Report No. 110

II. A Demption

26.5. Section 152-Ademption explained.-

Section 152 reads:

"152. If anything which has been specifically bequeathed does not belong to the testator at the time of his death, or has been converted into property of a different kind, the legacy is adeemed; that is, it cannot take effect, by reason of the subject-matter having been withdrawn from the operation of the will.

Illustration

(i) A bequeaths to B-

"the diamond ring presented to me by C";

"my gold chain";

"a certain bale of wool"; "a certain piece of cloth";

"all my household goods which shall be in or about my dwelling-house in M. Street in Calcutta, at the time of my death".

A in his lifetime,-

sells or gives away the ring;

converts the chain into a cup;

converts the wool into cloth;

makes the cloth into a garment;

takes another house into which he removes all his goods.

Each of these legacies is adeemed,

(ii) A bequeaths to B-

"the sum of 1,000 rupees in a certain chest", "all the horses in my stable".

At the death of A, no money is found in the chest, and no horses in the, stable. The legacies are adeemed.

(iii) A bequeaths to B certain bales of goods.

"A takes the goods with him on a voyage. The ship and goods are lost at sea, and A is drowned. The legacy is adeemed."

26.6. Amendment recommended.-

In connection with section 152, it should be noted that the conversion of an asset by legislative action falls within section 163, and is outside section 152. Thus, compulsory changes in the nature of the asset when effected by an Act of Parliament-for example, by nationalisation or otherwise,-do not fall within section 152. We consider it desirable that the case should be excluded from section 152 by express words. For this purpose, we recommend that in section 152, after the words "has been converted into property of a different kind", the words "by act of parties" should be inserted.

It is further to be noted that even as regards converted property, the section leaves no scope for a different intention. We are of the view that it should be made subject to a proviso1, whereunder the will should govern the converted property as it would have governed the original property, if such an intention can be inferred.

1. This is not a draft of the amendment.

26.7. Section 153-No ademption in case of demonstrative legacy.-

Section 153 deals with a demonstrative legacy, and its main object is to provide that there is no ademption in the case of a demonstrative legacy.

The essential distinction between specific legacy and demonstrative legacy is one born of the intention of the testator. In the case of the former, the testator shows an intention that the beneficiary should receive only a specified thing, while, in the case of the latter, the testator indicates an intention that the thing shall be taken primarily for the specified fund, but that any balance can be taken from the residue in the event of deficiency1.

The section does not seem to need any change. It may, however, be noted that the rule has been judicially construed as subject to a contrary direction in the will2.

1. Webster (in re:), Goss v. Webster, (1937) 1 All ER 602.

2. Chiunam v. Tadikonda, ILR 29 Mad 155.

26.8. Section 154.-

Section 154 deals with the ademption of a specific bequest of a right to receive something from a third party. To state in simple terms the proposition enacted in the section1, where the right to receive is bequeathed and the specific legacy is received by the testator, the legacy is adeemed2. The relationship of this particular situation with the general concept of ademption as explained in sections 152, requires brief discussion. Ademption, as explained in section 152, arises when there is a change either in the legal ownership or in the nature of the property.

This is the general concept. In the situation dealt with in section 154, though there is no physical change of the thing, the legal categorisation of the thing is changed. What was an actionable claim-"right to receive"-(a species of intangible property) is replaced by something tangible. There is no alteration of the physical nature of the property, but its legal complexion does change; and it is this altered legal complexion that causes ademption-the presumption being that the testator did not bequeath, and had no intention of bequeathing, a thing with such changed legal complexion.

1. Cf. section 153.

2. For contrast with section 162, see para. 26.18, infra.