Bell v. Clark

Citations

• 38 Pa. Super. 365
• 1909 Pa. Super. LEXIS 144

Syllabus

<p>Payment — Misappropriation of payments — Debtor and creditor.</p> <p>1. Where no appropriation of a payment is made by either party to specific claims, the law will apply the payment in the way most beneficial to the creditor; and, therefore, to the debt which is least secured, unless to the prejudice of a surety.</p> <p>2. Where a payment is made less in amount than the aggregate of various claims due by the debtor to the creditor, and neither party makes an appropriation, the law will apply the payment to claims primarily due by the debtor to the creditor, and notes made by him as principal, in preference to his liability as indorser and surety on the note of a third person.</p> <p>3. The maker of a promissory note purchased with another person a judgment against the indorser on the note, which judgment was held by a bank as collateral security for a number of claims against the indorser. The amount paid for the judgment was less than the aggregate of the claims of the bank. The object of the assignment was to enable the assignees to clear title to certain lands in which they were tenants in common with the indorser. It was stipulated in the assignment that if anything was realized by the sale of the lands, over the amount paid, the bank should receive it towards the liquidation of the account against the indorser, but nothing further was in fact received by the bank. It was also stipulated that the bank should continue to hold and retain any notes or other securities for which the judgment had been collateral, unaffected by the assignment. An action was brought by the bank against the maker of the note indorsed by the defendant in the judgment assigned. Held, that the maker could not set up as a defense that the money paid for the assignment of the judgment involved payment of the note in suit.</p>