O'Bryan Bros. v. Wilson

• Decision Date: 29 May 1905
• Citation: 86 Miss. 540,38 So. 509
• Parties: O'BRIEN BROTHERS v. GEORGE A. WILSON, ADMINISTRATOR
• Court: Mississippi Supreme Court

38 So. 509

86 Miss. 540

O'BRIEN BROTHERS v. GEORGE A. WILSON, ADMINISTRATOR

Supreme Court of Mississippi

May 29, 1905

FROM the chancery court of Leflore county, HON. CAREY C. MOODY Chancellor.

O'Brien Brothers and others, the appellants, filed exceptions to the final account of Wilson, administrator of the estate of W. A Bounds, deceased. These exceptions were disallowed by the court below, and the final account allowed as stated by the administrator. The exceptors appealed to the supreme court. The facts are fully stated in the opinion of the court.

[The case, or a branch of it, was once before the supreme court and is reported. See O'Brien Bros. v. Wilson, 82 Miss. 93.]

Decree reversed and remanded.

S. R Coleman, and McWillie & Thompson, for appellants.

The second exception is predicated of the action of the administrator in crediting himself with the sum of $ 3,276.84, being the amount due on one of several notes given by the decedent to J. B. West for the purchase money of the Beauty plantation, the credit being supported by the note etc., as voucher 8 to his final account. It was one of five similar notes, each of which was for something over three thousand dollars, falling due, respectively, on the first days of January, 1898, 1899, 1900, 1901, and 1902, and secured by a deed of trust on said plantation and all crops to be grown thereon during the years 1897, 1898, 1899, 1900, and 1901.

W. A. Bounds died on January 11, 1900, and on February 1, 1900, the Beauty plantation, and two other plantations, known as the Moore's Lake and Steele places, and considerable live stock, implements, etc., were sold under another trust deed given by W. A. Bounds to Mrs. H. A. McDonald, after the execution of the one in favor of J. B. West. At this sale Mrs. M. J. Bounds, the widow of W. A. Bounds, became the purchaser. On February 20, 1901, the appellee, Wilson, purchased from the widow an undivided one-half interest in the Beauty and other plantations and the live stock, etc., thereon, the right of said Wilson to begin when the J. B. West debt and certain other lien debts should be paid. She afterwards conveyed to him the whole of said property unconditionally. Shortly after his purchase of a half interest in the property from Mrs. Bounds, as above stated--that is to say, on April 8, 1901--Wilson, as administrator, applied $ 3,276.84 of the general assets of the estate of Bounds to the payment of the J. B. West note which fell due on January 1, 1901, the estate being then insolvent. The unsecured creditors cannot see the propriety of the action of the administrator in thus relieving the property of himself and Mrs. Bounds by paying a debt amply secured by said property out of the general assets and leaving them but an insignificant dividend.

Mrs. Bounds bought under the H. A. McDonald trust deed, subject to the trust deed in favor of J. B. West, and this occurred on February 1, 1900. The cotton crops of 1900 were subject to the prior lien of West's trust deed, and should have been appropriated pro tanto to this West note, which fell due on January 1, 1901. The administrator, who received cotton belonging to Bounds of the crop of 1899 of the value of $ 7,042.76, claims that the proceeds of this cotton were subject to the lien of the 1900 note which he paid, but does not show on which of the three places of Bounds it was grown.

It would seem that so far as the 1901 note is concerned the proceeds of this cotton should not have been diverted from the general assets of the estate. Where a planter gives a trust deed on his crops to meet notes maturing annually at the close of each season, it is only a rational interpretation of the instrument to say that the crops of each year are incumbered to the extent of the note falling due at the end of that year, that he is free to deal as he pleases with the surplus of the crops, and that a purchaser of such surplus from him would not be liable to account to the beneficiary of the trust deed. If this was not the intention of the parties, there was no occasion to designate the years specially, and the provision would have been made to include crops to be grown on the land for all succeeding years until the notes should have been paid. Moreover, it must have been recognized by the parties that surplus of the crop should go to the debtor to enable him to make a crop out of which he might meet the next succeeding note. The rule that the rents and profits belong to the mortgagor, in the absence of an express stipulation to the contrary, should be applied here, and no further incumbrance of the annual crops be recognized than was sufficient to accomplish the end sought--that is to say, the payment of each of the annually maturing notes.

