Williams v. Butts

87 So. 145, 124 Miss. 661

• Court: Mississippi Supreme Court
• Decided: October 15, 1920
• Docket: No. 21557
• Status: Published

Opinion

Smith, C. J.,

delivered the opinion of the court.

The appellant exhibited an original bill in the court below against- the appellee, alleging in substance that on March 30, 1908, she borroAved from C. S. Scarbrough the money with which to purchase certain land to which T. H. Campbell then held the legal title; that by agreement Campbell executed a deed thereto, absolute on its face, to Scarbrough, but that the deed was, in fact, intended to operate as a mortgage securing the repayment to Scarbrough of money loaned by him to the appellant with which to purchase the land; that the debt secured thereby had been paid, but, if not, the appellee would pay any balance found to be due thereon; and prayed for a reconveyance to her of the land.

The appellee answered the bill denying that the deed was intended to operate as a mortgage, and alleged that Scarbrough purchased the land and agreed to convey it to the appellant on the payment to him of two hundred seven dollars and seventy-nine cents, interest thereon, and the expense incurred by him in making the purchase; that she failed to pay Scarbrough, and thereby forfeited any right she may have had under the agreement.

The case was heard in the court below on bill, answer, and proof, from which it appears that Allen Sims, the father of the appellant, died about the year 1903, seized and possessed of the land in controversy, on which there was a mortgage executed by him to the British-American Mortgage Company, and leaving as his sole heirs the appellant and her brother, I). iCS. Sims; that a controversy arose between the appellant and her brother relative to the share which each should inherit from their father, and was settled by an agreement that the appellant should receive a four-fifths and D. C. Sims, a one-fifth interest therein ; that as the appellant was unable to pay her pro rata of the note due by her deceased father to the British-American Mortgage Company, she requested TV. T. Stevens to purchase it, which he did, and received an assignment thereof from the British-American Mortgage Company pursuant to the following agreement between Stevens and herself:

“It is agreed that as TV. T. Stevens has advanced the money to pay the British-American Mortgage Company one-half of the amount due them, that T. H. Campbell agrees to get an assignment from the British-American Mortgage Company of their claim, and that the property shall be sold out under said deed of trust to the British-American Mortgage Company, and if W. T. Stevens becomes the purchaser of said land, he agrees to sell it to Anna Williams if she desires to purchase the same that he is out (? ), including all expenses of the sale, attorney’s fees, and the expenses of his coming to Yazoo City, with interest on the money at the rate of ten per cent, per annum, the intention being to make W. T. Stevens whole for the money and expenses that he is out, together with'ten percent, interest on the money.”

After receiving the assignment of this note and the deed of trust, a trustee appointed by Scarbrough for that purpose, as provided in the deed of trust, sold the land on the 30th day of March, 1908, in accordance with the provisions of the deed of trust.

Neither Stevens nor the appellant appeared at the sale, but T. H. Campbell, who had been acting in the matter as attorney for the appellant, appeared and purchased the land himself for the sum of two hundred dollars, and the trustee executed to him a deed thereto. Campbell’s purpose in purchasing the land Avas to convey a four-fifths interest therein to the appellant when she should pay Stevens the amount due him on the British-American Mortgage Company’s note, and a one-fifth interest therein to D. C. Sims; he having paid his pro rata of the British-American Mortgage Company’s note before its assignment to Stevens. This conveyance to Sims he afterwards made.

A feAV days after Campbell purchased the land, the appellant came to his office accompanied by S. C. Scarbrough, who stated that “he would take up the agreement with Stevens, and that he wanted to make himself whole and secure his advance of two hundred seven dollars.” Campbell then told him that he, “(Campbell) could either convey the property to Anna (the appellant), and she could give him (Scarbrough) a deed of trust back, or he could convey the property direct to him (Scarbrough), and he signed an agreement to reconvey to Anna upon the payment of the two hundred seven dollars to him,” to which Scarbrough replied “that if it was all the same lie would prefer that I (Campbell) deed him the property, and let lvim agree to reconvey it to Anna.” Thereupon Campbell conveyed the land to Scarbrough for the sum of two hundred seven dollars and seventy-nine cents, and Scarbrough executed to the appellee a separate written agreement, reciting his purchase of the land from Campbell, and continued as follows:

“Now I do hereby agree that upon the payment to me by Anna Williams of the two hundred seven dollars and seventy-nine cents with ten per cent, interest from date and all expenses incurred by me in and about the purchase of said land, from T. H. Campbell, including my expenses to Yazoo City, I hereby agree to reconvey to said Anna Williams said land.”

