had no notice. In the course of his opinion, Rapallo, J., said. "It is contended that the right of the creditor to the application is subject to the condition that such application be not inequitable, and such is the language used in some of the authorities cited. The equities referred to, however, are usually the equities existing between the debtor and creditor, and I have found no case recognizing those arising out of transactions between the debtor and third persons of which the creditor has no notice. The mere fact that there is a surety for one of the debts does not preclude a creditor from applying a payment thus received to the debt for which he has no security.

The money belongs to the debtor, and where the credi tor is ignorant of any duty on the part of the debtor in respect to it, he may receive and apply it as if no such duty existed. If no application has been made by either party, and the duty were cast upon the court of making the proper application, the equities of the surety would, doubtless, be considered. But where the application has been made by the creditor in accordance with his apparent legal right, and in ignorance of any fact which should prevent him from making such application, I do not think he is bound to change it on the subsequent disclosure that a third party had an interest in having it otherwise applied, and that the debtor had violated a duty to such third party in not directing such application. The application made by the creditor cannot be said to have been inequitable, if no facts were brought to his knowledge at the time showing that he ought not to make it. It would create great confusion in commercial dealings to hold that, after the lapse of time, and when the position of the parties may have been changed by such a payment, the transaction could be reopened, and the creditor obliged to revive an unsecured debt which he had treated as paid, and apply the payment on a debt for which he had ample security." In this case, it will be seen, the debtor made the payment voluntarily, and that he made no disclosure of the source from which the money came which he paid to his creditor; and the further fact appears that the creditor actually applied the money thus paid to him upon one of the debtor's two debts, and in ignorance of any equities existing between the debtor and any third party. Judge Rapallo, in his opinion, expressly states that if the court were to make the application, upon all the facts being known, the equities of the surety would be considered. There is one case in Massachusetts, Wilcox v. Fair.

haven Bank, 7 Allen, 270, which holds a different doctrine. In that case, the debtor to the bank conveyed to it certain personal property to be held by it as security for the payment of several promissory notes and drafts, upon which he was then, or might within two years thereafter become, liable. The personal property was sold for the purpose of paying the liabilities of the debtor upon various pieces of paper, some of which had no sureties, and others had different sureties upon them. The property not realizing enough to pay all the liabilities to the bank, it claimed the right to first apply the money to the payment of the note upon which the debtor was alone liable, and that being extinguished, then upon the paper upon which the debtor and his sureties who might be insolvent were liable, and the balance, if any, upon the paper with solvent sureties. The court decided that the bank had the right so to do, and upon two grounds: one of which was, that the sureties had no claim to be subrogated to the rights of the bank in the security without paying or tendering payment in full of all the debts for which the security was given. This they had not done. With this decision upon the rights of subrogation no fault can be found. But the further ground was taken that the bank had the right to appropriate the whole proceeds of the mortgaged property to any debt which it chose, and it could therefore exercise such right by applying the moneys in the manner claimed by it as above stated.

No authority is cited for such a position, and we think such an application would be inequitable under all the circumstances of the case, and having in view the general rule upon this question as laid down in the civil law and in cases at the common law following it, as above referred to. The principle decided in that case leaves out of view entirely all rights or equities of the surety. The law has always regarded a surety as having some rights in the security, though furnished directly by the debtor to the creditor. The security having been furnished by the debtor, the creditor must dispose of it upon equitable principles, and these equitable principles are entirely lost sight of in the case referred to.

The case of Field v. Holland, 6 Cranch, 9, has not been overlooked. It was a case where payments had heen voluntarily made, but no application of them had been directed by the debtor at the time of such payments. Subsequently he contended that they should have been applied on the judgment in question, to its extinguishment. The court, per Marshall, C. J.,

determined that all payments should be applied to debts existing when the payments were made, and it appearing that there were sundry demands against the debtor at the times which were not secured by judgment, the payments should be first applied to extinguish those demands, and the balance only should be applied on the judgment. It was said by the learned chief justice, that it appeared that the application of the payments had actually been made by the creditor in the manner which the court adjudged should be done. Such application was also held to be supported by general principles as well as by the particular circumstances of the case. The case is cited in Pattison v. Hull, 9 Cow. 767, where Cowen, J., says of it, that he was "persuaded that had the attention of the learned chief justice, who delivered the opinion in the case of Field v. Holland, been drawn to the great preponderance of authority the other way, his conclusion would have been the same with that of the court in Maryland."

In Gwinn v. Whittaker's Adm'r, 1 Har. & J. 754 (A. D. 1805), Chase, C. J., said he regarded the principle as firmly established in that state, and that it was in harmony with the English decisions that "if the debtor is indebted on mortgage and simple contract, or on bond and simple contract, and when he makes a payment should neglect to apply it, the law will make the application of it in the way most beneficial to the debtor, that is, to the mortgage or bond." To the same effect is Dorsey v. Gassaway, 2 Id. 402, 411, 412; 3 Am. Dec. 557 (A. D. 1809). None of these cases is exactly in point, yet the one in Cranch, where the payment was voluntary and no direction given by the debtor, does allow the creditor to apply it as he pleases, and also says that the court would apply it, if he had not, to the debt for which the creditor had the least security.

