Story v. Livingston

delivered the opinion'of. the- Court.

This cause haying been before this Court at its term in 1837, it was then decreed, that the decree of the District Court, dismissing the bill of the complainant, should be reversed; that' the cause should be "sent' back for' further proceedings in the.Court below, with directions that it should be referred to a master, to take an ■ account between the parties. The mandate then recites the principles upon which the accoimt was to be made;;' provides the time within which any sum that may be found to be due to either'of the parties should be paid after the entry .of affinal decree in the Court below; directs, if a sum shall be found due to the complainant, a surrender and reconveyance of the property fropa the defendant to the complainant, or to such person or persons ás shall be shown entitled to the same;' and further orders, in the event of a sum being found to - be due to the defendant, if it'shall not be paid within.six months after a final decree of the District' Court upon the master’s report, that the property shall be sold by order.of the District Court, at .such time and notice as the Court shall direct; and that the proceeds be first applied to the payment of the balance due the'defendant, and that the residue, therepf be paid to the complainant.

•In pursuance of the mandate, the District Court appointed Duncan N; Hennen master, to examine into and: report upon the account according to the rules, and principles established in the judgment of this Court. The master was swprn in open Court, fáithfully to perform the duties of his appointment. On the same day the master • ordered a-meeting to be .held on the 6th of March, which was adjourned to the 8th; when he commenced, the reference by taking testimony in behalf of the" complainant, and it was adjourned to the next day. . The meeting was then' adjourned to the 24th March, when other testimony was taken; was then adjourned to the 1st .April; thence; on, the application of the defendant, was adjourned to tlje 15th April, and the' reference was closed the day after. All the, meetings were attended by. the ’parties; the complainant being represented by counsel, and the defendant having .been personally , present, aided by counsel. After these proceedings were had, the defendant’s counsel, in November following, obtained an order from the.. Court upon the corhplainant; to "show cause why the “suit *365 should not be stricken from the. docket, the bill of the complainant dismissed, or the suit abated ;” which. rule was returnable on the 1st December. The grounds relied upon to sustain this motion were, 1. That Edward Livingston,'the former complainant, departed this life on day of and before the hearing of the cause in this Court, at the spring term thereof in 1836:

3. The said Livingston departed this life before the making or •.enrolment of the decree at the spring term of the year 1836; consequently the Court could not then entertain any jurisdiction of the cause.

3. This cause has never.been regularly revived in the name of the present complainant; nor could it be so' revived by the laws and usages of chancery practice, Mrs. Livingstop. claiming as a" devisee. This rule was continued from time to time under, sundry orders of the Court, until the 18th of December, when ,the Court rejected and overrule-i the motion. This motion wé have noticed, not only because it was a singular, attempt to oust the jurisdiction of the Court over the cause, after it had been decided on its merits in the Supreme Court,, and the. Court below was acting under its mandate; but, because from the time when it was made, and when the rule was granted, the defendant having hot before objected ;to the reference ■ to the master, and having joined in all the prodeedings under that reference; it cannot be. viewed in apy other light than an attempt to prevent the master’s report from being returned to the Court, instead, of contesting its conclusion, and the master’s proceedings .under the mandate, by regular exceptions., It presents an anomaly without any parallel in the history of chancery proceedings'; placing an inferior tribunal, acting under the mandate of a superior, in- the attitude of reversing the judgment of the latter — calling upon it . to disregard' the mándate altogether — to revokuits'oWn proceedings under such mandate — and, in effect, to, act in contradiction to the sole’authority by which the District Court was in possession of. the cause. •But the motion being overruled, on the same day the master presented his report to the Court, which was read and filed. The following exceptions weré then made to the report 'of the master by the defendant:—

1. That chancery practice has been ábolished by a rule of the Court, ánd such proceeding is unknown to the practice of thé Court.

3. The master has'erred in not allowing to the defendant the thousand dollars, with interest, paid to Morse, or some part thereof.

3. The master’s report does not show that it reports all the evidence taken'before the master.'

4. The master, in making his estimates and calculations, has not pursued the mandate of the Court.

5. It appears, from the-master’s report, that the stores were rented from November to November; and he erred in assuming the 1st of April as the period of payment of annual rent.

