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that plaintiff was deceived by fraudulent representations and that, consequently, he is not bound by the receipt upon the face of the check. The terre tenant does not now controvert that finding but, accepting it as final, he still contends that the amount due upon the lien should be reduced in the proportion which $1,458.20 bears to the total indebtedness. In other words, he contends that the parties have made an appropriation of the payment and that thereby the whole indebtedness and not any particular item of it was reduced and that he is entitled to a portion of that reduction.

Aside from the numerous cases which hold that a third party may claim the advantages arising from the appropriation of payments, some of which will be cited hereinafter, it is clearly established by statute that a terre tenant may raise "any defence which would defeat the action were it a personal one against the contractor to recover for particular work or materials.

Act of June 4, 1901: (P. L. 447; section 36.) See also Weitzel v. Zane, 61 Pa. Superior Ct., 478. This, however, does not confer upon the terre tenant a right to disturb an appropriation actually made by the debtor or creditor; even though the terre tenant or, more strictly, the building be regarded as surety for the contractor (Weitzel v. Zane, supra) he cannot set aside an appropriation actually made at the right time: Logan v. Mason, 6 W. & S. 9. The general principles of the appropriation of payments are equally clear and, perhaps, the best and most succinct expression of them is afforded by Garrett's Appeal, 100 Pa. 601, wherein it is said:

"The well-recognized rule is, that debtor has the right, at his election, to make the appropriation of payments. If he omits it, the creditor may make it. If both omit it, the law will apply the payments according to its own notions of justice. It is too late for either party to claim a right to make the appropriation at the time or after a controversy has arisen in regard to the appropriations: United States v. Kirkpatrick, 9 Wheat, 720. When the aid of the law is invoked several rules have been declared. One, that the payment shall be applied in discharge of the earliest liabilities of a running account; another, that it shall be applied in the way most beneficial to the creditor, and therefore to the debt least secured,

unless to the prejudice of a surety: Pierce v. Sweet, 9 Casey, 151."

Apply these rules to the instant case the following conclusions are irresistible; first, that the giving of the check with the statement thereon constituted an appropriation of the proceeds thereof to the payment of whatever current account was then in existence between Butterweck and plaintiff; second, that the appropriation having been made by the debtor, plaintiff was bound thereto by his acceptance and use of the check; third, that the appropriation so made extended only to the allocation of the proceeds to the current account as distinguished from any other indebtedness arising from other transactions and not evidenced by the account; fourth, that the fraud perpetrated by Butterweck avoids the check as a receipt in full but not as an appropriation of so much of the consideration as plaintiff actually received in the settlement; and fifth, the appropriation having been made by the debtor there is no occasion for the court to make an appropriation since creditor and terre tenant are bound by it, and that the task of the court is to determine from the evidence the terms of the appropriation so made by them.

Thus, a greater problem still confronts us. The appropriation was made to the account. But how shall the proceeds be allocated among the items of the account? Here there is no appropriation whatever. Although it is our duty to appropriate the payment among the items we are without any evidence to guide us. We cannot apply the payment in discharge of the earliest liabilities of the account; for they all bear the same date, and yet it is not conceivable that all were due upon the date of entry. We cannot apply it in a manner most beneficial to the creditor; for we are not informed as to which of the items he is least secured. We cannot protect the equities of sureties; for we know of no sureties in the case, unless the terre tenant be one and even his equity can prevail only if there be no other equal equities entitled to protection.

It is patent that the appropriation having been made by the debtor his intention at the time is a potent factor. Whether or not there was an appropriation and, if so, its nature and extent may be inferred from all the surrounding circumstances: West Branch Bank v. Moorhead, 5

