payment, and that, if the debtor pleads payment and thereby defeats the action, the volunteer may bring an action of assumpsit for money paid to the creditor at the defendant's request, for the plea of payment in the former action would amount to a ratification of the payment.1 A stranger who voluntarily pays the debt of another may take an assignment of it from the creditor and enforce the debt against the debtor. And if, at the time payment is made, the creditor agrees to assign him the debt, though no assignment in writing is made, the stranger will be regarded in equity as the equitable assignee of the debt, and the transaction as a purchase of the debt,20 Where one person is compelled to pay money which another is bound by law to pay, a promise by the latter is raised by law to reimburse the person paying. Accordingly if a sheriff pays the amount of an execution, to discharge himself from liability for neglect in not making the money, the defendant may avail himself of such payment to have the judgment satisfied, but he thereby becomes liable to the sheriff for money paid for his use. Generally, where it is equitable that a person furnishing money to pay a debt should be substituted for the creditor or in the place of the creditor, such person will be so substituted. But ordinarily a stranger by voluntarily paying the debt of another in the absence of request so to do is not entitled to be subrogated to the lien rights of the creditor.*

VI. MODE OF PAYMENT

28. In General. If a mode of payment is prescribed by statute or by the contract it must be strictly pursued. Accordingly where a city contracted for the construction of a sewer, and the only way provided for payment was through a special assessment, it was held to be the duty of the city to collect the assessment and turn over the proceeds to the contractor, and that such duty was enforce

19. Neely v. Jones, 16 W. Va. 625, 37 Am. Rep. 794.

20. Crumlish v. Central Imp. Co., 38 W. Va. 390, 18 S. E. 456, 45 A. S. R. 872, 23 L.R.A. 120.

W. Va. 625, 37 Am. Rep. 794.

Note: 50 Am. Dec. 167.

And see ASSUMPSIT, vol. 2, p. 776. 2. Poe v. Dorrah, 20 Ala. 288, 56 Am. Dec. 196.

3. Note: 23 L.R.A. 127. And see

4. Demeter v. Wilcox, 115 Mo. 634, 22 S. W. 613, 37 A. S. R. 422; Union Trust Co. v. Monticello, etc., R. Co., 63 N. Y. 311, 20 Am. Rep. 541.

Note: 23 L.R.A. 125.

1. Fitzgerald, etc., Const. Co. -V. Fitzgerald, 137 U. S. 98, 11 S. Ct. SUBROGATION, 36, 34 U. S. (L. ed.) 608; United States Fidelity, etc., Co. v. Sandoval, 223 U. S. 227, 32 S. Ct. 298, 56 U. S. (L. ed.) 415; Neale v. Newland, 4 Ark. 506, 38 Am. Dec. 42; Hough v. Etna L. Ins. Co., 57 Ill. 318, 11 Am. Rep. 18; Slack v. Kirk, 67 Pa. St. 380, 5 Am. Rep. 438; Winchester ". Beardin, 10 Humph. (Tenn.) 247, 51 Am. Dec. 702; Neely v. Jones, 16 . C. L. Vol. XXI.-3.

33

5. Tennessee Bond Cases, 114 U. S. 663, 5 S. Ct. 974, 1098, 29 U. S. (L. ed.) 281; Weston v. Syracuse, 158 N. Y. 274, 53 N. E, 12, 70 A. S. R. 472, 43 L.R.A. 678.

able by mandamus. A mere direction by the maker of a note to his agent to apply thereon money which he has received and holds as such agent does not constitute a légal application of the money by reason of the fact that the same person is also the general agent. of the payee of the note, unless there is evidence that he consented, expressly or impliedly, as the agent of such payee, to apply the money as directed. Payment by a debtor to one to whom his creditor is in debt will not operate as a payment in the absence of consent or authorization on the part of the creditor. Thus a note held by a married woman against her husband for money loaned is not, as matter of law, satisfied by payments of a greater amount by him on land purchased by her in her own name, if she is not shown to have. known of the payments or to have accepted them as a satisfaction: of the note..:

29. Persons Acting in Dual Capacity of Debtor and Creditor.— It is a familiar principle when the hand which is to pay is the hand also to receive, that is payment in law." Hence the appointment of a debtor as executor, or his taking out letters of administration, operates as payment into his own hands, and his duty as execu-. tor or administrator is to inventory his own debt.10 Likewise where a person is acting in the double capacity of administrator of a decedent's estate and guardian of his minor heirs, and it becomes his duty as such administrator to pay to himself as guardian a sum of money distributed to his wards, the law will presume such payment to have been made by him. But this legal presumption may be. rebutted. And if he charges himself with the fund as administrator, but refrains from charging himself with it as guardian, the legal presumption of a transfer of the fund is rebutted.11 There must be concurrence and coexistence of the legal obligation to pay and of the authority and duty to demand and receive payment. If the two do not concur and coexist, there is no room or reason for the presumption. Hence no presumption of the payment of the debts of a corporation arises from the fact of the assumption of such debts by another corporation whose president and chief stockholder is a member of a firm to which such debts are due.12

