Court Opinion

ID: 6163780
Source: CourtListenerOpinion
Date Created: 2022-02-05 18:22:20.563176+00
Date Added: 2024-06-11T08:55:33.075795
License: Public Domain

Beckwith, C. J.,
(dissenting.) I will state my reasons for dissenting from the conclusion reached by a majority of the court. The plaintiffs, Henry Bros., were dealers in meats, and the defendant was a customer. The defendant testified that he had traded with them for three years. This action was' brought in the municipal court of Buffalo upon an account for meats sold and delivered to the defendant in the months of May and June, 1887. The plaintiffs filed a verified bill of particulars in amplification of their complaint, setting forth their account of sales to the defendant in the months .of May and June, 1887, showing several sales in each month, and in the same bill of particulars crediting the defendant with payments from time to time in the same months of May and June, and demanded judgment for the balance of the account. On the trial it came to light that one Swain was taken into partnership with the plaintiffs on the 1st day of June, 1887; but it is undisputed that the defendant knew nothing of that change in the firm until the coming on of the trial. On the trial Rudolph Henry testified to the sales of meat made in the month of May, and to a payment of $25 the last day of May, but omitted to make proof of the sales in June; thus making a claim for the meats sold in May only. On cross-examination he admitted the several payments made in June, and then made proof of the several sales made in June; thatSwain had become a member of the firm June 1st, and that the sales were made by the new firm. The defendant testified that he knew nothing of anybody except the original firm of Henry Bros., and that he kept his account as with them. The judge of the municipal court in his return states that it was conceded by both parties on the trial, although no direct evidence thereof was given and no formal admissions made, that the account which the plaintiffs opened against the defendant when he commenced buying of them was continued without change as to the heading against him after Swain became a partner, as the same appears on the bill of particulars filed in the action. The defendant testified that when he made the payments nothing was said by either party as to how the money should be appropriated, and that in his dealings he knew only Rudolph Henry. This is the substance of the evidence, as, in my opinion, it should be looked at for the purposes of this review. There was some testimony obtained from the defendant respecting a new account in June which I will notice later; and the defendant testified that on a certain day in June he made a purchase of meats amounting to $40.04, and that at the same time he paid $40.04, in full of the same purchase. I regard this item of evidence of no consequence. If the defendant is not mistaken, but, as he says, made specific purchase and paid the purchase price, then the payment left no debt, and *508that purchase was an isolated transaction, and is out of the case. If, on the other hand, the $40.04 was not paid on a particular purchase, then the money was to be applied as the other payments were applied. The evidence and the bill of particulars show that after the payment of $25 on the 31st day of May there was a considerable balance due the plaintiffs upon the sales made in that month, which the trial court refused to reduce by applying thereon the payments made in June. In my opinion, those payments ought to have been al-. lowed in reduction of the plaintiffs’ account. In the first place, both the plaintiffs and defendant treated them as so applied. The complaint and bill of particulars show that in fact the plaintiffs had so actually applied them, and the defendant kept his account in a way to show he considered them so applied. It is well settled that a plaintiff in an action should not be permitted to change the application of payments after suit brought. In the second place, where there is a running account of that kind upon which payments are from time to time made, the creditor and debtor usually understand that there is to be such an application, and that the purchaser’s indebtedness at any time is the balance of the account after setting off the payments against the sales in the order of priorities. And that is the way the law treats the subject by applying payments in discharge pro tanto of the items of debitin thé creditor’s account in the order of the priority of date. This rule of law is founded, I apprehend, on the presumption that such was the intention of the debtor, and the plain understanding of the debtor and creditor, dealing together. Clayton's Case, 1 Mer. 579; Bank v. Bank, 44 Hun, 54; 2 Pars. Cont. 633; U. S. v. Kirkpatrick, 9 Wheat. 720; 2 Greenl. Ev. § 533; Truscott v. King, 6 N. Y. 147. Where the only dealings between persons consist of a running account of sales on one side and payments on the other, it is quite clear that they understand that the payments go in reduction of the earliest items in the creditor’s account. And in a case where a new party is taken into the firm of the creditors, and nothing is said about it, and the debtor has no knowledge of the change, and continues to deal with the firm as before, 'buying and making payments from time to time, and the sellers continue to enter and blend the sales in the same account, under such circumstances the conduct of the members of the firm would seem to be an assurance to the customer that their dealings go on in the same manner, without change, and that his payments are applied in the ordinary and customary manner. Otherwise, the debtor would be deprived of his right to distinguish the debt he would pay, to say nothing of his possible unwillingness to make a debt with the new firm. Where there is a change of partners, especially without the knowledge of the •debtor, and the dealings are carried on as before, and the sales are blended and continued in the same account, there the authorities seem to hold that payments are to be applied as though no change of partners had taken place, (1 Story Eq.. Jur. § 459e;) and the rule is the same on the accession of a ■new partner as on the retirement of a member of a firm, (Will. Eq. Jur. 113.) Especially must this be the rule where from the conduct of all the members •of the firm, including the new one, the presumption exists and continues that •the dealings are continued upon the same account with the consent of all the ■partners. Hooper v. Keay, L. R. 1 Q. B. Div. 178, 16 Moak, Eng. R. 269.
