WINDER v. DIFFENDERFFER. 205

to the defendant John Diffenderffer than to charge him with in-
terest, according to the rule of the court, from the time each sum
was received; and therefore, the computation of interest from the
rests will in this case be approved.

But it is objected, that interest should not be charged on the in-
terest computed as a portion of the balances at each of those rests.

From all that has been said upon this subject, I take it, that
interest upon interest, or compound interest may be charged in
three kinds of cases; first, where with the knowledge and permis-
sion of the debtor his whole debt, principal and interest, has been
paid by a third person or his surety; because, as to such third per-
son or surety the interest is the same as the principal sum lent, (k)
Second, where a trustee or holder of money has been directed, or
undertakes to invest the sum placed in his hands in a way to make
it productive, and fails or refuses to do so, he shall be charged with
compound interest. As where a trustee was ordered to invest a
certain sum of money, then in his hands, in bank-stock; and that
he should, in like manner, invest the dividends arising from such
investment; on his failing and refusing to do so he may be charged
with interest upon the sums so directed to be invested, and interest
upon that interest until the whole sum shall be invested or brought
into court. (I) And third, where a trustee has received rents and
profits which he should have applied so as to be productive, or
towards the maintenance of devisees; but failing or refusing to
do so, retains and uses the money as his own, in a manner to
derive profit from it; there also he shall be charged with the
whole profits he has made from the use of it; or on his failing
clearly to shew what those profits were, it will be presumed, that
the annual amount of interest had yielded him interest; and he
must be charged with interest thereon accordingly; considering
each year's interest as an addition to the capital sum lent or
withheld, (m)

The equity of the last rule is founded upon the fact of the benefi-
cial application of the money to the trustee's own use in violation
of his trust, and to the prejudice of the cestui que trust; and there-
fore, it must appear, that the nature of the trust required the trustee
to make the funds which came to his hands productive as soon, and
to as large an amount as practicable in the mode prescribed, or in

(k) 2 Fonb. 438.—(I) Sammes v. Rickman, 2 Ves. jun. 37; Ringgold v. Ringgold,
1 H. & G. 12; Latimer v. Hanson, 1 Bland, 51.—(m) Co. Litt. 172, a.
27 v.2