Genin v. Et Ux.

• Decision Date: 17 November 1877
• Citation: 11 W.Va. 549
• Court: West Virginia Supreme Court
• Parties: Genin, Ex'or, et al. v. Ingersoll et ux.

11 W.Va. 549

Genin, Ex'or, et al.

v.Ingersoll et ux.

Supreme Court of Appeals of West Virginia.

Decided November 17, 1877.

1, G. sold to T. several tracts of land for $14,000.00, I. executed to G. seven single bills for $2,000.00 each, the first payable on the 2d day of February, 1855, and the others 1856-7-8-9-60-61, respectively, with interest payable annually on all except the first, and executed a mortgage, in which his wife joined, to secure the payment of said single bills, in which he says the price of the land was $14,000.00 and "the whole of which is to be paid to said Thomas H. Genin as follows: in seven equal annual installments of $2,000.00 each, one of which installments is to be paid on the 2d day of February in each of the seven years next following the date hereof, with interest on said purchase money from the 2d day of February 1854, at the rate of six per centum per annum, payable annually that is to say, on the 2d day of February in each of the next seven years the interest on all the principal then unpaid is to be paid," &c. In a suit to foreclose the mortgage, the cause is referred to a commissioner, and the commissioner in making up his statement charges interest upon interest, and the court confirms the report thus made. Held:

I. That interest upon interest was not allowable, there being

no agreement that after interest was due, interest should be charged thereon.

II. In general, where neither the debtor nor the creditor makes an application of the payments, where there are several debts existing from the same debtor to the same creditor, the payments will first be applied to the discharge of the oldest debt, and so on until all are paid? paying interest first; in this cause, under the terms of the mortgage the seven notes therein secured must be re garded as one debt on which the interest was payable annually, and the payments made should first have been applied to the payment of the interest due on the whole debt, then to the discharge of the notes in their order.

Appeal from, and supersedeas to, a decree of the circuit court of Marshall county, rendered on the 3d day of April 1876, in a cause in chancery, then pending in said court, wherein John N. Gen in, executor of Thomas H. Genin, deceased, was plaintiff, and Josiah Ingersoll and Matilda C, his wife, were defendants, granted upon the petition of said defendant, Josiah Ingersoll.

Hon. T. Melvin, Judge of the first judicial circuit, rendered the decree complained of.

Daniel Lamb and Hanson Criswell for appellant.

J. L. Parkinson and J. Dallas Ewing for appellee.

Johnson, Judge, states the case as follows:

On the 2d day of February 1854, Josiah Ingersoll and Matilda, his wife, executed to Thomas H. Genin, a mortgage on certain lands therein mentioned, to secure the purchase money thereon. In said mortgage is the following clause: "The said Josiah Ingersoll has purchased the above granted land from said Thomas H. Genin and Florian Genin, at the price of fourteen thousand dollars ($14,000.00), the whole of which is to be paid to the said Thomas H. Genin, as follows; in seven equal annual installments of two thousand dollars ($2,000.00); each one of which installments is to be paid on the 2d day of February in each of the seven years, next following the date hereof, with interest on said purchase money, from the 2d day of February 1854, at the rate of six per cent per annum, 'payable annually that is to say, on the 2d day of February in each of the next seven years, the interest on all the principal then unpaid, is to be paid (for which installment and interest the said Josiah has given his seven sealed notes to said Thomas H. Genin), all which purchase money and interest, the said Josiah hereby promises and binds himself, his heirs, &c, to pay to the said Thomas H. Genin, or his assigns, at the respective times aforesaid. Now therefore the condition of this deed is such, that if the said Josiah, his legal representatives or assigns, shall punctually pay to" the said Thomas H. Genin, or his assigns, the said several installments of principal and interest, when the same shall respectively fall due, and payable as aforesaid, so that no default be made in payment of any of them in whole or part, then this deed shall be void, &c." The following copy of the second note shows the character of all of them:

$2,000.00 Marshall County, Va., Feb. 2, 1854.

On or before the 2d day of February 1856, I promise and bind myself, my heirs, &c, to pay to Thomas H. Genin, or his assigns, two thousand dollars, with interest thereon from the 2d day of February 1854, payable annually, being the second installment of the purchase money for the land this day conveyed by quit claim deed to me by said Genin and son. Witness my hand and seal.

