Fidelity & Deposit Co. of Maryland v. B. F. Sturtevant Co., 86 Miss. 509

Fidelity & Deposit Co. of Maryland v. B. F. Sturtevant Co.

86 Miss. 509 | Miss. | 1905

Houston-, J.,

delivered the opinion of the court.

The appellee sold and delivered to the- Moorhead Cotton Mills, a corporation of Moorhead, Sunflower county, Mississippi, certain machinery on credit, without express reservation of title. After the purchaser had failed to pay for same at the time stipulated, appellee instituted, on January 30, 1903, suit and proceedings in the circuit court against it, under Code 1892, ch. 79, the appellee (plaintiff below) making the requisite affidavit under said statute. The sheriff duly executed-*518the writ of seizure and took said.machinery into his possession on January 31, 1903, but released and restored same to said cotton mills on February 2, 1903, upon their executing proper forthcoming bond, with the appellant as surety. When said court convened, the defendant made no defense whatever to the suit, and did not appear; but appellant, as said surety, on April 2Ó, 1903, filed a special plea, setting up that on July 1, 1901, the Moorhead Cotton Mills executed (without stating to whom) its certain deed of trust covering all of this property ^ that on the first Monday of February, 1903, default having been made in the payment of the debt thereby secured, all of the property of said Moorhead Cotton Mills, including this machinery, was sold and delivered to third parties (without stating to whom) ; and that it is not now in the control of said cotton mills or this surety, and is not subject to any judgment in favor of plaintiff. To this plaintiff filed a replication, alleging that said deed of trust (which is made an exhibit to the replication) was executed on July 1, 1901, but not filed for record until September 14, 1901; that this machinery was sold and delivered to said cotton mills on August 29, 1901, and that the jsurchase money due therefor remains unpaid, and is the demand here sued on, and that said property was levied on and seized under the writ of seizure herein, while it was still in the hands, possession, and control of said cotton mills; that said deed of trust was not a paramount or prior lien'to the purchase-money lien of plaintiff on said property, which had been seized under the writ in this suit; that said deed of trust was utterly void as to “after-acquired” property, because of insufficiency and too great generality of description; that, after its filing and delivery, the mortgagee therein parted with no new consideration to defendant cotton mills; that the alleged foreclosure was merely m p'ais; and that said cotton mills voluntarily and wrongfully surrendered possession of said property on which plaintiff had a paramount *519lien, and for the forthcoming of which said cotton mills and said appellant as surety had executed their bond in this proceeding, which was then still pending undetermined. To this replication the appellant, as such surety, interposed a demurrer, which, being overruled, and the cotton mills and said surety declining to plead further or make further defense, judgment final was entered against them, from which the said surety alone appeals, the principal not joining therein.