6. Weston v. Syracuse, 158 N. Y. 274, 53 N. E. 12, 70 A. S. R. 472, 43 L.R.A. 678.

7. Moore v. Norman, 52 Minn. 83, 53 N. W. 809, 38 A. S. R. 526, 18 L.R.A. 359.

8. Feder v. Ervin, (Tenn.) 38 S. W. 446, 36 L.R.A. 335.

9. Wilson v. Wilson, 17 Ohio St. 150, 91 Am. Dec. 125; Linsenbigler v. Gourley, 56 Pa. St. 166, 94 Am. Dec. 51.

10. Sampson v. Fox, 109 Ala. 662, 19 So. 896, 55 A. S. R. 950; Linsenbigler v. Gourley, 56 Pa. St. 166, 94 Am. Dec. 51. See also EXECUTORS AND ADMINISTRATORS, vol. 11, p. 113.

11. Wilson v. Wilson, 17 Ohio St. 150, 91 Am. Dec. 125.

12. Sampson v. Fox, 109 Ala. 662, 19 So. 896, 55 A. S. R. 950.

30. Transmitting Money by Mail.-A debtor is bound to pay his creditor in person or his authorized agent, and does not, fulfil his obligation by making all reasonable efforts to transmit to the creditor the amount of the debt,18 and therefore,,depositing in the post office a letter containing the money, and addressed, to the creditor, does not discharge the debt,14 unless, by the; creditor's express direction or assent, the usual course of dealing between the parties, or other facts from which such direction or assent may be inferred, the creditor has authorized the money to be thus delivered to him.15 Where a debtor is directed by his creditor to remit money by mail the posting of a letter inclosing the remittance as directed constitutes a payment, although the letter is lost.16 But direction by a creditor to remit money without specifying the mode will not authorize the debtor to select the mail as the medium of conveyance to the creditor, so as to impose the risk of the remittance on him.17. A direction to remit in the usual way, however, sent to a bank by a depositor resident in a foreign country, authorizes the bank to send a draft through the mails.18 A previous remittance by letter does not authorize the debtor to adopt the mode pursued in that instance as the one by which the creditor desires future remittances to be made, so as to impose on him the risk of loss in transitu, for one instance of remittance by mail does not establish usage.19 If the creditor authorizes remittance by mail under certain specified precautionary observances, and the debtor remits without observing such precautions, the debtor is not discharged.20 If it is impossible for the debtor to transmit the money in the manner and under the precautionary attendant circumstances directed by the creditor, he cannot make the remittance at the risk of the creditor. His authority is to remit in the

13. Gurney v. Howe, 9 Gray (Mass.) 404, 69 Am. Dec. 299; Buell v. Chapin, 99 Mass. 594, 97 Am. Dec. 58 and note.

Note: 21 Eng. Rul. Cas. 16.

14. Williams v. Carpenter, 36 Ala. 9, 76 Am. Dec. 316; Gurney v. Howe, 9 Gray (Mass.) 404, 69 Am. Dec. 299; Buell v. Chapin, 99 Mass. 594, 97 Am. Dec. 58; Jung v. Second Ward Sav. Bank, 55 Wis. 364, 13 N. W. 235, 42 Am. Rep. 719.

Notes: 97 Am. Dec. 59; 21 Eng. Rul. Cas. 16.

15. Williams v. Carpenter, 36 Ala. 9, 76 Am. Dec. 316; Burr v. Sickles, 17 Ark. 428, 65 Am. Dec. 437 and note; Gurney v. Howe, 9 Gray (Mass.) 404, 69 Am. Dec. 299; Buell v. Chapin, 99 Mass. 594, 97 Am. Dec. 58; Jung v. Second Ward Sav. Bank, 55

Wis. 364, 13 N. W. 235, 42 Am. Rep. 719.

Notes: 97 Am. Dec. 59; 21 Eng. Rul. Cas. 16.

16. Jung v. Second Ward Sav. Bank, 55 Wis. 364, 13 N. W. 235, 42 Am. Rep. 719; Warwicke v. Noakes, 1 Peake 67, 3 Rev. Rep. 653, 21 Eng. Rul. Cas. 14 and note.

17. Burr v. Sickles, 17 Ark. 428, 65 Am. Dec. 437.

Note: 97 Am. Dec. 59.

