In cases of payments which are not made by the debtor voluntarily, the creditor has no right of appropriation, but must apply the money towards the discharge of all the debts in proportion. (h)

A question has been made as to the manner of making up the account where partial payments have been made at different times on bonds, notes, or other securities.

635

Interest may

be cast in three ways. It may be cast on the whole sum to the day of making up the account, and also upon each payment from the time when made to the same day, and the difference between these sums is the amount then due. Or interest may be cast on the whole sum to the day of the first payment, and added to the original debt, and, the payment being deducted, on the remainder interest is cast to the next payment, and so on. The objection to this method is, that if the payment to be deducted is not equal to the interest which has been added to the original sum, then a part of this interest enters into the remainder, on which interest is cast, and thus the creditor receives compound interest. A third method is, to compute the interest on the principal sum from the time when interest became payable to the first time when a payment, alone, or in conjunction with preceding payments with interest cast on them, shall equal or exceed the interest due on the principal. Deduct this sum and cast interest on the balance as before. In this way payments are applied first to keep down the interest, and then to diminish the principal of the debt, and the creditor does not receive compound interest. This last method

a payment in such manner as to affect the relative liability or rights of his different sureties without their consent. Postmaster-General v. Norvell, Gilpin, 106.

(h) Thus where a creditor recovered one judgment on several notes, some of which were made by the judgment debtor alone, and others were signed also by a surety, and took out an execution which was satisfied in part by a levy, it was held, that he could not appropriate this payment solely to the notes not signed by the surety, but that all the notes were paid proportionably. Blackstone Bank v. Hill, 10 Pick. 129. So where an insolvent debtor assigns his property for the benefit of such of his creditors as become parties to the assignment, and thereby releases

their claims, and a dividend is received by one of such creditors, it must be applied ratably to all his claims against the debtor, as well to those upon which other parties are liable, or which are otherwise secured as to those which are not SO secured. "This is not a case," say the court, "in which the debtor or creditor has the right to make the application of any payment, for the application is made by law according to the circumstances and justice of the case." Commercial Bank v. Cunningham, 24 Pick. 270. See also Merrimack County Bank v. Brown, 12 N. H. 320; Waller v. Lacy, 1 Man. & G. 54. But see contra, Portland Bank v. Brown, 22 Me. 295.

1 Payments will be applied to interest rather than principal, though the principal is overdue. Drury v. Wolfe, 134 Ill. 294, 296; Lash v. Edgerton, 13 Minn. 210; Stewart v. Stebbins, 30 Miss. 66; Anderson v. Perkins, 10 Mont. 154, 159; Howard v. McCall, 21 Gratt. 205.-W.

has been adopted in Massachusetts by decision, and generally prevails. (i)

One holding a note on which interest is payable annually or semi-annually, may sue for each instalment of interest as it be

comes payable, although the note is not yet due. (j) Al636 though it has been held that after * the principal becomes

due the unpaid instalments of interest become merged in the principal, and must therefore be sued for with the principal, if at all, (k) the better reason is that the promises to pay the principal and interest at different times are several and afford distinct causes of action. (kk) 1 And if he allows the time to run by without demanding interest, he cannot afterwards, in an action on the note, recover compound interest. (1)

SECTION II.

OF PERFORMANCE.

Having treated of payment as the specific defence to an action grounded on alleged non-payment, we will now speak of performance, generally, as the most direct contradiction and the most complete defence against actions for the breach of contract.

To make this defence effectual, the performance must have been by him who was bound to do it; and whatsoever is necessary to be done for the full discharge of this duty, although only incidental to it, must be done by him. (x) Nor will a mere readiness

(i) Dean v. Williams, 17 Mass. 417; Fay v. Bradley, 1 Pick. 194; and see Connecticut v. Jackson, 1 Johns. Ch. 17; French v. Kennedy, 7 Barb. 452; Williams v. Houghtaling, 3 Cowen, 87, note; Union Bank v. Kindrick, 10 Rob. (La.) 51; Hart v. Dorman, 2 Fla. 445; Jones v. Ward, 10 Yerg. 160; Spires v. Hamot, 8 Watts & S. 17; United States v. McLemore, 4 How. 286; Story v. Livingston, 13 Pet. 359; Wallace v. Glaser, 82 Mich. 190; Anderson v. Perkins, 10 Mont. 154; 3 Randolph, Com. Paper, § 1497.

(j) Greenleaf v. Kellogg, 2 Mass. 568; Cooley v. Rose, 3 id. 221; Herries v.

Jamieson, 5 T. R. 553. See also Townsend v. Riley, 46 N. H. 300. And see ante, p. * 620, note (c).

(k) Howe v. Bradley, 19 Me. 31. (kk) Sparhawk v. Wills, 6 Gray, 163; Andover Savings Bank v. Adams, 1 Allen, 28.

(7) Hastings v. Wiswall, 8 Mass. 455; Ferry v. Ferry, 2 Cush. 92; Doe v. Warren, 7 Greenl. 48, and Bennett's note; Connecticut v. Jackson, 1 Johns. Ch. 13; Van Benschooter v. Lawson, 6 Johns. Ch. 313; Attwood v. Taylor, 1 Man. & G. 279; Sparks v. Garrigues, 1 Binn. 152, 165; Leonard v. Adm'r of Villars, 23 Ill. 377.

