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Opinion of the Court.

paid. It cannot, therefore, be now held that the appellant has been misled to his disadvantage in having acted upon the faith of any of the previous decrees of the court in the cause.

The question, however, still recurs whether the rule for computing interest on the debts as the basis of distribution adopted by the court in its decree of January 5, 1884, is correct as a matter of law. On this point there is no reason for doubt. The decree of sale, as we have already stated, contained no finding of the amount of the indebtedness, nor of the persons to whom it was owing, and no order for its payment as a condition of redeeming the property from the necessity of sale. But the report of the master of April 21, 1876, contained a full and carefully prepared detail of all the items constituting the indebtedness, with a list of the creditors, a classification according to the order of priority in the matter of lien, and a calculation of interest to October 15, 1875, upon all debts, except those embraced in class No. 1, in respect to which special provision was subsequently made showing the total amount then due to each creditor. It is not stated anywhere in the record why the date of October 15, 1875, was selected by the master as a place of rest in the calculation of interest, but it must have been taken as the most convenient day for calculations in reference to closing the report, which evidently required considerable time for its preparation. If the calculation had been made as of the date of the decree for sale, with a view to the insertion therein of the amounts due to the several creditors, on payment of which the sale might be averted, the interest would have been brought down most properly to that date and added to the principal to constitute the whole sum then payable. If not paid at that time, the aggregate of principal and interest thus combined would have constituted the new principal, which, according to the uniform practice of the court, would bear interest from that date. In that case there could have been no complaint made against compounding interest. We think a similar effect must be given to the decree of the court confirming the master's report made April 28, 1876. It substantially declared the amount due October 15, 1875, as consisting of the principal

Syllabus.

sums and interest to that date added for the purposes of the sale and distribution, and the decree of January 5, 1884, directing the calculation of interest for purposes of distribution upon the aggregate amount of the principal and interest as of October 15, 1875, was only a proper explanation of the decree of April 28, 1876, confirming the master's report. The date of the confirmation of that report was a suitable period in the progress of the cause, where the creditors were so numerous and the calculations so complicated, for the court to fix, for the information and guidance of all concerned, the amount severally due to each creditor with the order of priority in which he was entitled to be paid. The amounts to be found due necessarily embraced the principal sum with the accrued interest up to a fixed date, and from that period the aggregate became the sum of the debt, the whole of which thenceforth properly carried interest. No exception was taken to the report; it was confirmed by the court; and, in our opinion, it cannot reasonably bear any other construction than that which the court subsequently placed upon it.

Upon the whole case, no injustice has been done the appellant; and the decree of the District Court of West Virginia is Affirmed.

EASTON v. GERMAN-AMERICAN BANK.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK.

No. 291. Argued May 4, 1888. - Decided May 14, 1888.

A creditor whose debt is secured by a deed of trust of real estate to a third party as trustee, may purchase the property at a sale by the trustee under the terms of the trust; and if he credits the debtor on the mortgage debt with the amount of the purchase money, it is in fact and in law a money payment to the use and benefit of the debtor.

The plaintiff in error acquired by the purchase from the assignee in bankruptcy no interest either in the debt of the bankrupt to the defendant in error, or in the real estate conveyed in trust to secure it.

Statement of the Case.

THE Court stated the case as follows:

On April 14, 1875, the firm of Bowen Brothers, of Chicago, borrowed of the German-American Bank of New York the sum of $27,500, for which they gave their promissory notes, payable, respectively, in two, three, and four months from date. As collateral security for the payment of the loan they deposited with the bank forty bonds executed by themselves, payable to bearer five years from date, with interest semiannually, of the denomination of $1000 each, dated April 1, 1873, the payment of which was secured by a deed of trust made by the individual members of the firm to George W. Smith, conveying to him certain real estate therein described, situated in Cook County, Illinois. By the terms of the written agreement, under which the collateral security was deposited, the bank was authorized, on non-payment of the notes at maturity, to sell the bonds either at the board of brokers, at public auction, or at private sale, and without notice; and to apply the proceeds of the sale to the payment thereof. These collateral bonds thus deposited were part of a series of one hundred of like tenor and amount, all secured by the deed of trust to Smith. That deed of trust provided that, in case of default in the payment of the bonds or interest, it should be lawful for the trustee, on the application of the holder of any of the bonds, to sell the real estate or any part thereof, and all the right and equity of redemption of the grantors therein, at public vendue, to the highest bidder, for cash, and, upon making such sale, to execute and deliver a deed of conveyance in fee of the premises sold. In January, 1877, the trustee in the trust deed, upon the application of the State Savings Institution of Chicago, the holder of thirty-two of the bonds upon which there had been a default for non-payment of interest, sold the real estate in strict conformity with the terms of the power in the trust deed, after due notice, at public auction, to Wirt Dexter, for the sum of $50,000, and conveyed the premises to the purchaser in pursuance of the same. Dexter, in making the bid and purchase of the premises at public auction, acted as agent for the holders of all the bonds,

