First Nat. Bank of Fargo v. Roberts

• Decision Date: 29 August 1891
• Citation: 49 N.W. 722,2 N.D. 195
• Parties: First Nat. Bank of Fargo v. Roberts et al.
• Court: North Dakota Supreme Court

2 N.D. 195

49 N.W. 722

First Nat. Bank of Fargo

v.Roberts et al.¹

Supreme Court of North Dakota.

Aug. 29, 1891.

Syllabus by the Court.

1. Evidence held sufficient to sustain verdict of payment.

2. Allegation of payment in answer upon information and belief held sufficient.

3. It is not necessary that a debtor should direct application of payment at the precise time the money is paid. A direction some time prior to such payment, but not changed at or before such payment, is a manifestation at the time of the intention or desire of the debtor as to the application of such payment, within the meaning of section 3457, Comp. Laws.

4. A different application by the creditor will not bind the debtor, who has no knowledge thereof; and the delivery by the former to the latter of a roll of notes of the latter, which does not include the note which the debtor directed should be paid out of the money received by the creditor, does not constitute constructive notice of the creditor's different application of the payment, where such delivery is accompanied by a statement naturally inducing the belief that the debtor's direction has been obeyed.

Appeal from district court, Cass county; William B. McConnell, Judge.

Action by the First National Bank of Fargo against Matilda M. Roberts and others on a promissory note. Judgment for defendants. Plaintiff appeals. Affirmed.Stone, Newman & Resser, for appellant. Benton & Amidon, Ball & Smith, and M. A. Hildreth, for respondents.

Corliss, C. J.

The defendants having obtained judgment below, the plaintiff appeals. The note sued upon was executed by defendant Roberts, and the payment thereof was guarantied by defendants Hanson & Osgood. It was the last renewal of a note given by defendant Roberts to Hanson & Osgood for wheat sold by them to her. They, desiring to turn the original note into cash, had it discounted by the plaintiff, they guarantying the payment of it. All of the renewal notes were likewise guarantied by them. One of the defenses was payment. It appeared that in the month of August, 1886, the plaintiff held a large amount of paper on which the defendant Roberts was liable. About this time Mrs. Roberts secured a loan of $20,000 on her real estate from M. B. Erskine. The understanding was that the proceeds of this loan were to be paid to the bank, and applied in extinguishment of her indebtedness to the bank so far as the money would apply. This indebtedness was somewhat in excess of $20,000. While negotiations for the loan were progressing, the husband of Mrs. Roberts, who was agent for her in these transactions, stated to the president of plaintiff that the note sued upon in this action must be paid out of this money. He also testifies that he never changed this application of the money, and that he did not know that the plaintiff had disregarded his instructions until the summons was served in this action. It is true that there is a conflict in the evidence on this question. The cashier, Mr. Lyon, states that he and Mr. Roberts went over the notes to be paid, and that he told Mr. Roberts that the plaintiff was not willing to cancel the note in question, and that Mr. Roberts consented that it should not be canceled. It would not be urged here that the verdict of the jury should be disturbed if there was any substantial denial of Mr. Lyon's statement, but it is insisted that there is no issue in this respect. Mr. Roberts, when interrogated on cross-examination about this alleged conversation, stated that he did not recollect anything of that kind; that he did not think that he and Mr. Lyon went over the notes; that he did not recollect it. The jury have found that he did not recollect such conversation. This is surely evidence from which the jury might find that such conversation never took place. Moreover, Mr. Roberts distinctly swears that he never changed his direction that this note be paid out of the $20,000 loan. But it is further urged that the application of this money to the payment of this note was not made at the time of the payment of the money to the bank, but some time prior thereto; and that, under the provisions of our statute, the debtor must manifest his desire as to the application of the payment at the very time the money is paid. Section 3457, subd. 1, Comp. Laws. We think this is a too technical construction of the statute,-one which loses sight of its obvious purpose. It was not designed to change the rule of the common law. The owner of money assuredly may determine the terms on which another shall receive it from him when he voluntarily parts with it. It is his, and he may control it up to the time he surrenders his control over it. He may insist that the creditor shall apply it in a certain way as the only condition on which he, the debtor, will pay it to the creditor. It is sufficient if the will of the debtor is manifested to the creditor at the time. This is all the statute, in its most technical wording, requires. If, as in this case, in the course of negotiations and dealings connected with the future payment of money to a creditor the debtor distinctly manifests his intention as to the application of it or of any part of it, and that purpose is not changed before the receipt by the creditor of the money, then in truth the intention-the design-of the debtor is manifested at the time the money is paid. If the statute is to have a technical construction,-one which makes it necessary for the debtor to speak his mind at the precise moment he parts with the money,-he must take care that no appreciable time elapses after he has expressed his will,...