6. A reasonable allowance should have been made to Story for the costs arid risk of collecting rents. . .

*366 7. The. master erred in all his charges against the -defendant; and failed to allow the defendant his proper credits.

. All of these exceptions, except the third, are irregularly taken, and might .be disposed of by' us; without any examination óf them in connexion with the master’s report. They aré too general; indicate nothing but dissatisfaction with the entire report; and furnish no specific grounds, as they shofild have done, wherein' the defendant has suffered ány wrong,, or as to which of his rights have, beén disregarded. Strictly, in chancery practice, though it is' different in some of our states', no exceptions to a master’s report can be made, which were not' taken before the master: the object being to save time, and to give him ab opportunity to correct his errors or reconsider his opinion. Dick. 103. A party neglecting to bring in objections, cannot afterwards except to the report, Harr. Ch. 479; unless the Court, ón motion, see reason to be dissatisfied with the report,’ and refer it to the master to, review his report, with liberty to, the •party to take objection to it. 1 Dick, 290, Madd. Rep. 340. 555. But without restricting exceptions to this course, we must observe, that exceptions to a report of a master must state, article by article; •those parts of the report which are intended to be excepted to. Exceptions to reports of masters in chancery are in the nature .of •a special .demurrer; and. the party objecting must point, out the error, otherwise the part , not excepted to will be taken as admitted. Wilkes vs. Rogers, 6 Johns. 566.

The.Court directed the master to amend his report, so as to state that it contained all the evidence given, under.the reference, which ■the master did by his.certificate; and this disposes of the defendant’s-•third exception. To that certificate the defendant’s counsel did not object. In-the subsequent proceedings in the Court, upon the report, it was treated by both parties as conclusive of the fact; that all the evidence had been disclosed in the report as it was originally made-•The report was then before the Court , upon exceptions by the defendant, which were'argued by the counsel of the respective' parties; and the Court overruled the exceptions on the 15th January, and decreed the; defendant to pay to the 'complainant, within six months from that day, thirty-two thousand nine hundred and fifty-eight dollars eighteen cents, the sum found by the master to,be due by the. defendant to the complainant; and' further'“décreed that the master’s report be in all other respects confirmed, and that the-defendant conform to the decree of the Supreme Court in the case.”' After this décree was made, the defendant filed a petition for a rehearing. The grounds taken in the petition are reasons against the confirmation of. the report on account of the Court’s proceedings -upon it, by which the defendant'alleges he had been deprived of an opportunity to except to the report as.it had been amended. That the cause upon the report had not been docketed regularly for trial, on account of the master’s having taken testimony viva, voce, when it should .have been by depositions upon interrogatories; that the Court in its decree had not disposed of the question of costs; and *367 that the Court in its general direction to the defendant to do all things directed by the mandate of the Supreme Court, had left it uncertain to whom the defendant was to surrender and to convey the property.' The Court after this petition"had been answered by-the complainant, heard an argument upon the motion. The judge finally overruled the application for a rehearing; and decreed that, the defendant should surrender and reconvey the property described in the bill of complaint, to Louise Livingston, widow and executrix, and devisee of Edward Livingston, deceased, and to Cora Barton, daughter and forced heir of said Edward Livingston; in conformity to the decree of the Supreme Court of thé United States, and to the decree heretofore made; in pursuance thereof, by this Court. This-decree was made bn the 6th February, 1837. The cause is now regularly before • this. Court, on an appeal "from the decree of the District Court, overruling the defendant’s exceptions to the master’s report, and confirming the same. But .before we .consider the exceptions, we think it proper to notice the-petition for a rehearing. Upon any matters in that petition, not directly touching the master’s report, but assuming what this Court did -or did not decide or direct to be done by its mandate, it -is only necessary to repeat what this Court said in ■ ex parte Story, 12 Peters, 343. “ The' merits of the controversy were, finally decided by thfe .Court, and its mandate to the District Court; require only the executipri of its de.cree.” As to the Objection, that the defendant had,not an opportunity to'except to the master’s report as it was amended, it is founded upon a misconception of the fact, for the defendant’s third exception, that the report did not show that it .reports the evidence, and the Court simply allowed the master to certify that it did. If this certificate had not been allowed by the Court, the exception coulcl not have prevailed, muess the several allegations, that'the evidence did,not appear in the report, had been accompanied by a specification of .the particulars in which it was deficient. On such an ..exception, supported by the oath of the party making it, or without oath if the opposite party joins in the exception without requiring the exception to be verified by affidavit, the Court would call upon the master’to report the evidence. We have noticed- this exception as a point of practice. The truth of the exceptions not appearing on the face of the proceedings, and not being supported by affidavit-or otherwise, the Court cannot notice the exceptions. Thompson vs. O’Daniel, 2 Hawk. Rep. 307.

