SECTION 4.

To Whom Payment may be Made.

1. It may be made to an attorney, who is employed to collect the debt. This does not necessarily justify payment to the agent of the attorney, as a retainer to collect is personal and in the nature of a special authority.

2. It may be made to any agent of the creditor, who is authorized to receive payments in the ordinary course of business, or to a person who, to all appearance, seems to be authorized to do the business of the creditor, who has his papers, and whom the creditor permits to assume such appearances.

3. To a trustee, he having the legal title; or to one of several executors.

4. To one of several partners. This, as we have seen, is a necessary incident to the power of a partner, and payment may safely be made to one partner, even where the other partners have forbidden the debtor so to pay to him.

The effect of such payment, as a discharge of the debtor, can be prevented only by a dissolution, injunction, or the appointment of a receiver.

SECTION 5.

Effect of Part Payment.

Part payment of a debt, before it is due, received by the creditor, upon an agreement that it shall be in full discharge, is undoubtedly effective as such discharge; the law presuming the convenience of payment before the day when it should become due to be a sufficient consideration, in its advantage to the creditor, or its inconvenience to the debtor, or, rather, in the absence of fraud, declining to enquire into it. So the receipt of something other than money in satisfaction of a debt, though apparently inadequate in value, is a good payment. So, the acceptance of a new security, as the debt or bond of a third party, though for a less amount, if agreed to be in full payment of the debt, is a valid discharge. So, where a part only of the debt is paid in money, the creditor

at the time executing a discharge under seal of the whole debt, he will be effectually estopped from afterwards attempting to collect the balance. In such a case, if the discharge is without seal, it is a mooted question settled differently by the courts of different states, whether it is effective as a discharge of the entire debt. The ground upon which it is claimed that it is not so effective is, that the whole sum being due in money, a part only of the money cannot properly be deemed a sufficient consideration for a discharge of the whole debt. In such case it is, therefore, prudent for the debtor to require, that the release or receipt of his creditor of a part for the whole shall be under seal.

Where the new arrangement exists wholly in contract, resting on an agreement to receive a part of a debt in satisfaction of the whole, the debt being already due, such agreement imposes no legal obligation, there being clearly no sufficient consideration to support it. This applies to the case of a simple transaction between debtor and creditor, and not to what are sometimes called composition deeds or agreements, in which the signature of each creditor may be treated as part consideration for the signature of the other and others.

SECTION 6.

Payment, when Presumed.

First. By statutes of limitation, which are found in the legislation of every state, a synopsis of which is given in the Chapter on Limitations.

Second. Lapse of time, and other circumstances independent of statutes of limitation, sometimes warrant presumption of payment:-for example: A receipt given for rent due, affords presumptive evidence, that instalments previously due have been paid; so where a highway tax for one year was not included in the bill for the next;-One having a demand against another receives money and gives a receipt in full, the law presumes the payment of all accounts. sumption is only prima facie, and may be rebutted by evidence, that such was not the intent of the parties.

This pre

An order to pay money, found in the hands of the drawee, is presumed to be paid. So, if a check, payable to the order of a party, and endorsed by him.

Money sent in a letter by mail, at the request of a creditor, discharges the debt, whether it be received or not. All requisitions of the Post Office Department, to ensure safety in transmission, must however be complied with. ·

CHAPTER XV.

OF INTEREST AND USURY.

SECTION 1.-Definitions.

INTEREST is compensation paid by the borrower to the lender for the use of money, or by the debtor to the creditor for its detention after it becomes due. The amount on which interest is paid is called the principal. The ratio which the annual

interest bears to the principal is known as the rate per cent. In most commercial countries and states, the rate per cent. is regulated by law, the rate fixed being known as legal interest; and, if more than this is paid, or agreed to be paid, it is called usurious interest. There are also simple interest and compound interest. A loan is at simple interest, when the interest is paid as it falls due, or, not being then paid, fails to become a part of the principal or to draw interest thereafter: it is at compound interest, when, instead of being paid, the interest is successively added to the principal at the periods when it falls due, thus forming a new and increased principal at every such period.

Compound interest is not usurious, though a contract or promise to pay it cannot generally be enforced. Such a contract, however, is not wholly void, nor attended with any penalty, as it would be if usurious, but is valid for the principal and simple interest only. If compound interest has accrued and has been actually paid, with or without a contract, it cannot be recovered back, and if accounts are settled, or agreed in good faith to be settled, by annual or semi-annual rests, the law approves this.

Compound interest is also sometimes recognized and enforced at law and in equity: thus, if one hold money for a party for whom he is trustee, for a long time, without accounting for it, he will, ordinarily, be charged with the whole amount reck

No

oned at compound interest; and sometimes, in a case of disputed accounts, courts direct this mode of settlement. good reason can be given, why a contract for compound interest should not be valid and enforceable at law and in equity.

The debtor may always pay the interest promptly when it becomes due, if he desires to, and thereby prevent the accruing of compound interest; and when, from any cause, he suffers it to remain unpaid, the creditor ought to be allowed to recover interest thereon. It would frequently promote the convenience of both debtor and creditor, to allow the interest to accumulate from year to year, and be added to the principal, as is done by savings banks to the convenience of their customers, and the rule preventing its enforcement is more injurious than beneficial.

Usury originally meant, any taking of money for the use of money, and he was deemed a usurer who, lending money, required in repayment, a return of anything more than the amount originally loaned.

The divine law to Israel prohibited the Hebrews from exacting interest of each other. David, in answer to the question, "Who shall abide in the tabernacle of the Lord?" embraces in the answer, "He that putteth not out his money to usury." That the Jews then, as now, were in the habit of trading in money and making a profit therefrom is shown by the charge of Nehemiah, who rebuked the nobles and the elders of his time, saying, "Ye exact usury every one of his brother."

In the early ages, this was considered a moral wrong, and the greater the amount of interest reserved, the greater was the wrong. For many generations, however, this opinion, if it has not ceased to exist, has lost most of its practical or legal force, it being now universally deemed no more wrong to take pay for the use of money, than for the use of any other property.

The tendency of commercial opinion is manifestly towards free trade in money. The opinion that money should be borrowed and repaid, or bought and sold, upon whatever terms