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Tous les autres exemplaires originaux sont filmds en commen^ant par la premiere page qui comporte une emprainte d'impression ou d'illustration et en terminant par la derniAre page qui comporte une telle empreinte. Un des symboles suivants apparaftra sur la dernlAre image de cheque microfiche, selon le cas: le symbols —^ signifie "A SUIVVtE ", le symbols y signifie "FIN". Les cartes, planches, tableaux, etc., peuvent dtre filmAs A des taux de reduction diffirents. Lorsque le document est trop grand pour dtre reproduit en un seul cliche, il est film6 A partir de I'angle supArieur gauche, de gauche d droite, et de haut en bas, an prenant le nombre d'images ntcessaire. Les diagrammes suivants illustrent la mithode. 'rata o leiure. J 32X 1 2 3 1 2 3 4 5 6 COl HIS REPOl ^^^ i*r SUPKBME COURT IN EQUITY. COIMERCIAl BAM TS. WMOT AND OTHERS. JUDGMENT OP HIS HONOR CHIEF JUSTICE BITCHIB, DELIVERED 9th MARCH, 1806, OVERRULING EXCEPTIONS OF THE PLAINTIFFS TO THE REPORT OF JOHN M. ROBINSON, ESQUIRE, BARRISTER, UNDER REFERENCE IN THE ABOVE CAUSE, BY DECRETAL OR DEE, DATED 80th SEPTEMBER, ■l8«2, AND CONFIRMING SUCH REPORT. ST. JOHN, N. B. PRINTED BT BARNKS AND COUIANV. 1866. SUPREME COURT IN EQUITY. COMMERCIAL BANK TS. WILMOT AND OTHERS. JUDGMENT or HIS HONOR CHIEF JUSTICE RITCHIE, DELIVERED 9th MARCH, 1866, OVERRULING EXCEPTIONS OF THE PLAINTIFFS TO THK REPORT OF JOHN M. ROBINSON, ESQUIRE, BARRISTER, UNDER REFERENCE IN THE ABOVE CAUSE, BY DECRETAL ORDER, DATED SOxn SEPTEMBER, 1862, AND CONFIRMING SUCH REPORT. ST. JOHN, N. B. FRINT80 BY BARNEU AND COMFAXV. 186tt. C( BI ] ref( am the mis diK Bil anc to use ha\ or I qui l)Ul irio pla cia aiK J. wli wo if] shi; by aiK tifl the bot arc iiK J att Co ref CoMMEECIxVL BAiNK vs. WILMOT AND OTnEPwS. 9th March, 1866. 3( Otli September, 1862, it was Robinson, Esq., a Barrister, to inf|uiro KITOHIE, C. J. By decretal order, dated referred to John M. Rob insc, ^., , _ ^ and take an acconnt uf the amount due the plaintitTs on the mortgages in theh* Bill set forth, and of monies paid by them for ])remiums of insurance, taxes, and other ex- penses, payable by mortgagee in possession of the pre- mises, and what monies have been paid by them for interest dne on the mortgage to Thomas Merritt, in plaintiffs' Bill mentioned, and also to take an account of the rents and profits of the mortgaged ju'cmises which have come to hands of plaintiffs or others, by their order, or for their use, or which, without their wilM default, they might have received, and in what manner the same have been or should be applied. And the Barrister was also to in- quire and report, if defendants should desire the same, but not otherwise, whether J. M. Wilmot and K. D. Wil- mot, or either of them, at any time transferred to the plaintiffs any shares of the capital stock of the Commer- cial Bank of New Brunswick, and upon what account, and whether the same have been credited by plaintiffs to J. M. Wilmoi:, deceased, and if so, at what time and upon what account, and at what rate, and whether the same were credited at the proper valnc, or how otherwise ; and if not so credited, what is or are the proper value of such shares resj)ectively, and what dividends have been received l)y the plaintiffs therefrom, and whether there was any aiid what dol)t due by the said J. M. Wilmot to the plain- tiffs, upon which tlie same ought to be credited, and wdie- tlier there is any and what sum due thereon. And for the better taking the said account and discovery, all parties are to produce, &c. And the said Barrister was also to inquiro whether it was advisable that a seile of the mort- gaged premises should take place, &c. By virtue of which order, the Barrister, having been attended by the parties, by their respective Solicitors and Counsel, proceeded to inquire into the matters to him so referred ; and reported that having taken the account and M M mado the allowances and charn^cs in tlic manner therein mentioned, he found and eertiiied that the plainlillk' Hiorti^'a^'o debt was overpaid by tho rent received by theiu tor the quarter ending the first day of February, A. D. 1802, and that, after tlio reeeipt of that (inarter's'ront, the i)laintifl8 owed tho defendants a balance of £47 ITs., and that on receij)t of the (piarter's i-ent due; the first of Fe- bruary, tlien last past (1806), tho i)laintifr3 were indebted to the defendants in the sum of £007 17s. ; that deiend- ants having been permitted to receive the rents subsefpient to the said first day of