The agreement contains no limitation upon the time within which the appellant must pay Scarbrough the money advanced by him for the purchase of the land, and the explanation given by -Campbell,' the draftsman of the instruments, of this omission is that — He “(Campbell asked them (the appellant and Scarbrough) in what time' Anna was to pay back the two hundred seven dollars, and Mr. Scarbrough said he would give her (the appellant) five years if she wanted it, and Anna spoke up- and said, No, Mr. Scarbrough, I don’t want so long a time. I can pay it back before that.’ And Mr. Scarbrough said, Must leave that blank, and Anna and I will agree on what time she will pay the two hundred seven dollars.’ ”

The appellant was living on and farming the land at this time, and continued thereafter so-to do, Scarbrough supplying her each year with money and goods with which to make the crops. On March 30, 1908, Scarbrough charged the appellant with two hundred seven dollars “payment on land” and two dollars “expenses,” these being two of the items appearing on appellant’s general account with Scarbrough for the first year. At the end of the year, on November 25, 1908, this account, Avhich included the money advanced for the purchase of the land and the money and supplies furnished the appellant with which to make a crop on the land, amounted to. five hundred eighty-three dollars and eighty-seven cents, to which Scarbrough added fifty-eight dollars and thirty-five cents as interest, making a total of six hundred forty-two dollars and twenty-two cents. There appears on this account a credit of two hundred fifty-one dollars and ninety-three cents, leaving a balance due on January 12, 1909, when the balance was struck and agreed on by Scarbrough and the appellant, of three hundred eighty-nine dollars and twenty-nine cents, which balance was carried forward into the new account for 1909. The credit on this account was for money obtained from the sale of the crop made by the appellant with the money and supplies advanced to her by Scarbrough for that purpose.

Scarbrough continued to advance the appellant money and supplies with which to make her crops for several years, and she made payments to him out of the proceeds thereof each year, but not sufficient to cover the amount due Scarbrough for the advances so made. The balances due Scarbrough by the appellant, in which were included both the money advanced by him for the purchase of the land and to make the crops, were agreed on by them at the end of each year.

Scarbrough made no advance to the appellant for the year 1913, and the balance due him by the appellant on February 4, 1914, according to his books, was eight hundred thirty-five dollars and sixty-nine cents. In 1914 the appellant paid Scarbrough rent for the place, and after his death, which occurred in 1915, she paid rent to the appellee, Scarbrough’s sole heir at law, for the years 1915 and 1916. In 1914 she told W. T. Stevens, a neighbor, that she 'had given up the place, as she could not pay for it and was renting it.

The only persons who knew the facts and circumstances surrounding the execution by Campbell of the deed .to Scarbrough, and of the agreement by Scarbrough with the appellant, were Scarbrough, the' appellant and Campbell. Scarbrough, as hereinbefore stated, is dead. The appellant did not testify, and Campbell’s testimony is as hereinbefore set forth.

The court below held the deed from Campbell to Scarbrough to be a mortgage; fixed the amount due Scarbrough on the account against the appellant as it appears from his books, after purging it of usurious interest, which account included both the money advanced for the purchase of the land and with which to make the crops, and decreed that on the'payment thereof the land should become the property of the appellant.

From this decree the complainant in the court below prosecutes a direct appeal, and the defendant in the court below a cross-appeal. The appellant and cross-appellee’s complaint is that the court below erred: First, in not applying the payments made by the appellant to Scarbrough to the debt due Scarbrough by the appellant for the money advanced her by him with which to purchase the land; and, second, in holding that the appellant must pay the balance due on the advances made by Scarbrough to the appellant with which to make the crops in order to satisfy the mortgage. The complaint of the appellee and cross-appellant is that the court below erred in holding that the deed from Campbell to Scarbrough was intended to operate as a mortgage, and in not holding that it was a deed absolute, with an agreement on the part of Scarbrough to sell the property to the appellee on the payment to him of the price agreed on therefor.

■ It is reasonably certain from Campbell’s testimony that the money paid by Scarbrough for the land was understood by the parties to be a loan from Scarbrough to the appellant which she was to repay, and that the deed from Campbell to Scarbrough was intended merely as a security therefor.

