Pacific Nat. Agricultural Credit Corporation v. Hagerman

55 P.2d 667, 40 N.M. 116
CourtNew Mexico Supreme Court
DecidedFebruary 3, 1936
DocketNo. 4021.
StatusPublished
Cited by5 cases

This text of 55 P.2d 667 (Pacific Nat. Agricultural Credit Corporation v. Hagerman) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pacific Nat. Agricultural Credit Corporation v. Hagerman, 55 P.2d 667, 40 N.M. 116 (N.M. 1936).

Opinion

SADLER, Chief Justice.

For some years prior to November 1, 1931, Southspring Ranch & Cattle Company, a corporation, hereinafter called “the Ranching Company,” had been indebted in substantial amount-to Pacific National Agricultural Credit Corporation, the appellee herein. The indebtedness was secured by chattel mortgage on several thousand head of sheep and certain ranch equipment. Maturities from time to time were cared for by successive renewals. The creation of the indebtedness extended as far back as 1927. The capital stock of the Ranching Company was owned by the Plagerman family. Herbert J. Hagerman was its president, Percy Hagerman its vice president and active manager, and Lowry Hagerman, his son, secretary-treasurer. The separate stock ownership of Herbert and Percy Ha-german aggregated almost eighty percent of the capital stock of the company.

Lowry Plagerman, the appellant herein, at all material times owned what is known as the Arcade Ranch. The Ranching Company, at some time in the year 1927, occupied said ranch with its large herds of sheep and continued at all material times in such occupancy, using same for the grazing of its sheep. Said herds were under mortgage to appellee when first brought upon the ranch of appellant. The latter knew of the existence of this mortgage, which was renewed from time to time, as aforesaid. The last renewal, prior to- November 1, 1931, took place in February, 1931.

On November 1, 1931, the principal balance due upon said mortgage as last renewed was the sum of $50,000. A renewal was arranged as of that date which involved an additional advancement of $12,-000, bringing the indebtedness to the new principal amount of $62,000. In connection with such renewal, the indorsement of the paper by Herbert Hagerman and Percy Hagerman was required and secured. The renewal was pursuant to a loan agreement dated November 21, 1931, which set out the conditions of such renewal. It seems that appellee, the mortgagee, proposed to pledge the new note and mortgage to Federal Intermediate Credit Bank of Berkeley, Cal. In connection with negotiations for the pledge, Federal Intermediate Credit Bank demanded of appellee that it secure from the Ranching Company, on certain named conditions, a pasturage agreement or lease from Lowry Hagerman to the Ranching Company on the Arcade Ranch to run for the life of the loan. One of the conditions was that the lessor should consent to assignment of the lease to appellee by the Ranching Company as “additional collateral.” Another condition, subsequently interposed and consented to by' all parties concerned, was that appellee be permitted to assign the lease to Federal Intermediate Credit Bank.

The negotiations in connection with the requirement for the lease and its subsequent assignment were almost wholly by telegraphic communications between appellee and the Ranching Company. In substance, and so far as material, the terms of the pasturage arrangement, arrived at by an exchange of telegraphic communications as aforesaid and carried forward into the formal written instrument dated November 1, 1931, provided: (1) That, of a balance amounting to $6,172.68 due for pasturage fees accrued prior to November 1, 1931, $2,500 should be paid by lessee, the Ranching Company, within four months and the balance on or before August 1, 1932. (2) Current rentals, at the rate of five cents per head per month, were to be paid by lessee on or before the 10th day of each month for the preceding month.

Pursuant to an express consent to assignment, carried in the lease agreement, a formal assignment to appellee, dated December 2, 1931, was executed by the Ranching Company, reading as follows:

“Roswell, New Mexico, Dec. 2, 193L

“For value received, The Southspring Ranch and Cattle Company hereby assigns to Pacific National Agricultural Credit Corporation its rights under the foregoing agreement upon the following express conditions :

“First This assignment is made upon the express understanding that it is to be held by Pacific National Agricultural Corporation as additional Collateral to a note of the Southspring Ranch and Cattle Company to Pacific National Agricultural Credit Corporation dated Nov. 1, 1931, in the amount of sixty-two thousand dollars ($62,-000.00) and due one year after date, said note having been given under the terms of an agreement between The Southspring Ranch and Cattle Company and Pacific National Agricultural Credit Corporation dated Nov. 21, 1931.
“Second Pacific National Agricultural Credit Corporation shall not use the pasture age rights hereby assigned for any purpose other than for the carrying of sheep acquired from The Southspring Ranch and Cattle Company.
“The Southspring Ranch and Cattle Company,
“By Percy Hagerman, Vice-Pres.
“[Seal]
“Attest:
“Lowry Hagerman, Secretary.
“San Francisco,-1931.
“The above assignment is accepted subject to all its terms and conditions.
“Pacific National Agricultural Credit Corporation,
“By-, President.”

As indicated in the copy of said assignment just quoted, there was indorsed at the end thereof a form of written acceptance for execution by the appellee. The lease, with attached assignment, was duly transmitted to appellee. It retained the assignment without objection for approximately two months, when, on January 29, 1932, by letter to the Ranching Company, it acknowledged receipt of the lease and assignment, stating that the written acceptance “was not executed as it was not thought necessary by us that we should execute the acceptance.”

In disbursing the proceeds of the aforementioned advancement of $12,000, the ap-pellee honored a draft drawn on it by appellant for $841.50, which sum appellant applied on account of arrearages earned prior to November 1, 1931. When it paid said draft, the appellee was without knowledge that any part of its proceeds was to be used to pay or apply on said arrearages. Except for this credit, the total amount of such arrearages, and in addition current rentals for the months of April, May, and June, 1932, in the sum of $1,331.75, remained due the appellant under the lease agreement at the time of trial.

The appellant, Lowry Hagerman, had personal knowledge of the terms and conditions of the contract dated November 21, 1931, hereinabove referred to, under which the additional advance of $12,000 was made. One of such conditions was that evidence should be furnished by the Ranching Company to appellee “of continuing first lien upon collateral now under pledge” to it.

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Bluebook (online)
55 P.2d 667, 40 N.M. 116, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pacific-nat-agricultural-credit-corporation-v-hagerman-nm-1936.