mortgagee can retain, out of money in his hands, more than six years' 3 & 4 Will. 4, arrears (Re Marshfield, Marshfield v. Hutchins, 34 Ch. D. 721). See in the c. 27, s. 42. case of personal estate, Re Hancock, Hancock v. Berry, 59 L. T. 199. And where the executors of a mortgagee sold land and paid proceeds into court in a suit to administer the mortgagee's estate, the mortgagee's representatives were held, on their petition, entitled to be paid more than six years' arrears (Edmunds v. Waugh, 1 Eq. 418). Arrears, however, were limited to six years in other cases where the mortgaged property was represented by money in court, and petitions were presented for payment out, whether by mortgagee (Re Stead, 2 Ch. D. 713) or mortgagor (Re Slater, 11 Ch. D. 227).

In Elvy v. Norwood (5 De G. & S. 240), the heir of a mortgagor who Tacking. had covenanted for himself and his heirs to pay the mortgage debt and interest, could not redeem without paying twenty years' arrears of interest, as the mortgagee was entitled to tack the arrears to the debt as against the heir. Since 3 & 4 Will. 4, c. 104, a mortgagee of freeholds may tack his simple contract debt in a foreclosure suit as against the heir of the mortgagor (Thomas v. Thomas, 22 Beav. 341). As to a mortgagee of copyholds, see Rolfe v. Chester (20 Beav. 610). The question of tacking must be raised on the pleadings (Sinclair v. Jackson, 17 Beav. 405).

The exception in this clause of the act is, where a man has an estate Possession of and there are several incumbrances on it, and one of the incumbrancers prior incumenters into possession, the right of the subsequent creditor to recover brancer. interest during the full period of such possession, although that period may exceed six years, is saved, provided he come within one year after the determination of that possession. A judgment creditor who has the first security upon the estate, and gets into possession, is a prior incumbrancer in possession within this proviso (Henry v. Smith, 2 Dru. & War. 390). The prior incumbrance referred to in this exception is one which affects the estate or interest upon which the subsequent incumbrance is also a charge (Vincent v. Going, 1 J. & Lat. 697). A., being entitled to a mortgage on certain lands vested in a trustee for him, agrees that a subsequent annuity creditor should have precedence over his debt, and joins in a demise of the lands to a trustee for the annuitant, but his trustee who had the legal estate did not join in the demise. A. remains in possession until the death of the grantor of the annuity. The annuitant was held not debarred from recovering more than six years' arrears, as he fell within the terms of the exception (Drought v. Jones, 2 Ir. Eq. R. 303, "a doubtful authority"; Sugd. R. P. Stat. 146, n.). See also Montgomery v. Southwell, 2 Con. & Law. 263.

The nature and object of this exception is explained by Lord Westbury in Chinnery v. Evans (11 H. L. Ca. 115). There a mortgage having been created of certain estates, the mortgagor having subsequently sold the equity of redemption and assigned some outstanding charges to a trustee for the purchaser, and the purchaser having entered into possession, the land was not in the possession of a bona fide incumbrancer prior to the mortgage within this exception.

(b)

Debts secured by judgments are sums of money charged upon or payable out of land within the meaning of this section. In relation to the Statutes On judgof Limitations, the rights of judgment creditors for arrears of interest, as ments. against the real and personal estates of their debtor, are equal and coextensive. As far as the bar of the statute operates for the protection of the real estate, to the same extent the personal estate is protected. The Debtors (Ireland) Act, 1840, s. 26, enacts that every judgment debt due upon any judgment not confessed or recovered for any penal sum for securing principal and interest shall carry interest, &c. The interest thus given is subject to the limitations of the statute, R. P. Lim. Act, 1833, s. 42 (Henry v. Smith, 2 Dru. & War. 381; compare Watson v. Birch, 15 Sim. 523; Jay v. Johnstone, 1893, 1 Q. B. 190). In the case of an Irish judgment not registered as a mortgage only six years' arrears of interest are recoverable out of the judgment debtor's personal estate

3 & 4 Will. 4, c. 27, s. 42.

1 & 2 Vict.

(Macdonnell v. Fitzgerald, 1897, 1 I. R. 556). See as to the Irish judgment creditor's remedy against the land, Shea v. Moore, 1894, 1 I. R. 158.