It is undoubtedly true that in the case of the payment of a sum of money by a debtor to a creditor who holds two distinct and independent claims against •him that are due, and the debtor gives no direction, expressed or implied, as to which debt he means to make the payment upon, the creditor may apply the payment on either of his demands. In such connection the doctrine has grown up and become a favorite one that he may do so because after payment, without any direction from the debtor, he becomes the owner of the sum of money, and may do what he pleases with his own at anytime before trial. This does not seem to me just a proper doctrine of the law of payment, although the fact ■is indisputable that a man may do what he pleases with his own. The idea of *509payment is not that of the transfer of the title of property, but the solution or extinguishment of a debt, and when the object of the act of payment is not expressed by the debtor, nor susceptible of being inferred from the circumstances, the payee may be deemed to be authorized to complete the act according to his own wishes; and some authorities hold that he may do that at any time before an action is commenced. Where a tradesman opens a running account with a customer who from time to time pays sums of money, it would seem that there could be no doubt about what passes in their minds, nor that what transpires is that the debtor supposes that he is making a payment on the general account, and that the creditor knows that the customer so understands it, and accepts the money with that knowledge, and therefore the agreement .between them becomes complete that the application of the money will be in accordance with the debtor’s intention. When such are the circumstances, there being nothing more in the case, the law, according to a long-established rule,—the principle of which is not always clearly elucidated, —applies the payment to the reduction of the earliest debts of the account. To my view, the circumstances of this case and the evidence show that the plaintiffs herein actually made such application of the defendant’s payments; that, whether they did or not, they ought so to have done; that the law, upon the circumstances, made such application; that the coming in of Swain as a partner without the knowledge of the defendant,—the plaintiffs’ account being continued in the same manner, sales and payments being made upon the same account without any knowledge of a change being acquired by the defendant,—did not deprive the defendant of his right to say that he made his payments upon the assumption that the ordinary application would be made, and that the plaintiffs, after taking in the new member, accepted the payments with knowledge of the defendant’s understanding. The evid -nceshows no objection on the part of Swain, and the fact that he was interested in the sales made in June, the defendant remaining ignorant of his connection with the firm, raised no equity which required the moneys which the defendant was able from time to time to pay to be applied on the claim in which he was interested rather than the older claim of the plaintiffs; and, the two claims existing, the defendant had the right, had he known of the change in the firm, to direct his payments to be applied to the account of the original firm. My notions of the case are that the plaintiffs actually applied the June payments on their account. (1) They recognized such application even after the commencement of the action by their bill of particulars. (2) That such application was according to the understanding of the parties. The circumstances show there could have been no other intention on the part of the defendant. (3) That such application was required by the established rule of law. (4) The change in the partners being without the knowledge of the defendant,—the account being continued in the same manner as before,—the rule of law still operated as to the payments in June, and the same presumption as to the intent of the debtor and understanding of the parties continued. Accordingly, I think that after the action was commenced the court ought not to have allowed the plaintiffs to change the application of the payments. It looks to me as though the plaintiffs sought to make the change to save judgment going against them, with costs. It is stated in the brief of defendant’s counsel that the defense of bad meat applied to the sales made after the 1st day of June.
But there, is another piece of evidence which I have so far excluded from consideration. On cross-examination the defendanttestifled: “ At that time, May 31st, I paid $25 on this account, and owed the balance,—$72.50. I had nothing more until June 3d. Then they struck anew account. What I paid on June 3d—$15.56—was on the new account.” On redirect examination he said: “I continued right on as I began. They never told me any different. I knew of no new account. I kept it in one account.” It appears conclusively that the defendant knew nothing about Swain having become a part. *510ner, and what; he meant by saying “they struck a new account” is not clear, unless it was that the balance due upon the dealings in May was ascertained and carried over to the account for June, upon which he considered he made his payments. Finding the balance at the end of each month, but continuing the account and dealings in the same way, would not, as I conceive, make any difference as to the intended application of the payments or the rule of law to be applied. The defendant proved the payments in June under the circumstances mentioned. I think they were payments on the plaintiffs’ account, and that the judge of the municipal court erred in depriving the defendant of the results of the proof, and therefore I think the judgment appealed from should be reversed. Code Civil Proc. § 3063.