Sec 923

Supposing several distinct debts are due from A. to B., and B. transmits to A. funds only sufficient to pay a part of those debts, the question arises as to which of them the money is to be applied. And the first rule to be observed is, that if the debtor designates the debt that is to be extinguished first, the money must be appropriated to pay that debt;1 and if the creditor accept the money, it goes to the specific debt,2 no matter what he may say at the time.3 And an appropriation once designated cannot be changed by the creditor without the debtor's assent.4

Appropriation of payment to be in accordance with debtor's intent.

1 Story Eq. Jur. 12th ed. sec 4596 et seq.; Leake, 2d ed. 914; Chitty on Cont. 11th Am. ed. 1110; Clayton's case, 1 Mer. 605; Simson V. Ingham, 2 B. & C. 72; Mills V. Fowkes, 5 Bing. N. C. 461; Cremer V. Higginson, 1 Mason, 338; U. S. V. Wardwell, 5 Mason, 85; Franklin Bk. V. Cooper, 36 Me. 222; Pierce V. Knight, 31 Vt. 701; Smuller V. Union Canal Co., 37 Penn. St. 68; Lee V. Early, 44 Md. 80; Pin-dall V. Bank, 10 Leigh, 481; Miller V. Trevellian, 2 Rob. Va. 2; Nutall V. Brannin, 5 Bush, 11; McDaniel V. Barnes, 5 Bush, 183.

2 Croft V. Lumley, 5 E. & B. 680; Kitchin V. Hawkins, L. R. 2 C. P. 31; Kershaw V. Kirkpatrick, L. R. 3 Ap. Cas. 345: King V. Andrews, 30 Ind. 429; Champenois V. Fort, 45 Miss. 355.

3 Benj. on Sales, 3d Am. ed. sec 746; Peters V. Anderson, 5 Taunt. 596; Waller V. Lacy, 1 M. & G. 54; Reed V. Boardman, 20 Pick. 441.

4 Levystein V. Whitman, 59 Ala. 345. The student will find an elaborate essay on the topic in the text in Ihering's Jahr. for 1874, vol. 14, under the title "Auf welche von mehreren Forderungen eine geleistate Zahlung abzurechnen ist, von Henrici, Vice-Prasident im Koniglich Preuss. Ober-tribunal."

Sec 924

If the debtor do not expressly designate the debt that is to be extinguished by the payment, his intent as to the appropriation of the payment may be inferred from all the circumstances of the case.1 Thus it has been held that the proceeds of a mortgaged estate will be appropriated to the discharge of the mortgage debt, though there were earlier debts due from the same debtor to the same creditor, supposing no one of these debts is a specific lien on the fund.2 When one of two debts is disputed, and the other is admitted, the payment will be presumed to have been intended by the debtor to have been appropriated to the undisputed debt.3 - Intention may be proved by parol evidence of directions given by the debtor.4 But "the mere avowal of an intention to apply a fund or have it applied in a particular way, has never yet been held to be an application of it."5 - When a payment is of a sum precisely the same as the amount of one of several debts, the presumption is that it was intended to pay that debt.1 - A debtor who owes both individually and as executor in distinct debts is supposed, all other things being equal, to intend to pay his own debt.2 And when he pays out of partnership funds, the inference is it is to a partnership debt.3 - When, upon the death of a partner, the surviving partners continue to deal with a particular creditor, and payments are made him by the surviving partners on a continuous account, the payment is to be appropriated to the partnership debts.4 - But the circumstance that the debtor sent the money through a party who was his security for one of several debts he owed the payee, is not sufficient ground to infer that the payment was meant by the debtor to go to the debt thus secured.5

Intent to be inferred from circumstances.

1 Chitty on Cont. 11th Am. ed. 1111; Leake, 2d ed. 915; Benj. on Sales, 3d Am. ed. sec 747; Newmarch V. Clay, 14 East, 244; Robert V. Garnie, 3 Caines, 14; Foster V. McGraw, 64 Penn. St. 464; McKelvey V. Jarvis, 87 Penn. St. 414; Young V. English, 7 BeaV. 10; Nash V. Hodgson, 6 D. M. & G. 474; Tayloe V. Sandiford, 7 Wheat. 14; Hunt V. Brewer, 68 Me. 262; Scott V. Ray, 18 Pick. 361; Mitchell V. Dall, 2 Har. & G. 159; 4 Gill & J. 361; Fowke V. Bowie, 4 Har. & J. 566; Pickett V. Bank, 32 Ark. 346; see Levystein V. Whitman, 59 Ala. 345; Jones V. Ma-ney, 7 Lea (Tenn.) 341; Trullinger V. Kofoed, 7 Oreg. 228.

2 Stoveld V. Eade, 4 Bing. 154; Sanders V. Knox, 57 Ala. 80; Pattison V. Hall, 9 Cow. 747; and cases infra, sec 929. And see generally as sustaining the position of the text, Baker V. Stack-poole, 9 Cow. 420; Martin V. Draker, 5 Watts, 544; Bosley V. Porter, 4 J. J.

Marsh. 621; Libby V. Hopkins, Sup. Ct. U. S. 1882; 25 A. L. J. 153; U. S. V. Eckford, 17 Pet. 251; Blackstone Bank V. Hill, 10 Pick. 129; Rosseau V. Cull, 14 Vt. 83; Selleck V. Turnpike Co., 13 Conn. 453; Adams Ex. Co. V. Black, 62 Ind. 128. That the intent of the debtor may be inferred from extrinsic facts, see Waters V. Tompkins, 2 Cr. M. & R. 723; Starrett V. Barber, 20 Me. 457; Robinson V. Doolittle, 12 Vt. 246; Gwinn V. Whitaker, 1 Har. & J. 754; Dorsey V. Gassaway, 2 Har. & J. 402; Lindsey V. Stevens, 5 Dana, 104; see Ramsom V. Thomas, 10 Ired. 165.

3 Burn V. Boulton, 2 C. B. 476; West Branch Bank V. Moorhead, 5 W. & S. 542; Scott V. Fisher, 4 T. B. Monroe, 387; see Stone V. Seymours, 15 Wend. 19; and cases infra, sec 934; but see, contra, Field V. Holland, 6 Cranch, 8.

4 Wittkowsky V. Reid, 182 N. C. 116. But see Brice V. Hamilton, 12 S. C. 32.

5 Gordon, J., Guthrie's Ap., 92 Penn. St. 272, citing Beans V. Bullitt, 57 Penn. St. 221.