Texas Farm Products Co. v. Burrus Feed Mills, Inc.

• Decision Date: 03 June 1960
• Docket Number: No. 15661,15661
• Citation: 337 S.W.2d 203
• Parties: TEXAS FARM PRODUCTS COMPANY, Appellant, v. BURRUS FEED MILLS, INC., d/b/a Burrus Feed Mills, Appellee.
• Court: Texas Court of Appeals

Page 203

337 S.W.2d 203

TEXAS FARM PRODUCTS COMPANY, Appellant, v. BURRUS FEED MILLS, INC., d/b/a Burrus Feed Mills, Appellee.

No. 15661.

Court of Civil Appeals of Texas, Dallas.

June 3, 1960.

Rehearing Denied July 1, 1960.

S. M. Adams, Jr., Nacogdoches, for appellant.

Matthews & Sligh, Dallas, for appellee.

DIXON, Chief Justice.

Appellant Texas Farm Products Company, a corporation, has appealed from a judgment holding that a chattel mortgage lien owned by appellee Burrus Feed Mills, Inc., on a flock of chickens is prior and superior to a chattel mortgage lien claimed by appellant.

On March 16, 1957 William A. Purgahn, of San Augustine County, Texas, purchased two thousand 'Day Old Trapnest Pullets' from Ward's Feed Store for a consideration of $720. The purchase was financed by appellee Burrus Feed Mills. In payment Purgahn executed his purchase price note and chattel mortgage to Ward's Feed Store, which note and mortgage were transferred to appellee and filed for record in San Augustine County, Texas, on the day of the purchase, March 26, 1957. Thereafter Purgahn made twenty-five purchases of feed, which purchases were also financed by appellee and for which Purgahn signed purchase notes, thereby running up the principal amount of his indebtedness to appellee to about $2,900. After allowing credits there was about $2,284 due at the time of trial.

The chattel mortgage executed by Purgahn contains this description of the property mortgaged:

'All of the chickens, and the increase thereof, owned by the mortgagor or which may hereafter during the existence of the indebtedness be owned by the mortgagor, said chickens being located or to be located on the farm, commonly known as the Purgahn Farm located 13 miles South from the town of San Augustine, on F M-705 in the County of San Augustine, State of Texas, which farm is more fully described as follows: 150 acres Farm Land.'

Subsequently, some time in the early part of 1958, Purgahn bought three thousand 'Babcock Bessie Pullets' from DeWitt Hatcheries in Nacogdoches, Texas, executing an unsecured note for the purchase price. Thereafter, in order to obtain feed, he executed a note and mortgage in the amount of $6,000, payable April 15, 1959 to appellant Texas Farm Products Company. This mortgage contains the following description of the property in question:

'3,000 Babcock Bessie Pullets to be paid for under condition 1 as described in Laying Flock Agreement dated April 15, 1958'.

At the time he executed the $6,000 note and mortgage Purgahn was not indebted to appellant in any amount. The note was to cover future purchases of feed, which at the time of trial amounted to about $900.

Meantime Purgahn had quit paying on his indebtedness to appellee Burrus Feed Mills. Appellee's credit man visited the Purgahn farm in June 1958, having heard that Purgahn had acquired additional chickens. The additional chickens at that time were about eight weeks old.

Soon thereafter appellee filed suit against Purgahn for $2,899.91 including interest and attorney's fees, and against Purgahn, Texas Farm Products Company and Bobby Hedricks for foreclosure of its chattel mortgage lien against both flocks of chickens. Bobby Hedricks came into the picture in this manner: immediately after citation was served appellant Texas Farm Products Company caused the three thousand 'Babcock Bessie Pullets' to be picked up and transferred from Purgahn's farm to the farm of Bobby Hedricks in Nacogdoches County.

Later a receiver was appointed, the chickens were sold, and the money from the sale is now being held in the treasury of the court.

The trial court rendered judgment in favor of plaintiff Burrus Feed Mills against Purgahn for $2,956.19, and against all defendants for foreclosure of its chattel mortgage lien on all of the chickens. The judgment also provides that the money held in court should be first applied to payment of Purgahn's indebtedness to Burris Feed Mills.

Opinion.

In its only point on appeal appellant Texas Farm Products Company says that appellee's chattel mortgage is not sufficiently definite to fix a lien on the second flock of chickens.

It will be observed that appellee's chattel mortgage provides that the lien shall cover the flock of chickens then owned by Purgahn and also chickens 'which may hereafter during the existence of the indebtedness be owned by the mortgagor'. Appellant argues that the latter provision in appellee's mortgage is too indefinite to be effective as a mortgage on after-acquired property, such as the three thousand pullets on which both appellant and appellee claim liens. In support of its contention appellant relies on the holdings in Richardson v. Washington et al., 88 Tex. 339, 31 S.W. 614; McDavid v. Phillips, 100 Tex. 73, 94 S.W. 1131; and Watson v. D. A. Paddleford & Son, 110 Tex. 525, 221 S.W. 569.

Appellee also cites Richardson v. Washington, supra, contending that the terms of its mortgage together with other undisputed facts in this case are in conformity with the holding in the Richardson case. In addition appellee cites us to Speer v. Allen, Tex.Civ.App., 135 S.W. 231; First Nat. Bank of Fabens v. American Trust & Savings Bank of El Paso, Tex.Civ.App., 1 S.W.2d 437; and Barron v. San Angelo Nat. Bank, Tex.Civ.App., 138 S.W.142.

In the Richardson v. Washington case, supra, it was held that a mortgage upon personal property not owned by the mortgagor at the date of the mortgage is void unless, after acquiring the property, the mortgagor performs some act indicating a purpose to bring it within the terms of the mortgage. On the other had equity will enforce the mortgage if it is clear, considering the surrounding circumstances at the time of the transaction, that the parties intended that the lien should be fixed on the after-acquired property.

The location and ownership of the land where the property is located, or is to be located is also sometimes very important, especially if the property is itself of a kind difficult to describe with such accuracy as might set it apart from property of a similar kind. Richardson v. Washington, supra; 14 C.J.S. Chattel Mortgages Sec. 64, p. 671. See also cases hereinbefore cited.

The McDavid case reiterates the holding in the Washington case, but is not in point with the facts in ...