The .parties themselves evidently considered the transaction as a loan, for Scarbrough, as hereinbefore set forth, charged the appellant’s account with the money advanced by hirn to purchase the land, and it was included each year in the balance agreed on by them as being due Scarbrough by the appellant.

The case, therefore, comes within the rule and principle of Brooks v. Kelly, 63 Miss. 616, Hoopes v. Bailey, 28 Miss. 328, Wallis’ Heirs v. Wilson’s Heirs, 34 Miss. 357, Freeman v. Wilson, 51 Miss. 329, and Fultz v. Peterson, 78 Miss. 128, 28 So. 829, and the court below committed no error in holding the deed from Campbell to Scarbrough to be in fact a mortgage.

One of the contentions of the appellee and cross-appellant is, conceding that the deed to Scarbrough must be held to be a mortgage, that it appears from the facts and circumstances of the case that the appellant and Scarbrough had a settlement in 1914 in which the .appellant relinquished any equity of redemption she may have had in the land. But this question was not presented to the court below by the allegations of the bill or answer, and will not be considered here.

The appellant’s principal contention is that, the payments made by her to Scarbrough >were not applied by the parties themselves to the payment of either the loan made to her of the money with which the land was purchased, or to the supplies furnished her with which to make the crops, and that the court must now apply these payments to the loan made by Scarbrough to the appellant for either of two reasons: First, it is the oldest debt; and, second, is the most burdensome to the debtor; and, if this is done, that debt will be thereby discharged.

If neither the debtor nor the creditor applies a payment to a parti cular one of several debts due the creditor by the debtor, the court will do so, but if the intention of the parties in making and receiving the payment can be ascertained with reasonable certainty from all the facts and circumstances of the case, the payment will be applied by the court accordingly. Tayloe v. Sandiford, 7 Wheat. 14, 5 L. Ed. 384; Adams Express Co. v. Black, 62 Ind 128; Barrett v. Sipp, 50 Ind. App. 304, 98 N. E. 310; 96 Am. , note; 2 Am. & Eng. Enc. L. (2d Ed.), 447 et seq.; 80 Cyc. 1240.

Scarbrough had agreed to give the appellant five years within which to repay the money with which the land was purchased. The advances made by him to enable the appellant to farm the land were presumably to be repaid each year out of the crops made therewith, and the money with which the payments were made was in fact obtained from the crops so made. The payments made during the first year amounted to more than the debt due on the land; Eive years after the loan was made Scarbrough quit supplying the appellant with money and goods with which to make crops, and she commenced to pay rent on the land. In 1914 the appellant stated to W. T. Stevens that she had given the land up, as she could not pay for it and was renting it, and she thereafter made no claim to the land until two years after Scarbrough’s death.

It seems reasonably clear from these circumstances that both Scarbrough and the appellant understood that the payments were to be applied to the account due Scarbrough for advances with which to make the crops. Unless the appellant intended the payments to be so applied, her long delay in asserting her now claimed right to have the mortgage canceled, and the payment by her of rent on-the land, is inexplicable, for, if the payments were to be applied first to the debt due on the land, that debt would have been extinguished by the payments made during the first year, and the appellant would then have been -entitled to a deed from Scarbrough to the land in December, 1908, more than eight years before she began this suit.

It follows, therefore, that the payments must be applied first to the debt due by the appellant to Scarbrough for advances made by him to her with which to make the crops, and as the amount thereof is greater than the amount of the payments, nothing Avill be left to be applied to the payment of the money advanced by Scarbrough for the purchase of the land.

Tlie debt secured by the mortgage is only that incurred by the appellant because of the loan to her by Scarbrough of the money with which to purchase the land, with interest thereon, and the expense, if any, incurred by Scarbrough relative thereto as set forth in his agreement to convey the land to the appellant, and'does not secure any balance that may be due Scarbrough for money and supplies furnished the appellant Avith which to make the crops, and the appellant Avill be entitled to a deed to the land Avhen she shall have paid the debt secured thereby. The court beloAv erred in including in the amount that she must pay before becoming entitled to the deed to the land the balance due Scarbrough for the money advanced to the appellant Avith which to make the crops, and for the error in so doing the decree will be reversed, and the cause remanded.

Reversed and remanded.