Federal Land Bank of New Orleans v. Wilson
| Decision Date | 14 January 1932 |
| Docket Number | 4 Div. 613. |
| Parties | FEDERAL LAND BANK OF NEW ORLEANS v. WILSON ET AL. |
| Court | Alabama Supreme Court |
Rehearing Denied March 31, 1932.
Appeal from Circuit Court, Crenshaw County; A. E. Gamble, Judge.
Bill for appointment of a receiver by the Federal Land Bank of New Orleans against J. J. Wilson and John Smith. From a decree discharging the receiver appointed without notice and sustaining a demurrer to the bill and dismissing it complainant appeals.
Reversed and remanded.
C. B Fuller, of Opp, for appellant.
F. B Bricken and C.J. Kettler, both of Luverne, for appellees.
The Federal Land Bank, mortgagee of farm lands, upon default made in December 1930, did, in August 1931, foreclose the mortgage under power of sale, becoming the purchaser at such sale. At that time there was a growing crop on the premises, a portion being cultivated by the mortgagor, and a portion by his tenant under a tenancy created subsequent to the land mortgage.
After the foreclosure sale, demand was made for possession, or else that the occupants attorn to and pay rents to the bank. Both demands were refused. A suit in ejectment followed. Pending this suit, the occupants of the land proceeded to gather the crops and dispose of same in disregard of the claims of the bank.
Thereupon the present bill was filed in aid of the pending ejectment suit, alleging that the occupants are insolvent, that the ejectment suit cannot be determined in time to protect complainant's rights in the crops, and praying for the appointment of a receiver of the crops.
Upon complainant's giving the required bond, the register, without notice, appointed a receiver. At that stage respondents presented to the judge of the court a motion to discharge the receiver and vacate the appointment; also filed demurrers to the bill. The demurrers were sustained, and the receiver discharged; hence this appeal.
As for the equity of the bill, the case is strictly analogous to the very recent case of Federal Land Bank v. Lloyd (Ala. Sup.) 138 So. 417.
We there held complaint entitled to the appointment of a receiver. It will be noted that interest of the purchaser at foreclosure sale in the growing crops recognized in that case is by way of security for mesne profits for use and occupation. The claim of complainant bank in the instant case is to like effect. The decision in the Lloyd Case, supra, is decisive of the main question in this case. But, because of the very great importance of the questions involved, we seek to further define as clearly as we may the rights of parties growing out of such situations.
The execution and recordation of a mortgage of real estate carries notice to all persons of the legal and equitable incidents thereof; the nature of the title in both mortgagee and mortgagor; the right to the possession and the usufruct.
Upon default, foreclosure, and demand for possession, at common law, crops growing on farm lands, being a part of the realty, become the property of the purchaser at foreclosure sale. This applied to crops of the mortgagor or his tenant entering under a letting subsequent to, and therefore in subordination to, the mortgage.
By statute a crop mortgage given after the 1st day of January of the year in which it is grown passes the legal title. The mortgagor, remaining in possession of lands, either by virtue of stipulations entitling him so to do, or by grace of the mortgagee, is, as to all persons other than the mortgagee, the owner of the lands. He may cultivate same, or let it to tenants, and both may gather, remove, and make use of the crops as their own, even after default, unless and until the mortgagee has entered or made demand for possession. Metcalf v. Clemmons-Powers & Co., 200 Ala. 243, 76 So. 9. The crop mortgage, under our statute, passes only the title of the mortgagor. He cannot deplete the security of the mortgage by passing a whole year's usufruct of the mortgaged property. Thompson v. Union Warehouse Co., 110 Ala. 499, 18 So. 105.
The holders of crop mortgages executed since January 1st of the year in which crops were grown in the instant case occupy no higher position than their mortgagor.
But what are the rights of the mortgagee or his purchaser at foreclosure sale under the existing law of Alabama as touching crops then on the lands?
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