Payment

PAYMENT, the performance of an obligation, the discharge of a sum due in money or the equivalent of money. In law, in order that payment may extinguish the obligation it is necessary that it should be made at a proper time and place, in a proper manner, and by and to a proper person.

Payment may be made at any time of the day upon which it falls due, except in the case of mercantile contracts, where the creditor is not bound to wait for payment beyond the usual hours of mercantile business. If no place be fixed for payment, the debtor is bound to find, or to use reasonable means to find, the creditor, unless the latter be abroad. Payment must be made in money which is a legal tender, unless the creditor prefers to waive his right to payment in money by accepting some other mode of payment, as a negotiable instrument or a transfer of credit. If the payment be by negotiable instrument, the instru ment may operate either as an absolute or as a conditional dis charge. In the ordinary case of payment by cheque the creditor accepts the cheque conditionally upon its being honoured; if it be dishonoured, he is remitted to his original rights. If payment be made through the post, in a letter properly directed, and it be lost, the debt is discharged if there was a direction so to transmit the money. Payment must be made to the creditor or his agent. A bona fide payment to an apparent agent may be good, though he has in fact no authority to receive it. Such payment will usually be good where the authority of the agent has been counter manded without notice to the debtor. The fact of payment may be presumed, as from lapse of time. Thus payment of a testator's debts is generally presumed after 20 years. A written receipt (q.v.) is only presumptive and not conclusive evidence of pay ment. If payment be made under a mistake of fact, it may be recovered, but it is otherwise if it be made under a mistake of law, for it is a maxim of law that ignorantia legis neminem ex cusat. Money paid under compulsion of law, even though not due, cannot generally be recovered where there has been no fraud or extortion. For appropriation of payments see APPROPRIATION.

Money may be paid into court to abide the result of pend ing litigation, as where litigation has already begun, as security for costs or as a defence or partial defence to a claim. Payment into court does not necessarily (except in actions for libel and slander) operate as an admission of liability. Money may some times be paid into court where no litigation is pending, as in the case of trustees. The payment of wages to labourers and work men otherwise than in coin is prohibited. See under LABOUR LAW: Truck Acts. Domestic or agricultural servants are excepted. See

also LIMITATION, STATUTES OF.

Scotland.

The law of Scotland as to tender of payment agrees with that of England, except that Bank of England notes are not legal tender, and that part payment if accepted in full satisfac tion extinguishes the whole debt. Scots laws, however, recognizes two presumptions in regard to payment. Debitor non praesumitur donare, an unascribed payment if accepted by the creditor must be imputed to account of the debt, but where there are several debts the creditor may choose which debt he will impute the pay ment to. Donatio non praesumitur is applied as meaning that where a stranger pays the debt he is presumed to have paid it with the debtor's money. Payment or satisfaction is also pre sumed from lapse of time, i.e., (1) three years from the last entry in merchant's accounts, (2) five years from the tenant's re moval in the case of rent, (3) six years in the case of bills, and (4) 20 years in the case of obligations contained in holograph writings. Where a debt is constituted by writ or is the result of a credit transaction, payment cannot be proved by witnesses.

United States.

In the United States the law as a rule does not materially differ from English law. In some States, however, money may be recovered, even when it has been paid under a mistake of law. The question of legal tender has been an im portant one. In 1862 and 1863 Congress passed acts making treasury notes legal tender (see GREENBACKS). After much liti gation, the Supreme Court of the United States decided in 1871 (Knox v. Lee) in favour of the constitutionality of these acts, both as to contracts made before and after they were passed. These notes are legal tender for all purposes except duties on im ports and interest on the public debt. All gold coins and standard silver dollars are legal tender to any amount. Silver coins below the denomination of a dollar are legal tender up to $10, and cent and 5-cent pieces legal tender to an amount not exceeding 25 cents. It falls exclusively within the jurisdiction of Congress to declare paper or copper money a legal tender. By the constitution of the United States, "no State shall . . . make anything but gold and silver coin a tender in payment of debts" (art. i. s. 1o).

A number of American States have by statute or decision de parted from the general rule that a receipt in full is insufficient to make an agreed part payment discharge the entire debt. And in this connexion it should be noted further that a certified check, though it is commonly accepted as such, is not in fact legal tender.

See I. Williston, Contracts § 120; R. Pound, 18 Yale L. J. 454.