The next objection in the petition for a rehearing, that the master, under the order of the Court, did-not possess the power to take testimony; and that if he did possess such power, then it was irregularly exercised, because it should have been by depositions upon interrogatories"’; we notice also; as- points of practice, not now to be settled, but which have been long- since determined. In a reference to a master for any purpose, the order need not particularly empower him to take testimony, if the subject matter is only to. be ascertained by evidence. And in taking evidence, though *368 the better plan is to take the answers in writing, upon written- interrogatories ; he may examine witnesses viva voce, the parties to the suit being'present, personally or by counsel, not objecting to such a course,(as was the .case in this instance,) and joining in the examinatiom .Such is the general rule in chancery. In- many, if .not in most of the states.in this Union, however, it is the practice for the master to examine witnesses viva voce, and to take down their answers in writing.' But the objection in both its parts is answered and overruled by the twenty-eighth rule of practice for the Courts of Equity of the United States. That rule provides for bringing witnesses before the master, for their compensation, for an attachment for a' contempt, when a witness refuses to appear upon subpoena; •and the last clausé’bf it, allowing the examination of witnesses viva voce, when produced in open Court. We think the same reasons which allow it to be done in open Court, permit it to-be done by a' master. But it is said, the decree-of the District Court does not provide for the payment of costs. This toó, is a point Of practice, which we remark need not be a part of the decree or judgment, though it-often is so; as the payment-of them in most cases depends upon rules, and when rules do not apply, upon the Court’s order, in directing the taxation of costs.

We how proceed to examine the exceptions taken by the defendant, tó the master’s report. -The first, “ That chancery practice has' been abolished by a -rule of the District Court of Louisiana, and that such proceeding is .unknown to the practice of the Court,” is not an exception to the report, but a denial of the propriety of the reference, to the master: also, -of the'Court’s authority to- make such a reference under the mandate, and involves the assertion that' the rule,, if any such exist, may control the mandate and set it aside as a nullity. No such rule appears in the record. If any such exist, it certainly was disregarded in this'- instance, (as it should be in every other by the Court,) or was not deemed applicable to a case like thé one before it." We think the-occasion, however, a-proper one for this Court, to remark, if any such rule has been made by the District Court in Louisiana, that it is in violation of those rules which the Supreme Court of the United States has passed- to regulate the practice in the Courts of Equity of the United States. They are as’ obligatory upon the Courts of the United States in Louisiana, as they are upon all other United States Courts; and the only modifications or additions which cahbe made in them by the Circuit'or District Courts, are such as shall not be inconsistent with the rules-prescribed. Where the rules prescribed by the Supreme Court to the . Circuit Courts do not apply, .the practice of the Circuit and District Courts shall be regulated by the practice of the High Court of Chancery in England. The parties to’ suits in Louisiana have a right to the benefit -of them; nor can they be denied by any rule or order, without causing delays, producing unnecessary and oppressive expenses, and in the greater number of instances, an entire denial of equitable rights. This Court has said upon more than one occasion, *369 after- mature deliberation upon able arguments of distinguished counsel against it, that the Courts of the United States in Louisiana possess equity powers under the Constitution and laws of the United States: that if there are any. laws in Louisiana • directing • the mode of procedure in equity causes, they are .adopted by the act of the 26th May, 1824, and will govern the practice in the Courts of the United States. 9 Peters, 657. But-if there are no laws regulating the practice in equity causes, we repeat what was said at the last term of this Court, in ex parte Poultney vs. The City of La Fayette, 12 Peters, 474, “ That the rules of. chancery practice in Louisiana", mean the rules prescribed by this Court for the government of the Courts of the United States, under the act. of Congress of May 8th, 1792, chapter 137, section 2'. These rules recognise the appointment of a master': the Court below in making this reference, acted under them, and the mandate, and. it could not? therefore; sustain the exception tq the master’s report. On the second exception, we need only remark, that the master apprehended rightly the decision and mandate of the Court. The payment to Morse by the defendant was not considered an expenditure on account of the property, nor on account' of- Livingston. It was intended to he excluded .from the credits, to which the .defendant was entitled.

