Loudon v. Cooper

• Decision Date: 19 March 1940
• Docket Number: 27756.
• Citation: 3 Wn.2d 229,100 P.2d 42
• Parties: LOUDON et ux. v. COOPER et al.
• Court: Washington Supreme Court

100 P.2d 42

3 Wn.2d 229

LOUDON et ux. v. COOPER et al.

No. 27756.

Supreme Court of Washington

March 19, 1940

Department 2.

Suit by E. J. Loudon and wife against M. D. Cooper to restrain foreclosure of a chattel mortgage and limit the amount recoverable by defendant from J. M. Wade, who intervened, as claimant of mortgaged apples, in which defendant filed a cross-complaint. From so much of the judgment as was adverse to defendant, she appeals.

Reversed with instructions. Emblements.

Where land is leased for part of crop raised thereon, contract is executed by lessor when he places lessee in possession, and lessor's portion of crop is due and will be payable when ready for delivery, until which he and tenant hold crop as co-owners or cotenants, while land sale contract, providing for delivery of portion of crop raised on land by vendee to vendor for sale and application of proceeds on purchase price, without reservation of title to crop in vendor, does not vest title to crop or any portion thereof in vendor, as such contract is wholly executory, and parties thereto do not hold crop as co-owners or cotenants.

Appeal from Superior Court, Chelan County; W. O Parr, Judge.

Palmer Askren & Brethorst and B. E. Lutterman, all of Seattle, for appellant.

Crollard & O'Connor, of Wenatchee, for respondents.

JEFFERS Justice.

This is an appeal by defendant M. D. Cooper from a judgment entered by the superior court for Chelan county, June 9, 1938.

On January 10, 1939, M. D. Cooper commenced a chattel mortgage foreclosure action in Chelan county, by notice and sale, and thereafter the sheriff of Chelan county took into possession 1,550 boxes of apples, in the possession of J. M. Wade, who claimed to have purchased from E. J. Loudon, the mortgagor, the apples covered by the mortgage. Thereafter it was stipulated by M. D. Cooper, the mortgagee, E. J. Loudon, the mortgagor, and J. M. Wade, intervener, that the value of the 1,550 boxes of apples was $1,100, and Wade paid this amount to the sheriff, who paid it into court. It was further stipulated that the above sum should be held in lieu of the apples until the determination of this action. The apples were thereupon released to Wade. The proceedings were then transferred to the superior court by Wade and Loudon.

In the complaint filed in the superior court, plaintiffs Loudon and wife, and intervener Wade, sought to have M. D. Cooper, defendant, restrained from proceeding with the mortgage foreclosure, and further sought to obtain a judgment to the effect that Mrs. Cooper be adjudged to be entitled to only the sum of $575.22 from the intervener. Mrs. Cooper filed an answer and cross-complaint, wherein she set up four purported causes of action. In the first, she asked judgment against Loudon and wife on the note signed by them, in the amount of $2,119.72, together with interest, attorney's fees and costs; for the foreclosure of a crop mortgage given to secure the note; and for the application on such judgment of the $1,100 held by the court in lieu of the 1,550 boxes of apples. In her second cause of action, defendant sought to have foreclosed a chattel mortgage on a Ford car and Chevrolet truck, given by the Loudons to defendant to further secure the note referred to in the first cause of action. In her third cause of action, defendant alleged that the intervener converted the apples covered by her crop mortgage, by selling them and putting them beyond the reach of defendant, and asked judgment against the intervener for any deficiency remaining after applying on her judgment the $1,100 and the amount received from the sale of the car and truck. In her fourth cause of action, she alleged that the intervener converted all the apples grown on the Cooper tract, and further alleged that she was the owner of twenty per cent of such crop, by virtue of a real estate contract under which Loudon and wife were purchasing the tract from her. She asked for judgment against Loudon and Wade for the value of twenty per cent of such crop.

Intervener Wade filed a reply and answer to defendant's cross-complaint, wherein he set up certain purchase agreements entered into between him and Loudon, under which he claimed to have bought the fruit crop covered by the chattel mortgage, and denied liability to defendant in any amount in excess of $575.22, which he claimed was the value of the crop at the time he purchased it from Loudon.

The cause was tried to the court on the issues as made by the pleadings.

