McKenzie v. Hopkins

SpaudiNG, Ob. J. This action was brought to determine tbe ownership of tbe proceeds of a certain crop raised by one G. N. Hopkins upon land belonging to tbe plaintiff and appellant during tbe year 1911. Tbe defendants, other than Hopkins, are claimants each to a portion of said proceeds under chattel mortgages, upon Hopkins’s share of tbe crop, duly executed and filed, given by said Hopkins to secure indebtedness owed by him to such defendants respectively. Tbe claim of tbe plaintiff is that be employed Hopkins to sow and harvest tbe crop in question, and was to pay him, as compensation for bis labor and that of bis teams and tbe use of his machinery, one half tbe proceeds of tbe crop so raised, and that tbe whole of such one half was to be applied upon indebtedness owing from Hopkins to him. The case is here -for trial de novo, and we find tbe facts to be that tbe plaintiff was tbe owner of tbe land; that for several years preceding tbe year 1909 defendant Hopkins had been plaintiff’s tenant on said land, one half tbe crop raised each year belonging to Hopkins. No formal lease was executed for the years 1909, 1910, and 1911, but — 184 — Hopkins remained on tbe land, and continued to cultivate it, with no new agreement or contract. In the meantime he gave separate mortgages on his half of the crop of 1911 to each of the defendants, as follows: September 22, 1910, to the defendant Farmers & Merchants Bank, at Kensal, to secure $335.61, payable October 1, 1911; on the 3d of October, 1910, to the Kensal Implement Company to secure his note for $ 705.73, due October 1, 1911, on which the sum of $149 was paid in November, 1911; on October 12, 1910, to defendant II. M. Tucker Company, to secure his note for $128.05, on which $50 was paid October 12, 1911. Each of said mortgages was properly filed on or about the date it was given. It is found that said McKenzie had sold crops aggregating in value more than the amount involved in this litigation, and appropriated to his own use the proceeds; that about the 7th day of November, 1911, he shipped to the Minnekota Elevator Company a portion of said crop belonging to the defendant Hopkins, for sale; that said elevator company sold the same, and that the net proceeds thereof were $1403.23; that subsequently and while said elevator company still retained possession of the proceeds of such crop so belonging to said Hopkins, it caused to be presented to the district court of Stutsman county, and filed in the office of the clerk thereof, an affidavit stating the amount of money in its hands derived from the crop so sold, that there were conflicting claims thereto, and setting forth the mortgages of the defendant hereinbefore described, and that it was unable to determine to whom said proceeds of said grain rightfully belonged, or who was entitled to the possession thereof; whereupon the court made its order designating the Stutsman County Bank of Courtney as a depositary with which said sum of money might be deposited, and directing notice to be given to all parties holding conflicting claims thereto, pursuant to § 6995, Rev. Codes 1905; that thereupon said Elevator Company deposited said sum with said bank. Hopkins furnished all the teams and machinery and most of the labor for the production of the crop, incurred indebtedness to other defendants for supplies, with the knowledge of McKenzie, with no prospect of being able to pay if appellant’s version is correct, unless the one half of the crop paid more than the debt due him; and when appellant learned that the mortgages in question had been given, and — 185 — one balf tbe crop insured as belonging to Hopkins, be said nothing .to the mortgagees. There was no crop in 1909 or 1910. We cannot reproduce the evidence in full, showing the grounds for our conclusion, but call attention to some of its salient features. The appellant’s family lived in Jamestown during all the time in question, and he testifies that he was on the farm during the farming season most of the time; that he raised the crop; that nobody else had any interest in it; • that he was the owner of the proceeds; that he was on the farm while the crop was being put in and harvested; that there was no written contract for the year 1911,'or for the years 1909 and 1910; that he did not rent it for 1909 and 1910 to anybody; that the agreement was that Hopkins was to farm it, and after appellant got the crop he was to give Hopkins credit on a debt he was then owing, for the amount received from one half the crop; that this applied to the three years, 1909, 1910, and 1911, but that in the spring of 1911 he had no agreement with Hopkins as to what share of the crop he was to receive. After thus testifying, he further states that in the spring of 1909 he had a talk with Hopkins, and it was arranged in such talk that he was to work there, and have for his work the money received from half the crop, to be applied on the indebtedness of Hopkins to appellant; that he had the same talk in the spring of 1911 as to the crop for that year; that he supposed that there was nothing said as to what should be done with the surplus, if there was grain enough to pay the indebtedness, but that it was his intention to give the balance of that half to Hopkins, but that appellant was to handle the crop entirely. These extracts from the testimony of McKenzie we quote: Q. At that time (spring of 1911) you had no agreement with him as to what share of the crops he was to receive? A. No, sir. Q. But I believe