1 Dulaney v. Payne, 101 Ill. 325, decided that, for this reason, a judgment for unpaid instalments of interest obtained after the maturity of a note was no bar to a separate action for the principal sum thereby secured. — W.

(2) Usually the acceptance of money, after it is due, implies a waiver of objection growing out of the delay if it is tendered unconditionally, and the recipient

retains it without objection, he is held to assent to the payor's terms. Shea v. Mass. Benefit Ass'n, 160 Mass. 289, 294, 35 N. E. 855.

to do discharge him from his liability, unless he makes that manifest by tender or an equivalent act. (m)1

By the statutes of the United States, known as the Legal Tender Acts, the promissory notes of the United States are made a legal tender. After much conflict and some fluctuation, these acts were held by a majority of the Supreme Court of the United States (the Chief-Justice and three side justices dissenting) constitutional and valid as applied to contracts made before their passage: the dissenting justices holding them valid only as to contracts made after their passage, on which point the court was unanimous. (mm) 2 The same court held that a note payable in specie could not be satisfied against the will of the holder by a tender of "legal tender" notes. (mn)

If the tender be of money, it can be a defence only when made before the action is brought, (n) and when the demand is of money,

(m) Thus, if a tenant by a deed covenants to pay rent in the manner reserved in the lease, but no place of payment is mentioned, the tenant must seek out the lessor on the day the rent falls due, and tender him the money. It would not be sufficient that he was on the premises leased, at the day, ready with the money to pay the lessor, and that the latter did not come there to receive it. Haldane v. Johnson, 8 Exch. 689, 20 Eng. L. & Eq. 498. And see Poole v. Tumbridge, 2 M. & W. 223; Shep. Touch. 378; Rowe v. Young, 2 Brod. & B. 165. In Cranley v. Hillary, 2 M. & S. 120, the plaintiff had agreed with the defendant, his debtor, to release him from the whole debt, if the debtor would secure him a part by giving him certain promissory notes. The plaintiff never applied for the notes, nor did the defendant ever tender them, but he was ready to give them if they had been applied for. The plaintiff afterwards sued the defendant on the original cause of action, and the defendant relied upon the agreement to compound. Held, that the

defendant should have offered the plaintiff the notes, and that as he had not, the plaintiff was not barred from his action. See Soward v. Palmer, 2 J. B. Moore, 274; Reay v. White, 1 Cromp. & M. 748, that a tender may be dispensed with under certain circumstances. See also Eastman v. Rapids, 21 Iowa, 590.

(mm) Knox v. Lee, and Parker v. Davis, 12 Wallace, 457. See also Maryland v. Railroad Co., 22 Wall. 105.

(mn) Trebilcock v. Wilson, 12 Wallace, 687.

(n) Bac. Abr. Tender (D); Suffolk Bank v. Worcester Bank, 5 Pick. 106. And in Hume v. Peploe, 8 East, 168, it was held, that a plea of tender after the day of payment of a bill of exchange, and before action brought, is not good, though the defendant aver that he was always ready to pay from the time of the tender, and that the sum tendered was the whole money then due, owing, or payable to the plaintiff in respect of the bill, with interest from the time of the default for the damages sustained by the plaintiff by rea

1 But a statement that a tender will not be accepted makes actual tender unnecessary as a condition precedent to a right of action. Veeder v. McMurray, 70 Iowa, 118; Duffy v. Patten, 74 Me. 396; McDonald v. Wolff, 40 Mo. App. 302; Post v. Garrow, 18 Neb. 682; Lawrence v. Miller, 86 N. Y. 131. See also Mathis v. Thomas, 101 Ind. 119; Potter v. Taggart, 54 Wis. 395. W.

2 In Juillard v. Greenman, 110 U. S. 421, the Supreme Court held that Congress has power to make notes legal tender in time of peace as well as in time of war. All the judges held that the case was within the principle of the earlier cases, and all excepting Justice Field expressed the opinion that those cases were correctly decided. — W.

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and is definite in amount or capable of being made so. (x) It seems to be settled that a tender may be made to a quantum meruit although once held otherwise; (0) but, generally, where the claim is for unliquidated damages, it has been held in England, very strongly, that no tender is admissible. (p) In this

country cases of accidental or involuntary trespass form an exception; in part by usage, or by an extension of the principle of the 21 Jas. I. c. 16, or express statutory provision. (4) This seems to be settled in some States, and would, we think, be held generally. A tender may be pleaded to an action on a covenant to pay money. (r)

A plea of tender admits the contract, and so much of the declaration as the plea is applied to. It does not bar the debt, as a payment would, but rather establishes the liability of the defendant; for, in general, he is liable to pay the sum which he tenders whenever he is required to do so. (8) But it puts a

1 Hence where a party pleads tender it is an admission that the other party is entitled to judgment for at least the amount tendered. Denver, &c. R. R. Co. v. Harp, 6 Col. 420; Monroe v. Chaldeck, 78 Ill. 429; Wolmerstadt v. Jacobs, 61 Iowa, 372; Phoenix Ins. Co. v. Readinger, 28 Neb. 587. See also Wilson v. Doran, 39 Hun, 88, and cases cited. - W.