Crompton v. Pratt

Wells, J. Upon the facts stated we think a jury would have been warranted in finding that the price of the articles sued for had been paid by O’Brien to the defendant, before the latter retook and sold them. They were charged in general account, upon the defendant’s books, with other articles sold and delivered in the usual mode. They were the earliest in date upon that account; “ the whole account being kept in the usual form of merchants’ book accounts.” The sums credited “ were paid by O’Brien and were received and applied by the defendant towards the payment of said account.” “Neither of them directed or made any specific application thereof to any particular items or class of items of the account, except as' appears upon the facts stated.” The general rule of law, in case of payments by a debtor to one who is his creditor upon distinct transactions, or for distinct amounts, when neither party makes an appropriation at the time, is that the payments are applied by law to the liabilities of earliest date. The authorities cited by the plaintiffs we think sufficiently sustain this position. The rule is especially applicable to items of debt and credit in a general account current. We do not think the other facts stated are sufficient to overcome the presumption involved in this rule of law. The interest of O’Brien to perfect his title to the property weighs against the interest of the defendant to obtain payment of his unsecured rather than of his secured claims. But the option belongs to the debtor in preference to the creditor; and it is only when he omits to exercise that option that the law presumes an intention on his part to allow the creditor to exercise his election. When both parties concur in the entry of the payments upon general account, without specific application, the law infers an intention on the part of both, that they shall satisfy the charges therein in the order of their entry; and they will be so applied unless some controlling equity requires a different disposition. We do not discover any such controlling equity in this case. [258] The fact that the defendant minuted the terms of the delivery against the charges upon his books, when the entries were made, does not, in our opinion, affect the question of the intent with which the payments were made, received and credited. When the defendant undertook to assert his right to retake the property, the law had already so applied the payments, made and credited in general account, as to perfect the title of O’Brien, and thereby give validity to the plaintiffs’ mortgage. Day v. Bassett, 102 Mass. 445. By the terms of the report, judgment is to be entered for the plaintiffs, if, in the opinion of this court, they could maintain said action upon said facts. As we are of opinion that they can maintain the action, judgment must be entered accordingly for the agreed value of the articles, with interest from the date of the writ.