18. Jung v. Second Ward Sav. Bank, 55 Wis. 364, 13 N. W. 235, 42 Am. Rep. 719.

19. Burr v. Sickles, 17 Ark. 428, 65 Am. Dec. 437. See generally, USAGES AND CUSTOMS. 20. Williams v. Carpenter, 36 Ala. 9, 76 Am. Dec. 316.

Note: 21 Eng. Rul. Cas. 17.

manner and under the circumstances prescribed, and if he remits without pursuing the directions, he acts without authority. In regard to the transmission of money by mail, there is a distinction between the relation of creditor and debtor, and that of principal and agent. An agent employed to collect a debt and remit the proceeds is bound only to use ordinary and reasonable skill and diligence, in sending it to his principal, except so far as his discretion is limited by positive instructions.

31. Depositing Money at Place of Payment.-Although an instrument is by its terms payable at a certain bank, the mere deposit of the money in that bank in order that it might be applied in payment of the note does not constitute a payment of it. The only effect of the payer having the money at the place where an obligation is payable is that it will enable him to plead a tender in exoneration of interest and costs of suit, provided he makes his tender good by payment of the principal into court.*

32. Transfer of Creditors on Bank Books; Directing Bank to Charge. Where debtor and creditor have accounts at the same bank, and the creditor directs payment to be made at this bank, the transfer of the amount in the banker's books on the order of the debtor effects a payment, although the bank fails, so that the creditor loses the benefit of the transfer.5 When the holder of a note sends it for collection to a bank with which the maker is a depositor, knowing that if the maker is in funds the note will be paid by charging it to his account, the subsequent transaction is to be viewed as though it had occurred directly between the holder and the maker. Therefore when the maker being in funds directs the bank to pay the note and charge it to his account, and the bank verbally accepts the appropriation of the maker's credit with it in payment of the note, that should constitute payment in view of the fact that the payee in sending the note to it for collection must have expected that payment would be made in exactly that way. It is not important how the bank evidences its acceptance of the maker's verbal order or whether it does anything to remit the proceeds to its principal. All that is necessary to constitute payment is the intention to make the application, which may be evidenced in a variety of ways, e. g., by bookkeeping entries, by canceling the note and surrendering it to the makers, by the drawing of a check by the makers and its acceptance in payment

by the bank. It is incumbent on the holder of the paper to secure payment, and loss resulting from his neglect should fall on him, not on the drawer, who has no further duty to perform. This holds good in the case of a note payable at a bank where the maker has funds to meet it at maturity, especially since such a note is by statute made the equivalent of a check. To the extent that the maker has appropriated his credit, he is not called on to look after it, but discharges his duty by keeping his account good. It must be then that where a note is made payable at a bank and the makor is in funds at the time it is due, if through neglect of the holder the note is not paid, the loss must fall on the holder, and the note, to the extent of such loss, will be deemed paid."

33. Acceptance by Bank of Verbal Order to Pay.-There is a marked distinction between payment and the evidence thereof that is not always kept in mind, and there are many cases in which stress has been laid. on the evidence of payment such as canceling a note, marking it paid, or charging it on the books of a bank to a maker, but none holding that such evidence is necessary to establish the fact of payment. The act and the evidence of it must not be confused. The act in a case where a note is sent to a bank for collection and the maker verbally directs it to be charged to his account is the acceptance of the maker's verbal order to charge the note to his account. Making the bookkeeping entries would merely create evidence of that act. When that verbal order is accepted the maker's credit is irrevocably appropriated pro tanto to the payment of the note precisely as though a written order in the form of a check had been presented and accepted. It may be that something more than a mere state of mind on the part of the one to make the application is necessary to constitute payment and that the mental determination of an officer of the bank, not accompanied by or resulting in any act, would not suffice. However, the acceptance of the maker's verbal order to make the application is an act fully as effective as, e. g., the marking of the note paid.

VII. MEDIUM OF PAYMENT

In General

34. Money. In the absence of any agreement to the contrary money is the sole medium of payment. This does not mean that

6. Baldwin's Bank v. Smith, 215 N, Y. 76, 109 N. E. 138, Ann. Cas. 1917A 500.

Banking Ass'n v. Zorn, 14 S. C. 444, 37 Am. Rep. 733. See also CHECKS, vol. 5, p. 501,

J

8. Baldwin's Bank v. Smith, 215 N. Y. 76, 109 N. E. 138, Ann. Cas. 1917A 500 and note.

7. Adams v. Hackensack Imp. Commission, 44 N. J. L. 638, 43 Am. Rep. 406; Baldwin's Bank v. Smith, 215 N. Y. 76, 109. N. E. 138, Ann. Cas. 9. Borland v. Nevada Bank, 99 1917A 500; Bank of Charleston Nat. Cal. 89, 33 Pac. 737, 37 A. S. R. 32;