February, ho had nothing further to charge on that account. ^ To this report the plaintiffs excepted, Ist, That tlie Bar- rister has charged the plaintiffs with three several quar- terly payments of rent of £100 each, due on the first days of August and November, 1842, and the first day of b^e- bruary, 1843, against the monies expresfod to be payable in and by tho mort<^agcs B and C, instead of against the debt due the plaintiffs, and ])roposed to be secured by the Letters C d e and C d, and tho mortgage P. 2ndly. That the Barrister has certified that a certain promissory note for £010 lis. 3d., with tho interest ac- crued thereon, was included in the mortgage C, and represented by certain other notes mentioned in that mortgage, and that he had deducted the amount of one of the said notes from a certain amount of Bank IStock divi- dends and interest, and had charged the pain tiffs with the balance or sum of two hundred and fifty-seven pounds eight shillings and eightpence (£257 8s. 8d"), according to the statement made in his said report ; whereas the said Barrister was not authorized by the said order to make any such inquiry, charge, or appropriation, and if he was so authorized, there was no evidence before the said Bar- rister to justify his finding that the notes mentioned in tho mortgages, or any of them, were a renewal of the note for £010 lis. 3d., nor of any valid subsisting agreement witli reference to the Bank' Stock, such agreement, if it ever existed, having been cancelletl and put an end to by the parties thereto, nor of any other facts or circumstances to warrant the Barrister in making any such inference, statement, appropriation, or charge. But if the said note for £010 lis. 3d., was paid or satisfied by any other notes or securities given in lieu thereof, then, according to the Barrister's report of the circumstances, the said R. D. Wilmot mif^lit ho entitled, ])y a proper Buit to ])C l)rf)u;^lit lor aiu^li ]mi'poso, to liiivo tlic B:ink Sto(;k, which lie hiul triiMslt'iied to tho plaintiU'ri, ro-trfiiisfurred to hiiu ; h\U. no sniii of money, nuittcr or thin«^ urisin!irri8tcr was not authorized or empowered under the ank Stock y>cr statement in his report £257 Hs. 8d., with interest thereon — whereas no credit should have been allowed therefor. And 4thly. That the Barrister has found a!id certified that there is a balance due to the defendants ui)on the ac- counts and dealings between the plaintiffs and defendants in respect of such mortgage, whereas lie ought to have certified a balance due to the plaintiffs. These exceptions were argued before me by counsel for the parties respectively, on the 5th, 0th, and 8th August. I have, as soon as other judicial engagements would ]K'rmit, referred to the evidence before, and Judgment delivered by me in this cause, in September, 1862, carefully perused the evidence before the Barrister, and considered his report^ and the exceptions taken thereto. I will now proceed to deal with such exceptions in their order. As to the first, the objection is sim])iy that the throe first (piarters' rent, received by plaintiffs from the mortgaged premises, ought not to be credited to de- fendants on the mortgages set forth in the i^ill, and for convenience designated "B" and"C," but that when rcv^cived they should have been and were by plaintiffs cre- dited against a debt or debts due plaintiffs, and, as alleged in the exception, proposed to be secured by Letters marked " C d e," and " C d," and the mortgage marked " P." ^ The Letter " C de" would seem to have been the origin 1 6 of the moi'tp;apjc tmiisaetion : it was a siini)le propohitioii, 111 no way bimlni*^ tho property, and we iiiid l>y the rocordd of tho Bank, as rc^iorted hy tliu Darristur, that " At a Hp(!(!ial mectiii;; of I)irectorH,*Oth Noveuiher, 1841, '' prthujit, tlie I'n'riidont, ^[r. McLHiiclusion is fully corroborated and sustained by the additional evidence before the Master, from which I may quote, first a copy of the Minutes of tho Board of Directors : — " At a meeting ** of Directors, IGtli May, 1842, present, the President, Mr. " M(;li:ui,sj;liliii, Mr. 1 U)li', Mr. Wanl, Mr. HaimiioiHl, Mr. '' IN'rUiiiH, Mr. Simoiuls, Mr. UedoU, Mr. Travis, Mr. Jlii/('ii. " Tlio Bounl proceed (.'