J. R. Watkins Co. v. Buchanan , 149 Miss. 483 ( 1928 )

^* Corpus Juris-Cyc. References: Guaranty, 28CJ, p. 957, n. 6; Payment, 30Cyc, p. 1244, n. 56; On the general rule as to application of unappropriated payments, see 21 R.C.L. 103. Appellant appeals from an adverse judgment from the circuit court of Chickasaw county.

By agreement of the parties, a jury was waived and the cause submitted to the judge for decision. Appellees R.E. Buchanan and W.I. Jinkins were voluntary sureties for one G.L. Russell, under written contract to sell merchandise for appellant, the merchandise to be shipped, as needed by Russell, from appellant's place of business at Winona, Minn. The bond or guaranty executed by appellees — was to guarantee payment of Russell's purchases during the life of the bond. The contract and bond sued upon were dated June 2, 1919, and the bond was to expire March 1, 1920.

Russell owed appellant, at the time of the execution of the bond, three hundred sixty dollars and fifty-nine cents, which sum was also to be included in the guaranty. Russell was operating under this arrangement, when on December 1, 1919, appellant demanded that he execute a new contract, and bond covering the amount then due appellant, also subsequent purchases. This new bond was forwarded by Russell to appellant at its home office, and purported to be signed by the same sureties, the appellees herein. It was to expire March 1, 1921. In form it was the same as the former bond, except as to the amount of the indebtedness stipulated and the date of expiration. Russell severed his relations with appellant in June, 1920, owing, it is alleged, a considerable sum of money.

Some time thereafter suit was brought against these appellees on the last bond. An itemized statement of debits and credits covering all transactions between appellant and Russell was made an exhibit to the declaration. The appellees defended this suit on the ground that the alleged new bond was a forgery. Their plea of non est factum was upheld, and, on appeal to this court, was affirmed, 100 So. 285.

Thereafter appellant filed this new suit, which is predicated upon the first bond. The appellees, under proper pleas in the court below, defended upon three propositions: (1) That the appellant, having first sued on the last bond, pressing its former suit to final judgment after being apprized of its alleged forgery, is now estopped under the doctrine of election of remedies; (2) that the judgment in the first suit is resjudicata; and (3) that the rule of application of payments extinguishes the debt for which these appellees could be held liable. Appellant insists that none of these principles of law are applicable to the facts in this case.

Under our view it becomes unnecessary to pass upon the two first propositions. It is clear that any liability of these appellees would be limited to the express provisions of the bond or guaranty signed by them. They could not be held for any merchandise sold to Russell subsequent to the expiration date of the bond. The accounts filed, both in the first suit and in the case at bar, are made exhibits for comparison. They are somewhat confusing, and seem to have been confusing to the trial court. If all the debit items covered by the first bond are totaled, and this total is balanced against the total of all payments made by Russell, the principal, the debt for which these sureties are liable will be extinguished.

If neither of the parties expressly directed an application of payments, the rule that all credits should be applied upon the oldest items of the account applies. Appellant contends that there is enough in the language of the written contract to control the application of all payments. An examination of same fails to convince us that it contains such direction. Following the rule that in such cases all credit should be applied upon the oldest items of the account, the indebtedness covered by the bond is completely extinguished. This rule is enunciated in Fletcher v. Gillan, 62 Miss. 8; Duffey v. Kilroe, 116 Miss. 7, 76 So. 681.

It follows that the judgment of the court below should be affirmed.

Affirmed.