¶1The referee erred, I think, in finding that only the sum of $194.50 was due upon the note of Mrs. Bergen in suit.
¶2Assuming that the referee had a right to require the plaintiff, as he was both the creditor and assignee of Cross & Wilson and the holder of the three notes indorsed by Mrs. Bergen and preferred in the assignment of said Cross & Wilson, to account for the assets received by him as such assignee and applicable to the payment of such notes, yet I think he erred in holding in effect that the assignee was bound to apply such assets ratably on the three notes of Mrs. Bergen. The plaintiff held three notes of $1,000 each indorsed by Mrs. Bergen and payable in eleven, twenty-three and thirty-five months respectively.
¶3As the creditor and debtor were the same and no other person was interested in the question, I think the assignee might apply the money in his hands applicable to the payment of these three notes to extinguish them in their order as they fell due.
¶4*644This, it appears, he did, having paid, canceled and surrendered up the two notes which first matured, amounting to $2,180.76, and applied the proportion oí residue of the money in his hands at the-time of the commencement of the action payable under the assignment on the notes indorsed by Mrs. Bergen, amounting to $422, upon the third note last matured so indorsed, being the note in suit. Strictly, the plaintiff was entitled to recover at law for the balance unpaid upon such note.
¶5So far as the plaintiff had received money from the assets of the principal debtors and applied them on the notes of Mrs.' Bergen, the referee was entitled to receive the proof and hold the notes as paid, or paid pro tanto, but so far as they were not in fact paid the plaintiff was entitled to recover at law.
¶6As a defendant may now set up an equitable defense and have affirmative relief upon his equity in an action at law, the defendant doubtless might, by proper allegations in his answer, have required the plaintiff to account as assignee in this action for the assets of the firm of Cross & Wilson in his hands and have had the recovery upon this note limited to the amount actually remaining due thereon after the taking of such account, but the defendant has sought or asked for no such affirmative relief.
¶7The allegation of the answer was that the plaintiff as such assignee had collected and received more than sufficient from the assets of Cross & Wilson to pay off the preferred creditors of such firm, and that the note in suit had been fully paid-
¶8Mrs. Bergen as the defendant clearly had no defense to these notes. They were made and indorsed.to be turned out to the plaintiff in payment for goods sold, and were so used.
¶9The question whether the plaintiff was entitled to recover costs it is unnecessary to consider, as the action must be re-tried.
¶10The judgment should be reversed, a new trial had, with costs to abide the final decision of the court.
¶11Judgment reversed and new trial ordered.