Mosse v Salt
| Jurisdiction | England & Wales |
| Judgment Date | 10 November 1863 |
| Date | 10 November 1863 |
| Court | High Court of Chancery |
English Reports Citation: 55 E.R. 106
ROLLS COURT
S. C. 32 L. J. Ch. 756. See Goslings v. Blake, 1888, 22 Q. B. D. 156. Followed, Stewart v. Stewart, 1891, 27 L. R. Ir. 351.
C269] mosse . SALT.(l) Nao. 6, 10, 1863. [S. C. 32 L. J. Ch. 756. See Goslings v. Blake, 1888, 22 Q. B. D. 156. Followed, Stewart v. Stewart, 1891, 27 L. E. Ir. 351.] When the accounts between banker and customer have been carried on for a series of years on a particular principle, the Court will assume there is an agreement to that effect; but acquiescence in it does not amount to a settlement of account. When a mortgage is given by a customer to his bankers for a fixed sum, and not for the running balance, the banker cannot include that sum in the banking account and charge compound interest on it. Bankers had a mortgage and a banking account with their customer : Held, that in ascertaining the amount due between them, the accounts must, in the first instance, be taken separately arid on different principles. Though in dealings between merchants, in discounting bills and the like, and in loans made for short periods, the income tax is not deducted, yet, in a mortgage transaction, the mortgagor is entitled to deduct it. The Defendants, Messrs. Salt & Co., were the Plaintiff's bankers, and he, being indebted to them on an account stated, executed a mortgage to them of some property, which was dated the 5th of November 1846, for securing the payment, at the end of six months, of the sum of 2678, 8s. Id. and interest at 5 per cent. In 1853 Messrs. Salt obtained a transfer to them of a prior mortgage for 1600. Messrs. Salt made a further advance of 1059 to the Plaintiff, and in March 1853 obtained an additional security. They continued to act as bankers for the Plaintiff and received moneys on their securities. The bill stated that they sent to the Plaintiff accounts, sometimes yearly and sometimes for shorter periods. These accounts treated the mortgage debts as sums due to the bankers on overdrawn accounts, and after setting off the annual income and other moneys received by them against the mortgage debts and disbursements on the other side, they charged interest on the balance and added that interest to the principal in the succeeding account. It also alleged that the Defendants never allowed income tax on their charge for interest on their debt, though it had been deducted from the several sources of income. That the income of the property [270] mortgaged was sufficient to keep down the interest, and to satisfy all other payments in respect of the principal, and that it left a balance which the bankers impounded and applied in reduction of their debt. That the account between them had always been an open and running account, and that from the last account rendered it appeared that the Defendants claimed a balance (1) Ex relatione. M BEAT. 271. MOSSE V. SALT 107 of 2040, 12a. 5d., but that it would have been much smaller, if proper allowances had been made. The Plaintiff prayed that proper accounts might be taken of the mortgages and of the moneys received on account of the property comprised in the securities, and that the Plaintiff might be allowed the income tax charged against him. It asked a declaration that, after the 1st January 1853, the Defendants were only entitled to charge interest on the principal sum for the time being at the rate of 4 per; cent, only. It was also asked that the accounts might be taken as between debtor and creditor, on the footing of mortgage transactions, and a declaration that the Defendants were not entitled to compound interest. The Defendants said that the Plaintiff opened a banking account with them, without any special agreement as to...
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