Statement of the Case.

including the German-American Bank, he having been authorized by them to bid for and purchase the property for them jointly. Thereafter he conveyed an undivided forty one-hundredths of the property purchased by him, and in a partition suit that interest in the real estate was set off, to the GermanAmerican Bank in severalty. Dexter paid no money in bidding in the property except the actual costs of the sale, but the trustee credited upon the bonds held by the GermanAmerican Bank forty one-hundredths of the amount of the bid, being $472 upon each bond; and the whole sum, amounting to $18,880, was indorsed as a payment on the three notes. The German-American Bank continued to hold title to the real estate conveyed to it by Dexter until February 8, 1881, when, in consideration of $56,000, the bank conveyed the same in fee to John C. Dore, and thereafter, in February, 1882, also delivered to Dore the forty bonds then in its possession with the credits indorsed thereon. These bonds were delivered to Dore in accordance with an agreement dated February 19, 1881, which recited that Dore "desires to obtain possession and ownership of said forty bonds in connection with the purchase of said property from said bank.”

In the meantime, the members of the firm of Bowen Brothers, on November 10, 1877, were adjudged bankrupts on a petition filed on June 2 of that year; and during 1878 they severally received their final discharges in bankruptcy. On April 21, 1880, Robert E. Jenkins, assignee in bankruptcy of the Bowen Brothers, by an order of the court, sold all his right, title, interest, and claim as assignee, and all right, title, interest, and claim of the bankrupts in and to the land described in the trust deed, to Carl F. Hermann for the sum of $840, and afterwards conveyed the same to him by deed dated and acknowledged May 13, 1880. The assignee also on April 21, 1880, sold to the appellant, Charles L. Easton, for the sum of $5, the claim against the German-American Bank of New York "for interest in all collaterals pledged with said bank by said bankrupts or either of them;" and by a deed dated May 15, 1880, assigned the same by the same description to him.

Statement of the Case.

It was not denied that John C. Dore purchased the land from the German-American Bank with knowledge of the previous conveyances by the assignee in bankruptcy, to Hermann and to Charles L. Easton.

On February 24, 1881, James H. Easton, a brother of the appellant, having succeeded to the title of Hermann to the land in question, filed a bill in equity in the Circuit Court of the United States for the Northern District of Illinois, against the German-American Bank, to which, by an amended and supplemental bill, John C. Dore was also made a defendant, in which were set forth substantially the facts stated in the present bill of complaint, and praying for an account against the German-American Bank, and that the complainant might be permitted to redeem the land on payment of what might be found due on the original loan to Bowen Brothers. It is admitted that this suit was brought in the name of James H. Easton, for the benefit of Josiah H. Helmer, the latter having previously acquired the title of Hermann and conveyed it to James H. Easton in order to enable the suit to be brought in the Circuit Court of the United States. Helmer himself had previously brought an action of ejectment to recover possession of the land. The ejectment suit was abandoned when the bill in equity was filed; and pending the bill, in September, 1883, before the commencement of the present suit, a settlement was made between Helmer and Dore, whereby, in consideration of a certain sum paid by Dore, both Helmer and James H. Easton, the latter at Helmer's request, by separate deeds released all their right, title, and interest in and to the lands in question to one Berger for the benefit of Dore.

On January 27, 1884, the present bill in equity was filed, wherein Charles L. Easton, claiming title by virtue of the deed of assignment made to him by Jenkins as assignee in bankruptcy of the Bowen Brothers, seeks to hold the GermanAmerican Bank accountable to him for the sum of $56,000, as the proceeds of the collaterals held by it realized from the sale of the real estate conveyed to the bank by Dexter, and a decree for any sum found due to it by reason thereof after payment from the said proceeds of the original indebtedness of Bowen Brothers to the bank.

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