Carpenter v. Goin

Woods, J. The defendant in this case, owing debts to different parties lodged with an attorney for collection, paid to the attorney towards those debts a sum of money less than either. He did not designate the debt to which he wished the payment to be applied, either at the time of making the payment, or at any other time, until the attorney himself had made the application to the debt of Shaw & True. He then requested the attorney to apply it to that of the present plaintiff. The money was paid on the 13th of April, the application made soon after the 8th of July, and the election of the defendant to appropriate it to the demand in suit was notified to the attorney on the 17th of August. The simple question is whether the defendant had, at the last named day, any right or power to direct the application of the money which he contends for. The principle examined somewhat at length, and laid down in the cases of Caldwell v. Wentworth, 14 N. H. Rep. 431, and in Sawyer v. Tappan, in the same volume, page 352, is that where money is paid to a creditor holding more claims than one presently due, the debtor has the right to elect as to the application of the money; that if he omit to do so th at right devolves upon the creditor; and that if neither party appropriate it the law will apply it according to the principles of justice and equity. [482] It is not necessary that the debtor should formally declare his election at the moment of making the payment; and it is held to be sufficient to restrain the creditor, if there be circumstances known to him clearly indicating the intention of the debtor, or tending to raise a fair presumption as to what it would be. No such circumstances appear to be disclosed in this case. So far as it is possible to judge, it was wholly indifferent to the defendant to which claim the payment should be applied, and the attorney might well have presumed that the debtor intended to exercise no choice as to the application of the money. The sum was insufficient for the full payment of either claim, and so no advantage could have resulted to the defendant in the matter of costs, by way of terminating one of the actions, and, of course, the accruing costs. It is true the payment was not made to a creditor having several claims, but to the attorney of several creditors. The cases, however, appear to fall within the same principle, except that in cases like the present, a duty may attach to any election that may devolve upon the attorney in favor of the client, if either, entitled to priority. From that circumstance a presumption might have arisen ; for it may well be presumed that the debtor intended by his silence to leave the attorney to follow the indications of his duty, and the rights of other parties. It is not denied that he did this in making the application of the money which he did. There is no ground in law or in any concession of the parties apparent in this case, for giving preference in this payment to the later over the earlier attaching creditor. The conclusion therefore is that the defendant had no right to direct the appropriation of the payment at the time he undertook to do so. Judgment for the plaintiff.