which is bound the property of the person who supplied the debtor with funds. 59 § 1807. Application of collateral. The creditor's right to apply the proceeds of collateral held for several debts is not limited by the fact that for one of the debts a surety also is bound. "The collateral is a trust fund which cannot be released except upon the discharge of all the obligations of the principal debtor it is pledged to secure, without releasing sureties on such obligations, but if it be applied solely to the discharge of the debtor's obligations, so far as it will extend, the surety has no vested right to have a preference in payment simply because his debt came into existence prior to another also entitled to the benefit of the collateral." 60 Obviously the proceeds of collateral must be applied to a debt for which the collateral was held, to the exclusion of other unsecured debts.61 § 1808. Definition of tender. Tender is an offer to perform a condition or obligation coupled with the present ability of immediate performance, so that were it not for the refusal of coöperation by the party to whom tender is made, the condition or obligation would be immediately satisfied. As the condition or obligation in question may require for its performance either the payment of money or the transfer of property, tender may relate either to money or property. In the strict sense of the word, there can be no tender of any services or other performance which takes time. Tender of an unliquidated amount of money is also in the 59 Sioux City, etc., Mfg. Co. v. Merten, 174 Iowa, 332, 156 N. W. 367, L. R. A. 1916 D. 1247; Crane Bros. Mfg. Co. v. Keck, 35 Neb. 683, 53 N. W. 606; Lee v. Storz Brewing Co., 75 Neb. 212, 106 N. W. 220. It does not clearly appear whether the Iowa court would reach the same result even though the debtor expressly directed an application unfavorable to the person furnishing the money. The Nebraska court apparently would regard the direction as binding. 60 Irving v. Mutual Trust Co., 82 N. J. Eq. 629, 633, 90 Atl. 274, citing Wilcox v. Fairhaven Bank, 7 Allen, 270; Fall River Nat. Bank v. Slade, 153 Mass. 415, 26 N. E. 843, 12 L. R. A. 131. See also Hansen v. Manley, 72 Ia. 48, 33 N. W. 357. 61 Young v. English, 7 Beav. 10; Johnson v. Thomas, 77 Ala. 367; Hicks strict sense impossible of performance, but by statute, in many States, one bound to pay an unliquidated amount may by offering a sum which is equal to or greater than the amount found due on subsequent liquidation, free himself from further liability for interest and costs.62 § 1809. Importance of tender. Tender may be important in various aspects: 1. As a total discharge from liability to perform an obligation. In this aspect the subject has previously been discussed in connection with excuses for non-performance of obligations.63 2. As giving a right to performance by the other party or a right to an action of damages against him. In this aspect the subject has previously been discussed in connection with conditions and excuses for their non-performance.64 3. As excusing damages for delay in performance. It is in this aspect that the subject remains to be treated. The fundamental principles have been thus stated: "In actions of debt and assumpsit, the principle of the plea of tender, in our apprehension, is, that the defendant has been always ready (toujours prist) to perform entirely the contract on which the action is founded; and that he did perform it, as far as he was able, by tendering the requisite money; the plaintiff himself precluding a complete performance, by refusing to receive v. Bingham, 11 Mass. 300; Thatcher v. Massey, 20 S. Car. 542. 62 In American Surety Co. v. Venner, 183 Mass. 329, 332, 67 N. E. 331, the court said: "The only tender that can be made effectual under a contract is a tender of the whole amount due. The present contract was a single, indivisible undertaking, completely to indemnify the present plaintiff. Until there was a tender of entire relief from liability, the defendants continued liable. Green v. Shurtliff, 19 Vt. 592; Dunning v. Humphrey, 24 Wend. 31. No provision was made, nor attempted to be made, to relieve the plaintiff from its liability for the interest that was certain to accrue while the suit to determine the disputed question was is analogous to that which, in the 63 Supra, § 677. 