66 No. 3. Burdick v. Garrick. - Notes. In But this rule is applied only in cases of gross misconduct, such as employing the funds in business, trade, or speculation, or where the trustee has refused to disclose the profits or interest realized on the trust money. most of the cases, if not all, where the trustee has been charged with the highest rate of interest or profits for using the trust fund in his own business, the trust fund was embarked by him in his business, or used in trade or speculation. The same principle is applied where the trustee has neglected or refused to disclose the interest or profits realized on the trust fund. "Justice GRIER, in Barney v. Saunders, 16 How. 535, clearly and tersely states the rule as follows: On the subject of compounding interest on trustees, there is, and indeed could not well be, any uniform rule which could justly apply to all cases. When a trust to invest has been grossly and wilfully neglected, where the funds have been used by the trustees in their own business, or profits made, of which they give no account, interest is compounded as a punishment, or as a measure of damages for undisclosed profits, and in place of them. For mere neglect to invest, simple interest only is given.' "In Schieffelin v. Stewart, 1 Johns. Ch. 620, where the administrator had used the money of the estate in his business, and had made large loans for his own benefit, and had not disclosed the profits of the money so invested, Chancellor KENT said: 'The only question in the case is whether the charge of compound interest be proper. It was the duty of the administrator to have made distribution of the assets or placed them in a situation to become productive, and to accumulate for the heirs. He did neither, but employed the money in his own business or trade, or in making large loans for his own benefit; and as he has not disclosed, as he might have done, to the Master, what were the profits of the assets so employed, it appears to me, as well on principle as on authority, that he is justly chargeable with the interest (compound) contained in the report. The only way for the plaintiff to avoid this conclusion was by fairly disclosing what he had made by the use of the money. It is certain that the allowance of compound interest is often essential to carry into complete effect the principle of the Court, that no profit, gain, or advantage shall be derived to the trustee from his use of the trust funds. It secures fidelity and removes temptation, and it is the ground of the allowance of annual rests in taking the account where the executor has used the property and does not disclose the proceeds.' The same principle is laid down by Chief Justice TILGHMAN in Fox v. Wilcocks, 1 Binney, 194; also in Findlay v. Smith, 7 Serg. & Rawle, 264. In McCloskey v. Gleason, 56 Vt. 264, Judge Ross, in delivering the opinion of the Court, says: 'Instead of relaxing the rule charging the trustee — who so intermingles the trust estate with his own that he cannot tell what property belongs to the estate, nor what gains he is making thereon - with the highest legal rate of interest, and allowing him nothing for his services, it should be made more stringent.' 999 In Ames v. Scudder, 11 Missouri Appeals, 168, it was held that compound interest would not be charged against negligent trustees, where there was no "realization of profits on the assets, or any withdrawal of funds from their legitimate channels of accumulation," nor facts raising "any presumption that the assets would have been increased in any way if the line of duty had been more strictly followed." Where a testator and his executor had been partners, and the latter, without separating the interest of the former in the firm property and assets, continued to employ it in the business, he was charged with compound interest. Hannahs v. Hannahs, 68 New York, 611: "While compounding interest is in some sense a penalty for negligence or wrong-doing, the executor here was properly chargeable with negligence." INTERPRETATION. SECTION I. General Principles of Interpretation of Written Instruments. IN the interpretation of written instruments, the rule is to gather from the whole instrument the intention of the person or persons whose mind is presumed to be expressed by the instrument. The grammatical and ordinary sense. of the words is to be adhered to, unless that would lead to absurdity or some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified so as to avoid that absurdity or inconsistency, but no further. VOL. XIV. - 37 No. 1. Cholmondeley v. Clinton, 2 Mer. 171-176. Cholmondeley v. Clinton. 2 Merivale, 171-362; 2 Jacob & Walker, 1-201 (22 R. R. 83, 84 et seq.). Interpretation. Principles of. - Destination in Plain Words. -Context. G. being tenant in fee of an estate derived from his inaternal grandfather, S. R., by a deed, in 1781, reciting that he was desirous that the estates should remain in the family and blood of S. R., and to the intent that the estates night continue in the family and blood of his late mother on the side of her father, settles the estates to the use of himself for life, remainder to the heirs of his body; for default of such issue as he should appoint: for default of appointment, "to the use of the right heirs of S. R." G. was at the time of the settlement himself the right heir of S. R. Held: by Sir W. GRANT, M. R., and a majority of the King's Bench, that the ultimate limitation was, in effect, a limitation to G. himself and his heirs; by BAYLEY, J., dissenting from the judgment of K. B., and by Sir T. PLUMER, M. R., that the intention of the limitation was to bring in the person of the mother's family who would be heir, on the heirs ex parte paternâ being excluded. The suit of Cholmondeley v. Clinton was a suit in which various points were keenly contested. It was ultimately decided by the House of Lords on a ground which is now beyond controversy by statute (3 & 4 Will. IV., c. 46); namely, that a suit to establish a right to possession under an equitable title is barred by the same limitation which would be a bar to