
    George Poindexter vs. Rene La Roche and Mary Jane La Roche.
    If the record shows that the counsel of both parties consented that a commissioner, appointed by the chancellor to take and state an account between the parties, should proceed to take the account, and there is no evidence that such consent was intended to give the commissioner authority also to proceed to settle his report without further notice to the parties, and he does proceed to settle his report without notice, and exceptions are filed to his report for the want of notice, the exceptions should be sustained, and the case recommitted to the commissioner.
    Where a cause was referred to S. & F. or either of them, to state an account between the parties, and S. alone stated the account, and his report was excepted to, and the exceptions sustained, and the cause recommitted to “the commissioner;” held, that S. was the commissioner to whom the recommitment was made, and a report therefore made by F. upon the recommitment might properly be excepted to.
    As a general rule an agent is a competent witness for as well as .against his principal; but where a judgment in favor of the party calling him will procure a direct benefit to himself, is incompetent.
    L. filed a bill against P. to foreclose a mortgage; P. answered that he had paid the debt secured by the mortgage to W. the agent of L. to whom, as agent, the mortgage was executed, and the notes thereby secured given; L. called W. as a witness to prove that the money, or a large portion of it, paid by P. to W. had been applied by W. without consulting P. to the payment of a debt which P. owed W. in his own right, and not the payment of the debt secured by the mortgage; and P. objected to W. as an interested, and therefore an incompetent witness: Held, lhatW., if permitted to testify, would possess the means of securing the payment of his own demand, and also to discharge himself from liability to his principal by charging P.; and his evidence, therefore, in relation to his individual transactions with P. was inadmissible.
    It is settled that if a party who is indebted on a mortgage and simple contract, or on a bond and simple contract, makes a payment, and omits to apply it specially to one of the debts, the law will make the application in the way most beneficial to the debtor, that is, to the mortgage or bond.
    
      Where a person who is indebted both on a bond and on a judgment, sells his land, and the purchaser makes a payment to the creditor, without applying it to either the bond or judgment, the law will apply it to the judgment in exoneration of the land.
    E. purchased land of P. which was incumbered by a mortgage executed by P. to W., as the agent of L., to secure the money contracted to be paid by P. to W. as the agent of L. for the land; W. also held a claim in his own right against P., not included in the mortgage ; E. being indebted to P. for the land, paid the money to W. on P.’s account, not knowing that P. was indebted to W. individually, without making any application of the payment: Held, that W. had no right to apply the payment to his individual debt, and that the law would apply it to the reduction of the incum-brance resting upon the land.
    Where a case is referred to a commissioner to state an account between the parties, and one of the parties files exceptions to the report of the commissioner, and the chancellor refers the exceptions to a master commissioner, who overrules all the exceptions, and the report of the master commissioner is confirmed by the chancellor, without any exceptions being taken thereto, the party who filed the exceptions to the report of the first commissioner, is not thereby concluded, but he may avail himself of the benefit of those exceptions in the high court of errors and appeals.
    ErroR, from the superior court of chancery; Hon. Robert H. Buckner, chancellor.
