v. appellant was entitled to the order he sought, he could redeem KENSINGTON from the second mortgagees on payment of 5,7221. 13s. 10d. BOUVERIE. and interest, that being the balance of the charge after satisfying the first mortgage. The respondents, the Bouveries, who held the second mortgage, contended that the late lord had created a charge of 20,000l. on this estate; that he had assigned that charge to them; that they were entitled to all his interest. therein; and as the rents had not been sufficient to keep down the interest of that charge, they contended that what the late lord had paid to supply the deficiency made him an incumbrancer on the estate to that extent, and gave them, as his mortgagees, the rights to which he was entitled. The object of this claim was to exonerate pro tanto other property of the late lord mortgaged to the Bouveries. When the case came before the Master of the Rolls (1), his Honour, by a decree, dated 1st March, 1854, declared the appellant entitled to redeem the Kensington estate, upon *payment of what should appear to be due in respect of the said sum of 20,000l. and interest thereon, charged by the indenture of the 4th February, 1835, and an account was directed of what was due, and of the rents and profits received by the respondents, or which, without their wilful default, might have been received by them since the death of the late lord, and an inquiry to whom the principal and interest on taking the accounts should appear to be due in respect of the said charge, and in what proportions, &c. The chief clerk made his certificate on the 17th February, 1855, by which he certified that the principal sum was due with 1,0291. 8s. 1d. for interest, calculated from 10th August, 1852, the day of the death of the late lord, to the date of the certificate, and 721. 6s. 7d. for costs; that there was nothing due from the respondents for rents received since that day, and that the sum of 21,101l. 14s. 8d. so due, was due in the following proportions: to Lord Braybrooke and others (the first mortgagees) 14,4281. 7s. 6d., and to the Bouveries (the second mortgagees) 6,6731. 7s. 2d. on account of the principal sum of 24,500l. secured to them upon the said charge, and interest. On the 9th March, 1855, a motion was made to the Master of the Rolls to vary the certificate, and that the interest might be calculated from the 4th February, 1835, instead of the 10th August, 1852, but his Honour declined to make any order on this motion. The case was then taken by appeal to the LORDS JUSTICES, (1) 19 Beav, 39. R.R. VOL. CXV. 18 [ *561 ] 2. BOUVERIE. KENSINGTON Who directed the certificate to be varied as asked by the motion. And it was declared that as between the late lord and those claiming in remainder, he was bound to keep down the interest on the 20,000l. during his life (after the interest on the 60,000l. charged on the fee) only so far as the net receipts and profits received by him would *extend, and that the surplus was a charge on the fee, and an account was directed on this principle. [ *562 ] [*563] [ *564 ] [571] This was the order now appealed against. * The Attorney-General (Sir R. Bethell) and Mr. Eddis, for the appellant: * There are two rules which must be borne in mind: *first, that where there is a charge affecting the fee simple of an estate, the tenant for life of that estate is bound to keep down the interest out of the rents and profits, but, unless it is his own debt, his liability is confined to paying the rents and profits, so far as they will go, in discharge of the interest. The next rule is, that if there is a mortgagee who allows the mortgagor tenant for life to continue in possession, he cannot, though the interest is in arrear, have an account against the mortgagor of past rents received. Here the interest was duly paid during the life of the late lord, and there can be no claim now against the estate itself, on the mere ground that the interest which was thus duly paid exceeded the rents and profits received from it. * * * Mr. Elmsley (with whom was Mr. Southgate) for the personal representatives of the late Lord Kensington: It is for the appellant to show in what way the estate is now discharged from any part of the charge created upon it. It is not discharged either by inference of law or by the conduct of the tenant for life. The true rule is to be found in the two cases of Revel v. Watkinson (1) and Penrhyn v. Hughes (2), and it is this, that unless there is conduct on the part of the tenant for life which amounts to a discharge of the settled estate, the unpaid interest will remain as a charge upon it. There is no such conduct here, and the unpaid interest remains. as a charge. Suppose the late lord had not mortgaged the charge, he would have been entitled to the interest on it; if the rents could not discharge that interest, he would have been a creditor for the deficiency. His personal representatives stand in the same position that he did. He had incurred debts, and assigned the charge to meet them; he has not received from (1) 1 Ves. Sen. 93. 5 Ves. 99, 106. The assignee of the life estate of a tenant for life must apply the surplus income in discharge of arrears of interest previously accrued on a mortgage of the fee simple.— O. A. S. v. the rents and profits sufficient to keep down the interest of that KENSINGTON charge; he has made a will, and appointed executors, and BOUVERIE. given them duties to discharge; to enable them to discharge which duties, this interest on the 20,000l. must be paid. These facts show distinctly that he never did intend to exonerate the estate. Assuming therefore that the intention of the tenant for life is to be treated as explaining his conduct and affecting his rights, his intention to have the full benefit of this charge and the interest thereon is plainly shown. The Attorney-General replied. THE LORD CHANCELLOR (LORD CAMPBELL): My Lords, after an anxious consideration of this case, I adhere to the opinion I had formed upon it at the conclusion of the argument, that the decree of the MASTER OF THE ROLLS ought to be affirmed. I do not proceed on the ground that if a tenant for life in possession of an estate subject to a charge bearing interest, pays the interest, although the rents and profits are insufficient to enable him so to do, he might not make himself an incumbrancer for the excess of his payments beyond the amount of his rents and profits. But it seems to me that if, remaining in possession, he receives the rents and profits, and regularly pays the interest upon the charge during his lifetime, having given no intimation that the rents and profits