14 A.L.R. 1353 | N.D. | 1921
Lead Opinion
This action was brought in the district court of Ward county to recover damages for the alleged conversion of certain wheat. The complaint contained two causes of action. The defendant interposed a general demurrer to both causes. The trial court sustained the demurrer, and the plaintiff has appealed.
For a first cause of action it is averred, in substance: That the plaintiff during all of the year 1919 was the owner of certain lands in Ward county in this state; that in the spring it leased such lands for that year, by a written contract or lease on the so-called “crop-share plan,” to two men named, respectively, Gordon Fix and F. L. Fix; that by the terms of said contract it was provided that the said Gordon Fix and F. J. Fix should not sell or remove, or suffer to be sold or removed, any of the produce of said farm or premises of any kind, character, or description until the division thereof, without the written consent of the plaintiff, and that until such division, the title and possession of all the hay, grain, crops, and produce raised, grown, and produced on said premises should be and remain in the said plaintiff. That by the terms of said contract it was further provided that the plaintiff might deduct from the share of the crop due to the said Gordon Fix and F. J. Fix certain indebtedness owing to the plaintiff from one Anton Fix, the father of said Gordon Fix and F. J. Fix. That the contract further provided
The second cause of action constitutes a reaverment of the foregoing facts, and in addition thereto it is averred that on or about March 8, 1919, said F. J. Fix made, executed, and delivered to the plaintiff his certain promissory note in the sum of $220.63 payable October 1, 1919, with interest from date at the rate of 10 per cent per annum. That at the same time and place, for the purpose of securing the payrpent of said note, said F. J. Fix executed and delivered to the plaintiff a certain chattel mortgage, whereby, among other things, he mortgaged to the plaintiff an undivided one-fourth interest in'and to all crops of every kind sown, grown, or harvested during the year 1919 upon the premises in controversy. That said chattel mortgage was filed for record in the
The defendant contends that the provision in the contract reserving title in the plaintiff to all of Gordon and F. J. Fix’s share of the crop was ineffective against it, for the reason that the contract was not filed as a chattel mortgage. That contention presents the principal, and determinative, question on this appeal.
Defendant admits that this court in McFadden v. Thorpe Elevator Co. 18 N. D. 93, 118 N. W. 242, ruled that such provision was effective without filing; but it contends that that decision was overruled by this court in Minneapolis Iron Store Co. v. Branum, 36 N. D. 355, L.R.A. 1917E, 298, 162 N. W. 543. The question of the filing of such contract was not involved or decided in the Branum Case. The controversy there arose between the holder of a chattel mortgage and a general creditor who had garnished an elevator company which had received into its possession the tenant’s share of the grain before any division had been made. Under former decisions of this court it had been ruled that the tenant, prior to division, had no interest in the grain to which a mortgage could attach. After due consideration we determined that such former rulings were erroneous. The decision in the Branum Case, however, was specifically restricted to the following propositions: “1. That instruments known as cropper’s contracts or farm leases, like all other contracts, must be construed so as to carry into effect the actual intention of the parties thereto. One provision cannot Be singled out and given an effect nullifying other provisions, but the contract must be construed as a whole, and the real intention of the parties as thus gathered must control.
“2. That where a lease of a farm on shares gives to the lessee a certain share of the crop, but contains a provision to the effect that title shall remain in the lessor until the conditions of the lease have been complied with by the lessee, he (the lessee) has an equitable interest in the crops, even prior to the performance of the conditions, which equitable interest may be mortgaged.
“3. That the decisions of this court in Bidgood v. Monarch Elevator Co. 9 N. D. 627, 81 Am. St. Rep. 604, 84 N. W. 561, and Herrmann v.
