Interest. Payments made on account are first to be applied to the interest which has accrued thereon. And if the payment ex ceed the amount of interest, the residue goes to extinguish the principal ; Peebles v. Gee, 12 N. C. 341; Jencks v. Alexander, 11 Paige, Ch. (N. Y.) 619 ; Bond v. Jones, 8 Smedes & M. (Miss.) 368 ; Hearn v. Cut berth, 10 Tex. 216; Righter v. Stall, 3 Sandf. Ch. (N. Y.) 608 ; Miami Exporting Co. v. Bank, 5 Ohio 260 ; Hart v. Dorman, 2 Fla. 445, 50 Am. Dec. 285 ; Spires v. Hamot, 8 W. & S. (Pa.) 17 ; Mills v. Saunders, 4 Neb. 190 ; Jacobs v. Ballenger, 130 Ind. 231, 29 N. E. 782, 15 L. R. A. 169. Funds must be applied by the creditor to a judgment bear ing interest, and not to an unliquidated account ; Scott v. Fisher, 4 T. B. Monr. (Ky.) 389 ; nor to usurious interest ; Dun can v. Helm, 22 La. Ann. 418; Bank of Ca diz v. Slemmons, 34 Ohio St. 142, 32 Am. Rep. 364.
Priority. When no other rules of ap propriation intervene, the law applies part payments to debts in the order of time, dis charging the oldest first ; Whetmore v. Mur dock, 3 Woodb. & M. 390, Fed. Cas. No. 17, 510 ; Huger's Ex'rs v. Bocquet, 1 Bay (S. C.) 497 ; Thurlow v. Gilmore, 40 Me. 378 ; Dows v. Morewood, 10 Barb. (N. Y.) 183; Allstan's Adm'r v. Contee's Ex'r, 4 Harr. & J. (Md.) 351; Ross's Ex'r v. McLauchlan's Adm'r, 7 Gratt. (Va.) 86 ; Shedd v. Wilson, 27 Vt. 478; Berghaus v. Alter, 9 Watts (Pa.) 386; Harrison v. Johnston, 27 Ala. 445 ; Town of St. Albans v. Failey, 46 Vt. 448; Allen v. Brown, 39 Ia. 330 ; Worthley v. Emerson, 116 Mass. 374 ; The Barges 2 and 4, 58 Fed. 425. Where the payment is upon an ac count, the law will apply it to the oldest items ; The Tom Lysle, 48 Fed. 690. go strong is this priority rule that it has been said that equity will apply payments to the earliest items, even where the creditor has security for these items and none for later ones; Truscott v. King, 6 N. Y. 147. But this is opposed to the prevailing rule.
Sureties. The general rule is that neither debtor nor creditor can so apply a payment as to affect the liabilities of sureties, with out their consent ; Merrimack County Bank v. Brown, 12 N. H. 320 ; Myers v. U. S., 1 McLean 493, Fed. Cas. No. 9,996; Brander v. Phillips, 16 Pet. (U. S.) 121, 10 L. Ed. 909; Postmaster General v. Norvell, Gilp. 106, Fed. Cas. No. 11,310. Where a principal makes general payments, the law presumes them, prima facie, to be made upon debts guaranteed by a surety, rather than upon others; though circumstances and intent will control this rule of surety, as they do other rules of appropriation ; 1 C. & P. 600;
8 Ad. & E. 855 ; 10 J. B. Moore 362; Mitch ell v. Dall, 4 Gill & J. (Md.) 361; Donally v. Wilson, 5 Leigh (Va.) 329.
Continuous accounts. In these, payments are applied to the earliest items of account, unless a different intent can be inferred; 4 B. & Ad. 766 ; 4 Q. B. 792 ; U. S. v. Kirk patrick, 9 Wheat (U. S.) 720, 6 L. Ed. 199; Gass v. Stinson, 3 Sumn. 98, Fed. Cas. No. 5,262 ; Miller v. Miller, 23 Me. 24, 39 Am. Dec. 597; Morgan v. Tarbell, 28 Vt. 498; Dulles v. De Forest, 19 Conn. 191; Harri son v. Johnston, 27 Ala. 445 ; Horne v. Bank, 32 Ga. 1; Shuford v. Chinski (Tex.) 26 S. W. 141; Winnebago Paper Mills v. Travis, 56 Minn. 480, 58 N. W. 36. Where one is in debted on two different accounts and money is paid without directions, the creditor may apply it to the later account ; Henry Bill Pub. Co. v. Utley, 155 Mass. 366, 29 N. E. 635 ; Perot v. Cooper, 17 Colo. 80, 28 Pat 391, 31 Am. St. Rep. 258 ; or he may apply half the amount paid on each of two debts, where neither is barred by the statute of limitations; Beck v. Haas, 111 Mo. 264, 20 S. W. 19, 33 Am. St. Rep. 516.
Partners. Where a creditor of the old firm continues his account with the new firm, payments by the latter will be ap plied to the old debt, prima facie, the pre ceding rule of continuous accounts guiding the appropriations. As above, however, a different intent, clearly proved, will pre vail ; 5 B. & Ad. 925 ; 2 B. & Ald. 39; Lo gan v. Mason, 6 W. & S. (Pa.) 9. When a creditor of the firm is also the creditor of one partner, a payment by the latter of partnership funds must be applied to the partnership debts. Yet circumstances may allow a different application ; 1 Mood. & M. 40 ; Fairchild v. Holly, 10 Conn. 175; McKee v. Stroup, 1 Rice (S. C.) 291; Sneed v. Wiester, 2 A. K. Marsh. (Ky.) 277; Cod man v. Armstrong, 28 Me. 91; Johnson v.
Boone's Adm'r, 2 Harr. (Del.) 172. See Too tle v. Jenkins, 82 Tex. 29, 17 S. W. 519. And so, unappropriated payments made by a party indebted severally and also jointly with another to the same creditor, for items of book-charges, are to be applied upon the several debts; Livermore v. Claridge, 33 Me. 428.
The rules of appropriation, it has now been seen, apply equally well whether the debts are of the same or of different orders, and though some are specialties while oth ers are simple contracts; Town of Alex andria v. Patten, 4 Cra. (U. S.) 317, 2 L. Ed. 633 ; Bennett v. Woolfolk, 15 Ga. 221; Pen nypacker v. Umberger, 22 Pa. 492 ; Hamil ton v. Benbury, 3 N. C. 385.