Otto v. Klauber

PaiNE, J. Ever since the case of Cumber v. Wane, 1 Strange, 426, it has been the settled law, that a bald promise by a creditor, for no other consideration or benefit than the mere payment in money of a part of an admitted debt, to accept such part in satisfaction of the whole, was void for want of a consideration. In the notes to that case in 1 Smith’s Leading Oases, 549, the English and American authorities are collected, [474] from which it appears that several qualifications to the general rule have been established, based upon some new matter of advantage to the creditor, to which the debtor was not previously bound. But, subject to these qualifications, the rule itself has been uniformly adhered to. It was recognized in the recent case of Hansbrough v. Peck, 5 Wallace, 497, and also by this court in Palmer and others v. Yager and others, 20 Wis. 91. There is nothing to bring this case within any of the exceptions to the general rule. ' Otto was indebted to Klauber individually, and to Klauber & Co. There was an accounting, and the amount due on both accounts was ascertained and admitted tobe about $1,200. For the sum of'$712.50 both accounts were receipted in full, the receipts, however, being signed by Klauber & Co. This was all there was of • it — nothing but the mere payment of part of a sum due, as a consideration for extinguishing the entire debt. The promise, therefore, was hot binding and cannot be enforced. But the counsel for the plaintiff in error suggest, that it the payment was not to be in full, 'then he had the right to apply it to either or both accounts as he saw fit, and that Klauber cannot recover the entire balance on his individual account. . It is true that a debtor may apply his payment to any debt he chooses. But he must do this when he makes it, otherwise the creditor may apply it. Here it is obvious that, as between the two accounts, Otto made no application specially to either, because he supposed he was paying both in full. But even if the fact that here the accounts were due to different parties, one belonging to the firm and the other to Klauber individually, would prevent the application of the rule allowing the creditor to apply the payment, which is not determined, still the receipt having been given by Klauber & Co., that of itself would indicate an application of the payment in the first [475] instance to tbe company account, leaving any balance that might remain due upon Klauber’s individual account only. There was no error, and the judgment must be affirmed. By the Court. — Judgment affirmed.