If there is a failure of performance, partial or total, then the contract is broken. Whether the breach amounts to a discharge is a question which we shall hereafter discuss.87

82 Wood Reaping & Mowing Mach. Co. v. Smith, 50 Mich. 565, 15 N. W. 906, 45 Am. Rep. 57; Hawkins v. Graham, 149 Mass. 284, 21 N. E. 312, 14 Am. St Rep. 422; Magee v. Lumber Co., 78 Minn. 11, 80 N. W. 781; Electric Lighting Co. of Mobile v. Elder, 115 Ala. 138, 21 South. 983; McNeil v. Armstrong, 81 Fed. 943, 27 C. C. A. 16; City of Elizabeth v. Fitzgerald, 114 Fed. 547, 52 C. C. A. 321. See "Contracts," Dec. Dig. (Key-No.) § 2S2; Cent. Dig. §§ 1284-1289.

83 Ante, p. 512. Where the act to be done is the payment of money, the presumption is that it is to be paid on demand. Warren v. Wheeler, 8 Metc. (Mass.) 97. See "Contracts," Dec. Dig. (Key-No.) § 212; Cent. Dig. §§ 944-955.

84 Ante, p. 512.

85 BECK & PAULI LITHOGRAPHING CO. v. COLORADO MILLING & ELEVATOR CO., 52 Fed. 700, 3 C. C. A. 248, Throckmorton Cas. Contracts, 350; Brady v. Oliver, 125 Tenn. 595, 147 S. W. 1135, 41 L. R. A. (N. S.) 60, Ann. Cas. 1913C, 376. See "Contracts," Dec. Dig. (Key-No.) § 299; Cent. Dig. §§ 1S72-1S81.

86 Leake, Cont. 441; Startup v. Macdonald, 6 Man. & G. 593. See "Contracts," Dec. Dig. (Key-No.) § 213; Cent. Dig. §§ 957-977; "Time," Dec. Dig. (Key-No.) § 11; Cent. Dig. § 53.

87 See post, p. 556 et seq.

Same - Payment

238. Payment consists in the performance of a contract -

(a) By the delivery of money, or

(b) By the delivery of negotiable instruments conferring the right to receive money, in which latter case the payee may take the instrument -

(1) In discharge of his right absolutely, or

(2) Subject to a condition (which, in most jurisdictions, will be presumed, in the absence of expressions to the contrary) that, if not paid when due, the payee reverts to his original rights, either to performance of the contract or satisfaction for its breach.88

If the liability of a party to a contract consists in the payment of a sum of money in a certain way or at a certain time, such a payment discharges him by the performance of his agreement. If, again, a person who is liable to perform certain acts under his contract wishes instead to pay a sum of money, or, having to pay a sum of money, wishes to pay it in a manner at variance with the terms of the contract, he must agree with the other party to accept the proposed payment in lieu of such performance as he is entitled to under the contract.89 In such a case the payment is a performance of the substituted agreement, and a discharge of the contract. Again, where one of two parties has made default in the performance of his part of the contract, so that a right of action has accrued to the other, the obligation formed by this right of action may be discharged by an accord and satisfaction; that is, an agreement, the consideration for which is usually a money payment, made by the party against whom the right exists, and accepted in discharge of his right by the other.90 Payment, then, is the performance of a contract, whether it be a performance of an original or of a substituted contract, or of a contract in which payment is the consideration for a forbearance to exercise a right of action which may have arisen from the breach of an agreement.91

88 Anson, Cont. (4th Ed.) 272-274. 89 Ante, p. 526.

90 Post, p. 615.

91 In Union Biscuit Co. v. Springfield Grocer Co., 143 Mo. App. 300, 126 S. W. 996, it is said per Nixon, P. J.: "In order to constitute payment as that word is used in law, there must he (1) a delivery; (2) by the debtor or his representatives; (3) to the creditor or his representatives; (4) of money or something accepted by the creditor as the equivalent thereof; (5) with the intention on the part of the debtor to pay the debt in whole or in part; and