But in such a case as this, where neither party has applied the payment, and the moneys came from the course of judicial proceedings to enforce the security intended as such for all the debts, we think the weight of authority as well as the equities of the case call for the application of the moneys arising in such judicial proceedings to all the debts pro rata, especially where the debt to which the bank in this case desires to apply the moneys, in order to its entire extinguishment, is one for which the debtor is bound only as surety, and where such an application would work injustice to the debtor as to his debts for which another was bound as his surety.

AM. ST. REP., VOL, VIII. — 50

The case of National Bank of Newburgh v. Bigler, 83 N. Y. 51, 63, is not inconsistent herewith. There was no question of the rights of sureties involved in the case. The debtor owned a judgment against the city of New York (but which was still in controversy), and assigned it by an assignment, absolute in form, to the creditor to the extent of fifty thousand dollars. The evidence showed that the assignment was intended as a general security to the creditor for the indebtedness of the debtor, but it was delivered without any express condition, and without any direction as to the application of its proceeds. The judgment was subsequently reversed, but upon a compromise, to which the assignor of the judgment assented, the sum of about forty-four thousand dollars was paid by the judgment debtor, the city of New York, to the creditor, with the assent of such assignor. Before such payment he demanded that the amount received from the city should be applied upon certain specific debts of his, which the creditor refused to do, and did apply such payment upon certain other debts of the debtor. This court held that when the payment was made by the city to the bank (the creditor), it was the money of the bank, and was not that of the debtor Bigler, who had no ownership or control over it, because he had long ago parted with the right to receive it. Not having directed how the money should be applied when be assigned the judgment, and having parted with his ownership without condition, he was held not able to dictate what the bank should do with its own money. This is no such case.

The authors of the learned note to the cases of Mayor etc. v. Patten, 4 Cranch, 317, and Field v. Holland, 6 Id. 8, as found in 1 American Leading Cases, 286, at page 300, in speaking of applications of payments by the law, say the general rule is to appropriate the payments to all the debts ratably, but that it is very difficult to determine when the principle becomes properly applicable; and they cite the case of Blackstone Bank v. Hill, 10 Pick. 129, as recognizing the rule that the right of application by the creditor, when the debtor omits to make it, does not apply to cases of payment in invitum, or by process of law. Many cases are cited in the note on this branch, but the authors finally assert their belief that the general principle of the common law is, that the ownership of the money determines the right of appropriation, and after it is paid the debtor can make none. It would seem that in cases of payment in invitum, or by judicial proceedings, the

creditor does not become the owner of the money until it is paid, and the law at the very time of the payment makes its own application, and the creditor has no opportunity to make it himself. It were an endless if not an unprofitable task to cite and comment upon the vast number of inconsistent and almost contradictory cases, both English and American, upon this somewhat confused branch of the law. We are disposed to follow the rule laid down in Bridenbecker v. Lowell, supra. The opinion in that case was written by a judge who was for many years a member of this court, and who had a long judicial experience, and his learning and ability have been universally recognized. His opinion in that case is marked with evidences of great care and research, and we think it is based upon authority and sound reasoning.

Upon a review of the whole case, we are of opinion that the order of the general term was right, and should be affirmed, with costs to the defendant Moore.

RULE AS TO APPLICATION OF PAYMENTS: Wood v. Callaghan, 61 Mich. 402; 1 Am. St. Rep. 597, and cases collected in note 603.

WHEN PAYMENT IS TO BE REGARDED AS VOLUNTARY, and when compul. sory: Vick v. Shinn, 49 Ark. 70; 4 Am. St. Rep. 26, and note 30

HUSSEY V. Coger.

[112 NEW YORK, 614.]

MASTER AND SERVANT. - A SUPERINTENDENT UPON WHOM IS DEVOLVED the whole management and control of work, and who is authorized to employ and discharge workmen, to regulate and direct the manner of their work, to provide the means and appliances necessary for its prosecution, and to determine the time and place of its employment, may be regarded as standing in the place of his master, and while in the discharge of his duties as such superintendent he is not deemed a fellow. servant with the other employees of his master who are under his control.

MASTER AND SERVANT. A SUPERINTENDENT OR VICE-PRINCIPAL MUST BE REGARDED AS A FELLOW-SERVANT with other employees of his master who are under his charge and control, when he is not discharging the duties of superintendent or vice-principal, but is engaged in the performance of duties which properly belong to an ordinary servant or em ployee. Hence, where a servant was injured from the negligence of his superintendent in directing operations respecting the uncovering of a hatchway, it was held that the defendant could not recover of the master for the injuries suffered, because the superintendent was not at the time acting as such, but was rather discharging the duties of a fellow-servant.