Chestnut Street Trust & Saving Fund Co. v. Hart

Citations

• 217 Pa. 506
• 66 A. 870
• 1907 Pa. LEXIS 747

Syllabus

<p>Promissory notes — Accommodation notes — Trust company — Defenses— Payments — Appropriation of payments.</p> <p>Where the trust officer of a trust company, on a small salary, makes a promissory note for a large amount, payable to the company, as an accommodation for the president of the company, on the assurance by the president that he would never be asked to pay it, such note will be considered as an ordinary accommodation note, and the maker will be liable on it, unless he shows that the trust company actually agreed that he should not be held upon it. In such a case the discrepancy between the maker’s salary and the amount of the note is immaterial; and it is also immaterial that the president continued to acknowledge his liability on the note to the company, and that the company continued to look to him for payment.</p> <p>In such a case, where the president, after the insolvency of the trust company brought about by his own appropriation of its funds, assigns to the assignees of the company a fund without directing any appropriation to any particular item or items of his indebtedness, the assignees have a right to apply the fund to any claims against the president, and the fact that the assignees applied the fund to the payment of debts other than the note in question, cannot be set up as a defense by the accommodation maker of the note.</p> <p>Where a debtor makes no appropriation of a payment, the creditor upon receiving payment, may apply it to that item of debt which to him seems the least secure.</p>