"Josiah Ingersoll. [Seal]."

On the back of this note is the following receipt:

" The within has been paid off at several times, for which items of payment he, the drawer,-holds my receipt,

to-wit:

"On Feb 19, 1856,.......................................................$1300 00

"April 22, "..................................................... 500 00

"Dec. 29, "..................................................... 200 00

"April 3, 1857.......................................................... 500 00

"June 30, "........................................................ 300 00

"T. H. Genin." Some of the other receipts for purchase money, both by Thomas H. Genin and John N. Genin, executor of the last will of said Thomas, appear in the record, none of which shows an application of the purchase money paid, nor is there any thing in the record to show, that Ingersoll, the debtor, ever directed how any of it should be applied. He paid from time to time, as appears by the report of the commissioner, amounts which in the aggregate amounted to between $17,000.00 and $18,000.00. At June rules 1873, John N. Genin, executor and residua- ry legatee of Thomas H. Genin, filed his bill in the circuit court of Marshall county, charging that the moneys mentioned in the mortgage, and the interest thereon had not been paid, or any part thereof, and prayed that the mortgage might be foreclosed. To this bill Ingersoll and wife were made defendants. Affidavit having been filed that Matilda Ingersoll was a non-resident of the State, an order of publication issued as to her; but it does not appear by the record or by any decree of the court that it was executed: and she does not appear in the case. The defendant, Josiah Ingersoll, answered the bill, in which answer he set up his payments, claiming that on the five remaining notes, after paying off the first two, he had paid $10,000.00 of principal", and $7,823.50 of interest, and that he had overpaid the debt; and prays that an account might be taken of the several payments made on said mortgage debt, and that the balance, if any there might be, due the defendant on that account might be ascertained, &c. On the 3rd of October 1874 an order by consent was made referring the cause to a commissioner," to take and state an account of the balance, if any, remaining due on the mortgage debt mentioned in the bill, and what parcels of land remain subject thereto, and in what order the said parcels are respectively chargeable therewith, and of the amount, if any, which may be due to the defendant, Ingersoll, on account of over-pay, if made by him, on said debt."

The commissioner filed his report, containing two statements:

Number one, was made on the basis of applying the payments as they were made, first, to the discharge of the interest on the whole debt included in the five remaining notes-two of the seven having been considered paid, and delivered up to Ingersoll and then to the discharge of the principal. This statement, at the time the report was made up, showed that Ingersoll was indebted to the plaintiff $858.37.

Statement number two, charges interest upon interest. after the same became due and remained unpaid, and found the said Ingersoll indebted to the plaintiff in the sum of $2,093.42.

The defendant excepted to the within report of commissioner Morris for this:

1st. That the commissioner proceeded upon the assumption, that the payments made by defendant on account of the first two notes, and credited thereon, only paid off and discharged said two notes, with interest on the principal sum, when the notes were taken up, when, in fact, the payments will show, even upon the principle adopted by the commissioner, that they were overpaid $183.33 1/3, after paying the annual interest on the whole of the principal.

2d. The commissioner did not consider that the payments made by Ingersoll prior to the taking up the first note, were the only payments appropriated by Genin in discharge of the annual interest on the principal sum, as appears from his indorsement on the back of said note.

3d. The commissioner should have commenced his account with the first note, and ascertained whether the payments made by Ingersoll on account of the same, including the interest on the principal sum, paid or overpaid the same the defendant showing that the same was overpaid $183.33J, for which the commissioner gives him no credit; and the commissioner should, in like manner, have ascertained whether the payments made by Ingersoll, on account of the second note, and interest on principal sum, paid or overpaid the same the defendant showing by his said payments that the same was overpaid $80.00, for which the commissioner gave him no credit.

4th. The commissioner erred in stating in his said report that there was due said Genin $10,000.00 as of February 2, 1857, when, in fact, only $2,000.00 was due at that time, and a similar amount falling due each year until 1861. The commissioner should have taken up each note in its order, and applied the payments to the discharge of the interest on the same first, and then to the principal, until the first note was paid; and so on in like manner with each note in its regular order...