    On the 1st day of February, 1837, George Poindexter, Thomas 0. Enos, and Archibald Dunbar, by leave of the chancellor, filed in the superior court of chancery their bill of review, alleging that Rene La Roche and Mary Jane his wife, on 6th June, 1835, filed a bill against them in the circuit court of Wilkinson county, on the equity side of the court, averring that on 11th November, 1839, Poindexter mortgaged a tract of land, in Wilkinson county, to La Roche and wife, to secure the payment of a debt of about $12000, due to them; which debt was secured by notes of Poin-dexter given to Nathaniel A. Ware, although in fact of La Roche and wife; and of which debt there then remained unpaid the sums of $1215 and $194 24, described in two notes falling due on the 1st January, 1835, and the sums of $1214 and $97 04, falling due on or before 1st January, 1836; that the land so mortgaged was sold by said Poindexter to Enos and Dunbar and possession delivered to them; and prayed for an account and sale of the land to satisfy the debt. That Enos and Dunbar answered the bill admitting the purchase of the land from Poindexter, and praying for protection and a dismissal of the bill against them. Poindexter filed a demurrer to the bill which was overruled at the May term, 1886, of the circuit court, and sixty days allowed to answer. That on 1st November, 1886, Poindexter filed his answer, averring several payments, which, if they had been properly applied by Ware, would have extinguished the debt, and praying for an account; that on 8th November, 1836, a pro confesso was taken against Poindexter, and on the 10th day of November, 1836, an interlocutory decree was rendered referring the cause to a commissioner to take and state an account between the parties; that on the 11th day of November, 1836, the commissioner’s report was returned and ordered to be confirmed. And on the 12th day of November, 1836, a final decree was signed and filed, decreeing the sum of $3020 to be due from Poindexter, and a sale of the lands mortgaged for the payment thereof. The record of the proceedings in the suit in the circuit court of Wilkinson county, was made exhibit to the bill of review. Complainants charged that there were many errors on the face of the interlocutory and final decrees; that the pro confesso was taken after an answer was filed by Poindexter; that the interlocutory decree to account was taken upon the bill as confessed by Poindexter when his answer was in; that the taking of the account was ex parte, the defendants proving no notice of the time and place of taking it; that the report of the commissioner was returned and confirmed in one day after the interlocutory decree to account; that the final decree was rendered in two days after the interlocutory decree to account. The bill prayed for a certiorari to remove the cause from the circuit court of Wilkinson county into the superior court of chancery; that the decree might be opened, set aside and reversed, and that a supersedeas be awarded superseding the decree, and for other relief, &c. &c. A certiorari was awarded to operate as a supersedeas, upon Poindexter’s entering into bond in double the amount of the decree in the circuit court. The bond was given and the certiorari issued. The record of the circuit court of Wilkinson county referred to, contained the bill of complaint of La Roche and wife stating that George Poin-dexter, on the 11th day of November, 1829, mortgaged to La Roche and wife two tracts of laud lying in Wilkinson county, containing together about one thousand and nine acres; conditioned that the mortgage should be void when Poindexter paid fourteen promissory notes given by him to Nathaniel A. Ware, although in fact of La Roche and wife, and payable to his or their order, all dated 22d December, 1828, and amounting in the aggregate to eleven thousand two hundred and twenty dollars; that at the time of filing their bill, there were unpaid the sums of $1215 and $194 24, described in two of said notes falling due on 1st January, 1835, and the sums of $1214 and $97 04, due on two other of the notes on 1st January, 1836 ; that the lands remained in possession of said Poindexter till sometime in 1833, when they were conveyed by him to Thomas O. Enos and Archibald Dunbar, in whose possession they were at the filing of their bill; that La Roche and wife claimed the title to the premises as absolute in them ; that they had frequently called on Poindexter in a friendly way, and requested him to pay the residue of the debt, and he always refused to do so. They prayed that Poindexter be decreed to pay the sums specified to be due on the notes as well as interest on the same; that Enos and Dunbar be forever barred from all equity of redemption and be decreed to deliver to them the possession of the premises and all the deeds and title papers they had to the same, or that the lands should be sold and out of the proceeds the balance due to La Roche and wife paid. The mortgage given by Poindexter to La Roche and wife was filed with the bill as an exhibit, and was conditioned to be void when Poindexter paid to La Roche and wife the fourteen following described notes given by Poin-dexter, and all dated 22d December, 1828, to wit: one due and payable on 1st January, 1830; second due and payable 1st January, 1831; third, on 1st January, 1832; fourth, 1st January, 1833, each for the sum of $1214; fifth, due and payable on 1st January, 1834; sixth, 1st January, 1835, each for $1215; seventh, 1st January, 1836, for $1214; eighth, 1st January, 1830, for $680; ninth, 1st January, 1831, for $582 88; tenth, 1st January, 1832, for $485 76; eleventh, 1st January, 1833, for $3S8 64; twelfth, 1st January, 1834, for $291 44; thirteenth, 1st January, 1835, for $194 24; fourteenth, 1st January, 1836, for $97 04; all drawn in favor of Nathaniel A. Ware, attorney in fact for La Roche and wife, and payable to his or their order, amounting to $11,220. On the mortgage was indorsed a statement, that the seven last mentioned notes were given as the interest which might accrue on the respective instalments, for which the seven first mentioned notes were given, up to the time they respectively fall due; therefore, if Poindexter should pay the whole or any part of the seven in-stalments before they became due, that the notes, given for the interest, should be cancelled, so far as the payments should satisfy the instalments, in whole or in part.
