SUPREME COURT—IN BANCO.

Evening Star, Issue 7337, 8 October 1887, Page 4

SUPREME COURT—IN BANCO.

(Before Mr Justice Williams.) In the case of M'Leod v. National Bank and another, His Honor yesterday delivered judgment as follows:—"In this case the amount really at issue is trifling. It is true that interest for the purposes of proof stops at bankruptcy, but this rule applies only to mortgagees who come to the Court for assistance or claim to prove— ('Robson on Bankruptcy, sth ed., p. 357). Here the bank (the mortgagee) relies on its security; and as interest ia payable on all mortgages, legal or equitable, whether reserved or not ('Fisher on Mortgages,' 3rd ed., p. 984), it has a clear right to retain, at any rate, simple interest after the bankruptcy. The only question is whether, during the period of rather less than two years which elapsed between the date of the bankruptcy and the final liquidation of tie amount secured, the bank has a right to continue the account by half-yearly rests—m other words, to charge compound interest. The question depends upon whether or no the mortgage itself discloses a contract to pay compound interest. If it does, then the mortgagee is entitled to retain compound interest; if not, then, on the authority of Croskill v. liower (32 Beav., 86), simple interest only is chargeable. In the latter case, as sra*ed by Rsmilly, M.R., in his judgment (p. 94), the mortgage contained nothing which could affect the question as to whether interest was to be calculated at compound interest or simple interest. In the present case I think a contract to pay compound interest sufficiently appears on the face of the mortgage. TLo mortgage is to secure advances, and, amongst other things, usual bankers charges. "Where an account is overdrawn, it is notorious that the U3ual bankers' charge is interest on the account taken with rests. Now, the right to make this charge being given by the security would continue so long as the security remained a subsisting security, and would, in my opinion, be unaffected so far as the security is concerned by the bankruptcy of the mortgagor. I think, therefore, the bank is entitled to retain the interest it charged. I have already decided that the bank is entitled to retain the other item objected to. Summons dismissed. Costs (L 4 4s) and disbursements ; defendants' costs in the case."