A judgment creditor of a tenant in fee in remainder after an estate for life, is not entitled to recover out of the lands arrears of interest which accrued due during the existence of the tenancy for life, and more than six years before the commencement of the suit (Vincent v. Going, 1 J. & Lat. 697; see Wheeler v. Howell, 3 K. & J. 198; Sinclair v. Jackson, 17 Beav. 405).

Formerly a judgment did not carry interest, but interest might be recovered at law, in the shape of damages, by an action on the judgment (Gaunt v. Taylor, 3 M. & K. 302). Now by Judgments Act, 1838, ss. 17, c. 110, ss. 17, 18 (post), every judgment debt carries interest at the rate of 41. per cent. from the time of entering up the judgment until the same is satisfied. As to interest on debts generally, see p. 206, post.

18.

A contract for the sale of an estate, made in March, 1811, stipulated that the purchase-money should be paid on the 13th May following. The money was not paid, but the purchaser entered into and continued in possession. In 1849, a bill was filed to enforce the vendor's lien on the estate for the purchase-money. It was held that the principal had not become payable, as no title had as yet been shown by the vendor, and that the interest could not be due within sect. 42 until the principal money became payable. Turner, L. J., said that the interest became due upon completion, although it was to be calculated from the inception of the contract Toft v. Stevenson, 5 D. M. & G. 735).

On a reference as to incumbrances on an estate, a claim for a sum charged thereon, carried in under such inquiry by one not a party to the suit, was held to take the charge as to the interest out of this section, and the incumbrancer was entitled to arrears of interest for six years antecedent to the claim (Greenway v. Bromfield, 9 Hare, 201).

(c) Arrears of interest on legacies can only be recovered for six years, calculated from the filing of the bill (Hughes v. Williams, 3 Mac. & G. 683; Chappell v. Rees, 1 D. M. & G. 393; Re Walker, 7 Ch. 120; see Thompson v. Eastwood, 2 App. Cas. 215). But where the assets consisted of a reversion, and for the benefit of the estate realization was delayed, legatees received interest from the expiration of one year from the death of testatrix, a period exceeding six years (Blachford v. Worsley, 27 Ch. D. 676). As to interest on legacies, see Lord v. Lord (2 Ch. 782); Re Richards (8 Eq. 119); and as to the time from which such interest runs, see Re Waters (42 Ch. D. 517); Re Bignold (45 Ch. D. 496); Re Friend, Friend v. Young (1898, W. N. 26); Re Gardner, Long v. Gardner (1892, W. N. 164); R. S. C., Ord. 55, r. 64.

(d) According to the law as it stood before 1879, it was settled that where there was an express trust sect. 25 of R. P. Lim. Act, 1833, applied, and the claim was not barred by sect. 42. So held in the case of annuities secured on realty (Ward v. Arch, 12 Sim. 472; Mansfield v. Ogle, 24 L. J. Ch. 700; Cox v. Dolman, 2 D. M. & G. 592; Snow v. Booth, 8 D. M. & G. 69; Lewis v. Duncombe, 29 Beav. 175; Knight v. Bowyer, 2 De G. & J. 421; see Round v. Bell, 30 Beav. 121; Cunningham v. Foot, 3 App. Cas. 974); in the case of an annuity payable out of personalty (Playfair v. Cooper, 17 Beav. 187); in the case of a mortgage secured by a term in a trustee (Shaw v. Johnson, 1 Dr. & Sm. 412); in the case of a simple contract debt charged by will on real estate (Blower v. Blower, 7 W. R. 101); and in the case of interest on a legacy directed to be raised by a sale of realty (Gough v. Bult, 16 Sim. 323; Kellett v. Kellett, I. R. 5 Eq. 298; Thompson v. Eastwood, 2 App. Cas. 215). Now by R. P. Lim. Act, 1874, s. 10 (post, p. 213), an express trust does not prevent time running in case of arrears of rent or of interest in respect of any money or legacy charged upon or payable out of any land or rent. The section does not affect legacies not so charged or payable.

In the case of proceedings against trustees commenced after 1889, regard must now be had to the Trustee Act, 1888, ss. 1, 8 and 12, post, p. 247.

66

(e) See the cases as to acknowledgments, ante, p. 198. In Bolding v. 3 & 4 Will. 4, Lane (1 D. J. & S. 122), it was said that the words in this section, by c. 27, s. 42. whom the same was payable," do not denote merely the persons who are legally bound by contract to pay the interest, but all the persons against Acknowwhom the payment of such arrears might be enforced. ledgments.

