Federal Land Bank v. McCloud

20 P.2d 201, 52 Idaho 694, 1933 Ida. LEXIS 9

• Court: Idaho Supreme Court
• Decided: February 14, 1933
• Docket: No. 5787.
• Status: Published

Opinions

BUDGE, C. J. —

This action was brought by appellant to recover from respondents certain specific crops or their value in case delivery could not be had. From the record it appears that on October 15, 1926, appellant and respondents, A. F. McCloud and Lulu S. McCloud, entered into a written contract whereby the former agreed to sell to the latter certain real- property in Gooding county, at a price fixed therein. Title to the land remained in appellant at all times herein, although provision was made in the contract whereby title might be transferred to the purchasers at the end of four years from date of the contract. The following provisions, among others, were contained in the contract:

“The parties of the second part (McClouds) .... further covenant and agree to turn over to the party of the first part (appellant) each year on account of said purchase price one-half (%) of all grain and other crops raised on all of the above described land, except for the year 1927, and for that year one-third (%) of said crops. The proceeds from the sale of the grain and other crops so turned over to the party of the first part shall be applied, first, to the payment of interest; and second, to the payment of the-principal .... The parties of the second part further covenant and agree to deliver the grain and other crops hereinbefore covenanted to be turned over to the paxty of the first part, in the elevator or other place at Wendell, Idaho, or at some other convenient point, as the party of the first part shall direct, within a reasonable time after threshing and harvesting the same, and free from all expense or charge to the party of the first part, said grain and other crops to be delivered in the name of the party of the first part. If any of the alfalfa or clover grown on said land shall be cut for hay, the same shall be stacked on said land and divided by such agent of the party of the first part.

“It is further covenanted and agreed that, until the delivery of the grain and other crops to the party of the first part as aforesaid, during the continuance of this contract, the legal title to, and ownership and possession of all of the grain raised during each and every year shall be and remain in the party of the first part.”

The McClouds went into possession and farmed the premises thereafter. Certain hay, clover seed and alfalfa seed raised upon the premises in 1930 were not divided. McCloud sold the hay and delivered the clover and alfalfa seed to respondents Shields and Gannon, at the latter’s warehouse, and took a warehouse receipt therefor in his own name. Appellant thereupon commenced this action, the complaint alleging facts substantially as above set forth, and praying judgment for the division and delivery to it of its share of the crops in question, and in the event that the same could not be divided or delivered, that it have judgment against McCloud and wife for the value of its share, and further, that in the event Shields and Gannon have appropriated any portion of appellant’s share of such crops, it be given judgment against them for the value of the crops so appropriated.

Shields and Gannon answered, denying generally the allegations of the complaint, and alleging affirmatively the delivery of the seed to them and the issuance of warehouse receipt therefor; the pledge of the warehouse receipt by McCloud as security for the repayment of $1,471.70 advanced by them to McCloud; their subsequent purchase of the seed from McCloud; and that such transactions were made in good faith and without knowledge or notice, actual or constructive, that appellant owned or claimed any interest in said seed. McCloud and wife answered denying generally the allegations of the complaint.

Upon the issues so framed, the cause was tried by the court, a jury being waived. At the close of plaintiff’s evidence and at the close of all the evidence motions for non-suit made by Shields and Gannon were denied. However, the trial court in its conclusions concluded that their motion for nonsuit should be granted. Findings of fact and conclusions of law were made and filed and judgment was entered dismissing the action, from which judgment this appeal is taken.

Appellant specifies five assignments of error. The controlling question raised thereby is whether or not the crops in question were owned by appellant and the McClouds as tenants in common under the terms of the contract above referred to. In support of its contention that a tenancy in common in the crop was created by the contract, appellant relies principally upon the case of Devereaux Mortgage Co. v. Walker, 46 Ida. 431, 268 Pac. 37, 38, which involved the interpretation and construction of language similar to that of the contract here in question. In that case the language was contained in a lease, creating the relationship of landlord and tenant, while the relationship of vendor and purchaser was created by the contract of sale here. The trial court held that the difference in the relationships distinguished the two cases and that the rule applied in the former was not applicable to the latter. We are unable to see any logical distinction calling for the application of a different rule, especially in view of the remarks of the court in Lynch v. Sprague Roller Mills, 51 Wash. 535, 99 Pac. 578, 580, namely:

“ .... the construction which courts have uniformly placed on contracts between landlord and tenant is a safe rule to follow in construing similar contracts between vendor and purchaser.”

