Thomas v. Prairie Home Co-Operative Co., 27714.
| Decision Date | 17 July 1931 |
| Docket Number | No. 27714.,27714. |
| Citation | 121 Neb. 603,237 N.W. 673 |
| Parties | THOMAS v. PRAIRIE HOME CO-OPERATIVE CO. |
| Court | Nebraska Supreme Court |
OPINION TEXT STARTS HERE
Syllabus by the Court.
The filing of a valid chattel mortgage, as provided by section 36-301, Comp. St. 1929, on crops to be grown, executed after the same have been planted, is, according to the generally accepted rule, operative as constructive notice, even after the crops have been grown and severed.
Syllabus by the Court.
Gillilan v. Kendall & Smith, 26 Neb. 82, 42 N. W. 281, 18 Am. St. Rep. 766, overruled.
Appeal from District Court, Lancaster County; Shepherd, Judge.
Action by Dora M. Thomas against the Prairie Home Co-operative Company. From an adverse judgment, plaintiff appeals.
Reversed and remanded.Edward C. Fisher and Frederick J. Patz, both of Lincoln, for appellant.
Burkett, Wilson, Brown, Wilson & Van Kirk, of Lincoln, for appellee.
Heard before GOSS, C. J., and DEAN, GOOD, EBERLY, DAY, and PAINE, JJ.
This action was brought in the district court for Lancaster county by Dora M. Thomas as plaintiff against the defendant company for the conversion of certain corn. The plaintiff, a landlord, contended that she had a valid chattel mortgage on such corn, sold by one Harry W. McCall, her tenant, to the defendant, and by it converted to its own use. The defendant answered by a general denial, but pleaded specially that in good faith and without notice, actual or constructive, it had purchased the corn in question on the open market. There was a trial to a jury and verdict and judgment for the defendant. From an order denying a new trial plaintiff appeals.
By exceptions to instructions given, and to admission of certain evidence, as well as by appropriate motions, there is presented, as one of the questions for review, the sufficiency of the description in the chattel mortgage involved in this case (conceded to have been duly filed and indexed), viz., “85 acres of corn now growing on the farm I am now farming, described as (here follows correct description),” to identify the corn after the same has been husked and harvested. The district court answered this question in the negative, and by its order expressly overruled the motion for a new trial, “upon the authority of Gillilan v. Kendall & Smith, 26 Neb. 82, 42 N. W. 281, 18 Am. St. Rep. 766, which stands somewhat alone and has been much criticised, but remains unreversed and unmodified.”
The facts involved in the transaction include the following: Harry W. McCall had lived, as tenant, on the farm now owned by plaintiff some twelve years. Plaintiff as owner succeeded to her husband's rights on the latter's death some years ago. The farm was situated within view of, and a quarter of a mile distant from, the defendant's elevator. The relation of landlord and tenant between plaintiff and McCall was well known to defendant's manager, Mr. Welch, at all times. He had actual knowledge where the corn in controversy was planted and when; observed its growth; knew when it was husked and placed in cribs; knew when it was shelled and marketed in his elevator; knew that the tenant was going to sell all of it and deliver both the landlord's and tenant's shares, and understood when he was dealing for the corn that he was buying all that was left on the Thomas place, and that the corn was the corn raised on the land in 1929. This manager's evidence is that he is now unable to state the exact date when arrangements for the sale of the corn were first made, but says that “it was in December, just a few days before he delivered it.” The manager also testified: “Well, he (McCall) said Mrs. Thomas had told him as soon as he got done shucking she wanted to sell the corn, and he said he was going to sell his corn along with it.” Defendant's manager also testifies that when the corn was delivered McCall, the tenant, informed him that the rent corn had been placed in cribs separate from his share, and that the two shares were not confused or mixed. As a matter of fact each share was separately delivered and separately received and paid for by the defendant.
