Weil v. Herring

• Decision Date: 19 September 1934
• Docket Number: 234.
• Citation: 175 S.E. 836,207 N.C. 6
• Parties: WEIL et al. v. HERRING et al.
• Court: North Carolina Supreme Court

175 S.E. 836

207 N.C. 6

WEIL et al. v. HERRING et al.

No. 234.

Supreme Court of North Carolina

September 19, 1934

Appeal from Superior Court, Wayne County; Daniels, Judge.

Action by Leslie Weil and another, trading as H. Weil & Bros against W. B. Herring and others. Judgment for plaintiffs and defendants appeal.

No error.

Where debtor disposed of cotton to creditor without specifying how proceeds of sale of cotton should be applied, creditor could apply proceeds according to his own judgment.

On July 16, 1928, the defendants executed and delivered a negotiable promissory note to H. Weil & Bros. for the sum of $420. This note was not paid, and on June 16, 1931, Weil brought suit thereon. The defendants answered, alleging that R. A. Herring signed the note as surety and that the maker, W. B. Herring and wife, Betty Herring, had deposited with Weil eight bales of cotton and requested him to sell the same and apply the proceeds to the payment of said note. They further allege that Weil sold the cotton and applied the proceeds to other indebtedness of W. B. Herring, and that the proceeds of the sale were more than sufficient to pay the note involved in this litigation with a balance of $62.75, which said defendant sought to recover by way of counterclaim. The plaintiffs replied to the answer, alleging that W. B. Herring, the owner of the cotton, delivered the same to the plaintiffs to be applied on the general indebtedness of said Herring, and that said plaintiffs so applied said proceeds.

The issue submitted to the jury was as follows: "Did W. B. Herring direct that the cotton be sold and applied to his indebtedness to the plaintiff without specifying application to the $420.00 note?" The jury answered the issue "Yes."

Thereupon the parties agreed upon certain facts, which are as follows:

"1. That on July 16, 1928, W. B. Herring and wife, Bettie Herring, and R. A. Herring, executed a note under seal to H. Weil & Brothers for $420.00, being the note referred to in the complaint.

2. That on January 19, 1928, for an account extending over several years, W. B. Herring and wife executed a note to Weil & Brothers for $9,605.62, said note being secured by a second or subsequent deed of trust on land; and said lands were prior to the fall of 1928, sold under the prior lien or liens, and the proceeds were insufficient to pay off the prior encumbrances, and the said note for $9,605.62 remained unpaid in the Fall of 1928. That W. B. Herring and wife were also indebted to Weil Brothers at that time on a note for $500.00 executed April 13, 1928, upon which was due a balance of more than $150.00.

3. That on the 13th day of April, 1929, W. B. Herring and wife, Bettie E. Herring, executed to Weil Brothers a crop lien on all their crops of cotton and tobacco for the year 1929, on their farm in Sampson County owned by the femme defendant, Bettie E. Herring, which crop lien was not to exceed $2,000.00.

4. That the defendants, W. B. Herring and wife, Bettie E. Herring, executed a second crop lien (unrecorded) on said crop for the same year to the defendant, R. A. Herring, for the sum of $2,000.00, which was made subject to the prior lien of the plaintiff, H. Weil & Bros. This crop lien was unrecorded and Weil Brothers had no notice of it.

5. That during the fall of 1929, the defendants, W. B. Herring and wife, Bettie Herring, delivered to the plaintiff, Weil Brothers, eight bales of cotton produced in 1929, on the lands referred to above, which was stored in the plaintiff's warehouse in Goldsboro, and also delivered to the plaintiff the proceeds of their tobacco sales and these proceeds from the sale of tobacco paid off in full the plaintiff's crop lien except a small balance of eight or nine dollars.

6. That the plaintiff, H. Weil & Brothers, sold said cotton on May 10, 1930, and after paying the storage and weighing and other charges, the net proceeds amounted to $486.25, and thereupon the said Weil Brothers paid the $9.00 balance due on their crop lien and applied the balance of $477.75 on the $9,605.62 note."

Upon the verdict and the agreed facts aforesaid the trial judge decreed that the plaintiffs recover of defendants the sum of $420, with interest, etc.

From judgment so rendered, defendants appealed.

Butler & Butler and P. D. Herring, all of Clinton, for appellants.

Kenneth C. Royall and Allen Langston, both of Raleigh, for appellees.

BROGDEN Justice.

Can the owner of cotton, which is covered by an unrecorded crop lien or chattel mortgage, sell the same to a creditor then in possession thereof, in partial payment of a pre-existing debt held by such creditor...