Security State Bank v. Krach

161 N.W. 568, 36 N.D. 115, 1916 N.D. LEXIS 180

• Court: North Dakota Supreme Court
• Decided: December 14, 1916
• Status: Published

Opinions

Bruce, J.

This is an action to foreclose three chattel mortgages on crops grown on the east half of the southwest quarter and the west half of the southeast quarter of section 4, twp. 136, range 97, in Hettinger county, North Dakota. Judgment was rendered for the plaintiff. The defendant appeals, and asks for a trial de novo.

Two of the mortgages appear to have been given to the plaintiff directly. The third was purchased by the plaintiff from the International Harvester Company.

The defense of the defendant is “that a part of the wheat seized was not covered by any of the mortgages; that the International Harvester Company mortgage did not cover any of the grain seized; that the oats and the balance of the wheat seized were covered only by' the mortgages to the plaintiff securing the purchase price of certain land which was taken back by the defendant, and that such mortgages were unenforceable at the time of the commencement of this action and at the time of the trial, and were void and no liens upon the grain or anything else.”

We have first to determine whether any lien on or right to the crops raised in 1912 existed in the plaintiff, the Security State Bank, by reason of the chattel mortgages executed to it on October 2Ith, 1911, and which mortgages covered not merely the grain raised on section 4, but that raised on section 9.

There seems to be no dispute; at any rate we find from the evidence that these mortgages were given for the purchase price of the land under an executory land contract.

There also can be no question that prior to the commencement of the present action, and on the 15th day of February, 1913, the grantor served upon the defendant a written cancelation of said contract, and thereafter, and on the 9th day of March, 1914, secured a judgment canceling said contract and restoring the land to him.

These being the facts, it is clear to us that the plaintiff cannot now in this action recover anything on the purchase price of the land, and as this is all the consideration there is for the notes and mortgage, that that consideration has failed. Roney v. H. S. Halvorsen Co. 29 N. D. 13, 149 N. W. 688; Palmer v. St. Elmo Invest. Co. — Cal. —, 29 Pac. 508.

Plaintiff, however, contends that the last-mentioned action and the present one are separate and distinct. He contends that on the rescission by a vendor of an executory land contract, the policy of the courts is to place the parties in statu, quo, and that, though the election to rescind the contract debars the vendor from suing for, or recovering, the unpaid purchase price, he nevertheless is entitled to recover for the value of the use of the premises while in the vendee’s possession.

This may be true, but the action before us is not for the recovery of rent, but for the foreclosure of the mortgages, and the chattel mortgages were given, not to secure the payment of that rent, but the payment of the purchase price.

In so far as the right to recover on the mortgage which was purchased by-the bank from the International Harvester Company, other considerations apply, and there can be no question that a recovery can be had thereunder, provided that the grain on which the mortgage is sought to be foreclosed was raised on land covered by that mortgage.

We are satisfied, however, that the plaintiff has not proved this latter fact, and that the record tends to prove the contrary. We are satisfied also that the burden of proof was upon the plaintiff to establish this fact. Martin v. Hawthorn, 3 N. D. 412, 57 N. W. 87.

The International Harvester Company mortgage, unlike the others mentioned, did not cover the crops grown on section 9, but only those grown on the so-called homestead on section 4. The evidence of the deputy sheriff shows conclusively that the grain seized was either taken from what is termed “the small granary” on the farm or from “Freeman’s elevator.” The testimony of the defendant, which is corroborated by that of another witness, tends to show, if it does not conclusively show, that the grain grown on section 4 was neither stored in the so-called small granary, nor hauled to this.elevator.

There is, therefore, a failure of proof. The judgment of the Dis- . trict Court is reversed and the cause is remanded with directions to enter judgment for the defendant, dismissing the complaint, and for his costs' and disbursements. The plaintiff and respondent will pay the costs and disbursements of this appeal.