Musselman as to the application of the proceeds when he left the draft for discount, and they found a verdict for the defendant. A motion for a new trial was refused, the court holding that Musselman had not concurred in the bank's appropriation of the money, but that it had been used against his will.

In Robert v. Garnie, 3 Caines 14, the defendant owed a debt himself, and was also jointly indebted along with another. Although there did not appear to have been any directions given to apply a payment which he made to the separate debt, yet a receipt having been given to him for the payment in his own name, that was held to be evidence of its having been made on his own account. The payment in that case would seem to have been of an amount which exactly paid the balance due from himself, but which would have overpaid the joint debt.

In Hunt v. Brewer, 68 Maine 262, the defendant Brewer being indebted, first as member of a firm and afterwards individually, gave the plaintiff his own note, taking a receipt "Received from F. S. Brewer his 90 day note for $300, to be paid at either bank in Portland." The plaintiff claimed that he had applied the payment to Brewer's own indebtedness, he having made no appropriation of it; while the defendants insisted that there had been an actual appropriation to the joint indebtedness. There being a conflict of evidence on the question of appropriation it was held no misdirection by the judge to have told the jury that the receipt was silent and could have no legitimate bearing one way or the other. But Appleton, C. J., dissented, holding that unexplained the receipt had an obvious meaning and applied to Brewer's own transaction, because it contained no reference to Brewer & Lathrop, and it was his own note.

The rules applicable to this subject seem to me very clearly stated in Munger on the Application of Payments. He first states the general rule "If both debts are due at the time of the partial payment the debtor is at liberty to apply the payment to which he pleases." Then certain limitations, modifications and exceptions are given. (1) This intention must be manifested at the time of payment; (2) This intention need not be expressly deciared by the debtor, but may be manifested by, or inferred from, circumstances, and may in a proper case be referred to a jury as a question of fact; and (3) The direction for the appropriation must be made to the creditor, or the circumstances from

which it is to be inferred must be communicated to him, or known by him, otherwise there will be no valid appropriation. Here there was no direction from Kennedy to the plaintiffs to apply the money upon the notes on which he was maker. The evidence of J. W. Kennedy and Mr. Biggs furnish no proof of that. All that can be said is that an intention that it should be so appropriated may be inferred from Kennedy desiring the balance after such a payment to be handed over to his wife. But that was expressed in a conversation between himself and Spencer. There is no evidence that the plaintiffs or MacArthur ever heard a word of that.

Waller v. Lacy, 1 M. & G. 54, which was cited by counsel for the defendant, does not seem to me to have any bearing on the question at issue. In that case an attorney having several demands against a client, some of which were barred by the statute of limitations, was held not entitled to appropriate, in payment of the barred claims, money received on account of damages recovered by the client in an action. In the judgment of Bosanquet, J., it was said "Whatever right of appropriation a plaintiff may have over a sum paid to him he has no such right over money in his hands belonging to another person. It is only proper that a party should have the power to appropriate a payment made to him without any special application, but the doctrine of appropriation cannot apply to the present case where money has come to the plaintiff's hands not by the act of the defendant but by the act of a third party."

In this case the debtor gave the creditor, or trustees, an order to hold as security for his debt moneys expected to come to their hands. When they became entitled to the money they, in pursuance of the order which they had accepted handed to the creditors a draft upon the purchaser from whom the money was coming payable to the order of the debtor. By virtue of that draft, which must have been indorsed by the debtor or his attorney, the creditors received the money. That was the same as a payment by the debtor himself.

The plaintiffs are in my judgment entitled to a verdict for $1,100 and interest at ten per cent., amounting to $82.50, or in all $1,182.50. But I reserve leave to the defendant to move to enter a nonsuit or a verdict for him if the court should think him so entitled.

SHARP v. McBURNIE.

Counter-claim arising after writ issued.

A defendant cannot counter-claim in respect of a cause of action not matured before the issue of the writ.

A plea of counter-claim should show that it was payable before and at the

commencement of the action.

(Over-ruling Taylor, J., Dubuc, J. dissenting.)

J. Rowe for plaintiff.

J. S. Ewart, Q. C., for defendant.

[26th October, 1885.]

KILLAM, J.-The plaintiff sues upon a covenant contained in a lease from the defendant to him, that the defendant should pay him at the rate of $5.00 per acre for breaking land on the demised premises, and also upon the common counts. Upon the trial the defendant applied to be allowed to plead by way of counter claim a covenant in a mortgage from plaintiff to him for payment of $775.00 and interest. This my brother Taylor, who presided at the trial, allowed.

