Summary
In Blount v. Miller, 172 Miss. 492, 496, 160 So. 598, 599 (1935), it was held that "to take a case out of this (three-year) statute there must be a writing evidencing an acknowledgment of indebtedness, or promising to pay, in such terms as to render any supplementary evidence unnecessary."
Summary of this case from Armstrong Cork Company v. BooneOpinion
No. 31479.
April 1, 1935. Suggestion of Error Overruled, April 29, 1935.
1. LIMITATION OF ACTIONS. Advances of money and supplies made by lessor to lessee constitute an "open account" so as to require action thereon within three years after cause of action accrued, notwithstanding deed of trust given by lessee provided that advancements should be secured by deed, since writing was insufficient to make debt one acknowledged in writing under six-year statute of limitations ( Code 1930, sections 2292, 2299).
"Open account" is defined as one which consists of a series of transactions and is continuous or current, and not closed or stated.
2. LIMITATION OF ACTIONS.
Writing sufficient to take case out of statute providing that actions on open account or stated account not acknowledged by writing shall be commenced within three years must contain an acknowledgment of indebtedness, or promise to pay, in such terms as to render supplementary evidence unnecessary (Code 1930, sections 2292, 2299).
3. PAYMENT.
Where neither debtor nor creditor has made application of payments, court will do so for them, pursuant to rules which require payments to be applied to oldest item of indebtedness and rule which requires application most favorable to debtor (Code 1930, sections 2292, 2299).
4. COURTS.
Circuit court, in action of replevin on appeal from judgment of county court which failed to hold part of claim was barred by limitations, should reverse and try case de novo (Code 1930, sections 704, 2292, 2299).
APPEAL from the circuit court of Leflore county.
HON. S.F. DAVIS, Judge.
Replevin by Frank Miller, trustee, against J.A. Blount. From a judgment in favor of plaintiff, defendant appeals. Reversed and remanded.
Colson Guy, of Greenwood, for appellant.
The trial court committed error in permitting appellee to introduce testimony in rebuttal tending to prove an open account against appellant in order to show a balance due on the note, such evidence being evidence in chief.
Southern R. Co. v. Hays, 78 Miss. 319.
The trial court committed error in receiving testimony on the part of appellee tending to prove an open account against appellant barred by the statute of limitation over the objection of appellant.
Sec. 2299, Code of 1930; Hambree v. Johnson, 119 Miss. 204.
The trial court committed error in applying credits of payments made by appellant on the last items of the open account against him in order to keep the note alive and showing a balance due.
Duffy v. Kilroe, 116 Miss. 7, 76 So. 681.
We respectfully submit that the first items in cash and goods and merchandise advanced by Mr. Wilson to Mr. Blount constituted the consideration for the eight hundred dollar note, and when the eight hundred dollar note had been taken up in cash and merchandise the remainder of the advances were made on open account.
The lien of the deed of trust was extinguished on December 17, 1929, by reason of Mr. Wilson then having sufficient proceeds from cotton sold and other credits before that date given, to more than pay the eight hundred dollar note and the open account, or the account in full. Pollard Hamner, of Greenwood, for appellee.
We submit that when the appellee, plaintiff below, introduced his note and trust deed and rested, he was then entitled to judgment unless the appellant, defendant below, introduced evidence to overturn the plaintiff's case; and when contradictory evidence was offered by the defendant the burden then shifted to the plaintiff to overcome the defendant's evidence in rebuttal.
The trust deed in issue specifically provides that moneys or things advanced from one year from date thereof "shall be secured by this instrument, bear interest at the rate of eight per cent per annum, be payable on demand and be collectible by sale of the property and choses in action herein assigned and conveyed as hereinabove provided for." This verbiage constitutes a clear written obligation to pay with eight per cent per annum interest, and is as binding and effective as a note for a fixed amount, and being a written promise to pay comes clearly within the six-year statute of limitations.
We submit, first, that Wilson had the right to apply payments on the account as he chose in the absence of any direction from Blount, the debtor, as to such application, and secondly, that the application of payments can make no difference in the liability of Blount in this replevin suit because the trust deed secured not only eight hundred dollars, but all sums of money advanced within one year from the date of the instrument, and the trust deed itself becomes a written obligation to pay, and is governed by the six-year statute of limitations just as the specific note for eight hundred dollars is governed.
The deed of trust in question lifts the indebtedness in excess of eight hundred dollars from appellants to Wilson out of the open account claimed and out of the three year statute of limitations, and makes of it a written promise to pay, and a written promise of eight per cent per annum interest thereon.
Section 1946, Code of 1930; Witczinski v. Everman, 51 Miss. 841; Gray v. Helm, 60 Miss. 131; Williams v. Butts, 124 Miss. 661, 87 So. 145.
This is an action of replevin begun in a county court, in which the appellee was the plaintiff, and a judgment there in his favor was affirmed on appeal to the circuit court. The case was tried in the county court without a jury.
