Wales v. Gray

Grant, J. (after stating the facts). Had the debtor, Toll, the right to direct the application of payments? We think not. The terms of the trust must control. If the debtor alone were concerned, it would make no difference upon which note the payment was applied. Charles P. [348] Toll parted with his right to dictate or control the application when he gave the security. He then agreed and directed the trustee “to devote the net proceeds to the payment of these two notes.” The trust deed stands upon the same footing as a mortgage, securing distinct payments. In the absence, therefore, of any direction as to the priority in the deed itself or declaration of trust, the proceeds must be applied pro rata. Jennings v. Moore, 83 Mich. 231, and authorities there cited. The court below so held, and the decree is affirmed, with costs. Montgomery, Hooker, and Moore, JJ., concurred. Long, C. J., did not sit.