West Springfield Trust Co. v. Hinckley

• Decision Date: 05 January 1927
• Citation: 258 Mass. 157,154 N.E. 580
• Parties: WEST SPRINGFIELD TRUST CO. v. HINCKLEY et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

258 Mass. 157

154 N.E. 580

WEST SPRINGFIELD TRUST CO.

v.HINCKLEY et al.

Supreme Judicial Court of Massachusetts, Hampden.

Jan. 5, 1927.

Appeal from Superior Court, Hampden County; A. R. Weed, Judge.

Suit by the West Springfield Trust Company against Harry P. Hinckley, the Hampden County Tobacco Growers' Association, Inc., Fred E. Muzzy, Henry J. Perkins, and another, in which the two last named defendants file a cross-bill. From decree on cross-bill for defendants Muzzy and Perkins, the Association appeals. Affirmed.S. M. Robson, of Springfield, for plaintiff.

Ely & Ely, of Springfield, A. S. Kneil, of Westifield, and F. M. Kingsbury, of Springfield, for defendants.

SANDERSON, J.

This is a bill in equity brought by the West Springfield Trust Company against Harry P. Hinckley, the Hampden County Tobacco Growers' Association, Inc. (hereinafter called the association), Fred E. Muzzy, Henry J. Perkins, and the Hampden National Bank. A cross-bill was filed by Muzzy and Perkins against the other parties to the original suit. The case was referred to a master who made a report which was confirmed. A decree dismissing the original bill was entered from which no appeal was taken. The association appealed from an interlocutory decree on the cross-bill overruling its exceptions and confirming the master's report, and from a final decree on the cross-bill in favor of Muzzy and Perkins, hereinafter called the plaintiffs.

Hinckley was the owner of certain land in Agawam on which, during the years 1919, 1920 and 1921, he cultivated tobacco. On March 7, 1919, he entered into a contract with the association agreeing to harvest and deliver to it all of his marketable tobacco in such quantity and condition and at such times as the association may desire, and appointing the association his agent for the purpose of marketing according to the rules of the association all the tobacco which should be grown by him during the year 1919 and each year thereafter so long as the agreement might continue. It was further agreed that any indebtedness due from Hinckley to the association should be a first lien upon the tobacco and should be deducted from the net proceeds of any sale of tobacco. Hinckley also agreed that he would not sell or otherwise dispose of his tobacco except through the associationand the association agreed to pay him the amount received less the uniform charges for marketing. The association was given the right in case Hinckley failed to fulfill any of the provisions of the contract to take exclusive possession and control of the tobacco and market the same. On August 3, 1920, Hinckley gave a chattel mortgage in the usual form to Muzzy and Perkins on ‘all the tobacco now harvested and placed in tobacco sheds numbered one (1), two (2), three (3), four (4) and five (5), in the town of Agawam, Massachusetts, or that may be placed therein from this year's cutting.’ The locations of these sheds were set forth in the mortgage. This mortgage was given to secure the mortgagees for indorsing Hinckley's note for $10,000 and interest, and was duly recorded. The note secured by the mortgage was finally paid by Muzzy and Perkins in equal shares. In October, 1922, the mortgage was foreclosed for breach of condition and the property bid in by the attorney for the mortgagees for $8,000. Later, by agreement of all parties, the tobacco was sold by the association and the proceeds held to await the outcome of this suit. From the proceeds of the sale the association paid certain claims and the balance was held by the Hampden National Bank on two certificates of deposit. These proceeds were no more than sufficient to settle the indebtedness which the mortgage was given to secure.

It was contended by the association that, because of certain rights growing out of the contract with Hinckley hereinbefore referred to, it might retain a portion of the proceeds to settle its claims against him. The plaintiffs in the cross-bill, however, contend that their rights are superior to those of the association because of their title under the mortgage. The question to be decided is that of priority of rights as between the association under its contract, and Muzzy and Perkins under their mortgage.

It is necessary to decide at the outset to what uncut tobacco the mortgage refers. From the master's report and the inferences to be drawn terefrom, it is apparent that Hinckley's 1920 crop of tobacco went into the designated sheds and then was removed by Hinckley to the premises of the association; that his crop was kept separate and distinct from that of others, except a part made into cigars; that at the time when the mortgage was given, Muzzy, one of the mortgagees, inspected the tobacco and had an impression as to the relative amount that was cut and in the sheds. The master found that about one-fifth of the crop was then cut or in the sheds and that the rest of the crop was in the ground, though nearly grown. He also found that the tobacco sold and covered by the description in the mortgage brought $11,087.80.

It appears from the report that the mortgage was in the usual form of chattel mortgage. A mortgage in that form contains a covenant of ownership of and a right to sell the property mortgaged. The mortgage also provided that the goods were not without the consent of the mortgagee to be removed from ‘said locations,’ referring to the sheds in Agawam. In an action begun before the sales act (G. L. c. 106), the court said:

‘It is conceded that at the time the wool was sold and delivered nothing was said as to the defendant's ownership. But by having possession, coupled with the act of sale, he represented himself to be the owner with the legal right of disposal, and this conduct was equivalent to an implied warranty of title in him.’ Hartley v. Rotman, 200 Mass. 372, 376, 86 N. E. 903, 907.

The description in a mortgage may be aided by the presumption that the mortgagor is the owner of the property. Joslyn v. Moose River Lumber Co., 83 Vt. 49, 74 A. 385,138 Am. St. Rep. 1067,21 Ann. Cas....