#### BOLLIN BAKER v. W. D. P. SHARPE, Sr.

(Filed 20 September, 1933.)

Payment B a — Evidence as to instruction for application of funds to debt being conflicting, directed verdict is held erroneous.

Plaintiff was defendant’s tenant farmer, defendant advancing money to plaintiff, and tbe parties sharing the crops equally. The operations for one year resulted in a balance due from plaintiff to defendant in a certain sum. The operations for the next year resulted in a profit and a sum due plaintiff by defendant. There was conflicting evidence whether plaintiff instructed defendant to apply the amount due plaintiff from the second year’s operations to the debt due defendant by plaintiff from the first year’s operations, defendant claiming that plaintiff had instructed him to apply the surplus to the debt. *Held,*a directed instruction in the plaintiff’s favor was erroneous, the evidence as to the direction for the application of the funds being conflicting.

Appeal by defendant from *Parker, J.,*at February Term, 1933, of Wilson. New trial.

This is an action brought before a justice of tbe peace, by plaintiff against tbe defendant, to recover a balance due him on a tenancy agreement for tbe year 1932. Defendant contended that tbe sum due plaintiff for 1932 was applied on a balance due him for 1931. Judgment was rendered in tbe justice of tbe peace court for plaintiff and against defendant, and defendant appealed to tbe Superior Court, where the matter was beard *de novo.*

Tbe evidence was to tbe effect that tbe plaintiff, appellee, tenant, and tbe defendant, appellant, landlord, bad a tenancy agreement for tbe years 1930, 1931, and 1932; that said agreement provided for a division of proceeds from tbe sale of crops on tbe basis of one-half to tbe tenant, one-half to tbe landlord. Tbe landlord, retained all moneys received from tbe sale of said crops and made monetary advances to tbe tenant from time to time, said advances being made from tbe one-half due tbe tenant. In 1931 tbe tenant was in arrears by reason of said tenancy in tbe sum of $146.00. Tbe record discloses that “it is admitted by tbe defendant and plaintiff that tbe plaintiff was to have one-half of tbe crop raised upon tbe lands during tbe year 1932 as bis part of tbe *197crop. Tbe crops were sold by tbe defendant; after tbe defendant bad deducted from tbe proceeds of tbe sale tbe plaintiff’s one-balf interest in tbe crop, there remained tbe sum of $146.00 out of tbe plaintiff’s one-balf share in tbe crop after tbe plaintiff bad paid for all of tbe advances for tbe year 1932.”

Tbe defendant landlord credited tbe amount due tbe tenant plaintiff, $146.00, on bis past due indebtedness. Tbe court below charged tbe jury as follows: “Gentlemen of tbe jury, there is one issue being submitted to you in this case, which reads as follows: 'In what amount is tbe defendant indebted to tbe plaintiff?’ If yoir find tbe facts to be as all tbe evidence tends to show and by its greater weight you will answer tbe issue, 'In what amount is tbe defendant indebted to tbe plaintiff?’ in tbe sum of $146.00. I charge you, gentlemen, as a matter of law, if you find tbe facts to be as all tbe evidence tends to show and by its greater weight you will answer tbe issue, $146.00.” Tbe jury answered tbe issue $146.00. Judgment was rendered on tbe verdict. Tbe defendant excepted, assigned error to tbe charge of the court below, and appealed to tbe Supreme Court.

*George W. Tomlinson and Charles M. Griffin for plaintiff.*

*Sharpe & Grimes for defendant.*

Pee Cueiam.

Tbe plaintiff testified, in part: “Asked for settlement but Sheriff Sharpe would not give me one. I asked him for $146.00. He would not give it to- me. Said I owed it to him on back account. I bad never said anything about paying bis back account.” On cross-examination : “Q. What was said to you, if anything, about paying tbe account of 1931? There wasn’t anything said about it. I never mentioned it. He never mentioned it to me. Did not say anything about it. . . . Q. Did you specify on which account it was to be applied? Yes, I think I notified him. Told him I wanted it put on this last gone year. Told him along about the first tobacco I sold sometime in September. That was tbe only time I said anything to him about it. I didn’t say anything to him about it until I got through paying this year’s, last year’s, expenses.”

Tbe defendant testified, in part: “I said 'What do you want done with it?’ He says, 'I want so much money and pay tbe other on my account.’ Tbe first time I bad notice that there was no settlemebt was when I got tbe summons. Baker never said anything about applying tbe money on any particular account.”

Tbe principle of law is thus stated in *Stone v. Rich,*160 N. C., 161 (163-4) : “There is no rule in tbe law better settled than tbe one in regard to tbe application of payments: (1) A debtor owing two or more debts to tbe same creditor and making a payment, may, at tbe time, *198direct its application to any one of tbe debts. The right is lost if the particular application is not directed at the time of the payment. (2) If the debtor fails to make the application at the time of the payment, the right to apply it belongs to the creditor. (3) If neither debtor nor creditor makes it, the law will apply it to the unsecured debt or the one for which the creditor’s security is most precarious, or, as sometimes expressed, according to its own view of the intrinsic justice and equity of the case,” citing numerous authorities. *Supply Co. v. Plumbing Co.,*195 N. C., 629.

*We*think the exception and assignment of error made to the charge of the court below by defendant, must be sustained. *We*think that there was conflicting testimony as to the application of the money, and it was a question for the jury to determine. For the reasons given, there must be a

New trial.