(l witli tlio . Wilmot, " dated 4th July, 1842, and upon which letter being read, " it was resolved that Messrs. Hazen and Whipple, along " with the President, be a Committee to make arrange- « ments with Mr. Wilraot." On the 7th, from the same source, we find that " At a meeting of Directors, held 7th " July, 1842, the Board proceeded with the discount sheet, " after which the President, on behalf of the Committee " appointed to make arrangements with R. D. Wilmot, " reported that they had attended to that duty, and read " a minute of the agreement entered into with Mr. Wilmot, (( K '9 " and Nvhicli agreeir.enl. Wcae unanimously concurred in by " the Board, and resolved tliat tlie same be earned into " effect with all convenient despatch." The result of this, no doubt, was the " C " mortgage, which was dated the 14th of the same month, and was given with a proviso for payment of twelve notes, bearing even date therewith, amounting in all to £2,807, which notes were particularly set out in the mortgage, but which, it would seem, were never actually given. On the hearing, there were notes put in evidence with reference to whic'li I find in my last Judgment as follows :— " The amount of these notes, with " the interest added to the times when the same are made " payable respectively, would seem to correspond with the " notes mentioned in' this mortgage, as being endorsed by " these payees respectively, and so may afford a probable " conjecture that these were the notes intended to be se- " cured by this mortgage. That this is accurate, with respect " to the note in favor of Mr. K. D. Wilmot, for £610 lis. " 3d., his evidence makes apparent ; for he says, after sta- " ting his belief that the notes mentioned in the mortgage " were never given, ' I remember that these notes, " ' statpd to have, been given by myself, represent an •• ' amount of £604 Ss. 2d., which was the amount of J. M. " ' Wilmot's note in my favor, for which a new note for £610 lis. 3d., was given, signed by me, as agent for J. ' M. Wilmot, and endorsed by myself, in my own name, ' to the Commercial Bank, previous to the execution of ' that mortgage, and 1 think that the amounts stated in " ' tliat mortgage, with interest, would be the amount of " 'said original note for £604 Ss. 2d., and interest to the' " ' time of payment named in the mortgage ; either that or " ' the note substituted for it for £610 lis. 3d." ' The Bar- rister having been satisfied that these were the debts in- tended to be secured by this mortgage, allowed plaintiffs, and I think rightly, the several amounts as mentioned in the mortgage. Thus we see the securing a general indebt- edness, as contemplated by mortgage " F," was corrected, and the security on the mortgaged premises confined to certain specific liabilities. On the 25th July,. the plaintifts gave Fotherbys, the tenants in possession of the mortgaged premises, notice of the mortgage of the 6th November, 1841, and required Fotherbys to pay the rents to them, and not to J. M. Wilmot. In my last Judgment this is ob* served on as follows—" This proceeding is not explained,. 10 " and Mr. Hazen says he cannot say why this notice was " issued after the second mortgage was given, and it is the " more singular, as at the time it was given the first pay- " ment, under the mortgage of 6th November, 1841, had " not become due, and but three days previously the Bank " liad recorded the substituted mortgage of the 1st June, " 1842, unless it might possibly have been under some " such arrangement as that proposed by Mr. R. 1). Wil- " mot, in his letter of July 4th, 1842, (C d)." Be this as it may, it is abundantly clear the plaintiffs went into re- ceipt of the rents and profits as mortgagees, and in no other character, and from that time received the rents accruing due, and continued in receipt of the rents and profits of the mortgaged premises to the 1st February, 1865. Having thus pbr-ed themselves in the position of mortgagees in possession, by virtue of their mortgage interest, they con- trolled the tenants, and required them to account to plain- tiffs for the rents. What then was it their duty to do with the rents when received ? clearly to discharge the mortgage debt, and so relieve the property from the burthen of the mortgage, and restore it when so discharged to the mort- gagors. This the Barrister has done ; but the exception says the three first quarters' rent should have gone against the debt due plaintiffs, and proposed to be secured by letter " C e d ;" in fact, so they have. Mortgage " P " was obvi- ously taken to secure the proposition in that letter, or the final arrangement to which that letter led. The Solicitor advises that the security so taken would not effect the object intended ; he is required to draw up a new mortgage, which will, and have the same executed as early as pos- sible : it is done, and mortgage " B " is taken ; but the exception again says, these three quarters should go against the debt due plaintiffs, and proposed to be secured by letter »« d "_so in fact they have. That letter was considered at a meeting of the !