The relevant facts are not in dispute, and may be stated as follows: On December 31, 1936, M. D. Cooper entered into a contract with E. J. Loudon, wherein Mrs. Cooper agreed to sell, and Loudon agreed to buy, a certain orchard tract in Chelan county, known as the Cooper tract, for the sum of $9,000. The contract provided that the purchaser should pay $200 in cash, and the balance of $8,800, together with interest, should be paid by the vendee delivering to the vendor, at Chelan, Washington, each year, until the full purchase price was paid, twenty per cent of all apples grown on the property, packed in standard boxes, or in bulk, at the option of the vendor, and upon the date of delivery or deliveries, the vendor should credit the vendee on the purchase price with the amount for which the apples were sold. The contract also contained the usual provisions of such contracts relative to forfeiture, etc.

On May 13, 1938, the Loudons executed a crop mortgage on the entire crop of apples to be grown during the year 1938 on the tract above described, and also on another tract known as the Baldwin tract, to secure a loan of $2,150 made by Mrs. Cooper. This mortgage, among other provisions, contained the following: '* * * and in case of failure to properly cultivate, harvest or care for said crops, the mortgagee is hereby authorized to enter on said land and do all that is necessary to properly harvest or care for such crops, at our expense, and apply the net amount realized therefrom in payment of said indebtedness.'

The mortgage further provided: 'We the mortgagors, agree to properly cultivate the orchards on the said premises and care for said crops of apples in a good orchardmanlike manner, and to do all things that are necessary and proper for the protection thereof.'

The above mortgage was properly executed and filed for record in Chelan county, May 19, 1938. On May 13th, for the purpose of further securing the loan of $2,150, the Loudons executed and delivered to Mrs. Cooper a chattel mortgage on a Ford sedan car and a Chevrolet truck. This mortgage was properly executed and filed for record, May 19, 1938.

In all the above transactions, Mrs. Cooper, who lives in Seattle, was represented by Mr. Brethorst, of the firm of Palmer, Askren & Brethorst, and all money paid to Loudon was paid through Mr. Brethorst. On August 4, 1938, Mr. Brethorst wrote Mr. Loudon, enclosing a check for $100, and informing him that with this remittance he would have received $2,119.72, leaving a balance of $30.28, and further informing Mr. Loudon that Mr. Brethorst understood that he would be able to finance the balance of the operations through a friend. Mr. Brethorst requested that he be given full particulars as to the crops, and how the balance of the operations was to be financed.

On August 8th, Loudon wrote Mr. Brethorst, and from this letter we quote: 'I saw Mr. J. M. Wade of Jim Wade Fruit Co. today--8th of Aug. & ask him to make shure where I stood Before I commited myself tho I was sure in my mind it would work out as I intended.'

The letter then continues with statements relative to the spraying; that it would be difficult to clean the apples at packing time; and that Mr. Wade would see him through. We again quote: 'The crop is good & up to now quite clean with a few stings which are healing over.' The letter then continues to the effect that there would be about 11,000 packed boxes on the two tracts. On August 26, 1938, Loudon, having expended all the money obtained from Mrs. Cooper, and being without funds to harvest the crop, entered into what is termed 'Memorandum of Fruit Purchase Agreement,' with J. M. Wade, by the terms of which agreement Loudon purported to sell to J. M. Wade all the Winter Banana apples on the Baldwin tract, as they existed on the trees. Payment was to be made at a specified price per ton for different grades, on the basis of the number of boxes which would be packed out, the cost of harvesting, hauling, washing, sorting and loading to be deducted from the quoted price, and payment to be made upon completion of the packout. Wade retained the right to apply the purchase price to the satisfaction of any liens against the crop.

On September 20, 1938, a similar purchase agreement was made, whereby Loudon purported to sell to Wade all the commercial apples on both the Cooper and Baldwin tracts. Payment was to be made on the basis of varieties, grades and sizes that the crop should pack out, and on the basis of certain stated prices less the cost of harvesting, hauling and packing the fruit; payment to be made upon completion of the packout.

Apparently not having heard from Loudon since his letter of August 8th, on November 30, 1938, Frances Cooper, a daughter of M. D. Cooper, wrote Mr. Loudon in regard to certain real estate taxes and water assessments for 1937, and concluded her letter as follows: 'We would also like to know who is selling the 1938 crop of apples and how many of them have been sold and at what price.'

The crop was harvested and all expenses paid by Mr. Wade. It does not appear that defendant was informed of the sale to Wade until after the apples had been packed. Defendant then made demand upon Wade, basing her right to do so on her mortgage and...