When the debtor loses his right to make application of payments, the creditor acquires a right thereto. Upon the question of the extent of his right there is a conflict of authority. The Common Law rule as enforced in the majority of American states is that the creditor may apply the payments so as to protect his own interests, as long as he does not inflict positive injustice on the debtor ;1 as to the oldest claim,2 so as to prevent it from being barred subsequently by the statute of limitations.3 He may apply payments thus made to an open account in preference to one evidenced by a note,4 to an unsecured debt in preference to one secured,5 such as a debt secured by a mortgage,6 or a lien,7 or by personal security,8 or to a debt insufficiently secured in preference to one fully secured,9 or to a debt against the debtor alone in preference to one secured by additional personal security.10 Thus a bank which holds A's note for a debt which B has guaranteed may apply A's deposits to the payment, of checks drawn by A.11 The creditor may appropriate one payment among two or more debts.12 The creditor may even apply payments to debts which for some technical reason are unenforceable, but are on valuable consideration and are not tainted with illegality. Thus he may apply a payment to a debt unenforceable because of non-compliance with the statute of frauds,13 or the stamp act,14 or a debt barred by the statute of limitations,15 or unenforceable because contracted when the debtor was an infant.16 The creditor cannot, however, make any application of such payment as will be unfair or unjust to the debtor. Thus he cannot apply the payment to a claim which is in dispute in preference to one whose correctness is conceded,17 or to a claim which has been paid before,18 or to an illegal claim instead of a legal one,19 even if such legal and illegal items are in one account,20 as to an usurious contract in preference to a legal one.21 So the creditor cannot apply the payment to a debt which cannot have been contemplated by the creditor, as to a debt not due when the payment was made," or to a debt incurred after such payment was made.23

14 Schoonover v. Osborne, 117 la. 427; 90 N. W. 844.

1 California Bank v. Webb, 94 N. Y. 467; Long v. Miller, 93 N. C. 233; Fargo First National Bank v. Roberts, 2 N. D. 195; 33 Am. St. Rep. 768; 49 N. W. 722.

2 Dent v. Bank, 12 Ala. 275; Rish-er v. Risher, 194 Pa. St. 164; 45 Atl. 71.

3 Raymond v. Newman, 122 N. C. 52; 29 S. E. 353.

4 Moss v. Adams, 4 Ired. Eq. (N. C.) 42.

5 Field v. Holland, 6 Cr. (U. S.) 8. 6 Herzogv. Purdy, 119 Cal. 99; 51

Pac. 27.

7 Wyman v. Herard, 9 Okla. 351 59 Pac. 1009.

8 Coney v. Laird, 153 Mo. 408; 77 Am. St. Rep. 721; 55 S. W. 96.

9 Stanley v. Turner, 68 Vt. 315;. 35 Atl. 321.

1 Pearce v. Walker, 103 Ala. 250; 15 So. 568; Murdock v. Clarke, 88 Cal. 384; 26 Pae. 601; Wellman v. Miner, 179 111. 326; 53 N. E. 6091 Keairnes v. Durst, 110 la. 114; 81 N. W. 238; Heaton v. Ainley, 108 la. 112; 78 N. W. 798; superseding 74 N. W. 766; First Presbyterian Church v. Santy, 52 Kan. 462; 34 Pac. 974; Wood v. Genett, 120 Mich. 222; 79 N. W. 199; Shelden v. Bennett, 44 Mich. 634; 7 N. W. 223; Cox v. Sloan, 158 Mo. 411; 57 S. W. 1052; Thorn, etc., Co. v. Bank, 158 Mo. 272; 59 S. W. 109; Lenzen v. Miller, 53 Neb. 137; 73 N. W. 460; modifying on rehearing 51 Xeb. 855; 71 N. W. 715; Turner v. Hill, 56 N. J. Eq. 293; 39 Atl. 137; Burnett v. Sledge, 129 N. C. 114; 39 S. E. 775; Pelzer v. Steadman, 22 S. C. 279; Fargo v. Jennings, 8 S. D. 99; 65 N. W. 433; Jeffers v. Pease, 74 Vt. 215; 52 Atl. 422; Pope v. Ice Co., 91 Va. 79; 20 S. E. 940; Kelso v. Russell, 33 Wash. 474; 74 Pac. 561; Buster v. Holland, 27 W. Va. 510.