you said you expected to give him credit for one half the proceeds thereof upon his indebtedness, if he received any crop ? A. Yes, sir. Q. That was true during 1909 and 1910 ? A. Yes, sir. — 186 — And again: Q. Now, when did yon tell Mr. Hopkins for the crop of 1911 that he was not to have any interest in that crop ? A. I do not know that I ever told him that. Q. You never told him that? A. I do not know as I did. Q. You never told him in the spring of 1911 to that effect? A. No. Q. Nor in the fall of 1910 ? A. I do not remember that I did say anything to him about the 1911 crop in 1910. Q. And in 1910 you did not tell him that before harvest, did you? A. I do not remember that I ever did. The defendant Hopkins testified that it was his horses and machinery that were used to farm the land; that he thought he made an arrangement with McKenzie for farming the land in 1911, about the 1st of April of that year; that he was then living on the farm; that he had no settlement in 1909; that in 1911 he got from McKenzie about $150 for hired help, and McKenzie did not agree to give him any interest in the crop; that he had never had any settlement with him; that McKenzie was the boss; that • he himself. did not engage threshers to thresh the crop; that he did not expect to get anything for his wages and use of his teams and machinery, if there -was no crop. A long examination was had with reference to the amount of Hopkins’s indebtedness to McKenzie, but he testified that there had been no settlement, and that he did not know what it was; that there was nothing said about how much feed he was to furnish nor when he was to have a settlement; that he was to have his pay when the grain was threshed, but that he had never said anything about getting his pay, but went to Canada immediately after selling his stock, in the fall, after threshing in 1911, without any settlement; that he did not ask McKenzie about selling the crop. One Nichols, cashier of the defendant Farmers & Merchants State Bank of Kensal, testified that on or about the 23d of September, 1910, he took a mortgage to the bank from Hopkins; that Hopkins told him — 187 — be was to stay on tbe place in 1911, and that abont harvest time in 1911 he had a talk with McKenzie, the appellant, relative to such mortgage on the crop; that he told McKenzie that the bank had a first mortgage, and he would like for him to see that Hopkins paid, and McKenzie informed him that he did not know whether Hopkins was farming the land on shares or working by the month that year; that McKenzie never told him that Hopkins had no interest in the crop. One Keckler testified that he was a member of the Kensal Implement Company, defendant, the holder of one of the mortgages on the crop; that on the 3d of October, 1910, he had a talk with Hopkins, and was informed by him that he was to continue to work the land on shares, and would give him a one-half mortgage on the crop of 1911; that he thereupon took the .mortgage; that in January or February he had a talk with appellant McKenzie regarding the crop grown in 1911, wherein he asked McKenzie if there was no way to settle the matter without going into court and avoid expenses, and McKenzie said that there had been no written lease for the last two years, and that there was no equity for him in the grain and crops; that during a talk in 1910 Hopkins informed him that he was going to work the farm on shares, and that McKenzie told him to work the land as he had been. J. S. Carr, an attorney, testified, among other things, that during October or November, 1911, he had a conversation with McKenzie regarding the grain involved in this action; that he notified McKenzie of the chattel mortgages held by the Implement Company and the Bank, and inquired of McKenzie if Hopkins was his renter, and that McKenzie’s reply was that he did not know whether he was his renter or hired man that year; that he then asked McKenzie if Hopkins had been renting his land the last year, 1910, and that he said yes, that this year it was different but he guessed he had not made any new agreement, that on another occasion he was employed to present a bill to McKenzie for collection, and, among other things McKenzie told was that he guessed he would make Hopkins his hired man for the year 1911. Oarr also testified that in the latter part of June or fore part of July, 1912, after Hopkins had returned from Canada to serve as a witness in this case, he had a talk with him, and Hopkins informed him that he worked the land in 1911 as a renter, or at least — 188 — tbat be, Hopkins, understood so; tbat be understood be was working it in 1911 as be bad .in 1910; tbat be said be did not have any agreement. One Holmes testified tbat Hopkins came to bim in tbe fall of 1910, and asked bim to do tbe tbresbing on tbe McKenzie lands, on wbicb be bad a crop in 1911. One Oroonqnist testified as to conversations be bad with reference to taking bail insurance on Hopkins’s • share of tbe crop, and again about a conversation when Hopkins was tbresbing when be was informed by Hopkins tbat be bad shipped a car of flax, and when be got returns be would pay tbe money; tbat be shipped it because McKenzie wanted to ship it all. Hopkins testified on cross-examination tbat in tbe spring of 1911 McKenzie told bim to go ahead and work on tbe farm with tbe horses and machinery, and be would furnish tbe men, pay bim one half tbe crop, to be credited on what be owed McKenzie; tbat be did not expect to get anything for bis work if be raised