The question is whether a defendant can be allowed to set-off a claim accruing due after commencement of the action. This could not be done under the English statutes of set-off, but the defendant's contention is that it should be allowed under our own statute, 44 Vic. c. 11 s. 57, under which were added to section 28 of cap. 31 of the Con. Stat. Man. the following sub-sections : "(a) A defendant in any action may set off or set up by way of counter claim against the claims of the plaintiff, any right or claim, whether such set off or counter claim sound in damages or not; (b) Such set off or counter claim shall have the same effect as if such relief were sought in a cross action, so as to enable the court to pronounce a final judgment in the same action both on the original and on the cross claim.”

By 2 Geo. II. c. 22. S. 13, "where there are mutual debts between the plaintiff and defendant, or if either party sue or be sued as executor or administrator, where there are mutual debts between the testator or intestate and either party, one debt may

VOL. III. M. L. R.

II

be set off against the other, and such matter may be given in evidence under the general issue or pleaded in bar as the nature of the case shall require."

By 8 Geo. II. c. 24 ss. 4 & 5, the former statute was made perpetual, and it was required that where either of the debts should accrue by reason of a penalty contained in a bond or specialty the defence should be specially pleaded.

It appears to have been held, under these statutes, in Reynolds v. Beerling, referred to in a note to Evans v. Prosser, 3 T. R. 188 that a defendant could set off against the plaintiff's claim a claim upon a judgment recovered after action brought and before plea pleaded. This case again was decided upon the authority of Sullivan v. Montague, 1 Dougl. 108, where Lord Mansfield, C. J., held that actio non goes in every case to the time of plea pleaded not to the commencement of the action. The question there was whether a judgment in another court recovered after action brought, could be set up in bar of an action of trespass under the general issue. That this should be done is, however, only consistent with the long received principle that a judgment may be set up in evidence by way of estoppel without pleading where there had been no opportunity of pleading it. In Evans v. Prosser, however, it was distinctly held that a plea of set off that the plaintiff was indebted to the defendant at the time of plea pleaded was bad, but the plea should show that he was indebted at the commencement of the action, and Buller, J., said, with reference to Reynolds v. Beerling, that "perhaps the court did not consider the strict law so much as the justice of the case." I fancy, rather, that they were misled by the expres sion of Lord Mansfield, which was not intended to be applicable to such a case.

In Le Bret v. Papillon, 4 East, 505, counsel, referring to the dictum in Sullivan v. Montague, that actio non goes in every case to the time of pleading, not to the commencement of the action, Lord Ellenborough said that had "never been cited as law since Evans v. Prosser." Radcliffe, J., in Carpenter v. Butterfield, 3 Johns. Ca. (N. Y.) 144, explains that expression well where he says "but this introductory form of pleading is by no means decisive of the question. It is a mere allegation that the plaintiff ought not then to maintain his action; but the cause or reason why he ought not to maintain it may consistently

with the allegation have arisen before or after the commencement of the action. . . . It may in many cases properly refer to and allege a time subsequent to the beginning of the action and up to the very time of pleading, as where the defence arises from some act done by the plaintiff himself as a release made or a payment accepted by him subsequent to the commencement of the suit. . . . . But in all those cases the matter of his defence must arise from some act of the plaintiff done in relation to the suit or the claim on which it is founded."

In Dendy v. Powell, 3 M. & W. 442, Lord Abinger, C. B., said, "No doubt all pleas refer to the time of the commencement of the action." The decision in Evans v. Prosser was followed in Dendy v. Powell; Braithwaite v. Coleman, 4 Nev. & M. 654; Richards v. James, 2 Exch. 471; Rogerson v. Ladbrooke, 7 Moore 412; Spradbery v. Gillam, 6 Exch. 422; Leman v. Gordon, 8 C. & P. 392; Walker v. Clements, 15 Q. B. 1046. The same view is implied in an earlier case, Baskerville v. Brown, 2 Burr. 1229. The principle was so well established that the form of plea of set off given by the Common Law Procedure Act adopts it. I have, however, referred thus particularly to the early cases to show that the form of plea of set off given under that statute and constantly used here until lately is not the creation of that or any other statute, but it had its origin naturally in the adaptation of the previously existing principles of the common law system of practice and pleading to the new defence given by the statutes of set off. These principles were still subsisting in our system of practice and pleading when the statute 44 Vic. c. 11, was enacted, and those principles, unless clearly altered by that statute, must be applied to the enlarged defence of set off or counter claim allowed by it.

The presumption is the stronger against any intention of the legislature to make any alteration in the time at which the claim sought to be set off should have accrued due, after such a line of decisions showing the effect of applying the common law system of practice and pleading to the old statutes of set off, which of themselves were quite as consistent with the allowance of the set off of a debt accruing after action brought as is our own statute. Our statute also points directly to a class of claims not previously allowed to be set off. The principle that only debts accruing before action brought could be set off was as