Wheeler v. House

The opinion of the court was delivered by Bennett, J. The plaintiff, in this action, seeks to recover the amount of two notes given in September, 1843, payable on demand, in bar of which the statute of limitations is plead. In October, 1847, the plaintiff, having the notes with him, called upon the defendant and he paid a certain sum, though not enough to pay one note, and the plaintiff endorsed one-half the sum paid on one note, and the other half upon the other of them. The testimony, whether the application of the money so paid was by the approbation of the defendant, or not, was conflicting. The jury were told that, if the defendant, at the time of payment, gave no direction where to apply the money, the plaintiff might apply one-half upon one note and the other half on another note, provided, under the circumstances, such an application would be reasonable, and such as the plaintiff might reasonably expect would be satisfactory to the defendant, if known to him. If the application had been made by the approbation of the defendant, he could not complain, but it was not put to the jury to find any such fact. In the case of Ayer v. Hawkins, 19 Vt. 26, no direction was given by the debtor as to the application, and it was held that the creditor could not split up the payment and endorse a part of it upon one note and the residue of it upon others. Though in that case the debtor did not exercise his right to direct the application, yet it was held that all he yielded to the creditor, by such neglect, was the right that he might select upon which of the notes he would make the application, and the debtor would be bound by such a selection. Though in the case in the 19th of Yt, the statute of limitations had actually run upon the notes,, when the endorsements were made, yet, we apprehend, the case before us is not to be distinguished, in principle, from that case. In the one case, the statute of limitations had run, while in the other it was running, and if the splitting up the application of the payment is binding upon the debtor, the effect is to revive all the [737] notes upon which the application had been made for a period of six years from that time. It is well said in the case of Ayer v. Hawkins, “that the right of designation among the creditors’ demands, is essentially the right of the debtor,” and that “ if he silently waives it in favor of the creditor, it should be intended that he does so, relying upon an application to which he could not justly or reasonably object.” And it may be added, the debtor has the right to rely upon the application being made in the manner usually adopted in the course of business. Though it may be true, that, where the debtor, at the time of payment, neglects to direct its application, the right to malee it generally devolves upon the creditor with certain limitations, and if he has more than one demand against the debtor, he may select the one upon which the application is to be made; yet I am not aware of any case where the payment was not sufficient to cancel one demand, in which the creditor has been allowed to divide up the payment, and apply a part to one demand and a part to another; and, certainly, it is not in accordance with the usual course of business, to make such a divided application of a general payment. We think the case of Ayer v. Hawkins should govern this, notwithstanding the reasoning of the judge is, in some measure, grounded upon the fact that the statute had run, when the endorsements were made upon the notes. All the right which the defendant yielded to the plaintiff, was a selection upon which note he would endorse the payment, and a divided application of the payment is not to be presumed to have been within the intention of the parties, in the absence of proof. The court will, in the application of payments, carry out the intention of parties whenever that intention can be ascertained. The judgment of the county court is reversed and the case remanded.