
    New York and Brooklyn Brewing Company, Appellant, v. Peter Angelo, Respondent.
    Second Department,
    May 26, 1911.
    Replevin — Municipal Court — equitable relief — defenses — payment — directions for application—judgment not affording affirmative relief.
    An equitable defense does not change a legal action into one in equity.
    In an action of replevin in the Municipal Court of New York city to recover a liquor tax certificate alleged to have been assigned to the plaintiff by the defendant," and for damages for the detention thereof, the defendant may take the defense that the assignment, and a power of attorney accompanying it, were delivered as collateral security for a loan which has been fully paid, and, in seeking to establish such plea, the defendant does not invoke the exercise of equitable jurisdiction.
    Where the evidence shows that plaintiff loaned defendant money to pay for the license; that the assignment was given to secure the loan and that later certain persons called on plaintiff’s'treasurer and asked him ' how much money was due on the license and paid the sum asked, the court is justified in concluding that the payment was made with a direction to apply it to discharge the indebtedness on the license.
    This is so, although the defendant at the time owed plaintiff other independent debts and although plaintiff applied part of the money received to one of these other debts without, however, notifying the defendant.
    A direction for the application of payments need not be express, but may be implied, as where the payment exactly equals in amount one of several existing debts.'
    The plaintiff in an action of replevin is bound to show that he had a right to the property at the time the suit was commenced, and if incidental to the suit he takes the chattel, a judgment determining that defendant is the owner does not give affirmative relief.
    The effect of a judgment in defendant’s favor in such action is to determine that the certificate is his property, although damages are not assessed and the value of the property is not found.
    Such a judgment does not afford affirmative relief although the defendant may enforce his right to the certificate by execution.
    ■Appeal by the plaintiff, the New York and Brooklyn Brewing Company, from a judgment of the Municipal Court of the city of New York, borough of Brooklyn, in favor of the defend-, ant, rendered on the 24th' day of October, 1910.
    
      
      Henry A. Rubino [Finis E. Montgomery with him on the brief], for the appellant.
    
      George K. Jack, for the respondent.
   Jenks, P. J.:

The plaintiff appeals from a judgment of the Municipal Court for the -defendant. The ground of its appeal is that such judgment affords affirmative equitable relief in a court that has- no equitable jurisdiction. The action is in replevin to recover a liquor tax certificate and damages for detention. The certificate was issued to the defendant. The- plaintiff’s claim of title rests upon a written' assignment and power of attorney executed in its favor. The defendant pleaded' that the delivery of such assignment and power of attorney (together with a note for $975 as evidence of indebtedness) was for col-, lateral security for the payment of that sum which the plaintiff had lent to the defendant to pay for the- certificate, that the note had been paid., whereupon the defendant had become entitled to a return of it and of such assignment and power of attorney, cancellation thereof, and to the certificate. He demanded judgment that the complaint be dismissed, the ■ certificate (taken by proceedings herein) be returned, and for damages. .. ■ ■

The defendant was entitled to demand judgment for the return of the chattel. (Mun. Ct. Act [Laws of 1902, chap. 580], § 117.) He could avail himself in that court of the defense that the assignment and power of attorney were. delivered as collateral security, and in seeking to establish such plea he did not invoke the exercise of equitable jurisdiction. (Koehler & Co. v. Duggan, 49 Misc. Rep. 100 and case cited; cited in Electrical Audit & R. Co. v. Greenberg, 56 id. 517; Cushman v. Family Fund Society, 13 N. Y. Supp. 428, 432.) The interposition of ah equitable defense does not transform a legal action into an equitable one. (Rodgers v. Earle, 5 Misc. Rep. 167.)

I think that the testimony is sufficient to establish the con. tention of the defendant that the assignment and power of attorney were delivered for collateral security and that the note was delivered as evidence of the defendant’s said indebtedness. And I. think -that the evidence justified the conclusion that such indebtedness was discharged in full by a payment of $68.75. It appears that certain persons, on September 7, 1910, called upon the treasurer of the plaintiff to inquire how much money was due on the license, that they were informed that there was due $68.75, whereupon that sum was paid' to the plaintiff. The plaintiff applied $50 of such sum to the license account, and the balance, $18.75, upon an independent -indebtedness of the defendant to the plaintiff. It does not appear that such an application by the creditor was then or at any time thereafter made known to the defendant. I think that the court was justified in a conclusion that this payment of $68.75 was made with a direction for specific application to discharge the balance of the debt of $975. (Pattison v. Hull, 9 Cow. 747, 765; Stone v. Seymour, 15 Wend. 19; Goodman v. Snow, 81 Hun, 225.) A direction for application of payment need not be express, but may be implied, as when, e. g., the payment exactly equals in amount one of several existing debts. (Stone v. Seymour, supra; Robert v. Garnie, 3 Caines, 14.)

I think that the defendant doés not stand with a judgment for affirmative relief gained upon equitable grounds. The court gave judgment for the defendant. The effect, of that judgment is to determine that the certificate is the property of the ■ defendant, although damages are not assessed and the value of the property is not found. In such case the chattel is awarded to the defendant, who may enforce that judgment by execution. (Hammond v. Morgan, 101 N. Y. 186; Johnstone v. Weibel, 131 App. Div. 166.) This judgment may rest upon the finding that the defendant has discharged, the debt for the money advanced to him to pay for the certificate, and that the assignment and power of attorney delivered were collateral, and that the note delivered as evidence of the debt has been fully paid. The relief afforded to the defendant is not affirmative. . The judgment but finds that the title to the chattel is in the defendant. The replevin of the chattel was not essential to the action. (Mun. Ct. Act, §§ 96, 130.) The plaintiff was bound to show that it had a right to the delivery of the property at the time of the commencement of the suit. (Wood v. Orser, 25 N. Y. 351.) And if, incidental to the replevin suit, the plaintiff took the defendant’s chattel, the judgment which determines that the ownership is that of the defendant does not afford affirmative relief.

The judgment must be affirmed, with costs.

Thomas, Carr, Woodward and Rich, JJ., concurred.

Judgment of the Municipal Court affirmed, with costs:  