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PART I.
CH. V.

Payment to one acting

trator.

Hotham (1), decided that, where a settlor covenanted to transfer a sum of stock into the names of the trustees of a settlement under which he took the first life interest, but the stock was not transferred, such implication could not arise so as to prevent time from running in favour of settlor, because the trust fund never having had any existence as such, he could not be supposed to have received the interest. And the same reasoning would apply where the settlor had contracted, whether by specialty or simple contract, to pay a sum of money and had not paid it (2).

The part payment must be made either to the creditor or his agent. Where the maker of a promissory note, after it had been transferred by indorsement, made a part payment to the original holder in ignorance of the indorsement over, it was held, in an action by the indorsees, that such a part payment could be of no avail to take the debt out of the statute (3). It is now quite settled that part payment to a stranger is of no effect (4).

In Clark v. Hooper (5), where a note had been made as adminis- to an intestate and interest had been paid to a person who was acting as, and was supposed to be, but was not, in fact, the administrator, the decision that the payment took the debt out of the statute went on the ground that it was an acknowledgment to a third person. The decision cannot now be supported on that ground, but may be supported on other grounds, namely, that where a payment is made to a person who is believed by the person paying to be in a representative capacity, the payment may enure to the benefit of the estate which the debtor supposed to be represented by the

(1) Kay, 673.

(2) See Stone v. Stone, L. R. 5 Ch. 74.

(3) Stamford, Spalding and Boston Banking Co. v. Smith, L. R. (1892) 1 Q. B. 765.

(4) Ib.

(5) 10 Bing. 480; 4 Moore & S. 353.

CH V.

person to whom the payment was made (1). Of course, if PART I. a person so believed to be an administrator afterwards takes out letters of administration, the effect of the part payment will enure to the benefit of the estate on another ground, namely, that the administration relates back to the death of the intestate, so that the payment raises a promise to the administrator (2).

It is not necessary that the payment should be actually made in money, but any agreement between the parties which is by mutual agreement intended to have the effect of pro tanto discharging the party indebted, will be held to have the same effect as actual payment of money. The existence of such an agreement is a question for the jury, and may, it is submitted, be proved by implication or course of dealing or subsequent ratification, as well as by express agreement (3). For example, the delivery of goods to a creditor (4) or his agent (5), or the maintenance of the child of the creditor (which was, in fact, supplying goods to the child on behalf of the father (6)) have been held sufficient. The receipt by a mortgagee of the rents and profits of the mortgaged property is not equivalent to the payment of interest or part payment of principal so as to take the mortgage debt out of the statute, for such a receipt is not a payment by the person liable to the debt or by some one on his behalf (7). Where there are debts due on both sides,

(1) Stamford, Spalding and Boston Banking Co. v. Smith, L. R. (1892) 1 Q. B. 769, 771.

(2) Bodger v. Arch, 10 Exch. 333. See chapter on Pleading, Part VIII. Ch. I.

(3) See Worthington v. Grimsditch, 7 Q. B. 479.

(4) Moore v. Strong, 1 Bing. N. C. 441; Hooper v. Stephens, 4 A. & E. 71; Hart v. Nash, 2 C. M. & R. 337; Collinson v. Margesson,

27 L. J. Exch. 305.

(5) Pearce v. Selby, 6 Jur. 896.

(6) Bodger v. Arch, 10 Exch. 333; and see Doe v. Lightfoot, 8 M. & W. 560; Amos v. Smith, 31 L. J. Exch. 423.

(7) Cockburn v. Edwards, 18 Ch. D. 449, overruling the dictum of Shadwell, V.C., in Brocklehurst v. Jessop, 7 Sim. 438; Harlock v. Ashberry, 19 Ch. D. 539.

Payment

need not be in money.

PART I.

CH. V.

and the accounts are gone through by the parties and
a balance struck, this in effect constitutes a payment
on either side to the amount of the smaller debt (1).
But it is the striking of the balance that constitutes the
payment, and not the mere existence or even statement
in writing of cross demands (2).

In Stewart v. Connick (3) a trustee in 1861 rendered
to his cestui que trust an account which showed that the
cestui que trust owed the trustee £191, and, on the cestui
que trust applying for money, the trustee refused to make,
further advances until the cestui que trust had reduced
the balance due by him. The trustee remained in
possession of the trust property and furnished no further
accounts, and made no other payment to the cestui que
trust till September, 1863, when he gave the cestui que
trust a small sum, and afterwards gave him various
other sums. The trustee died in 1869, and after his
death his widow, who was his personal representative,
applied the receipts of the trust property in reduction
of the debt of the cestui que trust, and in May, 1870,
brought an action against the cestui que trust for the
balance owing. The defendant having pleaded the
statute, it was held that the above-mentioned facts were
evidence from which it might be inferred that there
was an authority given by the defendant to the plain-
tiff's husband to apply the defendant's income in liqui-
dation of the balance due on the account of 1861, and
that it was to be presumed that the payments made
after 1863 were payments by the trustee of his own
money, and therefore that the balance due in 1861 bad
been taken out of the statute by part payment.

