Thе facts in this case are somewhat complicated, but when analyzed and understood, we think it will not be difficult to ascertain the rights of the parties. It appеars that John Farnum & Co. are commission merchants in Philadelphia, of which firm Peter Farnum was a partner; that the deceased, Percy Atherton, was a manufaсturer at Fitch-burg, in this county. Atherton and David BufFum, for their joint account, .purchased the machinery of a factory, and Atherton mortgaged his undivided half to John Farnum, to secure his note to Farnum or order, for $2500. Atherton carried on the business of manufacturing at a place called the Stone Mill, and consigned his manufactured goоds to the plaintiffs at Philadelphia, as factors, for sale, and the plaintiffs advanced large sums to Atherton ; and this continued _to the death of Atherton. About the timе this account was opened, John Farnum indorsed the note for $2500, and assigned the mortgage, given to secure it, to John Farnum & Co. who charged the note in their account current, but at the same time gave Atherton notice, that they still considered the mortgage in force as collateral security.
Now, it is contended by thе plaintiffs, that as this note was charged as an item in an extensive account current, and the amount, many times over, afterwards credited, the earliest credits, by the rules of appropriation, must be applied to the payment of the earliest debits, and so the note must be deemed absolutely paid, and the mоrtgage discharged, although there was constantly a large cash balance due, on such account, from Atherton to the plaintiffs. But these conventionаl rules respecting the appropriation of payments are adopted only in the absence of proof of the agreements or acts of the parties regulating such application of payments. It is always at the election of a party indebted to another on more than one account, on paying money, to elect on which account the payment shall be applied ; and this election being notified to the creditor, if he aсcept the payment, it shall be
Such was the state of things when Athertоn died; and on his estate being represented insolvent, the defendant, as his administrator, brought his estate and effects to a sale at auction, at which Peter Farnum, one of the partners in the firm of John Farnum & Co. attended; the firm, as it appears in this case, being large creditors. The state of the factory and machinery was this: John Farnum & Co. had purchased one undivided half of the machinery of Buffum, the original co-purchaser with Atherton. Atherton had obtained a lease of the рremises where the business was carried on, and had an unexpired term therein. The interest, which the administrator proposed to sell, was an undivided half of the maсhinery, with the unexpired term in the mill, and the advantages incident thereto.
A question then arose, whether the machinery, thus to be sold, still remained subject to the incumbranсe of said mortgage. Peter Farnum, being called upon, said he had a good and valid mortgage on the machinery, and that nothing had been paid upon it. The administrator then said he should sell, subject to whatever incumbrance was on it, and that the purchaser must take his risk. Peter Farnum became-the purchaser at $3500. Now, whether any other purchaser might have successfully contested that mortgage with John Farnum & Co. for whose account it was purchased, or not, we think that they could not. After the declaration of Peter Farnum.
In regard to the other question raised on the report, the court are of opinion, that the plaintiffs are bound to account
The goods, when forwarded, were the property of the administrator ; the consignees’ lien for their general balance against the intestate did not attach to them; and therefore the consignees must account for them to the administrator for the full amount, and their claim against the estate will be increased accordingly by withdrawing that credit.