Sect. 42 differing from sect. 40 makes no mention of part payment. So Part paythat it would seem that part payment of an instalment of interest would ment. not prevent the operation of the statute as to the balance (Astbury v.

Astbury, 1898, 2 Ch. 115).

The 42nd section contains no exception in favour of persons under dis- Disabilities. abilities; and if the act be construed literally, infants and lunatics, and other persons under disabilities, will only be enabled to recover six years' interest (see De Beauvoir v. Owen, 5 Exch. 182). "Even as to legacies charged upon real estates, there is no saving as to arrears of interest for infancy, or the like. In the case of younger children's portions, although by way of legacy, the interest is often allowed to remain in arrear for several years, for the accommodation of the head of the family; and the statute will, unless it be modified, often bar a just claim unnecessarily, and ultimately injure the person whom it was intended to benefit; and whether a legacy be payable out of real or personal estate, of course interest upon it, where it carries interest, ought not to be barred during the infancy of the legatee" (Sugd. V. & P. 638, 11th ed.).

(b)

(4) A suit for the recovery of mesne rents and profits in equity, was not a ACCOUNT OF suit for the recovery of arrears of rent within sect. 42 (Hicks v. Sallitt, 3 RENTS IN D. M. & G. 816). On the question how far the account was to be carried EQUITY. back in such suits, the following distinctions were laid down. In cases of (a) express trusts, it was said that the Statutes of Limitation would afford no From accruer defence, and that an account would be directed from the accruer of the of plaintiff's plaintiff's title (Sturgis v. Morse, 3 De G. & J. 1; Wright v. Chard, 4 title. Drew. 673; Mathew v. Brise, 14 Beav. 341; see now R. P. Lim. Act, 1874, s. 10, post, p. 213). Where there is no express trust, but the person in possession has had notice of the plaintiff's title, it was formerly held, For six years. that as at law more than six years' mesne profits could not be recovered, so in equity the account would not be carried back beyond six years from the filing of the bill (Reade v. Reade, 5 Ves. 744; Hurmood v. Öglander, 6 Ves. 215); and in Hicks v. Sallitt (3 D. M. & G. 782), where the defendant was a purchaser for value, with notice of the plaintiff's title, Turner, L. J., thought that the statute Lim. Act, 1623, might be applicable, by analogy to the action of account at law. An account for six years was granted in Hickman v. Upsall (4 Ch. Div. 144); see Burnell v. Burnell (11 Ch. D. 213). But, "where there is no trust, no fraud, no (c) infancy, no suppression, where, in short, there is a mere bona fide adverse From filing possession, it is not according to the course of the court to carry back the of bill. account of rents beyond the filing of the bill" (Hicks v. Sallitt, 3 D. M. & G. 782, where Lord Cranworth refers to the older cases; see Thomas v. Thomas, 2 K. & J. 79; Penny v. Allen, 7 D. M. & G. 409; Morgan v. Morgan, 10 Eq. 99). The principle of the rule, however, is that in order to disentitle the plaintiff to an account of rents before the institution of the suit, there must be neglect in bringing the suit (Hickman v. Upsall, 4 Ch. D. 148).

Where the plaintiff has been under the disability of infancy during the Infancy of possession of the defendant, the latter is regarded as a bailiff for the plaintiff. former, and an account will be directed during the period of infancy (Blomfield v. Eyre, 8 Beav. 250; Nanney v. Williams, 22 Beav. 452; Schroder v. Schroder, Kay, 591; Pascoe v. Swan, 27 Beav. 508; Pelly v. Bascombe, 4 Giff. 390; Thomas v. Thomas, 2 K. & J. 79; Wall v. Stanwick, 34 Ch. D. 763; see Re Hobbs, Hobbs v. Wade, 36 Ch. D. 553, and the older cases discussed in Howard v. Shrewsbury, 17 Eq. 399). But so far as regards the arrears of rent, it was said that the bill must be filed within six years after the plaintiff comes of age (Lockey v. Lockey, 1 Eq. Ca. Abr. 304, pl. 10; see as to recovering the land, Tinker v. Rodwell, 69

3 & 4 Will. 4, L. T. 591, ante, p. 152). It has been laid down in Ireland, that a person c. 27, s. 42. entering on the estate of an infant, whether the infant has been actually in possession or not, will be fixed with a fiduciary position towards the defendant, (1) when he is the infant's natural guardian; (2) when he is so connected by relationship or otherwise with the infant as to impose upon him a duty to protect, or at least not to prejudice, the infant's rights; (3) when he takes possession with knowledge or express notice of the infant's rights (Quinton v. Frith, I. R. 2 Eq. 396). See cases quoted ante, p. 127.

