Robinson v.
Cummings,

As to an executor creditor it is settled, that in an account with him, as to his claim, rests shall not be made.

"Mr. Cummings the defendant, being a bond creditor and made executor, in his account charged a gross sum for interest 2 Atkins 410. for 15 years, the period of his executorship. The Master allowed the charge. Exception, That he should have applied the assets as they came in, to pay off his own bond.

2 Atkins,533.

Gould v.
Tancred.

Davis v. May,

es, 238.

Lord Hardwicke said,-" The court never directs that an executor bond creditor should discharge by piece-meal the principal and interest of his bond. He may discharge all other demands before his own. But where there are assets in his hands above all other demands, he must apply them to his debt, if sufficient to pay the whole, he is not compelled to take part." Next as to mortgages in possession.

"In this case the general rule is recognized, that in taking the account of a mortgagee in possession, annual rests are to be made.

It is at the same time said that this is not the invariable rule. That it is often a great hardship on a mortgagee where the sum was large, and he could only satisfy his debt by parcels. The following case will explain the subject and shew the rule fully.

"On a bill to redeem, it appeared, that the mortgage was Cooper's cas granted 1793, the principal sum £700. From 93 to '99 the mortgagee received nothing for principal or interest, and the debt then amounted to £1000.

Cited 2 Cases from Registers books.

In '99 the Mortgagee was let into reception of the rents and profits. The rent exceeded the annual interest, so that by 1809 the whole interest as well the arrear in '99, as the current interest since, was fully paid; and the principal £700 remained alone due. Since 1809 to June 1813, the time of filing the answer, the mortgagee or his Representatives continued to receive the rents, which in each year were three or four times as much as the interest.

On an application to amend the minutes, the point was in what manner the account should be taken.

For the Plaintiffs, it was insisted, that from 1809, the annual excess of rent should be applied to sink the principal, and that therefore annual rests should be made.

On the other side, it was urged, that the proper mode was to compute interest on the £700, from the date of the mortgage, and to ascertain the amount of rents received, and deduct such amount from the aggregate of principal and interest.

That the register had searched his book for 3 years past, and found ten decrees for taking accounts of mortgagees in

dates,

possession, in only two of which, (those cited for the plaintiffs) Names and were annual rests ordered and not in the others, from which of the cases it was clear, that it was not the usual course of the court to given in a direct annual rests, unless the case was extraordinary, and note, where the mortgagor would be materially injured without it. The register had also stated, that it was not usual to direct annual rests, except under special circumstances.

The Master of the rolls said,-His recollections of the form of decrees was the same, either decrees made annual rests Here the throughout or not; there was no intermediate case. special circumstances seemed to make the other way. Rests were not directed."

From these cases it is plain, that the making annual rests in case of a mortgagee in possession is not to increase the amount with which the receiver is chargeable, but to reduce his demand; and is nothing more than to carry into effect the rule of stating an account laid down by Lord Hardwicke, and sanctioned by our court, that monies coming to the creditors hands shall be applied first to extinguish the interest, and the excess to sink the principal, and of course has nothing to do with the charging any party with either interest, or compound interest. It is to this class of cases of annual rests, that the rule, that a Master may not make them without being directed to do so by the decree, alone applies.

"Decree of redemption, and the usual direction for an ac- Webber v.

count.

Hunt, 1 Maddock's Rep.

Motion to amend the minutes, and for a direction under the 13. circumstances, for the Master to make annual rests.

The Vice Chancellor said,-He had found a difference of practice among the Masters; some make rests without any specific direction in the decree for that purpose, and some do not, but merely totalize the principal, interest and costs, and the rents and profits.

The Master is not at liberty to make rests, unless directed to do so by the decree. Cites several cases. Fowler v. Wightwich, A. D. 1810, &c.

362.

In Yeates v. Hambly, it appears, that the form of the decree 2 Atkyns, was,- "That an account should be taken of what should be coming due on account of rents and profits, to be applied in the first place in payment of interest and principal, and in sinking the principal, and the Master to make annual rests. (In the case as in Atkins, it is "in paying the interest, and then in sinking the principal.") This is the proper form of the decree where rests are to be made, but rests can never be made by the Master unless specifically directed by the decree.

In the present case annual rests are proper, and the minutes must be altered accordingly."

All the cases cited to support this rule are cases of accounts with mortgagees in possession. And besides there are instances in which, in cases of the second class before distinguished, the Master has made rests without a direction in the desree to that effect.

Second. The second class of cases in which rests are made, are cases of an executor or other trustee called to an account for sums received; and in which the annual or other balances are ascertained, that interest may be computed, if he is to be charged therewith.

There are cases where annual rests was made without being directed by the decree. "Certain freehold estates having been Earl of Lin- left to the appellant's father, subject, so far as the personal escoln, appellant, Poulton tate of the devisor should fall short, to his debts, the executor Allen, refiled a bill against the appellant, alleging a deficiency, and spondent. 4 Br. P C. 553. how it arose, and praying a sale of sufficient of the real estate. 2 Edit. The answer alleged misconduct and waste of the executor in administering; and that there was sufficient to pay the debts of the personal estate; and the appellant filed a cross bill to procure an account of the personal estate, debts, &c.