    Enos and Dunbar filed their answer, admitting the possession of the premises described in the bill, under a conveyance from Poindexter to them, but denying all collusion, and praying to be dismissed with reasonable costs. On 12th of May, 1836, George Poindexter filed a demurrer to the bill, which was overruled, and sixty days allowed to answer. On the 1st day of November, 1836, he filed his answer, stating that he purchased of Ware, as agent of La Roche and wife, the tracts of land described in the bill, and gave his fourteen notes, as stated in the bill, seven of which were for interest, and seven for the principal, and for payment of which, he executed a mortgage; that at divers times, he made payments to Nathaniel A. Ware, as attorney of La Roche and wife, which would have extinguished the debt secured by the mortgage, and he prayed an account to be taken. On the 8th day of November, 1836, it was ordered that the bill of La Roche and wife be taken, as confessed against Poindexter, for want of an answer within the sixty days allowed to answer in. On the ,10th day of November, 1836, an interlocutory decree was made, to take an account, which decree was signed and filed, and referred to a commissioner of the court. On the 11th day of November, 1836, the commissioner made his report, showing an indebtedness to complainants of $3020 36 ; and on the same day it was ordered to be confirmed. On the 12th day of November, 1836', a final decree was rendered, decreeing Poindexter to be indebted to that amount, and barring his equity of redemption, and decreeing a sale of the mortgaged premises, or so much of them as would satisfy complainant’s claim, and appointing the sheriff of Wilkinson county to execute the decree, and decreeing the costs to be paid by Poindexter, and eight per cent, interest on $3020 36, from date of decree, till paid, &c.
    On the 3d day of July, 1837, a motion was made to dismiss the bill of review for want of jurisdiction, which motion was, after argument, overruled. La Roche and wife then demurred to the bill of review; their demurrer was overruled, and the decree of the circuit court of Wilkinson county ordered to be opened for further proceedings. Poindexter then filed a cross bill, averring that he purchased the land described in the original bill, from Nathaniel A. Ware, as attorney in fact for La Roche and wife, that the notes for the purchase-money and mortgage given to secure them, were all drawn in favor of Ware, as attorney, and the payments had been principally made to him, and yet Ware was not a party to the bill filed to foreclose the mortgage, thereby departing from the contract as written, which was done for the purpose of introducing the deposition of Ware, that he might, by his own oath, discharge himself from liability to La Roche and wife, for the amount paid him by Poindexter for their benefit, and in discharge of the debt for the purchase of the land. That Poindexter, being in the city of Philadelphia, in 1831, paid La Roche, on account of the debt secured by the mortgage, the sum of fifteen hundred dollars, and took his receipt for that amount; that the receipt had been since lost or mislaid, and could not be produced ; and he prayed that before a final decree was rendered, La Roche and wife might be compelled to disclose on oath whether the fifteen hundred dollars had not been paid as stated. La Roche and wife failed to answer the cross bill, and it was taken for confessed against them. Upon the petition of Poindexter, the cause was referred to A. M. Feltus and Nathaniel Scudder, or either of them, as commissioners, to ascertain and report the amount due on the mortgage, and they were directed to take all legal and competent evidence, in relation to the payments made on the mortgage. In January, 1840, Nathaniel Scudder made a report that the parties appeared before him, by themselves or counsel, and by consent of the parties, he proceeded to ascertain the amount, principal and interest, due on the mortgage, and he found that Poindexter had given fourteen notes, seven being for the principal, amounting to $8600, and seven for the interest thereon, amounting to $2720, for the land bought of Nathaniel A. Ware, as attorney in fact of La Roche and wife, amounting, in the aggregate, to the sum of eleven thousand two hundred and twenty dollars, being the debt mentioned in the mortgage; and that Poindexter had