Devereaux Mortg. Co. v. Walker

• Decision Date: 06 June 1928
• Docket Number: 4867
• Citation: 46 Idaho 431,268 P. 37
• Parties: THE DEVEREAUX MORTGAGE COMPANY, a Corporation, Respondent, v. WILLIAM A. WALKER and LAVINA WALKER, His Wife, E. J. TAYLOR, D. A. SPAULDING, C. B. WALKER, UTAH SAVINGS AND TRUST COMPANY, Receiver for the CONSOLIDATED WAGON AND MACHINE COMPANY, an Insolvent Corporation, and J. S. HALEY, Defendants, and THE FIRST NATIONAL BANK OF DRIGGS, a National Banking Association, Defendant and Appellant
• Court: Idaho Supreme Court

268 P. 37

46 Idaho 431

THE DEVEREAUX MORTGAGE COMPANY, a Corporation, Respondent, v. WILLIAM A. WALKER and LAVINA WALKER, His Wife, E. J. TAYLOR, D. A. SPAULDING, C. B. WALKER, UTAH SAVINGS AND TRUST COMPANY, Receiver for the CONSOLIDATED WAGON AND MACHINE COMPANY, an Insolvent Corporation, and J. S. HALEY, Defendants, and THE FIRST NATIONAL BANK OF DRIGGS, a National Banking Association, Defendant and Appellant

No. 4867

Supreme Court of Idaho

June 6, 1928

APPEAL from the District Court of the Ninth Judicial District, for Madison County. Hon. Ralph W. Adair, Judge.

Action to recover share in crops. Judgment for plaintiff. Defendant the First National Bank of Driggs, appeals. Affirmed.

Judgment affirmed. Costs to respondent.

F. L Soule, for Appellant.

Under any ordinary lease providing for a share of the crop to the landlord as rental, the title to the whole crop is in the tenant, and the rights of the third parties must be determined by that principle. This is the rule even where the third party acquires his rights after the execution of the lease, while here the lien of appellant's mortgage was in force and of record before the lease was made. This rule has the sanction of the overwhelming weight of authority, and this court has already adopted this rule as the law of this state. (Eaves v. Sheppard, 17 Idaho 268, 134 Am. St 256, 105 P. 407; Holt Mfg. Co. v. Thornton, 136 Cal. 232, 68 P. 708; Imperial Valley Co. v. Globe Grain Co., 187 Cal. 352, 202 P. 129.)

The respondent cannot claim the benefits of a crop mortgage under its lease, as against third parties, because its lease is not executed nor recorded as a crop mortgage. It is simply a secret contract lien, which is good only between the parties to the instrument. A crop mortgage cannot be acquired otherwise than as provided by law. "These provisions as to mortgages cannot be evaded by any mere shuffling of words." (Palmer v. Howard, 72 Cal. 293, 1 Am. St. 60, 13 P. 858; Crocker v. Cunningham, 122 Cal. 547, 55 P. 404.)

H. J. Swanson, for Respondent.

When a mortgagee enforces his mortgage upon a part of his mortgage security only, and neglects or omits to foreclose it as to the remainder of the security, he thereby waives the lien upon the remainder. (Jones on Mortgages, 7th ed., sec. 1463, second sentence in said section.)

That there could be but one foreclosure of a mortgage has undoubtedly been the law in Idaho, until it was possibly changed by the 1927 Session of the Idaho legislature. (C. S., sec. 6951, 1927 Sess. Laws, chap. 155.)

Even if the appellant still has a mortgage, it is the law in Idaho that a mortgage on a future crop attaches only to such interest as the mortgagor may have in it when it comes into being. (Twin Falls Bank & Trust Co. v. Weinberg, 44 Idaho 332, 257 P. 32.) And the same case also restates the well-known rule that the court will ascertain, from the contract itself, the intention of the parties so far as is possible and give it effect.

BAKER, Commissioner. Varian, Brinck, CC., Wm. E. Lee, C. J., Taylor, T. Bailey Lee, JJ., concurring. Budge and Givens, JJ., dissent.

OPINION

BAKER, Commissioner

In 1920 William A. Walker and wife, to secure the payment of certain notes then made by them and later transferred to the appellant, the First National Bank of Driggs, Idaho, gave their chattel mortgage covering, with other property, the crops to be grown during the years 1921 to 1925, inclusive, upon particularly described land in Madison county. The land upon which the crops were to be grown was at that time mortgaged to the respondent, the Devereaux Mortgage Company. The real estate mortgage was later foreclosed and the property was sold, at a date not shown, to the respondent. On April 23, 1923, the respondent and the Walkers entered into an agreement, called a lease, by the terms of which the respondent did "let and farm lease" the real property to the Walkers for the period of one year. Various provisions of the agreement indicate the parties contemplated the operation of the property during the year 1924 under the same contract. The Walkers, called "lessees," covenanted "to pay as rental for said premises one-third of all crops planted and grown upon said premises . . . . to be delivered at the warehouse in Rexburg free of cost to The Devereaux Mortgage Company." It was further provided that upon the default of the lessees, the lessor might terminate the agreement and in that event the lease should "become a lien on any crops that may be at that time in the ground or on the premises for any unpaid rental or any share due or to become due as rental." The 1923 crop was sold by the bank under foreclosure of its chattel mortgage and no part of the crop was delivered to the respondent. After the 1924 crop had been harvested, removed from the premises and placed in a warehouse the respondent commenced this action to recover one-third of the same, and asserted the priority of its claim over the lien of the appellant. By cross-complaint, the appellant sought to foreclose the crop mortgage held by it and asserted the priority of its mortgage lien over any claim or interest of the respondent. The crop was sold and the proceeds were paid into court to await the determination of the action. The trial court decreed that one-third of the proceeds, with respondent's costs, be paid to it and that the balance be paid to the appellant bank.

