Moss v. Adams

• Decision Date: 31 December 1845
• Citation: 39 N.C. 42,4 Ired.Eq. 42
• Parties: JOHN B. MOSS et al. v. PETER ADAMS et al.
• Court: North Carolina Supreme Court

4 Ired.Eq. 42

39 N.C. 42

JOHN B. MOSS et al.

v.PETER ADAMS et al.

Supreme Court of North Carolina.

December Term, 1845.

If a debtor, who is indebted to the same creditor on different accounts, does not make the application of a payment at the time such payment is made, he cannot do so afterwards.

If the debtor fails to make the application, the creditor may do so at any time afterwards before suit brought.

Where neither debtor nor creditor makes the application of the payment, the law will apply it to that debt, for which the creditor's security was most precarious.

This was an appeal from an interlocutory decree of the Court of Equity of Guilford County, at the Fall Term, 1845, his Honor Judge DICK presiding, dissolving the injunction, which had been granted in the cause.

By the pleadings it appears, that the plaintiffs, Moss and M. W. Alexander, and the defendant, Bencine, as partners, took a contract from the government for carrying the Mail from Greensborough in this State, to Yorkville in South Carolina, to commence on the 1st day of January, 1839; and that they purchased from Peck, Wellford & Co. who had been the previous contractors on the line, horses, coaches, and other stock, to the value of $6,730. In liquidation thereof they gave four bonds--each for $1,682 50, and payable on the 1st of May, 1st of August, and 1st of November, 1839, and 1st of February, 1840; and the other plaintiffs, Long, D. Alexander, and Storkle, executed the bonds as sureties. A man by the name of Bowen took another Mail contract in South Carolina, to commence also on the 1st of January. 1839, and in like manner he became indebted to Peck, Wellford & Co. for which he gave them four notes--each for the sum of $1,675, payable on the same days with those before mentioned. In the spring of the year 1839, and after Bowen had paid his note which fell due on the 1st of May, 1839, the defendant, Bencine, purchased Bowen's contract and stock; and part of the agreement was, that Bencine should take up Bowen's notes to Peck, Wellford & Co. by substituting his own with satisfactory sureties. Accordingly, Bencine gave to Peck, Wellford & Co. his three notes for the sum of $1,675, each payable 1st August, 1st November, 1839, and 1st February, 1840, and the defendant, Adams, executed the notes as the surety of Bencine. A few months afterwards, the plaintiff, M. W. Alexander, and the defendant, Bencine, purchased from the plaintiff, Moss, his share of their joint contract and the stock; and part of the agreement was, that the purchasers should pay the debts to Peck, Wellford & Co. in exoneration of Moss. Sometime after that, Bencine purchased out the interest in the concern of the plaintiff, M. W. Alexander, and agreed with him, that he, Bencine, would pay to Peck, Wellford & Co. all the bonds of Moss, Alexander, and Bencine.

For some years previous to 1839, Bencine had been the agent of Peck, Wellford & Co. in conducting their line, and in the course of the business he became indebted to them in the sum of $2,720 59 1-4; and in liquidation thereof, he gave an acceptance, January 24th, 1840, for $120 27, in part, and on 5th of March, 1840, his note for $2,600 32 1-4, then payable.

In July, 1839, Bencine remitted the sum of $1682 50 to Peck, the acting partner of Peck, Wellford & Co. residing in Fredericksburg, Virginia, and he applied it in discharge of the bond of Moss, Alexander, and Bencine, which fell due 1st of May preceding, and charging no interest thereon. On the 23d of November, 1839, Bencine made a further remittance to Peck of $3,000, of which Peck applied at the time the sum of $1,713 90 in full of the principal and interest due on the bond of Moss, Alexander, and Bencine, which fell due 1st of August of that year, and the residue of $1,286 10 he applied as a credit to their bond, for $1,682 50, which fell due on the 1st of November: which left a balance due on that bond of $410 12, and the whole of their bond for $1682 50, to fall due 1st February, 1840.