Laches.

In case of charities.

(5)

INTEREST ON

DEBTS GENE-
RALLY.

Interest on
debts at

Where the plaintiff has been guilty of laches an account will only be directed from the filing of the bill (Dormer v. Fortescue, 3 Atk. 130; Pettiward v. Prescot, 7 Ves. 541; Pickett v. Loggan, 14 Ves. 215; Schroder v. Schroder, Kay, 591). The right to an account, even in the case of mines, may be lost by laches (Parrott v. Palmer, 3 M. & K. 632). A party's right to an account may also be restricted in consequences of laches in not finding out a mistake earlier by the means which were in his power (Denys v. Shuckburgh, 4 Y. & Coll. 42).

There is no fixed limit of time in directing an account against the trustee of a charity. In each case the court is bound by the particular circumstances (A.-G. v. Exeter, Jac. 448). An account against a corporation for a breach of trust in receiving charity funds was not confined either to the filing of the information, or to six years before that time (A.-G. v. Brewers' Co., 1 Mer. 495; A.-G. v. Stafford, 1 Russ. 547). And an account of the rents and profits of a charity estate was decreed for a period of 200 years against the corporation, who, by their answer, admitted the receipt, and stated that they had from time to time debited themselves in their books with the amount (A.-G. v. Exeter, Jac. 443; 2 Russ. 362; 3 Russ. 395; A.-G. v. Caius College, 2 Keen, 110; A.-G. v. Pretyman, 4 Beav. 462; see now R. P. Lim. Act, 1874, s. 10, post, p. 213). Where, however, charitable trustees have acted honestly, though mistakenly, the court will not make them account for rents received prior to the filing of the information (A.-G. v. Wax Chandlers' Co., L. R. 6 H. L. 14; A.-G. v. Christchurch, 2 Russ. 324). When the court limits an account of the rents and profits of charity estates to the time of filing the information, or to six years before that date, it does not act with reference to the statute. The court proceeds upon the principle that it will not deal harshly with men, who, meaning to discharge their duty faithfully, have nevertheless mistaken it (A.-G. v. Exeter, 2 Russ. 367). The principles upon which the court acts in taking an account against corporations who are trustees of charities, and have misapplied the funds, are discussed in A.-G. v. Newbury (3 M. & K. 647); see A.-G. v. Davis, (18 W. R. 1132).

At common law, independently of statute, it was the general rule that interest was not payable on any debts, unless expressly agreed on, or unless a promise could be implied from the usage of trade or other circumstances (Higgins v. Surgent, 2 B. & C. 348; Rhodes v. Rhodes, Johns. 653; see L. C. D. R. v. S. E. R., 1892, 1 Ch. 140). An agreement to pay common law. interest was inferred where a tradesman delivered accounts charging interest which were not objected to, and the customer made payments on account (Re Anglesey, Willmot v. Gardner, 1901, 2 Ch. 548. Semble, Re Lloyd Edwards, Williams v. Trench, 61 L. J. Ch. 22, is overruled on this point). In some early cases it was said that interest might be given where a debt was wrongfully detained (Eddowes v. Hopkins, 1 Doug 376; Arnott v. Redfern, 3 Bing. 353; see the later dicta in Caledonian Rail. Co. v. Carmichael, L. R. 2 H. L. Sc. 66; Webster v. British Co., 15 Ch. Div. 174; L. C. D. R. v. S. E. R., 1892, 1 Ch. 153). But this was said to be inconvenient by Lord Tenterden, who laid down the rule that interest is not due on money secured by a written instrument, unless it appears on the face of the instrument that interest was intended to be paid, or unless it be implied from the usage of trade, as in the case of mercantile instruments (Page v. Newman, 9 B. & C. 381). This rule is not now open

c. 27, s. 42.

to question (L. C. & D. R. v. S. E. R., 1893, A. C. 441). Unless by express 3 & 4 Will 4, agreement, interest can only be claimed on a bill or note as damages (Ex p. Charman, 1887, W. N. 184; see Bills of Exchange Act, 1882, ss. 9 (3), 57; Lawrence v. Willcocks, 1892, 1 Q. B. 696).

