Court Opinion

ID: 9830467
Source: CourtListenerOpinion
Date Created: 2023-09-01 20:14:05.765813+00
Date Added: 2024-06-11T12:24:21.387966
License: Public Domain

On Motion for Rehearing.
[8] Appellee presents an insistent motion for rehearing, contending that the $105.10 prorated by the court below, and by this court wholly allowed as a credit on the $418 note first declared upon in appellee’s petition, was not a voluntary payment by the defendant Jenkins, in tlie sense that he was thereby, as we held, entitled to direct its application, and that therefore appellee had the right, under the authorities hereinafter cited, to apply the payment in whole or in part to the note for $155, also declared upon. The basis for the contention is a provision in the mortgage given to secure the first note that in general terms is made to apply to any future indebtedness, and the following cases are cited in support of the contention: Case Threshing Machine Co. v. Matthews, 188 Mo. App. 429, 174 S. W. 198; Rush v. First National Bank, 160 S. W. 325; Taylor & Co. v. Cockrell, 80 Ala. 236.
In the case first cited, which was by a Missouri Court of Appeals, it was said, among other things, that:
“Whore a creditor holds several securities for the same debt, he is entitled to enjoy the full benefit of all without restriction, unless some contractual stipulation provides otherwise. For instance, if the creditor holds several notes, as- here, against the same debtor, all of which are secured by a mortgage, and on one or more of the notes a personal security is bound as well, he is entitled to the benefit of all of the securities he has taken. Therefore, if the property be sold under the mortgage, the creditor may apply the proceeds of the sale to the payment of the notes not otherwise secured, and pursue the personal security for the payment of tlipse to which he has affixed his name in assurance of their payment; otherwise, the creditor will be denied the right to the benefit of all of the security he has taken for the debt. The point has been expressly decided, as will appear by reference to the following cases: Mathews v. Switzler, 46 Mo. 301; Sturgeon Bank v. Riggs, 72 Mo. App. 239.”
It is insisted that the facts of this case bring it within the principle so declared. We find that the mortgage given to secure the $418 note signed by Jenkins and his sure*1095ties, J. A. Donolio and W. L. Donolio, contains the following recitals:
“This conveyance, however, is intended as a trust for the better securing R. Morgan, of Grandview, Texas, in the payment of my indebtedness to them, the same being evidenced by a certain promissory note, of which the following is a substantial copy:
“ ‘$418.00 Grandview, Texas, 5/23/1914.
“ ‘Oct. 1, 1914, after date, without grace, I, we, or either of us, promise to pay to the order of R. Morgan, of Grandview, Texas, four hundred and eighteen dollars, for value received, at the Farmers’ & Merchants’ National Bank, with interest from maturity at the rate of ten per cent, per annum and ten per cent, of principal and interest for attorney’s fee, if placed in the hands of an attorney for collection.
“ ‘Due. . “ ‘No. P. O. W. N. Jenkins.’
“And, whereas, it is contemplated that the first party may hereafter become indebted unto R. Morgan, of Grandview, Texas, in the further sum or sums of money to the amount of $150.00, either by note or open account, which said indebtedness now accrued, or to accrue in the future, it is agreed, shall all be payable at Grandview, Texas, and bear interest at the rate of ten per cent, per annum from date of actual accrual until paid, by whatever means the same shall accrue; and this conveyance is made for the security and enforcement of the payment of the said present and future indebtedness.”
There is, therefore, at least apparent force in the contention appellee now makes that the error of the trial court, if any, was in not applying the entire $105.10 payment to the $155 note only secured by a chattel mortgage. But after a careful consideration of the entire record we find ourselves indisposed to disturb our original conclusions. In the first place, we are not all entirely agreed that the payment of the $105.10 by Jenkins was not a voluntary payment, the writer particularly being inclined to think it was, in which event, under all of the authorities, Jenkins had the right to direct the application of the payment, as he undoubtedly did; and, second, that regardless of whether the payment was voluntary, we all are of opinion that its proper application is as announced in our original opinion. As we construe the evidence, we are not inclined to the view that the appellee’s first mortgage covered the debt evidenced by the $155 note. The provision quoted is evidently part of a printed form in common use by merchants who take crop mortgages, for the identical provision appears in the chattel mortgage given to secure the $155 note, and to this debt nothing appears indicating that the provision has any relevancy. The evidence shows that the first mortgage matured by its terms on October 1, 1914. The second matured on November 15, 1914, and contains the following express provision:
“It is agreed that R. Morgan will extend the payment of this note [the $155 note], or any part thereof, provided I am unable to pay it all this fall.”
The second mortgage covered an indebtedness in excess of the indebtedness to which the future or contingent indebtedness was limited in the first, and, as shown by the evidence, the future indebtedness in contemplation at the time of the execution of the first mortgage bears no relation to a stump puller, for which the second note was given, but had reference to the usual account for farm supplies. To illustrate: Ap-pellee in testifying said:
“Mi-. Jenkins read the mortgage that secured the $418 note. He made no complaint about it. He had it in his hand and signed it. He heard the part of it read there that provides for $150 additional indebtedness, and we discussed about Jenkins buying more goods from me. The account amounted to $58.93. The books there will show the amount of this account.”
At another point he testified:
“Jenkins had the mortgage [the $418 mortgage] in his hands and signed it. We discussed, about Jenkins running an account and buying goods from me.”
The stump puller, for which the $155 note was given, and upon which the second mortgage rested, seems to have been later secured by Jenkins in furtherance of an object altogether disconnected with farm supplies for that crop year. He testified:
“Some time later I wanted to buy a stump puller. There was about 65 acres of stumps on the place I was working, which belonged to Mr. George Hurley, and he told me that if I would clear it of stumps he would give me all I could make off of about 180 acres of land for two years. This 180 acres of land included the 65 acres that was in stumps. I had previously cleared a part of this land, and a part of it was in pasture; but I was to get all I could make off of the 180 acres for two years, if I would clear the 65 acres of stumps. I was trying to buy a stump puller, and was at Mr. Morgan’s store in Grandview, Tex., and he told mo that he had a stump puller there that he would sell me for $155.”
[9] If, as we think the evidence tends to show, the $418 mortgage only covered the note therein specified and the account of $58.93 for merchandise, in payment of which it is undisputed part of the mortgaged crop was applied, then it was proper to apply the $105.10 payment on the $418 note, regardless of Jenkins’ direction to have it so done. As said in one of the cases appellee cites (Taylor v. Cockrell, 80 Ala. 236):
“The general rule is that, while a creditor has the right to apply a general payment, the debtor having made' no specific application, the law, in the absence of an agreement to the contrary, applies a payment realized from a particlar fund in relief of such fund. On this principle a mortgagee, in the absence of an agreement with the mortgagor, is bound to apply moneys realized from the sales of property covered by the mortgage to the mortgage debt; but, as between mortgagor and mortgagee, such money may, by the consent of the mortgagor, be applied to the payment of an unsecured debt.”
In addition to what we have said, it may not be inappropriate to further observe that the record shows that appellee’s mortgage was foreclosed on the stump puller yet in his possession, and there is no evidence pointed out tending to show that it is of less value than the amount of the $155 indebtedness to secure which the mortgage was given, and it is therefore not apparent that ap-pellee can be materially prejudiced by the *1096application made by tbis.court of the $105.10 payment.
We conclude, on the whole, that the motion for rehearing should be overruled; and it is so ordered..