Report No. 110
25.3. Section 151-Order of payment when legacy directed to be paid out of fund, the subject of specific legacy.-
According to section 151, where a portion of a fund is specifically bequeathed and a legacy is directed to be paid out of the same fund, the portion specifically bequeathed shall first be paid to the legatee, and the demonstrative legacy shall be paid out of the residue fund and so far as the residue shall be deficient, out of the general assets of the testator.
The illustration to the section reads as under:-
"A bequeaths to B, 1000 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 1500 rupees; of these 1,500 rupees, 1,000 rupees belongs to B, and 500 rupees are to be paid to C. C is also to receive 500 rupees out of the general assets of the testator."
The illustration makes it clear that a specific legacy takes precedence over a demonstrative legacy. At the same time, the demonstrative legacy can, if necessary, claim participation in the residue.
We are making in a subsequent Chapter1, a recommendation to combine sections 151 and 157.
1. Paras. 26.13 and 26.14, infra.