^oard, 5th July. A committee was appointed on 7th July. That Committee reported. They read a minute of the agreement entered into with Mr. Wilmot — either that letter, or the final arrangement in- duced by it ; and the Board resolved that the same be car- ried into effect with all convenient despatch. And it is done, and on the 14th July, mortgage "C" is given, though not acknowledged until 4th August, or recorded until 6th September, which, howeve- in my opinion, does not affect the case, as when acknc ^dgcd and recorded it i 11 otiee was d it is tlic first pay- L841, had the Bank Ist June, ider some I. 1). Wil- Be this as it into re- n no other accruing profits of ). Having tgagees in they con- t to plain- ;o do with mortgage len of the the mort- exception ue against d by letter was obvi- ber, or the 3 Solicitor effect the mortgage, rly as pos- ra ; but the So against by letter considered nittee was ,ed. They with Mr. ;ement in- me be car- And it is is given, r recorded nion, does recorded it would, as between the parties, take effect from its date. But lastly, tlie exception says the three quarters' rent should have been credited to mortgage " P." We have seen how conclusive the evidence is that mortgage " P " was a mistake, and did not continue a valid security, there- fore instead of its being credited on an erroneous and non- subsisting security, it is credited on the corrected securities substituted in lieu thereof. But apart from all this, con- clusive as I think it is, to show that the Barrister placed all the receipts from the mortgaged premises to the credit of the right accounts, viz., the mortgages "B" and "C," what say the Bank about it. Their counsel in this cause says they had the right to appropriate the three quarters' rent outside the mortgages "B"and "C," and having such right, they did so appropriate them. As to the first proposition, the right so to appropriate and turn the rents and profits of the mortgaged premises from the payment of the mortgage debt, could only exist by virtue of a clear agreement between the mortgagor and mortgagee, of which, throughout the case, I can discover not one tittle of evidence. On the -contrary, Mr. R. D. "Wilraot, before the Barrister, distinctly swears that neither he nor his father ever agreed to the rents of the mortgaged premises being applied in liquidation of any other sum or sums than those included in mortgages " B" and "C ;" and how does the conduct of the Bank, by its books and oflicers, correspond with the contention of their counsel on this point, or on tlie second proposition that the Bank did so appropriate them. We find that no special account, as I think there ought to have been, was opened with these mortgaged premises. All the rents were received and credited to Mr. Wilmot generally. Mr. Sancton says, " I think there was " no separate account of the Market Square mortgage " opened in the books of the Bank. There was no sepa- " rate account of the £1,750 Commercial Bank Stock kept: " tliere was but one general account of all transactions " with John M. Wilmot. The entries of the rent are in " the handwriting of T. B. Milledge. All those entries " after Mav, 1 84:3, were made while I was in the Bank. " !N"o directions were necessary for making those entries : " they were made as a matter of course, as daily transac- " tions of tne Bank. I presume the clerk who made those entries was aware of the existence of the mortgages " B " " aud '* C=" I don't know whether lie v^as or was not. a ■14 , 12 " I prosnmo I was aware of the exifitenco of those mortga- *' jros as tliey wore there when I first went to the Baiik. " 1 don't know whether Mr. Wihnot was aware of those " entries or not." In other words, all amounts received were entered generally as cash received, on account of J. M. Wilmot, without reference to any particular account or security. But let us see how the Bank acted, hyits officers, in response to the application of Mr. J. L. Wilmot and other defendants' solicitation to them for accounts. Three in number are furnished, marked respectively, Q. U. Y. The first (U), in the handwriting of Mr. Hazen, the Solici- tor, is certainly only a rougli, informal, memorandum of account, furnished to J. L. Wilmot. It is headed " Memo, of rents received by Commercial Bank— paid quarterly ;" and the first item is—" One year, to 1st May, 1843, £400." It then goes on to 1st May, 1858. At bottom—" Memo. " of mortgages— 1st June, 1842, £1,035. 