Y. D. Lumber Co. v. Refuge Cotton Oil Co., 27616

CourtMississippi Supreme Court
Writing for the CourtSMITH, C. J.
PartiesY. D. LUMBER CO. v. REFUGE COTTON OIL CO. et al. [*]
Docket Number27616
Decision Date11 February 1929

120 So. 447

153 Miss. 302

Y. D. LUMBER CO.
v.
REFUGE COTTON OIL CO. et al.
[*]

No. 27616

Supreme Court of Mississippi

February 11, 1929


Division A

1. MORTGAGES. Deed of trust covering land and ginning machinery and "equipment" did not include seed house constructed on leased railroad right of way (Hemingway's Code 1927, sections 2443, 2580).

Deed of trust covering land on which a public cotton gin was situated, stating that it was the intention to convey and deliver 'to the trustee all ginning machinery and equipment of every kind and character, whether same be located on the described lands or to be located thereon, held not to embrace a seed house located on leased railroad right of way so as to take precedence over materialmen's lien, in accordance with Code 1906, section 2784, and section 3058, as amended by Laws 1926, chapter 150, section 1 (Hemingway's Code 1927, sections 2443, 2580); the word "equipment" meaning whatever is used in equipping, and usually being applied to movable and not to immovable property.

2. MORTGAGES. Intention to include seed house in deed of trust is of no efficacy as against materialman without notice of claim.

The fact that parties to deed of trust covering land and public cotton gin may have intended to embrace therein seed house [153 Miss. 303] located on leased railroad right of way is of no efficacy as against materialman furnishing materials used in construction of seed house without notice of any claim thereto under deed of trust.

HON. J. L. WILLIAMS, Chancellor.

APPEAL from chancery court of Humphreys county, HON. J. L. WILLIAMS, Chancellor.

Suit by Refuge Cotton Oil Company against Y. D. Lumber Company and others. Decree for complainant, and defendant named appeals. Reversed in part and rendered.

Decree reversed in part, case not remanded.

Butler & Snow, for appellant.

Under chapter 81, Mississippi Code of 1906, and amendments thereto, as construed in Big Three Lumber Company v. Curtis, 130 Miss. 74, the appellant had a lien upon the seed house in question from the time Cain purchased the lumber to be used in the seed house, effective as to purchasers or encumbrancers for a valuable consideration without notice from the time of commencing the suit to enforce the lien.

It will be seen from the facts stated that appellant sold the lumber and the seed house was erected therefrom in October, 1926, on certain land leased by Cain from the Y. & M. V. Railroad Company, and that the deed of trust from Cain in favor of the Refuge Cotton Oil Company was not executed and recorded until June 1, 1927.

The lower court found, and for the purpose of this discussion, we assume that the seed house was not in fact embraced in the Refuge Cotton Oil Company deed of trust.

It further appears that the appellant on August 9, 1927, filed its petition in the circuit court of Humphreys [153 Miss. 304] county, Mississippi, to enforce its lien upon the seed house and that prior to the 15th day of November, 1927, when the Refuge Cotton Oil Company had the gin property deeded by Martak to Hutchins that it had notice of the appellant's lien against the seed house and the bill under which the trust deed was corrected was not filed until December 23, 1927, long after the Refuge Cotton Oil Company had actual notice of the lien, and it will be noted that the primary purpose of the bill is to have the court adjudicate that the deed of trust is superior to the lien of the appellant.

Under these circumstances, it would seem that it was manifest error for the court to reform the deed of trust and give it priority over the lien of appellant on the seed house. Goodbar Co. v. Dunn, 61 Miss. 618; Sack v. Gilmer Dry Goods Co., 115 So. 339; Nugent v. Priebatsch, 61 Miss. 402; Miss. Valley Co. v. Railroad, 58 Miss. 849; Duke v. Clarke, 58 Miss. 465; Weidman v. Carpenter, 65 Colo. 63; Wixon v. Wixon, 76 Colo. 392; White v. Denman, 16 Ohio St. 59; Thorpe v. Helmer, 275 Ill. 86.

In Weidman v. Carpenter, 65 Colo. 63, the court cites with approval Goodbar & Co. v. Dunn, supra. In the Colorado case mentioned the court holds that a judgment lien under recording statutes similar to those in Mississippi stands upon the same footing as that of a purchaser in good faith, and that a mortgage cannot be reformed to the prejudice of the judgment lien creditor.

It would seem that the appellant here stands in a better position than would a judgment lien creditor. Appellant sold the material to Cain upon the faith of his ownership of the leasehold interest in the land, free and unencumbered and, under the statute, his lien became effective from the date of the contract as to a creditor with notice and from the date of beginning suit, as a creditor without notice. Appellant sold the material before the deed of trust was given and at a time when the property upon which the seed house was located was wholly unencumbered. [153 Miss. 305] He began suit to enforce his lien without notice of the alleged equity of the Refuge Cotton Oil Company to have the deed reformed and without actual notice of the deed of trust. On the other hand the Refuge Cotton Oil Company made no investigation or inquiry according to the proof in the case, to ascertain whether the seed house was on or off the one acre of land embraced in its deed of trust. The abstract, which it had, showed that the one acre of land adjoined the right of way of the railroad company and the most casual inspection would have shown that the seed house was on the right of way of the railroad company. So, we say that under any view of the case it was error to reform the deed of trust to the prejudice of the appellant.

Montgomery & Montgomery, for appellees.