The Civil Procedure Act, 1833, enacts (sect. 28) that upon all debts or 3 & 4 Will. 4, sums certain, payable at a certain time or otherwise, the jury, on the c. 42, ss. 28, trial of any issue, or on any inquisition of damages, may, if they shall 29. think fit, allow interest to the creditor at a rate not exceeding the current rate of interest from the time when such debts or sums certain were payable, if such debts or sums be payable by virtue of some written instrument at a certain time; or if payable otherwise, then from the time when demand of payment shall have been made in writing, so as such demandant shall give notice to the debtor that interest will be claimed from the date of such demand until the time of payment; provided that the interest shall be payable in all cases in which it is now payable by -law. The act provides further (sect. 29), that the jury, on the trial of any issue, or on any inquisition of damages, may, if they shall think fit, give damages in the nature of interest, over and above the value of the goods at the time of the conversion or seizure, in all actions of trover or trespass de bonis asportatis, and over and above the money recoverable in all actions of policies of assurance made after the passing of this act.

Lord Tenterden was the author of the above statute, which was passed with reference to the rule laid down by him in Page v. Newman, sup. (L. C. & D. R. v. S. E. R., 1893, A. C. 440). Sect. 28 was declaratory of the Sect. 28. law before the statute (Webster v. British Co., 15 Ch. Div. 173, 178). Under both sect. 28 and sect. 29, any interest given is by way of damages (Ib. 174, 175; see Re Roberts, Goodchap v. Roberts, 14 Ch. Div. 49).

The act gives the jury a discretion, "if they shall think fit" (Attwood v. Taylor, 1 M. & G. 322; 4.-G. v. Ludlow, 1 Hall & T. 219). And interest will not be given where there has been no default on the part of the person against whom interest is claimed (4.-G. v. Ludlow, sup.; Webster v. British Co., sup.). There must be either a written demand or a written instrument under which the sum is payable (Harper v. Williams, 4 Q. B. 219). A written application for a loan was not such a Written written instrument (Taylor v. Colt, 3 H. & C. 452; 13 W. R. 78). The instrument. instrument must ascertain the sum and the time (L. C. & D. R. Co. v. S. E. R. Co., 1892, 1 Ch. 144). Six months after death is a time certain (Re Horner, Fooks v. Horner, 1896, 2 Ch. 188). Where the instrument does not mention the time certain, but contains provisions which on the happening of an event render the time certain, this is not sufficient within the statute. (Merchant Co. v. Armitage, L. R. 9 Q. B. 114; L. C. & D. R. v. S. E. R., 1892, 1 Ch. 120; see contra, Duncombe v. Brighton Co., L. R. 10 Q. B. 371). The sum certain must be due absolutely, and in all events (L. C. & D. R. v. S. E. R., 1893, A. C. 436). Interest was allowed where the instrument gave data for ascertaining the amount, and a dispute as to such amount was settled by the court (McIntosh v. G. W. R. Co., 4 Giff. 683; see Newton v. Nock, 43 L. T. 197).

A demand in writing may entitle the jury to give interest from date of Demand in demand, although the writing claimed interest from a prior date (Londes- writing. borough v. Mowatt, 4 El. & Bl. 1). The demand need not specify the exact amount of the debt (Mildmay v. Methuen, 3 Drew. 91, a demand for work and labour in an administration suit; Geake v. Ross, 32 L. T. 666, disapproving Hill v. South Staffordshire Ry. Co., 18 Eq. 154; see Ex p. Kemp, 1894, 3 Ch. 702). A solicitor may give notice that he will claim interest on his bill of costs delivered (Berrington v. Phillips, 1 M. & W. 48; see Ward v. Eyre, 15 Ch. D. 130). And where the client is dead the notice should be given to the representative, even where an administration action is pending (Re McMurdo, 1896, W. N. 171). A summons in a winding-up was a sufficient demand (Ex p. Alison, 15 Eq. 394). But an answer in a Chancery suit was not (Ward v. Eyre, sup.);