Case ID: mich_50/html/0112-01.html
Source: Caselaw Access Project
Author: {"author": "Cooley, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Detroit, Hillsdale & Southwestern Railroad Company v. Joseph W. Smith
    
      Payment — Set-off.
    Payment implies a voluntary act of tbe debtor looking to tbe satisfaction, in whole or in part, of tbe demand against bim.
    A creditor cannot lawfully pay bimself w-itb tbe debtor’s money without the debtor’s consent, express or implied ; and when tbe debtor delivers bim money for a purpose which negatives tbe idea of payment, tbe creditor’s control of it is limited to tbe purpose declared.
    A joint indebtedness cannot be set-off in a suit brought by only one of tbe debtors.
    Error to the Superior Court of Detroit. (Chipman, J.)
    Jan. 10.
    Feb. 27.
    Assumpsit. Plaintiff brings error.
    Reversed.
    
      Henry M. Cheever for appellant.
    A debtor can control the application of moneys turned over by him to the creditor: Hall v. Marston 17 Mass. 574; Martin v. Draher 5 Watts 544; Wetherell v. Joy 40 Me. 325; M’Neilly v. Richardson 4 Cow. 607; Smuller v. Union Canal Company 37 Penn. St. 68 ; U. S. Bank v. Macalester 9 Penn. St. 475 ; Eastman v. Hodges D. Chipman 101.
    
      John Atkinson for appellee.
   Cooley, J.

Action for money had and received. The receipt of the money by defendant from the plaintiff was admitted on the trial. It appears that defendant at the time was general superintendent of the plaintiff, and also of the Toledo, Ann Arbor & Grand \ Trunk Railroad under a joint employment by the two railroad companies at a salary of live thousand dollars a year. Each railroad company was to pay one-half the salary. When the money now in contest was transmitted to the defendant, the Toledo Company was behind in its payments, and defendant claimed the right to apply the money upon what was due him for salary, and did so. It was sent to him to pay laborers, but when thus appropriated by defendant, plaintiff made other provision for the laborers, and brought this suit. -

The trial judge directed the jury to return a verdict for defendant. This he did on the assumption that the application of the money by the defendant upon his salary was a payment. So it would have been if he had had permisson so to apply it; but he did not. Payment implies a voluntary act of the debtor looking to the satisfaction, in whole or in part, of the demand against him; but in this case there was no such act whatever. Wl^t was done by defendant was directly in the face of the plaintiff’s orders, who did not contemplate or desire any such payment. A creditor cannot lawfully pay himself with the debtor’s money, without the debtor’s consent, either express or implied; and when the debtor delivers him money for a purpose which negatives the idea of payment, the creditor’s control is limited to the purpose declared. Such was the case here.

It is clear, then, that there was no payment of this money upon defendant’s salary. The trial judge was of opinion that under the circumstances there could be no set-off; and in this he was clearly right, for there were two debtors and the money in defendant’s hands belonged to one of them only. There was no separate debt due from the plaintiff to the defendant.

The judgment must be reversed with costs and a new trial ordered.

' Graves, C. J. and Marston, J. concurred.