fore the discussion herein is limited to a statement of those rules which are general to all questions of payment, and covers the time, place, mode and medium of payment, the application of payments made, the operation and effect of a payment, and pleading and proof of payment. There is also a treatment of the right to recover back money paid under duress, fraud, or mistake. A discussion of the proof of payment necessarily carries as a part a consideration of the presumption of payment from lapse of time. There is, however, no treatment of the closely allied subject of the limitation of actions. And likewise the question of the effect of payment as tolling a statute of limitations and the effect of applying a payment to a barred debt as waiving the right of action thereon are considered in the article which discusses the limitations of actions." Other related matters which are treated elsewhere in this work are payments in performance of compromises,10 or by way of accord and satisfaction; 11 payment as a compliance with the statute of frauds,12 and tender of payment.18

3. Constituent of Elements of Payment.-The authorities agree that to constitute payment the money or other thing must pass from the debtor to the creditor for the purpose of extinguishing the debt, and the creditor must receive it for the same purpose.14 Thus where public moneys on deposit are taken by the depository merely for the purpose of counting and then returned to the bank, there being no intentions on the part of either the officers or the bank that the deposit should be paid, there has not been a payment.15 Depositing money in the post office addressed to the creditor, at least where he has not so directed, is not a payment, for there is no delivery, and therefore where a bank after mailing its check in payment of a customer's note discovers that the customer was not in funds but had in fact assigned his property, and recalls its check from the post office, payment has not been effected, especially where the whole transaction was unknown to the payee.16 Again, it has been held that an agreement at the making of a note that it shall be set off against a note due the maker from the payee, which is not present, so far as the smaller will pay the

9. See LIMITATION OF ACTIONS, vol. 17, pp. 921-922.

10. See COMPROMISE AND SETTLEMENT, vol. 5, p. 875.

S. W. 836, 134 A. S. R. 60; Fremont
County v. Fremont County Bank, 145
Ia. 8, 123 N. W. 782, Ann. Cas. 1912A
1220; Lovett v. Eastern Oil Co. 68 W.

11. See ACCORD AND SATISFACTION, Va. 667, 70 S. E. 707, Ann. Cas. 1912B vol. 1, p. 176.

12. See STATUTE OF FRauds. 13. See TENDER.

14. Bronson v. Rodes, 7 Wall. 229, 19 U. S. (L. ed.) 141; Reynolds v. Crawfordsville First Nat. Bank, 112 U. S. 405, 5 S. Ct. 213, 28 U. S. (L. ed.) 733; Parker v. Carter, 91 Ark. 162, 120

360. As to mutual accounts operating as payment, see infra, par. 42.

15. Lovett v. Eastern Oil Co., 68 W. Va. 667, 70 S. E. 707, Ann. Cas. 1912B 360.

16. Steinhart v. National Bank, 94 Cal. 362, 29 Pac. 717, 28 A. S. R. 132.

larger, is executory, and does not, pro tanto, extinguish either note.17 When the creditor owes a claim or demand to the debtor, he cannot without the consent or direction of the debtor, apply what he owes as a credit on the note or demand he holds against the debtor. The reason for this rule is that the debtor, who is, to the extent of his demand, a creditor, has the right to direct and control the disposition that shall be made of his debt, and to apply or not apply as he pleases to the payment of demands that he owes, and this privilege cannot be taken out of his hands by the mere act of another person.18 But judgment by default, upon an account in which the defendant is credited with the full value of certain services, will be a bar to an action for such services brought during the pendency of the first action.19 It is essential to constitute a gift that the subject be accepted by the donee, and although in the case of money the acceptance is usually presumed, vet the presumption may be rebutted by proof of nonacceptance.20 It follows that a creditor cannot without consent of his debtor give redit for a payment not actually made.1 However, in some jurisdictions the courts have permitted a creditor to remit a part of his claim in order to bring the cause within the jurisdiction of the court. A payment is no less absolute because it is made subject to a demand for a receipt, for a debtor has a right to demand a receipt as evidence of payment. In the absence of any agreement, either expressed or clearly implied, payment means the discharge of a debt or obligation in money; 4 and by some codes it is defined to be performance of an obligation for the delivery of money only. This does not mean that nothing else may constitute payment. On the contrary by agreement of the parties anything of value, which the debtor gives and the creditor receives as a satisfaction of a debt, will be considered payment; but in such a case it is the distinct agreement of the creditor to accept the thing in discharge of the debt that gives it the character

6

17. Cary v. Bancroft, 14 Pick. Va. 667, 70 S. E. 707, Ann. Cas. 1912B (Mass.) 315, 25 Am. Dec. 393.

18. Samuel v. Samuel, 151 Ky. 235, 151 S. W. 676, Ann. Cas. 1915A 278, 42 L.R.A. (N.S.) 1155 and note.

Note: Ann, Cas. 1915B 698.

