"The evidence, we submit, shows that the cotton was shipped by P. J. Zeigler, as an individual, and as he owed the plaintiff on other notes the plaintiff had the right, in the absence of direction from him, to apply the credit for the cotton to whichever note the plaintiff saw fit."

Their proposition is thus stated in a different form:

"The defendant, P. J. Zeigler, is a maker of the notes. He owed another note to the plaintiff, which was his note alone, without any directions, and without any connection with Virginia S. Zeigler, the plaintiff had the right to assume that the cotton was the individual cotton of P. J. Zeigler, and to credit any debt owing by him with the proceeds of sale."

The provision in the contract that "it is expressly agreed that all cash proceeds from any of said notes or goods as collected shall be immediately applied to the payment of your obligations to us whether same shall have matured or not" shows that the cotton in question was applicable to the joint indebtedness of Virginia S. Zeigler and P. J. Zeigler. Therefore it could not be applied to the individual debt of P. J. Zeigler, unless all parties to the contract consented to such application, of which fact there is no testimony what

ever.

P. J. Zeigler testified as follows:

"Q. Mr. Zeigler, did you in compliance with that contract send down these farmers' notes to the plaintiff? A. We did. Q. Now, Mr. Zeigler, I will ask you this: State as a matter of fact whether or not that 53 bales of cotton was shipped in compliance with and to be applied on that contract? A. It was shipped in compliance with the contract. Q. State whether or not the 53 bales of cotton was covered by the farmers' notes and shipped in compliance with those notes? A. It was covered by the farmers' notes and shipped under those notes. Q. Was that cotton marked with the farmers' marks? State how the cotton was marked? A.

The cotton was all marked with a private mark, showing how the cotton was received by me."

This testimony shows that in any view of the case the facts should have been submitted to the jury, especially as it was admitted that there were no directions as to the manner in which the cotton was to be applied when it was shipped to the plaintiff; and the contract provided that it should be applied to the notes in suit.

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The respondent's attorneys also rely upon the folowing proposition:

"If it be conceded that the proceeds of the sale of mortgaged property must be applied to the mortgage debt, in the absence of instruction or direction as to application, this does not affect the matter at bar. As between the mortgagor and Zeigler, this law might be pertinent, but only the makers of those mortgages could raise this question. When the cotton reached Zeigler's hands without this question being raised the cotton became the property of Zeigler just as if he had purchased same, with cash. He could then make such disposition of such cotton as appeared to him best. When the cotton reached plaintiff it was divested of any such character as it had when it came into the hands of Zeigler."

When the defendants sold the fertilizers, under said contract, the purchaser executed mortgages on their cotton crops, and these mortgages were delivered by the defendants to the plaintiff in accordance with said contract. The 53 bales of cotton in question were covered by said mortgages. When the cotton was delivered to the defendants their only authority under the contract was to ship it to the plaintiff, to be credited on their joint indebtedness. If the proposition for which the respondent's attorneys contend is sound, then Zeigler had the right, not only to apply the cotton to his individual indebtedness, to the plaintiff, but also to convert it to his own use in any other manner he saw fit, and thereby destroy the plaintiff's collateral securities.

When the cotton was delivered by the mortgagors to the defendants, they did not come into possession of it in their own right, but as trustees for the plaintiff under the terms of the contract. Therefore it cannot be successfully contended that when the cotton came into the hands

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of Zeigler the effect was the same as if he had purIchased it with cash; nor that it was divested of the lien created by the mortgages when he received it. The delivery of the cotton to the plaintiff had a double effect: Under the terms of the contract, the plaintiff, as we have said, was required to apply it to the notes in question; and the respective shares of the mortgagors in the cotton were, by operation of law, applied to the satisfaction of the several mortgages in full or pro tanto. McSween v. Windham, 104 S. C. 509, 89 S. E. 500.

