Ayer v. Hawkins

| Vt. | Mar 15, 1846

•The opinion of the court was delivered by

Royce, J.

The questions saved for the consideration of this ■ court relate exclusively to the second ground of defence; — 1, Whether the facts appearing in the case were sufficient to warrant the implication of a new promise to pay all or any of the notes in suit, — and •2, Whether the plaintiff could avoid the effect of the statute as to all the notes, by dividing and distributing the payment in the manner-which the case discloses.

It has been too long settled to admit of present discussion, that part payment of a debt barred by the statute, if made without protestation against farther liability, is a recognition and acknowledgment of such debt at the time of making the payment, from which a promise to pay the residue shall be implied. Hence we have only to inquire, under this branch of the case, whether the sum of twenty dollars, which passed from the defendant to the plaintiff in 1841, constituted such an unconditional payment upon all or either of these notes. The jury have negatived the pretence, that it was advanced as a loan; and there is surely no ground to suppose it intended as a gift. It must, therefere, be taken to have been a payment upon some existing indebtedness. And as no evidence tended to show the existence of any claim whatever, aside from the notes, it was a legitimate inference, and, indeed, the only one which could properly be drawn, that the payment was made on account of some one or more of the notes, or of the indebtedness manifested by them. It is not essential, that the defendant should have recollected the giving of the notes, if he was aware of the indebtedness for which they were given, and acted with reference to it. And these facts, at least, are established by the verdict. A promise of farther payment was consequently to be implied, and it remains to be determined how far the implication should be carried. This involves the second quest tion presented.

A party paying money may always accompany the payment with directions to govern its application. If he owes his creditor severa} debts, he may apply the payment to either. In this the authorities all concur. And it is a rule equally well settled, that upon the neglect of the debtor to direct an application of the payment, the right to make it generally devolves upon the creditor. There is also a third case, where both parties neglect the application, and where the law is left to make it upon principles of equity and justice; but that case may be passed without remark on this oc? casion, as it is not now before the court. At present we have only to inquire, how a creditor, holding several demands against the same debtor, is at liberty to appropriate a general payment. The rules upon this subject were not established with any primary reference to such a state of things as existed in the present case, where all the demands of the creditor were barred by the statute. Yet cases have occurred, where his demands were of different degrees, where they were differently and unequally secured, where a part were barred by the statute of limitations, and where some were legal demands and others merely equitable. And he has been allowed to apply payments upon either of such demands, when the debtor has omitted to give any direction; Chit. Cont. 753; 13 Petersd. Ab. 247; and cases there cited. His right may not be free from doubt, however, in either of the two cases last mentioned; in the last it has been much questioned.

But though it is usually said, that the creditor may apply such a general payment as he pleases, there are many cases, where he is not indulged to this extent, even in the absence of any express direction from the debtor. The right to direct the application being universally conceded to the debtor in the first instance, regard is still had to his intention in the matter, whenever the facts and circumstances render that intention sufficiently clear and certain. Chit. Cont. and Petersd. Ab. ut supra. Newmarch v. Clay, 14 East 239. It has even been decided, that the creditor never acquires the right to apply such a payment with a view merely to his own interest or convenience, unless the debor has had an opportunity to direct its application; as if the money comes to the creditor without having passed through the hands, or under the control, of the debtor. Chit. Cont. 757, and cases cited. All this is sufficient to show, .that the right of designation among the creditor’s demands is essentially the right of the debtor. And hence, if he silently waives it in favor of the creditor, it should be intended that he does so relying .upon a mode of application to which he could not justly or reasonably object.

But the course which the plaintiff pursued in this instance, by distributing the payment upon all his demands, and thus seeming to preclude all defence under the statute as to either, was such as he doubtless knew was not anticipated and would not be approved or sanctioned by the defendant. It is entirely without precedent, so far as I have discovered, among the numerous cases reported on this subject. And we are fully convinced, that it has not produced the .effect designed, The plaintiff was at liberty to select any one, even the largest, of the notes, and apply the payment upon it; for so much had been yielded to him by the defendant. And the defendant must be taken to have understood, that his legal liability upon such note would be thereby revived. But beyond this his presumed intention or expectation cannot justly be extended. As the charge of the judge was in accordance with these views, and the plaintiff was enabled to recover to the extent of his legal right, there is no apparent error to be corrected, and the judgment below is affirmed.