Clendening v. Hawk

Young, J. One question only is presented by defendant’s appeal in this case, and that relates to the correctness of the order of the trial court in granting plaintiff’s motion for a directed verdict at the close of the case. The plaintiff seeks to recover the value of a quantity of grain which he alleges was converted by the defendant on September 15, 1896. The grounds upon which the right of recovery is based are set out at length in the complaint, in two [421] distinct causes of action. The first alleges his ownership of the grain in question. The second sets up the lien of a chattel mortgage executed by one J. M. Keep, and default therein entitling him to possession. The answer meets the allegations of ownership contained in the first cause of action by an explicit denial, and as to the second cause of action, based upon the chattel mortgage, alleges that Keep, the mortgagor, had no right or' interest in this grain which he could mortgage. So far as the facts, contained in the record are material to a review of the single question presented here, they are these: For several years just prior to 1896, the year in which this grain was grown, J. M. Keep had been a tenant of the Maryland' Land Company, farming for it upon shares certain lands owned by it in Cass county. Under the terms of his several leases with them, which were made yearly, he retained three-fourths of the grain, and delivered the remaining fourth at the elevator at Buffalo to his lessor. During this time one W. J. Hawk, the husband of defendant, appears to have attended to receiving the grain at Buffalo for the lessor, and also to have attended to certain matters connected with the actual leasing, but to what extent is not clear; neither is it material in this case, for it is shown that the lease under which the grain in controversy was grown was made under the express direction of the lessor.. On December 6, 1895, Keep leased the land for the year 1896, by a written lease of that date, identical in terms with that of the preceding years. This lease was duly authorized by the owner of the land, and is the only lease it either authorized or ratified. It does not admit of dispute that Keep acted under this lease up to the time that he had about 100 acres of wheat seeded. Here, however, begins a series of transactions among the creditors of Keep which have supplied the material for this litigation. It appears that Keep was indebted to A. E. Clendening & Co., of which firm plaintiff was a member, upon a promissory note for $275, which was secured by a chattel mortgage, upon the crop of 1896 and upon other property; also to the defendant in a large sum, also secured upon this grain and additional property, defendant’s security being prior to that held by Clendening & Co. At and after this time Keep entered into separate contracts, and at different times, with plaintiff, who had become the owner of the note of Clendening & Co., and with defendant’s husband, whereby, through them, he secured such advances of money, provision, and credit as was necessary for him to produce this- crop, and without which it is evident he could not have done so. By these separate arrangements both Clendening and defendant’s husband sought, not only to secure themselves for 'the advances made, but also to further secure Keep’s original indebtedness, by obtaining his entire interest in the crops raised for this year. On May 14, 1896, Keep entered into a written contract with defendant’s husband, by which he agreed to cultivate 'the lands in question for that year for the first party named [422] in the contract, who was denominated therein as “W. J. Hawk, Agent,” and to pay all expenses, and to deliver all the grain at the elevator at Buffalo in the name of the first party. This contract was signed, W. J. Hawk, Agent First Party,” and “J. M. Keep, Second Party.” For such services the first party was to pay to Keep the sum of $4 per acre. There seems to have been an oral ixnderstanding out sum there should be x'etained the amount of Hawk’s advances, as well as defendaxrt’s claim. Keep testifies that his cash contract contained certain conditions in referexice to plowing which were to be changed before it was to go into effect, that they were not changed, and that he did not give up his original lease, but continued to act thereunder. With this, however, we are not concerned; for this coxitract is shown to be wholly between Keep and the defendant’s husband, axxd it did not, therefore, abrogate or supersede the lease made by the owners of the land on December 6, 1895, which stands without coxrtradiction in the record as the only lease or contract either authorized or ratified by them for this year, or of which they had axiy knowledge. I't appears that Keep, as well as the plaintiff, when he examined the cash con-ti'act, considered it as the coxitract of the Maryland Land Company. That it was not is clear. This is shown by the testimony of John R. Bond and Samuel A. Reynolds, who had the immediate chax-ge of this land for the owner. Both testified that the lease of December 6, 1895, was the only contract they had for the year 1896; that defendant’s husband had no authority to make the later contract. Even Mr. Hawk does not claim that this cash contract, signed by him, “W. J. Hawk, Agent,” in any way