Bell v. Bell

20 S.C. 34 | S.C. | 1883

The opinion of the court was delivered by

Me. Chief Justice Simpson.

This action was brought for the settlement of the estate of Willis B. Huckabee, deceased, who died in March, 1865, bequeathing his estate to plaintiffs, and several of the defendants, his children; the defendant A. A. Huckabee, one of them, being appointed executor. The will directed that each of the legatees should account to the estate for whatever amounts they might be indebted thereto, without interest.

It appeared that some time before the death of the testator, h> wit, in August, 1873, the defendant J. J. Huckabee executed a note to his father, with W. C. Huckabee, his brother, as surety, for $2,905; that in February, 1874, these parties confessed a, judgment to W. B. Huckabee on this note, amounting at that time to $3,006.68. It further appeared that, on account of certain dealings between J. J. Huckabee and the defendants Witte Bros., of Charleston, the said J. J. Huckabee, on or before January 22d, 1874, had become indebted to the said Witte Bros, in the sum of $2,000, for which Huckabee gave his note at said date, with W. B. Huckabee, the testator, and A. A. Huckabee, as his sureties, with interest at the rate of fourteen per cent, per annum, and payable on or before December 1st, 1874. At the same time, as further security to this note, and for supplies to be advanced to him to an amount not exceeding $1,200, with interest at fourteen per cent., he executed a mortgage to Witte Bros, of a tract of land containing 1,150 acres, situated on the waters of Wateree river in Kershaw county.

This mortgage bore date prior to the confession of judgment of J. J. Huckabee and W. G. Huckabee to their father, the testator. The plaintiffs, however, claimed that the debt had been satisfied by produce consigned by Huckabee to "Witte Bros., and one object of the complaint was to have it so declared in order that the land of J. J. Huckabee covered by this mortgage might be sold to pay the judgment confessed to the testator free from the cloud of the mortgage; and to this end Witte Bros, were made parties to the action, who answered, denying that their mortgage had been satisfied, and alleging that the confession of judgment was without consideration, and, therefore, void. J. J. Huckabee and W. G. Huckabee also set up the defense that the confession was without consideration; and J. J. Huckabee further claimed that his father was largely indebted to him for services as manager of his father’s business from 1851 to 1862 — nine years and seven months, and again from 1865 to 1872, six years and eight months — and for other services' as blacksmith at the rate of $300 per annum; and further, for one-third interest in a tract of land, known as the Jack Nelson land, which he alleged had been purchased by his father with the understanding that he was to have one-third interest therein.

The case was referred to the master, who, after full testimony, reported that the judgment by confession was founded upon a sufficient consideration, to wit, a store account, and was a valid judgment; that the Witte Bros.’ mortgage had been satisfied by sales of produce shipped by J. J. Huckabee, and that the claim of J. J. Huckabee against the estate of his father was stale and barred by the statute of limitations; and he recommended that out of the proceeds of the . sale of the 1,150 acres of land mortgaged to Witte Bros, the judgment confessed to the testator, W. B. Huckabee, be first paid, and the balance, if any, be applied to a second mortgage of Witte Bros., executed in 1875, and junior to the judgment confessed.

Upon exceptions to this report, Judge Wallace sustained it, except as to the satisfaction of the Witte Bros.’ mortgage; as to this, he held that the note of $2,000, secured by said mortgage, had not been paid, and he ordered the land sold, the proceeds thereof to be applied first to the amount and interest of said note, and, after the satisfaction therof, then to the judgment against J. J. Huckabee and W. G. Huckabee, and any balance to the second mortgage of Witte Bros. From this decree the plaintiffs and the defendant J. J. Huckabee have appealed; the plaintiffs upon the ground that his Honor should have held, upon the facts and law of the case, that the $2,000 note secured by mortgage to Witte Bros, had been paid; and the defendant, upon the grounds : 1. Because his Honor erred in sustaining the report of the master, wherein he held that defendant’s whole claim for services was barred by the statute of limitations; 2. Because his Honor erred in sustaining the report of the master, wherein he holds that the demand for one-third of the Jack Nelson land, set up by J. J. Huckabee, was untenable; 3. Because his Honor erred in sustaining the master’s report, that the confession of judgment was a valid and subsisting debt.

