Doctrine of marshalling

Marshalling is an equitable doctrine applied in common law jurisdictions in the context of lending. It concerns two or more creditors who are each owed debts by the same debtor, where one of them can enforce his claim against more than one security or fund and the other can resort to only one. The doctrine gives the second creditor an equity to require the first to satisfy himself, or be treated as having satisfied himself, so far as possible out of the security or fund to which the second has no claim. Lord Hoffmann described it as a principle for doing equity between such creditors, and in the United States Justice Stone described it as resting on the principle that a creditor with two funds to satisfy his debt may not, by how he applies them, defeat another creditor who may resort to only one of the funds.