14th July, 1842, " £2,807, with interest." On the other side is headed— " Charges on Property." The items are then given. The first item of rents- one year, to 1st May, 1843 — covers the three quarters in dispute. Here then, we have the first appropriation of the rent in question. It was pre- viously to this, in the but one general account of all the transactions with J. M. Wilmot, and certainly it is here credited by one, of all persons, the best qualified to place it to the right account : he having had all to do with preparing the securities ; a Director of the Bank, present at the meet- ing of 16th May, 1842 ; the Solicitor of the Bank, who, at that meeting was directed to draw up a new mortgage agreeably to Mr. Wilmot's letter ; who was also present as a Director at the meeting of oth July, 1842, who was then appointed one of a committee, with Mr. Whipple and the President to make arrangements with Mr. Wilmot, which committee, on 7th July, 1842, reported to the Board, and who, as Solicitor, subsequently drew the mortgage " C ;" which we have seen, was obviously the way m which the minute of agreement was carried into eff*ect, in accordance with the resolution of the Board. But Mr. Hazen does not stand alone in giving the mortgaged premises credit for this amount. After defendants had employed counsel, two accounts are rendered, one a strictly formal account, the other, a memorandum of charges and credits, made up by or under the immediate superintendence of Mr. Sanc- ton, the Cashier-, both of which give the mortgages B and 13 mortga- le Baiik. of those received Lint of J. jcount or 3 officere, mot and u Three :i. u. Y. le Solici- ndum of " Memo, irterly ;" 3, £400." " Memo, ily, 1842, [leaded — en. 7, 1843— we have was pre- .f all the t is here ">lace it to )reparing the meet- , who, at mortgage ) present who was ipple and Vvilmot, le Board, ige " C ;" rliich the icordancc izen does es credit I counsel, account, made up Ir. Sane- res B and u I G credit for the three quarters'' rent. Mr. Sancton says, looking at the mortgages B and C, " I liad these mortga- " ges in my hands at the time I made up the accounts — (Y " and Q ;) — the other mortgage (P), I had no reference to. ' The first item of the account is 1842, let August — One ' quarter's rent, £100 ; Ist Nov., do., £100. 1843,1st '* February, one quarter's rent, £100." Kere again was Mr. Sancton, the proper responsible offi- cer, to see that the accounts of the Bank are accurately made out, with all the records, vouchers and documents of the Bank before him, making up the accounts and render- ing them in precisely the same manner, so far as the ap- propriation of these sums are concerned, as the Solicitor had previously done ; and in answer to a question by Mr. Jack as to what this account was given to John L. Wilmot for, says, " It was given to Mr. Wilmot for the purpose " of shewing how the account stood on the books ;" that is, that he could see v/hat amounts the Bank had credited his father, and also what amounts the Bank had paid on ac- count of that property for his father or his estate ; and as to the materials he had for making up the accounts, he says, '" I made that account (Y) from the books and papers in the *' Bank in connection with that estate," the Wilmot estate ; and again, " In making up these accounts I had before me " the books of the Bank, the mortgages, and a memoran- " dum accompanying the settlement with Mr. Wilmot at " the time he gave the securities ;" and to no more legiti- mate course, as regards the interests of the Bank, could lie have referred. It is, however, now contended that he was in error, which error it is alleged the books of the Bank establish. Without stopping to enquire how this could affect defendants, 1 have looked at the accounts re- ferred to, taken from those books, and have found nothing, in my opinion, to impugn Mr. Sancton's accuracy on this point. I have also looked carefully through the evidence, but have failed to discover one word from Mr. Hazen or Mr. Sancton or Mr. McLaughlin, or from the mouth of any of the witnesses, indicating that such approjiriation was incorrect. I think, therefore, had the Barrister not allowed the sums as he did, he would, under the evidence, have done n-; i Test injustice to the defendants. I there- fore am constrained to sustain his report on this point, and overrule the exception. The