State Bank v. Nelson

186 N.W. 766, 48 N.D. 702, 1922 N.D. LEXIS 91
CourtNorth Dakota Supreme Court
DecidedJanuary 14, 1922
StatusPublished
Cited by1 cases

This text of 186 N.W. 766 (State Bank v. Nelson) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Bank v. Nelson, 186 N.W. 766, 48 N.D. 702, 1922 N.D. LEXIS 91 (N.D. 1922).

Opinion

Birdzell, J.

This is an action to foreclose a chattel mortgage. The mortgagors, Nelson and Johnston, were not personally served, and did not appear. The defendant Halpern answered. From a judgment in favor of the latter for $1,614.52, the plaintiff appeals, and asks for a trial de novo. The material facts are substantially as follows:

The defendants Nelson and Johnston, farmers in the vicinity of Bowman, had become indebted to the plaintiff bank in the sum of $6,-[705]*705339-55- On December 30, 1919, they gave to the bank a note for this amount, payable June 1, 1920, secured by a chattel mortgage upon .certain described cattle, horses, and machinery and upon “all crops of every name, nature and description, which have been or may be sown, grown, planted, cultivated or harvested during the year A. D. 1920 on the following described real estate, viz.: On the S. W. Ya of section 15, N. W. Ya of section 22, N. W. Ya of 'section 10 and the S. S. section 14, all in township 130, range 103.” N'elson resided upon the premises at the time, and he and Johnston were in possession. The defendant Halpern owned the land. On February 19, 1920, Halpern leased a portion of the land described in the mortagage to one Rossenborg and the remainder to the defendant Nelson. The plaintiff bank, at the time of the leasing to Nelson, was consulted with reference to the same, and advised in a general way regarding, the terms of the lease, although it seems that it did not receive a copy. Halpern made known to the bank his desire that it should not take the personal property under the mortgage during the coming crop season, as the note would mature in June, and the bank manifested its interest in the crop to be- raised. The lease was in the nature of a cropper’s contract. It covered the N. of section 10, the S. S. of section 14, S. W. Ya of section 15 and the N. W. Ya of section 22, except certain of the cultivated lands therein, which had beer rented to Rossenborg. The cropper agreed to haul Halpern’s share to an elevator at Griffin for 8 cents per bushel, and it was agreed that the division of all grains should be made at that elevator, all the wheat to be delivered in the name of Halpern. The share of each contracting party was to be one-half, and certain expenses were to be divided accordingly. It was expressly agreed that the title of all crops should remain in Halpern until division, and that the cropper’s share should be held by Halpern as security for $300 cash rent to be paid on pasture lands and “for any other or further advances that the said party of the first part might make’’ to the second party. It seems that the mortgagor Johnston did not remain upon the place, and took no part in cropping the land that season; also that Nelson was financially embarrassed to such an extent that it was found necessary for Halpern to make certain advances to him to defray current expense of operation. In addition to the purchase of a tractor by Halpern and his becoming liable for the purchase price of a small truck, which two items are not claimed as advances in this action, Halpern advanced about $1,088.16. This he claims is a lien on [706]*706Nelson’s share under the contract. Some of the items claimed as advances are contested by the plaintiff, and will be referred to later. On August 6th, Nelson left the country, and Halpern made the arrangements for harvesting and threshing the crop, advising the plaintiff bank as to what he was doing. While Halpern was thus arranging for the threshing and the hauling of the grain with the knowledge of the bank, it had caused the foreclosure proceedings in question to be begun; but it did not advise Halpern of that fact. The latter arranged for one Gross to haul certain of the grain from the threshing machine, and with one Tembreull to haul the balance. He directed one Blank, his father-in-law, to superintend the threshing. On the morning the threshing operations started, after Gross had hauled one load from the machine, Tembreull appeared with a truck and a trailer, which he placed in position to receive the threshed grain, contrary to the directions of Halpern’s agent, and he forcibly seized the spout and directed it into his truck over the protest of the agent. Several hours afterwards the deputy sheriff came upon the premises and gave directions to the effect that the agents of the bank were not to be disturbed in taking the grain as the bank had put up a bond. This record does not disclose the return of the deputy sheriff on the warrant of seizure, issued in connection with this foreclosure action. It seems that the grain was later stored in the elevator. As the grain was delivered to the elevator in Bowman storage tickets were not issued to the sheriff; but, at the direction of the bank, they were issued in the name of Nelson, Halpern, and the bank, and the deputy sheriff gave instructions that the tickets were not to be given out.

The plaintiff in its complaint, in addition to the ordinary allegations in a foreclosure action, pleaded the leasing arrangements between Halpern and his codefendants, and that the defendant Halpern claimed an interest in the crop adverse to the plaintiff. In his separate answer Halpern pleaded the terms of,the lease, his advancements thereunder, the default of Nelson, the conversion of the crops by the plaintiff, and his damages incident thereto. In the prayer for judgment, however, he asked that he be decreed to be the owner and entitled to the immediate possession of one-half of the crops, in default of which he have judgment for the value; also that he be decreed to have a superior lien on the other one-half for his advances; that possession of this half be restored to the answering defendant, or his lien thereon paid with interest. There is also a prayer for the recovery of special damages claimed by this [707]*707defendant to have been incurred through being deprived of this particular wheat for seed purposes; defendant claiming that it had a special value for that purpose above the market value. The trial court found that there were 475 bushels of wheat and 133 bushels and 18 pounds of flax grown on the premises, one-half of which belonged to Nelson, and that there were 140 bushels of rye raised by Rossenborg to which the Nelson mortgage did not attach, and 56 bushels of rye raised on the premises occupied by Nelson to which the mortgage did attach and upon which it became a superior lien to that of Halpern. The court found the wheat and flax to have been converted, that its value, according to the highest market price, was $1,480.90, and that Halpern had a prior lien upon Nelson’s share for advances amounting to $1,072.40.

The principal argument of the plaintiff and appellant upon this appeal is that, as Nelson and Halpern were tenants in common of the crop, and as the bank, the appellant, succeeded to the interest of Nelson and took possession under the mortgage in the right of Nelson, it did not convert the crop to its own use. The evidence clearly shows that the bank did not proceed legally under its mortgage to acquire possession of the mortgaged property, but that it took possession by force before any attempt was made to seize the crop under the warrant of seizure. Neither does the,'record show that any legal seizure has ever been made. It abounds, however, with evidence that those who were active in excluding Halpern from possession of the grain were acting as agents of the bank; thus the bank is in no position to justify under the warrant of seizure. It did, in fact, convert the grain to its own use.

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Related

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Bluebook (online)
186 N.W. 766, 48 N.D. 702, 1922 N.D. LEXIS 91, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-bank-v-nelson-nd-1922.