Court Opinion

ID: 3982842
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:39:24.292859+00
Date Added: 2024-06-11T13:53:43.027553
License: Public Domain

On Motion for Rehearing.
Plaintiff, Bankers Life Company, appellee here, has filed its motion for rehearing in this case, insisting that we erred in our original opinion when we concluded its pleadings were not sufficient to support the judgment rendered. It also insists that we erred in holding that, under the law and facts, the payment of the $6,000 in August, 1932, should have been applied to the liquidation of interest due.
We perhaps did not express all the reasons that might have been urged in support of the conclusions there reached by us, and because of the insistence of plaintiff's motion and the authorities cited we feel persuaded it is entitled to a fuller discussion of the subject.
The petition of plaintiff and the testimony offered in support of it, we believe, show beyond question that its action was prematurely brought; yet, because the pleadings were so drafted that they were somewhat uncertain, and for the further reason that they might reasonably be interpreted differently from the manner in which we construed them, we reversed the judgment and remanded the cause rather than render it. Article 1856, Rev.Civ.Statutes; Williams v. Safety Casualty Co. (Tex.Sup.) 102 S.W.2d 178.
The petition discloses there was only one debt or claim held by plaintiff. It consisted of a note and interest accruing thereon. That when the $6,000 payment was made by the executor to plaintiff, it was allowed as a credit on plaintiff's claim, the allegation being: "Said claim and promissory note have been duly credited with the sum of $6000.00 as of the 27th day of August, 1932."
There is no allegation that plaintiff ever applied the payment to the principal of the note to the exclusion of interest due thereon. Even if it had made such application, in the absence of an agreement between the parties to that effect, we do not think, under the rules of equity, it could be permitted to stand.
The rule is well settled in this state that if a debtor owes more than one obligation to a creditor, he may direct the application of any payment made, to either *Page 1117 
of his obligations he may choose. If no designation is made by the debtor, then the creditor may apply the payment to such of the several debts as he may desire, provided he does so at a time and in a way to be fair, right, and equitable to the debtor. Parrish v. Haynes (C.C.A.)62 F.2d 105; Stone v. Pettus, 47 Tex. Civ. App. 14, 103 S.W. 413; Bray v. Crain, 59 Tex. 649; Taylor v. Coleman, 20 Tex. 772; Snyder-Bell Grocery Co. v. Hamilton (Tex.Civ.App.) 276 S.W. 752; Bitter v. Bexar County (Tex.Com.App.) 11 S.W.2d 163.
The pleadings show the principal of the debt was due August 1, 1937, with interest maturing each year. The payment of $6,000 was shown to have been made on August 27, 1932, and the suit was instituted June 18, 1933. If plaintiff had applied the payment to interest due then, no other installment was due prior to the institution of the suit, and plaintiff was therefore not warranted in declaring the principal on the note due. If it had applied the payment to undue principal and left matured interest unpaid, thereby enabling itself to accelerate the maturity of the principal, it would have been unfair to the defendants and highly inequitable. "Equity looks on that as done which ought to be done." "Equity follows the law." Absent a showing that the payment was applied to the principal by the creditor at a time when it was fair and equitable to the defendants (and we scarcely can see how it could have been done in this case), the law will apply the payments to the interest due, as stated in our original opinion.
We have had no case called to our attention, nor have we been able to find one, which goes so far as to say that under any conditions could the creditor exercise an option to apply a payment to the principal of an unmatured note, and leave past-due interest unpaid, and when thus applied, declare the remainder of the principal due because of failure to pay the interest. It is so manifestly unjust and unreasonable we cannot perceive of it being done. The plaintiff in this case has not in so many words insisted upon such a right, but fair deductions from the pleadings strongly point in that direction. We cannot lend our aid to such a contention.
As early as 1876, in the case of Lowery v. Dickson, 1 White 
W.Civ.Cas.Ct.App. § 497, the whole rule applicable to the principle here involved was tersely stated in this language: "A debtor who owes his creditor money on distinct accounts may direct his payments to be applied to either, as he pleases. If the debtor makes no such appropriation, the creditor may apply the money as he pleases. If neither party makes a specific appropriation of the money, the law will appropriate it as the justice and equity of the case may require. * * * But the creditor cannot prefer a debt not due to one due or overdue."
What we have said with reference to the application of the $6,000 payment in a great measure eliminates the necessity for us to further discuss plaintiff's contention that by fair deductions and reasonable intendments, its petition should be construed to mean that sufficient allegations were made that the debt sued on was due when the suit was instituted.
Plaintiff insists that we should have passed upon other assignments of error pointed out by defendants in their brief wherein the question of res adjudicata is raised. Because of the nature of defendants' pleadings below, we do not consider they were entitled to have that question determined either in the court below or here, and this prompted us to not discuss them upon original hearing. If and when the matter is raised by proper pleadings, those matters may be determined.
We see no reason to change our conclusions as expressed in the original opinion, and the motion for rehearing is overruled. *Page 1119