Case ID: mass_19/html/0131-01.html
Source: Caselaw Access Project
Author: {"author": "Parker C. J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Charles Barrett versus Winslow Lewis.
    If an agent, having blended a demand due to his principal with one due to himself, receives a general remittance from the debtor, it shall be applied towards the discharge of both debts in proportion.
    Assumpsit on a promissory note and on money counts.
    The cause was tried before Parker C. J., at November term 1823, it having been previously referred to auditors, who were to make a special report of their proceedings and results.
    It appeared from the report of the chief justice, that the house of Winslow Lewis & Co. were creditors of one Yonge, during the transaction which gave rise to this suit, and that the defendant was the agent of the brig Enrique, of which the plaintiff and Yonge and one Taggart were the owners. Yonge was indebted to the owners for the proceeds of an outward cargo of the brig, and he remitted and otherwise paid to the defendant, without any special appropriation, several sums mentioned in the report of the auditors. The auditors considered these payments as properly referable to the account of the owners of the brig and of Winslow Lewis & Co. in proportion to their respective demands.
    The counsel for the defendant contended, that he had a right to apply the payments exclusively to the debt due to his house, and that he had done it accordingly.
    The auditors considered, that from the manner in which the defendant transacted his business as agent for the owners of the brig, and from the state of his books and accounts, he had con solidated all the demands against Yonge, making but one debt of them ; and that this appeared particularly from an account settled with Yonge at Amelia Island by a brother of the defendant, who was sent there for the purpose of settling and procuring payment. This was attempted to be explained by the defendant’s counsel by various arguments and evidence, and by showing a subsequent settlement of accounts with Yonge by the plaintiff and defendant separately. The jury were instructed, that if they believed, from the evidence, that the defendant had assumed the demands of the owners of the brig, so far as to make them a part of his own demand, intending at the time to consider the whole as one debt, he could not afterwards make a different arrangement, and the proceeding of the auditors was correct.
    The jury found a verdict for the plaintiff, and on a motion for a new trial,
    
      A. Townsend contended,
    that the defendant had a right to apply the payments as he pleased, because the debtor had made no special appropriation of them; Goddard v. Cox, 2 Str. 1194; Clayton’s case, 1 Merivale, 608 ; and because the defendant, being the factor of Yonge, had a lien for his general balance ; Jarvis v. Rogers, 15 Mass. R. 396 ; Hendricks v. Robinson, 2 Johns. Ch. R. 309; Bradford v. Kimberly, 3 Johns. Ch. R. 431 ; Kirkman v. Shawcross, 6 T. R. 14.
    
      Prescott and F. Dexter, for the plaintiff,
    said it was not pre tended on the other side, that the accounts were separated until after the payments were made, and they contended that the defendant, as a person to whom debts were due as trustee and on his own account, was bound to apply the payments ratably ; Innes v. Johnson, 4 Ves. 575 ; and that as a bailee for hire he ought to take the same care of his employer’s interest as of his own. If Yonge had died here insolvent, and the defendant had exhibited the consolidated account to commissioners of insolvency and had received ten shillings on the pound, he could not apply the whole payment to his own demand. The present case is similar in principle
   Parker C. J.,

in giving the opinion of the Court, said the auditors and jury thought there shoüld be an apportionment, on the ground that the defendant had mingled his own and the plaintiff’s debt, and that having thus settled an account, he was bound as trustee to apply the payments pro rata; and the Court saw no objection to the principle on which the auditors and jury had proceeded.

Motion for a new trial overruled. 
      
       The general rule laid down by Mr. Justice Story, with regard to the application of payments, is, that where a person owes money upon several distinct accounts, he has a right to direct his payments to be applied to either, as he pleases; if he pays money on his accounts generally, without appropriating it, the creditor may apply it as he pleases; if neither the debtor nor creditor makes any specific application of the money so paid, the law will appropriate it according to the equity and justice of the case. Cremer v. Higginson, 1 Mason, 338; United States v. Wardwell, 5 Mason, 85. See Pattison v. Hull, 9 Cowen, 769, 771; Baker v. Stackpoolo, 9 Cowen, 420; Chitty v. Naish, 2 Dowl. Pract. Cas. 511; Mitchell v. Dall, 4 Gill & Johns. 361. The doctrine of election, however, does not apply, where there are not distinct accounts, or where separate accounts are treated as one entire account by all parties. In case the entire account is a long, running and unadjusted one, payments will be applied to extinguish the items of it according to their priority in point of time. Clayton's case, 1 Merivale, 572; Bodenham v. Purchas, 2 Barn. & Ald. 45; Simson v. Ingham, 2 Barn. & Cressw. 65; Williams v. Rawlinson, 3 Bingh. 71; United States v. Kirkpatrick, 9 Wheat. 720 Postmaster General v. Furber, 4 Mason, 336; Baker v. Stackpoole, 9 Cowen, 435; Pemberton v. Oakes, 4 Russell, 154 (3 Pet. Cond. Eng. Ch. R. 609); Smith v. Wigley, 3 Moore & Scott, 174. But if, as in Barrett v. Lewis, swpra, the different debts, blended together in the same account, are of the same date and are in other respects equal, the application of payments should be made proportionately to each. This rule is derived, without any modification, from the civil law. Pothier, par Dupin, tom. 1 ,pt. 3, c. 1, art. 7. reg. 4; 1 Evans’s Pothier, 374. On this rule, though not acknowledged, is undoubtedly founded the decision in Perris v. Roberts, 1 Vern. 34; S. C. 2 Ch. Ca. 84. So in cases of payments not voluntary, the creditor has no right to elect, but must apply them proportionately to the debts due. Blackstone Bank v. Hill, 10 Pick. 129. See also Postmaster General v. Furber, 4 Mason, 336; Seymour v. Van Slyck, 8 Wendell, 403; Webb v. Dickinson 11 Wendell, 63; Bank of N. A. v. Meredith, 2 Wash. C. C. R. 47; Mason v Marsh, 2 Caines’s R. 99; Bacon v. Browne, 1 Bibb. 334; Smith v. Screven, 1 M'Cord, 368; Gwinn v. Whitaker, 1 Har. & Johns. 754; Hilton v. Burleigh, 2 N. Hamp. R. 196; 1 Evans's Pothier, 368, et seq.; Cole v. Trull, 8 Pick. 325.