were not sufficient to enable him to do so, or that he means to consider any excess of his payments beyond the rents and profits a charge upon the inheritance, his legal personal representatives cannot be permitted to say that such a charge exists. The controversy in this case is substantially between the present Lord Kensington and the legal representatives of his father. If the charge cannot be claimed by them, I think I can easily show that the mortgagees are in no better situation. We may begin by considering how it would have been if the late Lord Kensington had created the charge, and, without mortgaging it, had continued in possession till his death, without any intimation that the rents and profits were not equal to the interest on the charge. Upon his death, could his representatives have claimed that he had a charge upon the estate for an alleged excess of the amount of the interest beyond the amount of the rents and profits? and upon a bill filed by the remainderman to redeem the charge, could they, for the purpose of showing *that there was some, and what deficiency, have insisted on an account of the rents and profits of the estate from the creation of the charge to the death of the tenant for life? I apprehend that, under such circumstances, they would July 25. [ 572 ] [573] v. KENSINGTON have been told that there was a presumption that the rents and profits were equal to the interest on the charge, and that they could not be let in to rebut this presumption. BOUVERIE. [ *574 ] Lord Kensington having mortgaged the charge, I think his position became the same as it would have been if he had become tenant for life, the charge having been previously created in favour of third persons. I rather wonder that any question has been made as to his power to create the charge for the 20,000l. and interest, or, as to such charge having actually been created. I cannot doubt that the corpus of the estate was effectually charged with the 20,000l. and interest, and that all we have to consider is the third question made by Lord Justice TURNER, Whether the estate being so charged, the charge is subsisting so far as the rents and profits have been insufficient to answer the interest?" Now, whether a court of equity ought or ought not to hold that this charge is still subsisting, I think we must consider that in point of fact the interest upon the 20,000l. was regularly paid by Lord Kensington. Let us then consider the general question, "If the tenant for life of an estate, subject to a charge, he being bound, as far as the rents and profits furnish him with the means, to keep down the interest upon it, remains in possession, and during his life, regularly pays the interest without any intimation that the rents and profits are insufficient, or that he has any intention of charging the corpus of the estate with any deficiency, can his legal personal representatives be permitted to set up a claim for *an alleged deficiency, and to demand an account of the rents and profits during the whole incumbency of the tenant. for life?" If the tenant for life had entirely paid off the charge, most undoubtedly, as far as the principal sum is concerned, he would have a charge on the corpus of the estate, because the annual rents and profits could not be considered as supplying a fund from which the principal could be paid. But, with regard to the interest, the annual rents and profits in the vast majority of cases do, and in all may be presumed to supply a fund from which the interest may be paid. With regard to the principal, it cannot be reasonably supposed that the tenant for life means to make such a present to the remainderman, and the claim of a charge to the amount of the principal may be made effectual without any account being taken; whereas, with respect to any deficiency in the means to pay the interest, the tenant for life may reasonably be supposed to waive any right he might have to make it a charge upon the estate, he being allowed BOUVERIE. to remain in undisturbed possession and in the comfortable KENSINGTON expectation, that when he is dead and gone, no inquiry will take place into his management of the property, nor any attempt be made to charge his representatives with wilful neglect which might be imputed to him. It is said that this is a question of intention, and that there should be some evidence of intention. But Lord THURLOW said, "The smallest demonstration is enough to show that the tenant for life means to take the debt upon himself." Surely this demonstration may be by acts as well as by words, and a continued system of a tenant for life, paying the interest upon a charge which he is bound to keep down as far as the rents and profits will permit, may amount to a declaration (which he *cannot afterwards gainsay) that the rents and profits are sufficient, or that he does not mean to bring any charge upon. the inheritance for the deficiency. The most alarming inconveniences would arise from the doctrine, that in every case where a tenant for life of an estate under a charge, the interest of which he ought to keep down from the rents and profits, pays the interest regularly during his lifetime, he is to be considered as silently making himself an incumbrancer on the estate for any excess, large or small, of the payments for interest above the rents and profits. In the first place, an account must be taken, extending over the whole incumbency of the tenant for life, which may be abovo seventy years; and the enquiry must be not only as to the rents and profits which he did actually receive, but as to such as by reasonably good management he might have received: the whole management of an estate, consisting perhaps of many. thousands of acres, must be enquired into; and the result may be that there is a balance of 6s. 8d. in favour of the representatives of the tenant for life. The MASTER OF THE ROLLS, perhaps, went too far in saying that such an account could hardly be taken, but he might have said truly, that the cost of taking it would generally greatly exceed the benefit to be expected from it. Then see the injustice done to the remainderman. It being important to him to know whether the interest is kept down by the tenant for life, he may be supposed to enquire into the fact. If he finds that the interest has not been kept down, he may well suppose that the rents and profits have been misapplied by the tenant for life, and he may apply for the appointment of a receiver. Finding that the interest is regularly paid as it becomes due, he gives himself no farther thought; but upon the death of *the tenant for life, he hears [ *575 ] [ *576 | |