Spring Garden Ass'n v. Tradesmen's Loan Ass'n , 46 Pa. 493 ( 1864 )

The opinion of the court was delivered, February 25th 1864, by

Agnew, J.

This case is ruled by the decision in The North American Building Association v. Sutton, 11 Casey 463. Payments to stock are not ipso facto payment to the mortgage-debt or loan. It is true, according to former decisions, the mortgagor may apply his payments on the stock to the mortgage-debt, a license to do so being implied in the nature of these building loan transactions. The building association may also apply them by virtue of the terms of the assignment of the stock, which is taken as a collateral security. But in order to effectuate application of payments on stock to the debt, it requires an act of appropriation by one or the other of the parties. Strangers to the transaction stand upon a different footing. They can require nothing which the parties do not. Hence in this case there being no appropriation by either party, but, on the contrary, a notice by the debtor to the creditor not to apply the stock payments to the loan debt, and an acceptance and acting upon this notice by the creditor, the purchasers at sheriff’s sale of the mortgaged premises cannot compel an application of the collateral security to reduce the mortgage.

The judgment of the court below is therefore affirmed.