155 So. 176 | Miss. | 1934
Lead Opinion
On or about January 1, 1930, one Harrington rented from appellant county four hundred acres in a sixteenth section in appellant county for that year for an agreed rental of four thousand dollars. Thereafter the tenant gave a deed of trust to appellee bank on all crops to be raised during that year on said sixteenth section lands. The tenant was allowed to sell the cotton produced on the lands and to receive the proceeds as if there were no liens upon the crop. He did so and deposited the proceeds to his own credit in appellee bank. There was a short crop and the proceeds were insufficient to pay the amount due the landlord and the advances due to the bank under the deed of trust. The tenant paid the landlord less than one thousand dollars on the rent account, leaving due to the county as landlord more than three thousand dollars. Nevertheless, the tenant, in November, 1930, paid to the bank, by check drawn on his account in said bank, where the proceeds of the crop were deposited, the sum of three thousand dollars. The county demanded of the bank that said sum be paid over by the bank to the county as holder of the superior lien; the bank refused; suit was filed by the county to enforce its demand; and its bill was dismissed by the trial court.
It is contended in support of the decree that the county had waived its lien, but we are of the opinion that the rules on that subject which are applied as against private owners are not available as against a county, which can act only as allowed by statute. There was no statute on this subject at that time. Such a statute was later passed, chapter 159, Laws 1932; but, whether that act is or is not valid, it is of no consequence here, because it had no retroactive effect.
In the next place, it is contended that the bank had no notice that the proceeds of the crop paid over to the bank as aforesaid were in fact proceeds of crops raised on said sixteenth section lands. We have carefully examined *560 the evidence on that issue and, without elaborating upon the details thereof, we are of the opinion that the evidence, reasonably interpreted, and viewing it as a whole, is manifestly sufficient to show knowledge on the part of the bank, or, at least, is sufficient to carry knowledge to the bank of such facts as would put it upon inquiry, which inquiry, if reasonably and prudently followed, would have led to knowledge that the proceeds aforesaid were of cotton raised on said sixteenth section lands.
Thus, we are brought to the simple question whether the proceeds of the cotton sold by the tenant, and which proceeds were deposited by him to his own account and were later paid to the bank on the tenant's debt to the bank, were trust funds impressed with a trust in favor of the superior lienholder, the county. This question we must answer in the affirmative under the settled rule that where a mortgagor or lienor sells the mortgaged property or the property incumbered by any fixed lien and receives the proceeds thereof, the proceeds stand in the place of the thing sold, and the lien attaches to the proceeds as trust funds, Cole-McIntyre-Norfleet Co. v. Du Bard,
Reversed, and decree here for appellant.
Dissenting Opinion
I am unable to agree with the conclusion reached in this case by the majority. The lessee of the sixteenth section lands, Harrington, had leased and worked said lands for a number of years prior to the year involved in this suit, and had, throughout that period, sold the cotton *561 grown by him to various cotton buyers, taking checks therefor, placing said checks in the bank, and paying the county by check drawn from the money so received. Usually, the cotton was placed in a warehouse and warehouse receipts were issued under the Uniform Warehouse Receipts Law (Code 1930, section 3481 et seq.) and turned over to him, and the cotton was sold to the various buyers by delivering to them these warehouse receipts thus issued. In the year involved here, and in previous years, Harrington had borrowed money from the bank to finance his farming operations, giving a deed of trust upon the crops to be grown, the leased lands, and other property.
The bank knew Harrington was working sixteenth section lands, but did not have knowledge of his other business, or, at least, that issue was in dispute and was decided in the bank's favor by the chancery court.
The right of a county is measured by the statute which gives the county the same right as individuals under like circumstances. Code 1930, sections 6002 to 6004. The county is not given in special terms a lien upon the products grown upon sixteenth section lands, but its rights thereto are given by construction and by the foregoing sections.
Some of the cotton grown for the year involved was sold outside this state, and there was no lien upon the cotton after it passed out of this state. Ball v. Sledge,
The county's right being the same as an individual's right is, of course, subject to the same conditions as an individual's would be, and a landlord who habitually permits a lessee or share-crop tenant to sell his products cannot enforce a landlord's lien against or recover the value of the products from a good faith purchaser. Phillips v. Thomas,
A considerable portion of the cotton involved in the case at bar was purchased by local dealers, or dealers having a local buyer in the county, and the landlord has a remedy against such purchasers. The county should be required to prosecute this remedy in this case.
I think the facts in this case are insufficient to make the bank liable on any theory of knowledge. There is nothing in the record, other than the memorandum upon the receipt, to show that the checks, which were negotiable instruments, either payable to bearer or order and duly indorsed, were for the crops grown on the said leased premises. In Eyrich v. Capital State Bank,
The checks which were deposited in the bank in the case at bar were deposited at various times, and on deposit became the funds of the bank, and the bank became a creditor of the depositor. It would certainly be unreasonable to hold that the notice of a mere memorandum upon a check at the time of its deposit under such circumstances would charge the bank with notice thereafter when the depositor undertook to check out the money. *563
In Eyrich v. Capital State Bank, supra, it was further said that: "Where a check properly signed in the firmname is presented to a bank having on deposit funds of the partnership, although there are circumstances known to the bank or some of its officers which would suggest doubts as to the destination of the fund, and an investigation would disclose to what purpose the funds were being applied, the bank is not bound to refuse payment and suspend its ordinary course of business to satisfy itself as to the proper application of the fund."
In Deer Island Fish Oyster Co. v. First National Bank of Biloxi,
In the case at bar all the checks being negotiable instruments passed through the bank, and the bank became debtor to the depositor for the amount of the checks, and the checks were collected in due course by the bank, including the check for the thirty-one bales of cotton sold outside this state.
As I understand it, it is not contended that the deposits, when made, were trust funds which required the bank to hold them until paid out in the proper way. In other words, when the funds were deposited the title passed to the bank unincumbered by any trust, and the bank thus became debtor to the depositor. This is insufficient to make the bank a trustee when it thereafter accepted a check in payment of its debt due by the depositor.
There are various cases, some of which I think were decidedly stronger than the case at bar, in which our court has refused to impress a trust upon such funds. In Adler v. Interstate Trust
Banking Company,
In Love v. Little,
The case at bar is brought in the chancery court, and the complainant is in no position to invoke the aid of equity. The complainant cannot be said to have come into court with clean hands, nor could it be said to have acted with diligence, nor according to equitable conduct.
When a county comes into court, unless there are statutory provisions to the contrary, it comes subject to the same provisions and conditions under which a private person comes. Humphreys County v. Cashin,
The court here should have refused aid to the county, and did so, and we should likewise have refused its aid because it has put itself in a condition where it can gain relief only by the hurt of other persons who were induced to act with reference to the habit of the county in transacting business, such as leasing its lands and collecting the rents therefor.
I think, therefore, that the judgment should be affirmed.