268 P. 46 | Nev. | 1928
It was the duty of the Portland Cattle Loan Company, even if there were no indorsers on the note, in the absence of any agreement to the contrary, to apply the proceeds from the sale of the mortgaged stock towards the payment of the mortgaged indebtedness, but when there are indorsers on the note and other interested parties it becomes obligatory upon them so to do. 27 Ency. Law and Procedure, page 1394, paragraph E, citing in connection therewith Ellis v. Mason, 10 S.E. 1069 and other cases; 30th Ency. Law Procedure, page 1237, paragraph F; numerous citations of authorities in No. 8 at page 1237, 30th Ency.; 30th Ency. page 1248, paragraph 8; Hicks v. Bingham, vol. 11, Supreme Court Mass. page 302; Strictland v. Kendall, 3 So. 41; Frazier v. Lanahan, 71 Maryland, 131; 17th Am. St. Rep. 517; Nixon v. Culvert, 57 N.W. 285; Winston v. Farrow,
The rule is almost universally laid down that guarantors, sureties, indorsers and other third parties have no interest in the method of the application of funds by either a debtor or creditor. Wyandotte Coal Co. v. Wyandotte Pav. etc.,
The findings and verdict of a court or jury will not be disturbed by the appellate court where there is any evidence on which the court or jury could have reasonably formed their conclusions. McNee v. McNee,
The action was tried before the court with a jury. Special issues were submitted to and answered by the jury, which were adopted by the court in its findings. Substantially the issues found by the jury and adopted by the court were as follows: That the note and mortgage sued upon had not been paid; that there was no understanding between the plaintiff and the defendant, Wheeler Stoddard, Inc., and defendant C.S. Wheeler and Lytton Stoddard, or either of them, that the money received from the sale of the mortgaged stock should be applied to the payment of the note and mortgage sued upon in reference to any other account between the parties; that plaintiff notified the defendant, Wheeler Stoddard, Inc., that the money received from the sale of the stock was not applied on the note and mortgage, and that the latter had notice from the plaintiff, or knowledge that the money so received was applied on the drawing account and other indebtedness between the parties and not upon the note and mortgage; that the plaintiff on or about the 3d day of November, 1922, informed defendants Carl Wheeler and *58 Lytton Stoddard that it had applied all except about $7,500 of the $31,374 received from the sale of the mortgaged sheep to the current or open account of Wheeler Stoddard, Inc., and not to the payment of the note and mortgage sued upon in this case.
This case presents the question whether the appellants were entitled to have the proceeds of the sale of the mortgaged sheep applied to the satisfaction of the mortgage debt.
1. It is a general rule that in the absence of an agreement to the contrary, money realized from the sale of mortgaged property must be applied on the mortgage even without direction to that effect. But there in an exception to this general rule, which is sustained by ample authority. In 21 R.C.L. 97, the author, referring to the general rule which appellants claim is controlling in this case, states:
However, "a mortgagor, if he sees proper, may consent to adopt or ratify an unauthorized application of payment made by his mortgagee creditor of the proceeds of mortgaged property to an unsecured debt. Whether the mortgagor has consented to either is a question of fact to be determined by the jury, and the burden is upon the mortgagee, in either case, reasonably to satisfy the jury of such consent or ratification."
This rule was stated in Boyd v. Jones,
We are of the opinion that the facts of this case bring it within the exception stated. As said in Cain v. Vogt,
"Rules which bind the mortgagee who sells upon foreclosure, or takes possession of and sells and converts the security have little application to a case where the payment is made from money obtained by a voluntary sale" of the property.
2. Such is the case here. The sale, while made at the request of the mortgagee, was voluntary. A representative of the respondent merely assisted in finding a buyer. The jury found, as we have seen, that appellants Wheeler Stoddard, Inc., Carl Wheeler and Lytton *59 Stoddard, were notified by respondent of the application of the money received from the sale of the mortgaged sheep to the payment of the balance due on the first mortgage and to the running account, and that they had knowledge of such application. They acquired this knowledge by notice in writing from the respondent in November, 1922. This suit was instituted on March 31, 1924. During the intervening time appellants made no protest against the action of respondents, or demand for an application of the money to the extinguishment of the mortgage debt. Their silence in this respect during this long period, with knowledge of the fact that respondent had applied the payment to the first mortgage and on the running account, amounts to a ratification of such application, and they cannot now be heard to insist that the second mortgage debt should have been preferred.
3. The point is made by appellants that the evidence does not support the finding of the jury and court that they received notice from the respondent of the manner in which the money received from the sale of the sheep was applied.