This court has held in Big Three Lumber Co. v. Curtis, 130 Miss. 74, 93 So. 487, that a mechanic's lien as to buildings erected is effective as against prior encumbrances upon the land, but not as to subsequent purchasers or encumbrancers without notice.

The authorities cited by appellant do not apply here. In each of the cases cited, there was a deed, or deed of trust, which failed to impart notice to a subsequent creditor, or purchaser for value, because the deed, or deed of trust, was either not recorded, or failed to describe the property. In none of these cases, cited by appellant, was there any negligence or violation of any statute on the part of the party who was awarded a priority. In each case, there was negligence on the part of the vendee or mortgagee, which had resulted in failure to impart notice to a subsequent purchaser or creditor who was innocent.

A careful reading of the deed of trust from Cain to the Refuge Cotton Oil Company will show that it contains recitals sufficient to put a reasonably prudent man [153 Miss. 306] on inquiry, and accordingly, the appellant was charged with notice thereby. The gin plant and all equipment used in connection therewith was expressly covered by the trust deed. For the broad meaning of the word "equipment," see Landau v. Sykes, 98 Miss. 495, 54 So. 3.

A reasonably prudent man, after having read this deed of trust, to the oil company, would have inquired about the status of the seed house and, accordingly, the appellant was charged with notice. Dead River Club v. Stovall, 147 Miss. 385, 113 So. 336.

Butler & Snow, for appellant, on questions propounded by the court.

The court invites a discussion of the following question: "Is the seed...

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7 practice notes
  • Henderson v. Bank of Am., N.A. (In re Simmons), Bankruptcy No. 1200937EE.
    • United States
    • United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Southern District of Mississippi
    • April 24, 2014
    ...before us.Pan–Am. Life Ins. Co. v. Crymes, 169 Miss. 701, 153 So. 803, 806 (1934); see also Y.D. Lumber Co. v. Refuge Cotton Oil Co., 153 Miss. 302, 120 So. 447 (Miss.1929) (deed of trust which failed to describe seed house was not effective against subsequent lien creditors); Miss. Industr......
  • State v. Norman Tie and Lumber Co.
    • United States
    • Alabama Court of Civil Appeals
    • January 21, 1981
    ...buildings of a business enterprise." Webster's Third New International Dictionary (1971). See, Y. D. Lumber Co. v. Refuge Cotton Oil Co., 153 Miss. 302, 120 So. 447 The courts of other states have considered the question of whether a building or a similar structure constituted "machinery" o......
  • Roney v. State, 27307
    • United States
    • United States State Supreme Court of Mississippi
    • February 11, 1929
    ...that he did take any part in the fight. The statement of the district attorney that up to the time of the trial he had virtually admitted [120 So. 447] that he had participated in the fight was the statement of a fact which, if accepted, discredited and swept away his entire [153 Miss. 299]......
  • Alliance Ins. Co. v. City Realty Co.
    • United States
    • United States District Courts. 11th Circuit. Middle District of Georgia
    • September 1, 1931
    ...As to expirations, see Nat. Fire Ins. Co. v. Sullard (1904) 97 App. Div. 233, 89 N. Y. S. 934; Arrant v. Ga. Casualty Co., 212 Ala. 309, 120 So. 447; Charles Rippenberger Co., bankrupt (N. Dist. Ill. Dec. 31, 1925); In re Chapman et al. (D. C. W. Dist. Ky.) 50 F.(2d) 252; Whitney v. Whitney......
  • Request a trial to view additional results
7 cases
  • Henderson v. Bank of Am., N.A. (In re Simmons), Bankruptcy No. 1200937EE.
    • United States
    • United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Southern District of Mississippi
    • April 24, 2014
    ...before us.Pan–Am. Life Ins. Co. v. Crymes, 169 Miss. 701, 153 So. 803, 806 (1934); see also Y.D. Lumber Co. v. Refuge Cotton Oil Co., 153 Miss. 302, 120 So. 447 (Miss.1929) (deed of trust which failed to describe seed house was not effective against subsequent lien creditors); Miss. Industr......
  • State v. Norman Tie and Lumber Co.
    • United States
    • Alabama Court of Civil Appeals
    • January 21, 1981
    ...buildings of a business enterprise." Webster's Third New International Dictionary (1971). See, Y. D. Lumber Co. v. Refuge Cotton Oil Co., 153 Miss. 302, 120 So. 447 The courts of other states have considered the question of whether a building or a similar structure constituted "machinery" o......
  • Roney v. State, 27307
    • United States
    • United States State Supreme Court of Mississippi
    • February 11, 1929
    ...that he did take any part in the fight. The statement of the district attorney that up to the time of the trial he had virtually admitted [120 So. 447] that he had participated in the fight was the statement of a fact which, if accepted, discredited and swept away his entire [153 Miss. 299]......
  • Alliance Ins. Co. v. City Realty Co.
    • United States
    • United States District Courts. 11th Circuit. Middle District of Georgia
    • September 1, 1931
    ...As to expirations, see Nat. Fire Ins. Co. v. Sullard (1904) 97 App. Div. 233, 89 N. Y. S. 934; Arrant v. Ga. Casualty Co., 212 Ala. 309, 120 So. 447; Charles Rippenberger Co., bankrupt (N. Dist. Ill. Dec. 31, 1925); In re Chapman et al. (D. C. W. Dist. Ky.) 50 F.(2d) 252; Whitney v. Whitney......
  • Request a trial to view additional results

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