Jos. W. Jenkins & Co. v. Beal , 70 N.C. 440 ( 1874 )

RodMAN, J.

On the 18th January, 1870, defendant executed to plaintiffs a deed, which after reciting that plaintiff's had agreed to furnish him with money and supplies to enable him to cultivate a certain piece of land during the year 1870, to an amount not to exceed $500, in order to secure the payment of such advances on 1st December next, conveyed to plaintiffs defendant’s crop, to be raised on said land, and certain stock, &c., to be void, if such advances should be paid, &c., and agreed to consign to plaintiffs his crop or else to pay plaintiffs 2 1-2 per cent, commission, &e. The plaintiffs accordingly advanced to defendant to a value much exceeding $500, between the 5th February, 1870, and the 30th December, 1870. On the 30th June, 1870, the advances amounted to $1,216.91, and the first payment was made in September, 1870. On the 1st December, 1870, .the balance in favor of plaintiffs was $1,530.62, the defendant having paid to that date $234.63. Afterwards further advances and also further payments were made, so that on January 1, 1871, according to plaintiff’s account, there was a balance due him $1,093.88, although the payments since December 1st, 1870, had exceeded $500.

The plaintiff’s brought their action to recover the mortgaged property. The defence was, that the mortgage debt had been paid. The Judge so held and gave the plaintiffs a judgment not for the property which they demanded, but for a certain sura of money, and plaintiffs appealed.

The only question presented to ns is this. The defendant having failed to make any appropriation of the several payments made by him, were the plaintiffs at liberty to apply them to the excess advanced over the sum secured by the mortgage, or were they bound to apply them to the mortgage debt ?

This question is fully answered by the learned opinion of Ruffin, C. J., in Moses v. Adams, 4 Ired. Eq. 42. This opinion is so well supported by reason and authority, that it would be superfluous to attempt to add to it. Those who choose to search for later cases will find them referred to in the notes to Clayton’s Case. 1 Tudor’s Lead. Cas. in Mer. Law 1.

The rule is, that where a debtor owes several debts to a creditor and makes payments, he may appropriate the payments to any oí the debts he may please ; but if he fails to do so at the time, the creditor may appropriate them as he pleases (subject to some exceptions not material here) at any time before he brings snit for the balance. Here there was no appropriation by the debtor, and the creditor appropriated the payments as he lawfully might to so much of the debt as was not secured by the mortgage debt unpaid and existing.

His Honor, the Judge below, therefore erred in holding the mortgage satisfied. The plaintiffs were entitled, by virtue of their legal title, to recover the property sued for. But the Superior Court is a Court of Equity, as well as of law. Upon such recovery the question would immediately arise whether the plaintiffs were entitled to hold the mortgaged property as a security only for the sum of $500, secured by the mortgage, or for the payment of the larger sum due them, if the mortgaged property shall turn out to be worth more. That question amounts to this: Whether one who has mortgaged property for $500, and who afterwards becomes indebted to the mortgagee in a sum beyond the mortgage debt, can redeem by paying simply the mortgage debt, or only on paying the whole that he owes. In this State we have not recognized the doctrine of tacking, as defined in the English law. That doctrine is stated thus: Where there are three successive mortgages on the same property, the first mortgagee of course has the legal estate, and if the third morgagee shall obtain an assignment from the first, the second mortgagee cannot have the property without paying off both the first and third mortgages. But it will be perceived that that ease differs materially from the present, as here the question is between the mortgagee and the mortgagor, and the rights of no. third persons have attached. The question is of general importance, but as it is not presented to us now, and may not be, we express no opinion on it.

Per Cueiam. Judgment reversed, and ease remanded to be proceeded in, &c.