The third exception has been already disposed of. It was only a permission tq the master to certify that his report-contained all the evidence taken under the reference.

' The fourth and seventh exceptions, on account of. their generality and indefiniteness, may be considered in connexion. The first of them is, that the master, in making his estimates and calculations, has no.t pursued the mandate of the Court; and the seventh is, that the master erred in- all his charges against the defendant, and.failed to allow the defendant his proper credits. In what particular the mandate has not been pursued, is not stated. It is -a general objection to the whole report, imputing to the master a misconception of the principles upon which the account Was to. be taken; and amounts to this, that if the Coürt shall see upon the face, of the report and the master’s proceedings, error against the defendant, it will correct it, though no exception has been filed. In this view of it, the defendant shall be protected, if the Court shall detect error in the report. As to error in charges, and a denial of proper credits to the defendant, we remark, that without some specification of erroneous charge, and of disallowed credit, it is impossible to determine what the' defendant objects to as a charge, or claims as a credit. Was any credit refused which was claimed, except that of the $11)00 to Morse ? That, we have said, was rightly refused. Was he not allowed all other credits on-the general account of expenditures? Did the defendant, whilst the reference was in progress, or after the report upon it was made, claim any credit by the .exhibition of any account? Did he ask to introduce any evidence to the master in support of any credit ? Did he claim any other credit than such as are to be found in the account, giving; on his own oath, a statement *370 of his ■ expenditures, and of the rents of the property, from 10th Augustj 1822, to the 26th January, 1829? Nothing of the kind, appears. On' the contrary, there is in thé report, a statement by the master, which is conclusive of the' fact, as it has not been denied, that the defendant, though repeatedly called upon, and after having repeatedly promised to give an account, and having had five weeks to furnish it, refused to give any account.

' The parties were summoned to the reference, .by the master, on the 6th of March. On the 8th, the defendant, Story, appeared in person, accompanied by counsel. Upon his suggestion, however, that 'one of his couiisel was absent' from the city; and that he had- been so much occupied as no,t to have had leisure to complete his account, with his'request that' the hearing should be postponed, though it was opposed by the complainant’s counsei, the master adjourned the reference to give the defendant time to furnish his account, and to surcharge the account of the expenditures and rents up to the last of • January,. 1829.- The right to correct any errors in that account was ^conceded to him, the account was .given in evidence subject to such concession. Two witnesses were then sworn on the part of the complainant, without objection,. and • were examined • by both parties. The meeting was then adjourned to the next day,-the parties-, again .attended, but- the witnesses who had been summoned not being present, the defendant again suggested the propriety of adjourning for a few days, when he should be ready to present his account, which he had almost ready. It was assented to. The meeting,was adjourned to the 24th of March. . On that day, the parties appeared before the master, a witness was examined on the part of the complainant, and the- defendant again declared he had been prevented by important business from completing his account; and he ' requested a little more time to make it complete. .The complainant’s counsel 'consented to an adjournment to the 5th of April. On that day, the defendant again requested further time; the case was continued to the 15th of April, and"t,hen the defendant said, he did not intend to furnish any account; but urged, that as the account of expenditures and rents up to the last of January, 1829, had been received as evidence,¿hat it must be considered as conclusive of the expendi- ■ tures which had been made on account of the property. This was allowed to be correct. We have then the refusal of the defendant to . furnish an'-account,’ and proof that he did not claim any other credit .than, those in that account. With what propriety can a denial of credits be urged as an exception to the report ? Thp defendant was the only person who could furnish an account of the credits to which he, supposed hims’eíf. to be. entitled. He refused to do so. To allow hirá-to sáy, theré is error in the report in this respect, would permit him to take ádvantage of his Own wrong, .and to defeat the complainant’s right by artifice. Nor is the account of expenditures'and receipts up to the-last of January; 1829, now examinable, (except as to mere errors in computation,) either as regards the principal Or interest; the defendant being concluded by his admission of it, *371 when he claimed the expenditures as a set-off against his own statement of the rents.