W. & S. 542. If, therefore, we could ascertain Butterweck's intention we should probably discover a solution to our problem. When he delivered the check did he intend that the proceeds should be ratably distributed among all the items of the account or that it should be distributed in the order of their merit as regards their security? The statement upon the check of itself is unenlightning. It points neither one way or another. As a matter of fact, Butterweck pretended to pay all his debts in full; that is, the cash, the check and the equity in the house conveyed to plaintiff were sufficient, if good, to pay all the items in full. But concerning the house the jury has said that he committed a fraud; that is to say, that when he conveyed he knew that there was a lien upon the house which would consume the equity therein. Knowing that at the time when he gave the check, had he any intention and, if so, what was his intention as to the way in which the cash and the check (which was good) were to be applied to the payment of his debts to plaintiff? If he knew that all his debts were due the same date and were of equal grade it is not at all unreasonable to suppose that he intended a ratable distribution among them. On the other hand, if they were due at different times it is reasonable to think that he wished them paid in order of their maturity or if of different grades of merit, then in the order of their greatest merit; taking, first, those which he was legally and morally bound to discharge in preference to others, take, for intsance, his liability upon the Jones house. He sold the Jones house on November 1, 1920, presumably by a grant, bargain and sale deed and, therefore, was liable to Jones for any incumbrance done or suffered by him and plaintiff's claim was such an incumbrance. Act of May 28, 1715 (1 Smith Laws, 94 section 6). He was bound in conscience to protect the title which he conveyed to Jones and, therefore, it would be entirely natural to suppose that when he paid plaintiff on November 17, 1920, he intended that the valid portion of his settlement should be applied to the payment of the incumbrance on the Jones house. Possibly he did so intend or should be taken so to have intended if the Jones house was the only house represented by the account which was sold during that period and under like circumstances. But if other houses were likewise sold

during the same period, no such intention can be inferred. In that case the intention, if it existed at all, was to protect all titles which he was bound to protect. In short, it comes down to this: That without evidence of the nature of the items of the account there is no basis upon which an appropriation to the items can be made by court or jury and that without that same evidence there is nothing from which Butterweck's intention can be deduced.

There are cases of other jurisdictions which are cited for the proposition that in the absence of circumstances requiring a different application courts will distribute the payment ratably among the items of a running account. See 30 Cyc. 1248. But a careful reading of those of the cited cases which are available does not sustain the proposition for which they are cited. The cases we have studied clearly teach that when the parties have not positively and indubitably appropriated the payment the courts will dissipate the doubt by making its appropriation accord with what the evidence shows was the intention of the parties and, in all such cases, have found from the evidence of all the circumstances that the parties contemplated a ratable distribution: Taylor v. Foster, 132 Mass., 30; Turner v. Hill, 56 N. J. Equity, 293; Gillett v. Depuy, 48 N. Y., 388. Which is, of course, the Pennsylvania rule. Then, too, there is our own case of Harker v. Conrad, 12 S. & R., 301, which, at first blush, might be taken to hold that the court will, as a matter of law, declare an appropriation in such manner as to protect a terre tenant's rights, but which upon careful study will be found to accord with the general principle that when no appropriation is made (and an appropriation made at an improper time is no appropriation) the court will make an appropriation in accordance with the rules already stated or in accordance with what the evidence shows were the debtor's intentions at the tir of the payment. There, a contractor having furnished material for two houses and having received an unappropriated payment, from the owner, applied the payment to one house and allowed the time for filing the lien upon that house to expire. When he sought to recover upon his lien against the other house which had been bought by an innocent third party, Gibson J., said:

"The debtor has a right to make the application, in the first instance, and failing to exercise it, the same right devolves on the creditor; but where neither had exercised it, the law nevertheless presumes in ordinary cases, that the debtor intended to pay in the way which, at the time, was most to his advantage.

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Then according to this, if the controversy was between the original parties, it would admit of a doubt, whether the payment ought not to be considered, as having been made on the foot of the account for materials furnished to the house in Fourth Street But the introduction of a purchaser without notice into the case leads to an opposite result; he stands in superior equity to Harker and Thorn (owners) who were bound in conscience to protect the title which they had conveyed to him, and who, there is, therefore, as much reason to presume intended to make this payment for his benefit as there would be to presume that they intended to apply it in the way most conducive to their own interest, if a particular application of it could have produced an equal benefit to themselves. The law ought to presume and does presume that every man is governed by the dictates of conscience and that he will do what honesty requires of him, even though it be against his interest; such a presumption can prejudice no one, nor does it injure the plaintiffs here."

That conclusion flowed naturally from the facts in evidence. The court could readily ascertain all the facts concerning each item and having found them was able to give full protection to the terre tenant's equity by finding the owner's intent to protect it. But here, as already pointed out, there is no evidence whatever from which an inference of intention can be drawn. There the terre tenant's equity was balanced against plaintiff's and there were no other equities to consider. Here we know not how many others are in Jones' shoes and until we know that, our theories concerning Butterweck's intentions do not arise even to the dignity of a mere conjecture.

We have said enough to indicate that the question as to whether or not an appropriation has been made and what its terms were, is a question for the jury: Kann v. Kann, 259 Pa. 583; Gunster v. Jessup, 192 Pa. 223; Pardee v. Markle, 111 Pa. 548; Stewart v. M'Quaide, 48 Pa.

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