Law Dictionary of Legal Terminology

ANNUITY

ANNUITY, contracts. An anuity is a, yearly sum of money granted by one party to another in fee for life or years, charging the person of the grantor only. Co. Litt. 144; 1 Lilly's Reg. 89; 2 Bl. Com. 40; 5 M. R. 312; Lumley on Annuities. 1; 2 Inst. 293; Davies' Rep. 14, 15.

2. In a less technical sense, however, when the money is chargeable on land and on the person, it is generally called an annuity. Doet. and Stud Dial. 2, 230; Roll. Ab. 226. See 10 Watts, 127.

3. An anuuity is different from a rent charge, with which it is frequently confounded, in this; a rent charge is a burden imposed upon and issuing out of lands, whereas an annuity is chargeable only upon the person of the grantee. Bac. Abr. Annuity, A. See, for many, regulations in England relating to annuities, the Stat,. 17 Geo. III. c. 26.

4. An annuity may be created by contract, or by will. To enforce the payment of an annuity, the common law gives a writ of annuity which may be brought by the grantee or his heirs, or their grantees, against the grantor and his heirs. The action of debt cannot be maintained at the common law, or by the Stat. of 8 Anne, c. 14, for the arrears of an annuity devised to A, payable out of lands during the life of B, to whom the lands are devised for life, B paying the annuity out of it, so long as the freehold estates continues. 4 M. & S. 113; 3 Brod. & Bing. 30; 6 Moore, 336. It has been ruled also, that if an action of annuity be brought, and the annuity determines pending the suit, the writ faileth forever because no such action is maintainable for arrearages only, but for the annuity and the arrearages. Co. Litt. 285, a.

5. The first payment of an annuity is to be made at the time appointed in the instrument creating it. In cases where testator directs the annuity to be paid at the end of the first quarter, or other period before the expiration of the first year after his death, it is then due; but in fact it is not payable by the executortill the end of the year. 3 Mad. Ch. R. 167. When the time is not appointed, as frequently happens in will, the following distinction is presumed to exist. If the bequest be merely in the form of an annuity as a gift to a man of "an annuity of one hnndred dollars for life" the first payment will be due at the end of the year after the testator's death. But if the disposition be of a sum of money, and the interest to be given as an annuity to the same man for life, the first payment will not accrue before the expiration of the second year after ihe testator's death. This distinction, though stated from the bench, does not appear to have been sanctioned by express decision. 7 Ves. 96, 97.

6. The Civil Code of Louisiana makes the following provisions in relation to annuities, namely: The contract of annuity is that by which one party delivers to another a sum of money, and agrees not to reclaim it, so long as the receiver pays the rent agreed upon. Art. 2764.

7. This annuity mav be perpetual or for life. Art. 2765.

8. The amount of the annuity for life can in no case exceed the double of the conventional interest. The amount of the perpetual annuity cannot exceed the double of the conventional interest. Art. 2766.

9. Constituted annuity is essentially redeemable. Art. 2767.

10. The debtor of a constituted annuity may be compelled to redeem the same: 1, If he ceases fulfilling his obligations during three years: 2, If he does not give the lender the securities promised by the contract. Art. 2768.

11. If the debtor should fail, or be in a state of insolvency, the capital of the constituted annuity becomes exigible, but only up to the amount at wich it is rated, according to the order of contribution amongst the creditors. Art. 2769.

12. A similar rule to that contained in the last article has been adopted in England. See stat. 6 Geo. IV., c. 16, s. 54 and 108; note to Ex parte James, 5 Ves. 708; l Sup. to Ves. Jr. 431; note to Franks v. Cooper, 4 Ves. 763; 1 Supp. to Ves. Jr. 308. The debtor, continues the Code, may be compelled by his security to redeem the annuity within the time which has been fixed in the contract, if any time has been fixed, or after ten years, if no mention be made of the time in the act. Art. 2770.

13. The interest of the sums lent, and the arrears of constituted and life annuity, cannot bear interest but from the day a judicial demand of the same has been made by the creditor, and when the interest is due for at least one whole year. The parties may only agree, that the same shall not be redeemed prior to a time which cannot exceed ten years, or without having warned the creditor a time before, which they shall limit. Art. 2771. See generally, Vin. Abr. Annuity; Bac. Abr. Annuity and Rent; Com. Dig. Annuity; 8 Com. Dig. 909; Doct. Plac. 84; 1 Rop. on Leg. 588; Diet. de Jurisp. aux mots Rentes viageres, Tontine. 1 Harr. Dig. h. t.