In re Hogan V Atlantic Elevator Co.

• Decision Date: 27 November 1896
• Parties: HOGAN v ATLANTIC ELEVATOR CO.
• Court: Minnesota Supreme Court

66 Minn. 344

69 N.W. 1

HOGANvATLANTIC ELEVATOR CO.

Supreme Court of Minnesota.

Nov. 27, 1896.

(Syllabus by the Court.)

1. The filing of a chattel mortgage on a growing crop of grain continues to be constructive notice to all the world, although the grain is threshed and removed from the land on which it was raised.

2. Ludlum v. Rothschild, 43 N. W. 137, 41 Minn. 218, followed, as to the effect of a chattel mortgage on property not then owned, but to be thereafter acquired, by the mortgagor.

3. Held, that there was no evidence that the mortgagor ever became the owner or acquired any interest in the property purporting to be covered by the mortgage.

4. Also, that the fact that the defendant bought the grain for an adequate consideration, in the usual course of business, was prima facie evidence that it was a purchaser in good faith, in the absence of any opposing, suspicious circumstances, and that the burden was on the plaintiff, who claimed under a chattel mortgage, to show that it was executed in good faith.

5. Refusal to restore goods on demand is only evidence of a conversion, and, whenever a conversion can be otherwise proved, it is not necessary for a plaintiff to prove a demand and refusal.

Appeal from district court, Stearns county; D. B. Searle, Judge.

Action by Johanna Hogan, executrix, against the Atlantic Elevator Company. There was a verdict for plaintiff, and from an order denying a new trial defendant appeals. Reversed.

Wilson & Van Derlip, for appellant.

Geo. H. Reynolds, for respondent.

MITCHELL, J.

This was an action for the wrongful conversion of a quantity of wheat, of which the plaintiff alleged she was the owner and entitled to the possession. The basis of plaintiff's claim to the property was a chattel mortgage executed November 15, 1893, by one Wuttke to the Bank of Melrose, on “all the wheat, & c., which shall be sown, grown, raised, and harvested during the season of 1894 on sections No. 33 and 34, town. 123, range 33,” to secure payment of a note for $175 and interest, due October, 1893. The mortgage was duly filed. On the trial the plaintiff introduced evidence for the purpose of proving that, after the wheat covered by the mortgage was threshed, it was hauled to Lintonville, and sold to the defendant, at its elevator.

1. The defendant makes the point that “a chattel mortgage upon a growing crop should not be construed to be a lien upon the grain when severed and removed from the premises.” In other words, the contention is that in view of the fact that the property is left in the possession of the mortgagor to harvest and thresh, and that, after it is removed from the land where raised, it bears no earmarks by which it can be identified, therefore, as to purchasers of the grain, we should apply a rule somewhat similar to that of the common law in sales in market overt, as seems to have been done in Gillilan v. Kendall, 26 Neb. 82, 42 N. W. 281. The law is settled otherwise in this state by Close v. Hodges, 44 Minn. 204, 46 N. W. 335, in accordance with the great weight of authority. Jones, Chat. Mortg. § 69. The English custom of markets overt is not recognized in this country. Whether the necessities and policy of commerce require any modification of the law of chattel mortgages as to property, like growing crops, which is left in the possession of the mortgagor, the form of which he may change, and which, when thus changed, is incapable of identification by inspection, is a question for the legislature, and not the courts. The general principle applicable to the law of personal property is that no one can transfer any better title than he himself has, and the statutory law as to chattel mortgages is that filing constitutes constructive notice to all the world. Where a valid chattel mortgage has been filed, a purchaser of the property from the mortgagor can only obtain title free of the incumbrance when the conduct of the mortgagee amounts to an express or implied authority to the mortgagor to sell the property, or has been such as to equitably estop him from denying that he had given the mortgagor such authority. Grain must necessarily be harvested when it is ripe, and, in the course of husbandry, is usually threshed and marketed, or stored, soon afterwards. But mortgagees of growing grain frequently pay no attention to the property after the execution of the mortgage, practically leaving the whole matter of harvesting, threshing, and the subsequent disposition of the grain to the mortgagor, and then, if he pays the debt out of the proceeds, well and good; but, if h...