The free and untrammeled right to make lawful contracts is guaranteed not only by the Constitution of the state, but by the Federal Constitution, N. D. Const. §§ 1, 13; 14th Amend. IT. S. Const. 6 R. C. L. pp. 269, 270.. The decision in the Branum Case was not intended to deny or infringe upon such right. The decision did not hold the provision reserving title in the landowner to be ineffective or void. If this court had so ruled, then of course the lessee would have been the legal owner of the share of the crop coming to him; but the decision, it will be noted, merely holds that the lessee under a contract containing such provision “had an equitable interest in the crops, even prior to the performance of the conditions (of the contract), which equitable interest may be mortgaged.” 36 N. D. 383. This language, at least, impliedly recognized that, prior to the performance of the conditions of the contract, the theoretical legal title is, by virtue' of the provisions of the contract, in the landlord. It will also be noted that the former decisions of this court were overruled only "in so far as they announce the doctrine that a lessee under such lease (one containing a provision reserving title to all crops in the landlord until the division thereof) has no interest in the grain to which a mortgage lien can attach until after a division of the crop has been made.” 36 N. D. 383.
The fact that the contract may or may not create the relation of landlord and tenant does not alter or affect the relative rights and obligations of the parties thereto. Those rights and obligations are still measured by the terms of the contract. Thus, in Angell v. Egger, 6 N. D. 391, 71 N. W. 547, this court, in effect, held that the contract was a lease, and the relation between the parties that of landlord and tenant. The court said: “Whether the agreement between plaintiff and defendant created the relation of landlord and tenant is not material. We may safely assume it to be a lease, and certain provisions of it seem to be inconsistent with any other interpretation of it. But while it is true that one who has an interest as lessee in real property is prima facie entitled to the crops raised thereon during the life
Stipulations reserving title to all crops in the landlord until a division thereof have been the source of much litigation. Some courts have construed such stipulations as vesting actual and complete title in the landlord, and as precluding the tenant from having any interest whatever therein until after a division is made and certain grain set apart to the tenant. That was the view originally taken by this court. After due deliberation we determined that that view was erroneous, and that the tenant did have an equitable interest in the crops which he was producing, even before a division. Those views we still entertain. We do not believe that it accords with the intern tion of the parties to'construe such stipulation as vesting the actual
We are not concerned with a situation where, by provision in a lease, it is sought to reserve title in the landlord to certain personal property, such as furniture or appliances, which the tenant has brought upon the premises. We are concerned only with a situation where the owner of land, in contracting with another for its use, expressly stipulates that title and possession of all crops produced shall be and remain in the owner of the land. The right to so contract has frequently been upheld, and, so far as we can ascertain, has never been denied.
It is a well-settled principle of law that “the ownership of realty carries with it as an incident thereto the prima facie presumption of the ownership of both the natural products of the land, such as grass and trees, and the emblements, or annually sown crops, blit such presumption is not conclusive. And the owner of land may, in parting with the úse of it to another, make such conditions and reservations in relation to the land itself or to the products growing from it as he chooses, instead of parting with the full right.” 17 C. J. 381. And where the owner of land, in parting with the use' of it to another, stipulates that the legal title, control, and possession of all crops shall be in him for certain purposes, that stipulation is entitled to be enforced so as to carry out the intention and purposes for which it was made. But it will not be construed so as to enable the owner to violate the rights of the tenant, nor will it be construed so as to violate the rights of the owner of the land. On the one hand, the legal title reserved in the landlord will be recognized and enforced in accordance with, and to carry out, the intention and purposes for which the reservation was