There is yet another reason why there was error in directing the verdict. Even if it should be conceded that the delivery of the cotton to the plaintiff constituted it a pur

4

chaser, it was not, however, entitled to the rights of

a purchaser for valuable consideration without notice, as it did not part with anything of value at the time the cotton was delivered to it, nor was there any agreement between P. J. Zeigler and the plaintiff that any consideration whatever was to be paid. There was not even an agreement that the cotton was to be credited on the previous indebtedness of P. J. Zeigler; but if there had been such an agreement it would have been of no avail to the plaintiff, as past indebtedness is not a sufficient consideration to constitute the relation of purchaser for valuable consideration without notice. Pittman v. Raysor, 49 S. C. 469, 27 S. E. 475.

On the 9th of March, 1914, the defendants executed a mortgage in favor of the plaintiff on certain personal property. We do not now, however, deem it necessary to con

sider the provisions of that mortgage, as none of them are inconsistent with the views we have expressed. Judgment reversed, and case remanded for new trial.

9622

GRIGGS ET AL. v. GRAVES.

(91 S. E. 319.)

LOGS AND LOGGING-CONRTACTS-CONSTRUCTION-ACTIONS-INSTRUCTION. -In an action of claim and delivery for a sawmill, where the controversy was as to amount due, under the contract defendant was entitled to compensation for boards manufactured and delivered at designated points, and for the cutting and hacking of lumber for plaintiffs, it was improper to restrict his claim for compensation to boards manufactured.

Before BOWMAN, J., Cheraw, July, 1915. Reversed.

Action by T. G. Griggs and J. J. Griggs, partners, trading as Griggs Bros., against D. L. Graves. From a judgment. for plaintiffs, defendant appeals.

Mr. Geo. K. Laney, for appellants.

Messrs. R. T. Caston and Stevenson & Prince, for respondent.

February 10, 1917.

The opinion of the Court was delivered by MR. JUSTICE FRASER.

This is an action in claim and delivery. The plaintiffs claim to be the owners of a certain sawmill and appurtenances, in the possession of the defendant, under the following contract:

"This agreement by and between T. G. Griggs, for Griggs Bros., parties of the first part, and D. L. Graves, party of

Opinion of the Court.

It

[ 106 S. C. the second part, witnesseth: That D. L. Graves, the second party, has this day released unto Griggs Bros. a certain sawmill, boiler and engine, and all the sawmill flxtures which he owns or controls at this time, released to the said Griggs Bros. until he shall pay to the said Griggs Bros. the sum of $600.00, with interest at 8 per cent. per annum. is further agreed by the parties that the said D. L. Graves is to cut lumber for Griggs Bros. and move from place to place, as Griggs Bros. shall designate, and shall cut and hack the lumber so cut; Griggs Bros. to furnish the timber and to pay D. L. Graves the sum of $5.00 per thousand cash for the lumber so sawed at the time of sawing, the remainder of whatever is earned to be placed on the $600.00 mentioned above, and to be figured for the set now being sawed at the rate of $9.00, less stumpage and hauling-hereafter the price to be $5.50 for the sawing; Griggs Bros. furnishing the timber and doing the delivering of the lumber. It is further understood that D. L. Graves shall have until January 1, 1914, to pay the $600.00 above mentioned. (Griggs Bros. further agrees to pay D. L. Graves $12.00 per thousand feet for all the No. 1, 2 and 3 boards they make at present location, delivered f. o. b. cars Ruby or Mt. Croghan, S. C., as Griggs Bros. may direct.) And if he fail to do so, it is a part of this agreement that unless D. L. Graves shall pay the said sum of $600.00 by January 1, 1914, the said sawmill, boiler and engine and fixtures shall become the property of Griggs Bros., and they witness our hands and seals this January 23, 1913."

The con

The execution of the contract was not denied. troversy was as to the amount due, and that to be determined by the quantity of lumber delivered.

In charging the jury, his Honor, the trial Judge, said: "I am also requested, gentlemen, to charge you, and I do charge you, that the contract in this case provides for delivery of the lumber at Ruby, or Mt. Croghan, and defendant can only charge plaintiffs with such as was delivered to such