The deed of trust under which it is claimed the cestui que trust acquired a lien on this machinery was .executed by the said cotton mills to the International Trust Company to secure 100 bonds of $1,000 each, aggregating $100,000, dated July 1, 1901, and payable twenty years from date. The description of the property therein is as follows: “All and singular its [the Moorhead Cotton Mills’] property and franchises of every nature and description whatever, whether now owned or hereafter to be acquired, including all its equipments and personalty, and all its lands, buildings, machinery, and real estate in the village of Moorhead, county of Sunflower, state of Mississippi, and elsewhere, and all its franchises, rights, and privileges, and all and singular the lots, pieces or parcels of land, with all and singular the buildings and improvements thereon, situated, lying, and being in the village of Moorhead, county of Sunflower,- state- of Mississippi, bounded and described as follows [here follows a particular description of the lots and parcels of land situated in the village of Moorhead], together with all and singular the factories, tenements, hereditaments, and appurtenances belonging to the property hereby conveyed, or in any wise thereto appertaining; and the reversion, remainder, tolls, incomes, rents, issues, and profits thereof; and also all the estate, right, title, and interest, property, possession, claim, and demand, whatsoever, as well in law as in equity, of the party of the first part of, in, and to the same, and any and every part thereof; and also all and every other estate, *520right, title, and interest, property, and appurtenances which the sad party of the first part now owns or may hereafter acquire.” Now, at the time this deed of trust was executed (duly 1, 1901) the grantor did not own or have in its possession this machinery, which was not sold to it until after August, 1901; so that, of course, no lien or right of any bind was given on it to- the International Trust Co. under the provision as to> the property “now owned” by the grantor; and if the deed of trust gave any lien on or right to said machinery, it must exist under that provision of the deed of trust as to “after-acquired property.” But when the appellee sold and delivered this machinery to the Moorhead Cotton Mills it had (so far as appears from this replication or record) no actual notice of any such deed of trust,'nor did it have constructive notice of that deed of trust, because it was not filed for record until September 14, 1901. The replication also alleges — and, of course, the demurrer admits — that after its filing and delivery the mortgagee parted with no new consideration to said cotton mills, and before any foreclosure or sale under said deed of trust, and while the property was still in the hands, possession, and control of said cotton mills, the first vendee, that appellee, the seller, had exercised his right given him by the statute, and acquired his purchase-money lien by the levy of the writ of seizure on the property, and said cotton mills, with this appellant as surety, had executed a forthcoming bond for it. While, of course, it is settled law in this state that a party can, under proper restrictions and limitations, give a deed of trust on property to be thereafter acquired by him, still this court said in Cayce, Trustee, v. Stovall, 50 Miss., 400, cited by counsel for appellant: “We do not wish to be understood as having committed ourselves to the broad doctrine that a mortgage of chattels thereafter to be acquired is unlimited, and in all circumstances to be sustained.” And in Everman v. Robb, 52 Miss., 660 (24 Am. St. Rep., 682), after reviewing the cases announcing the doc*521trine of equitable liens on things not in esse at the date of the contract, the court says: “A careful study of the cases will disclose: (1) That in each instance the contract had reference to some particular designated property which may, in the ordinary course of things, and with reasonable certainty, come into existence. (2) The assignor or mortgagor must, at the date of the contract, have an actual interest in or concerning the subject. There must be an interest in praesenti, of which the future acquisition is the product, or in such wise incident to or connected with it, constituting a tangible and substantial predicate of a contract.” Learned counsel for appellant expressly recognize this as a correct statement of the law, and, after saying that there are certain restrictions thrown around the doctrine that a party can give a valid mortgage on after-acquired property, and that he cannot mortgage generally all of his property to be acquired within a given time after the date of the instrument, they give excerpts from Deeley v. Dwight, 18 L. R. A., 299, note, where almost the exact language is used as that above quoted from 52 Miss., 660 (24 Am. St. Rep., 682). Certainly the instant ease does not fall within that class where, at the date of the contract, the mortgagor, having an actual interest in praesenti in the subject of which the future acquisition was the product, may give a valid lien on the products of said property already owned by him, because such products, though not in esse, have a potential existence. There the thing hypothecated springs out of, or is the product of, the property, which, at the date of the deed of trust, is owned, or leased, or in possession of the grantor by consent of the owner. For instance, as shown by the court in McCown v. Mayer, 65 Miss., 541 (5 South. Rep., 98), there may be a valid sale or mortgage of the wine the owner’s vineyard is expected, to produce, or of the crops produced on the land, the milk of the owner’s cows for the next year, or the future young of animals, or the wool that may be *522grown on sbeeji which are then owned by the grantor, but not on sheep which he might thereafter acquire. And even in such cases the mortgagor must have at the time an actual interest in or concerning the property, of which the future acquisition is the product, and that property must be definitely described or designated. Under this head, or subdivision, fall the following cases, among others: McCown v. Mayer, supra; Everman v. Robb, supra; Russell v. Stevens, 70 Miss., 685 (12 South. [Rep., 830). Of course, the Moorhead Cotton Mills, at the date of this deed of trust, were neither the actual owners nor were they the potential owners of this machinery; and, of course, it was not the product of property then owned by said mills. As well said by counsel for appellee, “machinery cannot grow machinery” like sheep grow wool or lands produce crops. It is evident, therefore, that this deed of trust and this case do not fall under this division.