The appellant takes the position that since the agreement did not expressly reserve to the respondent title to the crop, the Walkers owned it by absolute title, and that the lien of appellant's mortgage attached to the entire crop; that respondent's claim was at most a lien to become effective only upon the termination of the agreement and that such lien, when it came into existence, if at all, was subsequent in time and in right to the lien of its mortgage.

The sole question presented is whether the mortgage of the appellant constitutes a lien upon the share of the crop claimed by the respondent. The validity of the mortgage is, in all other respects, apparently conceded.

It has become the settled law of this state that a mortgage upon crops to be thereafter sown and grown attaches as a lien only to the interest held or retained by the mortgagor in such crops when they come into being. (C. S., sec. 6373; Green v. Consolidated Wagon & Machine Co., 30 Idaho 359, 164 P. 1016; Twin Falls Bank & Trust Co. v. Weinberg, 44 Idaho 332, 257 P. 31.) The appellant therefore, had no greater interest in the crop than the Walkers had.

Contracts by the terms of which the owner of land gives to another the right to occupy and farm the land for a particular period upon the promise and agreement of the other to deliver and return a definite part of the crops to be grown on such land have resulted in much litigation with a variety of results.

The great majority of cases hold that a co-ownership is created between the land owner and the grower in all crops grown by the latter while in possession of land under an agreement by which he covenants to deliver a portion of such crops to the owner of the land. The following authorities, among many others, support that rule: 8 R. C. L., p. 374, sec. 21; Fuhrman v. Interior Warehouse Co., 64 Wash. 159, 116 P. 666, 37 L. R. A., N. S., 89; Pearson v. Lafferty, 197 Mo.App. 123, 193 S.W. 40; Putnam v. Wise, 1 Hill 234, 37 Am. Dec. 309; Bernal v. Hovious, 17 Cal. 541, 79 Am. Dec. 147; Knox v. Marshall, 19 Cal. 617; Baughman v. Reed, 75 Cal. 319, 7 Am. St. 170, 17 P. 222; Woodsend v. Chatom, 191 Cal. 72, 214 P. 965; Olin v. Martell, 83 Vt. 130, 138 Am. St. 1072, 74 A. 1060; Messinger v. Union Warehouse Co., 39 Ore. 546, 65 P. 808; Halsey v. Simmons, 85 Ore. 324, 166 P. 944, L. R. A. 1918A, 321; Niagara Oil Co. v. Ogle, 177 Ind. 292, Ann. Cas. 1914D, 67, 98 N.E. 60, 42 L. R. A., N. S., 714; Sims v. Jones, 54 Neb. 769, 69 Am. St. 749, 75 N.W. 150; Olson v. Olson, 168 Ill.App. 358; Brown v. Lincoln, 47 N.H. 468; Kuiper v. Miller, 53 N.D. 711, 207 N.W. 489; First National Bank v. St. Anthony & Dakota Elev. Co., 171 Minn. 461, 214 N.W. 288; Straight Bros. Co. v. Chicago, M. & St. P. Ry. Co., 183 Iowa 934, 167 N.W. 705. To these might be added the case of Jensen v. Anderson, 50 Utah 515, 167 P. 811, in which the land owner was permitted to recover his share in replevin action.

While the very great majority of cases are to the effect that the owner of land has a property interest in the crops before division and delivery and that he and the producer own the crops, there is much diversity of opinion as to the reason for that conclusion and the proper classification of the relation created by their agreement. Probably the greater number of courts base their decision upon the ground that in the absence of qualifying provisions evincing a contrary intent, contracts whereby one gives to another the use of land to cultivate upon the agreement on the part of the other to return a specified portion of the crops produced create a tenancy in common in the crops whether the agreement be a lease or a cropping contract, and it is of no consequence that the agreement be denominated a "lease" and the share to be delivered "rental." The reasoning is that the parties intended that the occupier of land, whether he be called tenant, cropper, servant or contractor, shall deliver to the land owner, not a sum of money equal to the value of the share of the crop but the particular portion of the crop he agreed to deliver; that the owner of the land is entitled to receive a particular share or portion of the crops produced on his land and is not merely the holder of a claim or demand against the occupier, for a sum equal to the value of a particular portion or share of the crop at the time and place of delivery,...