no crop. McKenzie denied in some cases having made statements tbat be did not know whether Hopkins was bis renter or hired man, and in others disclaimed any recollection of such statements. Tbe mortgages in question were proved and introduced as exhibits, and it was shown tbat about harvest time in 1911 McKenzie bad gone to tbe register of deeds’ office and made a list of such mortgages; tbat also on tbe 12th of June, 1911, Hopkins bad applied for bail insurance on bis half of tbe crop, and obtained a policy later. Among tbe mortgages disclosed on Hopkins’s half of tbe crop for 1910 was one given by Hopkins to McKenzie, securing $1,500, dated October 1st, 1909, and another securing $1,569.35, covering much personal property and an undivided interest in the crops for tbe year 1905, and bearing date of October 1st, 1905. Affidavits of McKenzie renewing this mortgage-are in evidence and bear date of March 5th, 1908, and February 7th, 1911, and tbe security was sold under foreclosure on tbe 17th of November, 1911. There was then claimed to be due on tbe debt secured thereby $1,862.59, and tbe net proceeds were $1,292.41. Of course, tbe testimony showing what Hopkins told different witnesses not in tbe presence of McKenzie is not competent for all purposes, but it was admissible to show Hopkins’s understanding at tbe — 189 — time tbe mortgages were given, and the conversations to show his understanding that he was a lessee of McKenzie, and not his hired man. There is much testimony, a great deal of which is conflicting or evasive, which, as we have indicated, it is impossible to set forth. As an illustration of the examination of Hopkins we quote as follows from the record: The Court: What were you going to get for your wages if you did not get any crop ? The Witness: A. I did not expect to get anything, the. same as I had for four or five years. I owed George there, and he told me I would have a chance to pay it off in that way. The Court: You just depended entirely on raising a crop if you got anything there. The Witness: Yes, sir. The Court: Did you owe him for that money he advanced in 1911 to you? .The Witness: I do not know. I have not kept account of anything. The Court: And you want to tell the court that you did not know anything about what that contract is between you and Mr. McKenzie; we want to know the truth about it? The Witness: Which contract ? The Court: Do you know you owe him anything for the money advanced for you ? The Witness: What money ? The Court: Do you owe him any of that money ? Mr. Thorp: I want to ask what money the court means ? The Court: The money advanced to pay the hired men. Do you owe him anylhing.paid hired men? The Witness: No, sir. The Court: Do you owe him any other money advanced in 1911? The Witness: No, not that I remember of. The Court: You don’t owe him a thing for 1911 ? The Witness: Yes, as much as it is. The Court: State what it is. The Witness: I do n6t know what it is.. The Court: You don’t know what it is ? — 190 — The Witness: No, sir. Tbe Court: Well, was be to furnish everything there on the place? The Witness: To furnish the men. The Court: Did he hire the men? The Witness: No. The Court: You hired the men? The Witness: Yes, told me to hire the men. The Court: When was this contract, this statement, first entered into between you and Mr. McKenzie? The Witness: About the first of April. I believe he was over there to buy some feed and seed. The Court: Was there anything said about how much you were to furnish there ? The Witness: No, sir. The Court: Was there anything said about how much you were to put in? The Witness: Yes, sir. I believe there was. The Court: When you were to have a settlement or not, anything said about that ? The Witness: No, not anything in particular. The Court: Was there anything said about when.you were to get your pay for your work? The Witness: When the grain was threshed. The Court: Have you ever asked for it? The Witness: No, sir. Mr. Knauf: Q. You went up to Canada immediately after selling your stock, did you not? A. Yes, sir. Q. That was along about the 1st of November, 1911 ? A. No, I think it was about the 18th or 20th of December. Q. And before you went you did not have any settlement with Mr. McKenzie ? A. No, sir. Q. He did not pay you any money, or you give him any ? A. No, sir. A consideration of the entire record cannot fail to impress the reader — 191 — with a conviction that Hopkins remained on the place during the years 1909, 1910, and 1911 without any new contract; and that the theory that he was using all his horses and machinery, boarding himself and family, and incurring considerable other expense besides his own labor, for the purpose of making payment on his indebtedness to McKenzie, and with the probability of leaving him nothing on which to live or keep up his belongings, was thought of after McKenzie discovered the mortgages to the defendants named, in the office of the register of deeds. After the crop was harvested he foreclosed on the personal property; Hopkins went to Canada without any settlement, and, as each of them testify, without knowledge of the amount due or whether it had all been paid by the foreclosure and the share of the crop. No effort was made at settlement. No demand for one was made by Hopkins. Altogether the theory of appellant seems wholly improbable, and the contract, one that no man in poor circumstances, hard pressed, and, as shown, without funds, as Hopkins was, would make. Furthermore, as near as can be computed