5. If some of the debts are barred by the statute of limitations, the creditor cannot first apply the unappropriated funds to them, and thus revive them and take them out of the statute. 2 Crompt. M. & R. Exch. 723 ; 2 C. B. 476; 7 Scott, 444; 31 Eng. L. & Eq. 555; 13 Ark. 754; 1 Gray, Mass. 630. Still, a debtor may waive the bar of the statute, just as he may apply his funds to an illegal debt; and the creditor may insist, in the si lence of the debtor, unless other facts con trovert it, that the money was paid on the barred debts. 5 Mees. & W. Exch. 300 ; 26 N. II. 85; 25 Penn. St. 411. Proof of such in tent on the debtor's part may be deduced from a mutual adjustment of accounts before money is sent, or from his paying interest on the barred debt. But, in general, the creditor' cannot insist that a part-payment revives the rest of the debt. He can only retain such partial payment as has been made. 1 Gray, Mass. 630. It has been held that the creditor may first apply a general payment to dis charging any one of several accounts all barred, and by so doing he will revive the balance of that particular account. But he is not allowed to distribute the funds upon all the barred notes, so as to revive all. 19 Vt. 26. See LIMITATIONS.
6. Wherever the payment is not volun tary, the creditor has not the option in appro priation, but he must apply the funds re ceived ratably to all the notes or accounts. This is the rule wherever proceeds are ob tained by judicial proceedings. So, in cases of assignment by an insolvent debtor, the share received by a creditor, a party to the assignment, must be applied pro rata to all his claims, and not to such debts only as are not otherwise secured. 10 Pick. Mass. 129; 24 id. 270 ; 1 Mann. & G. 54; 1 Perr. & D. 138 ; 1 Miss. 526; 12 N. H. 320; 22 Me. 295 ; 1 Sandf. N. Y. 416.
A creditor having several demands may apply the payments to a debt not secured by sureties, where other rules do not prohibit it. 11 Mete. Mass. 185. Where appropriations are made by a receipt, prima fade the creditor has made them, because the language of the receipt is his. Day. Dist. Ct. 146.
It is sufficiently evident from the foregoing rules that theprinciple of the Roman law which required the creditor to act for his debtor's interest in appropriation more than for his own, is not a part of the common law. The nearest approach the civil law rule is the doctrine that when the right of appro priation falls to the creditor he must make such an application as his debtor could not reasonably have objected to. 21 Vt. 456 ; 20 Miss. 631. See IMPUTATION.
7. The law will apply part-payments in accordance with the justice and equity of the case. 9 Wheat. 720; 12 Serg. & R. Penn. 301 ; 2 Vern. Ch. 24; 6 Cranch, 28, 253, 264; 4 Mas. C. C. 333 ; 5 id. 82.
Unappropriated funds are always applied to a debt due at the time of payment, rather than to one not then due. 2 Esp. 666 ; 1 Bibb, Ky. 334 ; 5 Gratt. Va. 57 ; 9 Cow. N. Y. 420 ; 5 Mas. C. C. 11 ; 27 Ala. N. s. 445; 20 id. 313 ; 10 Watts, 255 ; 4 Wisc. 442. But an express agreement with the debtor will make good an appropriation to debts not due. 22 Pick. Mass. 305. The creditor should refuse a payment on an account not yet due, if he be unwilling to receive it ; but if he do receive it he must apply it as the debtor directs. 40 Me. 325. A payment is applied to a certain rather than to a contingent debt, and, therefore, to a debt on which the payer is bound directly, rather than to one which binds him collaterally. 22 Me. 295 ; 1 Smedes & M. Ch. Miss. 331. And where the amount paid is precisely equal to one of several debts, ajury is authorized to infer its intended ap plication to that debt. 8 Wend. N. Y. 403 ; $ Caines, N. Y. 14; 1 Woodb. & M. C. C. 150.
S. The law, as a general rule, will apply a payment in the way most beneficial to the debtor at the time of payment. This rule seems to be similar to the civil law doctrine. Thus, e.g., courts will apply money to a mortgage debt rather than to a simple con tract debt. See 12 Mod. 559 ; 2 Harr. & J. Md. 402 ; 10 Humphr. Tenn. 238 ; 12 Vt. 246 ; 9 Cipk. N. Y. 747, 765 ; 1 Md. Ch. Dec. 160 ; 25 Miss. 95. Yet, on the other hand, in the pursuit of equity, courts will sometimes assist the creditor. Hence, of two sets of debts, courts allow the creditor to apply unap propriated funds to the debts least strongly secured. 1 Stark. 153 ; 1 Freem. Ch. 502 ; 18 Miss. 113 ; 15 Conn. 438 ; 10 lred. No. C. 165 ; 11 id. 253 ; 2 Rich. Eq. So. C. 63 ; 13 Vt. 15 •, 6 Cranch, 8 ; 11 Leigh, Va. 512 ; 14 Ark. 86 ; 4 Gratt. Va. 53 ; 15 Ga. 321; 9 Cow. N. Y. 747, 765.
9. Interest. Payments made on account are first to be applied to the interest which has accrued thereon. And if the payment exceed the amount of interest, the balance goes to extinguish the principal. 1 Dev. No. C. 341 ; 11 Paige, Ch. N. Y. 619 ; 1 Strobh. Eq. So. C. 426 ; 16 Miss. 368 ; 4 Tex. 455 ; 10 id. 216 ; 5 Cow. N. Y. 331; 3 Sandf. Ch. N. Y. 608 ; Wright, Ohio, 169 ; 5 Ohio, 260 ; 2 Fla. 445; 8 Watts & S. Penn. 17. Funds must be plied by the creditor to a judgment bearing interest, and not to an unliquidated account. 4 T. B. Monr. Ky. 389.