Gaertner v. Western Elevator Co.
| Decision Date | 19 June 1908 |
| Docket Number | 15,603 - (116) |
| Citation | 116 N.W. 945,104 Minn. 467 |
| Parties | F.C. GAERTNER v. WESTERN ELEVATOR COMPANY |
| Court | Minnesota Supreme Court |
Action in conversion in the district court for Martin county to recover $126.75. The defendant alleged a counterclaim because of payment to the International Harvester Company. A second action was brought to recover the price of other grain delivered to the Mutual Elevator Company. By stipulation of the parties the actions were tried together. The court made findings and ordered judgment in favor of defendant in both cases. From an order, Quinn, J., denying plaintiff's motion for amended findings and judgment thereon or for a new trial, plaintiff appealed. Reversed and new trial ordered.
Notice of Title.
A vendee has constructive notice of the title of his vendor who is in actual possession of the personal property sold.
Chattel Mortgage.
A past indebtedness is sufficient consideration to sustain a mortgage given to secure it.
Conversion.
Defendant elevator company, which bought grain from plaintiff in actual possession under forfeiture on a crop mortgage, paid part of the purchase price to a third person, claiming under a chattel mortgage which was expressly subject to a landlord's first lien, but which had been in fact recorded before plaintiff's. It is held that, in view of the actual knowledge of such third person as to plaintiff's rights, of the recitals in the mortgage having reference thereto, and of the plaintiff's possession of the grain at the time of the sale, the plaintiff was entitled to recover in conversion the amount so paid a third person.
Mathwig & Sasse, for appellant.
Dean & Palmer, for respondent.
This is an appeal from an order of the trial court refusing plaintiff's motion for amended findings and judgment thereon in his favor, or, in lieu thereof, for a new trial.
Plaintiff on January 23, 1906, leased by writing a farm to one Edhlund for the farming season of 1906. Edhlund gave a chattel mortgage on all crops to be grown on the farm during said season, free from incumbrances, and other personal property, to secure three promissory notes. Two of these notes, aggregating $1,062.50, were for two overdue notes not extended; the third, in the sum of $550, was for the 1906 rent. The lease was not recorded. The mortgage was recorded January 23, 1906. The rent note due September 1, 1906, was not paid. Plaintiff, after forfeiture under the mortgage, and pursuant thereto, in effect, took possession of the crop of flax and oats grown on the farm. Part of that crop he sold and delivered to defendant elevator company, and part to another elevator company. Before defendant paid plaintiff, the International Harvester Company made claim to this grain under a chattel mortgage recorded eight days prior to plaintiff's, given to it by Edhlund before he had any lease of the premises. This mortgage secured past-due indebtedness, the time of payment of which had been extended, inter alia, on "also all crops of every name, nature, and description now sown, or planted and to be sown, planted or grown during the crop season commencing on the first day of May next subsequent to the date of this mortgage upon the west half of section 3, township 103, range 32, county and state first aforesaid, said real estate being owned by G. G. Groger, in my possession and control, this mortgage being the first lien on all the property above described, excepting about $1,000 to the landlord; this $1,000 is not secured on anything else but the crop." At the time of the execution of this mortgage there was on file in the office of the town clerk a crop mortgage given by Edhlund to the plaintiff, dated April 8, 1905, for $1,062.50 in notes due September 1, 1905. This mortgage was admittedly void, because it did not state the year in which the crop securing the indebtedness was to be grown. It was the only mortgage on record when the harvester company's mortgage was given. Defendant paid that company a certain sum on account of its mortgage, and the balance to the plaintiff. Plaintiff brought suit in conversion against defendant to recover the amount so paid to the harvester company. The defendant's answer set up the mortgage to the harvester company as a first lien, and payment to it as a counterclaim.
A similar action was brought to recover the price of the part of this crop delivered to the other elevator company. By stipulation, the actions were tried together. The result of this appeal determines them both. The court made its findings and ordered judgment for defendant in both cases.
1. The contention of the defense is this: The proceeds of the sale to the elevator company by the defendant constituted a fund in its hands which stood in the place of the grain sold. It had a resulting right to discharge in their order the incumbrances thereon. It was its right so to do. The essential question is: Did the defendant have notice of the plaintiff's rights under his mortgage? The record discloses no such notice. The mortgage to the harvester company was first lien on the crop, except a mortgage which under the recital in that mortgage, must possess three characteristics: It must (1) have been in the amount of about $1,000; (2) have run to the landlord, Groger; and (3) have been secured on crops only. The mortgage under which plaintiff claims was for more than $1,000, ran, not to Groger, but to Gaertner, and was secured on other property in addition to the crop. The reference to the mortgage assumed would logically refer to the void mortgage given by Edhlund in 1905. "Under these circumstances, the defendant, not being a party to any of the mortgages under consideration, and having no notice of or knowledge of the same, except such as is acquired from the records," should "be held to have had notice...
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