The evidence discloses that on December ____, 1928, the appellant rented farm land from Wilson for the year 1929, and Wilson agreed to advance the money and supplies with which to make a crop on the land rented. On December 20, 1928, the appellant executed a deed of trust to Wilson on crops to be raised by him during the year 1929, and certain other personal property, including two mules, to secure the payment of a promissory note of eight hundred dollars due November 15, 1929, and any additional amount he might owe Wilson for advances made him for the making of the crop. Payments were made by the appellant on the debts secured by this deed of trust, but not sufficient in amount for the payment of both the note and the advances made in addition thereto.
The appellant's claim is that, when his payments are properly applied, the note will appear to have been paid; and, though a balance will appear to be due on the additional advances made him, the debt evidenced thereby is barred by the statute of limitations, section 2299, Code 1930. The appellee's contention is that, when the payments are properly applied, the debt for the advances made, in addition to the note, will appear to have been paid, but there will remain a balance due on the note. If this is true, the cause of action will not be barred; the suit having been brought within six years from the maturity of the note. But the appellant also says that the six-year, and not the three-year, statute of limitations applies to the entire debt, for the reason that the deed of trust contains a promise to pay it, and therefore the debt is one evidenced by writing. Section 2292, Code 1930. Section 2299, Code 1930, provides that: "Actions on an open account or stated account not acknowledged in writing, signed by the debtor, and on any unwritten contract, express or implied, shall be commenced within three years next after the cause of such action accrued, and not after." "An open account is one which consists of a series of transactions and is continuous or current, and not closed or stated," 1 C.J. 601; and such is the account here for the advances made in addition to the promissory note.
The language of the deed of trust relied on by the appellant to withdraw the case from the provisions of this statute is: "Any and all sums of money or other valuable things which may hereafter, and within one year from the date of this instrument, advanced by said R.G. Wilson to or for the account of the grantor or grantors herein, or any of them, shall be secured by this instrument, bear interest at the rate of eight per cent per annum, be payable on demand unless otherwise agreed, and be collectible by sale of the property and choses in action herein assigned and conveyed as hereinbefore provided for." This language is insufficient to withdraw the case from the operation of the statute, for "to take a case out of this statute there must be a writing evidencing an acknowledgment of indebtedness, or promising to pay, in such terms as to render any supplementary evidence unnecessary." Foote v. Farmer, 71 Miss. 148, 14 So. 445, 446.
It is not clear, from the evidence, whether any advances had been made to the appellant when the promissory note was executed, but, if there had been, it is clear that the amount thereof was considerably less than the amount of the note. All advances made by Wilson were charged by him in the form of an open account, without allocating any specific portion thereof to the note, and continued for some time after the maturity of the note. On November 15, 1929, the date of the maturity of the note, this open account discloses that there had been advanced to the appellant money and supplies to the amount of one thousand seven hundred thirty-seven dollars and one cent, and that he had made payments thereon at different times, amounting to one thousand three hundred thirty-five dollars and sixty-five cents, leaving a balance then due Wilson of four hundred one dollars and thirty-six cents.
The appellant claims that these payments should be applied first to the promissory note, but we will place that contention on one side and express no opinion thereon, for the reason that the same result will be reached in another manner.
The payments made by the appellant after the 15th of November amounted to six hundred thirty-five dollars and seventy-five cents. As no applications of these payments were made by the parties, it devolves upon the court to make them. In doing this, one of two rules applies: First, that which requires such payments to be applied to the oldest item of indebtedness; and, second, that which requires them to be applied most favorably to the debtor, under the second of which the appellant says the demand should be applied to the promissory note. But the application of either rule will here disclose that the promissory note has been paid. If the payments are applied to the oldest indebtedness, they must, of course, be applied to the payment of the four hundred one dollars and thirty-six cents, which antedated the advances thereafter made. When this is done, it will appear that the four hundred one dollars and thirty-six cents was paid and that there remained two hundred thirty-four dollars and thirty-nine cents for application to the advances thereafter made. But the appellee says that several of the items charged after November 15th were then due and should be added to the items charged prior to that date. An examination of these items discloses that only one of them could possibly come within that category, and that is the charge of one hundred twenty-five dollars for rent on part of the land rented by appellant from Wilson. Deducting that amount from two hundred thirty-four dollars and thirty-nine cents would still disclose an overpayment of the indebtedness due on November 15th by one hundred nine dollars and thirty-nine cents. So far we have not dealt with interest. Consequently, we must hold that the promissory note has been paid.
This leaves a part of the advances made on open account by Wilson to the appellant after November 15, 1929, unpaid, but, as hereinbefore said, these items are barred by the three-year statute of limitations. We have left out of view the appellant's claim to credits which he says are disclosed by the evidence and do not appear on the statement filed by the appellee.
Instead of affirming the judgment of the county court, the court below should have reversed it and tried the case de novo. Section 704, Code 1930.
Reversed and remanded.