. What has been said of the fourth and seventh exceptions applies to theififth, which is, that a reasonable allowance should have been made to the defendant for the costs and risk of collecting the rents. If under the mandate, any such-allowance could be made, the claim for it should have been presented to the .master supported by evidence of what was the customary compensation for such services, if the service is not compensated by a law of Louisiana. A mere claim for a reasonable allowance cannot give a right to any, and of course is no valid exception to the .report. It is the case of a party before a master, who merely claims for general expenses, without ■stating particulars.' Under such a claim he will be allowed nothing. Methodist Episc. Ch. vs. Jacques, 3 Johns. Ch. 81.

Six of the exceptions having been disposed of,' the. seventh only remains to' be considered. ' It is, “ that it appears from the master’s report,-that the- stores were rented from November to November,, and he erred in assuming the 1st April as the period Of payment of annual rent.” It Was said in argument, that computing the payment of annual rent in extinguishment of the defendant’s debt, on the 1st April, is in effect to deprive him.of interest for a part of the year, as the aggregate of the rent was not in fact received; that ■ it is to allow interest upon rents and profits, contrary to the mandate, and established decisions. ' This would certainly-be so if the -rent had only been received at th,e end of the year. But if the rents were payable at intervals in the year, and were actually so received; and if the half, or any other portion of the ascertained annual rent shall, extinguish the interest upon the debt when.it was received, and ■reduce the principal; why should the whole debt continue .to draw interest ? Surely, to allow this Would be to vary the obligations of these parties to each other, differently from what would be their respective rights in any other case of a debt drawing' interest upon which a payment' had been made, which paid the interest and part' of-the principal. Is there any- difference in the effect of a payment, whether made in person by the debtor, or if it arises from the income of his property.? The7 correct-rule in general is, that the creditor shall .calculate interest whenever a payment is made;' To this interest the payment is first to be applied; and; if it* exceed .the interest due,' the-balance is to be. applied to diminish the principal. If the payment fall short of the interest, the balance of interest is not to be added to the priricipál só as to produce interest. This rule is equally applicable whether the debt be one which expressly draws interest, or on which., interest is .given in the name of damages. Smith vs. Shaw’s adminis., 2 Wash. C. C. Rep. 167. 3 Cowen, Note A. 87. This then be..ng the rule, if the fact is probable in this case that the income of the property received at any time in. the' .course of . the year did; pay interest and a part of principal, the defendant 'cannot complain; he being the receiveu-of the money, and refusing to give "any account of the -aggregate, or its parts when re *372 céivéd, if the master has taken a date for the computation of the aggregate rent as payment which places the parties upon an equality. Besides, the mandate does, not restrict the right, of the complainant to. a credit fox the-aggregate of -the rent at the end of the. year, it does not allow interest upon-the rent, but directs the rents'to be applied to the payment of.the sums incurred in building and repairing; secondly, to the interest on the sums which have been advanced on the loan* or in the improvement of .the lot; and, thirdly, to the discharge of the principal of the loan. The fair inference from the silence qf the mandate as-to the time-when .the rents are to’be credited is, that they are to be so when they are received if the interest and part of the principal are. paid. This is the general rule for the application of payments, and- is the rule of equity which does substantial justice. -What then is the case of the defendant in this particular ? He has a debt drawing five per centum interest, yielding anriually $ 1135’ 55, and is in, possession of the property of the complainant, giving a rent' annually, after deducting @700 for repairs and taxes, of @8000. ’ But, it may be- asked, by what means or evidence did the master ascertain the. amount of rents, and that they wére paid at such times, and in such amounts, as tb-jus'tify the, computation o'f'the annual aggregate as a payment before the' expiration of the year'? First, he must have known that leases of houses are .not made, either, in Louisiana or elsewhere, for the payment of the-, 'entire rent" at the end of-the year;' next, he had an account made-by the defendant, verified by his oath, showing., that for seven years’the rents of this property were received by him,-principally in monthly payments; in thb year 1-828.altogether' soand then, at intervals of two, three, or four months, in sums over seventeen' hundred dollars up to three thousand. ' The rents received in January’ahd February, 1828, exceeded the amount of. interest upon the principal deb.t'or loan-by six hundred dollars. . The rentin'that account, . received on the 26th- January, 1829-, ’was @950,"and the account states a thousand’-'as due on the 1st of February, 1829. The amount of the annual rent the master ascertained from the tenants, who were .witnesses before him, not to - be less than eight thousand dollars. Let it be remémbered-that thequésti’on.now is not whether the defendant shall pay interest upon rents and profits, but the time when •hé shall credit a payment upon the debt which discharges the interest ánct a part of the principal. ■ His debt was carrying' interest, ,and therefore his receiving the rents of the property at any time in a sum sufficient to pay the interest and part of the principal, should .be applied at the date when it was received. The defendant could not claim an exemption from the operation of- this general rulé, in virtue of any relation between himself and the complainant, as trustee, bailiff, attorney, or agent of the latter; who was always ready to pay when called upon, who had not mingled-tHé rents with his own money, and not used it as his own, or that it had been kept on hand. to. abide the decree of the Court. If he had been in either of these attitudes, especially the latter, his own oath, if. not *373 controlled-by other testimony and the circumstances of the. cáse, would have entitled, him to a continue^ accumulation of interest upon the debt, without, any credit of the rent, until the. final decree had directed a sum to be paid to the complainant. Under the circumstances of this.cáse, the defendant refusing to give any account, yet admitting that he had received the rents, at intervals, hr the year; when we consider such to 'be the usual way of renting houses, he having agreed that the certificates.of the tenants should be received as evidence of the amount of rents respectively pajd-by them — the tenants having proved the amount of the annual rent of the premises — we conclude that the master did right.in assuming an intermediate point in the year for the computation of the annual amount of rent, in the absence of. all proof when its parts were paid; -and that it was thejairest way of carrying out the subsfantial intention of the mandate of this Court. But suppose; as was urged. in argument, that the mandate had directed ah annual application of the rent of the premises to the payment of the debt , .of the defendant, without specifying, that the interest was to. be calculated to a date contemporaneous with the last payment of the rent, and the debt was one carrying interest de die in diem, . The mandate could only be executed according to the general rule in the casé of such a debt, by making every receipt'for rent, in discharge first of thé interest, then of the principal. Raphael vs. Boehm, 11 Vesey, 91. The mandate is to be interpreted according to the subject matter to which. it has been applied, and not in.a manner to cause injustice.