If a tender is made by the debtor of money or other thing as in full satisfaction of his debt, the acceptance by the creditor of that which is tendered constitutes a complete discharge of the debt. The creditor may not apply the amount received and recover a balance claimed to be due.92 Unless otherwise agreed between the parties, payment may be made only in money.93 With the consent of the creditor, however, the debtor may discharge his obligation by the delivery of anything of value.9*

If counterfeit coins, bank notes, or other moneys are given in performance of a promise to pay money, even though they are believed to be good, there is no payment. The promisee may treat it as a nullity.95 But a coin issued by authority of law to circulate as money is not deprived of its legal tender quality merely by being worn in the process of circulation, nor when bruised or cracked, so long as it is not appreciably diminished in weight, and retains the evidence of its being genuine.96 So payment by a rare coin is good, if it is genuine and distinguishable as such.97

(6) accepted as payment by the creditor." See "Contracts," Dec. Dig. (Key-No.) § 308; Cent. Dig. §§ 1463, 1164.

92 St. Regis Paper Co. v. Tonawanda Board & Paper Co., 107 App. Div. 90. 94 N. Y. Supp. 946 [affirmed 1S6 N. Y. 563, 79 N. E. 1115]; Nassoiy v. Toni-linson, 148 N. Y. 328, 42 N. E. 715, 51 Am. St. Rep. 695. See "Contracts," Dec. Dig. (Key-No.) § 304; Cent. Dig. §§ 1457-1464; "Accord and Satisfaction;' Dec. Dig. (Key-No.) § 11; Cent. Dig. §§ 75-82.

93First Nat Bank of Blakely v. Davis, 135 Ga. 687, 70 S. E. 246, 36 L. R. A. (N. S.) 134. Payment made to a solvent bank by a check drawn upon it is equivalent to payment in money and is binding upon a principal for whom the bank acted as agent Pollok Bros. v. Niall-Herin Co., 137 Ga. 23, 72 S. E. 415, 35 L. R. A. (N. S.) 13. See "Payment," Dec. Dig. (Key-No.) § 9; Cent. Dig. §§ 34-53.

94 First Nat. Bank of Blakely v. Davis, 135 Ga. 687, 70 S. E. 246, 36 L. R. A. (N. S.) 134. See "Payment," Dec. Dig. (Key-No.) § 9; Cent. Dig. §§ 34-53.

95 Markle v. Hatfield, 2 Johns. (N. Y.) 455, 3 Am. Dec. 446; Young v. Adams, 6 Mass. 182; Gilman v. Peck, 11 Vt 516, 34 Am. Dec. 702; Blalock v. Phillips, 38 Ga. 216; United States v. Morgan, 11 How. 154, 13 L. Ed. 643; First Nat. Bank of Athens v. Buchanan, 87 Tenn. 32, 9 S. W. 202, 1 L. R. A. 199, 10 Am. St Rep. 617. He may be estopped, however, if he was guilty of negligence in receiving the counterfeit, or if, after discovery, he delays for an unreasonable time to return it or notify the debtor. Thomas v. Todd, 6 Hill (N. Y.) 340; Pindall's Ex'rs v. Bank, 7 Leigh (Va.) 617; Rick v. Kelly, 80 Pa. 527; Wingate v. Neidlinger, 50 Ind. 520; Union Nat Bank v. Balden-wick, 45 111. 375; Atwood v. Cornwall, 28 Mich. 336, 15 Am. Rep. 219. See "Payment," Dec. Dig. (Key-No.) § 11; Cent. Dig. § 58.

96 Cincinnati Northern Traction Co. v. Rosnagle, 84 Ohio St. 310, 95 N. E. 884, 35 L. R. A. (N. S.) 1030, Ann. Cas. 1912C, 639. See "Payment;' Dec. Dig. (Key-No.) § 10; Cent. Dig. §§ 1,2-61.

97 Atlanta Consolidated St Ry. Co. v. Keeny, 99 Ga. 266, 25 S. E. 629, 33 L. R. A. 824. See "Payment," Dec. Dig. (Key-No.) § 10; Cent. Dig. §§ 42-61.

Clark Cont.(3d Ed.) - 35

Where, for the purpose of making a payment, money is sent by the debtor to the creditor by mail, and is lost before it reaches him, it will discharge the debt, and the loss will fall on the creditor, if the remittance was in the manner authorized by him, but not otherwise.98