No. 832.

Book 2, part 2, tit. 4, chap. 5, sec. 3, § 7.

No. 834.

the payment of a sum of money, made by a debtor to his creditor, to one of several debts which are due by the former to the latter. It is frequently of much importance to the parties to which of such debts the payment should be appropriated; some debts are better secured than others, or there may be a surety or a pledge given for one and not for another. It is not always easy to say how the appropriation ought to be made. Some rules have been made for the purpose of ascertaining the rights of the parties; these will now claim our attention.

832.-Rule 1. When a debtor owes several debts to the creditor and he pays money on account to him, he has a right to direct the application of the payment to which debt he pleases, by doing so at the time of payment; this is called the right of appropriation. (a)

833.-Rule 2. If the debtor neglect to make the appropriation at that time, then the right passes to the creditor; (b) and he is not bound to make the application at the time of the receipt of the money. But when once made, as by rendering an account, bringing suit, and declaring in a particular way, the appropriation cannot be changed.(c)

834. Rule 3. When neither party avails himself of the power to make the appropriation, the courts will, as far as possible, make it according to the apparent interest of the parties, and with a view to do equity both to them and their sureties. (d) To this general rule there are several corollaries.

1. The application must be made to that debt which is most beneficial to the debtor.(e)

(a) Oliver v. Phelps, 1 Spencer, 180; Bacon v. Brown, 1 Bibb, 334; Starrett v. Barber, 7 Shepl. 457; Selfridge v. Northampton Bank, 8 W. & S. 320.

(b) White v. Trumbull, 3 Green, 314; Salleck v. Turnpike Co., 13 Conn. 453.

(c) Bank of N. A. v. Meredith, 2 Wash. C. C. 47.

(d) Emery v. Tichout, 13 Verm. 15; 3 W. & S. 550; 5 W. & S. 542. (e) Gwinn v. Whitaker, 1 Har. & John. 754; Dorsey v. Garraway, 2 Har. & John. 402; Logan v. Mason, 6 W. & S. 9.

No. 834.

Book 2, part 2, tit. 4, chap. 5, sec. 3, § 7.

No. 834.

2. When the debts are of an equal nature, the payment must be presumed to be made to discharge the oldest.(a)

3. When the debts are of the same date, and equal in every other respect, the payment will be appropriated proportionally among them.

4. When principal and interest are both due, the payment will be first applied to the interest.(b)

5. When one debt is due and another is not, the payment will be applied to the first. (c)

6. Courts will apply payments to do justice to sureties and relieve them, whenever they can. (d)

7. When there are several debts, and the payment corresponds exactly to one of them, it will be so applied.(e)

8. When there are several items in an account, and some of them cannot be recovered while others may be enforced, and a payment is made, it will be applied to the latter.(f)

9. When a member of a firm is indebted, and the firm owe the same person, a payment made by such partner will be presumed to be on his own account.(g)

10. When several persons are interested in the notes on which suit is brought, and a partial payment is made on the judgment obtained on them, a surety shall have a proportionate credit.(h)

(a) United States v. Kirkpatrick, 9 Wheaton, 720; Fairchild v. Holly, 10 Conn. 175; Berghaus v. Alter, 9 Watts, 386.

(b) Jones v. Kilgore, 2 Rich. Eq. 63; Baines v. Williams, 10 S. & M. 113.

(c) Peebles v. Dee, 1 Dev. 341; Spires v. Harnot, 8 W. & S. 17; Jencks v. Alexander, 11 Paige, 619; Seymour v. Sexton, 10 Watts, 255; Bacon v. Brown, 1 Bibb, 334; Righter v. Stall, 3 Standf. Ch. R. 608.

(d) Postmaster General v. Norvell, Gilp. 106; Harker v. Conrad, 12 Serg. & R. 391; Brander v. Phillips, 16 Pet. 121; Myers v. United States, 1 McLean, 493.

(e) Huger v. Bocquet, 1 Bay, 497.

(f) Hilton v. Burley, 2 N. Hamp. 193; Rackley v. Pearce, 1 Kelly, 241. See Ayer v. Hawkins, 19 Verm. 26.

(g) Johnson v. Boone, 2 Harring. 172.

(h) Blackstone Bank v. Hill, 10 Pick. 129.

No. 835.

Book 2, part 2, tit. 4, chap. 5, sec. 4.

§ 8. Of payment of money into court.

No. 836.

835. Payment of money into court is the actual deposit of money with the clerk or prothonotary of the court in a particular case, made by the defendant to answer the plaintiff's demand. To make such a payment valid there must have been a previous tender, or the payment of the money must be made with leave of court.