Under these admitted facts, the appellant insists that the district court erred in the application of the rule announced by this court in Gillilan v. Kendall & Smith, 26 Neb. 82, 42 N. W. 281, 18 Am. St. Rep. 766, viz.: “A chattel mortgage upon growing grain is not constructive notice to third parties of a mortgage on the same grain thereafter lawfully placed in crib or bin, and a dealer in grain who, in good faith, in open market, purchases such grain from the mortgagor, and receives it at his warehouse, will take it free from the lien of the mortgage.” In the case just cited it will be noted that Maxwell, C. J., in the opinion of the court, states in part: And, in such Gillilan Case, the sole question to be determined by this court was presented by the exception to the instruction given by the district court in the following language: “A party taking a chattel mortgage upon growing corn in order to preserve his lien as against innocent purchasers, is bound to see that when the corn is gathered such notice is given to the public of his lien by keeping the same separate and unmixed with other corn as will prevent innocent parties from purchasing such corn; and in this case, if the jury believe from the evidence that the plaintiff, after the execution of the mortgages offered in evidence by him, did nothing more than to file his mortgages in the office of the county clerk, and allowed the corn to become mixed with other corn, and if the jury further believed from the evidence that the defendants, without actual notice of the existence of these mortgages, purchased the corn, or some portion of it, at their elevator in the town of Malcolm, in open market, then the plaintiff cannot recover, and your verdict will be for the defendant.” In the present case, all the corn raised on the land leased by the plaintiff to McCall is properly accounted for, and it also seems an admitted fact that the plaintiff's rent share was properly separated from the share belonging to the tenant, and that the tenant's share was capable of identification in the bin where it was stored. As between mortgagor and mortgagee, the lien of the latter was perfect. Eigbrett v. State, 111 Neb. 388, 196 N. W. 700.
In the case of Chicago Lumber Co. v. Hunter, 58 Neb. 328, 78 N. W. 619, a similar question was before the court, wherein the mortgaged property was described as: “ ‘50 acres of corn planted on the S. E. 1/4 of Sec. 17-1-8, being the N. 30 of the S. 80 acres and the south 20 of the N. 80 acres,’ accompanied by the further statement that the mortgaged property is in the possession of the mortgagor in N. county,” etc. In that case this court held: “One who bargains for the future delivery of a quantity of corn to be taken from the stalk in a designated field is charged with notice of a then existing and duly-recorded chattel mortgage, in which such corn is described as a growing crop.” Further, it was held: “When such corn is husked and delivered in execution of the contract, the purchaser is presumed to know that it is part of the crop covered by the mortgage.”
And in Fines v. Bolin, 36 Neb. 621, 54 N. W. 990, this court expressly held that the rule announced in Gillilan v. Kendall & Smith, supra,
It would seem that the qualification made by the two cases last cited to the rule announced in the Gillilan Case is important in the instant case.
This conclusion is reinforced by the pronouncement of this court in Security State Bank v. Schomberg, 119 Neb. 598, 230 N. W. 487, 488, wherein we held: “The rule that a chattel mortgage enabling a third person, aided by inquiries suggested by the instrument itself, to identify the mortgaged property is sufficiently definite applies to chattel mortgages on growing crops.” And further held: “As described in the opinion, the contents of a registered chattel mortgage on growing grain and also on the matured crop, whether ‘in the field, in cribs or bins, in elevator or any other place,’ held sufficient to suggest to a third person inquiries which, if pursued, would elicit knowledge that such grain, when delivered by the mortgagor at an elevator and sold by him there, was incumbered by the lien of the chattel mortgage.” The foundation on which this opinion proceeds is that with a mortgage constructively before the purchaser containing the words, “in the field, in cribs or bins, in elevator or any other place,” it suggests to the third person the aiding inquiries: “Where was this grain, in the field, what crib or bin or elevator was it stored in before being presented for sale?” It suggests inquiries which would logically cover the growth, production, harvest and storage of grain until presented in the open market for sale. But in the instant case, as well as in Fines v. Bolin, supra, and Chicago Lumber Co. v. Hunter, supra, no inquiries are or were necessary, for the defendants in each of these cases had actual knowledge of the history and identity of the grain, and the constructive knowledge of the original existence of the chattel mortgage added by law. The law does not require vain things, and therefore in each of the three cases just cited this court held the rule announced in Gillilan v. Kendall & Smith, supra,...
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