We will take up the plaintiffs’ exceptions first. To a proper understanding of the question raised in this exception, it will be necessary to go a little deeper into the facts connected with the business transactions of J. J. Huckabee and Witte Bros. It seems that Huckabee was a planter in Kershaw county, and that he obtained his supplies, &c., necessary to the running of his farm, from Witte Bros, merchants, in Charleston, to whom he shipped his cotton and other produce; that at the end of the year 1873, the balance against Huckabee, in favor of Witte Bros., was something over $2,000, for which Huckabee gave his note (the note in question). The account of 1873, on the books of Witte Bros., was left standing, no entry of the note as a credit being made; the balance of 1873, including the $2,000, being carried forward and left standing as the first entry on the account of 1874.

At the time the note was taken, as has already been stated, Witte Bros, agreed tó advance, for the year 1874, an amount not to exceed $1,200. And with the view to secure this note and the advances agreed upon, Huckabee then executed the first mortgage, to wit, in January, 1874. During that year Witte Bros, furnished supplies considerably over the amount agreed upon, to wit, $3,229.80, instead of $1,200. In November, Huckabee began to send forward cotton to Witte Bros., which he continued to do until January, 1875. The proceeds of this cotton were credited upon the account of Huckabee, no part being paid to the note.

In January, 1875, Witte Bros, agreed to make advances for that year to an amount not to exceed '$3,000, with interest at fourteen per cent., to be paid in December, 1875; and Huckabee agreed to send forward his crop of cotton for that year, the proceeds to be applied to pay expenses of papers, the advances and interest, “ and then to the payment of any amounts that may now be due ” to them; and should any balance remain, to be placed to the credit of Huckabee. That agreement was in writing, and contains a lien on the crop and a mortgage on the 1,150 acres before mentioned, to secure the $3,000 and interest, and also the sum of $2,000 now due for past advances. At the end of the cotton season for 1875, upon a balance being struck, March 28th, 1876, Huckabee was indebted $3,746.10, which included the $2,000 note.

The parties had little or no dealings in 1876. Their relations, however, were renewed in 1877, when further advances were made during that year. No balance was struck in 1877-8 or 9, but on January 26th, 1880, a balance is struck of $223.69 in favor of Huckabee, which balance, it is admitted, should be credited on the balance against him in 1875, to wit, the $3,446.10. This amount, to wit, $3,446.10 — $223.19, is the amount claimed by Witte 'Bros, in the account up to March 28th, 1875, including the $2,000 note and interest. It is not contended that the first mortgage secures any portion of this balance except the $2,000 note and interest, and the sole question is, whether, under the facts as above, that note should be regarded as paid.

The solution of this question depends upon the principles applicable to the application of payments. This doctrine has been much discussed both in England and also in the American States; and because of the contrariety in the decisions much confusion has resulted. This has given rise to a separate work on the subject by Mr. George H. Munger, where numerous cases are collected and discussed. At one time and in many cases in England, the civil law, which seemed to regard the interests of the debtor as most to be protected, was followed; at another and in other cases, the creditor was the favorite. ' Finally, as Mr. Munger concludes, the rule adopted in Great Britain and most of the States of this country, is as follows (Munger, ch. III, p. 10): 1. Where money is paid by a debtor to his creditor, the debtor has a right to make the appropriation to which account he pleases. 2. If the debtor make no appropriation, then the creditor may apply it at his own pleasure to the satisfaction of any demand which he has against his debtor. 3. If neither party make any such application, then if there be various debts due the creditor, the court will make the application according to its own view of the law and equity of the case under all the circumstances.

In our State this doctrine has also been much discussed and a conclusion reached somewhat in unison with the above principles, but rather more distinctly defined and limited. The most important of the cases in our reports are the following: Smith ads. Screven, 1 McCord 368; Black v. Shooler, 2 McCord 294; Schnett v. Schroder, Bailey Eq. 342; Heilbron v. Bissell and Warner, Bailey Eq. 430; McDonald v. Pickett, 2 Bailey 618; Carson v. Hitt and Jones, 1 McMull. *83; Jones v. Kilgore, 2 Rich. Eq. 66; Brice v. Hamilton, 12 S. C. 37. In the first three cases the proposition first above stated is distinctly announced, to wit: that a debtor when he makes a payment has the right to direct and control the application. This seems to be the well-settled doctrine everywhere. The second proposition, as a general rule, is also well settled, to wit, that the creditor may make the application if the debtor has not done so. This was held in Schnett v. Schroder, supra, and in Heilbron v. Bissell and Warner, supra. It was further held, that the creditor in making the application was not limited as to the time within which he may do so, in accordance with Stewart v. Cochran, Bailey Eq. 380. And in Brice v. Hamilton, 12 S. C, supra, the last case upon this subject, this court held, that when the debtor directs no application at the time of payment the rule is that the creditor may make the application at any time before judgment or verdict; approving Heilbron v. Bissell and Warner, and limiting Jones v. Kilgore.