from the evidence, half the crop brought a considerable sum more than enough to pay the indebtedness due McKenzie, and in this connection it must be said that the $1,500 mortgage on the 1910 crop is shown by the record to have been given with a view to defrauding creditors, and accepted by McKenzie for that purpose. This shows the disposition of the parties. McKenzie was repeatedly questioned about the indebtedness, and, when recalled after other witnesses had testified, was still unable to state the amount, and had evidently made no attempt to ascertain it. While this court is required to find the facts on the record before us, without regard to the findings of the trial court, yet the character of the testimony is such that the trial court had a great advantage over this court in determining the facts, and we feel that any doubt should be resolved in favor of the findings made. Among such findings was the following: “That said Hopkins was the renter, tenant, and lessee of said lands in 1911, and that he had said lands so rented from said McKenzie, under and by virtue of which rental said McKenzie was to receive an one-half of the grains maturing on said lands in 1911, and the said Hopkins to receive an one-half thereof; that all of the grains raised on said land in 1911 were sold by said McKenzie; that said grains were of the value and sold for the sum of $4,200.29 and therefrom said — 192 — McKenzie received tbe sum of $2,797.06, all of which he appropriated to his own use, and that the balance of the value of said grains and for which said sold was $1,403.23, which said sum was deposited in said Stutsman County Bank of Courtenay, as aforesaid, and that said Hopkins was the owner of all of the grain for which said $1,403.23 was received from the said grain belonging to said Hopkins, and mar tured in 1911 upon said lands, by reason of his tenancy upon said lands.” A further statement of the conflicting and indefinite statements of both appellant and Hopkins on the subject would serve no useful purpose, and is therefore not made. The circumstances — the fact that appellant surrendered possession during all the years, his apparent disinclination or his inability to disclose the amount of the debt due from Hopkins, and the latter’s total lack of knowledge on that subject, as well as many other circumstances- — -all support our conclusion that Hopkins was cropping the farm under no new contract. Section 5531, Rev. Codes 1905, reads: “If a lessee of real property remains in possession thereof after the expiration of the hiring, and the lessor accepts rent from him, the parties are presumed to have renewed the hiring on the same terms and for the same time, not exceeding one year.” Having found that the evidence does not justify a finding that there was a new contract providing for the employment of Hopkins by appellant, § 5531, supra, directly applies. There was a lease for prior years, that is, years prior to 1909, and Hopkins remained on the land with no new contract during the years 1909, 1910, and 1911, and appellant received rent for said premises from Hopkins during the year 1911; thereby a renewal of that lease took place from year to year. Wadsworth v. Owens, 21 N. D. 255, 130 N. W. 932. In saying that there was a lease for years prior to 1909, we adopt the designation of the contract for such years made by parties and counsel. The contract is not in evidence. The only other question is whether the plaintiff mortgagees can recover their interest in the fund, now in the hands of the depositary designated by the court, in this action. The contention of appellant is that, if the crop belonged to Hopkins, a conversion took place, and that the defendants are not entitled to have the ownership of the fund on deposit determined in this action. This question is briefed at con — 193 — siderable'length. It, however, appears to ns to require hut brief notice. Section 6995, Rev. Codes 1905, reads as follows: “Whenever two or more persons make claim for the whole or any part of the same money, personal property, or effects in the possession or control of any other person as bailee or otherwise, and the right of any such claimant is adverse to the right of any other claimant, or is disputed or doubtful, and the bailee, custodian, or person in control of any part of such property, money, or effects is unable to determine to whom the same rightfully belongs, or who is rightfully entitled to the possession thereof; or whenever such bailee, custodian, or person in control has notice or knowledge of any right or claim of right of any person in or to any part of such property, money, or effects adverse to the right of any other claimant therefor; or whenever any debt, money, property, or effects owing by or in the possession or under the control of any person may be attached by garnishment or other process, and there is any dispute as to who is entitled to the same or any part thereof; in any such ease the person in the possession or control of any such property, money, or effects, when an action in any form has been commenced for an account of or growing out of the same or in which the same has been attached as aforesaid, may pay such money or deliver such property or effects to the clerk of the court in which any such action having reference to said money, property, or effects, or the value thereof, may be pending, or out of which any garnishment or other process may issue with reference thereto; or if no such suit is commenced he may apply to the district