ACTUAL PAYMENT

2 definitions found across Law Mind sources

← Dictionary
ACTUAL PAYMENTAuthored
The Law Mind • 975 words
Definition
Actual payment is the real, completed transfer of funds or other consideration from one party to another in satisfaction of an obligation. It stands in contrast to constructive payment, credit arrangements, or bookkeeping entries that may be deemed payment by operation of law but do not reflect a genuine transfer of value. In its most common legal context, actual payment refers to the literal delivery of money — or its equivalent — as opposed to a promise to pay, a set-off, or a paper transaction. The term appears most frequently in three settings: 1. Limited partnership formation. Statutes governing the creation of limited partnerships historically required proof that the promised capital contribution had been actually paid in — not merely pledged or recorded — before the partnership could be validly formed and the contributing partner's liability limited. 2. Tax law. Payment of a tax liability is "actual" when funds are genuinely transferred to the taxing authority, as distinguished from the crediting of estimated tax payments or withholding, which involve legal fictions of payment at the time of withholding or deposit. 3. Debt satisfaction. A creditor's claim is discharged by actual payment when money genuinely changes hands, as opposed to an accord, novation, or equitable discharge that courts may treat as payment without a true transfer.
Common Language
Modern common usage (Wiktionary): "Actual" in ordinary English means real or existing in fact, as opposed to theoretical or potential. "Payment" is the act of paying money owed. Historical common usage (Webster's 1913): "Actual" — existing in act or reality; real as opposed to speculative or potential. The gap is narrow but operationally important. In common usage, the phrase "actual payment" is redundant emphasis — of course payment is actual. In legal usage, the phrase carries real weight: it distinguishes between transactions courts will treat as legal equivalents of payment (deemed payments, constructive payments, set-offs) and the real-world transfer of funds that the term demands. When a statute requires actual payment, the word "actual" does real work.
Why It Matters in Research
The critical research trap here is reading older partnership and corporate statutes without appreciating how aggressively courts policed the actual payment requirement. In nineteenth-century limited partnership law, failure to prove actual payment of contributed capital could collapse the limited partnership form entirely, exposing the limited partners to general liability. Researchers working in antebellum New York and Pennsylvania partnership cases should treat this element as jurisdictionally charged — courts in those states scrutinized capital payment records closely. In tax research, the term shifts meaning depending on context. For estimated tax purposes, "actual payment" distinguishes a direct remittance from a credit carried forward or a withholding deemed paid at the source. These distinctions matter when calculating underpayment penalties, because the timing of actual payment triggers different rules than the deemed payment dates applied to withholding. See the Law Mind Tax Encyclopedia entries on estimated tax payments for how modern doctrine handles this. The Rapalje & Lawrence entry is unusually thin — it functions as a pointer to case law rather than a definition. Researchers should treat it as a signal that "actual payment" was a contested factual and legal question in the courts it cites, not a settled doctrinal formula. The cited New York and Pennsylvania authorities (19 Barb. 283; 34 Pa. St. 344) represent the primary interpretive work; the dictionary entry itself provides no rule. Cross-era research caution: the term appears in modern tax statutes, modern partnership acts, and historical common law sources, but the operative definition shifts across each. Do not carry a definition from one context into another without checking whether the governing statute or doctrine supplies its own meaning.
Historical Dictionary Support
Rapalje & Lawrence (1883) is the sole historical dictionary source for this entry, and it offers definition by reference rather than definition by content. The entry does not state what actual payment means; it points to statutes and cases that resolved the question in limited partnership contexts. This is a diagnostic feature of the term: "actual payment" was a phrase courts defined case by case, applying it to the specific facts of capital contribution — whether notes, property, or services could substitute for cash, and what evidence sufficed to prove the transfer. What historical dictionaries miss: there is no treatment of actual payment in the tax sense, which became legally significant with the development of withholding regimes and estimated tax systems in the twentieth century. The older sources are useful only for the partnership and debt-satisfaction contexts.
Jurisdictional Note
