15 Conn. 437 | Conn. | 1843
The facts in this case appearing upon the report of the committee, so far as necessary to a correct understanding of the principles involved in it, are, — that Jesse Whiting and Whiting Peck were indebted to the Stum-
1. The defendant now claims, that the sum received by the bank as the avails of the Whiting mortgage, shall be applied pro rata, upon all the debts due from Whiting to the bank» which made up the note of 6137 dollars, 82 cents, including as well the notes for which he is responsible as indorser, as the other claims ; and that the same be deducted from the amount now claimed by the Stamford Bank to be due upon the defendant’s mortgage.
The doctrine of the application of payments upon distinct debts due from the same debtor to the same creditor, has beén too frequently discussed and considered, to require a particular examination at this time.
If both the debtor who pays, and the creditor who receives, waive their respective privileges of making an application of the payment upon any one of the separate debts due, it would seem, that neither of them ought to claim a right to demand of the court so to make the application as to advance
Although the indebtedness of Whiting and of Whiting 4* Peck had all been consolidated, and was embraced in the note and mortgage of 6137 dollars, 82 cents, yet, as the committee find, that this was not by way of extinguishment of the former separate demands, but only an additional security for them, upon terms too, which Whiting had not complied with the original debts still existed as if no such consolidation had been attempted, and the same right of applying payments continued to both the parties. This feature in the case is material, and constitutes an essential distinction between the present and the cases in Massachusetts, to which we were referred, by the defendant, in the argument, and in which there was no power or opportunity of election. Blackstone Bank v. Hill, 10 Pick. 129. Lincoln v. Bassett, 23 Pick. 154. Dalton v. The Woburn Agricultural and Mechanic Association, 24 Pick. 257.
Some cases from the English books were relied upon, by the defendant, as furnishing authorities for his claim, and especially the cases of Bardwell & al. v. Lydall, 7 Bing. 489. (20 E. C. L. 213.) and Raikes v. Todd, 8 Ad. EL 84⅜
The latter case was, in effect, the same, only the person for whom the guaranty was given, had become bankrupt, and his estate paid a dividend of 2s. 5d. on the pound of the debts proved. The plaintiff had proved his whpie debt; but had applied the dividend to that part of it not covered by the guaranty. But this was not sustained, by the court, for the same reasons. It is evident, in both these cases, that the rule of decision was, that the debtor in the first case, and the bankrupt law in the other, had made a specific application of the dividends to every part of the entire debt, as being indivisible; and that the court could only sanction and enforce what had been already done. The facts here are essentially different. As we have already seen, the original debts remained distinct and separate, and no application was made of the money received in payment, either by the debtor or by the statute.
If, then, as the defendant supposes, there was no application made by either debtor or creditor, of the avails received by the Stamford Bank from its mortgage from Whiting, the question is, is the court, by the principles of law or equity before stated and applicable to this case, bound to apply the payment so as to reduce the amount due upon the notes indorsed by this defendant ? What are his peculiar equities) that he should claim to direct the application of payments made and received by other parties ? The debtor and creditor had the sole right of controuling these payments ; and if neither of these have done this, the court must do it, as the rights, equities, and intention of these parties seem to de
But the plaintiff here insists, and we think very properly* that the creditor, the bank, when the money was received, correctly exercised its privilege of applying it in payment of such of the debts due to it from Whiting, &c., as were not secured by the defendant’s indorsement. The court would have done the same.
It was objected here, that this was done only by the cashier of the bank, by verbal directions from the directors, and not by the authority of a corporate vote. Such vote was not necessary. Much of the old strictness and formality required by the common law, on the subject of corporate action, from necessity, as well as upon principles better understood, has been dispensed with, in modern times, and especially in this country of corporations. The agents of corporations must necessarily have some latitude of discretion, and especially agents of such general powers as the cashiers of banking institutions. It is the duty of such cashiers to receive all moneys paid to the banks, and as incidental to this power, to apply them, subject to the supervisory authority of the directors. Beverley v. The Lincoln Gas Light and Coke Company, 7 Ad. & El. 829. (33 E. C. L. 222.) Bank of Columbia v. Patterson, 7 Cranch, 299. Fleckner v. Bank of the United States, 8 Wheat. 338. Osborne v. Bank of the United States, 9 Wheat. 738.
2. The defendant still further claims, that, whatsoever may
That a surety who has paid the debt, and perhaps in some cases, where he has not paid it, may, in the language of the civilians, be subrogated into the place of the creditor, as to all the securities and funds in the hands of such creditor, we admit. This right, however, is not one which can be exercised against the essential interests of the creditor; whose rights, by virtue of the securities or funds in his hands, are paramount, but can be ultimately enforced only against the debtor. If the creditor has been paid, he is to remain paid ; if only secured, he is to remain secured. It is very obvious, in this case, that to enforce the defendant’s claim, will be to withhold from the creditor a portion of the joint and legal demand which he has against the defendant, and which the defendant is liable to pay, and to compel him to forego the benefit of the security he has obtained to the extent claimed by the defendant. The bank is now to lose a considerable portion of its claims against Whiting and Whiting <$• Peck; and we are asked to compel it to suffer a still greater loss.
For our views more particularly, on this subject, we refer to our opinion in the case of Belcher v. The Hartford Bank, ante, 381.
We advise the superior court, that the defendant is entitled to no deduction from the amount due on his mortgage to the Stamford Bank, by reason of the avails received by that bank from the Whiting mortgage.
Decree for plaintiffs.