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.
In the absence of specific authority from the creditor to make payment by mail, and in the absence of a usage or custom of making payments in this manner, the debtor can not make payment by mail so as to impose the risk of loss in the mail upon the creditor.1 A direction as to the manner of making one payment is not authority to make successive payments in such manner.2 A single prior instance is not sufficient to show a similar custom between the parties, authorizing the debtor to remit by mail.3 A general direction to remit does not give to the debtor authority to remit by mail in such a manner as to impose the risk of loss upon the creditor,4 as by remitting money by registered mail.5 In some cases, however, it has been held that a direction given by mail to remit is equivalent to instruction to make payment through the mail at the risk of the creditor.6 Payment by mail, in accordance with the instructions of the creditor, operates as a discharge although the creditor does not receive the money.7
If the payment is sent by mail in such form that the loss of the letter containing such remittance does not prejudice either party's position as far as eventual payment is delayed, or if the remittance which is made by mail is not lost, but is merely delayed, a somewhat different question is presented as to the effect of such delay in making payment. If failure to make payment at a specified time will result in the forfeiture of the rights of the debtor, it is held that the date of the payment, for the purpose of preserving such rights, is the date of the receipt of the payment and not the date of mailing it in the absence of authority from the creditor to make payment in such manner, and in the absence of a general custom to that effect.8 It has been held, however, that equity will not cancel a lease which contains a condition subsequent to the fact that failure to make payment on time shall terminate the rights of the lessee, if the lessee had sent payment in proper form by registered mail properly addressed and in ample time, if the lessor is not prejudiced by the loss of the remittance except through such delay.9 If the debtor is authorized by the creditor to make payment by mail, or if the creditor has acquiesced in such method of" payment, or if there is a general custom authorizing such method of payment, delay in the transmission of such, payment does not operate as forfeiture of the rights of the debtor.10 If a debtor has been in the habit of making payments to his creditor by mail, an act of bankruptcy on the part of the debtor after such payment has been mailed and before it has been received, is treated as an act of bankruptcy after payment is made.11 If the debtor is authorized to make payment by mail, such payment is regarded as completed when the letter which contains the check, draft, or other proper medium of payment, is deposited in the post-office, if, by the rules of the postal authorities, the party who has deposited such letter is not allowed to reclaim it.12 If, however, the postal regulations allow the party who has deposited the letter to claim it, and such party does in fact claim such letter, it is held that such payment has not been made;13 and the party who had drawn a draft,14 or who has indorsed a bill of exchange,15 as payment of an obligation, may avoid liability upon such instrument if he recovers it from the mail under such circumstances.16
. 12 Second National Bank v. Prewitt, 117 Tenn. 1, 119 Am. St. Rep. 987, 9 L. R. A. (N.S.) 581, 96 S. W. 334.
13 Second National Bank v. Prewitt, 117 Tenn. 1, 119 Am. St. Rep. 987, 9 L. R. A. (N.S.) 581, 96 S. W. 334.
1 England. ThairwaU v. Great Northern Ry. Co. , 2 K B. 509; Mitchell-Henry v. Norwich Union Life Ins. Co. , 2 K. B. 67, 2 A. L. R. 1644.
Arkansas. Burr v. Sickles, 17 Ark. 428, 65 Am. Dec. 437.
Iowa. Gaar, Scott & Co. v. Taylor, 128 la. 636, 105 N. W. 125.
Massachusetts. Gurney v. Howe, 75 Mass. (9 Gray) 404, 69 Am. Dec. 299.
Washington. Masterson v. Union Bank & Trust Co., 86 Wash. 560, L. R. A. 1918A, 531, 150 Pac. 1126.
2 Dodge v. Smith, 34 Vt. 178.
3 Burr v. Sickles, 17 Ark. 428, 65 Am. Dec. 437.
4 Mitchell-Henry v. Norwich Union Life Ins. Co. , 2 K. B. 67, 2 A. L. R. 1644; Masterson v. Union Bank & Trust Co., 86 Wash. 560, L. R. A. 1918A, 531, 150 Pac. 1126.
5 Mitchell-Henry v. Norwich Union Life Ins. Society , 2 K. B. 67, 2 A. L. R. 1644.
6 Morgan v. Richardson, 95 Mass. (13 All.) 410; Buell v. Chapin, 99 Mass. 594, 97 Am. Dec. 58.
7 Jung v. Second Ward Savings Bank, 55 Wis, 364, 42 Am. Rep. 719, 13 N. W. 235.
8Beeman v. Supreme Lodge, Shield of Honor, 215 Pa. St. 627, 64 Atl. 792.
9 Kays v. Little, 103 Kan. 461, 1 A. L. R. 675, 175 Pac. 149.
10 Mutual Reserve Fund Life Association v. Tuchfeld, 150 Fed. 833; Coile v. Order of United Commercial Travelers. 161 N. Car. 104, 76 S. E. 622.
II McDonald v. Chemical National Bank, 174 U. S. 610, 43 L. ed. 1106.
12 Security National Bank v. Old
National Bank, 241 Fed. 0; Chapman v. Mills, 241 Fed. 717; Kirkman v. Bank of America, 42 Tenn. (2 Cold.) 307; Canterhury v. Bank, 91 Wis. 53, 51 Am. St. Pep. 870, 30 L. R. A. 845, 64 N. W. 311.
This is analogous to the rule which governs acceptance by mail. See Sec. 199 et seq.
13 Ex parte Cote, L. R. 9 Ch. App. 27; Traders' National Bank v. First