Valley Gin Co. v. McCarthy

Citation106 P.2d 504,56 Ariz. 181
Decision Date22 October 1940
Docket NumberCivil 4210
PartiesVALLEY GIN COMPANY, a Corporation, Appellant, v. NEIL S. McCARTHY and MARGUERITE McCARTHY, His Wife, Appellees
CourtSupreme Court of Arizona

APPEAL from a judgment of the Superior Court of the County of Maricopa. M. T. Phelps, Judge. Judgment affirmed.

Messrs Phillips, Holzworth & Phillips and Mr. David P. Jones, for Appellant.

Messrs Baker & Whitney and Mr. Lawrence L. Howe, for Appellees.



This is an appeal by Valley Gin Company, a corporation hereinafter called defendant, from a judgment in favor of Neil S. McCarthy and Marguerite McCarthy, his wife, hereinafter called plaintiffs. For the purposes of the appeal the facts shown by the record may be assumed to be as follows:

Plaintiffs were the owners of certain land set forth in the complaint, and on February 11, 1937, they leased it to one B.F. Wells, hereinafter called the lessee, for a period of one year from March 1, 1937. The lease provided it was based on an acreage of 225 acres, and it was contemplated by the parties, among other things, that there would be a mortgage of the crops grown. The lease, therefore, contained the following provisions:

"... and the lessee covenants and agrees not to permit any lien, charge or encumbrance, of any nature or kind, to accrue against said leased premises... except the hereinafter mentioned crop and chattel mortgage liens.

"... it is anticipated that there will be financing of this acreage and the owner agrees to sign a waiver against any loan on the crops being grown, for a loan of not to exceed $20.00 per acre each year."

The land in question was to be irrigated from pumps, and it was provided by the lease:

"... However, it is understood between the parties hereto and the lessors hereby covenant and agree that they will, within forty (40) days from the time of the signing of this lease, repair said pumps so that they will produce at least 2250 gallons per minute, and shall also, within said time, install a new motor starter on the well where the worn-out starter is now located."

Lessee went into possession of the premises and found it necessary to finance himself by mortgaging the crop, as provided in the lease. The matter was taken up with plaintiffs, and on February 16 the following letter was sent to the lessee:

"Dear Mr. Wells:

"The lease agreement between us... contains a provision... that there will be financing of this acreage and that I shall sign a waiver against any loan on the crops being grown for a loan not to exceed $20.00 per acre each year.

"This is to confirm our understanding and shall be considered as one of the terms of the lease, that the $20.00 per acre referred to shall be in addition to any amounts paid to me by others and yourself as rental for the leased premises and that the waiver against any crop loans for a loan of not to exceed $20.00 per acre shall be in addition to any amounts advanced for the payment of rent.

"Very truly yours,

"(Signed) NEIL S. McCARTHY.

Thereupon lessee applied to defendant for a loan to be secured by a mortgage on the crop, and defendant wrote plaintiffs, stating:

"In order for us to make this loan to B.F. Wells it will be necessary for us to have a waiver from you of your interest in crops until our loan is repaid with interest. For this reason we are sending you this letter with the request that you sign the waiver below and return to us as quickly as possible."

Plaintiffs thereupon executed and returned the following waiver:

"Valley Gin Company, Inc.

"Peoria, Arizona.


"In consideration of your making loan to B.F. Wells for the purpose of growing a crop of cotton on lands as described above; the undersigned owner, mortgagee of crops or chattels, or mortgagee of the premises described or beneficiary under Trust Deed of the premises described above does hereby authorize B.F. Wells to execute a crop mortgage to Valley Gin Company, Inc., covering crop of cotton to be grown during season of 1937 and further agree that all right, title, claim, interest or lien of the undersigned in, on or to the chattels, property, and crops mortgaged shall at all times be and remain subject and inferior to the lien claim, right and title of said Valley Gin Company, Inc., or their assigns.

"This waiver is limited to a sum not to exceed $20.00 per acre less payments for land rental and excluding harvesting costs and interest."

The waiver was a printed form used by defendants, with the exception of the last sentence, which was written in by plaintiffs before they executed it.

Lessee thereupon planted a crop of cotton on the land, and on August 18 plaintiffs agreed to make a further waiver of their landlord's lien in the following language:

"I am willing that you shall be entitled to priority of the crop for $22.00 an acre instead of $20.00 an acre, upon condition however that the entire $22.00 shall have been spent in the farming of the crop and not otherwise and for no other purpose and particularly that the additional $2.00 an acre, to which I am now consenting, shall be used solely to defray the cost of eliminating the Johnson grass and that the Johnson grass shall be eliminated."

After the crop was made it was harvested and delivered to defendant for ginning and sale. The gross proceeds of the crop which passed into the hands of defendant amounted to $7,730.11, which was by it credited to the account of lessee. Defendant had advanced a total sum to lessee considerably in excess of the amount received from the proceeds of the crop, and applied all of such proceeds to the repayment of its advances. Among these advances was $1,350 for the first installment of rent. Some $1,350 of rent remained unpaid after the crop was harvested, and plaintiffs sued defendant for that amount, alleging that it had converted the proceeds of the crop in a sum in excess of the rent still due.

Defendant answered, claiming that by virtue of the waiver above set forth it was entitled to the proceeds of the crop, not only in the sum of $20 per acre, afterwards increased by the letter of August 18 to $22 per acre, and the rent advanced but also to cover the amount advanced for the harvesting costs and interest thereon, and that such harvesting costs and interest...

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12 cases
  • State Road Commission v. Parker
    • United States
    • Supreme Court of Utah
    • January 31, 1962
    ...the judgment, are acquired, lost, or affected by reason of the judgment.'3 10 Utah 2d 417, 354 P.2d 105 (1960).4 Valley Gin Co. v. McCarthy, 56 Ariz. 181, 106 P.2d 504 (1940): 'The term (counterclaim) is a general and comprehensive one and may be defined as a cause of action in favor of def......
  • Occidental Chemical Co. v. Connor
    • United States
    • Supreme Court of Arizona
    • December 3, 1979
    ...Co., 112 Ariz. 285, 541 P.2d 385 (1975); Scoville v. Vail Investment Co., 55 Ariz. 486, 103 P.2d 662 (1940); Valley Gin Co. v. McCarthy, 56 Ariz. 181, 106 P.2d 504 (1940); Cruzan v. Franklin Stores Corp., 72 N.M. 42, 380 P.2d 190 (1963); 20 Am.Jur.2d Counterclaim, Recoupment, etc., § 54-55 ......
  • W. J. Kroeger Co. v. Travelers Indem. Co., 12016
    • United States
    • Supreme Court of Arizona
    • October 3, 1975
    ...of the defendant on which he might have brought a separate action against the plaintiff and recovered a judgment. Valley Gin Co. v. McCarthy, 56 Ariz. 181, 106 P.2d 504 (1940). The principle did not exist at common law but is solely statutory. Valley Gin Co. v. McCarthy, supra. If one is no......
  • Hays v. Richardson
    • United States
    • Supreme Court of Arizona
    • February 13, 1964
    ......        We have previously considered the meaning to be given this language. In Valley Gin Co. v. McCarthy, 56 Ariz. 181, 106 P.2d 504 (1940), it was urged that we could not consider the question of whether the demurrer to the ......
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