bound the owners of the land, or that it was a new contract, superseding the lease. On the contrary, he testifies: “I intended to work the land myself. The Maryland Laxid Company xiever gave me authority to hire anybody to work the land by the acre for 'them. No member of the company or owner of, the land ever gave me a lease of the land. . I had no lease individually for this land, or any permissioxi to work the land myself, except as I received authority from myself as agent for them. I 'never had any lease or contract, except from myself as agent.” This is clearly a coxitract between Keep and defendant’s husband. Whether it was consummated, and what its legal effect as between the parties thereto, it is not necessary for us to discuss; for it is plain that, under any coxistruction, it could not alter or supersede the lease of December 6, 1895, made by the owners of the land. The ownership of the grain in question is to be determined by the contract in force at the time it came into existence. That, as we have seen, is the original lease, which, as between the parties, has not been in axiy way affected by the subsequent arrangements of those who were not the immediate parties thereto. Under the terms of this lease three-fourths of the grain grown came into existence as the property of Keep, impressed with the lien of such chattel mortgages as he had given; the sur [423] plus above the amount required, to discharge such liens continuing subject to his right of disposal as owner as he saw fit. On September io, 1896, Clendening, believing that the cash contract had been authorized by the Maryland Land Company, and that it was its contract, secured a written assignment thereof from Keep, for the purpose of securing the amount then due him, and for advancements which he thereafter made on .the strength of holding the assignment. After the crop was threshed and delivered to defendant’s elevator in Buffalo, plaintiff made demand upon the Maryland Land Company for payment of the cash sum due Keep for producing the grain under this contract. It then developed that this contract was not only unauthorized by it, but its existence was unknown; further, that defendant’s husband had remitted to it the proceeds of its one-fourth of the grain, in accordance with the terms of the original lease, as he had done in previous years. Plaintiff’s demand was, of course, refused. Thereafter on January 9, 1897, he obtained from Keep an assignment of all his right and interest in the crop of 1896, including his rights under the original lease. These statements of facts are sufficient for our present purpose. It will be seen that plaintiff wholly failed to present any evidence to support the allegation of ownership contained in his first cause of action. The assignment of the cash contract' — if it were in force, and had been properly authorized — would transfer to him only a right to recover the amount of money due his assignor; and the assignment of the lease was made long after the date of the alleged conversion. Ownership at the time was necessary. This Court, in Parker v. Bank, 3 N. D. 87, 54 N. W. Rep. 313, said: “It is well settled that no action for conversion can be maintained unless the plaintiff shows a general or special ownership in the property converted, and possession or a legal right to immediate possession at the time of the conversion.” As to this cause of action the order of the trial court was correct. The second cause of action, wherein plaintiff relied upon his chattel mortgage lien, was, we find, improperly withdrawn from the consideration of the jury. The existence of the debt, the mortgage, the identity of the property, and default entitling plaintiff to possession were properly shown. It is true that plaintiff’s mortgage is not a first lien, and that the defendant had two prior mortgages on this grain; but it is settled law within this jurisdiction that a second mortgagee may maintain an action for conversion against the first mortgagee for the wrongful conversion of the property covered by the two mortgages, and recover as damages the value of the property converted, up to the amount due on his lien, less the amount due upon the prior liens held by the first mortgagee. Lovejoy v. Bank, 5 N. D. 623, 67 N. W. Rep. 956. If, in this case, it appeared that the amount of defendant’s mortgage liens exceeded the value of the property, then plaintiff would have suffered no damage, and direction of a verdict against him would [424] have been proper; but, on the contrary, it appears that the value of the grain received by the defendant was largely in excess of the amount of the debt secured by her chattel mortgages. The verdict was, therefore, as to this cause of action, improperly directed. (79 N. W. Rep. 878.) Defendant’s answer contains no allegation under which evidence of- the existence of prior incumbrances is admissable in mitigation of damages. This evidence was received at the trial over plaintiff’s objection, but upon the Court’s order,- which appears of record, permitting -defendant to amend her answer to conform to the proof. This has not been done, and the case is here upon the original pleading. Should we treat it as amended, however, it would not alter our conclusion. The judgment of the District Court is reversed, and a new trial ordered. All concur.