Larry v. Brown

SIMPSON, J. — This was a bill filed by the appellee against the appellant, praying specific performance of an agreement to sell the lands therein described to complainant. The contract on which the equity of the bill rests is set out as an exhibit to the bill and will be set out in substance in the statement by the reporter. The original agreement of renting, in which was included an option to purchase, was dated October 26, 1901, and the agreed statement of facts shows that advancements were received by complainant during the years 1902, 1903, 1904 and 1905; that on January 6, 1902, complainant executed to respondent a note and mortgage on his crops to he grown on said lands during that year, and on certain other personal property, for $200, due October 15, 1902, which included the $40 rent, and also amounts due for previous advancements, some of which had been made before the execution of the original agreement. Certain other advancements were made during that year and in the fall and winter payments were made, reducing the entire amount due, and on Maroch 30, 1903, complainant executed another mortgage and note, covering the same property and the crops of that year, for $133, due November 1, 1903, which included the balance due and advances up to date. During the fall of that year the complainant paid respondent sufficient amount of money to pay off entirely said mortgage, but said nothing as to which debt it was to be applied to. Respondent applied the money to the payment of said mortgage, and when, on November 7, 1903, complainant paid him $30, respondent gave him a receipt for the same “on rent note.” On March 2, 1904, complainant executed another [456] mortgage and note for'$143, due October 15,1904, which included the balance of $10 due from the previous year and advances received up to date. Other advances were received during that year, and by,sundry payments during the fall and winter of that year, the last payment being early in December, he paid the entire amount of advances and rent. No mortgage was made in 1905, but certain advancements wrere made, and on October 7th of that year complainant paid $50, without any particular instructions as to its application, and respondent gave two receipts, one for $35 ’“on ac’t” and the other for $15 “on rent,” and on November 15th, the remainder being paid, he executed a receipt therefor. All of the payments were made from proceeds of crops raised on said lands. The only thing said between the parties about the option, subsequent to the execution of the original instrument, was that complainant asked respondent in 1902, whether, in case he should improve the land and fail to avail himself of the option, he would be deprived of its use during the five-year period, to wdiich respondent replied, “No;” that as long as he paid the rent he could continue in possession for five years. The contention of the appellant is that, although complainant paid each year, on or before November 1st, an amount exceeding the $40 rent which was to be paid, yet, as the complainant gave no directions as to which debt the payment should be applied to, and as respondent applied it to the other amounts due, thus leaving a portion of the rent not paid promptly at maturity, the complainant thereby forfeited his option to purchase. There is no controversy about the fact that a proper tender was made, on November 18, 1905, to purchase the land. Whatever may be the rule in other jurisdictions, it is the lawr of this state that, where a debtor owes several distinct debts to one creditor and makes a payment [457] without directing how it shall be applied, the creditor may apply the payment to either debt, as he may choose. —Johnson v. Thomas, 77 Ala. 367; Heard v. Pulaski, 80 Ala. 502, 2 South. 343; McCurdy v. Middleton, 82 Ala. 131, 137, 2 South. 721; Kent & Barnett v. Marks & Gayle, 101 Ala. 350, 353, 14 South. 472. It is true that certain conditions may qualify this rule, such as that if one. of the debts be secured by a mortgage and the other not, and the payment is from the proceeds of the mortgaged property, said proceeds cannot, without the consent of both parties, be applied to any debt except the mortgage debt, until it is satisfied. — Strickland v. Hardie, 82 Ala. 412, 414, 3 South. 40; Boyd & Co. v. Jones & Poye, 96 Ala. 305, 308, 11 South. 405, 38 Am. St. Rep. 100; Pearce v. Walker, 103 Ala. 250, 252, 15 Soutt. 568; Darden v. Garson & Winter, 91 Ala. 325, 9 South. 278. The rule applying partial payments to the oldest items applies only where no particular application is directed or made by either party. — Connor v. Armstrong, 91 Ala. 265, 9 South. 816. The agreed statement of facts shows, not only that the complainant, when he made payments, did not direct to which debt they should he applied, but also that the creditor applied them to the debt other than the rent, and gave receipts to the complainant showing that fact, which receipts were received without objection. The debts were of equal dignity, secured by the same mortgage, or by lien on the crops for rent and advances. Consequently the rents were not paid at maturity. So it remains to determine the nature of the contract and the effect of such failure thereon. It Avas, first, a contract of renting; second, it had none of the elements of a sale; third, it AAras not an agreement to sell, for there was no such aggregatio mentium as is necessary to constitute an agreement. There Avas no obligation, on the part of [458] ■ the complainant, to purchase the land. The instrument itself shows that, while there was an agreement to rent, ■ yet there was merely an option granted to the complainant to purchase the land, at any time during the term • of five years, provided he paid the rent “at maturity,” and it is disitnctly stated that, if he failed to do so in ■ any year, he thereby forfeited the right to purchase. The ■parties have thus made time of the essence of the contract, and in order to avail himself of the option it was necessary for the complainant to pay the rent at maturi- • ty. — Fulenwider v. Rowan et al.} 136 Ala. 287, 303, 304, 34 South. 976. It is true that the time of payment, be- ; ing provided for the benefit of the party granting the .option, might be waived by him. — Lowery v. Peterson, 75 Ala. 110, 113; Garrison v. Glass, 139 Ala. 512, 517, 36 South. 725. Yet, in the present case, it cannot be said that the time of payment, as a condition precedent :to the exercise of -the option, was waived by “any act clearly evincing an intention to treat the contract as a valid subsisting contract of purchase,” for the reason that, because of the dual nature of the contract in question, the rent was payable at any rate, without regard ■ to the option, and the receiving of payment of the rent could not evidence an.intention to continue the option, or waive the condition necessary to its exercise. ■’ The decree of the court is reversed, and a decree will be rendered dismissing the bill. Reversed and rendered. Tyson, C. J., and Anderson and Denson, JJ., concur.