• As pointed out in the decision in Minneapolis Iron Store Co. v. Branum, 36 N. D. 355, L.R.A.1917E, 298, 162 N. W. 543, the supreme court of our sister state, South Dakota (National Bank v. Elkins, 37 S. D. 479, 159 N. W. 60), refused to follow the rule laid down in Bidgood v. Monarch Elevator Co. and Herrmann v. Minnekota Elevator Co. and adopted the rule announced by this court in Minneapolis Iron Store Co. v. Branum, 36 N. D. 384, L.R.A.1917E, 298, 162 N. W. 543. That is, the South Dakota supreme court held that under a farm lease reserving title and possession of all crops in the lessor until a division thereof, the lessee has an equitable interest subject to mortgage, and that such mortgage, after division and settlement, attáehes to the legal interest of the lessee. National Bank v. Elkins, 37 S. D. 479, 159 N. W. 60. In so doing, the South Dakota court in effect predicated its ruling upon two former decisions: Lyon v. Phillips, 20 S. D. 607, 108 N. W. 554; Iverson v. Soo Elevator Co. 22 S. D. 638, 119 N. W. 1006 (37 S. D. 479, 159 N. W. 61), The South Dakota supreme ■ court did not, however, deem these decisions contrary to the decision of this court in McFadden v. Thorpe Elevator Co. 18 N. D. 93, 118 N. W. 242; for, although that court in both Lyon v. Phillips, and Iverson v. Soo Elevator Co. supra, had ruled “that the interest of the tenant in crops to be grown under this kind of a farm lease or contract is the subject of mortgage” (37 S. D. 479), it had no hesitancy later to rule that such contract was “not a-chattel mortgage, nor in the nature thereof, so as to be required to be executed as such.” Dobbs v. Atlas Elevator Co. 25 S. D. 177, 126
It is interesting to note in this connection that a majority of the members of the South Dakota supreme court (Judges TVhiting, Smith, and McCoy) who participated and concurred in the decision in Dobbs v. Atlas Elevator Co. also, participated and concurred in the decision in National Bank v. Elkins. It might further be noted that two of the judges of the South Dakota court (Judges Corson and Whiting), who participated and concurred in the decision in Dobbs v. Atlas Elevator Co. also participated and concurred in the decision in Iverson v. Soo Elevator Co.; and that the decision in Iverson v. Soo Elevator Co. was written by Judge TVhiting, who, as already stated, also participated and concurred in the decisions in Dobbs v. Atlas Elevator Co. and National Bank v. Elkins. Hence, in so far as South Dakota is concerned, we have the situation that the supreme court of that state refused to follow the decisions of this court in Bid-good v. Monarch Elevator Co. and Herrmann v. Minnekota Elevator Co. in so far as they announced the doctrine that a lessee, under a lease containing a stipulation that the title to all crops raised shall be and remain in the lessor until certain acts are performed by the
Keversed and remanded for further proceedings in conformity with this opinion.
Concurrence in Part
(concurring in part and dissenting in part). In so far-as the majority opinion affirms the decision in the case of Minneapolis Iron Store Co. v. Branum, 36 N. D. 381, L.R.A.1917E, 298, 162 N. W. 543, I am in accord with it. That that case should bé recognized as completely settling the law on the questions there involved is a matter about which there can be no controversy, in view of the fact that, for a period of twenty-five years, a large amount of litigation was continually carried-on, with reference to the matters and legal propositions which were finally settled in that case. We confidently believe that the decision in this case will be as productive of as much litigation in the court as the case of Angell v. Egger, 6 N. D. 391, 71 N. W. 547.
It is not necessary here to enter into any extended discussion of
Where a farm is rented for a share of the crop, as, for instance, where the owner of the land leases it to another, the tenant; to farm and cultivate, and each to receive one half or a share of the crop, the landlord and tenant are tenants in common of the crops raised by the tenant. Minneapolis Iron Store Co. v. Branum, supra; Smyth v. Tankersley, 20 Ala. 212, 56 Am. Dec. 193; Knox v. Marshall, 19 Cal. 617; Riddle v. Dow, 98 Iowa, 7, 32 L.R.A. 811, 66 N. W. 1066; De Mott v. Hagerman, 8 Cow. 220, 18 Am. Dec. 443; Strangeway v. Eisenman, 68 Minn. 399, 71 N. W. 617; Anderson v. Liston, 69 Minn. 82, 72 N. W. 52; Avery v. Stewart, 75 Minn. 106, 77 N. W. 560, 78 N. W. 244; McNeal v. Rider, 79 Minn. 153, 79 Am. St. Rep. 437, 81 N. W. 830; Adams v. State, 87 Ala. 89, 6 So. 270; Ponder v. Rhea, 32 Ark. 435; Tinsley v. Craige, 54 Ark. 346, 15 S. W. 897, 16 S. W. 570; Creel v. Kirkham, 47 Ill. 344; Taylor v. Bradley, 39 N. Y. 129, 100 Am. Dec. 415; McLaughlin v. Salley, 46 Mich. 219, 9 N. W. 256; Rohrer v. Babcock, 126 Cal. 222, 58 Pac. 537; State, Edgar, Prosecutor, v. Jewell, 34 N. J. L. 259; Wilber v. Sisson, 53 Barb. 258.
