Mitchell v. Dall

4 G. & J. 361

• Court: Court of Appeals of Maryland
• Decided: December 15, 1832
• Status: Published

Opinion

Buchanan, Ch. J.,

delivered the opinion of the court.

This case was once before in this court, and was sent back under a procedendo, and it now comes up again upon a bill of exceptions taken at the trial, on the part of the appellant, containing Jive prayers, the Jirst and last of which, can neither of them be sustained. Not the former, because the prayer to the court was for a direction to the jury, that from the evidence they must find that Lewis & Co. directed the plaintiff to apply the first payment of $400 received through the defendant, to the discharge, in the first instance, of the draft of $395 89, which they were not bound to do, if they were not satisfied that the letter of the 8th of May, 1821, from Archibald Austin, the authorized agent of Lewis Sf Co. to the plaintiff, containing the direction relied upon, for the application of the money, had been received by the plaintiff, which was a matter for the jury, and could not properly have been taken from them by the court. The court, therefore, did right in refusing to give the instruction asked for, which could not have been given without determining as well the fact, that the letter was written by the authority of Lewis Sf Co., as, that it had been received by the plaintiff, and that would have been an usurpation of the province of the jury; nor the latter, because it was a general prayer not sanctioned by the act of 1825, ch. 117, under the construction heretofore given by this court to that act.

There is no question before us on the third prayer; that having been granted, and no exception taken by the defendant. But we think the instructions asked for in the second and fourth prayers, should have been given.

On the 25th of October, in the year 1820, the plaintiff sold goods to Lewis & Co. to the amount of $395 89, on a credit of six months; and on the 3d of January, 1821, he let them have another parcel of goods, to the amount of $552 97, on a credit of four months, upon the guaranty of the defendant Dali, upon which guaranty this suit is founded. It appears from the evidence set out in the bill of exceptions, that on the 7th of May, 1821, both debts being then due and unpaid, the plaintiff wrote to Lewis & Co., in these words: “ I have this day drawn on you at three days’ sight, in favor of J. C. Richards, Esq. for $395 89, amount of your purchase 25th of October last, on six months’ credit. Your last purchase is also due.” And gave in evidence that on the same day, he drew a draft on them at three days’ sight, for $395 89, the exact amount of the first debt, of the 25th October, 1820, which not being accepted, was returned to him.

He also gave in evidence a letter of the 8th of May, 1821 written for Lewis & Co. by Archibald Austin, their agent for that purpose, addressed to him saying, “ we regret to observe by yours of the 7th instant, that you have drawn upon us, at three days’ sight for $395 89, not_having funds here at this time to meet it; but we presume before the draft becomes due, you will be paid the amount of it, having directed Mr. John P. Austin, whom we dispatched on Saturday week to Norfolk, for money due by the government on deliveries of stone, to pay Mr. Dall the amount of the first invioce, to pay over to you on his return through Baltimore. We wrote Mr. Dall to this effect; but as it would appear he has not informed you, we presume he must have been absent; as Mr. Austin was directed to return with all possible despatch; and having intelligence of his leaving Old Point Comfort on Wednesday last, we have no doubt he will be in Baltimore in a few days, when he or Mr. Dall, will call and pay the amount of your draft. ” It is in proof that John P. Austin, the person named in that letter, did put into the hands of Dali, the defendant, $400; and that on the 10th of May, 1821, only two days after the date of that letter, Dali paid over $400 to the plaintiff, and took from him a receipt in these words, “ received of Jacob Lewis & Co., through James Dali, $400 on account.” And the question is, how that payment should be applied, whether in the first place, to the first debt of $39.5 89, the amount of the draft of the 7th May, 1821, or to the debt of $552 97, guarantied by Dali.

It is a general rule, that a debtor on different accounts may, when he makes a payment, apply it to which account he pleases; but if he does not at the time of payment, apply it specifically to either, but makes it generally, or on account, the creditor who receives it, may apply it to which account he pleases. And it makes no difference, though one debt be due on open account, and the other on bond, or the one on open account, and the other secured by a guaranty ; in either case, the creditor may apply the unappropriated payment to which debt he chooses, and is not bound to apply it so as first to relieve the surety, but may appropriate it at his discretion, in the first instance to the open account, and that although the open account existed anterior to the bond or guaranty, and the surety in the bond if there be one, or the guaranty had no notice of it, at the time of entering into his liability.

The application of a payment, it is true, need not always be expressly directed at the time, by the party paying the money; but his intention may be inferred from the circumstances of the particular case; and a payment may be attended by circumstances demonstrating its application as clearly, as it could be demonstrated by words. As in the case put by the chief justice in Naylor vs. Sandiford, 7 Wheat. 20, of a positive refusal to pay one debt, avd' an acknowledgment of another, accompanied by the delivery of the sum due upon it, which would be a circumstance as fully evincing. the intention of the debtor, to apply the payment to the •debt acknowledged, as it could be by an express direction, and would have the effect of an express direction to apply it to that debt, and the creditor would be bound so to apply it. But if there be no application of the payment at the time, by the debtor, either express or implied, or arising out of the nature of the transaction, the election is thrown upon the creditor, to apply it to which account he pleases.