64 Supra, §§ 743, 744, 832, 833. it. And as in ordinary cases, the debt is not discharged by such tender and refusal the plea must not only go on to allege that the defendant is still ready (uncore prist) but must be accompanied by a profert in curiam of the money tendered. If the defendant can maintain this plea, although he will not thereby bar the debt) for that would be inconsistent with the uncore prist and profert in curiam, (yet he will answer the action, in the sense that he will recover judgment for his costs of defence against the plaintiff,-in which respect the plea of tender is essentially different from that of payment of money into § 1810. Essential characteristics of tender. As tender would amount to complete performance, if the offer were carried out, the requisites of a valid tender are indicated by the requisites of valid performance. There must be an unconditional offer to perform, coupled with a manifested ability to carry out the offer, and a production of the subject-matter of the tender; 66 the amount tendered must not be less than what is due; 67 and if greater, there must be no demand for a 65 Dixon v. Clark, 5 C. B. 365, 377. 66 Camp v. Simon, 34 Ala. 126; Cothran v. Scanlan, 34 Ga. 555, 557; Angier v. Equitable Bldg. &c. Assoc., 109 Ga. 625, 35 S. E. 64; Chase v. Welsh, 45 Mich. 345, 7 N. W. 895; Deering Harvester Co. v. Hamilton, 80 Minn. 162, 83 N. W. 44; Lewis v. Mott, 36 N. Y. 395; Leask v. Dew, 102 N. Y. App. Div. 529, 92 N. Y. S. 891; Holladay v. Holladay, 13 Oreg. 523, 11 Pac. 260, 12 Pac. 821; Potter v. Thompson, 10 R. I. 1; Bowen v. Holly, 38 Vt. 574; Shank v. Groff, 45 W. Va. 543, 32 S. E. 248. In Iowa by statute an offer in writing is made the equivalent of actual production. Holt v. Brown, 63 Ia. 319, 19 N. W. 235. 67 Dixon v. Clark, 5 C. B. 365; Ebersole v. Addington, 156 Ala. 575, 46 So. 849; Shafer v. Willis, 124 Cal. 36, 56 Pac. 635; Rauer's Law & Collection Co. v. Sheridan Proctor Co. (Cal. App.), 181 Pac. 71; Smith v. Pilcher, 130 Ga. 350, 60 S. E. 1000; Cheney v. Roodhouse, 135 Ill. 257, 25 N. E. 1019; Shuck v. Chicago, etc., R. Co., 73 Iowa, 333, 35 N. W. 429; Chapin v. Chapin (Mass.), 36 N. E. 746; Boyden v. Moore, 5 Mass. 365; Thurber v. Jewett, 3 Mich. 295; Kingsley v. Anderson, 103 Minn. 510, 115 N. W. 642, 116 N. W. 112; Graham v. Linden, 50 N. Y. 547; Equitable Life Assur. Co. v. Von Glahn, 107 N. Y. 637, 13 N. E. 793; Barreda v. Merchants' Nat. Bank (Tex. Civ. App.), 206 S. W. 726; Patnote v. Sanders, 41 Vt. 66, 98 Am. Dec. 564. In Krauss v. Potts, 53 Okla. 379, 156 Pac. 1162, 5 A. L. R. 1213, it was held that where the amount due is within the exclusive knowledge of the creditor and the creditor on demand neglects or refuses to indicate the correct amount that is due, the debtor may tender so much as he thinks is justly due, and if less than the true amount, the tender is nevertheless good. return of the excess.68 The medium of payment must be that which the contract specifies or in the absence of contractual definition that which the law has made legal tender; 69 the time must be that fixed by the contract or by law; 70 it must not be before maturity; 71 and the hour of the day must be reasonable." But at the present time in case of a liquidated debt a valid tender may be made subsequent to the day of maturity by adding legal interest to the amount of the debt.73 § 1811. By whom and to whom tender must be made. 72 Tender must be made by the debtor or by his agent.74 Whatever may be the effect of payment by a stranger when accepted by the creditor,75 it is clear that the creditor is under no obligation to accept such a payment. It is even more obvious that no valid tender can be made except to the creditor or some one authorized to receive payment on his behalf.76 Under this principle a tender to a shopkeeper's clerk is sufficient, in the absence of circumstances tending to show lack of authority; and the fact that the claim has been previously put in the hands of an attorney for collection does not alter the rule." § 1812. Place of tender. Tender must also be at the place provided in the contract 68 Robinson v. Cook, 6 Taunt. 