After carefully reviewing the evidence we are of the opinion that it is sufficient to sustain these findings.
Mr. E.E. Williams, the credit manager and assistant secretary of respondent, testified that the money obtained from the sale of sheep covered by the mortgage was received by his company on November 3, 1922, and applied to the payment of the first mortgage and on the running account; that on the same day or the following he sent to Wheeler Stoddard, Inc., the company's official receipt for the money, to which was attached a statement showing the amount applied in payment of the balance on the first mortgage and the amount applied to the running account; that they never to his knowledge made any objection to the method by which the money was applied. There is also further evidence on this point furnished by an agreement between D.C. Wheeler, Inc., and Wheeler Stoddard, Inc. This agreement was signed by appellant C.S. *60 Wheeler for D.C. Wheeler, Inc. C.S. Wheeler was president and general manager of Wheeler Stoddard, Inc. The agreement was executed on November 13, 1922. It provided for the sale to D.C. Wheeler, Inc., of the remnant of the live stock, consisting of cattle, remaining covered by the second mortgage after the sheep subject to it had been sold, and the proceeds of the sale remitted to respondent. This agreement reads in part:
"* * * made this thirteenth day of November, 1922, between D.C. Wheeler, Inc., by its manager, C.S. Wheeler, and Wheeler Stoddard, Inc., whose action is hereby approved by the undersigned Parry Black, representative of the Portland Cattle Loan Company, which latter-mentioned company hold the live stock herein mentioned under a mortgage."
It also contains the following clause:
"The title of the above cattle is to remain in Wheeler Stoddard, Inc., and the mortgage held by the Portland Cattle Loan Company is not to be released until the full amount of money has been turned over to them, i.e., the sum of seven thousand one hundred and ten dollars ($7,110.00)."
4. The property described in the agreement is the same property which was the subject of this action on the foreclosure proceedings in the court below. It was executed something like ten days after the money for the sheep was remitted to respondent and a statement of its application rendered Wheeler Stoddard, Inc., as testified to by Williams. Consequently, it tended to show by the clauses recognizing that the live stock was still held under a mortgage that appellants had knowledge of the manner in which the money for the sheep had been applied and had acquiesced therein. It is true that C.S. Wheeler testified that Wheeler Stoddard, Inc., received the receipt for the moneys, but that no statement showing how the money was applied was received. However, on this evidence the question of notice and knowledge was for the jury and court.
5, 6. It is urged in behalf of appellants, C.S. Wheeler *61
and Lytton Stoddard, that they, being individual indorsers on the note secured by the mortgage, had the right to have the money derived from the sale of the sheep applied in satisfaction of the mortgage debt. There is no merit in this contention. The law is well established that the right of appropriation of money to one of several debts owing to the same person is a right existing exclusively between the debtor and creditor. 30 Cyc. 1251; Gordon v. Hobart, 2 Story, 243; Wyandotte Coal Co. v. Wyandotte Pav. etc.,
The general rule is thus stated in Cyc., supra:
"Third persons, such as guarantors, sureties, indorsers, and the like, secondarily liable on one of the debts, cannot control the application of a payment by either the debtor or the creditor, and neither the debtor nor the creditor need apply the payment in the manner most beneficial to such persons."
"But this right of appropriation," said Judge Storey, in Gordon v. Hobart, "is one strictly existing between the original parties; and no third person has any authority to insist upon an appropriation of such money * * * where neither the debtor nor the creditor have made or required any such appropriation."
In Wyandotte Coal Mining Co. v. Wyandotte Paving Co., supra, the court said:
"The right of appropriation of payments belongs exclusively to the debtor and creditor, and a third party cannot be heard to complain of a different appropriation from that agreed upon by the debtor and creditor."
The facts of a given case may bring it within an exception to the general rule, such as where the money paid is the money of the third party. But in such a case it has been held that "the creditor must know that he is receiving the third person's money or there must be *62 facts sufficient to put him on notice." Thacker v. Bullock Lumber Co., supra. The money in this case belonged to the debtor primarily liable, the Wheeler Stoddard, Inc., C.S. Wheeler and Lytton Stoddard as individuals had no interest in it, and consequently, under the rule applicable, had no right to insist upon an appropriation favorable to them.
Counsel for appellants in his brief makes a number of contentions based on alleged errors at law occurring at the trial. These are not considered for the reason that on a motion formerly heard and decided by this court in this case the memorandum of errors in this court involving errors at law occurring at the trial was struck from the record on appeal.
The judgment should be affirmed, and it is so ordered.