American Trust & Savings Bank v. Whitaker

2 S.W.2d 356
CourtCourt of Appeals of Texas
DecidedJanuary 12, 1928
DocketNo. 2098.
StatusPublished

This text of 2 S.W.2d 356 (American Trust & Savings Bank v. Whitaker) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Trust & Savings Bank v. Whitaker, 2 S.W.2d 356 (Tex. Ct. App. 1928).

Opinion

HIGGINS, J.

The El Paso National Bank brought this suit against Seth B. Orndorff, as maker, and E. M. Whitaker, as indorser, of a promissory note dated March 26, 192.5, in the principal sum of $2,500, payable to the order of Whitaker, executed by Orndorff and his wife, Mattie Dee Orndorff.

Whitaker vouched in the American Trust & Savings Bank and asked for judgment over against it.

The case was tried without a jury and judgment rendered in favor of the plaintiff against Orndorff and Whitaker for the balance of $2,651.92, due upon the note and in favor of Whitaker for like, amount over against the American Trust & Savings Bank, from which the latter prosecutes this writ of error, naming Whitaker only as the party adversely interested.

In the early part of 1924 Whitaker and the Orndorffs acquired jointly a tract of land in Dona Ana county, N. M., known as the Juanita or Shalem ranch, Seth Orndorff owning a one-half interest, Mrs. Orndorff and Whitaker each owning a one-fourth interest. In 1924 and 1925 the land was cultivated in cotton by Seth Orndorff and H. W. Pickard, as partners. In 1924 Whitaker received one-fourth'of the cotton grown upon his interest in the land as rent, and was t,o receive the same rental in 1925.

On February 18, 1925, Orndorff & Pickard executed a mortgage in favor of the American Trust & Savings Bank (hereinafter referred to as the bank) upon all the cotton to be grown by them upon the land in 1925, to secure the payment of two notes of the mortgagors in favor of the bank, each in the principal sum of $5,000, of even date with the mortgage, due November 1, 1925. The mortgage also secured any further and additional sum or sums that might be thereafter advanced by the mortgagee up to and not exceeding the sum of $20,000.

At that time Orndorff 'was negotiating with Whitaker for the purchase of the latter’s interest in the land and expected to purchase same, of which fact the bank was advised.

On March 26, 1925, Whitaker conveyed his one-fourth interest in the land to Mrs. Orn-dorff. Under the law of New Mexico, the presumption is that the title was vested in Mrs. Orndorff as her separate property. Extrinsic evidence of the intention of Seth Orn-dorff is that it was in fact so'intended.

In part payment for the land Orndorff and wife executed the note above mentioned. Its payment was secured by a “mortgage deed” upon the land conveyed executed by Orndorff and wife', and also by a mortgage upon an undivided' one-sixteenth interest in all cotton and grain grown upon the Shalem land in 1925. The mortgage deed and chattel mortgage bore even date with the conveyance from Whitaker to Mrs. Orndorff. This chattel mortgage was forthwith duly registered in Dona Ana county, N. M. The Orn-dorff & Pickard mortgage to the bank previously had been duly registered in said county.

It is impractical to consider and discuss in detail the many, assignments and propositions presented by plaintiff in error. Nor is it necessary to do so for the proper disposition of the writ of error is controlled by two primary questions, the first of which relates to the validity of the mortgage taken by Whitaker from Orndorff and wife upon one-sixteenth of the cotton grown in 1925, upon the Shalem land, and its priority over the mortgage taken by the bank ’from Orndorff & Pickard upon all the cotton grown in 1925, upon the same land.

The opinion of Justice Speer in Bowyer v. Beardon (Tex. Com. App.) 291 S. W. 219, is decisive of the validity of the mortgage taken by Whitaker and, in connection with other well-settled principles of - law, establishes its priority. The facts in the case cited were complicated. It is sufficient to say there was involved the validity of a mortgage given by á landlord upon a portion of an unma-tured crop, which portion, under the terms of the rental contract, was to become his absolutely.

After referring to the rule that a tenant may mortgage his interest in an unplanted crop, Justice Speer said:

<i ⅜ ⅜ * There is no reason for any distinction between the respective rights of landlord and tenant in such respect. It necessarily follows, if the tenant may mortgage his unplanted crop, the landlord likewise may mortgage a portion of the same crop, which under the terms of a rental contract is to become his absolutely.
*358 “Now, under the facts certified, whether Thompson was to be paid his rentals in cotton or cash, or partly in cotton and partly in cash, the right to receive such payment in any event is property subject to sale and assignment, and likewise, subject to chattel mortgage. This being true, we think question No. 1 should he answered that the mortgage was valid.
“Im answer to question 2, it must be held that Bowyer was not necessarily the owner of the rents for 1924, merely because he was the owner of the land when such crops were harvested and the rentals became due. It is well settled that crops may be segregated from the land by any definite act showing such intention, thereafter becoming personalty, and as such assignable at will. In the absence of such segregation by the owner, • such rentals do go with the land.
“What we have said under question 1 answers question 3. Of course if Thompson, the owner of the land at the time, had such property in the crop rentals that he could mortgage the same, then such mortgage and its registration were valid. His act in executing this instrument amounted to a segregation of the crops and rentals from the land so as to make them personalty subject to chattel mortgage and registration, and, answering 4, this would constitute constructive notice to subsequent purchasers of the land of the lien on such rentals.
“To question 5 we answer the owner of land under rental to another may, upon sale of such land, reserve by verbal agreement the rentals thereafter to become due. This is a segregation by mutual agreement of the rentals from the land.” '

In this connection, see, also, Sanger Bros. v. Hunsueker (Tex. Civ. App.) 212 S. W. 514.

In the present case Whitaker owned a one-fourth interest in the Shalem land which, in 1925, was to be cultivated by Orndorff & Pickard under a contract, whereby Whitaker was to receive as rental one-sixteenth of the cotton grown upon the entire tract during that year. The mortgage given by Orndorff & Pickard to the hank on February 18, 1925, could not presently and adversely affect the then potential interest of Whitaker in the entire crop to be grown upon the premises.

On March 26, 1925, Whitaker conveyed his one-fourth interest in the land to Mrs. Orn-dorffi, together with the “rents, issues, and profits thereof,” etc: Upon the same day Orndorff and wife executed the note sued upon, the mortgage deed upon the land, and chattel mortgage upon one-sixteenth of the crop. The note recites it was secured by mortgage deed lien on the land “this day conveyed by Ed. M. and Elizabeth Whitaker to Mattie Dee Orndorff, more particularly described therein, and also described in a mortgage deed from Seth B.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Vinson v. W. T. Carter Bro.
161 S.W. 49 (Court of Appeals of Texas, 1913)
Mensing Brothers & Co. v. Cardwell
75 S.W. 347 (Court of Appeals of Texas, 1903)
Hooser v. G. M. Carlton Bros. & Co.
288 S.W. 1095 (Court of Appeals of Texas, 1926)
Sexton Rice & Irrigation Co. v. Sexton
106 S.W. 728 (Court of Appeals of Texas, 1907)
First Nat. Bank of Greenville v. First State Bank of Campbell
252 S.W. 1089 (Court of Appeals of Texas, 1923)
Bowyer v. Beardon
291 S.W. 219 (Texas Supreme Court, 1927)
Hunter v. Abernathy
188 S.W. 269 (Court of Appeals of Texas, 1916)
Barber v. Herring
229 S.W. 472 (Texas Commission of Appeals, 1921)

Cite This Page — Counsel Stack

Bluebook (online)
2 S.W.2d 356, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-trust-savings-bank-v-whitaker-texapp-1928.