53 Ala. 208 | Ala. | 1875
It is a clear principle of law, that the source or fund from which a payment is derived will direct its appropriation ; that is, when money has come from a particular fund, it must be applied in relief of the source from which the fund arises. Thus a mortgagee, receiving from the property, covered by the mortgage, a sum of money, is bound to apply it in extinguishment of the mortgage, and cannot appropriate it to the payment of an unsecured debt he may hold. 1 Amer. Lead, cases, 341, 1 Hilliard on Mort. 278-9. It follows the appellants were bound to apply the moneys received from Jones, in consideration of the release to him of the real estate covered by their mortgage, to the payment of the mortgage. They were also bound to apply the moneys received on the sale of the personal property, in the same way. If the mortgagor, Williams, had sought to redeem, he would have been entitled to claim this appropriation, and the appellants could not have claimed from him
2. The property mortgaged had been sold and converted into money by appellants, they having the prior mortgage. The surplus of the proceeds of sale, remaining in their hands after the satisfaction of their mortgage, was money had and received, belonging ex equo et bono, to the subsequent mortgages. It was recoverable in an action of assumpsit. Hitchcock v. Lukens, 8 Port. 333; Huckabee v. May, 14 Ala. 263. In such action it is permissible for the second mortgage to show the sums received by the prior mortgages from the property covered by his mortgage, that the sum in their hands to which they are entitled may be ascertained. No resort to a court of equity is necessary to compel the appropriation of such money to the satisfaction of his mortgage. The law makes the appropriation.
The rulings of the circuit court conformed to these views, and its judgment is affirmed.