19. Briggs v. Richmond, 10 Pick. (Mass.) 391, 20 Am. Dec. 526.

20. Moore v. Thomson, 44 N. C. 221, 59 Am. Dec. 550. And see GIFTS, vol. 12, p. 932.

1. Moore v. Thomson, 44 N. C. 221, 59 Am. Dec. 550. And see LIMITATION OF ACTIONS, vol. 17, p. 932.

2. See COURTS, vol. 7, p. 1056.

360.

4. Borland v. Nevada Bank, 99 Cal. 89, 33 Pac. 737, 37 A. S. R. 32; Mansfield v. Dameron, 42 W. Va. 794, 26 S. E. 527, 57 A. S. R. 884.

Note: 100 A. S. R. 393.
And see infra, par. 34.

89, 33 Pac. 737, 37 A. S. R. 32.
5. Borland v. Nevada Bank, 99 Cal.

6. Tennessee Bond Cases, 114 U. S. 663, 5 S. Ct. 974, 1098, 29 U. S. (L. ed.) 281; Parker v. Carter, 91 Ark. 162, 120 S. W. 836, 134 A. S. R. 60; Borland v. Nevada Bank, 99 Cal. 89, 33 Pac. 737, 37 A. S. R. 32; Ryan v.

3. Lovett v. Eastern Oil Co., 68 W. Dunlap, 17 Ill. 40, 63 Am. Dec. 334.

of payment. This is subject to the limitation imposed in most jurisdictions that a less sum received and accepted in discharge of a larger sum due is not a satisfaction. Whether a payment has been effected then is a question of intention. That intention will be presumed where money is given and accepted and is to be proven where anything else is substituted therefor."

4. Law Governing. In respect to all questions of remedy, including mere rules of evidence, the law of the forum governs; but the settled doctrine of public law is that personal contracts are to have the same validity, interpretation, and obligatory force in every other country, unless against its public policy, which they have in the country where they were made. The lex loci contractus (referring to the place of the seat of the contract, as distinguished from the place where it may casually happen to have been signed, and which may govern in mere matters of form or solemnization) is prima facie that which the parties intended to apply, and therefor the law which, in the absence of circumstances indicating a different intention, ought to prevail in all matters pertaining to the right and merit of the contract.10 Applying these principles the question whether the giving of a particular medium in payment, as for example a promissory note, operates as a payment and extinguishment of an antecedent debt is one which goes to the force and effect of the contract itself, and is not a mere rule of evidence, and therefore the law of the place where it was made applies.11 Likewise if a person is discharged from a debt by a tender and refusal made in a foreign country, by virtue of its laws, he may defend himself elsewhere, by relying on such tender and refusal and the laws under which he was discharged.12

II. TIME OF PAYMENT

5. In General.-The time of payment may or may not be of the essence of a contract, but where it is made a substantial circumstance it enters into the essence of the contract and must be observed.18 Money is payable immediately under a contract for its payment which

7. Borland v. Nevada Bank, 99 Cal. 89, 33 Pac. 737, 37 A. S. R. 32.

8. See ACCORD AND SATISFACTION, vol. 1, p. 184.

9. Ryan v. Dunlap, 17 Ill. 40, 63 Am. Dec. 334.

10. Thomson-Houston Electric Co. v. Palmer, 52 Minn. 174, 53 N. W. 1137, 38 A. S. R. 536. And see CONFLICT OF LAWS, vol. 5, p. 931 et seq. 11. Thomson-Houston Electric Co. v. Palmer, 52 Minn. 174, 53 N. 1137, 38 A. S. R. 536.

Note: 35 L.R.A. (N.S.) 108.

W.

As to whether a promissory note is payment, see infra, par. 70, 83, 87. 12. Warder v. Arell, 2 Wash. (Va.) 282, 1 Am. Dec. 488.

13. Mitchell v. Gregory, 1 Bibb (Ky.) 449, 4 Am. Dec. 655; Roden v. Williams, 100 Neb. 46, 158 N. W. 360, L.R.A.1917A 415; Roberts v. Beatty, 2 Pen. & W. (Pa.) 63, 21 Am. Dec. 410; Hollingsworth v. Fry, 4 Dall. (Pa.) 345, 12 Fed. Cas. No. 6,619, 1 U. S. (L. ed.) 860. See CONTRACTS, vol. 6, p. 896 et seq.