And in the decision of the case between these parties, as formerly brought before this court, 2 Harr, and Gill, 159, it is laid down to be “the undoubted right of the debtor, to direct the appropriation of any money paid by him, to any debt he may think proper; and although he may not give an express direction at the time of the payment, such direction may be implied from circumstances, but if no application has been made by the debtor, either express or implied, then the creditor may apply it. ” And speaking of the letter of the 8th of May, 1821, from Lewis & Co. to the plaintiff, the rejection of which, as incompetent testimony, formed one of the grounds of appeal, it is said, “ we think the letter was not only legal, but the best evidence for the purpose for which it was offered, it was the direction of the debtor to the creditor, in writing, how this payment was to be applied. It was the creditor’s authority for making the application, and after the receipt of this letter, he could not have rightfully applied it in any other manner. ”

The purpose for which it was offered was to show, that the amount specified in the receipt of the 10th of May, 1821, was intended to be applied, in the first instance, to the discharge of the first debt of $¡395 89, which construction of that letter we think is undeniably correct.

The draft by the plaintiff, on Lewis & Co., of the 7th of May, 1821, was for $¡395 89, the exact amount of the first debt of the 25th of October, 1820, and in his letter to them of the 7th of May, 1821, advising them of that draft, he informed him that it was for the amount of their purchase of the 25th October, 1820, and advised them further, that their last purchase, (the debt guarantied by Dali the defendant,) was also due. Here then, the two debts were clearly designated, and Lewis 8? Co. advised that the draft was on the first account, and not on the last, which was guarantied by Dall. With this information before them, they, in their letter of the 8th of May, 1821, tell the plaintiff, that they presume he will be paid the amount of the draft before it becomes due; that they had directed J. P. Austin, to put into the hands of Dall, the amount of the first invoice, (the debt of the 25th of October, 1820,) to be paid over by Dali, to him; that they had written to Dali to that effect; and that they have no doubt J. P. Austin, or Dall, will in a few days call and pay him the amount of his draft; which was as clear a direction to the plaintiff, to apply the money that should be put in Dall's hands by J. P. Austin, and by Dali paid over to him, to the first debt, or that of the 25th of October, 1820, as could well have been given.

And putting the letter from the plaintiff to Lewis 8f Co., of the 7th of May, 1821, out of the case, if the letter of the 8th of May, 1821, from A. Austin as their agent, was written by their authority, and received by the plaintiff prior to the first payment of $400, on the 10th of May, 1821, it was an application by them, binding on the plaintiff, of that payment to the discharge of the draft, and first debt of the 25th of October, 1820, unless, between the date of that letter and the receipt of the payment, he received a subsequent direction, either express or implied, from them, or their authorised agent for that purpose, to make a different application of it. And no evidence is perceived in the record showing or tending to show, any such subsequent direction.

Archibald Austin, who as the agent for that purpose, of Lewis & Co. wrote the letter of the 8th May, 1821, directing the application of the money, which was to be handed over by Dali to the plaintiff, no where so much as intimates that either with, or without the authority of Lewis & Co. he ever gave to the plaintiff, any other directions, express or implied. And whatever his own private views, not communicated to the plaintiff may have been, his letter disclosing the intention and views of his employers, speaks for itself, and there is not a word of proof in the record, that they ever gave to the plaintiff any other directions in any way. Nor would it seem that there was time sufficient for them to do so, there having been but one intervening day between that on which the letter was written, and that on which the payment was made. And that letter was the last communication between them and the plaintiff, before the payment, of which any evidence was offered.

John P. Austin, who says he knew of no debt due from Lewis & Co. to the plaintiff, except that of which Dali was the guaranty, may for that reason have supposed that the money he put into Dali's hands, was intended to be applied to that debt. But there is not a word of proof, that he had any authority whatsoever, to make or direct such an application of it. On the contrary, the only evidence offered of his having had any authority, to place it in the hands of Dali, is the letter of the 8th May, 1821, which explicitly directs the application of it, to the draft and first account. Nor is there a word of evidence that Dali himself, who paid over the money to the plaintiff, made any application of it, express or implied, to the debt which he had guarantied, or intended to do so. But on the contrary, he paid it “on account” generally, as is expressly proved by the receipt he took, as for money paid by Lewis §■ Co. through him, showing that, in making the payment he acted as their agent.

And whatever might have been the effect of such a payment by him, with his own money, being a guaranty of one of the debts, yet as it was not made with his own money, but with the money of Lewis & Co. put into his hands for that purpose, the mere fact, that it was made through him, is not a circumstance from which any inference can arise, that they intended it should be applied to the debt of which he was the guaranty, or tending to prove such an intention. And there is not perceived to be any evidence in the cause, that the plaintiff believed, or had any good reason to believe, that any such intention existed on the part of Lewis & Co. But their letter of the 8th May, 1820, is the only proof of what their intention was; and not only authorised, but required of the plaintiff, to apply the payment alluded to, to the first debt, no matter what might have been the intention of the defendant Dali, when he paid over the money to the plaintiff, or of John P. Austin, from whom he had previously received it. Where there is evidence tending to prove a controverted fact, it should be left to the jury,' but we can perceive no evidence here, tending to prove any other application by Lewis & Co. of the first sum of $400, that was put into the hands of Dall by John P. Austin, and by him paid over to the plaintiff “on account” on the 10th May, 1821, than that which is contained in that letter.

JUDGMENT REVERSED AND PROCEDENDO AWARDED.