and in view of the rule announced in 38 Cyc. 6, where it is said:

“Thus a tenancy in common springs up whenever an estate in real or personal property is owned concurrently by two or more persons under a conveyance or under circumstances which do not either expressly or by necessary implication call for some other form of cotenancy. It is held that a tenancy in common may be created by will, by descent, and the relation may be brought into existence by purchase, sale or conveyance. It is not the form of the instrument which determines the existence of the relation, but the concurrent rights in the same property at the same time, and the tenancy can arise by pledge or mortgage, by legislative grant, by prescription, by judgment or decree, by levy or execution, or by confusion or intermingling of goods, by consent, or with the owner’s fault.”

The language used in the Devereaux Mortgage Co. case, supra, is broad enough to include and cover any contract by which a tenancy in common is created.

In the Devereaux Mortgage Co. case, supra, the lessees covenanted: “to pay as rental for said premises one-third of all crops planted and grown upon said premises .... to be delivered at the warehouse in Rexburg free of cost to The Devereaux Mortgage Company.” and the lease further provided that upon default of the lessees, the lessor might terminate the agreement and in that event the lease should “become a lien on any crops that may be at that time in the ground or on the premises for any unpaid rental or any share due or to become due as rental.”

. After an exhaustive review of the -authorities construing similar provisions and holding that the same created a tenancy in common in such crops, the court said:

“In the contract in question the Walkers (lessees) covenanted to deliver to the respondent (lessor) at an agreed place one-third of the products of the land, not to pay a sum equal to the value of that share of the crops. They were not given the right to elect whether they would deliver crops or pay value or given authority to sell and then make division. Their contract was to deliver a share of the crops and nothing else. It simply was that the respondent should furnish the land and the Walkers should do and furnish all other things necessary to the production of a crop and that the compensation to the respondent for the use of its land and the compensation to the Walkers for their labor would be in crops in the proportion agreed upon. Contracts of this character are common and there would seem to be much in them to commend then to land owners and producers of crops. Each has the assurance that the abundance of the crops and the prosperity of the season will be controlling elements in determining the profits he will realize from the season’s operations. To hold that each party has at all times an ownership in the growing crops proportionate to the share he will ultimately receive, though the right to the possession be in the producer until harvested, will best effectuate the intention of the parties, and to ascertain intention rather than classify relations created should, it would seem, be the principal concern of the court.

“If it be held that the land owner has no interest in the crops and that his only remedy is to recover a. personal judgment against the occupier for a sum equal to the value of a share of the crops, the essential agreement of the parties is defeated, a dishonest tenant is enabled to dispose of the entire crop, his creditors can seize and sell the entire crop for the payment of their debts. The land owner is obliged to stand by, without right to process, though he may have full knowledge that the property which the other had agreed to deliver was being dissipated by him or converted by others. To construe such a contract as investing the grower with complete title and denying the land owner any title not only ignores the very purpose and intention of the parties but substitutes a different contract in the place of the contract the parties have made.

“The majority rule protects each party, assures him of his right to receive the identical property the other agreed he should have and denies the right of the other to dispose of, and his creditors to reach, more than the share to which he is justly entitled.”

In the contract before us the purchasers agreed “to turn over” to appellant “one half % of all the grain and other crops raised on all of the above described land” in 1930; that “the proceeds from the sale of the grain and other crops so turned over” to appellant should be applied in payment of the purchase price and interest; that they would “deliver the grain and other crops hereinbefore covenanted to he turned over” to appellant at an agreed place, “said grain and other crops to he delivered” in the name of appellant; that alfalfa and clover cut for hay should he stacked on the land and divided by the agent of appellant; that appellant should have and retain title to all the grain each year “until the delivery of the grain and other crops” to it; that no portion of said crops shall be removed from said land until division thereof; and that the agreement shall be void if “default be made in the delivery of said several payments of grain a/nd other crops to be grown on said land.” From these provisions we think it is clear beyond controversy that the parties to the contract provided and intended that it was a certain definite part of the crops themselves that was to be delivered or turned over to appellant, in specie, and not the proceeds of the sale of such crops, and, in the language of the Devereaux Mortgage Co. case, supra, the purchasers “were not given the right to elect whether they would deliver crops or pay value or given authority to sell and then make division. Their contract was to deliver a share of the crops and nothing else.”

