Hill v. Gregory

Hill v. Gregory, Wythe 73 (1790), was a case that discussed whether a creditor could choose how to apply a payment among a debtor's different accounts in the absence of specific directions from the debtor.

Background

Fendall Southerland held a bill of exchange and a bond issued by Carter Braxton (the listed defendant, Roger Gregory, was executor of Southerland's estate). James Hill endorsed the bill of exchange, and so was also liable to Southerland for any amount of that bill that Braxton could not cover. Braxton assigned some securities to Southerland and claimed that their value would be credited to the bill of exchange, but Southerland credited them to the bond instead. Braxton had issued the bond in 1776, and had sold Southerland merchandise between 1777 and 1780.

The Court's Decision

The High Court of Chancery allowed Southerland to credit Braxton's securities to the bond, stating that Braxton had not specified otherwise. The Court of Appeals reversed, stating that it was evident that Braxton intended the payment to go towards the bill of exchange, and that therefore Gregory should credit the accounts that way.