McMurtrie v. Keenan , 109 Mass. 185 ( 1872 )

Chapman, C. J.

If a defendant in an action has paid money to the creditor to be indorsed or applied on the demand in suit, but suffers the plaintiff to take judgment for the whole amount, he cannot recover the money back. He has had his day in court, and the judgment is conclusive. Public policy requires that this should be so. Loring v. Mansfield, 17 Mass. 394. Jordan v. Phelps, 3 Cush. 545. Sacket v. Loomis, 4 Gray, 148. Fuller v. Shattuck, 13 Gray, 70. Nettleton v. Beach, 107 Mass. 499. But if, after the creditor thus neglects to indorse or apply it, he has the means of collecting the whole debt without giving the debtor any day in court, and does so collect it; as, for example, by warrant of distress, or by selling a pledge, or by a mortgage with power of sale, or by collecting securities which are under his control, then the debtor may recover back the money which has thus been paid and not applied. There is no judgment or other proceeding which estops him.

In this case the jury have found that the plaintiff paid $120 for interest, which the defendant promised to indorse, but did not. But, having his note secured by mortgage with power of sale, he threatened to make a sale unless the plaintiff would pay the interest which he claimed. He could do this without giving the plaintiff any day in court. The plaintiff is therefore entitled to recover back the sum that ought to have been indorsed.

Exceptions overruled.