Respondents, in support of their contention that the proceeds of the crops and not the crops themselves were to be divided, place reliance upon Yakoobian v. Johnson, 102 Cal. App. 10, 282 Pac. 522, where it was held that in the absence of stipulation to the contrary, a purchaser let into possession is entitled to crops raised by him; and also on First Nat. Bank v. Montana Emporium Co., 59 Mont. 584, 197 Pac. 994, holding to similar effect. These cases are clearly distinguishable for the reason that in the contract before us there are express stipulations to the contrary. Lynch v. Sprague Roller Mills, supra, Moen v. Lillestal, 5 N. D. 327, 65 N. W. 694, and First Nat. Bank v. Andreas, 92 Cal. App. 62, 267 Pac. 937, relied on by respondents, are also distinguishable as in those cases the contracts provided for a division of the proceeds arising from the sale of the crops and not, as here, for a division of the crops themselves. Respondents further contend that inasmuch as the contract contained the following provision:

“It is further covenanted and agreed that until the delivery of the grain and other crops to the party of the first part as aforesaid, during the continuance of this contract, the legal title to, and ownership and possession of all of the grain raised during each and every year shall be and remain in the party of the first part.”

a distinction was made between the grain and other crops, and that the title to the grain only having been expressly reserved, no title was reserved as to the other crops. However, it is to be noted that the title to all of the grain raised is reserved until the delivery of the grain and other crops as provided in the contract. This reservation of title to all of the grain was evidently intended to be in the nature of security to compel a proper division of the crops and continued only until the crops were divided, and in no way modified or limited the provisions for division of the crops, and is not subject to the construction sought to be placed on it by respondents.

The following conclusions are justified from the foregoing: Appellant was a tenant in common with the McClouds of the crops raised on the premises in 1930- the relationship created was therefore not in the nature of an equitable chattel mortgage as contended by respondents and as found by the trial court; appellant, under the circumstances of this case, was entitled to maintain an action for the recovery of its share of the specific crops or the value thereof against the McClouds or any person to whom they had attempted to sell the same (38 Cyc. 89; note, 26 A. L. R. 1021; Adams v. Thornton, 5 Cal. App. 455, 90 Pac. 713), and was not limited to an action for damages.

Appellant being the owner of one-half of the crop in question, the McClouds attempted to sell property in which they had no title. The principle is well settled that a seller of personal property can convey no greater title than he had, and it makes no difference that the purchaser has no notice and is ignorant of the existence of other parties in interest. (7 R. C. L. 886; Klundt v. Bachtold, 110 Wash. 594, 188 Pac. 924; Tuttle v. Campbell, 74 Mich. 652, 42 N. W. 384, 16 Am. St. 652; Trustees v. Williams, 102 Wis. 223, 75 N. W. 954, 69 Am. St. 912; Waterford Irr. Dist. v. Turlock Irr. Dist., 50 Cal. App. 213, 194 Pac. 757.) One who buys property must, at his peril, ascertain the ownership; and if he buys of one having no authority to sell, his taking possession in denial of the owner’s right is a conversion. (2 Cooley on Torts, p. 506; 7 R. C. L. 879, 887. See, also, I. C. A., sec. 62-207, to the same effect.) While it therefore becomes unnecessary to determine whether Shields and Gannon, in purchasing the seed in question, had either actual or constructive notice of the interest of appellant therein, the record furnishes sufficient evidence to warrant the conclusion that they did have notice of appel lant’s ownership of the property and furthermore that they had sufficient information to put them on notice.

We are in accord with appellant’s contention that the trial court erred in not awarding judgment against McCloud for the value of appellant’s share of the crops. Regardless of the liability of Shields and Gannon, it is logical that if the share of the crops themselves cannot be recovered, the McClouds, having converted it to their own use, are answerable to appellant for its value, and this is true not only as to the seed but also as to the other crops converted. In view of what has been said, wre are likewise of the opinion that the trial court erred in granting the motion of Shields and Gannon for nonsuit, and in dismissing the action.

The judgment is reversed and the cause remanded, with instructions to enter judgment against Shields and Gannon and McCloud requiring them to deliver one-half of the seed raised upon the premises in 1930, or in the event delivery cannot be had, that a joint and several judgment be entered against them for the market value thereof; and to enter judgment against McCloud individually for one-half of the market value of the hay grown on the premises in 1930. Costs awarded to appellant.

Givens and Holden, JJ., and Koelsch, D. J., concur.

Petition for rehearing denied.