does not specify any time for payment. 14 Accordingly in the absence of an agreement respecting time of payment on the sale of goods the legal presumption is that the seller is entitled to payment immediately on the delivery of the goods.15 If under the circumstances of a particular case it is necessary to make a payment at a particular time, as for example to satisfy the part payment provision of the statute of frauds, a check given and received at that time, but not cashed until after the specified time, will operate as a payment as of the date when given.16 Where a debt is due and the happening of a future event is fixed on as a convenient time for payment merely, and the future event does not happen as contemplated, the law implies a promise to pay within a reasonable time.17 Thus to an agreement to pay as soon as a crop can be sold, or the money raised from any other source, the law annexes as an incident that one or the other shall be done within a reasonable time, and that the sum admitted to be due shall be paid accordingly. In such a case payment is not conditional to the extent of depending wholly and finally on the alternatives mentioned, but the stipulation merely secures to the debtor a reasonable amount of time within which to procure in one mode or another the means necessary to meet the liability.18 Money that is made payable in a reasonable time cannot, at the election of the person paying, be divided so as to make it payable at different times and in different years. A reasonable time is indivisible; and the person to whom the money is payable, under such a contract, cannot be required to take it in separate payments and at separate times.19 But a contract for the payment of distinct sums of money, at different periods, is very much in the nature of distinct contracts, so that when a particular sum is paid, the debtor or contractor is forever discharged from the contract to pay it.20 Under a contract to pay in instalments annually, payment at the end of each year is a compliance with the contract, and such a contract will not be construed as an agreement to pay in advance at the commencement of each period. As to what particular hour of the day a debtor may legally demand the right to pay, the general rule is that where a contract is to be performed on a certain

14. Bradford, etc., R. Co. v. New York, etc., R. Co., 123 N. Y. 316, 25 N. E. 499, 11 L.R.A. 116.

15. Chapman v. Lathrop, 6 Cow. (N. Y.) 110, 16 Am. Dec. 433 and note. Note: 62 L.R.A. 805.

And see SALES.

16. Hunter v. Wetsell, 84 N. Y. 549, 38 Am. Rep. 544. See infra, par. 69, and see STATUTE OF FRAUDS.

17. Crooker v. Holmes, 65 Me. 195, 20 Am. Rep. 687.

Note: 22 U. S. (L. ed.) 161.

18. Munez v. Dautel, 19 Wall. 560, 22 U. S. (L. ed.) 161 and note.

19. O'Donnell v. Leeman, 43 Me. 158, 69 Am. Dec. 54.

20. Faw v. Marsteller, 2 Cranch 10, 2 U. S. (L. ed.) 191,

1. Mower v. Sanford, 76 Conn, 504, 57 Atl. 119, 100 A. S. R. 1008, 63 L.R.A. 625; Henry v. Henderson, 81 Miss. 743, 33 So. 960, 63 L.R.A. 616. And see ANNUITIES, vol. 2, p. 9..

day and at a certain place, the legal time of performance is the last convenient hour of the day for transacting the business usually, that is to say, such convenient time before sunset as that the act may be completed by daylight. This rule is established for the convenience of the parties, that neither may be compelled, unnecessarily, to attend during the whole day. Earlier in the day, therefore, neither party can discharge himself in the absence of the other by being present and ready to perform; though if both parties are earlier present, the debtor may then pay, and even after sunset the debtor has the right to pay if his creditor is then present. Where payment is to be made in ponderous articles the rule is that a tender of the articles must be seasonably made, so that the person may have an opportunity to examine the articles tendered and see that they are such as they purport to be, and such as he is entitled to demand, before the close of the day on which the delivery is to be made. Whether the tender should be made before sunset may depend on circumstances, but when daylight is required for the proper examination and assortment of the goods tendered, there can be but little doubt that time should be given the tenderee for such examination before sunset and by daylight.

6. Anticipating Due Date; Extension of Time.-Not only has a debtor no right to delay payment beyond the due date, but he has no right to anticipate the payment of a debt payable at a future day, and bearing interest, without the consent of the creditor. A contract stipulating for payment on or before a certain day is payable certainly and at all events on the day named, and at that time, and not before, may payment be enforced against the obligor. However, such a stipulation gives to the obligor the right to pay before the date named, a right which he would not have otherwise. It is competent for the parties to a contract to enlarge the time of performance, but a promise to extend the time of payment must be founded on a good consideration, and it is not a sufficient consideration for an agreement to extend the time of payment that the debtor pays a part of the debt or the interest already accrued, or that he promises to pay interest for the future, or to do any other thing which he is legally bound to do. The giving and receiving of a promissory note of the debtor or of a third person has the effect to extend the

2. Note: 12 Am. Dec. 574, 575. And see TENDER.

3. Note: 12 Am. Dec. 575.

4. Saunders V. Frost, 5 Pick. (Mass.) 259, 16 Am. Dec. 394; Graeme v. Adams, 23 Grat. (Va.) 225, 14 Am. Rep. 130.

5. Mattison v. Marks, 31 Mich. 421, 18 Am. Rep. 197.

6

6. Lemmon v. Whitman, 75 Ind. 318, 39 Am. Rep. 150; Parmelee v. Thompson, 45 N. Y. 58, 6 Am. Rep. 33.

7. Stroud v. Thomas, 139 Cal. 274, 72 Pac. 1008, 96 A. S. R. 111; Parmelee v. Thompson, 45 N. Y. 58, 6 Am. Rep. 33.

8. Parmelee v. Thompson, 45 N. Y. 58, 6 Am. Rep. 33.