MAYOR AND COMMONALTY OF ALEXANDRIA
v.
PATTEN AND OTHERS
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A debtor owing money on multiple accounts may choose which debt to pay toward, and if the debtor fails to make that election, the creditor has the right to apply payments as it sees fit; however, the creditor is not required to make this election immediately and remains free to choose until actually doing so. The Supreme Court reversed the lower court's judgment, which had incorrectly instructed the jury that the creditor's right to elect how to apply payments was lost if not exercised immediately.
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Marshall, Ch. J.,
after stating the case, delivered the opinion of the court, as follows :—
It is a clear principle of law, that a person owing money on two several accounts, as upon bond and simple contract, may elect to apply his payments to which account he pleases; but if he fails to make the application, the election passes from him to the creditor. No principle is recollected, which obliges the creditor to make this election immediately. After having made it, he is bound by it; but until he makes it, he is free to credit eithejr the bond or simple contract.
Unquestionably, circumstances may occur, and perhaps did occur in this case, which would be equivalent to the declaration of his election on the part of the debtor, and therefore, the court was correct in instructing the jury, that if they should be satisfied, that the payments were understood to be made on account of the goods sold at vendue, they ought to apply them to the discharge of that account; but in declaring that the election, which they supposed to devolve on the plaintiff, if the application of the money was not understood, at the time, by the parties, was lost, if not immediately exercised, that court erred.
Their judgment, therefore, must be reversed, and the cause remanded for a new trial.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Randall v. Pettes, 12 Fla. 517 (Fla. 1868)
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Tayloe v. T. & S. Sandiford, 7 Wheat. 13 (U.S. 1822)
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Backhouse v. Robert Patton de bonis non, 5 Pet. 160 (U.S. 1831)
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