Page:Federal Reporter, 1st Series, Volume 7.djvu/308

 ^96 FEDERAL REPORTER. �laterals-belonging with It, except two policies of instirance upoti his life. November 20, 1873, the defendant lent him $713.85, at 18 per cent, inter- est, and-took his note therefor, secured by the two policies of insiirance ; and in October, 1875, another policy was delivered to further secure the two note?. Tweiity-four per cent, interest was paid on the loan of $5,000 from the time it was made, and on the $2,000 residue after the $3,000 was paid ; and 18 per cent, on all other loans from time to time down to May 3, 1876 ; leaving the principal sums of $6,750, $2,000, and $715.85 then appar- ently due. Early in 1877, Hoole was adjudged a bankrupt. The orator, who was book-keeper for the flrm, and afterwards for him, became the assignee of his estate. �This bill is brought to redeem the mortgaged estate and �Insurance policies, alleging that these debts have all been �satisfied by th© payment of the several sums of money which �have been paid on account of the debts, without alleging that �any part of them was paid as unlawful interest, or setting �upthatfact as a ground of extinguishment of the debts, or aa �affording or affecting any relief. The orator claims that the �" payments throughout the whole time should be applied to the �extinguishment of lawful interest due on all the debts at the �time of payment, and then to the principal of the debts. The �defendant insists — �That payment beyond legal interest was unlawful only by statute, and that as the payments in question were in fact made upon interest, and not upon principal, they cannot be made to apply upon principal, except upon pleadinga setting forth the facts as to how the payments were made as ground for relief according to the eilect of the statute ; that the orator, as assignee, has no right to have them treated otherwise than as pay- ments of interest, as they were made by the bankrupt ; that, if any pay- ments can be applied to these principal sums, none but those made by the bankrupt in liis individual right can be ; that the payments upon each note raust be applied to that note only, and that none can be carried from one note to another, although some should be more than paid. �There is sOme eontroversy as to what the effect of the trans- actions was by which the firm notes were taken up and the obligations of the bankrupt given. The testimony of the par- ties to them has been taken upon their respective sides, but they do not differ much as to the facts, although they do as to the construction put upon the facts. The orator, as book-keeper, had knowledge of that business. His testimony has been taken, and, in view of that of the others, seems to be reliable, and throws light upon this subject. He was asked : ��� �