Clarke v. Scott (1872) · DecisionDepot

Clarke v. Scott

Name: California Superior Court Tentative Rulings
Creator: DecisionDepot
License: https://creativecommons.org/licenses/by-nc/4.0/

California Supreme Court Jul 1, 1872 No. No. 3,158Published

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Holding. The court held that evidence regarding a prior agreement or understanding between the parties concerning the application of future payments to a specific note is admissible to establish the debtor's intent.

Issues

Whether the trial court erred in excluding evidence of an agreement regarding the application of payments to a specific note.

Disposition. reversed and remanded

Quotations verified verbatim against the opinion

“the proffered evidence ought to have been admitted.”

“it was then agreed or understood between all the parties that such payment as the defendant S. W. Scott might thereafter make should be applied toward the satisfaction of that particular note”

Synopsis

Riqht of Debtor to Direct Application of Payments.—The debtor, who owes the same person on several promissory notes, has the right to direct verbally on which notes any payments he may make shall be applied.

Evidence of Choice of Debtor as to Application of Payments.— In an action upon a promissory note against the debtor and one who signed as surety, where the defense is that other notes were given by the debtor at the same time as the one in suit, with a verbal agreement with the plaintiff that the first payments made by the debtor should be applied on the note signed by the surety until it was paid, and that payments had been made and had been wrongfully indorsed on the notes not signed by the surety, the defendants have a right to give such verbal agreement in evidence as tending to show .that the debtor, when he made the payments, had not changed his first intention as to how the payments were to be applied.

By the Court: The question as to whether the defendant S. W. Scott, at the times at which he made the several payments to the plaintiffs, did elect to apply them, or any of them, to either of the three notes of his which were held by the plaintiff's, is a question of fact. Under the general rule he, being a debtor, had the right to direct the manner in which the payments, or either of them, should be applied. Had he given a distinct verbal direction at the time of making any one of the payments, there could be no doubt that it would be a payment only upon the particular note designated by him. If it be a fact that at the time the defendants, J. M. Scott & Co., as sureties of the other defendant, S. W. Scott, signed the note in suit, it was then agreed or understood between all the parties that such payment as the defendant S. W. Scott might thereafter make should be applied toward the satisfaction of that particular note, it would be a circumstance tending, in some degree at least, to establish by presumption that the payments, when they were subsequently actually made by the defendant S. W. Scott, without any intermediate change of his first intention, were to be so applied; and in this view we think that the proffered evidence ought to have been admitted.

Judgment reversed, and cause remanded for a new trial.

Clarke v. Scott

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