Page:Federal Reporter, 1st Series, Volume 5.djvu/763

 KENTON FURNACB EAitEOAD & MFG. CO. V. m'aLPIN. tSl �on the part of the defendants, that there were debts existing at the time of this arrangement. It is claimed on the part of the plaintiff that these debts have hever been paid. �The plaintiff claims that there is a debt owing to Bell of $500. The Company have never recognized this as a debt against it, and the company have the right in a prooeeding brought directly by Bell against them to dispute that claim. If he presented a claim and it was not allowed, wecan hardly go into the examina,tion and investigation of the rights of the parties as between Bell and the company in this partictilar case. �It is admitted tha,t there were debts then due Damarin & Co. The defendants claim that these debts have since been paid, but admit there is now due a larger amount of indebt- edness to them than was in existence at that time. The plaintiff claims that the original indebtedness has never been satisfied. If the indebtedness to Damarin & Oo., which ex- isted at that time, has been fuUy paid, then this action, in so far as the indebtedness to them is concerned, must fail; for as to the indebtedness subsequently contracted the transac- tion of April 14, 1874, must be held binding. �It is claimed tha,t L. C. Damarin was the finançiQ,! agent' of this company. He was the business manager, and paid into the company ail that was paid in, aûd received f rom the company ail the proceeds of the sales of stock which were made, and he was the financial agent of the company. The law is this: Where there is a running account between par- ties, and the debtor pays, he has the right at the time he makes the payment to say to which one of the items contaiued in this running account this credit shall bç applied. If he fails, to do 80, then the crediter, when he reoeives the money, has a right to make the application. If the crediter, when he're- ceives the money, fails to make the applicatioû of the pay- ment to any particulair item of indebtedness, tlien the law applies this payment to the liquidation of the first debt which existed, or the first item ^hich existed. �Now, if L. G. Damarin, after this resolutioii was passed, although the financial manager of the company, advariceid ����