259 Pa. 583 | Pa. | 1918
Opinion by
Appellant states the following “question involved”: “Can a debtor in making payment on account of indebtedness specifically apply the payment to principal, when the interest at the date of payment exceeds the payment; or does the law make the application in such a case to interest, so as to prevent any application by the debtor?”
As a result of the rulings of the court below upon the law relevant to the point at issue, the plaintiff recovered somewhat less than his full claim, and, being dissatisfied Avith the amount of the verdict and judgment entered thereon, he has appealed. Appellant contends that a debtor has no legal right to direct a payment made by him to be credited on principal, when the interest then due exceeds the amount of the payment; hence that, under such circumstances, the creditor may retain the sum paid and appropriate it to interest, notwithstanding a different application may have been directed by the former and at the time expressly or impliedly agreed to by the latter.
In disposing of a motion for a new trial, the court beIoav states: “It is contended that the law, not the payor, makes the application, and that defendant’s direction ......was of no force or effect. With this......contention I cannot agree. The parties Avere of full age and could make any agreement they saw fit......; if the payment was in fact made on account of the [principal] debt, and if with that knowledge plaintiff retained the check, he cannot now apply the money otherwise.” We concur in this conclusion.
Roberts’ Appeal, 92 Pa. 407, 421, contains dicta which lends some support to appellant’s contention, but there is no ruling in that case Avhich controls the present one. Miller v. Leflore, 32 Miss. 634, 635, 644, and Johnson v. Robbins, 20 La. Annual 569, 570, are also called to our attention by the appellant; but both of them might with greater propriety have been cited by the appellee, for in neither instance did the debtor give any direction for a special appropriation of the payments there under con
Pindall v. Bank of Marietta, 37 Va. 481, 484, and Miller v. Trevilian, 2 Robinson’s Reports (Va.) 1, 27, cases cited by appellee, both rule that “a debtor owing a debt consisting of principal and interest, and making a partial payment, has a right to direct its application to so much of the principal, in exclusion of the interest; and the creditor, if he receives it, is bound to apply it accordingly” ; finally, the last of these cases contains an interesting discussion, beginning at page 28 of the report, as to the effect of this rule, to show that a creditor is not harmed by its application.
The following generalizations touching the question before us are furnished by 30 Cyc. At p. 1249: “Except where otherwise agreed, a payment made on an indebtedness consisting of principal and interest, not applied by either the debtor or creditor, will be applied first to interest due and then to principal [citing, inter alia, Moore v. Kiff, 78 Pa. 96; Spires v. Hamot, 8 W. & S. 17; Bell’s App., 4 Sadler 423].” See also Bower v. Walker, 220 Pa. 294, 297; Buck v. Mutual B. & L. Assn., 49 Pa. Superior Ct. 128; Com. to use of Bellas v. Vanderslice, 8 S. & R. 452-458; Penrose v. Hart, 1 Dallas 378. At p. 1228: “A debtor paying money to his creditor has the
In general, the court will make the application only in
The question raised by the record at bar has not been directly passed upon in any Pennsylvania case which our research has disclosed, and there are but few reported decisions upon the precise point in other jurisdictions. From an examination of the cases already mentioned it appears that, while a debtor, after making payments, may not demand their application to principal as against interest, yet he may so stipulate in making a payment, and, if it is accepted without immediate pro
It may be well here to state that the trial of this case involved a controversy as to the proper application of tAvo- different funds, one of $4,000 and the other of $1,000. When defendant paid plaintiff the latter sum, he explicitly directed in writing that it should be applied on principal, and, in the same letter, he expressed the wish that the sum of $4,000, previously paid, should be likeAvise applied. Plaintiff acknowledged receipt of the $1,000, noting that it was to be appropriated to principal, and, in his letter so doing, he discussed defendant’s suggestion for a like application of the $4,000, saying in that connection, “What I can’t see at the present time, without giving it much consideration, is how you can apply a payment on principal, as long as the interest is running against the debt; interest should be paid before the principal.” The verdict of the jury, which is in the nature of special findings, correctly determined that the $4,000 fund had been properly applied to interest, but
The assignments of error are overruled and the judgment is affirmed.