Dunnington v. Kirk

Hughes, J. There is conflict in judicial decisions, upon some questions, as to the rule governing the application of payments. The general rule is “that the party paying may direct to what the application is to be made. If he waives his right, the party receiving may select the object of appropriation. If both are silent, the law must decide.” The rule in this State is that where there is a single running account in which third persons are not interested, and a general payment is made (without application by the debtor), the creditor has no election to make the application, but the law will apply the payment to the several items of the account in the order of their priority, the first item on the debit side of the account being' the item discharged or reduced by the first item on the credit side of it. In Hughes v. Johnson, 38 Ark. 295, the court said : “ The power to make the application to the earlier or later items of the account rested, wholly with the debtor. A running account, although composed of items partly secured and partly not, is in so far one debt, that the creditor has no election as to which item he will credit and which not, in the absence of any appropriation by the debtor. * * The payment goes by the force of the law to the oldest items.” It is held in Truscott v. King, 2 Selden, 147, that, “where no specific application is made by the parties of payments upon a running account, they will be applied upon the first items of indebtedness, although the creditor may have held security for the payment of those items, and none for the final balance of the account.” In 2 Parsons on Contracts (5th ed.), 633, it is said, “And in general, the doctrine of appropriation, and the right of election, apply only where the debts or accounts are distinct in themselves, and are so regarded and treated by the parties. Where the whole may be taken as one continuous account, payments are, generally, but not universally, applied to the earliest items of the account.” To sustain the text, he cites Devaynes v. Noble, 1 Meriv. 609; U. S. v. Kirkpatrick, 9 Wheaton, 720; Jones v. U. S. 7 How. 681; and other cases. According' to the decision in Hughes v. Johnson, 38 Ark. supra, there was but one debt in this case, so far as the application of payments is affected. There was therefore no error in the court’s first instruction, nor in the refusal of the court to give the third instruction asked for by the appellants. Upon the trial, the appellant’s counsel asked the witness O’Tool: “How much of the 535 bushels of corn was taken in the replevin suit by the constable?” To this question objection was made by the plaintiff on the ground that the corn taken by the constable in the replevin suit referred to by the witness was no part of the corn involved in this suit. The objection was sustained, the answer to the question was not permitted, and the appellant excepted. • It does not appear very plainly from the evidence in the case that the replevin suit referred to in the question was a suit between the trustee and the appellee for the recovery of the corn, but we infer that it was. The question seems not to refer to the corn taken by the appellants without process, but to other corn included in the deed of trust, and which is not included in this suit. There was no error, therefore, in refusing to allow an answer to it to go to the jury. The judgment is affirmed. Bunn, C. J., did not participate.