In Heilbron v. Bissell and Warner, Chancellor Harper goes fully into a discussion of the whole subject, and after a thorough and most able examination of the prominent decisions, concludes in opposition to the leaning of the master of the rolls, as follows: “ With the respect due to so great an authority, I have examined the cases referred to and some others on the same subject, and my •conclusion is, on the preponderance of authority, that the creditor has the unlimited right to appropriate, when the debtor has made no appropriation at the time of payment.” This, then, seems to be the law in our State, and such being the law, the third proposition above is not very important, as it will not be often that the creditor would fail to exercise his right. It was said, however, in Jones v. Kilgore, if neither party would fix the .application, then it devolves on the court, and will be made pro tanto to the demands held by him who receives the money, or if one demand be less secured than the other the application would be made to it in the first instance, citing 5 Mason 82; 4 J. J. Marsh. 97; 9 Cow. 420.

Now, apply these principles to the facts of this case. The payments made by Huckabee to Witte Bros, in 1874, after the $2,000 debt had been contracted and the note therefor given, were made from the proceeds of the cotton shipped by Huckabee after November of that year. There is no evidence that Huckabee gave any directions as to the precise application when the consignments went forward. In the absence of this, Witte Bros, had the right to make the application which in their answer they say they did do, making the application to the advances of that year. This application was subsequently recognized as proper by Huckabee in the agreement made the next year, 1875, for advances of that year, as that agreement contains a lien on the crop and a mortgage on the. 1,150 acres of land to secure said advances, and also the sum of $2,000, due for past advances with the interest thereon. Besides this, wé think that the same result would follow from a careful examination of the original contract between the parties, and a proper construction thereof.

At the close of the year 1873, Huckabee was found indebted about $2,000; this was ascertained, and a note given for the amount, with delay of payment until December, 1874. This note was given by Huckabee, with his father and brother as sureties. It is true the amount was carried forward at the head of the account for 1874. This was, no doubt, done early in the year, and before it was settled by note; the note was not given until January 20th¿ 1874, and standing at that time in the shape of an account, it was never changed; yet, the facts are that the debt was ascertained, and was closed up by note before the business of the next year commenced. The argument of the appellant is that, notwithstanding the arrangement made as above, yet the debt of 1873 and 1874 was all one debt, represented by a running account; and that, under the law, where payments are made in such a case, the payments should be applied to the first items; and many authorities are referred to sustaining this latter proposition. These are not denied. The general rule of law, no doubt, is as stated; but, in our judgment, the facts do-not fit. We think there was a separation here of the two debts;, one was ascertained and liquidated before the - other was contracted ; one was present and the other in the future, when the mortgage was given, and the doctrine of the application of payments to two or more debts applied, and sustains the ruling of Judge Wallace on this subject.

As to the claims of J. J. Huckabee against the estate of his father for services, &c., and also his claim for a portion of the Jack Nelson land, the findings of fact and law of the master have been approved by Judge Wallace. We see no reason to disturb either. There seems to be no foundation in the facts for either claim; and, certainly, as to the first, the statute of limitations would be a complete answer in any event.

As to the judgment confessed by the Huckabees, the master finds as matter of fact that it was based upon a store account. The Circuit judge sustains this finding; and further, he states that there is nothing to show that Willis B. Huckabee, the plaintiff in the judgment, had any knowledge that the design of J. J. Huckabee or W. G. Huckabee, in confessing the judgment, was to hinder, defeat or delay their other creditors. We cannot say that these findings have no support in the testimony.

It is the judgment of this court that the judgment of the Circuit Court be affirmed.