paid, on account of that debt, the sum of thirteen thousand five hundred and sixty-one dollars and five cents, and had therefore overpaid it. The counsel of La Roche and wife, filed seven exceptions to the report of the commissioner. The sixth exception was in these words: “No notice of settling the report was given to La Roche and wife.” On the 16th day of June, 1840, the following order was made, to wit: “The exceptions to the report of the commissioner, made in this case, having been submitted, and the chancellor fully advised thereof, doth order that the sixth exception to said report be allowed, and the cause again referred to said commissioner, to hear and determine the other exceptions filed to said report, on notice to the parties, according to the rules of this court.” On the 9th day of December, 1840, A. M. Feltus made a report, stating that the counsel of the parties have entered into an agreement in these words: “It is agreed by the counsel for the complainants and defendants, that Monday, the 30th of November, A. D. 1840, shall be appointed by the commissioner, in this case, to account, as the day to settle the commissioner’s report; ” that as one of the commissioners appointed by the order of the chancellor, at the January term, 1839, in the absence of the other commissioner, he, at the request of the defendant, had proceeded to act in the case, and that neither the complainants nor their counsel appearing on the 30th day of November, 1840, to settle the commissioner’s report, according to their written agreement, he therefore returned to the court the original report of the commissioner, Nathaniel Scudder, without alteration in any respect whatever. The same exceptions were again filed to this report, and sustained by the chancellor, and the cause was then referred to W. H. Dillingham, to take and state an account between the parties. Dillingham, on account of the delicate relations existing between the principal defendant and himself, declined to act; and the cause was then, upon the petition of the complainants, referred to Charles A. Lacoste, to state an account between the parties, with full power to examine witnesses, and receive any legal and competent evidence ; and upon the petition of Poindexter, James T. McMurran was appointed to act as a commissioner, in conjunction with Charles A. La-coste. On the 29th day of March, 1843, Charles A. Lacoste made a report, stating that after giving due notice to the parties of the time and place of taking the account, and both parties having adduced all the evidence they had to offer, and submitted their briefs, he proceeded to state the account; he found that the debt secured by the mortgage mentioned in the bill, was the consideration of a tract of land lying in Wilkinson county, sold by Nalhaniel A. Ware, as agent and attorney in fact for La Roche and wife, to George Poindexter; that the fourteen notes named in the mortgage, were considered equivalent to $8500, cash, on the first day of January, 1839; that the purchase-money was made payable in seven instalments, for which seven notes were given, and seven notes were given for the interest on the several instalments, the whole, including principal and interest, amounted to $11,220; and reported that on the 18th day of March, 1843, there remained still unpaid of that debt, the sum of four thousand four hundred and six dollars and nine cents. The evidence reported by the commissioner was very voluminous, but it is not deemed necessary to notice here any other portion of it, than the evidence of Nathaniel A. Ware, a witness examined on the part of the complainants. He testified that he was the agent of the complainants, from 182S to 1836, to sell their lands in Missisrippi, and secure and collect the purchase-money; that as agent, he sold, in 1828, a tract of land in Wilkinson county to George Poindex-ter, and took his notes for the purchase-money, secured by a mortgage on the land; there were seven principal and seven interest notes; the sale was on eight years credit, and interest was calculated on the whole consideration of the land, at eight per cent, per annum, from the 1st day of January, 1829; that all of the notes had been paid except the four last, and they had never been paid to deponent, nor to any one, as he believed; that Poindexter had paid La Roche, in Philadelphia, fifteen hundred dollars, and he had been credited with that