Court Opinion

ID: 7814605
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:31:01.805535+00
Date Added: 2024-06-11T16:30:34.070239
License: Public Domain

George Rose Smith, J., dissenting. It seems to me that the majority’s action in reducing Morse’s judgment, by the amount of $1,394.26, is contrary to settled principles of law. A somewhat more detailed statement of the facts will make my position clear. In 1952 Keepers did certain construction work for Morse, under an agreement by which Keepers was to furnish the labor and Morse was to furnish the material. Upon the completion of that project Morse owed Keepers $2,379 for the labor he had supplied. Needless to say, that money was owed to Keepers personally and was of no concern whatever to Dr. Wilson. Instead of paying Keepers in cash Morse undertook to apply the $2,379 as a credit upon its books. At that time Keepers owed Morse about $1,400 upon a personal account of his own, and in addition there was a large unpaid balance for the construction of the third school building, the latter being referred to as the Greenland Gym job. In applying the credit of $2,379 Morse credited the entire amount to the Greenland Gym job. The trial court was warranted in believing from the evidence that Keepers knew nothing of this bookkeeping entry when it was made. Upon the basis of'this credit Morse sent Dr. Wilson a statement in the sum of $1,197.28. Wilson discussed the matter with Keepers; the trial court, as the trier of the facts, was at liberty to infer that Keepers then learned for the first time that the money due to him personally had been credited to the Greenland Gym job. Keepers got in touch with Morse and directed that part of the $2,379 be used to extinguish his personal indebtedness to Morse. Keepers undoubtedly was entitled to take this action, as it is familiar law that tbe debtor has tbe primary right to direct the application of payments. Harrison v. First Nat. Bk. of Huntsville, 117 Ark. 260, 174 S. W. 553. Conversely, Morse had no choice in the matter except to obey Keepers’ instructions in the matter. All that happened was that Dr. Wilson, who is now found to have actually owed the Greenland Gym account, was temporarily given credit for money that belonged to some one else. This mere bookkeeping entry was promptly corrected, and it is not contended that Dr. Wilson in any way relied upon the error to his detriment. For their conclusion the majority cite only the National Surety Company case and the Smart case. Neither case is relevant to this one except for the general statement that an appropriation of a payment, when made, cannot be changed to the prejudice of a third person. This rule has not the slightest application to the ease at bar. To begin with, there was no appropriation until Keepers acted, as the right of appropriation belonged to him. In the second place, Dr. Wilson has not been prejudiced in any proper sense of the term. He was temporarily credited with money that belonged to Keepers alone — money to which Dr. Wilson had no present claim. Before Dr. Wilson changed his position in any respect the erroneous credit was properly withdrawn at Keepers’ direction. If prejudice results from the deletion of a credit to which the debtor was never entitled, it obviously follows that in no instance can a mistake in a creditor’s statement of account ever be corrected. Of course that is not the law, notwithstanding the majority opinion in this case.