Bencine made no further payment until August 3d, 1841, and he then remitted to Peck $2,024 07, with directions to apply it to his own note for $2,600 32 1-4, which he had given for the balance he owed upon his agency before 1839; and it was accordingly so applied.

Then at different times in 1842 and 1843, Bencine made eight remittances, amounting in the whole to the sum of $5,396 37, without any directions as to the application; and they were by Peck, Wellford & Co. entered generally to the credit of Bencine in account, without applying any one of them to a particular debt: though with an intention, as Peck states in his answer, and as Bencine says he expected, that it should be ultimately applied, in the first place, to the satisfaction of the balance due on the note of Bencine himself, and his acceptance for $120 27 to Peck, Wellford & Co. At those periods, Bencine was in possession of a large property and none of the parties suspected his credit, unless the plaintiff, Moss, might have done so. In the latter part of the year 1843, however, it was ascertained that he was not able to pay his debts, and he made an assignment.

In July, 1844, Peck came to Greensborough for the purpose of settling the business with Bencine. They did so by applying, by consent, the said sum of $5,396 37, first to the debts for which Peck, Wellford and Co. held no security but the note and acceptance of Bencine alone; and they applied the residue thereof to a part payment of each of the three notes for $1,675, given by Bencine and by Adams as his surety, which left a balance due on each of them, including interest to July 11th, 1844, which amounted in the whole to the sum of $1,951 83. The sum due for principal and interest up to the same day, on the two bonds aforesaid of Moss, Alexander and Bencine, which fell due the 1st of November, 1839, and 1st of February, 1840, was then ascertained to be $2,644 17. Peck at first expressed a reluctance to make any particular application of the money, except to the debts for which he had only the personal security of Bencine. But Bencine urged the application that was made, upon several grounds: first, that Adams was his surety, and never had any interest in the matter, while Moss and M. B. Alexander had been once principals, and had made a profit in selling out to him: secondly, that he had paid the sum of $4,651 10, which had been applied to the bonds given by Moss, Alexander and Bencine, in exoneration of the two former, and if the remaining sum, not before applied, should then be applied to the bonds to which Moss and Alexander were parties, those persons would get the benefit of all the payments that had been at any time made, and Adams have no benefit of them whatever, and sustain a total loss: and thirdly, that, although the notes given by the two sets of persons, were payable at the same days, the contract with Bowen had been made, and the notes, in which Adams was surety, had been given, before Bencine's contract of purchase from either Alexander or Moss. Finally, Peck declared that he would concur with Bencine in making the application, provided Adams would then pay the notes which had his name on them, and also pay the balance that would then remain on the bonds of Moss, Alexander and Bencine, namely, the sum of $2,644 17, and take an assignment of those bonds without recourse to Peck, Wellford & Co. To that proposition, Adams assented, and the application of the payments was made accordingly; and the two bonds of Moss, Alexander and Bencine, endorsed to Adams, who advanced for them the full sum thus appearing to be due on them, and instituted an action at law on them against the obligors.

The present bill was then filed by all the obligors, except Bencine, against that person, Peck, Wellford & Co. and Adams, praying for a perpetual injunction. The bill states, that Peck knew that Bencine had become the sole owner of the line, in which the plaintiffs had been concerned, and had engaged with them to pay the whole debt, and thereby made himself the sole principal debtor: that soon after the sale by Moss, he informed Peck by letter, that he feared Alexander was about to fail, and requested him to collect the bonds forthwith, and that Peck replied, that two of the bonds were paid in full, and on the third $1,286 10, and that he was not at all uneasy about the safety or payment of the balance?? that Bencine soon afterwards informed Moss, that he had paid all those bonds except the sum of $1,200, and that he had promised Peck to pay that balance out of his next quarter's mail pay: that he, Moss, being induced by those representations of Peck and Bencine, to believe that he was in no danger, gave himself no concern about the bonds, and was prevented from keeping an eye on...