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 ton, 13 Minn. 210; March v. Lennon, 19 Minn. 75; Carson v. Cochran, 63, N. W. 1130, Minn. °

, J. On February 2, 1915, the plaintiff loaned $1,500 to the defendants, Schultz and Toppins. Those defendants thereupon executed and delivered to the plaintiff a first mortgage on the property described in the complaint to secure the payment of said $1,500. The mortgage provided that the buildings should be insured. They were so insured, and a clause attached to the policy, making the loss, if any, payable to the plaintiff. On November 3, 1915, the defendant Farmers & Merchants State Bank of New Salem took a second mortgage on the property described in the complaint to secure the sum of $2,404.86, then due to it from the defendants Schultz and Toppins. The plaintiff had knowledge of such second mortgage. In November, 1916, one of the buildings situated on the real property in question was destroyed, and another partially destroyed, by fire. After the fire and before payment was made by the insurance company, the cashier of the defendant bank saw the plaintiff, and demanded that whatever moneys the insurance company paid to the plaintiff be retained by the plaintiff and applied on the debt secured by the first mortgage so as to reduce such indebtedness. Upon the adjustment of the loss the insurance company issued a check for $606.39, payable to the plaintiff. The plaintiff, however, did not cash the check and apply the proceeds thereof on the indebtedness secured by the first mortgage, but indorsed and turned it over to the mortgagors on their promise that they would expend such moneys in rebuilding and repairing the buildings. The mortgagors did not comply with this agreement, although they made some repairs, and, out of the proceeds of the check, paid the plaintiff some $120 accrued interest on the mortgage. The mortgagors are insolvent. The defendant bank contends that it made demand on the plaintiff that he retain and apply the moneys received from the insurance company on the debt secured by the first mortgage. The then cashier of the bank testified:

“I told him (Krieger), once on the street and once in the bank, not to turn over this money; that it must be applied on the mortgage, because the building is worth that much less. He did not say anything.

“Q. Did you see the money for the fire insurance paid to Mr. Krieger, the check? A. I saw Mr. Krieger sign it. I was behind the