1st. Objection. For that it appears, in and by the said report, and the schedules thereto annexed, that the said master in taking and stating the said accounts contained in the said schedules, has charged the said defendant with compound interest upon the sums with which he stands charged in the said accounts, whereas the said defendant should have been charged simple interest only.

2d. Objection. For that the said master, in taking and stating the accounts contained in the schedule marked F. has debited and charged the defendant with the sum of $500, on the 10th day of November, 1805, and on the 5th day of July, 1807, with the sum of $1000, and with interest upon each of the said sums respectively, from the date of each charge, until the date of his said report; whereas, the said master, in taking and stating the accounts contained in the schedule last mentioned, ought not to have debited and charged the defendant with the said sums of money, nor with interest thereon, nor with either of them, nor any part thereof.

3d. Objection. For that the said master, in taking and stating the said accounts, has debited and charged the complainant on the 1st day of August, 1800, with the sum of $600. as the amount received by him from John Prior, whereas the said master ought to have debited and charged the complainant with a greater sum of money, to wit, the sum of $800.

4th. Objection. For that the said master has reported, that from an examination of the allegations of the parties, and the proofs thereon, he had ascertained that the complainant was not in the possession of the store-house, mentioned in the pleadings in the said cause, during any part of that period which had elapsed

since the issue in the said cause, whereas the said master should have reported, that he had ascertained, that during the period above mentioned, the complainant was in the possession of the said store-house, or that the defendant was not in the exclusive possession thereof, but that the same was in the possession of the complainant and defendant jointly.

In all which particulars, the defendant submits that the draft of the said report ought to be varied and rectified.

Take notice, that the annexed are copies of the objections taken by the defendant, to the draft of the master's report in this cause, which objections were filed with the said master, on the day of

inst.

When sim.

compound in

Interest upon interest, or compound interest, is never allowed unless in special cases, as where there is a set-ple and when tlement of accounts between the parties, after the in- terest is allow terest has become due, or an agreement is then made

ed.

that the interest due shall carry interest, or the principal and interest are computed in the master's report, and the same is confirmed. But an original agreement at the time of the loan or contract, that if interest be not paid at the end of the year, it shall be deemed principal and carry interest, will not be recognized as valid. (a) If there be evidence of the subsequent agreement of the parties from time to time, that the interest then due should be converted into principal, the court will direct the master to make rests in his accounts, according to such agreements.(b)

In settling accounts between partners, the period of the dissolution of the partnership is the proper time to make a rest and adjust the balance of the partnership account; and the partner against whom the balance is found, is chargeable with interest thereon.(c)

A partner who draws money from the copartnership funds, is not chargeable with compound interest, but with simple interest only, on the sums drawn out; unless it appears that he has traded or speculated with the money, and made a profit on it, and refused on being called on for the purpose, to disclose the profits. (d)

If an executor, administrator, or trustee, negligently suffer the trust moneys to lie idle, he is chargeable with simple interest on them. If he convert the trust moneys to his own use, or employ them in his business or trade, he is chargeable with compound interest.(e) And where an administrator employed the moneys belonging to his intestate's estate in trade for his own benefit,

(a) State of Connecticut v. Jackson, 1 Rep. 209. Johns. Chan. Rep. 13.

(b) Barrow and others v. Rhinelander,

1 Johns, Chan, Rep. 350.

(c) Stoughton v. Lynch, 2 Johns, Chan.

(d) Same case, ib.

(e) Schieffelin v. Stewart and others,

1 Johns, Chan. Rep. 620,

and refused to give any account of the profits, the master, in stating an account, after allowing a reasonable time for the settlement of the estate, charged compound interest, making annual rests in the accounts for that purpose, and it was confirmed by the court.(f)

Where an interest account was stated, and a balance struck and carried to the debit of the party in a new account, and interest charged on the balance, the Supreme Court of Appeals, in Virginia, held it to be compound interest, and refused to allow it.(g)

ing interest,

payments are

The correct and legal mode of computing interest, Rule for cast. on an account between debtor and creditor, where par- where partial tial payments are made, is first to carry the payment made. to the extinguishment of the interest due. If the payment exceeds the interest due, the surplus only must be deducted from the principal, and compute interest upon the balance of principal remaining due, to the next payment. If the payment be less than the interest, the surplus of interest must not be taken to augment the principal; but interest continues on the former principal, until the period when the payments taken together exceed the interest due, and then the surplus is to be applied towards discharging the principal; and interest is to be computed on the balance of principal as aforesaid.(h)

Whether the practice prevailing among merchants, in settling their accounts to state an interest account, in which interest is charged on each item of principal on the debit side, and credited on each item on the credit

(f) Same case, ib.

(g) Lewis's executor v. Bacon's legatee, 3 Hening & Mumford's Reports, 89. 116.

(h) State of Connecticut v. Jackson, 1 Johns. Chan. Rep. 17. Stoughton v. Lynch, 2 Johns. Chan. Rep. £09,

side of the account, and balance of such interest account struck and added to, the balance of principal is to be adopted in the settlement of accounts between merchant and merchant? Quere.

But where a master, under an order of reference to him, in stating an account between the parties who were partners in trade adopted this mercantile usage, the account was allowed to stand, there being evidence before the master, from the books of account and otherwise, that the parties themselves had followed this usage, and the calculation was so made by an eminent merchant to whom the accounts were referred with the consent of the parties, and the statement as made was not questioned by the parties before the master, but was acquiesced in by them, the parties were considered as concluded thereby; but the court made this decision without laying down any rule for its government hereafter on the point, considering that in the particular case, there was enough to hold the parties to the mode of settlement which had been adopted.(i)

Filing report.

The report being signed by the master, must be filed in the office of the register or assistant register. We have no rule specifying the time within which the report must be filed; it must therefore be done within a reasonable time. In England, the report must be filed within four days after signing, but it is held sufficient if filed before any proceedings be had thereon.(a)

(i) Same case, 2 Johns. Chan. Rep: (a) 2 P. W's. 516. Newland, 173. 209.