amount by the direction of La Roche ; about eighteen hundred and thirty-eight dollars and thirty-nine cents had been paid in the notes of Burras & McGee, with which he had also been credited; that on the 20th day of February, 1834, Enos & Dunbar paid deponent, on account of Poindexter, eight thousand six hundred and sixteen dollars and twenty-two cents, twenty-seven hundred and eight dollars and ninety-three cents of which had been credited on the debt to La Roche and wife, and the residue deponent appropriated to the payment of a.note which he held as his own property against Poindexter; and that no other payments than those above-mentioned were ever made to him by Poindexter or his agents on account of La Roche and wife. The counsel of Poindexter refused to cross-examine Ware, because they consider him an incompetent witness, and they excepted to his deposition being read on that ground. Poindexter filed numerous exceptions, covering thirty-five pages, to the report of the commissioner, Lacoste, which, by order of the chancellor, were referred to Robert Hughes, as master commissioner in chancery. On the 12th day of June, 1843, Robert Hughes made a report, disallowing all the exceptions taken to the report of Charles A. Lacoste. On the 13th day of June, 1843, the chancellor ordered the report of Robert Hughes to be confirmed; that the exceptions taken to the report of Lacoste to be disallowed, and that the report of Lacoste be in all things confirmed; and on the 3d day of July, 1843, the chancellor rendered a final decree, in favor of La Roche, for the sum of four thousand four hundred and six dollars and nine cents, with interest thereon, at the rate of eight per cent, per annum, from the 18th day of March, 1843, until paid, and that the mortgaged premises be sold for the payment thereof, &c.
    To reverse that decree, the defendants now prosecute this, writ of error.
    
      William Yerger, for plaintiffs in error.
    Was Nathaniel A. Ware a competent witness, or not, in favor of the complainants, to prove that payments made by Poin-dexter to him were made to him on a note, which he held against Poindexter in his individual right, and not on the notes which he held for La Roche and wife, and which were payable to him as attorney in fact for La Roche and wife?
    The rule is laid down that where the immediate effect of a judgment for the plaintiff is to confirm the witness in the enjoyment of an interest in possession, or to place him in the immediate possession of a right, he is not a competent witness for the plaintiff. Greenleaf on Ev. 438.
    So, too, the rule is laid down, that where the event of the suit, if it is adverse to the party adducing the witness, will render the witness liable either to third persons or the party adducing him, the witness is incompetent. Green, on Ev. 438 to 442.
    This principle is applied to all cases where the testimony of the witness adduced by the plaintiff would discharge him from the plaintiff’s demand by establishing it against the defendant. Green, on Ev. 442, n. 1.
    The principle contended for by me is distinctly and clearly recognized by the supreme court of Massachusetts, who have held that a witness, situated as Ware is, is incompetent on account of his interest. 10 Pick. R. 135.
    There are some cases in which an agent has been permitted to testify, although interested, upon the ground of public policy and for the sake of trade; but this rule has only been extended to general agents, and does not extend to persons only employed in the particular transaction in question. 8 Barn. & Cress. R. 408.
    It is also admitted to be true that where the witness is equally interested on both sides, he is competent. But if there is a preponderance in the amount or value of interest on either side, he will be disqualified from testifying on that side. Green, on Ev. 464; Carter v. Graves, 6 Howard; 16 Johns. R. 39; 1 Stark, on Ev. 180, 519, 521; 7 Wheat. 338.
    
      Montgomery and Boyd, for defendants in error,
    cited the following authorities: 4 Johns. Ch. R. 445 ; 5 lb. 441; 6 Johns. R. 566; 2 Robinson’s Practice, 383, 434; 2 Smith’s Ch. Pr. 40, 70, 71, 164, 369; Gildart's heirs v. Starke, 1 How. 467 ; 2 Maddock’s Chancery, 506, 507; 3 Johns. Ch. R. 78; 1 Paige’s R. 145.
   Mr. Justice Thachee

delivered the opinion of the court.

This is a writ of error to the superior court of chancery.