2 Lowenstein v. Meyer, 114 Ga. 709; 40 S. E. 726; Bourne v. Repass, 2 Va Dec. 694; 34 S. E. 623.

3 Blair v. Carpenter, 75 Mich. 167; 42 N. W. 790.

4 Whittaker v. Groover, 54 Ga. 174; Bell v. Bell. 20 S. C. 34; Fargo v. Jennings, 8 S. D. 99; 65 X. \V. 433.

5 M. A. Sweeney Co. v. Fry. 151 Ind. 178; 51 N. E. 234; Henry Bill Publishing Co. v. Utley, 155 Mass. 366; 29 X. E. 635; Kelso v. Russell, 33 Wash. 474; 74 Pac. 561; Northern Xational Bank v. Lewis, 78 Wis. 475; 47 X. W. 834.

6 Lewis v. Mfg. Co.. 56 Conn. 25; 12 Atl. 637; Bird v. Davis, 14 N. J. Eq. 467; Wadlinger v. Loan Association, 153 Pa. St. 622; 26 Atl. 647; Johnston v. Ins. Co., 107 Wis. 337; 83 X. W. 641.

7 Bean v. Brown, 54 X. H. 395; North v. La Flesh, 73 Wis. 520: 41 N. W. 633.

8 People v. Powers, 108 Mich. 339: 66 N. W. 215; Coxe v. Milbrath. 110 Wis. 499; 86 N. W. 174.

9 Hanson v. Manley, 72 la. 48; 33 N. W. 357.

10 Plain v. Roth, 107 111. 588; Hanson v. Manley, 72 la. 48; 33 N. W. 357; Burks v. Albert. 4 J. J. Mar. (Ky.) 97; 20 Am. Dec. 209:

Wood v. Callaghan, 61 Mich. 402; 1 Am. St. Rep. 597; 28 N. W. 162; Harding v. Tifft, 75 N. Y. 461; Fair Haven First National Bank v. Johnson, 65 Vt. 382; 26 Atl. 634.

11 London, etc., Bank v. Parratt, 125 Cal. 472; 73 Am. St. Rep. 64; 58 Pac. 164.

12 Beck v. Haas, 111 Mo. 264; 33 Am. St. Rep. 516; 20 S. W. 19; Young v. Alford, 118 N. C. 215; 23 S. E. 973. Contra, where such debts are barred by limitations, Ayer v. Hawkins, 19 Vt. 26.

13 Haynes v. Nice, 100 Mass. 327; 1 Am. Rep. 109.

14 Biggs v. Dwight, 1 M. & R. 308.

15 Williams v. Griffith. 5 M. & W. 300; Armistead v. Brooke, 18 Ark. 521; Ramsay v. Warner, 97 Mass. 8; 93 Am. Dec. 49; Pond v. Williams, 1 Gray (Mass.) 630; Moore v. Kiff, 78 Pa. St. 96; Hopper v.

Hopper, 61 S. C. 124; 39 S. E. 366.

16 Thurlow v. Gilmore, 40 Me. 378.

17 Perot v. Cooper, 17 Colo. 80; 31 Am. St. Rep. 258; 28 Pac. 391; Stones v. Talbot, 4 Wis. 442. This is sometimes explained on the theory that the debtor impliedly directs such application. Perot v. Cooper, 17 Colo. 80; 31 Am. St. Rep. 258; 28 Pac. 391.

18 Lyon v. Witters, 65 Vt. 396; 26 Atl. 5S8.

19 Rohan v. Hanson, 11 Cush. (Mass.) 44; Backman v. Wright. 27 Vt. 187; 65 Am. Dec. 187; Greene v. Tyler. 39 Pa. St. 368; Bancroft v. Dumas, 21 Vt. 456.

20 Dunbar v. Garrity. 58 N. H. 575; Storer v. Haskell. 50 Vt. 341.

21 North Bend First National Bank v. Miltonberger. 33 Neb. 847; 51 N. W. 232; Adams v. Mahnken. 41 N. J. Eq. 332; 7 Atl. 435; Fay v. Lovejoy, 20 Wis. 403.