This is.not like the case of a decree directing annual rents; with theviewof compounding interest. The question now under consideration has been ruled as it is now decided, in Bennington vs. Harwood, 1 Turner and Russell, Ch. Rep. 477, a casé upon a master’s report of ah accoitnt,. under a decree that the master should set ah annual value by way of rent upon the premises, the mortgagee-being in possession; the master of. the rolls decided, that a mortgagee can never receive more.than his principal and interest; and says, ecnów if in the early part of the year a payment is madé to-him,“exceeding the interest which is then due, and he is nevertheless allowed interest on the whole of his principal down to-the end of the year, what is the profit which he derives from his mortgage, in the interval'between the date of that payment, sand the date of the annual rent? It is clear that a part of his.principal has been repaid to him, and yet he receives interest, upon the whole of it: in other words, he gets more than five per cent on the sum for which he is actually a creditor. Suppose that the sum paid to Eádón on the 2d February had been equal to the whole of the £500, with the arrears of interest calculated to that day, would he have been entitled to interest up tp the 5th of July? Is it possible that such should be the effect of a direction to make annual rents? The sums which a mortgagee in possession receiyes in respect of the mortgaged premises, at'times intermediate beiween the dates of the annual rents, *374 must be applied, when they exceed interest, to the reduction of the principal;, and in the present case, that course is clearly prescribed, by the very words of the decree.” Now what was the decree in Bennington vs. Harwood? It was the usual decree against-a mortgagee in possession, containing the common directions, that the master should tax him the costs, of suit, and so1 set an annual value by way of rent, upon the premises, with further directions that the -sums received in February 1805, were to be applied forthwith, first - to the discharge of the then existing arrear of interest, and next to the ‘diminution of the principal. The master made the rest on the 5th July, instead, of doing so in February; and the counsel contended in that case-^-as counsel have'done in this — that a direction for annual rents, excludes all rents which are not annual. But that position was not sustained by the master of the rolls, on general .principles, though he concludes by saying in the present.case, “that Course is clearly prescribed by the words of the decree.” The defendant here is substantially a mortgagee in possession, having a debt due to him, carrying interest de die in diem; and must abide the. general rule for the application of payments to it.