336; Blow v. Russell, 1 C. & P. 365; Dean v. James, 4 B. & Ad. 546; Perkins v. Beck, 19 Fed. Cas. No. 10,984. 69 Juilliard v. Greenman, 110 U. S. 421, 28 L. Ed. 204, 4 S. Ct. 122. 70 Whitlock v. Squire, 10 Mod. 81; Dixon v. Clark, 5 C. B. 365, 378; Dobie v. Larkin, 10 Exch. 776; Maynard v. Hunt, 5 Pick. 240. 71 Brown v. Cole, 9 Jur. 290; Bowen v. Julius, 141 Ind. 310, 40 N. E. 700; Portland v. Atlantic, etc., R. Co., 74 Me. 241; Saunders v. Frost, 5 Pick. 259, 16 Am. Dec. 394; Moore v. Kime, 43 Neb. 517, 61 N. W. 736. 72 See supra, § 857. 73 Leftley v. Mills, 4 T. R. 170; Rudolph v. Wagner, 36 Ala. 698; Loughborough v. McNevin, 74 Cal. 250, 14 Pac. 369, 15 Pac. 773, 5 Am. St. Rep. 435; and see infra, § 1817, ad fin. 74 Bac. Abr. Tender (A); Watkins v. Ashwicke, Cro. Eliz. 132; Mahler v. Newbaur, 32 Cal. 168, 91 Am. Dec. 571; McDougald v. Dougherty, 11 Ga. 570; Rowell v. Jewett, 73 Me. 365; Sinclair v. Learned, 51 Mich. 335, 16 N. W. 672; Harris v. Jex, 66 Barb. 232. 75 See infra, §§ 1857–1861. 76 Moffat v. Parsons, 5 Taunt. 307; Mahan v. Waters, 60 Mo. 167, 170; Garnett v. Meyers, 65 Neb. 280, 287, 91 N. W. 400, 94 N. W. 803; Smith v. Kidd, 68 N. Y. 130, 23 Am. Rep. 157. 77 Moffat v. Parsons, 5 Taunt. 307; Hoyt v. Byrnes, 11 Me. 475. See also Wilmot v. Smith, 3 C. & P. 453; Kirton v. Braithwaite, 1 M. & W. 310. for performance, or if no provisions is made, then at the place determined by law. There are special rules in regard to negotiable paper,78 in regard to the transfer of chattel property,79 and in regard to the payment of rent by a tenant of real estate; but apart from such special rules the general principle of common law is that the debtor must seek the creditor and make tender to him wherever he is found; 81 and even without reference to this principle, the creditor's place of residence at the time when the contract was made will often be deemed by fair implication of fact the place of performance contracted for.82 In bilateral contracts each party is both a debtor and a creditor, and where the performance is due concurrently from each,83 it follows that either party wishing to put the other in default must seek him in order to make tender, unless the contract, custom or rule of law prescribes a place where both performances are to be made.84 § 1813. What money is legal tender. Legal tender for the payment of pecuniary debts in the United States is by statute established as follows: Gold coins for any amount; silver dollars for any amount; subsidiary silver coins for sums not exceeding ten dollars; minor coins of the United States for any amount not exceeding twenty-five cents; gold certificates and silver certificates for any amount; United States notes and demand treasury notes and interest-bearing 78 See supra, § 1166. 79 See supra, § 956. 80 "A tenant has to the last minute of the day to pay rent; if he tenders it to the lessor on the land, if he pays it before midnight, he is not liable to distress. As rent is issuing out of land, and is payable there, it is competent for the tenant to protect himself, by being ready on the land, at the door of the mansion house, or any place where it is convenient for the rent to be accounted for." Startup v. Macdonald, 12 L. J. Exch. 477, 483; Chapman v. Harney, 100 Mass. 353. 81 Startup v. Macdonald, 12 L. J. Exch. 477; Cranley v. Hillary, 2 M. & S. 120; Borah v. Curry, 12 Ill. 66; Taylor v. Meek, 4 Blackf. 388; Morey v. Enke, 5 Minn. 392; Bates v. Bates, Walk. (Miss.) 401, 12 Am. Dec. 572; Miles v. Roberts, 34 N. H. 245; Hunter v. LeConte, 6 Cow. 728; LaFarge v. Rickert, 5 Wend. 187, 21 Am. Dec. 209; Wagers v. Dickey, 17 Ohio, 439, 49 Am. Dec. 467; Berley v. Columbia, etc., R. Co., 82 S. Car. 232, 64 S. E. 397; Jones v. Main Island Creek Coal Co. (W. Va.), 99 S. E. 462. 82 Borah v. Curry, 12 Ill. 66; Barker v. Jones, 8 N. H. 413. 83 See supra, § 835. |