recovery under a legal title. The case will here be only reported upon the point which was elaborately argued before Sir W. GRANT, M. R., and afterwards before Sir T. PLUMER, M. R., as to the construction of the ultimate limitation in a certain deed of 1781. This was a settlement in the form of a lease and release, made by George, Lord Orford, of an estate which had come to him, through his mother, from his maternal grandfather, S. R. This indenture of lease and release was dated the 1st and 2nd of August, 1781, and expressed to be made between the said [176] George, Earl of Orford (described as only son and heir of Robert, Earl of Orford, by Margaret, his wife, who was daughter and only surviving child and heir of Samuel Rolle, who was only son and heir of Robert Rolle, Esquire, by Arabella, his wife, who was daughter and co-heir of Theophilus Clinton, Earl of Lincoln and Baron Clinton), of the one part, and Joshua Sharpe of the other part. It recited the will of Samuel Rolle, and his death, leaving his daughter Margaret him surviving, her marriage with Robert, Earl of Orford, and her death, leaving him, the said No. 1.- Cholmondeley v. Clinton, 2 Mer. 176, 177. George, Earl of Orford, her only son, who thereby became tenant in tail of the premises; and recited an indenture of bargain and sale and recovery (by which the premises became vested in himself in fee), and that he was " willing and desirous that the said premises should continue and remain in the family and blood of the said Samuel Rolle." It was then witnessed, that " for and in consideration of the natural love and affection which *the said George, Earl of Orford, had and bore unto his [* 177] relations, the heirs of the said Samuel Rolle, and to the intent that the manors, &c., and hereditaments thereinafter mentioned might remain, continue, and be in the family and blood of his late mother, the said Margaret, Countess of Orford, on the side or part of her father, the said Samuel Rolle," and for other considerations, he, the said George, Earl of Orford, conveyed, &c., all and singular the manors and hereditaments therein mentioned (being the estates devised by the will of Samuel Rolle), to the said Joshua Sharpe, his heirs and assigns, to the use of him, the said George, Earl of Orford, for life; and after his decease to the use of the heirs of the body of him, the said George, Earl of Orford; and for default of such issue, to the use of such person, &c., for such estate, &c., as the said George, Earl of Orford, by deed or will, should appoint; and in default of appointment, " to the use of the right heirs of the said Samuel Rolle for ever." And in the said deed was contained a general power to the said George, Earl of Orford, of revoking the uses therein before specified, and of limiting and declaring new uses of the same premises, or any part thereof. The said George, Lord Orford, subsequently mortgaged the estate to pay off certain incumbrances. He died on the 5th of February, 1791, without issue and intestate as to the equity of redemption. At the time of his death (or rather at the instant before his death, when the default of exercise of the power of appointment became determined), the person who would be accurately described as the right heir of Samuel Rolle was George, Lord Orford, himself. But in the arrangements made upon his death, it was assumed by all parties that the intention of the settlement was that the estate should go to the person representing Samuel Rolle by way of descent from his mother, Arabella, and this construction was acted on, and the estate possessed, accordingly, for more than twenty years. No. 1. Cholmondeley v. Clinton, 2 Mer. 177–341. The judgment of Sir W. GRANT, M. R., was, so far as relates to the question of construction of the settlement of 1781, as follows: [340] The MASTER OF THE ROLLS. The substantial question in this cause is, which of the parties is entitled to an estate which, being derived from a gentleman of the name of Samuel Rolle, is denominated the Rolle Estate? Lord Clinton and his father had, for more than twenty years before the filing of the present bill, been in the undisturbed possession of this estate, and had been considered as the undoubted owners of it. The plaintiffs now say, that it was under a mistake with regard to the effect of a deed executed in 1781 that this long enjoyment had been permitted; that, when the late Lord Clinton took possession of the estate, it really belonged to the late Horace Walpole, Earl of Orford, and from him has either descended to the plaintiff, Lord Cholmondeley, as his heir-at-law, or passed to the other plaintiff, Mrs. Damer, as his general devisee. The estate is subject to a mortgage made prior to the time when the right of either of these parties accrued; and it is from this circumstance that the question of title comes to be discussed in a Court of equity. The plaintiffs, assuming that the equity of redemption is in them, or one of them, filed this bill, for the purpose, first, of redeeming the mortgage, and secondly, of obtaining from Lord Clinton [* 341] the possession of the estate, and an account * (for a certain period, at least) of the rents and profits which he has received. The mortgage has, in point of fact, become vested in a trustee for Lord Clinton; but that does not in any degree affect the substance of the question between the parties. The last undisputed owner of this estate was George, Earl of Orford, who died in the year 1791. He had succeeded to it on his mother's death, as tenant in tail under the will of his maternal grandfather, Samuel Rolle; and having suffered a common recovery, became seised of the fee, subject to a mortgage for a term of years, which he afterwards converted into a mortgage in fee. Being the absolute owner of this estate, he (in 1781) executed a settlement of it, on the effect of which the first question in the cause depends. After a recital, to which I shall afterwards more particularly advert, he limited the estate to the use of himself for life; remainder to the heirs of his body; remainder, in default of such |