: This then is not a case in which the defendant has been deprived .of a day's interest by'the master's report, nor one in which interest has been allowed upon rents, and profits; but a.case in,which the application Of a sum received by the creditor, is made to prevent, his whole debt from chawing interest after a part of .it was probably paid. Of this there is a violent presumption. The general principle is, as it was ruled in Breckenridge vs. BrOoks, 2 -A. R. Marshal, 341, that a mortgagee in possession is not to pay interest-upon rents;- but,as the.Chief Justice said in -that case, “We will not say . there may not be special circumstances which would justify allowing interest upon .rents received by a mortgagee. We "say in this, that whenever a mortgagee in possession, having a debt due to him, carrying interest de die-in diem, shall collect an amount of rent, which, will-extinguish the interest'and a part of the principal, that he is bound, so to apply it.” In FenwTek vs. Macey’s executors, 1 Dana Rep. 286, rents received by a mortgagee were directed tb be appliéd as they accrued, to kéep down the interest. In Reed. ps. Lansdale, Hard. 7, it was ruled that the equitable rule in redeeming vthen the mortgagee is in possession, is to charge the profits ,of the mortgaged property against the principal and interest. ,

., Having thus disposed of the exceptions to .the report, and considered the principal ¿rgument of counsel against its confirmation, w« remark, that there is nothing on the face of the report adverse from the defendant’s rights which should cause it to be set aside. Even with the computation of the rents as a credit on the 1st April, he.is still a gamier'; for the difference, between the calculation so made, and what would have been the amount he; would have received if the rents had beep credited on'the 1st November, is more' than compensated by the pse-pf large sums of, money received by *375 him as rent, after the total extinguishment of his debt. ~ The com* •plainant,however., took no exception to the report; and it must stand good against her.

We notice in conclusion an objection to the report urged in .the ' defendant’s petition for a rehearing, and in the argument of the case. It is, that the decree of the Court below is inconclusive as to whom the property is to be reconveyed. . This is riot an objection which the defendant can be permitted to urge. When he shall obey the decree in reconveying and, surrendering the property, his responsibility will be at an end, As to the defendant, the decree of the Court is conclusive against all persons who may legally claim from him any interest on the property as devisee or heir of Edward Livingston. As to those, the law of Louisiana fixes their respective rights, and upon those rights, this Court has not, nór does it intend to_ adjudicate in‘this cause. The general rule certainly is, that all .persons materially interested in a suit, ought to be parties to; it, either as plaintiffs or defendants, that a complete • decree may be. made between those parties.. Caldwell vs. Taggart, 4 Peters, 190. But there are exceptions to this rule, and one of these is, where a decree in delation to the subject matter of litigation can be madej without a person ..who has an interest, having that interest in any way concluded by the decree. Bailey vs. Inglee, 2 Paige, 122. See'also, Joy and Wurts, Wash. C. C. R. 577; where the rule is comprehensively expressed, in respect to active and passive-parties; •and -where a party is not amenable to the process of the Court or where no beneficial purpose is to be effected, by making him a party, such interest must be a right in the subject of controversy which may be affected by a decree in the suit. ■ Such is the case as to. Cora Barton,,in this causé. The subject- matter is to-obtain from the defendant money decreed to be. due to Edward Livingston, and the surrender and reconveyance of. property forming a part of the real estate of Edward Livingston. After his death, his widow, as executrix, was made a party to the bill; and the decree in that suit, cannot, in any way determine the rights of Cora. Barton in her father’s es-tater Besides if there was any force in the objection it comes too late, for where a complainant omits to bring before the Court persons who are necessary parties, but the objection does not appear upon the face of the bill, the proper mode to take advantage of it, is by plea or answer. If the objection appears on the-face, of the bill, the defendant may demur. Mitchell vs. Lenox, 2 Paige, 280. The objection of a misjoinder of complainants should be taken either by demurrers or in the answer of the defendants: if is too late to urge a formal objection of this, kind for the first time at the hearing. Trustees of Watertown vs. Cowen, 4 Paige, 510. So also, it wás ruled in 3 Paige, 222. We might crowd this opinion with decisions to the same point, from .the English and American chancery, reporters.' But further the -objection cannot prevail, for it does not show that the process of the Court could reach Cora Barton. In Mallow vs. Hinde, 12 Wheaton, 193, it Was. *376 ruled, that wherever the case may be completely decided as between the litigant parties, an interest existing in some other person whom the process of the Court cannot reach, as if such person be a resident qf another state, will not prevent a decree upon the merits. And, in the same case, it was decided, where an equity cause may be finally decided-as between-the parties litigant, without bringing others before the Court who would generally speaking be necessary parties, such parties may be dispensed with in the Circuit Court, if its process cannot reach them; as if they are citizens of another state. -But when the rights of those not before the -Court are inseparably connected with the claim of the parties in the suit,' the peculiar constitution of the Circuit .Court is no ground for dispensing with such parties. 12 Wheato, 194. In whatever point of view therefore the objection is considered, whether as to the'interest of Cora Barton in the suit, the time when the objection has been made, or-the manner in which it is made, in not showing that the process of the Court could have reached her, is of no moment ii? this case.

