Matter of Gorden

• Decision Date: 08 March 1985
• Docket Number: Adv. No. 83-0167.
• Citation: 47 BR 245
• Parties: In the Matter of Marvin GORDEN, Debtor. Richard FRUIN and Mary Ann Fruin, Plaintiffs, v. Marvin GORDEN and Production Credit Association, Defendants.
• Court: U.S. Bankruptcy Court — Western District of Wisconsin

47 B.R. 245 (1985)

In the Matter of Marvin GORDEN, Debtor Richard FRUIN and Mary Ann Fruin, Plaintiffs, v. Marvin GORDEN and Production Credit Association, Defendants.

Adv. No. 83-0167.

United States Bankruptcy Court, W.D. Wisconsin.

March 8, 1985.

Michael J. Colgan, Bosshard, Sundet & Assoc., La Crosse, Wis., for plaintiffs.

Michael J. McAlpine, Gleiss, Goodman, Osborne & McAlpine, Sparta, Wis., for defendant PCA.

Galen Pittman, La Crosse, Wis., and William Chatterton, Madison, Wis., for defendant Marvin Gorden.

OPINION

ROBERT D. MARTIN, Bankruptcy Judge.

On April 1, 1981 Richard and Mary Ann Fruin (the "Fruins") entered into a lease with Marvin Gorden ("Gorden") of certain farmland consisting of 115 acres and described as; Sections 2, 10, and 11, in Township 12 North, Range 4 West, in the Town of Viroqua, Vernon County, Wisconsin ("Vernon County Property"). The lease was to expire on March 31, 1983, but the Fruins served an eviction notice upon Gorden in December 1982 for Gorden's failure to pay rent due under the lease for November 1, 1982.

On October 13, 1982 Gorden had entered into a security agreement with Production Credit Association ("PCA") granting PCA a security interest in crops including those growing on "Sections 3-2-11 Township 12N Range 4W in Vernon County Wisconsin." On January 6, 1983 Gorden corrected the mistake in the security agreement by granting a lien to PCA on the 1982 crops grown in section 10 ("section 10"). The Fruins' land in section 10 was approximately thirty-one acres, twenty-six acres of which Gorden planted in corn.

On January 21, 1983, pursuant to the December eviction notice the Vernon County Circuit Court entered an order nunc pro tunc to January 6, 1983, restricting Gorden from picking corn on section 10 until Gorden paid rent in the amount of $3,010.00 due to the Fruins. In addition the order provided that if Gorden failed to pay $3,010.00 to the Fruins before February 6, 1983, the Fruins would be authorized to take judgment against Gorden for that amount and would be restored to possession of their land.

Gorden filed for bankruptcy under chapter 11 on February 4, 1983. On May 5, 1983 this court ruled that the lease between Gorden and the Fruins had expired prior to filing in bankruptcy and that therefore the Fruins were entitled to possession of the Vernon County Property.

On April 21 and 25, 1983, Gorden harvested approximately fourteen acres of corn from section 10 yielding 1,435 bushels of corn. Gorden sold the harvested corn for $2.90 per bushel. The total value of the corn removed was $4,161.50, the cost for removing the corn was approximately $700.00, making the net value of the corn removed approximately $3,461.50. The balance of the corn was harvested by the Fruins.

The initial issue to be determined is whether the standing corn is affixed to the realty and therefore belongs to the Fruins or is personalty which belongs to Gorden. If the encumbered corn is personalty Gorden's interest in it continued after the term of the lease. If instead, the corn is realty the Fruins retained rights in it after the lease terminated. American Jurisprudence explains,

One very important question which recurs in many phases of the law of crops involves the nature of crops as realty or personalty. The answer to that question depends upon the circumstances of the particular case, including the character of the crops and whether or not they have been severed from the land, the relation and intention of the parties, and the nature of the transaction in which the question arises, many courts considering them realty in some transactions and personalty in others. The result, of course, is a situation which defies a positive and comprehensive statement as to whether growing crops are realty or personalty, and in which it would be presumptuous to attempt to make a categorical statement that would answer such question definitely for every occasion and under all circumstances in which it may arise.

21A Am.Jur.2d Crops § 3 (1981) (footnotes omitted).

There are three major approaches to the question. Some courts follow the doctrine of emblements. Emblements are literally defined as "the crops or products of the land legally belonging to a tenant," American Heritage Dictionary 447 (2d ed. 1982). The court in Sparrow v. Pond, 49 Minn. 412, 52 N.W. 36 (1892), explained

At common law those products of the earth which are annual, and are raised by yearly manurance and labor, and essentially owe their annual existence to the cultivation of man, termed `emblements\' and sometimes `fructus industriales\', were, even while still annexed to the soil, treated as chattels, with the usual incidents thereof as to seizure on attachment during the owner\'s life, and transmission after his death. . . . This classification is, of course, more or less arbitrary, but it is the one uniformly adopted by the courts. . . .

