West Springfield Trust Co. v. Hinckley

• Citation: 258 Mass. 157
• Court: United States State Supreme Judicial Court of Massachusetts
• Decision Date: 05 January 1927
• Parties: WEST SPRINGFIELD TRUST COMPANY v. HARRY P. HINCKLEY & others.

258 Mass. 157

WEST SPRINGFIELD TRUST COMPANY v. HARRY P. HINCKLEY & others.

Supreme Judicial Court of Massachusetts, Hampden.

January 5, 1927

October 20, 1926.

Present: RUGG, C.

J., CROSBY CARROLL, WAIT, & SANDERSON, JJ.

Mortgage, Of personal property: identity of chattels, future acquired property, growing crops.

A chattel mortgage made in August, 1920, of "All the tobacco now harvested and placed in [certain] tobacco sheds . . . in the town of Agawam,

Massachusetts, or that may be placed therein from this year's cutting," contained a covenant of ownership of and a right to sell the property mortgaged and a provision that the goods were not without the consent of the mortgagee to be removed from "said locations," referring to the sheds in Agawam. Held, that the covenant referred to the 1920 growing crop of the mortgagor which had been or thereafter would be placed in the designated sheds.

The owner of land has a right to mortgage as a chattel crops to be raised on the land.

The general rule that a mortgage of goods to be separated or to be acquired after the giving and recording of the mortgage must take possession of such goods after they are separated or acquired in order to protect his right to them against an attaching creditor or some other person claiming in the right of the mortgagor, does not apply to a mortgage of growing crops.

An owner of tobacco raising land in Agawam in 1919 made a contract with a group called an association by which he agreed to harvest and deliver to it all of his marketable tobacco in such quantity and condition and at such times as the association might desire, and appointed 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, and agreed that the association should have a first lien upon the tobacco for the payment of any indebtedness due from him to the association, that the amount of such indebtedness should be deducted from the net proceeds of any sale of tobacco, and that he would not sell nor otherwise dispose of his tobacco except through the association. In 1920 the owner gave a chattel mortgage on

"All the tobacco now harvested and placed in tobacco sheds . . . [of certain numbers] in the town of Agawam, Massachusetts, or that may be placed therein from this year's cutting." The mortgagee acted in good faith and gave value, and had no notice of the contract with the

association. The mortgage was duly recorded.

The association went to expense under its contract with the owner and claimed a lien therefor prior to the mortgage lien. Held, that

(1) The contract with the association was not a sale; (2) The circumstances did not justify the conclusion that the association had a right as against the mortgagee to be reimbursed for expenses;

(3) The mere fact that the property was left with the mortgagor did not give him implied authority to have the tobacco sorted and prepared for market at the expense of the mortgagee.

An agreement by one of two joint mortgagees of tobacco, made after foreclosure of the mortgage occurring over two years after the crop was harvested, that the amount of a debt already incurred to a third person by the mortgagor for the sorting of the tobacco might be deducted from the proceeds of a sale of the tobacco by the third person, was held to be without consideration and unenforceable.

BILL IN EQUITY filed in the Superior Court on October 16, 1922, against the defendants described in the opinion, seeking to establish a lien upon the proceeds of the sale of tobacco grown by the defendant Hinckley in 1921.

The defendants Muzzy and Perkins filed a cross bill making no claim as to the "1921 crop" but seeking to establish a lien upon the proceeds of the sale of the "1920 crop."

The suit was referred to a master. Material facts found by him are described in the opinion. The defendants Hampden County Tobacco Growers' Association, Incorporated, and Hampden National Bank filed exceptions and objections to the report. Pending a hearing of the exceptions, the defendant Muzzy died and the administrator of his estate, Joseph Cushing, was admitted as a party in his stead.

The suit was heard upon the master's report and exceptions thereto by Weed, J. He found and ruled that claims of the association and of Muzzy and Perkins were entitled to priority over the claim of the plaintiff and that such claims exceeded the proceeds of the sales of both crops. He also found and ruled as follows:

"Upon the facts found by the master, the association had, by virtue of its contract with Hinckley and its possession of the two crops thereunder, a lien thereon for any indebtedness of any kind owing by Hinckley to the association, and has a right to deduct said indebtedness from said proceeds, save only to the extent that the plaintiff and the defendants Muzzy and Perkins, have intervening or superior rights.

"In my opinion the Muzzy and Perkins mortgage was a valid mortgage of Hinckley's 1920 crop, taken by the mortgagees in good faith, for value and without notice of Hinckley's contract with the association relative to said crop. Muzzy's request that Hinckley sell the tobacco did not authorize Hinckley to subject the tobacco to any lien for sorting or other charges. Nor did the fact that the mortgagor was allowed to remain in possession after default imply such authority. The services, for which the association's sorting charges were made, were performed for Hinckley long before the foreclosure, and were his personal obligations. Moreover, the association was charged with notice of the mortgage, and that the mortgagees had a right to judge for themselves whether or not the tobacco should be sorted and conditioned for the market and by whom. Muzzy had no authority after the foreclosure to bind Perkins to pay the sorting charges due the association from Hinckley, and there was no consideration for the agreement made by Muzzy as found by the master, that the tobacco was to be sold by the association on condition that the sorting notes were to be deducted from the proceeds. Muzzy and Perkins are therefore entitled to be paid out of the proceeds of the 1920 crop the sum of $10,000, with interest from August 3, 1920. Such payment will exhaust the entire proceeds of the 1920 crop."

An interlocutory decree overruling the exceptions to the master's report and confirming the report and a final decree ordering the payment to Perkins and to the administrator of the estate of Muzzy of the proceeds of the sale of the "1920 crop" were entered by order of the judge. The defendant association appealed from both decrees.

The case was submitted on briefs. H.W. Ely, J.B. Ely, & A.S. Kniel, for Hampden County Tobacco Growers' Association, Incorporated.

S.M. Robson, for Joseph Cushing, administrator, and Henry J. Perkins.

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, Incorporated (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 might desire, and appointing the association his agent for the purpose of marketing according to the rules of the association all...