"[P]ayment requires both the receipt of funds by the creditor and the intention of both parties that funds should constitute payment." U.S. Bank Nat'l Ass'n v. Whitney, 81 P.3d 135, 140 (Wash. Ct. App. 2003) (citing Thrifty Supply Co. of Seattle, Inc. v. Deverian Builders, Inc., 475 P.2d 905, 907 (Wash. Ct. App. 1970)). "Payment to an authorized agent will operate as a discharge of the indebtedness, though the agent misappropriate[s] the payment."
The use of joint checks is widespread in the construction industry as a method for owners and general contractors to protect themselves from lien foreclosures by materials suppliers and lower-tier subcontractors whom higher-tier contractors and subcontractors have failed to pay. See, e.g., Dauphin v. Smith, 42 Wn. App. 491, 496, 713 P.2d 116 (1986); Thrifty Supply Co. of Seattle v. Deverian Builders, Inc., 3 Wn. App. 425, 429, 475 P.2d 905 (1970); Brown Wholesale Elec. Co. v. Beztak of Scottsdale, Inc., 163 Ariz. 340, 343, 788 P.2d 73 (1990); Post Bros. Constr. Co. v. Yoder, 20 Cal. 3d 1, 5, 569 P.2d 133, 141 Cal. Rptr. 28 (1977). Many jurisdictions (including Washington; see Dauphin, 42 Wn. App. at 496) have adopted the "joint check rule" to this purpose: "[w]hen a subcontractor and his materialman are joint payees, and no agreement exists with the owner or general contractor as to allocation of proceeds, the materialman by endorsing the check will be deemed to have received the money due him."
The Washington courts have simplified the definition somewhat, stating that "payment is established only with the receipt of funds by the creditors, coupled with an intention on behalf of both parties that the funds received constitute payment." Thrifty Supply v. Deverian Builders, 3 Wn. App. 425, 428, 475 P.2d 905 (1970). No authority has been submitted holding, in circumstances similar to those described herein, that a deposit of funds into court constitutes "receipt" of funds, constructive or otherwise, by the creditors.
Mayron's Bake Shops, Inc. v. Arrow Stores, Inc., 176 A.2d 574 (Conn. 1961), Thrifty Supply Co. of Seattle v. Deverian Bldrs., Inc., 475 P.2d 905 (Wash.App. 1970) (payment established only with receipt of funds by creditors). There was no tender of the overdue rent in this case until May 13, 1975, when United received the April rent check.
Under the common law, payment requires both receipt of funds by the creditor and the intention of both parties that the funds should constitute payment. Thrifty Supply Co. of Seattle, Inc. v. Deverian Builders, Inc., 3 Wn. App. 425, 428-29, 475 P.2d 905 (1970). Mutual Intent. Payment also requires both receipt of funds by the creditor, and the intention on behalf of both parties that the funds should constitute payment.
A transfer cannot constitute a payment unless there is mutual intent that it be a payment. Thrifty Supply Co. of Seattle, Inc. v. Deverian Builders, Inc., 3 Wn. App. 425, 428, 475 P.2d 905 (1970). The existence of intent is a question of fact for the jury.