Boyd v. Jones

• Decision Date: 23 June 1892
• Citation: 96 Ala. 305,11 So. 405
• Parties: BOYD ET AL. v. JONES ET AL.
• Court: Alabama Supreme Court

11 So. 405

96 Ala. 305

BOYD ET AL. v. JONES ET AL.

Supreme Court of Alabama

June 23, 1892

Appeal from circuit court, Marlon county; H. C. SPEAKE, Judge.

Action by A. Boyd & Co. against Jones & Pope. From a judgment for defendants, plaintiffs appeal. Reversed.

Nesmith & Sandford, for appellants.

Watts & Son, for appellees.

COLEMAN J.

The action was instituted by appellants to recover a balance due upon the written obligation of the defendants for the payment of $2,500, and also for the recovery of reasonable attorneys' fees, stipulated for in a contemporaneous agreement, made to secure the payment of the note or obligation. By the terms of the agreement the defendants contracted to ship 250 bales of cotton to plaintiffs at Memphis, Tenn., to be stored and sold on their account, and the proceeds to be applied in payment of "the storage which may be due on said cotton, and 2 1/2 per cent. on the amount of such sales for commission for selling said cotton and then to apply the proceeds of so much of said cotton as may be delivered by us to the amount hereinabove specified," etc. The amount above specified was that contained in the note, and to recover which the present suit was instituted. It was further stipulated that, upon failure to ship 250 bales of cotton, the defendants were to pay, as "stipulated damages," $1.25 per bale. The payment of the note was further secured by the transfer of collaterals. The evidence shows that only 72 bales were shipped to plaintiffs under their agreement. It further shows that the defendants became largely indebted to plaintiffs for shipment of goods, payment of drafts drawn by defendants, and remittances of money, in excess of the $2,500 evidenced by the note. The defendants were charged for the deficiency in the shipment of the cotton at $1.25 per bale, as stipulated by the parties. The plaintiffs sold the cotton received, and applied the proceeds, first, to the payment of the open unsecured account, and the balance, after paying the unsecured indebtedness, was credited upon the note. The main question of contention was whether the plaintiffs had the right to make such application of payments, and the errors assigned are upon the correctness of the charges given by the court to the jury, upon the facts in evidence bearing upon this question. The law is: "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 the mortgagor and mortgagee, such moneys may, by the consent of the mortgagor be applied to the payment of an unsecured debt." The consent of the mortgagor in such case becomes a material question. Taylor v. Cockrell, 80 Ala. 238; Strickland v. Hardie, 82 Ala. 414, 3 South. Rep. 40; Mahan v. Smitherman, 71 Ala. 563; Darden v. Gerson, 91 Ala. 324, 9 South. Rep. 278; Levystein v. Whitman,

59 Ala. 345. The burden rests upon the mortgagee to show that the mortgagor has consented that the proceeds of the payment covered by the mortgage might be applied in payment of any other debt than that secured by the mortgage. A mortgagor, if he sees proper may consent to adopt or ratify an unauthorized application of payment made by his mortgagee debtor of the proceeds of mortgaged property to an unsecured debt. Whether the mortgagor has consented to either is a question of fact to be determined by the jury, and the burden is upon the mortgagee, in either case, to reasonably satisfy the jury of such consent or ratification. We think the oral...