The actual payment requirement for limited partnership formation was a creature of state statute and varied considerably. New York and Pennsylvania were the primary jurisdictions developing doctrine in the nineteenth century. Modern uniform acts (RULPA, ULPA 2001) have relaxed or reframed capital contribution requirements, so historical case law on actual payment of capital may not transfer directly to current practice.
Encyclopedia Cross-Reference
The Law Mind Tax Encyclopedia — Credit for Estimated Tax Payments (tax_20) The Law Mind Tax Encyclopedia — Estimated Tax Payments Requirements (tax_50)
Related Terms
Constructive payment — Payment deemed to occur by legal fictionwithout actual transfer; the primary contrast term. Deemed payment — Similar to constructive payment; used in tax contexts to assign a payment date by rule rather than by fact. Capital contribution — The obligation to pay inof which actual payment is the required fulfillment in historical partnership law. Tender — An offer to make actual payment; distinguished from actual payment by the absence of completed transfer. Satisfaction — The broader concept of which actual payment is one method of discharge. Limited partnership — The entity context in which actual payment of capital was most litigated historically. Withholding — Tax mechanism creating deemed paymentcontrasted with actual payment of estimated taxes.
ACTUAL PAYMENTmain
Rapalje & Lawrence • 1888
- In statutes permitting the creation of limited partnerships, there is usually a provision that at the formation of the partnership proof must be inade of the actual payment of the capital. What is an actual payment, under such statutes, see 19 Barb. (Ν. Υ.) 283; 34 Pa. St. 344. ACTUAL PLACE OF ABODE, (in tax act). 9 R. I. 240. ACTUAL POSSESSION, (what constitutes). 1 McLean (U. S.) 266; 11 Pet. (U. S.) 41; 30 Iowa 239. (of land, in a statute). 59 Ν. Υ. 134; L. R. 8 C. P. 281, 306; 30 Iowa 239. (in statute relative to determination of claims to land). 7 Hun. (N. Y.) 616; 59 N. Y. 134. will is not my act. Actus non facit reum, nisi mens sit rea: An act does not make a man guilty, unless he be so in intention. AD.-At, for, in, to, near, until. Used in various Latin phrases, such asAd abundantiorem cautelam: For greater caution. Ad admittendum clericum: For the admitting of the clerk. A writ commanding the bishop to admit his clerk, upon the success of the latter in a quare impedit. Ad aliud examen: To another tribunal. Ad audiendum et terminandum: To hear and determine. Ad captum vulgi: Adapted to the common understanding. Ad colligendum bona defuncti: To collect the goods of the deceased. Special let- (under statute, by tenant claiming where the probate of a will, or the appointment of administration granted a "collector," compensation for improvements). Me. ACTUAL RESIDENCE, (in limitation law). 73 11. 16. ACTUAL SALE, (for taxes, what is). 5 Neb. 269. ACTUAL SEIZURE, (under fi. fa.) L. R. 6 Ex. 203. ACTUAL TOTAL LOSS.-A phrase used in marine insurance to denote such loss of property insured as deprives the party insured of the original thing, in distinction from any injury to the property which, although not amounting to such a loss, gives the insured the right to recover the insurance money. See ABANDONMENT; INSURANCE. ACTUAL TOTAL LOSS, (in marine policy). 25 Ohio St. 64. ACTUALLY OCCUPIED, (in a statute). 1 Pick. (Mass.) 387. ACTUALLY RECEIVED, (in a will). L. R. 12 Ch. D. 639. Actuarius.-A notary; one who drew up statutes; a paymaster of soldiers. ACTUARY.-- A registrar of a public body; the manager of a joint-stock company, particularly of an insurance company. In America, the officer who computes or calculates the risks and rates of premium for insurance. of a regular representative, is delayed. Ad communem legem: At common law. An obsolete writ for the recovery, by the reversioner, after the life tenant's death, of lands wrongfully alienated by him. Ad comparendum et ad standum juri: To appear and to stand to the law, i. e. abide the judgment of the court. Ad compotum reddendum: To render an account. Ad custagia, or ad custum: At the costs. Ad damnum: To the damage. The clause in a writ or declaration alleging the amount of plaintiff's loss or injury. Ad diem: At the day. Ad ea quæ frequentius accidunt jura adaptantur: The laws are adapted to those cases which more frequently arise. Ad effectum sequentem: To the effect following. Ad excambium: For exchange, or compensation. Ad exhæredationem: To the disherison. Ad exitum: At the end; at issue. Ad feodi firmam: To fee farm. Ad fidem: In allegiance. Ad filum medium aquæ: To the thread or centre line of the stream. See Ang. Waterc. 4; 5 Binn. (Pa.) 12; 6 Cow. (N. Y.) 518, 579; 3 Greenl. (Me.) 269; 1 Halst. (N. J.) 1; 20 Johns. (N. Y.) 99; 4 Mas. (U. S.) 397; 1 McCord (S. C.) 580; 2 N. H. 371; 5 Paige (N. Y.) 143 4 Pick. (Mass.) 263; 5 Id. 199; 1

Explore the full Law Mind legal research platform.

SubscribeEncyclopediaSign In
The Law Mind Legal Dictionary. This is a legal research library, not a lawyer.
Dictionary • Encyclopedia • Sign In