Merchants' & Farmers' Bank v. Pool Bros.

106 So. 627 | Miss. | 1926

^* Corpus Juris — Cyc. References; Mortgages 27 Cyc., pp. 1198, n. 95; 1218, n. 23; 1219, n. 29 New. Pool Bros., the appellees, contracted with one Alford to operate a sawmill in the manufacture and handling of lumber at a fixed price per thousand feet. Under the terms of this contract the mill was operated for some months. The laborers and employees about the mill were employed by Pool Bros. Pool Bros. also assisted in the operation of the mill. At the time of the contract between Pool Bros. and Alford, there was a deed of trust in favor of the appellant bank upon the land and timber embraced in the contract between Pool Bros. and Alford, in which deed of trust it was provided that the timber might be cut and manufactured into lumber by Alford upon payment of ten dollars per thousand feet to the bank. Pool Bros. operated the mill for some months and then instituted a suit against Alford to establish a laborer's lien upon the lumber involved in the suit under the provisions of chapter 131, Laws of 1908, and secured a judgment for one thousand eight hundred sixty dollars and levied upon the lumber manufactured for Alford under the said judgment. The bank thereupon foreclosed its deed of trust and bought the lumber under said sale, and before the execution sale was made, tendered its claimant's bond, and the cause came on for trial on the claimant's issue so made. On the trial the members of the firm of Pool Bros. each testified that when they were entering into negotiations for the trade with Alford they discussed with the cashier of the bank the situation with reference to the safety in making their money under the contract if the contract was made, and they each testified that the cashier said to go ahead and there would be enough to pay both of them. R.P. Pool, the father of the appellees, also testified substantially to the same effect. The cashier of the bank did not testify with reference to these conversations. The bank proved its debt and the proper foreclosure of the deed of trust and its purchase thereunder. Pool Bros. introduced the contract between them and Alford and their judgment against Alford and the above-mentioned conversations with the cashier of the bank. Each side requested a directed verdict on the issues made. The court below directed a verdict in favor of the plaintiffs, Pool Bros. The lumber seized under the execution was of greater value than the amount of the judgment rendered against Alford, and judgment was rendered against the bank on its claimant's bond for the amount of the judgment against Alford and costs.

The court below seemed to proceed upon the theory that the judgment in favor of Pool Bros. against Alford establishing a lien upon the lumber under the statute above referred to was conclusive under the case of Tallahatchie LumberCo. v. Thatch, 117 Miss. 260, 78 So. 154. Both the application of this decision to the present case and the soundness of the decision, if it be held applicable, are vigorously argued.

We think there is a distinction between the present case and the case of Tallahatchie Lumber Co. v. Thatch, supra, and that the principles therein announced are not controlling here, but that this case falls under the pronouncement of Ott v.Smith, 68 Miss. 773, 10 So. 70, in so far as the bank's right to contest the validity of the plaintiffs' claim against the lumber seized is concerned. Nevertheless, the judgment must be affirmed because it is not disputed by the bank that its cashier stated to Pool Bros. and to their father for them to go ahead and make the trade; that there would be enough money to pay all of them. By this statement the bank subordinated its deed of trust to the claim of Pool Bros. under their contract. The bank, of course, had a right under its deed of trust to refuse to waive anything, and it would be beyond the power of Alford after executing the deed of trust to make any contract without the consent of the bank which would impair its security. The bank had a right to hold its security unimpaired, and it had a right to permit the lumber to be manufactured under such conditions as it thought proper to make; and persons dealing with Alford, having notice, either actual or constructive, of the bank's deed of trust, would be bound by its terms and act at their peril. But on the record before us the bank waived its superior right and agreed that Pool Bros. might manufacture their lumber under their contract upon the representation by the cashier of the bank that there would be plenty of money from the proceeds of the lumber manufactured to pay both claims, and the plaintiffs, having acted upon this understanding, have the right to recover the amount of their claim.

We therefore think the judgment should be affirmed.

Affirmed.