The court will note that we are considering only the ordinary trust deed of the country; and if it be not true that the surplus of the year's crop is free after discharging the lien of the note maturing at the close of that year, one of two results must follow--that is to say, the debtor must either pay the next note a year before it falls due or hold his cotton for twelve months in order to meet it when it does fall due. The instrument cannot be given this absurd interpretation.

In the present case the administrator, as shown by his final account, paid the note which fell due on January 1, 1900, out of the crops of 1899, and no objection is made to that payment;but he should have required West to subject the crop of 1900 to the discharge of the lien securing the note falling due on January 1, 1901, for although the property had been purchased by Mrs. Bounds under another trust deed, West had a paramount lien upon the crops of that year, and the record in No. 10694 shows that a crop was made on the land that year.

It is not pretended that West did not have in 1901 an ample security for the unpaid balance of his debt outside of the funds in question, and the administrator owed it to the distributees to have a marshaling of securities and the exhaustion of the other property subject to the trust deed before diverting these funds of the general estate. It was immaterial to West from what source payment came, and Mrs. Bounds had not only purchased all the property subject to his lien, but was allowed to take the very crop of 1900 that should have been applied in payment of the 1901 note.

Under the terms of the West trust deed the beneficiary might have proceeded to foreclose for the whole debt on the partial default resulting from the failure of Bounds to pay the note maturing January 1, 1900, which was but a few days before the latter's death. But he did not elect to take possession and sell, and in less than a month after Bounds' death he accepted payment of that note, which was the only one then due. He doubtless knew his security was ample, and wanted to hold on to the interest-bearing investment. But whatever may have been the cause, he no longer had the right to foreclose after accepting payment, and it became wholly immaterial that he had been for a short time in a position to insist on payment of the whole debt.

Gwin & Mounger, for appellee.

These exceptions were passed on and decided in the case of O'Brien Bros. et al. v. G. A. Wilson et al., 82 Miss. 93. The matter of the stock of goods and the matter of the payment of the note were both pressed upon the attention of the court, and neither of these grounds of exception was overlooked by the court. The court discusses all of the facts in evidence relating to the stock of goods in 82 Miss. 99, 100, and decided that the finding of the chancellor upon these facts was correct.

The court was fully advised in rendering the decision in that case; there was no oversight on its part; and the identical questions involved in this case were passed upon in that, and the case is res adjudicata as to all of the excepting creditors as to all of the contentions in this case.

The second exception had no more foundation than the first. The deed of trust given by Bounds to West incumbered the several crops made on the West place during the years 1897, 1898, 1899, 1900, and 1901. The language of the instrument is as follows: "The said party of the first part intends to convey, and does hereby convey, unto said trustee all of the lands, . . . as also all the crops of cotton, corn, and all other agricultural products grown on or yielded by said lands during the years 1897, 1898, 1899, 1900, and 1901, and also all rents, issues, profits, income, and benefits yielded by or arising from said land during said years," etc. The purpose of said conveyance is stated by the instrument, as follows: "Now, therefore, in consideration of the premises and of one dollar received, and to secure the full and punctual payment of all of said draft and eight notes and all interest that may accrue thereon," etc.

There is nothing in the instrument to show that a certain part of said plantation is pledged to secure the payment of any certain note or that a certain part of any of the personalty conveyed is conveyed to secure any given note. The whole property is conveyed to secure the payment of the whole indebtedness. No particular crop is devoted to the payment of any particular note. The argument of inconvenience resulting from the necessity of holding a crop from one year to another has no application in the case at bar; people have the right to contract as they see fit. The funds derived from the...