Pearce v. Walker

• Decision Date: 15 May 1894
• Citation: 103 Ala. 250,15 So. 568
• Parties: PEARCE v. WALKER.
• Court: Alabama Supreme Court

15 So. 568

103 Ala. 250

PEARCE v. WALKER.

Supreme Court of Alabama

May 15, 1894

Appeal from chancery court, Marion county; Thomas Cobbs, Chancellor.

Bill by Thad. W. Walker against James P. Pearce. There was a decree for complainant, and defendant appeals. Reversed.

Almon &amp Bullock, for appellant.

McGuire & Collier, for appellee.

BRICKELL C.J.

The bill was filed by the appellee for the cancellation of a mortgage on lands he had executed to the appellant, and to enjoin the appellant from proceeding to the execution of a power of sale contained in the mortgage. The relief was sought upon two grounds, the first of which was that the mortgage had been extinguished by a second mortgage taken in satisfaction, and the second, the payment of the mortgage debt. The chancellor did not sustain the first contention and in that respect the decree is not now open to revision. The contention of payment was sustained, and a cancellation of the mortgage decreed, from which decree this appeal is taken.

A party pleading payment, whether as matter of defense or as ground of affirmative relief, must prove it, if the fact is denied. If of it no evidence is offered, or if the evidence of it be equally balanced, or if the evidence does not generate a rational belief of the fact, the party affirming its existence must fail for want of proof. 3 Brick. Dig. p. 698 §§ 1, 2. It is not the fact of payment which is now the matter of dispute. That there was a payment of a sum which taken in connection with other payments, was more than sufficient to satisfy the mortgage debt, is admitted. The controversy is whether a particular payment shall be applied to the mortgage debt, or to another debt owing by the mortgagor to a partnership of which the mortgagee was a member. The general rule is that, when a party indebted to the same person on more than one account makes a partial payment, he has the unqualified right to direct its application to one debt in preference to the other. The payment is voluntary, and the debtor may declare the terms upon which it is made, and the creditor must accept them, or reject the payment. If he accepts the payment, he takes it cum onere. Therefore it is that if the debtor pay with one intent, which is known or communicated to the creditor, and the creditor receives with another intent, the intent of the payer must prevail. Mayor, etc., v. Patten, 1 Am. Lead. Cas. 339. But if the debtor does not, at or before the time of the payment, give direction to its application, his control of the payment is gone, and the right of the creditor to appropriate it arises, and he has the unqualified right to apply it to any valid, subsisting debt he may hold against the debtor. Id. 341. An exception to this rule obtains when the money with which the payment is made is known to the creditor to have been derived from a particular source or fund. Then, without the consent of the debtor, the creditor cannot apply it otherwise than to the exoneration of the source or fund from which it was derived. Nor can the debtor, without the consent of the creditor, divert the payment from the relief of that source or fund. Id. 341; Strickland v. Hardie, 82 Ala. 412, 3 So. 40.

We have with much care examined the evidence, and we cannot concur in the conclusion of the chancellor that, at or before the time of the payment, the mortgagor directed its application to the...