74 Fla. 12 | Fla. | 1917
The appellee exhibited its bill of foreclosure in the Circuit Court for Santa Rosa County against J. F. Spivey, O. C. Bell and their wives, George R. Kline as Trustee of the estate of J. F. Spivey, Bankrupt, Citizens Bank of Moultrie, Georgia, and J. J. Battle of the same place.
'The bill alleges in substance that in January, 1908, Spivey and'Bell as partners engaged in the turpentine business in Santa Rosa County, were indebted to the Williams Naval Stores Company, whose name was afterwards changed to the Jennings Naval Stores Company, in the sum of eighteen thousand five hundred dollars, and executed five promissory notes and delivered them to appellee as evidence of said debt. Three of the notes were for $4,250.00 and became due July 1st, September 15th and November 15th, 1908, respectively; one for $4,470.89 due December 15, 1908, and one for $1,279.61 due January 1, 1909; that a mortgage was executed by the partners to appellee to secure the payment of the principal sum and interest represented by the notes, in which the wives of the mortgagors joined; that the property mortgaged consisted of a certain “turpentine still and the lands situated in Santa Rosa County, Florida, and particularly described as Lots 2, 3 and 4 in Section 1, Township 2 South Range
There was a decree against all the defendants except J:. J. Battle, who answered the bill, and the property dr.dered to be sold. The answer admits substantially the allegations of the bill and sets up the following, defenses:
The argument of appellant’s counsel upon the assignments of error is, that the evidence shows that the indebtedness of Spivey and Bell to the complainant as evidenced by the notes and which the mortgage was given to secure had been paid before the bill to foreclose was filed. Appellee’s counsel contends that the mortgage was made to secure not only the payment of the five promissory notes, but the performance of a shipping contract referred to in the mortgage; that the shipping contract after reciting the making of the notes and mortgage by Spivey and Bell provided for additional advances to be made to them by complainant from time to time, which should also be secured by the mortgage; that Spivey' and Bell should ship to the mortgagee all their naval stores products pro
The testimony consists of numerous contracts, promissory notes, statements of account and the testimony of T. A. Jennings, the president of the complainant corporation.
We gather from the evidence and admissions of counsel in their briefs that Spivey and Bell began business with the company in 1906, and on January 15, 1908, owed the company $17,220.00. It was then agreed that Spivey and Bell should have a limit of credit with the company of $18,500. Notes were taken for that, amount and the mortgage and shipping contract executed. The evidence shows that an account was opened by the complainant corporation against Spivey and Bell in which they were charged with the balance of $17,220.0-0', and the advances during the current year. During the year the account was credited with the proceeds from the naval stores shipped by Spivey and Bell under the shipping contract amounting to $14,893.74,. and on December 7, 1908, a balance was brought down on the debit side of the account of $14,307.12, whereupon another shipping contract was entered into between the parties, wherein it was expressly stated that the company was to make further advances to the partnership during the season of 1909 in-the sum of $2,692.88, and four new notes were taken from
The case. presents a question of application of payments. The fact that an account was opened by the complainant corporation, in which the indebtedness of Spivey and Bell which the mortgage was given to secure was charged and in the same account advances were charged and the account as a whole credited with the net proceeds of each season’s shipments and a new balance brought forward at the beginning of the next year, and this system continued from year to year for eight years, raises a question as to how the net proceeds of the shipments by Spivey and Bell were applied by their creditors. There is nothing in the record to show that Spivey and Bell directed their creditor to apply the credits to either the notes or the amount due for excess supplies or advances; nor is there any evidence that the creditor made any application to either debt. The first shipping contract which was dated January 15th, 1908, contained a clause to the effect that the factor
The rule as to the application of payments which obtains in this State was announced by this Court in Randall v. Parramore & Smith, 1 Fla. 409, as follows: “Where a debtor indebted on several accounts makes a payment he may apply it to either account. If he uoes not, the creditor may do so. If neither does, the law will appropriate it according to the justice of the case, provided there are no other parties interested.” ’ In this case the account of Spivey and Bell was carried by their factor, the complainant corporation, as a running account. The account began with an amount actually due. Notes were taken for that amount plus the amount agreed to be advanced for the succeeding season. The amount actually due however was charged to the account. As advances were made they were duly charged. When the products of the season which were shipped by Spivey and Bell were sold the net proceeds were credited to
It is too late for a creditor to claim a right to make an appropriation after a controversy has arisen. United States v. Kirkpatrick, supra. In this case we think the credits should be deemed to be payments pro tanto of the debts antecedently due. This seems to have been the intention of the parties as shown by the shipping contract referred to in the mortgage of which it may be sáid Battle was charged with notice. ’ For. by the provisions of that contract, the factor had the option to make fresh advances to Spivey and Bell, “when payment is made from time to time upon the aforesaid debt of the parties of the second part.’’ These “fresh advances” were to be made on promissory notes or open account and in such sums as the factor deemed expedient. It has.already been shown that “fresh advances” were made largely in excess of the advances agreed upon in the shipping contract and definitely stated and incorporated in the sum for which the notes were taken.
The shipping contracts made subsequently to the one referred to in the mortgage, were each new and distinct transactions of which Battle had no actual or constructive notice, and was not therefore advised of, nor took his judgment subject to the provision appearing in all of such contracts to the- effect that “all indebtedness so incurred by the parties of the second part shall be secured by the lien of the mortgage last above mentioned;” nor the further provision that “if any of the foregoing notes or. their renewals, or any installment of interest upon them, shall remain xinpaid when due, or if- any of-the advances provided for herein shall not be paid at the time when due according to the agreement between the parties hereto or if any stipulation or covenant in this agree
The bill alleges that on July 1, 1915, there remained due upon the “mortgage and the indebtedness secured théreby” a certain sum. The mortgage expressly states that it was intended to be and is a mortgage to “secure payment of five promissory, notes all bearing date January 15th, 1908,” and further particularly described as security for the performance on the part of Spivey and Bell of “a certain contract which is called a shipping contract of even elate herewith,” etc.
The payments made by Spivey and Bell being applied to the payment of the original indebtedness and the “fresh advances” made to them under the shipping contract of January 15th, 1908, have extinguished the indebtedness that existed when the mortgage was executed and the “fresh advances” under the contract of that date. There was therefore no basis in the evidence for the decree of June 20th, 1916. The decree is therefore reversed, with directions to enter a decree in favor of J. J. Battle and against the Jennings Naval Stores Company for the amount of the judgment obtained by J. J. Battle against Spivey and Bell and interest thereon and costs.