Bell v. Mckay & Co.

SOMERVILLE, J. (1) The appeal in this case is properly taken under section 2922 of the Code. On the return of the award, it not appearing that the arbitrators were guilty of fraud, partiality, or corruption thereon, it was the duty of the clerk or judge to enter it up as the judgment of the court; and, its necessary legal effect being a discharge of defendants from liability, a judgment to that effect was properly rendered by the court. [411] Plaintiff, however, excepted to the finding of the arbitrators and assigns error thereon, and we are therefore required to review the merit of their award both as to the law and facts, just as if it were originally the judgment of the trial court itself.—Code § 2922; Wilbourn v. Hurt, 189 Ala. 557, 86 South. 768; Hoffman v. Milner, 142 Ala. 678, 38 South. 758. The evidence before the arbitrators was largely documentary, and presents no substantial dispute of fact. It is clear that defendants could, by the express terms of their charter party, declare a forfeiture of the contract and withdraw their ship from the lessee’s service for any failure by it to pay an installment of charter money on the first day of each semimonthly period, unless punctual payment were waived by particular agreement, by implication from a general course of dealing, or by recognizing the contract as continuing after the default occurred (Andrews v. Tucker, 127 Ala. 612, 29 South. 34; Elliott v. Howison, 146 Ala. 568, 40 South. 1018), or, to state the last alternative somewhat differently, by failing to exercise the right of rescission promptly and within a reasonable time (Elliott v. Howison, supra; Re Tyrer, 9 Aspin. 186, 84 L. T. Rep. N. S. 653.) (2) With respect to the installment due to the lessors on September 19th for the half month ending October 4th, and which, it seems, has never been paid, the right of'rescission and withdrawal was unquestionable lost by the failure of the lessors to seasonably assert it. We do not understand that any serious contention is made to the contrary. The installment due November 4th for the half month ending November 19th was paid to and accepted by the lessors’ agent, on November 30th, the day before the declaration and notice of rescission was presented to the lessee, without objection by him. (3) The defendants’ right of rescission must therefore be grounded, as it in fact was, on the lessee’s default in the payment due on November 19th for the half month ending December 4th. It had been agreed between the lessee and defendants’ agent, Donald, that this payment should be made on November 30th, but it was not paid on that day. In the absence of a custom or agreement to the contrary, and none appears, it was the lessee’s duty to tender the payment to Donald at his place of business in Mobile; and its failure to do so was a default-for which rescission could have been made at that time. In so declaring we do not overlook the lessee’s contention that the lessors’ repeated accept [412] anee of charter money installments, without objection or warning, after the dates when they were strictly due, was such a waiver of the lessors’ right of rescission as to suspend its future exercise in the absence of either a general warning that strict payment would thereafter be insisted upon, or an actual demand followed by refusal or failure to pay. That contention is based upon the soundest principles of law and justice. But we think it is clear that the express agreement in this case that the overdue installment should be paid on November 30th was, in effect, a demand for payment on that date within the spirit of the rule above stated. (4) So far, then, as this installment was concerned, its payment on December 1st to Donald, who had already been discharged from the lessors’ service in this behalf, and who was without authority to bind them in any way, did not prevent the rescission of the contract, notice of which was on that day given to the lessee by the lessors’ new agents, Bestor & Young; for the mere acceptance by the lessors of this installment, which was overdue, was not inconsistent with their right of rescission for its delay.—Brooks v. Rogers, 99 Ala. 435, 436, 12 South. 61. (5) But on December 4th — the first day of the new period ending on December 19th — the lessee paid to the ex--agent, Donald, the full amount of the charter money in advance for that period. Donald had no authority to collect this payment, and his recognition of the charter contract as still existing could not bind the lessors. Nevertheless, when he remitted this payment to the lessors, with an explicit statement that it was paid and accepted as for a new period of extended service, but two alternatives were open to them. They were bound to reject the payment entirely, or to accept it as made. “The general rule is that, when a party indebted to the same person on more than one account makes a partial payment, he has the unqualified right to direct its application to one debt in preference to the other. The payment is voluntary, and the debtor may declare the terms upon which it is made, and the creditor must accept them, or reject the payment. If he accepts the payment, he takes it cum onere; therefore it is that, if the debtor pay with one intent which is known or communicated to the creditor, and the creditor receives with another intent, the payor must prevail.”—Pearce v. Walker, 103 Ala. 250, 252, 15 South. 568. [413] It can make no difference in the application of this rule that, as here, the payees were denying the existence of the obligation to which the payor applied his payment; for the reason and policy of the rule are the same in either case. By accepting the installment of charter money on December 4th, and retaining it with a knowledge of the terms upon which it-was paid to and accepted by Donald, they were bound by those terms; and the legal consequence of that transaction was a waiver of previous defaults and an extension of their ship service under the charter party until its stipulated conclusion, or until another default justified its withdrawal.—Brooks v. Rogers, 99 Ala. 435, 12 South. 61; Dahm v. Barlow, 93 Ala. 120, 126, 9 South. 598. The same result would also follow from the application of a familiar principle of the law of agency that “the principal must ratify the whole of the agent’s unauthorized act or not at all, and cannot accept its beneficial results and at the same time avoid its burdens. It follows that, as a general rule, if a principal, with full knowledge of all material facts, takes and retains the benefits of the unauthorized act of an agent, he thereby ratifies such act, and with the benefits accepts the burdens resulting therefrom.”—31 Cyc. 1267, 1268, and cases cited; Crawford v. Barkley, 18 Ala. 270, 273. Specifically: “If an agent obtains possession of the property of another, by making a stipulation or condition which he was not authorized to make, the principal must either return the property, or, if he receives it, it must be subject to the condition upon which it was parted with by the former owner. This proposition is founded upon a principle which pervades the law in all its branches, ‘Qui sentit commodum sentiré debet et onus.’ ”—Wheeler, etc., Co. v. Aughey, 144 Pa. 398, 22 Atl. 667, 27 Am. St. Rep. 638; Hitchcock v. Griffin, 99 Mich. 447, 58 N. W. 373, 41 Am. St. Rep. 624. It is to be conceded, of course, that the incidents accompanying the service of a ship under a charter party like this may modify some of the principles of law which ordinarily govern the conduct of the parties. Making distant and protracted voyages which cannot be interrupted, and which do not coincide with the periods for which the hire must be paid and accepted, it is conceivable that the lessors may, even after a default, accept and retain the hire for some future period necessarily to elapse before the return of the ship, and before it could be withdrawn from [414] service; and this might not be inconsistent with the right and the intention to rescind and withdraw under the previous default. But that qualification of the rule, even if conceded, could not be applied here, for the ship reached Ft. Morgan and was withdrawn from the charter service on December 8th. Moreover, the contingency above noted seems to have been expressly provided for by the charter party, which provides that: “Payment shall be made for such a length of time as the owners or their agents, and charterers or their agents, may agree upon as the estimated time necessary to complete the voyage.” The payment and acceptance of the installment on December 4th for the period ending December 19th had no relation to the question of a delayed return. It results that the award of the arbitrators was erroneous as a matter of law, and the judgment will be reversed, the award will be set aside and vacated, and the cause will be remanded for further-proceedings in accordance with this opinion. Reversed and remanded. Anderson, C. J., and Mayfield and Thomas, JJ., concur.