The history of the case is as follows: In June, 1835, La Roche and wife filed their bill in the circuit court of Wilkinson county, against Poindexter, Enos and Dunbar, to foreclose a mortgage upon certain lands, executed by Poindexter, in 1829, to secure the payment of a sum of money, which amount, with its interest, was contained in fourteen promissory notes, made by Poindexter, in favor of Nathaniel A. Ware, the attorney in fact of La Roche and wife. It was charged, that there remained due and unpaid upon said notes, at the time of the filing of that bill, the sums of $1215 and $194 24 upon two of the notes, payable January 1st, 1835, and the sums of $1214 and $97 04 upon two of the notes, payable January 1st, 1836. Enos and Dunbar were purchasers of the land subsequently to the mortgage. After a variety of proceedings in the circuit court, and in November, 1836, a final decree was rendered in that court against Poindexter, as upon a pro confesso, for the sum of $3026 36. In February, 1837, Poindexter filed in the superior court of chancery a bill of review to this decree, and the decree of the circuit court was re-opened, and in 1838 Poindexter filed his cross-bill to the original bill, alleging a payment to La Roche in 1831, of $1500. In January, 1839, this cross-bill was taken for confessed, and in March of that year, the cause was referred to Scudder and Feltus, or either of them, as commissioners, to state an account between the parties. In January, 1840, Scud-der alone, by consent of parties, took the account, and then made his report to the effect that Poindexter had paid the whole amount secured by the mortgage, and a sum over and above it. To this report exceptions were taken, and the sixth exception, based upon the ground that no notice of the settling of the report had been given to La Roche being sustained, the report was referred back to the commissioner to determine the other exceptions. This report was afterwards reported again to the court, without any alteration, by Feltus, the other commissioner, La Roche and wife not appearing before him. In April, 1842, a motion to sustain the exceptions to this report was allowed, and the report set aside. Subsequently to this, Dillingham was appointed commissioner in the case, but he declining to act on account of his relations with Poin-dexter, Lacoste was appointed, and in January, 1843, upon the application of Poindexter, McMurran was added to the commission, and both, or either authorized to act in the matter. In March, 1843, Lacoste filed his report, charging a balance of $4406 09 against Poindexter. Exceptions were filed by Poin-dexter to Lacoste’s report, which were referred to the master commissioner, Hughes, who, in hjs report, June 13th, 1843, disallowed all the exceptions. Upon the 3d July, 1843, no-further exceptions having been filed, the chancellor decreed finally in accordance with the report of Lacoste.

By an agreement of the counsel for both parties, all the proceedings in the Wilkinson county circuit court are to be disregarded in the examination of the case in this court, so far as any question of error may be concerned, and no objections to the form or manner of taking the depositions, or other formal objections connected with them are to be regarded, unless they appear by the record to have been saved by the parties.

The first point which presents itself for the consideration of this court, is the order of the-- chancellor sustaining the sixth exception to Scudder’s report, and recommitting it to the commissioner for the determination of the other exceptions. The record shows the consent of counsel, that the commissioner Scudder should proceed to take the account, but there is no evidence that such consent was extended to give him authority also to proceed to settle his report without further notice to the complainants. The 38th rule of the chancery court requires a commissioner, after an examination of an account is concluded, to assign the parties a day to attend before him to the settling of his report, and to make such objections as they may have, in writing. The report of Scudder was therefore properly recommitted, if for that purpose alone. Upon this reference, the other commissioner, Feltus, for the first time, assumed to act in the premises, and reported back the same report without alteration. The same exceptions became again the subject of an argument, upon the coming in of the report of Feltus, and they were sustained by the chancellor. This decision was also correct, even upon the sixth exception, because, in point of fact, his report was never settled by Scudder, upon due notice to the parties, as required by the 38th rule of the court. The recom-mitment of the report was to “ the commissioner,” and the agreement, signed by counsel upon the recommitment was, that a fixed day was set when the commissioner” should settle his report. Who was that commissioner 1 Certainly, none other than Scudder. It was Scudder’s report, in which Feltus had taken no part, and it was competent for either of the commissioners to commence the proceeding without the other. It appears plain from the record, as well as the natural consequence of the exceptions, that the recommitment was to Scud-der, as the commissioner alone competent to determine the exceptions and settle the report.

