Case ID: sc-eq_8/html/0380-01.html
Source: Caselaw Access Project
Author: {"author": "O’Neall, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William Stewart v. Thomas Cochran, and Others.
    A factor, to whom his principal is indebted upon several demands, may apply the proceeds of the crops of his principal, sold by him, to the payment of whichever of his demands he prefers, if the principal, himself, has given no direction as to their application. And where the principal was indebted to his factor by judgment, and also by mortgage, for distinct debts, held, that the factor was intitled toretain the proceeds of the crops in his hands, without making any application, until it could be ascertained by a sale of the mortgaged property, whether it would be sufficient to pay the mortgage debt; and if it were not, that he might then apply the proceeds of the crops to the unpaid balance of the mortgage debt, and the residue to the judgment: and that the right of the factor to make such application was not affected by an intermediate assignment by the principal, of his whole estate, for the benefit of his creditors, vide Heilbron v. Bissell, and Warner, post.
    
    Before De Saussure, Chancellor, at Charleston, January, 1830.
    By a former decree in this cause, it was referred to the master, to examine, and report upon, the claims of the creditors of Thomas Cochran, w'ith their respective liens, and priorities ; and the cause now came up upon exceptions to the master’s report, in relation to the claim of Mazydk, Gaillard, & Mazyck, who were creditors of Thomas Cochran, under the following circumstances.
    The claimants were the factors of Thomas Cochran, and had advanced him several sums of money, amounting together to $3,367.77, for which he confessed judgment to them on the 20th March, 1827. Shortly afterwards, they paid for him a debt of $2,000, to the Bank of the United States, and took from the Bank an assignment of a mortgage of slaves, executed by Cochran to secure payment of the said debt. On the 30th March, 1827, they received for a part of Cochran’s crop of rice, sold by them as his factors, the sum of $824.38, and on the 19th May following, the further sum of $1,411.02; making an aggregate of $2,235.40. On the 12th June, 1827, Thomas Cochran executed an assignment of his whole estate in trust for the payment of his debts. The mortgaged slaves were sold by Mazyck, Gaillard, & Mazyck, under their mortgage, on the 7th March, 1828 ; but the proceeds of the sale proved insufficient to pay the mortgage debt, of which a balance of $455.35 still remained due.
    Mazyck, Gaillard, & Mazyck, contended, that they were iutitled to apply the proceeds of the crops of rice sold by them, in the first place to the extinguishment of the mortgage debt, and the residue to the judgment; and then to come in for the balance due them, as judgment creditors. No direction was given by Cochran for the application of the proceeds of his crop of rice in the hands of his factors; but it was insisted, on behalf of the assignees, that Mazyck, Gaillard, & Mazyck, were bound to make an application of the fund within a reasonable time, and not having done so previous to the assignment, they could not do it afterwards: and, at all events, it was urged, that they had made their election by selling the mortgaged slaves, under the mortgage ; inasmuch, as the proceeds of the crops would have extinguished the mortgage debt, and therefore the enforcing the mortgage was an abandonment of the right to apply the proceeds of the crops to the payment of that debt.
    The master was of opinion, that as Cochran bad, himself, given no direction for the application of the proceeds of his crops, his factors had the right to apply them to whichever of their demands they deemed most advantageous for themselves; and their rights could not be affected by Cochran’s assignment. He was further of opinion, that the sale of the mortgaged slaves was neither a forfeit, ure, nor an abandonment, by Mazyck, Gaillard, & Mazyck, of their right to apply the proceeds of the crops as they thought proper; but that they had a right to retain the funds in their hands, until they could ascertain by a sale of the mortgaged property, what application would be most beneficial to them.
    The master therefore allowed the claim of Mazyck, Gaillard, & Mazyck ; and exceptions to his report, on that ground, were overruled, and the report confirmed, by his Honor the Chancellor, who concurred in opinion with the master.
    The assignees of Cochran appealed from the order of confirma. {¡nn and now moved that the same might be reversed, and the exceptions to the master’s report sustained.
    Gilchrist, for the motion.
    Mazyck, contra.
    
   O’Neall, J.

This Court concurs in opinion with the Chancellor, upon the questions, arising out of the exceptions to the master’s report, which have been submitted to us by the present appeal. His decretal order is therefore affirmed, and the appeal dismissed.

Johnson, J., and Harper, J., concurred.

Decree affirmed.