second exception relates to certain Bank stock trans- u f'orred by J. M. Wiliiiot and K. D. Wilmot on tlie Ist De- cember, 1841, whicli the Barrister reports was received by tlie plHintittri as collateral secnritj for two several promis- sory notes both of the same date as the transfer, drawn by '[..M Wilniot in favor of li. D. Wilmot, and endorsed by iiim to plaintifts, payable in three months, one for the sum ot £1,427 Ss. 6d., and the other for £610 lis. 3d., and both bearing interest from date. He further reports that IVfo i""*^^ ^^ ^^*^' ^'^^^^ ^^'^^ ^^ or about the 20th April, 1843, the transfer became absolute, and that the par value of such stock, £1,750, together with £3710s.,and£1.5 Is 8d., 't -ir ?i7M ^'^^'^^^^^ thereon, were placed to the credit of J. M. VVilmot on account ; and he further reported that no other evidence had been presented to show that any new or ^pocihc arrangement with regard to such stock or dividends was made between the parties at the time. He also found and certified that the note for £610 lis. 3d., with the in- terest accrued thereon, was included in the mortgarre C. Ihat the note for £610 lU. 3d. being thus covered" by the security of the Bank stock and mortgaged premises, after ai)propriating the proceeds of stock and dividends to the payment of the note for £1,427 6s. 6d., there remained a balance ot £257 8s. 8d., which he adopted as a payment, j)7'o(anio, of the note for £610 lis. 3d., leaving the balance to be discharged as a part of the mortgage debt by the rents of the mortgaged premises. To determine whether the Barrister was right in so dealing with the proceeds of the Bank stock, it will be necessary to ascertain first, the purpose for which the stock was transferred ; and upon this point, I think, the evidence leaves no room for doubt. We have from the archives of the Bank M'hat I cannot but con- sider most indisputable testimony— a document under the hand of the proper officer G. C. Partelow,the then cashier, ilie lirst side of the sheet contains an account shewinr^ a balance, Nov. 30th, 1841, against J. M. Wilmot of £1,427 5s 6d., and on the opposite page are the words following : John M. Wilmot having transferred to a Committee ap- " pointed for the purpose, 50 shares, and R. D. Wilmot 20 shares, of the capital stock of this Bank, as collateral a w-V^^^^ ^^^' *^' ^- '^i^'^ot's two notes in favor of R. D. Wilmot, dated this day, and payable in three months for ' £1,426 5s. 6d., and £610 lis. 3d., I do h.ereby promise ^^ and agree, on behalf of this institution, to furnisn or re- ' turn to the said parties respectively, when the said notes a a e Ist De- cived by I prom 18- ', drawn endorsed B for the 3d., and orts til at :li April, >ar value tSlsSd., jredit of I that no 7 new or ividends 30 found I the in- gage C. I by the les, after is to the lained a ayment, balance ; by the whether ceeds of rst, the pon this •t. We but con- ider the cashier. 3wing a £1,427 owing : ;tee ap- Imot 20 •1 lateral f RD. itliK for promise h or re- d notes 15 u f'\f^'^- ^l'% ^ciid capital stock. Coinniorcial Bank of ^. i» , baint John, 1st December, 1841. (Signed) G C '' Purtelow, Cashier :» this being subsequent to the lettei* o November 4, 1841, in which the lirst reference an 1 pioposal as to the Bank stock appears. Mr. Sancton says there was a paper in Bank with reference to the he Identities this as the paper, and says he presumes it was a copy ot what Partelow gave Mr. Wilmot at the time It 18 the only record of the terms on which the JianJf. stock was given and received, and it is not im- peached by evidence on either side. The document itself '/inTi '^ «?"''' .''^H'^ o"^^ ^'^^* ^l'*2^ ^«- 6^- ^8 to the «.blO lis 8d. note, Mr. Sancton, when under examination, after looking at notes marked A 16 and A, and at the discount book, says, " I believe those two promissory notes are the same notes referred to in the paper and niemoran- dum written and signed by Mr. Partelow, and marked 1) 1 ; he 13 then asked, Were the three notes mentioned in the mortgage C, made by John M. Wilmot for £213, £219 and £226 respectively, renewals of the £610 lis. 3d. note mentioned in the memorandum or paper marked D 1 • to which he replies, "Looking at the papers and books, I'be- lieve that the note for £610 lis. 3d., marked A 16, was u 1" ., Il '"^ ^^'^ security marked C, and was represented a t^Vt w.7^^ "^^^^ mentioned in that mortgage as made by J. M. Wilmot in favor of R. D. Wilmot." And on re-px- amination by Mr. Jack, he traces back the note of £610 lis. 3d. to the note of £604 Ss. 2d., as follows, " The entry 1 reterred to with reference to the note for £610 Us. 3d., 18 in foho 498 of journal or cash book No. 7. The entry 18 a note of John M. Wilmot in favor of E. D. Wilmot on demand for £604 8s. 2d., with interest from date, ^^ dated about 16th October, 1841. I think that would be «' fi Tnln! 2^te, according to the calculation of interest : mat i:.604 8s. 2d. note appears to have been renewed by « hp'i^^mu^' ^^'^"'^^ ^^ ^*^^^ «f ^-^' Wil«iot, marked T> 1 : ^ . ^^ ^^® ^^^^^ conclusively that both the liank stock and mortgage C, covered a portion of the same indebtednass, viz., the £610 Us. 3d. note. Now clearly the Bank wore bound to appropriate the Bank stock and divi- dends, when realized, to the discbarge of the indebted- ncss tor which they were held as aecnrity. ro far as th- i ■ f ' < riiimo would extend, uidoss some now aiTan«i^eiiient hud been entered into with respect thereto ; of M'liich I quite ui^ree with the Barrister^ there is not the slightest evidence. The agreement and the law so appropriated it, therefore on tlie 28th of April, 1843, when both parties admit the par value of the stock, and £53 Ss. of aividends thereon were placed to the credit of J. M. Wilniot, on account. The note for £1,427 6s. 6d., with the interest due on it, was paid, and the balance of £257 Ss. 8d., became a pay- ment on account of the note for £610 lis. 3d., being the most favorable appropriation for tlie Bank. When, there- fore, it was made apparent to the Barrister, in taking the account of the amonnt duo on the mortgage C, tliat a por- tion of one of the notes secured by it had been discharged by another fund, I think he was acting strictly within the order of reference, and quite right in reducing from the date of such discharge the charge against the mortgaged premises to that amount. The exception argues that Mr. K. D. Wilmot might bo entitled, by a proper suit to be brought for such purpose, to have the Bank stock, or, I presume, the balance, after paying the first note, retransferred to him ; but he sets up no such claim, and urges no objection to the view of the Barrister, and he could not, successfully, in my opinion, for the simple reason that it has been appropriated precisely, in accordance with the terms upon which he transferred it. I therefore am bound to sustain the report on tliis point also, and overrule the exception. The result of my ruling on the two first exceptions, disposes of the third and fourth exceptions, which must likewise be overruled. I regret much the delay and expense to which the par- ties have been put in this tedious and complicated litiga- tion. I cannot but think that much trouble and expense would Imve been saved to all parties, had the records of the I3ank exhibited, in a plain, clear manner, the several agreements entered into with Mr. Wilmot ; and had the books of the banik contained accounts, shewing each trans- action as it resUly was : an account of general indebted- ness, when there waa such, with only credits legitimately entitled to go to reduction of such indebtedness, and a separate account of each special security, with only tho credits which belonged to it, and which should go to no other, instead as they appear to have been all carried into one general account, without any reference to their special application. linen t luid cli I quite t evidence, therefore admit tlio Is thereon 1 account, due on it, ne a pay- being the ion, there- taking the hut a por- lischarged vithin the ; from the mortgaged I might be h purpose, mce, after lie sets up iew of the pinion, for precisely, isferred it. tliis point my ruling and fourth h the par- ited litiga- d expense records of he several id had the jach traiis- indebted- gitimately ess, and a only the no other, i into one jir special 17 It appears to me, if they did not intend to keep proi>er records and proper books of separate and special ti-aniac- tions with Mr. Wilraot, and wished to escape intricacy and contusion, and, as a consequence, trouble and litigation, they should not have had separate and special transactions with In*?' S '^ "^ i* i\owever for me to say that the present cashier and officers of the Bank cannot justly be held responsible tor the difficulties, if any, which may have arisen from the oose manner in which these transactions would seem to have been recorded, and the original accounts opened, and entries made in the books, as these occurrences took place before their connection with the Bank. I overrule the exceptions, and reserve the question of costs.