Page:Federal Reporter, 1st Series, Volume 5.djvu/504

 492 FEDERAL RBPOBTEB. �.TJie rigM of the plaintififs to apply the paynjients so made to, that portion of the acoount which is for intereet at 2 per cent, per month is denied. The argument is that the charge for interest is illegal, and while the creditors in this case had a right to apply the payments, his right is confined to demands which are legal, and can be enforced. Upon this point the law seems entirely settled. So far as I can discover, there is no conflict of authority. The established rule is that when a creditor has two demands, one of which is lawful and the other unlawful, — that is to say, arising out of some contract prohibited by law, — the creditor can apply an unappropriated payment only to the lawful demand. Rohan v. Hanson, 11 Cash. 44; Caldwell v. Wentworth, 14 N. H. 431; Bancrqft v. Dumas, 21 Vt. 456. �,; But inany demands are la\vful which cannot be recovered by a suit at law, and to the payment of ail such demands the creditor maylawfuUy apply mpneypaid to him by his debtor, whenever the debtor fails to make açy appropriation. Thus a, debt.barred by the statute of limitations may be liquidated in preference to debts not barred. Ramsey v. Wasner, 97 ^^Sb^B.^y MilUy^.FowheSf 5 Kng. (^.:C.)e55; Williams v. Qriffi.tJ.iy5 M.. &^^ 300. ' ' . �,,,:So in .cases where no recovery. can be had because the promise is not in writàng, as required by the statute of frauda. Haynea y^ Nice, 100 M.&B3,B27; Murphy \.Webber,61 Me. i78. �. In like manner, where a statute did not prohibit the sale of liquor, but enacted "that no person should maintain any action for sums for or on account of spirituous liquors, " it was held the seller might apply an appropriated payment to the account for liquors and sue for other articles. Philpott v. Jones, 2 A. & E. 41 ; Cruikshank v. Rose, 1 Mood. & Eob. 100. So, where the creditor had an equitable demand, arising out of partnership relations, he was allowed to apply payments, made generally, to the equitable claim, and sue at law for his legal demand. Sosanquet v. Uray, 6 Taunt. 597. These cases illustrate the distinction which is made between con- traets "which the law simply declines to enforce, and those which it directly prohibits." Phillip v. Moses, 66 Me. 70. ����