If a banker at whose house a bill is made payable happen CHAPTER also to be indorser of the bill, and on the bill being XVIII. brought to him when it becomes due he takes it up without By one, who observation, it is a question of fact for a jury whether he is both inpaid it as agent of the acceptor or merely retired it as dorser and indorser (r). agent for the acceptor. The acceptor of a bill, whether inland or foreign, or the When to be maker of a note, should pay (s) it on a demand made, at made. any time within business hours, on the day it falls due. And, if it be not paid on such demand, the holder may instantly treat it as dishonoured (t). But the acceptor has the whole of that day within which At what time to make payment; and though he should in the course of of day. that day, refuse payment, which refusal entitles the holder to give notice of dishonour, yet if he subsequently, on the same day, makes payment, the payment is good, and the notice of dishonour becomes of no avail (u). A plea of tender (x), by the acceptor after the day of Subsequent payment, is insufficient (y). tender. If a bill or note be paid before it be due, and is after- Before due. (r) Pollard v. Ogden, 2 E. & B. 459. (s) If a banker who has funds in his hands refuse to pay a cheque, he thereby subjects himself to an action at the suit of his customer, the drawer. Marzetti v. Williams, 1 B. & Ad. 415; 1 Tyrw. 77; Bollin v. Steward, 14 C. B. 595, ante, p. 19; Cumming v. Shand, 29 L. J., Exch. 121. So, too, if he refuse to pay a bill of his customer, made payable at the banking house; but in order to charge the banker, the presentment must be within banking hours. Whitaker v. The Bank of England, 1 C., M. & R. 744; 6 C. & P. 700; 1 Gale, 54. See the Chapter on PRESENTMENT FOR PAYMENT. (t) Ex parte Moline, 1 Rose, 303; Burbidge v. Manners, 3 Camp. 193; Leftley v. Mills, 4 T. R. 170; Haynes v. Birks, 3 B. & P. 599. (u) Hartley v. Case, 1 C. & P. 555; 4 B. & C. 339; 6 D. & R. (x) As to payment where there (y) Hume v. Peploe, 8 East, 168. But a drawer or indorser is not bound to pay till notice and request; and, therefore, a plea of tender, after the bill became due, may be good, if pleaded by a drawer or indorser. And as a drawer and indorser has a reasonable time to pay, he may, it should seem, plead a tender even after request, and of principal only, without interest. Walker v. Barnes, 5 Taunt. 240; 1 Marsh. 36; Soward v. Palmer, 8 Taunt. 277; 2 Moo. 274; but see Siggers v. Lewis, 1 C., M. & R. 370; 4 Tyrw. 874; 2 Dowl. 681; where a plea that the action was commenced before a reasonable time had elapsed for the defendant, the indorser, to pay the bill, was held ill. CHAPTER wards indorsed over, it is a valid security in the hands of XVIII. a bona fide indorsee. "I agree," says Lord Ellenborough, After action brought. "that a bill paid at maturity cannot be re-issued, and that no action can be afterwards maintained upon it, by a subsequent indorsee. A payment before it comes due, however, I think, does not extinguish it any more than if it were merely discounted. A contrary doctrine would add a new clog to the circulation of bills and notes, for it would be impossible to know whether there had not been an anticipated payment of them” (2). If an acceptor discount his own acceptance, he may transfer it, and the drawer and indorsers may become liable to a subsequent holder, even with notice (a). But if the acceptor is the holder in his own right when the bill falls due, it is extinguished (b). If the holder constitute any one of the parties liable to him his executor, and die, the appointment might in law have been equivalent to a release, though it was otherwise in equity unless such were the intention of the testator (c). A premature release will not, any more than a premature payment, protect the releasee from liability to a subsequent holder without notice (d). But the payment of a note payable on demand will be a defence, even against an indorsee for value without notice (e); for the statute, which imperatively prohibits the re-issuing of such a note, dispenses with notice. A payment after action brought will not prevent the holder from proceeding for his costs (f). Payment by If the bill be paid, the payer has a right to insist on its bankers' notes being delivered up to him; but if it be not paid the holder and cheques. should