Although such payment is not made to the creditor himself, yet it has the effect of a payment when made, and, if it is not in full, it has that effect pro tanto. (a) To give it that effect, however, the money must be paid either, first, after plea of tender pleaded, or, secondly, by leave of court.(b) When money is paid in under other circumstances, it is paid in at the risk of the defendant.(c)

The payment of money into court, admits the right of the plaintiff to it, and, even when the plaintiff fails in his suit, it will be answerable for costs. (d) The plaintiff may take it out, but the defendant cannot.(e)

When the amount paid in is sufficient to pay the plaintiff's claim for principal, interest and costs, up to the time of payment, he can recover no other costs against defendant. (f)

SECTION 4.—OF THE EXTINGUISHMENT OF AN OBLIGATION BY

CONFUSION.

836. By confusion is meant the concurrence of two qualities in some subject, which mutually destroy each other.(g) This confusion may be of goods or of rights. When the qualities of debtor and creditor are united in the same person, there arises a confusion of rights.

(a) Murray v. Bethune, 1 Wend. 191.

(b) Mazych v. McEwen, 2 Bailey, 28. (c) Currie v. Thomas, 8 Port. 293.

(d) Jenkins v. Cutchens, 2 Miles, 65; Clement v. Bixler, 3 Watts, 248. (e) 1 Wend. 191.

(f) State Bank v. Holcomb, 2 Halst. 193.

(g) Poth. Obl. n. 641; 3 Bl. Com. 405; Story, Bailm. § 40.

No. 837.

Book 2, part 2, tit. 4, chap. 5, sec. 5, 6.

§ 1. When this confusion arises.

No. 840.

837. When a man is indebted to a woman or vice verså, and they marry together, the debt is immediately extinguished, because in both instances the husband is bound to pay and entitled to receive. So if the creditor bequeath the obligation to the debtor. But there is an exception, when a bond is given by the intended husband to the intended wife with a view that it should take effect after his death; here there is no confusion. (a) Indeed, in that case the husband could not be entitled to recover; there could not, therefore, be any confusion of rights.

§ 2. Of the effect of confusion.

838. The moment the confusion takes place, the right to receive and duty to pay are extinct, and if the principal obligation is thus extinguished all collaterals are also satisfied.

SECTION 5.-OF THE EXTINGUISHMENT OF THE OBLIGATION BY THE LOSS OF THE THING.

839. There can be no obligation or debt unless something be due, which is the object of the obligation; hence it follows that if what is promised becomes extinct, no payment can be made. If, for example, for the price of one hundred dollars, which you are to pay me on the first day of January, I agree to deliver you my horse Napoleon, and in the mean time he dies, there is no contract subsisting.

But when the obligation is in the alternative, as, if I had promised you to deliver my horse Napoleon, or my pair of oxen, on the death of the horse, I would be obliged to deliver you the oxen.

SECTION 6.-of the EXTINGUISHMENT OF A CONTRACT BY A JUDGMENT OR AWARD.

840. A final judgment in favor of the obligor against

(a) Com. Dig. Baron et Feme, D.

No. 841.

Book 2, part 2, tit. 4, chap. 5, sec. 7, 8.

No. 843.

the obligee, on a suit founded on the obligation, when rendered by a competent tribunal, has the effect to extinguish the obligation, whether such judgment be obtained on the ground of nullity, or fraud, or any other cause whatever; for it is a maxim that res judicata, or the decision of a legal or equitable issue by a competent jurisdiction, is a complete bar to any future action: res judicata facit ex albo nigrum, ex nigro album, ex curvo rectum, ex recto curvum.

An award made by arbitrators chosen by the parties, if made according to the requisitions of the law, is of equal force for this purpose.

SECTION 7.-OF THE EXTINGUISHMENT OF A CONTRACT BY THE DEATH OF EITHER OF THE PARTIES.

841. In general, contracts are not extinguished by the death of either of the parties, for unless they are strictly personal, that is, to be performed by the contractor in person, they bind the heirs, executors and administrators of the contracting party, for the parties bind all their personal representatives and all the estate they then own or may afterward acquire.

842. But there are debts or obligations which are extinguished by the death of one or other of the parties. Such as are personal in the sense above mentioned; as where a man binds himself to teach an apprentice, the contract is at an end the moment the master or apprentice dies, so far as to require its further enforcement, but the remedies for a previous breach remain; other examples will be easily suggested, the contracts of principal and agent, and the principal contracts of bailment, are of this kind.

SECTION 8.-OF EXTINGUISHMENT OF A CONTRACT BY A

SET OFF.

843. When parties dealing together have claims against each other, one may deduct the amount which