Strong v. Bowes

WinsLow, J. It is conceded that the plaintiff acquired a good title to the note in suit, and the right to hold the same as collateral security for the repayment of the $1,800 loaned by the plaintiff to Thomas under the agreement of May 13, 1896, because said note was then indorsed in blank by the owner, and in the possession of Thomas, and received by the plaintiff in good faith, with no knowledge of any defect in the title of Thomas thereto. This being the case, we agree with plaintiff’s counsel that the controlling question in the case is' simply a question of application of payments. A considerable amount of other collaterals were held by the plaintiff as security for the $1,800 loan. On March 9,1897, when the 'note in suit fell due, the other collaterals in plaintiff’s hands were sufficient in value to discharge the $1,800 debt, but it had not been discharged. April 19, 1897, Thomas borrowed $280 more of the plaintiff upon his note, and agreed that all the collaterals then in plaintiff’s hands should be held as security for it. It may be conceded that this agreement could not affect the note in suit, because it was then past due, but this did not prevent the plaintiff from applying the other collaterals which he held to pay the $280 note, and holding the note in suit to secure the indebtedness of $1,800, for which it was rightfully pledged. This is what [546] the court finds was done, and this the plaintiff manifestly had a perfect right to do. By so doing he has simply enforced his admitted right to hold the note as collateral for the $1,800 debt, which right he acquired on the 19th of June, 1896. By the Court. — Judgment reversed, and action remanded with directions to enter judgment for the plaintiff in accordance with this opinion.