3) an executor, administrator, or legatee. If the estate is insolvent, the administration thereof follows the principles of the bankruptcy laws.

The following are some of the principal rules in the general administra tion of a solvent estate. First, there is not now as formerly any distinction between a creditor in respect of a claim founded upon simple contract, such as an ordinary trade creditor and a creditor on a "specialty " such as a covenant in a deed. Until 1870, there was such a distinction—and to the

prejudice of the former. But mortgage charges, and liens for unpaid purchase money on land and houses and other real property, have a priority, in that they are payable first, to the exclusion of the other creditors of the deceased, out of his real estate of whatever tenure. With that exception the assets of the deceased are applied for the payment of his debts in the following order :—(1) his general personal estate, unless expressly or impliedly exempted. The first charge hereon is for funeral expenses ; next the expenses of proving the will or taking out letters of administration ; (2) lands ex pressly devised for the purpose of paying debts; (3) estates which descend to the heir ; (4) real or personal property devised or bequeathed charged with debts ; (5) general pecuniary legacies pro rata ; (6) specific legacies and real estate devised ; (7) property appointed under a power ; (8) widows paraphernalia.

An executor or administrator may give preference to creditors, and he may pay a statute-barred debt. He can also retain part of the estate in satisfaction of a debt due to himself. But he can do this only as against creditors of equal degree with himself ; as, for example, where his Eknd the creditors' claims are all specialty. See further hereon : ABATEMENT OF LEGACIES; CHANCERY DIVISION; EQUITY; EXECUTORS AND ADMINISTRATORS.