Webb v. Dickinson — 11 N.Y. 62

Majority

p. 63

Webb vs. G. G. Dickinson.

Headnote

Where a guaranty was given, to be accountable for merchandize to be furnished to a third person, the guarantor stating that goods would be wanted to the amount of $100 or $150, on the strength of which the person recommended obtained a credit for $263, of which sum $154 were subsequently received by the creditor; it was holden, that a greater sum than $125 having been paid, the creditor had no claim under the guaranty.

This was an action of assumpsit on a guaranty. On the 18th December, 1829, the defendant addressed a letter to S. M’Fadden, introducing A. G. Dickinson, who (he stated) wished to purchase a hill of groceries; that he had a little money, but not enough for what he wanted, and if M’Fadden would recommend him to a wholesale grocery merchant in Waterford, he (the defendant) would be accountable for the goods. He further added that A. G. D. would sell the goods for cash, and would send down money from time to time and that the*goods or money would always be in readiness to pay the debt. To this letter there was a P. S. in these words: “ He wants to get to the amount of a hundred or a hundred and fifty dollars worth of goods.” The letter was delivered to the plaintiff, a wholesale grocery merchant, who, on the strength of it, sold to A. G. D., on the 22d December, groceries to the amount of $263,55 and received $25 in part payment. Subsequently further groceries, to the amount of $8,88, were furnished by the plaintiff. On the 26th April, 1838, A. G. D. had made sundry payments to the plaintiff, which, including the above $25, amounted in the whole to $70, 50, and on that day he confessed a judgment in favor of the plaintiff for $202,17, on which an execution was issued, and the goods remaining in possession of A. G. D. sold, which brought the sum of $83,63. The plaintiff credited such proceeds, after deducting $10, the costs of entering the judgment, and now claimed the balance of his demand from the guarantor, the defendant in this cause. A case was made, subject to the opinion of the court.

M. T. Reynolds, for the plaintiff.

W. Hay, for the defendant.

p. 65

By the Court,

This case raises a question which has been discussed in the books, to wit: How shall payments be appropriated, where no express appropriation has been made, either by debtor or creditor, at the time of payment ? It is well settled, that in case of the existence of separate demands, the debtor may appropriate the payment to which demand he pleases. If he makes no appropriation, then the creditor may make it; but if it is paid and received on account generally, then the rules of the civil and common law seem to be different: the former holding that the payment shall be applied according to the presumed intention of the debtor, while the latter gives the creditor the right to make an ex post facto appropriation as he pleases. To these general rules there are exceptions. The cases are all ^’collected by

Judge Cowen,in Pattison v. Hull, 9 Cowen, 760, n. See also 8 Wendell, 416. The principal difficulty in the cases has arisen out of the fact of the existence of several demands. That difficulty is not presented in this case. The plaintiff here had but one continuous account against Aaron G. Dickinson. The defendant, at the commencement of the account, became responsible to the amount of $150, deducting what was then paid. The plaintiff, then, gave a credit beyond the amount assumed by the defendant, and subsequently sold to A. G. D. other goods, charging them in account and giving credit for the moneys paid. In such cases, the first item on the debit side of the account is discharged or reduced by the first item on the credit side. To adopt any other rule, would be taking the account backward, and striking the balance at the head, instead of at the foot of it. See 1 Munf. 608 , 8 Wendell, 418, and 9 Wheaton, 737, where Mr. Justice Story says : in case of running accounts, where debits and credits are constantly accruing, payments should be applied to extinguish the debt, according to priority of time ; and payments extinguish so much of the debt antecedently due. By the civil law, payments should be applied to debts so as to relieve a surety; but in this case, it is unnecessary to invoke the aid of that principle; that just above referred to is sufficient for this case, and is strictly applicable. The payments must be applied to the head of the account, to the amount of $125 ; and a greater sum than that having been paid, the plaintiff has no claim against the defendant on his guaranty. The defendant is entitled to judgment.