Davis v. Montgomery

Stagy, C. J.

There is really no dispute in respect of the facts. The evidence is not in conflict. Plaintiff admits that in the event of a surplus from either building it was to be applied to the other. And even if it be conceded that, through error or misunderstanding of the conferences had between the parties, the Acacia applied rents from the Cafe Building against the accrued interest on the Davis Building, when plaintiff understood a different application would be made, which is the strongest permissible inference on the record, still it was her duty to protest at the time of receiving statement, or within a reasonable time thereafter, unless she were content with the application as made by the defendant.

Sweeney v. Pratt, 70 Conn., 274 , 39 Atl., 182 . Failing in this, she is now estopped.

McNeely v. Walters, ante, 112. Compare Development Co. v. Bon Marche, ante, 272. The pertinent rule is stated in 48 C. J., 654, with citations in support of the statement, as follows: “The debtor is estopped from questioning the application made by the creditor where he receives an account or receipt applying payments in a certain way and fails to object, even though the application was made by the creditor in violation of an alleged agreement between the parties.” The following will also be found as supporting the rule, either directly or in tendency:

McLear v. Hunsucker, 30 La. Ann., 1225 ;

Flowers v. O'Brannon, 43 La. Ann., 1042 , 10 So., 376 ;

Baker v. Smith, 44 La. Ann., 925 , 11 So., 585 ;

DeBusk v. Perkins, 207 Ky., 556 , 267 S.

W., 716 ;

Felin v. Trust Co., 248 Pa., 195 , 93 Atl., 956 ;

Sawyer v. Howard, 86 Vt., 63 , 83 Atl., 535 ;

Turner v. Osborn, 106 Miss., 737 , 64 So., 721 .

The foundation of estoppel in pais is error or inadvertence on the one side, and fault or dereliction on the other.

Morgan v. R. R., 96 U. S., *324 716;

Sweeney v. Pratt, supra; LeRoy v. Steamboat Co., 165 N. C., 109 , 80 S. E., 984 . There is no occasion for tbe doctrine when both parties are in the right.

Estis v. Jackson, 111 N. C., 145 , 16 S. E., 7 . The referee and the court below seem to have overlooked this principle.

In all probability the plaintiff was not concerned at the time with how the rents should be applied, for no doubt she then expected to repay both loans. However, when it later appeared that she would not be able to care for either, as an afterthought, she foregoes any effort to redeem the Davis Building and seeks to forestall foreclosure of the Cafe Building, hoping thereby to save it in the end.

The decision in Bonner v. Styron, 113 N. C., 30 , 18 S. E., 83 , is not at war with our present position.

The cause will be remanded for judgment accordant herewith.

Error.