Opinion of the Court.

being for $61,290 each, and bearing interest from March 31, 1880, and which are this day delivered to said Stuart. The amount covered by this list of securities, after discharging the three bonds aforesaid, is to be by us credited on the fourth bond of said Stuart of like amount with each of the other three and bearing interest from same time."

The specific claim made by the appellant is, that he is entitled to have these securities credited on his purchase-money bonds at an amount in the aggregate ascertained by a calculation of simple interest, upon the face of the principal sum, from the time when interest began to accrue and became in default until the date of their application to the payment of the purchase-money bonds, with the exception of the instances where by previous decrees interest upon interest had been expressly allowed; whereas the rule adopted by the court by the order of January 5, 1884, required the commissioners of sale, in distributing the proceeds of sale, and in paying therewith the debts reported and decreed to be paid, to calculate interest upon the aggregate amount of principal and interest thereof aggregated as of October 15, 1875, the date to which the calculations are brought in the report of the master filed April 21, 1876.

It is complained of this decree that it was made after the rights of the parties had become fixed by what had already been done under the previous orders of the court, and that the situation of the appellant was thereby altered greatly to his disadvantage. In reliance upon his construction of the previous orders of the court, the appellant had become the purchaser of almost all the obligations enumerated in the sixth class of the master's report in the expectation that, upon a calculation of the amount due to those entitled to priority, the obligations thus acquired by him would be satisfied, or nearly so, out of the proceeds of the sale. The transactions by which he acquired the ownership of these claims took place, respectively, on April 23, 1875, March 15, 1876, and March 31, 1880, the last being the date of the sale.

It is evident, in the first place, that the cause of complaint asserted by the appellant does not belong to him legitimately

VOL. CXXVII-34

Opinion of the Court.

in his capacity as purchaser. The decree for sale rendered May 15, 1877, did not contemplate payment of the purchase money otherwise than in money. It gave a credit running through a period of five years in equal annual instalments, with interest on each. There was nothing in the decree which authorized the purchaser to assume that he would not be called upon to pay each instalment as it fell due in cash. As a purchaser, therefore, bound for the payment of specific sums at given dates, and who cannot be compelled to pay more, and has no right to expect to pay less, it must be a matter of indifference how the proceeds of that sale shall be distributed among the creditors entitled thereto. The different modes of computing interest on the debts to be paid may affect relatively the creditors themselves, giving to one class more and to the other less, but it can make no difference in the amount of the fund to be distributed arising from the proceeds of the sale. The complaint of the appellant, therefore, if he has any, must be put forward in his capacity as a creditor in respect to his rights upon distribution; but upon the view most favorable to him the distribution of the proceeds of the sale, and all questions arising thereon as between creditors, were before the court and undecided, except in the instances already referred to where express declarations were made in respect to the mode of computing interest upon interest in individual cases. The appellant was bound to know, and ought to have acted upon the assumption, that all possible matters of question to arise upon the distribution of the proceeds of the sale were still open for the final decision of the court. If he chose to act upon his individual judgment of what that decision would be, he acted at his peril. The decree of January 5, 1884, was such a decision, directing the mode of calculating interest upon the debt in distributing the proceeds. of sale, and there is nothing in it inconsistent with any prior decision or decree of the court upon the same subject. Neither the decree of sale of May 5, 1877, nor the decree of March 1, 1882, directing the execution of the deed and reserving a lien for the unpaid purchase money, contained any direction as to the mode of computing interest upon the debts to be

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,