The decision of the Court of Exchequer in Maber v.

(1) Ashby v. James, 11 M. & W. 542.

(2) Williams v. Griffiths, 2 C. M. & R. 45; Cottam v. Partridge, 4 M. & G. 271; S. C. 4 Scott N. R. 819; Clark v. Alexander, 8 Scott N. R. 147; and see Pott v. Clegg, 16 M. & W. 327; 2 Wms. Saund.

(3) 5 Ir. R. C. L. 562.

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Maber (1) seems to have gone further than any of the cases above referred to in putting a transaction where no money passes on the same footing as actual payment. There the plaintiff, who sought to recover from an executrix a sum of money which had been lent to the testator more than six years before action brought, relied on the following transaction as taking the debt out of the statute. An interview took place within the six years between the plaintiff and the testator and the testator's wife, at which the amount of interest due on the loan was agreed between the parties, and the testator offered to pay the amount; but the plaintiff stopped him, and said to the testator's wife: "I will make you a present of it." The plaintiff then wrote a receipt which he gave to the wife, telling her to take care of it. The majority of the Court held this a sufficient part payment to take the case out of the statute; Bramwell, B., dissented on the ground that the transaction was not such as to alter the liabilities of the parties. Whatever may be the right view of the facts of this particular case, there seems no doubt what is the correct test in deciding whether any transaction can be considered equivalent to payment, for the purpose of taking a case out of the operation of the statute. All the judges seemed to have agreed that a transaction in order to be sufficient for that purpose must be such as would have supported a plea of payment, if the debtor had been subsequently sued for the sum alleged to be paid.

PART I.

CH. V.

bill or

note.

The acceptance by the debtor of a bill drawn upon Giving a him by a creditor or the delivery to the creditor of a bill drawn by the debtor on a third person, on account of part of the debt, is a sufficient part payment to take the debt out of the statute, whether the bill is paid at maturity or not; but even if it be paid, the promise implied from the part payment is made at the time of the delivery of the

(1) L. R. 2 Exch. 153; 36 L. J. Exch. 70.

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PART I.
CH. V.

Part payment, how proved.

bill, and not when it is paid. (1) And the effect of giving
a promissory note would be the same.

It was formerly held, though several judges from time
to time threw doubts on the correctness of such a doc-
trine (2), that the effect of Lord Tenterden's Act was to
prevent any admission by the debtor of part payment or
payment of interest by him being given in evidence,
unless such admission were in writing, signed by the
debtor. In Trentham v. Deverill (3), an account between
the plaintiff and defendant, in the handwriting of an
agent of the defendant, was admitted in evidence in proof
of payment of interest, on the agent admitting the
handwriting, although he did not remember the fact of
payment. In Bayley v. Ashton (4) this was said to be
reconcileable with the other cases, on the ground that
the witness only used the writing to refresh his memory.
This seems, however, to be a mistaken view of the case.
But it is now immaterial, as it was laid down by the
Exchequer Chamber in Cleave v. Jones (5), overruling all
the former cases, that part payment or payment of interest,
for the purpose of taking a debt out of the statute, may
be proved like any other fact. When interest on a debt
due from a firm was calculated periodically in the books
of the firm, and carried to the capital account, it was
attempted to be argued, on the authority of Cleave v.
Jones, that this was evidence of payment of interest; but
it was held that, so far from being evidence of payment,
it was evidence that no payment had been made (6).

(1) Gowan v. Forster, 3 B. & Ad. 507; Irving v. Veitch, 3 M. &
W. 90; Turney v. Dodwell, 3 E. & B. 136; 23 L. J. Q. B. 137.

(2) Willis v. Newham, 3 Y. & J. 518; Waters v. Tompkins, 2 C. M.
& R. 723; 1 T. & G. 137; Bayley v. Ashton, 12 A. & E. 493; 4 Per.
& Dav. 204; Maghee v. O'Neil, 7 M. & W. 531; and see East-
wood v. Saville, 9 M. & W. 615; Bevan v. Gething, 3 Q. B. 740.
(3) 3 Bing. N. C. 397.

(4) 12 A. & E. 493.

(5) 6 Exch. 573; 20 L. J. Exch. 238. See Edwards v. Janes, 1K. & J. 534.

(6) Jackson v. Ogg, Johns. 397.

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