The Hawaiian gazette., 1896-05-05

the r1RnI passes 10 the creditor who
may make such application as he
chooses.
Third-If neither party has made ap-
plication, the Court will apply the pay
ments according to the justice and
equity of the case, taking into consider
alton all it's circumstances. These prin.
ciples are too well settled to require
citations of authority.
The plaintiff contends ~ that the
Hawaiian Lodge, defendant, directed
no application of the payment nor could
it do so, as il had accepted an order
drawn by the contractor Redward upon
the lodge in favor of plaintiff for
all the contract price of the build
ing agreement. We think this pro-
position is sound. The making and
acceptance of the order were in effect
REIMBURSEMENT of the right by both
Redward and the lodge to direct any
application of the money. 1t became the
creditors money.
The plaintiff further contends (2)
that the plaintiff creditor did not, at the
time the payments were received by
him, make application of the same to
any specific items in his account, and
that (3) he did by his letter to the
lodge of December 26, 1895, after the
new trial was ordered, make application
of the payments to sundry articles fur
nished not covered by the lien.
These statements of plaintiffs we
think are erroneous.
The account sued upon contains nu-
merous items for material, ETC., fur
nisheu and then follow the various pay
ments made from time to time, with
balance brought down. Did not the
creditor in fact apply the money re-
ceived to the payment of the charges
in the order of time in which they ac-
crued? He certainly did not segre-
gate the items not covered by his no
tice of the lien and apply the pay
ments to them. Phillips on Mechan-
les Liens, Sec. 2S9, says: THE rule in
regard to an open, current account, the
items of which do not form distinct
debts, but are blended together in an
account, is, that the payments will be
applied, as they are paid, to the charges
in the order of time in which they ac-
crue. This case does not fall within
the principle of the application of pay
ments to distinct debts, because not the
items, but only the balance of an ac-
count, is considered debt, and falls
under the rules upon which mutual ac-
counts are cast and settled by law"
This is taken bodily from the Amer
lean Leading Cases, p: 299, Sd Ed. 1t
makes no difference whether we con-
slider that the creditor has actually
made the application to the earlier
items or whether the creditor not hav-
ing made any specific application the
Court is now to do it. The result is
the same. In Briggs v. Titus and wife,
7R. 1. AL, it was held that when pay
ments were made in an account for Ia
Dor and materials generally the pay
ments should be applied to the charges
in the account, in the order of time in
which they accrued.
In Day v. Anderson, SO N. j. l.. 1879,
it was held that where there were rights
to file liens upon two separate build
ings, for different parts of an account,
and the debtor and creditor having
treated the account as a running &C.
count, the application of note will be
made by the Court to the earliest items.
In Is Am. & Eng. Encyc. of Law, p.
244, the syllabus of a case, Lane v.
Jones, 70 Ala. 1856, is taken as follows:
Where neither the debtor nor creditor
makes a special appropriation of the
payments at the time they are made,
but they are entered as general credits
on a general account, the creditor is
without right to make special ap-
plication thereafter to any special part
of the account, to serve his interests as
may subsequently be developed" This
case, if correctly reported, is quite par
allel with the one before US.
We think the presumption is that,
when the payments were entered on
general account and not applied by
the creditor to the items not covered
by the notice of the lien, they were in
fact applied to the charges in the order
of time in which they accrued, and
when the appropriation was so made
and the defendants notified of it, as
they were by the suit upon the account
annexed, it was conclusive and both
parties were bound by it. 1t is not nee
essary to decide the question at what
time the creditor can make his appli-
cation. The decisions are conflicting,
but no authority extends the time later
than the time of bringing the action
and the manifesting and declaring the
application when the controversy
begins in Court l Am. Leading
Cases, p. POI. Granting for arguments
sake that this last stated rule may be
applied here, the creditor was too late,
for the controversy must be consid-
cred as beginning at the time the ac-
ton was brought, in 1894, and not when
plaintiff sent his letter of December &c,
1895, for no new action was begun. A
new trial only was ordered on the same
complaint and account
Willfong v. Patty, Haw., 226, is
urged upon US as an authority that a
statement of account made up for pur
poses of litigation is not an application
Of payments. That case held that under
its circumstances the debtor could not
have directed the application and that
the creditor had not. In that case there
we're two notes upon either of which the
application of dividends could have