This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The question, who is authorized to receive payment so as to discharge the obligation, usually turns on questions of ownership and agency, and is related to contract only collaterally. Payment to the original payee of a negotiable instrument, is not discharged as to an indorsee for value before maturity and without notice.1 The maker is not discharged by payment to the payee without surrender of the note even if the indorsee and payee had agreed to conceal the fact of the transfer from such maker.2 So the maker cannot pay the original payee after maturity after notice to the maker of assignment.3 If a note is assigned but not indorsed, it has been held that payment to the original payee is a discharge, although the note is not produced.4 Whether payment, to an agent of the creditor is a discharge of the debt, is determined by questions of agency. If the funds thus paid in actually reach the hands of the creditor, the debt is of course discharged, even if the agent to whom payment was made had no authority to receive such payment. An agent authorized to receive payment has no authority to accept payment in anything but money. Hence he cannot receive corporate stock.5 An agent authorized to collect overdue interest, who does not have possession of the instrument evidencing the indebtedness, has no authority to receive payment of the debt, and payment to him is not therefore a discharge. The bank at which a note is made payable, is not thereby made an agent of the creditor. Accordingly, a deposit in such bank by the debtor for the purpose of paying such note, is not of itself payment.6 So a deposit by a debtor in a bank to the account of his creditor is not payment unless he consents thereto, since the bank is the agent of the debtor.7 Payment to an administrator of the creditor appointed by the Probate Court of decedent's domicile, is a discharge of the debt. An executor under a Avill made during a temporary visit to another state, to whom the note has been given for safe keeping, cannot enforce payment thereof.8 Since the statute forbidding assignments of claims against the government in certain cases, is intended solely for the benefit of the government, payment by the government to the assignee will discharge its liability to the assignor.9 Payment of a salary to a de facto officer, is no discharge of the liability of the public corporation to the de jure officer entitled thereto.10
9 Meyer v. Stadtler, 23 Tex. Civ. App. 432; 56 S. W. 108.
1 Wilson v. Campbell, 110 Mich. 580; 35 L. R. A. 544; 68 N. W. 278; Hollinshead v. Stuart, 8 N. D. 35; 42 L. R. A. 659; 77 N. W. 89.
2 Tuck v. Bank. 108 Ga. 446; 75 Am. St. Rep. 69; 33 S. E. 983.
3 Maekay v. Church, 15 R. I. 121; 2 Am. St. Rep. 881; 23 Atl. 108.
4 Vann v. Marbury, 100 Ala. 438; 46 Am. St. Rep. 70; 23 L. R. A. 325; 14 So. 273.
5 Bank v. Hart. 37 Neb. 197: 40 Am. St. Rep. 479; 20 L. R. A. 780; 55 N. W. 631.