If some of the debts are barred by the statute of tinvitation8 the creditor cannot first apply the unappropriated funds to them, and thus revive them ; 2 Cr. M. & R. 723 ; 2 C. B. 476 ; Washington v. State, 13 Ark. 754; Pond v. Williams, 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 in sist, in the silence of the debtor, unless other facts controvert it, that the money was paid on the barred debts ; 5 M. & W. 300 ; Liver more v. Rand, 26 N. H. 85 ; Watt v. Hoch, 25 Pa. 411. See Beck v. Haas, 31 Mo. App. 180. Proof of such intent on the debtor's part may be deduced from a mutual ad justment of accounts before the 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 ; Pond v. Williams, 1 Gray (Mass.) 630. It has been held that the creditor may first apply a general payment to discharging any one of several accounts all barred, and by so doing he will revive the balance of that par ticular account, but he is not allowed to distribute the funds upon all the barred notes, so as to revive all ; Ayer v. Hawkins, 19 Vt. 26.
Wherever the payment is not voluntary, the creditor has not the option in appropria tion, but he must apply the funds received ratably to all the notes or accounts. This is the rule wherever proceeds are obtained by judicial proceedings. So, in cases of as signment by an insolvent debtor, the share received by a creditor, a party to the assign ment, must be applied pro rata to all his claims, and not to such debts only as are not otherwise secured ; Blackstone Bank v. Hill, 10 Pick. (Mass.) 129 ; 1 M. & G. 54; Stamps v. Brown, Walk. (Miss.) 526 ; Mer rimack County Bank v. Brown, 12 N. H. 320 ; Bank of Portland v. Brown, 22 Me. 295 ; Cowperthwaite v. Sheffield, 1 Saudf. (N. Y.) 416.
A creditor having several demands may apply the payments to a debt not secured by sureties, where other rules do not pro hibit it; Upham v. Lefavour, 11 Mete. (Mass.) 185. Where appropriations are made by a receipt, prima facie the creditor has made them, because the language of the re ceipt is his ; U. S. v. Bradbury, Day. Dist. Ct. 146, Fed. Cas. No. 14,635.
It is sufficiently evident from the fore going rules that the principle of the civil 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 com mon law ; Logan v. Mason, 6 W. & S. (Pa.) 9. The nearest approach to the civil-law rule is the doctrine that when the right of ap propriation falls to the creditor he must make such an application as his debtor could not reasonably have objected to ; Bancroft v. Dumas, 21 Vt. 456 ; Parchman v. Mc Kinney, 12 Smedes & M. (Miss.) 631. See IMPUTATION OF PAYMENTS.
The law will apply part-payments in ac cordance with the justice and equity of the case ; U. S. v. Kirkpatrick, 9 Wheat. (U. S.) 720, 6 L. Ed. 199 ; Harker v. Conrad, 12 S. & R. (Pa.) 301, 14 Am. Dec. 691; Field v. Holland, 6 Cra. (U. S.) 28, 3 L. Ed. 136 ; Sheehy v. Mandeville, 6 Cra. (U. S.) 253, 264, 3 L. Ed. 215; U. S. v. Wardwell, 5 Mas. 82, Fed. Cas. No. 16,640 ; Campbell v. Ved der, 1 Abb. App. Dec. (N. Y.) 295 ; Picker ing v. Day, 2 Del. Ch. 333 ; Leef v. Good
win, Taney 460, Fed. Cas. No. 8,207.
Unappropriated funds are always applied to a debt due at the time of payment, rather than to one not then due ; 2 Esp. 666 ; Bak er v. Stackpoole, 9 Cow. (N. Y.) 420, 18 Am. Dec. 508 ; Harrison & Robinson v. Johns ton, 27 Ala. 445 ; Seymour v. Sexton, 10 Watts (Pa.) 255 ; Stone v. Talbot, 4 Wisc. 442; Kline v. Ragland, 47 Ark. 111, 14 S. W. 474. But an express agreement with the debtor will make good an appropriation to debts not due ; Shaw v. Pratt, 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 ; Wetherell v. Joy, 40 Me. 325 ; Levystein & Simon v. Whitman, 59 Ala. 345. A payment is applied to a certain rather than to a con tingent debt, and, therefore, to a debt on which the payer is bound directly, rather than to one which binds him collaterally ; President, etc., of Bank of Portland v. Brown, 22 Me. 295. And where the amount paid is precisely equal to one of several debts, a jury is authorized to infer its in tended application to that debt ; Seymour & Bouck v. Van Slyck, 8 Wend. (N. Y.) 403; Moody v. U. S., 1 Woodb. & M. 150, Fed. Cas. No. 1,636. Where one holds two notes, one of which is secured, and he receives further security with express agreement that he may apply proceeds thereof to either note, he may make such application to the unse cured note notwithstanding the objection of second mortgagee ; Case v. Fant, 53 Fed. 41, 3 C. C. A. 418. Where a creditor is secured by both chattel and real estate mortgages, he may apply proceeds of sale of chattels first to the chattel mortgage and then to pay ment of debts otherwise secured; Schloss v. Solomon, 97 Mich. 526, 56 N. W. 753.
The law, as a general rule, will apply a payment in the way most beneficial to the debtor at the time of payment ; Neal v. Al lison, 50 Miss. 175 ; Moore v. Siff, 78 Pa. 96. 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 contract debt ;• see 12 Mod. 559 ; Dor sey v. Gassaway, 2 Harr. & J. (Md.) 402, 3 Am. Dec. 557 ; Bussey v. Gant's Adm'r, 10 Humphr. (Tenn.) 238 ; Robinson v. Doolittle, 12 Vt. 246 ; Pattison v. Hull, 9 Cow. (N. Y.) 747, 765 ; McTavish v. Carroll, 1 Md. Ch. Dec. 160; Hamer v. Kirkwood, 25 Miss. 95. In the absence of specific appropriation, the law will apply payments to unsecured in debtedness in preference to the secured ; Gardner v. Leek, 52 Minn. 522, 54 N. W. 746. Yet, on the other hand, in the pursuit of equity, courts will sometimes assist the cred itor. Hence, of two sets of debts, courts al low the creditor to apply unappropriated funds to the debts least strongly secured; Planters' Bank v. Stockman, 1 Freem. Ch. (Miss.) 502 ; Baine v. Williams, 10 Smedes & M. (Miss.) 113 ; Stamford Bank v. Bene dict, 15 Conn. 438 ; Ramsour v. Thomas, 32 N. C. 165 ; Jones v. Kilgore, 2 Rich. Eq. (S. C.) 6§ ; Emery v. Tichout, 13 Vt. 15 ; Field v. Holland, 6 Cr. (U. S.) 8, 3 L. Ed. 136; Smith v. Loyd, 11 Leigh (Va.) 512, 37 Am. Dec. 621; Byer v. Fowler, 14 Ark. 86 ; Har groves v. Cooke, 15 Ga. 321; Pattison v. Hull, 9 Cow. (N. Y.) 747, 765 ; The D. B. Steelman, 48 Fed. 580.