6

A decree of reference was made, to the Master to take an account of the personal estate, debts, legacies, annuities and funeral charges, reserving the consideration of the merits and costs till after the Master should have made his report.'

The Master reported, finding a balance in the executor's hands. And for the further information of the court, the Master in a schedule to his report, set forth an account by way of annual rests, showing the particular sums of the personal estate, which remained in the hands of the executors unapplied in a course of administration, at the end of each year from 1716 to 1748, which also showed what part of such unapplied sums are placed out at interest, and what remained dead in the executor's hands.'

When the cause was brought on, it was sent to the Master to review his report in not making a certain allowance to the executors, and the consideration of subsequent costs and further directions was reserved to the coming in of the report.

Upon an appeal to the House of Lords it was ordered, that after the word, "consideration," the words "of interest for the annual balance kept by the said B. Poulton in his own hands," should be inserted, and with this variation the decree should be affirmed."

So in this case,- 66 - The cause came on for further directions Newton r. Bennett, 1 upon a reserved question, whether the defendant should be Br. C. C. charged interest for sums belonging to the estate of Moore the 359. testator, and remaining from time to time in his hands.

The decree was to take an account generally and to make a separate report of the estate of Moore, come to the defendant's hands. Master Holt made his separate report making rests every year, and stating a final balance of £1688 to be due.

And the question now was, whether he should pay interest See Belt's for the sums from time to time in his hands. It was ordered Ed. note 2 that the Master compute interest upon the several rests in his report."

Annual rests are sometimes directed to be made by the decree. And this in two sets of cases.-1st, where the question of interest is reserved expressly, or the decree is silent in regard to it. And 2d, where interest is directed to be calculated. The following is an example of the first set of cases. "Themortgagee had been some time in possession, and the Quarrel. Beckford, 1 bill for an account and delivery up of the premises charged Mad. Rep. that he had been overpaid. The decree directed an account 269. of what was due on the mortgage for principal and interest; and of money laid out in necessary repairs of lasting improvements; and also to take an account of the rents, produce, and profits of the estate received by the defendant, or by any person by his order or for his use, or which, without his wilful default, might have been received thereout.—And that the said Master, in taking the said accounts of rents and produce of the mortgaged premises, do make annual rests. And, the consideration of interest and costs were reserved till the coming in of the report.

On further directions, the chief question was stated by the Vice Chancellor to be that of interest.-That the fact must be taken to be that before Trinity Term 1796, the mortgagee was overpaid by the sum of £1572, from which time each annual receipt ought to have been paid over, (deducting the current expenses of the year.) In this case the court that framed the decree have decreed annual rests, and have reserved the question of interest. I do not say that that has decided any thing on the subject, but it has put it in a course, and in a state, for the determination of the question of charging this mortgagee with interest, if it turned out to be that he was overpaid. And it was held, that the defendant should be charged interest, at the same rate as an executor having balances in his hands, viz. 4 per cent." This case is properly arranged under the

16 Vesey, 97. cited in Schiefflin v. Stewart, 1 John. C. C. 625.

Tibbs . Carpenter, 1 Madd. Rep. 293.

11 Vesey, 117.

1 Coxes Cases, 138. Lord Chan

cellor.

second class, as the annual rests, after the defendant was fully paid, operated to charge him exactly as an executor or other trustee.

It should be noticed, that the reservation of interest in a decree amounts only to this, that the court will not then decide the point; not implying, that if not reserved, the Master may compute it.

The

The decree in the case of Lady Ormond v. Hutchinson, cited by Chanceller Kent, amounts to nothing more than a reservation of interest. The terms are, "to take an account, &c. with annual rests, without prejudice to the question, whether the defendant ought to be charged with interest, or not." language of the Vice Chancellor in Quarrel v. Beckford shews that this provision was not necessary; as the direction as to annual rests decided nothing upon interest; and the clause has therefore only been inserted from greater caution.

Next. Where the decree directs rests, and is silent as to interest, it is impliedly reserved; and the Master cannot compute it.

"On a bill against an executor by parties entitled to a share in the residue, a decree was made for the usual accounts, and on further directions upon the coming in of the report, it was ordered that the Master should inquire what balances were in the executor's hands, on account of their receipts and payments set forth in the schedules to his report, at the end of one year after the testator's death, and making annual rests. Further directions reserved. The Master set forth the balances in the executor's hands, which in each year from 17 97 to 1811, with the exception of 4 particular years, were very considerable.

The Vice Chancellor stated, that one of the questions was, as to these balances and interest; and entered at large into the point, whether the interest should be simple or compound; and decreed simple only."

So Lord Elden said, in Raphael v. Boehm that in general cases rests are made in order to see whether interest is to be charged or not.

"In this case it is extremely plain, that the Master having reported so much money constantly in his hands (in consequence of the directions to him to make rests of the balance in Hallet's hands at the end of each year, and which was done with a view of ascertaining the extent of his misconduct) and Hallet having continued to pay interest on the specialty debts, without applying the money, this would fix him with interest without any further explanation."