keep it. Yet it has been held, that an agent is justified by the usage of trade, in delivering it up on re (z) Burbidge v. Manners, 3 Camp. 193; Morley v. Culverwell, 7 M. & W. 174. See Harmer v. Steele, 4 Exch. 1; Lazarus v. Cowie, 3 Q. B. 459; Jewell v. Parr, 13 C. B. 909; Attenborough v. Mackenzie, 25 L. J., Exch. 244. (a) Attenborough v. Mackenzie, 25 L. J., Exch. 244. Before maturity any party retiring a bill or note may re-issue it without more, Code, s. 37; but after maturity a drawer or indorser who has paid a bill or note must strike out his own and subsequent in dorsements before re-issuing it, (c) Freakley v. Fox, 9 B. & C. 130; Strong v. Bird, L. R., 18 Eq. 315; Code, s. 61. And see ante, p. 61. (d) Dod v. Edwards, 2 C. & P. 602; Code, s. 62 (2). (e) Bartrum v. Caddy, 9 Ad. & E. 275; 1 Per. & Dav. 207. (f) Toms v. Powell, 6 Esp. 40; 7 East, 536; Ord. XXII. r. 6 (a). XVIII. ceiving a cheque, though that cheque is afterwards dis- CHAPTER honoured (g). But the drawers or indorsers, in such a case, would be discharged, for they have a right to insist on the production of the bill, and to have it delivered up on payment by them (h). If the holder of a cheque receive bank notes instead of cash, and the banker fail, the drawer is discharged (i). If bonds be accepted in payment, the payment is good even though they prove to be valueless (j). A set-off does not amount to payment, unless it be What mutually agreed that one demand shall be set off against amounts to the other. Such an agreement amounts to payment (k). payment. And an agreement, even by one of several partners, with a debtor to the firm, that a separate debt due from the partner shall be set off against a joint debt due to the firm, binds the firm (7). Credit given to the holder of a bill by the party ultimately liable is tantamount to payment (m). Where a banker takes from a customer and his surety a promissory note, intended to secure a running balance, and makes advances on the faith of the note, it is not discharged by subsequent unappropriated repayments made by the customer to the banker, but still continues as a security for the existing balance (n). There are many circumstances under which a legacy by Legacy. a debtor to his creditor, of equal or greater amount than the debt, will be considered a satisfaction of the debt. But a legacy to the holder of a negotiable bill or note can never be considered as a satisfaction of the debt on that instrument. For a legacy is a satisfaction when it may be presumed to have been the intention of the testator that it should so operate; but that cannot be presumed, when, from the assignable nature of the debt, the testator could not tell whether or no the legatee was at the time of the bequest his creditor (o). 12. Where a man is indebted to another in several items, Appropriation of payments. (g) Russell v. Hankey, 6 T. R. (h) Powell v. Roche, 6 Esp. 76; Code, s. 52 (4). (i) Vernon v. Bouverie, 2 Show. 296. And see Guardians of the Lichfield Union v. Green, 1 H. & N. 884. (j) Schrader's Case, L. R., 11 Eq. 131. (k) Callander v. Howard, 19 L. J., C. P. 312; 10 C. B. 290. (1) Wallace v. Kelsall, 7 M. & W. 264; see Gordon v. Ellis, 7 M. & G. 607; 2 C. B. 821. (m) Atkins v. Owen, 4 Nev. & Man. 123; 2 Ad. & El. 35 ; Bell v. Buckley, 11 Exch. 631. (n) Pease v. Hirst, 10 B. & C. 122; 5 M. & Ry. 88. (0) Carr v. Eastabrook, 3 Ves. 561. CHAPTER and makes a partial payment, it often becomes a question, XVIII. important not only to the parties themselves, but to third persons, to which of the items the payment shall be imputed. The rule of the Roman law, and therefore in general of Continental law, is, that a payment shall be appropriated, first, according to the intention of the debtor at the time of making it(p); but if that be unknown, then, secondly, at the election of the creditor (q), signified to the debtor at the time of receiving it (r). If the intention of neither be known, payment must then be appropriated according to the presumed intention of the debtor, and it will be presumed that he meant to discharge such debts as were most burdensome as, a debt carrying interest, rather than one which carries none; a debt secured by a penalty, rather than one resting on a simple stipulation; a debt on which he may be made a bankrupt, rather than one which will not subject him to such a liability. If