This Court, in regard to-her, only directs her name to be inserted in the-reconveyance, it having been ascertained by the master that she-is a forced heir of Edward Livingston, and -that fact being admitted by the defendant, and the admission of its correctness being the foundation of his objection. The fleeree of the Court below affirming the master’s .report, and directing a reconveyance of the property, is affirmed.

This cause came on to be heard on the transcript of the record, from the Circuit Court of the United States, for the eastern district of Louisiana, and was- aggued by counsel. On consideration whereof, it is ordered, adjudged, and decreed by this Court,-that the decree of the said Circuit Court, in this cause, affirming the master’s report be, and the same is hereby, affirmed. And this Court doth order, adjudge, and decree that tlxel defendant do, on or before the tenth day of the ensuing term of the said Circuit Court, pay to the complainant, Louisa Livingston, the sum of thirty-two thousand nine hundred and fifty-eight dollars and eighteen cents, with interest thereon, at the rate of five per cent, per annum, from the 15th day of July, 1837, to the time of payment.' And this Court'doth further order, adjudge, and decree, that the said defendant Story, do on or before the 10th day of the next term of said Circuit Court, by deed convey to the said Louise Livingston, and Cora Barton, all the right, title and interest, in and ,to the premises in controversy, derived-to, and acquired by him, by the deed of conveyance made by the said Edward Livingston, with covenants of warranty against himself, and his heirs, and all persons claiming by, through-, or under him, the said- Benjamin Story, and that he deliver said deed into said Court, and that he deliver the possession of the-premises to said Louisa Livingston, her agent or attorney, on or before the tenth day of the next term of said Circuit Coqrt. And this cause is remanded to the said Circuit Court wjth instructions to.carry this de *377 cree into effect. And.it is further ordered, adjudged, and decreed, that said Circuit Court retain this cause upon the docket for the purpose of ascertaining, and decreeing the amount of the'rents of the premises from the first day of November, 1837, to thé time when possession thereof shall be surrendered according tó this descree, and with power to make such orders and decrees^as . may be •necessary for that purpose, and for the payment of the said rents from the said first day of November, 1837, to the time of the .surrender of the possession, with five per cent, interest on the said rents from the time said rents were received to the payment thereof. And this Court doth further order, adjudge, and decree, that the defendant do pay the costs in this Court upon this appeal, and the costs of the reversal of the decree of the said Circuit Court, by this Court, at its January term, 1837; and also such costs On'the proceedings in the said Circuit Court in this cause, as the said Circuit Court shall tax and order to be paid: and that the said Circuit Court do issue execution therefor.