To the same effect in principle is National Bank v. Elkins, 37 S. D. 479, 159 N. W. 60.
Where the contract, as in this case, reserves the title to the crops in the landowner, and the right to take and hold enough of the tenant’s share to repay advances, etc., that provision is nothing but a chattel mortgage, and, as such, to be valid against creditors of the tenant or subsequent purchasers, without notice, it must be filed in the same manner' as' is required by our statute for the filing of a chattel mortgage.
It must -be considered that the landowner, by reason of that provi- . sion, does not have anything but a lien upon the tenant’s share. That lien is a chattel-mortgage lien, nothing else. But, at least some of the members of this court contend that, under the statute requiring chattel mortgages to be filed, in order to be notice to subsequent purchasers, there is no provision made whereby the lease should be filed.
We - contend that this is not a defect, for the clause in the lien is, in reality, a chattel mortgage, and should be filed as such, and this is the rule in Minnesota and several other states. •
The Minnesota statute was § 4129, G'eneral Statutes 1894. It reads thus:
"Chattel Mortgage Void, Unless Filed. — Every mortgage on personal property which is not accompanied by an immediate delivery, and followed by an actual and continued change of possession, of the things mortgaged, shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good faith, unless it appears that such mortgage was executed in good faith, and not for the purpose of defrauding any creditor, and unless the mortgage, or a true copy thereof, is filed as hereinafter provided.”
Sections 4130 and 4131 of the General Statutes of 1894 of Minnesota provide for the place of filing and the effect of filing, and the court held that a lease containing a clause similar to the one under consideration, in order to be effective as a lien against subsequent purchasers or encumbrancers of the mortgagor, must be filed in accordance with § 4129, General Statutes of 1894 of Minnesota.
Our § 6758, Comp. Laws 1913, is practically identical with the section of the Minnesota statute. It reads thus:
“Void as to Whom, Unless Filed. — A mortgage of personal property is void as against creditors of the mortgagor and subsequent purchasers and encumbrancers' of the property in good faith for value, unless the original or an authenticated copy thereof is filed by depositing the same in the office of the register of deeds of the county where the property mortgaged, or any part thereof, is at such time situated.”
This js the logical and only reasonable construction. The opinion of the 'Minnesota court in the case above cited is based upon justice and reason. It imposes no hardship; it protects everyone, the landowner)-as well as the mortgagor and subsequent purchasers or encumbrancers in good faith of the 'mortgagor’s share of the crop, under the lease. It operates to protect the public, to protect those who extend credit to the mortgagor. It in no manner impairs the contract between the landlord and the tenant, but gives effect to it, and to the real intention of the parties. Its further effect is to prevent litigation, by clearly defining- the rights of the parties and the right of subsequent encumbrancers and purchasers, and by protecting them.
The only effect of the majority decision in this case is to create chaos, to lay the foundation for much future litigation. Creditors or persons who become subsequent purchasers and encumbrancers of tenants having a lease similar to the one in question will be met, no doubt, in scores of instances, by the landowner, who will appear on the scene, with a lease containing a provision such as this, and will claim the right to the mortgagor’s share of the crop, to satisfy all the demands owing the landowner, and will bo permit ted, under this decision, to hold it, although creditors and subsequent encumbrancers could have known nothing of such a claim, and who, if they had known, would not have extended credit represented by the chattel mortgages, which they may have taken to secure the same.
Under the determination of the matter, as contended for by the writer, all would be protected as in Minnesota, South Dakota, and many other states.
There is no reason why this harsh rule, contained in the majority opinion,' should be adopted. It opens the door to collusion and injustice. The landowner and the tenant could, under it, collude and defeat the claim of any mortgagee who may have chattel-mortgage security on the tenant’s share of crop.
There is neither reason nor justice in the decision. It is simply one which magnifies the rights of the landlord, or landowner, under his