all the debts are equal in degree, the payment must then be imputed to them according to their respective priority in the order of time (s). Such is the rule of the civil law, from which, in some particulars, the common law differs. Wherever, according to the English law, the transactions between the two parties form one general account current, or are treated by them as such, payments are to be imputed to debts in the order of time, and the balance is to be struck at the foot of the account (t). But, if an unappropriated payment be made on account of several distinct insulated debts, which cannot be considered in the light of a running account between the parties, the common law then differs from the civil law and gives the creditor a (p) Quotiens quis debitor ex pluribus causis unum debitum solvit, est in arbitrio solventis dicere quod potius debitum voluerit solutum, et quod dixerit, id erit solutum. D. 46, 3, 1. Vide etiam Cod. 8, 43, 1. (q) Quotiens vero non dicimus ad quod solutum sit, in arbitrio est accipientis cui potius debito acceptum ferat. D. 46, 3, 1. Cod. 8, 43 1. (r) Dum in re agenda (in re præsenti hoc est statim atque solutum est) hoc fiat; ut vel creditori liberum sit non accipere vel debitori non dare, si alio nomine exsolutum quis eorum velit : cæterum postea non permititur, D. 46, 3, 1, 2, 3. (s) D. 46, 3. If all the debts were equal and alike in every respect, the sum paid was applied to a rateable reduction of them all. A rateable appropriation is also sometimes made by the English law. See an example in Favene v. Bennett, 11 East, 36. But this presumption is capable of being rebutted by circumstances. Henniker v. Wegg, L. R., 4 Q. B. 782; City Discount Co. v. McLean, L. R., 9 C. P. 693. (t) Clayton's case, 1 Meriv. 604; Geake v. Jackson, 36 L. J., C. P. 108. right of appropriating it at any time before action (u), as he pleases (x), provided a prior appropriation have not been communicated to the debtor. An appropriation which would have the effect of paying one man's debt with another man's money will not be allowed (y). Nor can there be an appropriation which would deprive a debtor of a benefit, such as the taxation of costs (2). And it seems that an appropriation by the creditor, without the knowledge or consent of the debtor, will not of itself afford sufficient ground for raising against the debtor a new promise to pay (a). A payment may be imputed to a demand for which the creditor could not recover at law (b). But where a payment is made by a debtor on account generally, the court will not refer it to a debt barred by the statute, if it can be attributed to any debt not so barred (c). The law will ascribe a payment to a legal debt, rather than to an illegal one (d). A party receiving money for the use of another from a third person, which is not properly a payment but a set-off, cannot appropriate the money without the knowledge or consent of him for whom it has been received (e). It has been held, that a payment may be appropriated to a disputed debt, if it be really a good debt (ƒ). CHAPTER There are cases where a payment is appropriated by law Rateable to several debts proportionally. (u) Simpson v. Ingham, 2 B. & C. 65; 3 D. & R. 249; Mills v. Fowkes, 5 Bing. N. C. 455; 7 Scott, 444. (x) Clayton's case, 1 Meriv. 604; Bodenham v. Purchas, 2 B. & Ald. 39; Stoveld v. Eade, 4 Bing. 12; 12 Moo. 370; Field v. Carr, 2 Moo. & P. 46; 5 Bing. 13; Goddard v. Cox, 2 Stra. 1194; Bosanquet v. Wray, 6 Taunt. 597; 2 Marsh. 319; Kirby v. Duke of Marlborough, 2 M. & Sel. 18; Plomer v. Long, 1 Stark. 153; Woodroffe v. Hayne, 1 C. & P. 600; Shaw v. Picton, 4 B. & C. 715; 7 Dowl. & R. 201; Marsh v. Houlditch, Chitty, 9th ed. 404; Hammersley v. Knowlys, 2 Esp. 666; Birch v. Tebbutt, 2 Stark. 74; Marryatts v. White, 2 Stark. 101; Meggott v. Mills, 1 Lord Raym. 286; Dawev. Houldsworth, Peake, 64; Peters v. Anderson, 5 Taunt. 596; Wright v. Laing, 3 B. & C. 165; 4 Dowl. & R. 783; (z) James v. Child, 2 Tyrwh. (a) Nash v. Hodgson, 6 De G., M. & G. 474; 25 L. J., Chan. 186; 23 L. J., Chan. 780. (b) Crookshanks v. Rose, 1 M. & R. 100; 5 C. & P. 19. (c) Nash v. Hodgson, 6 De G., M. & G. 474; 25 L. J., Chan. 186; 23 L. J., Chan. 780. (d) Wright v. Laing, 3 B. & C. 165; 4 Dowl. & R. 783. (e) Waller v. Lacy, 1 M. & Gr. 54; 1 Scott, N. R. 186. (f) Williams v. Griffith, 5 M. & W. 300. appropriation. |