A material question presented in the cause, is an. objection made to the competency of Nathaniel A. Ware, as a witness, and which is made one of the exceptions to the report of La-coste. Ware, as attorney in fact of La Roche and wife, was the payee of the notes secured by the mortgage, and in his testimony, he alleges that Poindexter was indebted also to him individually, and that the payments made to him by Poindexter and Enos, or a portion of their amounts, were made on account of this individual indebtedness, and not to him as attorney in fact of La Roche and wife, and upon account of the mortgage debt. This question brings up the case of a principal relying upon the evidence of his agent. In the rules of evidence respecting the interest of a witness, there is an exception, constituting a rule in favor of the admissibility of agents; but there are exceptions again to this rule. One of these exceptions is where a judgment in favor of the party calling the witness will procure a direct benefit to the witness himself. 1 Greenl. Ev. 464. A direct benefit would accrue to Ware, by a judgment in favor of La Roche and wife. It was for Ware’s interest to show that the money paid into his hands was paid to him upon his individual account, and not to him as the attorney in fact of La Roche and wife, because he at the same time secured the amount of his own debt, and provided La Roche and wife with a judgment against Poindexter. The interest of Ware consisted in possessing within his own control the means of securing'the payment of his own demand, and also to discharge himself from liability to his principals, by charging Poindexter for them. Accordingly, we are inclined to hold all that portion of Ware’s deposition which related to his individual transactions with Poindexter, to have been inadmissible in this case.

The report of LaCoste also raises another question of much moment in this controversy. The propriety of the application by Ware to his individual debt, of any portion of the payment made to him by Enos, may well be doubted. When Enos made the payment, it is true that he gave no directions respecting its application, but, under the circumstances, what application would the law make'? The debt due La Roche and wife was a mortgage debt, and that due to Ware individually was a debt upon a simple contract. Enos was also a purchaser of the property encumbered by the mortgage debt, and he says that at the time of the payment to Ware he knew of no other debt due to Ware by Poindexter but the mortgage debt. Had Ware any right, in this state of case, to appropriate the payment made by Enos to the extinguishment of any other than the debt secured by the mortgage ? In the absence of any express direction, still a direction may be implied from circumstances. Mitchell v. Dall, 2 Har. & Gill. 159. It is surely a strong circumstance that the payment being made by Enos, whose only interest consisted in reducing the incumbrance resting upon the land of which he had become the purchaser, constituted a direction to apply the payment exclusively to that debt. It is settled, upon good authority, that “if a debtor is indebted on mortgage and simple contract, or on bond and simple contract, and when he makes a payment should neglect to apply it, the law will make application of it in the way most beneficial to the debtor; that is, to the mortgage or bond ; and in some cases the fund out of which the money arose, will direct the application. As where A. is indebted on bond and on judgment, and sells his 1 and, and the purchaser pays a sum of money to the creditor without application, the law will apply it to the judgment in exoneration of the land.” Gwinn et ux. v. Whittaker’s Adm’x. 1 Har. & Johns. 754; Dorsey v. Garraway, 2 Ibid. 402. See also Pattison et al. v. Hull et al. 9 Cow. 747, where all the cases establishing the foregoing principle are collected and examined.

The ground assumed in the argument of this cause that as upon the reference and report of the master commissioner) Hughes, no exceptions were filed by the plaintiff in error, he is thereby concluded from claiming any examination or reaping any benefit from the exceptions to Lacoste’s report, does not strike us with the force that seems to be trusted to it. There is no established rule or statute authorizing the chancellor to appoint a master commissioner, nor any rule by which the report of one commissioner can be referred to another for a determination of exceptions. The exceptions to Lacoste’s report were addressed to the chancellor, and the chancellor, by making a decree based upon the report of the master commissioner, Hughes, can be considered only as having adopted the report of Hughes, and thereby to have virtually himself overruled the exceptions.

In accordance with the foregoing opinion, it follows as the judgment of this court, that the decree of the chancellor must be overruled, the exceptions above mentioned to Lacoste’s report sustained, and that report set aside, and the cause remanded for further proceedings.  