38 Pa. Super. 365 | Pa. Super. Ct. | 1909
Opinion by
This action is brought upon a negotiable promissory note, dated January 7, 1897, made by the defendant payable to the order of Junius R. Clark, three months after date. The parties filed a stipulation in the court below agreeing that W. W. Bell, the nominal plaintiff, had taken and held the note as cashier of the First National Bank of Bradford; that the note was the property of said bank and that the case should be tried as if the action had been brought in the name of the bank “and further that upon the trial it shall be treated and considered as though the pleadings had been drawn in accordance with this stipulation.”
The uncontradicted evidence established that the note was the last of a series of renewals of an original note for $500, of which the bank was a holder for value before maturity; that at
The facts upon which the defendant relied, if by the jury found from the evidence, must necessarily be stated at some ' length. The note in question was not paid at maturity and, on September 21, 1900, this action was brought. Junius R. Clark was, when this note was discounted by the bank, and subsequently continued to be indebted to the bank in a large amount, in addition to his liability as indorser upon this note; on December 14, 1907, he executed and delivered to the bank his judgment note in the sum of $10,000 to be held by the bank as a security collateral to all the obligations upon which he was liable; the bank entered judgment against Junius R. Clark, upon this warrant of attorney, on February 23, 1898, in the sum of $10,000 with attorney’s commissions. And this judgment was revived in February, 1903. After the defendant had made the note in suit litigation arose between Mary E. Clark, this defendant, Ellen C. Hanna, Junius R. Clark, E. K. Clark and Roger P. Clark, concerning certain lands situate in McKean county. Ellen C. Hanna, in February, 1898, in an equity proceeding obtained a decree against Junius R. Clark for a large amount of money and also for the partition of certain lands. There was also litigation pending in the United States courts between the same parties and E. K. Clark and after it had been pending for a number of years the parties decided to make a settlement. Ellen C. Hanna and this defendant desired to purchase the interest of E. K. Clark in certain properties and in
The uncontradicted evidence established that, on May 13, 1903, when Ellen C. Hanna and Mary E. Clark paid to the bank $6,750 and procured the assignment to Mr. Richmond, their attorney, of the judgment against Junius R. Clark, the indebtedness of the latter to the bank, for which he had given this judgment as a collateral security, amounted to $10,612.80. This aggregate of indebtedness was made up of the following items, notes upon which he was liable as maker, with interest thereon, $9,965.80; an overdraft made by him of $201; and the note upon which this suit is brought, upon which he was liable as indorser only, $350, with $96.00 interest thereon. The only amount received by the bank since that date was $84.58, with which payment this defendant had no connection. The amount which the bank received from Ellen C. Hanna and Mary E. Clark was nearly $4,000 less than sufficient to discharge the entire indebtedness of Junius R. Clark to the bank. There is not a scintilla of evidence from which a jury should have been permitted to find that the agreement under which the bank assigned the judgment against Clark to Richmond, as attorney for Ellen C. Hanna and Mary E. Clark, was intended to be a full settlement between the bank and Mary E. Clark and a payment of the note now in suit. The express terms of the written agreement negative any such intention, “any notes or other securities held by the First National Bank of Bradford to secure which the above stated judgment was given as collateral, shall he held and retained by the said bank unaffected by said assignment.” And upon this point the oral testimony was in entire accord with the written agreement. The court very properly refused to submit this question to the jury. There was no evidence which would warrant a finding that Ellen C. Hanna and Mary E. Clark, at the time they paid the money for the judgment which they bought, made any attempt to appropriate the money, which they thus paid, to this note or any other security for which the judgment against Junius R. Clark had been held by the bank as collateral.
Junius R. Clark was the debtor of the bank, he gave the note upon which the judgment was entered as a security collateral to the other securities held by the bank. The bank undoubtedly took a risk in assigning this judgment to Ellen C. Hanna and Mary E. Clark, for had the assignees proceeded on the judgment and realized from the property of Junius R. Clark an amount in excess of $6,750 the bank might have been required to credit the amount of such excess upon the claims which it continued to hold against Junius R. Clark. When the bank assigned the judgment the consideration for that sale must, as between the bank and Junius R. Clark, be considered as having been realized from the note which he had given as a collateral security for all the claims against him. The effect of the receipt of that money by the bank was, as between the bank and Junius R. Clark, precisely the same as if the fund had been realized from the sale of property of Clark upon the judgment: that is
The bank was the creditor and Junius R. Clark was the debtor and the manner in which the $6,750 should be appropriated to the claims, which the former held against the latter, was a matter in which no other party had a right to interfere. They might have agreed to any application that they saw fit. Neither of them at the time, made any appropriation of the payment to particular claims. Mary E. Clark was not upon the note in suit a surety of Junius R. Clark; she was the maker of the note and the principal debtor. The law would certainly raise no implication that a payment upon the indebtedness of Junius R. Clark should be applied to the extinguishment of the independent indebtedness of Mary E. Clark, she being the principal debtor and not a surety. The only party here complaining is Mary E. Clark who contends that the money should have been applied to the payment of her note, upon which Junius R. Clark was liable only as indorser. Had Junius R. Clark paid to the bank the amount of this note, he as indorser would have been entitled to the paper and, so far as the evidence in this case discloses, he could have recovered from Mary E. Clark the amount thereof. The appropriation of this payment contended for by the appellant would have been adverse both to the right of the creditor, the bank, and Junius R. Clark, the debtor. No appropriation of the payment to specific claims having been made, the law would apply it in the way most beneficial to the creditor; and, therefore, to the debt which is least secured, unless to the prejudice of a surety: Pierce v. Sweet, 33 Pa. 151; Johnson’s Appeal, 37 Pa. 268; Smith v. Brooke, 49 Pa. 147; McKelvey v. Jarvis, 87 Pa. 414; Borland v. Murphy, 92 Pa. 91; Moore v.
The judgment is affirmed.