52 N.W. at 36-37. The court went on to find that the subject blackberries were not emblements but rather fructus naturales, which are considered as realty. In Voight v. Kanne, 10 F.2d 747 (C.A. 8th Cir.1926), the court, considering whether a bankrupt was entitled to exempt crops growing on the homestead under the state homestead exemption statute, explained, "there is some conflict in the different jurisdictions as to whether such crops, while unsevered, are personalty or realty, but the great weight of authority is that unsevered crops are personalty. This was the common law rule and it has been followed in most of the American jurisdictions." 10 F.2d at 748 (cites omitted). The court held that the crops were not exempt under the statute.

The doctrine of emblements as applied to the rights of landlord and tenant after expiration of a lease, distinguishes between "away-going" crops and mature crops. Away going crops are those crops which mature after termination of a lease. 21A Am.Jur.2d Crops § 24. Courts following the doctrine of emblements usually hold that the tenant is not entitled to away-going crops because the tenant could have chosen not to sow the field. Peterson v. Vak, 160 Neb. 450, 70 N.W.2d 436. Mature crops are those crops which are mature prior to the expiration of a lease. Generally, tenants have the right to crops and a reasonable time within which to remove them based on the principle that after termination of a lease the tenant has a reasonable time in which to take away his personal effects. Opperman v. Littlejohn, 98 Miss. 636, 54 So. 77. The crops Gorden planted were mature crops when the lease terminated, therefore under this doctrine he may have a reasonable time within which to harvest them.

However, the doctrine of emblements also differentiates rights under leases which expire and those which terminate before expiration.

It is the general rule that if one\'s estate in land comes to an end at a time which he could not have previously ascertained, without his fault, and without any action on his part to bring about such result, he is entitled to take the annual crops planted by him before the termination of such estate. This right is ordinarily referred to as the right or doctrine of `emblements\'. . . .

Strand v. Boll, 44 S.D. 228, 183 N.W. 284, 285 (1921).

When the lease terminates due to some wrongful act of the tenant, courts have held one of two ways. One line of cases distinguishes between the crops planted before and those planted after the tenant's forfeiture. In Collier v. Cunningham, 2 Ind.App. 254, 28 N.E. 341 (1891), a lease contained a condition against assigning an interest in land to a certain person. The tenant sold his interest in his growing wheat to that person. The landlord ejected the tenant, and attempted to seize the wheat. The court noted that the tenant's transfer to the third party occurred after he had planted the wheat. The court held,

There is no doubt that where . . . the plaintiff in ejectment recovers the land he is entitled to the crops thereon growing . . . which were planted after the action was commenced. . . . But this rule does not apply to crops planted by the lessee in possession before the commencement of the action, and therefore the recovery by the appellee in the action of ejectment did not carry with it the right to wheat sown by her tenant the fall previous to the action.

2 Ind.App. at 262, 28 N.E. 341. The court cited a Wisconsin case, McLean v. Bovee, 24 Wis. 295, 1 A.R. 185 (1864), in support of its holding. In the McLean case the court held that one who receives land in ejectment is entitled to the crop thereon partly cut and partly uncut which is planted after the action is commenced. No authorities were cited by the court and the case has not been followed since.

The Oregon courts hold that if a tenant commits a forfeiture, the landlord recovers the crops no matter when they were sown. In Frances Bros. v. Schallberger, 137 Or. 529, 3 P.2d 530 (1936), the tenant sowed the premises with wheat and gave a promissory note to the plaintiff secured by the crops on January 13, 1930. On February 28, 1930, the tenant was in arrears on rental payments and the landlord repossessed and rerented the land. The new lessee harvested the crops. The court explained,

Plaintiff also contends that under the doctrine of emblements, the growing crop in question belonged to the tenant. The whole law of emblements, it has been said, is based upon two grounds, public policy and natural justice and equity. Upon the first ground, says Blackstone, the encouragement of husbandry . . . being a public benefit. . . . the second ground is based upon the principle that the tenant is justly entitled to gather his crops, even though his term has expired, and without regard to the question whether such crops are to be considered as in the nature of personalty or realty. . . . Where the reason of the doctrine fails, it has no application, as where a tenant terminates his estate through his own fault or misconduct.

3 P.2d at 537. The...