There is, in this state, another well-recognized class of cases where after-acquired property may be mortgaged under well-defined limitations and restrictions. A mortgagor who has an actual interest in praesenti in certain property may mortgage not only that property, but also such other projoerty as the mortgagor may thereafter acquire, provided always said future acquisitions are to be used in and about the business,, or are attached or appurtenant to and necessary for said business, or are the natural .products arising from the operation of said business, constituting a tangible, substantial, and existing predicate for the contract. And even then this doctrine is subject to the limitation that it must be'shown that the description of the property is definite, and the instrument itself must specifically describe it, either as property which is acquired in and belongs naturally, if not necessarily, to the original business, or as property which would be put in a certain building, place, or locality. This doctrine, with its limitations and restrictions, has been so fully and lucidly expressed and'enunci*523ated by Justice Chalmers in the case of Miss. Valley Co. v. Chicago, etc., R. R. Co., 58 Miss., 896 (38 Am. St. Rep., 348), as to render it unnecessary to do more than refer to that case, and to say it has been twice approvingly cited — in the cases of Williams v. Crook, 63 Miss., 9, and Packwood v. Atkinson, 79 Miss., 646-651 (31 South. Rep., 337). In the first two cases just mentioned, descriptions in deeds of trust not as vague, indefinite, or general as the one in the instant deed of trust are positively pronounced and specifically condemned as too general and insufficient to operate to convey or give a lien on the property, and! those deeds of trust were held utterly void as to third persons.

Without going into a detailed analysis of the description in this deed of trust under discussion, which we deem unnecessary, it must be apparent, upon a careful reading of same, that it cannot be held to meet the requirements of the law in regard to “after-acquired property.” It will be noted that this deed of trust fails to show that the property thereafter to be acquired by said mortgagor should be used in and about the cotton mills or manufacturing business of the corporation, or should be the natural product arising from the operation of same, or that it should be attached or appurtenant to, or necessary for, said business; and neither the replication nor the record anywhere shows that, as a matter of fact, this machinery in controversy was ever used in or about said cotton mill business, or that it was ever attached or appurtenant to the cotton mill machinery, or was necessary for the operation of said business; in fact, it was seized and sold, so far as this record discloses, as separate, distinct, and independent pieces of machinery. Again, this deed of trust contains no restriction whatever as to the amount or character of the after-acquired property which it is to cover, or as to the uses and purposes for which, or as to the time within which, it should be acquired, or as to the locality where it was to be placed. It fails to give any of the *524essentials or any fact which might render the description sufficiently definite to insure identification or to aid in distinguishing the property from all other property of the same kind. The debt secured by this deed of trust was not due for twenty years and was not barred for twenty-six years, and it might-be renewed and run longer; and yet it attempts to cover all property of every kind and character, no matter for what purposes it is to be acquired or used, or whenever acquired, or wherever situated, whether in the state of Mississippi or elsewhere, and wherever it might be placed after it was acquired. The description of the mortgage in the case of Sillers et ux. v. Lester et al., 48 Miss., 513, cited by counsel for appellant, expressly and specifically limited the locality where the after-acquired property was to be placed to the Asia plantation, and the time within which the property was to be acquired to the year 1870. This mortgage, in our opinion, being null and void in respect to after-acquired property, as to third persons, of course the sale of this machinery thereunder was void. Besides, it was made subsequent to the acquisition by the ap-pellee of his purchase-money lien by the levy of the writ of seizure, under Code 1892, ch. 79, while said property was, as alleged in the replication, in the hands, possession, and control of the first vendee. Frank v. Robinson, 65 Miss., 171 (3 South. Rep., 253).

Nor is appellant’s case aided by the Moorhead Cotton Mills having surrendered possession of this machinery, on which ap-pellee had previously acquired said lien. The replication alleges that this possession was surrendered voluntarily and wrongfully, and it was done subsequent to the levy of the writ of seizure and to the execution by said cotton mills and this very appellant of a forthcoming bond for this property. At the very time of this voluntary surrender of the machinery it was in custodia legis. No legal proceedings were had in the premises to get lawful possession of it; and certainly its vol*525untary surrender by the mortgagor to a mortgagee who had no valid lien, or to any third person, could not defeat the rights of the prior valid lien of appellee, nor release this appellant surety from the obligation of its valid bond for the forthcoming of said property.

We think the demurrer to the replication was rightfully overruled.

Affirmed.