court of the district where such property, money, or effects may be situated, and upon showing to the satisfaction of the court the existence of facts bringing him within the operation of this section, said court shall make an order designating a depositary with whom said property, money, or effects may be deposited by the applicant for such order. In either case such person in the possession or control of such property, money, or effects shall at once notify personally or by registered mail all persons of whose claims he may have notice or knowledge, having or claiming any interest,' property, lien, or right in, to or upon such property, money, or effects, of such deposit; and upon giving such notice the person so depositing the same shall thereupon be relieved from further liability to any person on account of such property, — 194 — money, or effects; provided, that such depositor may be required upon the application of any party interested therein to appear and make disclosure before the court in which any such action may be pending, or by which any order designating a depositor may be made, concerning the said property, money, debts, or effects held, controlled, or owed by him. If the address of any persons having or making any claim as aforesaid cannot be ascertained, an affidavit to that effect shall be filed with the depositary, and the giving of such notice shall not be required in such case.” The consignee or bailee of the crop in question, before paying the proceeds thereof to appellant, learned of the conflicting claims of the several parties thereto, and made application to the court, under the provisions of the foregoing section, to be permitted to deposit the proceeds thereof in some bank to be designated by the court, and such designation was made by order. Had the elevator company failed to make such application, it would probably have become involved in expensive litigation with all the parties to this action. It might have been liable for conversion or in other forms of action. The statute, it appears to this court, was intended to obviate this risk on the part of the elevator company. The company was willing to pay the proceeds of the crop to such person or persons as were lawfully entitled to the same, and by making the application and the deposit in accordance with the order of the court the fund could be preserved intact and the elevator company relieved of liability to either of the several claimants. Such claimants could then litigate between themselves the question of ownership in the fund, or the effect of their liens thereon. It appears to be a very salutary provision, and intended by the legislature to apply to claims of the nature here exhibited. A case could hardly arise where it would be applicable if it is not 'so in the case at bar. There is no question of the identity of the fund. The proceeds of the crop were paid to the bank immediately upon sale and the entry of the order by the court. Such proceeds constitute a fund in the hands of the bank, subject to distribution to such claimants as may be entitled thereto, or to any part thereof, as determined in legal proceedings, in the absence of any waiver on the part of one or more claimants. McKenzie, the plaintiff and appellant, brought this suit, selecting his own form of action for determining to whom it should be distributed. In his complaint he — 195 — sets out bis claim to ownership and the facts relating to the consignment, sale, amount received, the application to and order of the court appointing the bank a depositary, the giving of notice by the elevator company to the various claimants, as required by law, and the fact that the defendants named claim some right, title, or interest in and to said fund adverse to the claims of plaintiff. He then denied that the defendants had any right, title, or interest therein, or to the flax from which said fund was derived, and averred that their claims were subordinated to and inferior to his rights. He demanded an order from the court directing said depositary to pay him the entire fund in its hands, and that the claims of the defendants and each of them be adjudged null and void and inferior to the rights of the plaintiff; The defendants answered separately, setting up in detail the liens under which they claimed and the amount due on their respective liens, and that the fund in the hands of the bank was the proceeds of a crop on which their liens existed, and each demanded judgment for the payment by the bank to him of the sum due on his separate lien. It seems to us that all the pleadings in the action, taken together, fully set forth the facts on which the respective parties rely for recovery, and that by whatever name the action is denominated no more appropriate method could be devised for determining the rights of the parties than by the form of action and defense employed. The question is, Who is entitled to the funds in the hands of the depositary? The facts necessary to a determination of this question are set forth in the pleadings. The elevator company presumably was the innocent • consignee of the crop. It'sought to be'relieved from litigation and costs and the liabilities incident to a retention of the proceeds by itself, and those which might arise if payment' was- made to appellant. In the absence of the statute heretofore quoted, it is impossible that some1 ol the contentions of appellant might be important, but; as indicated, the statute seems to be intended for cases like the one before us, and; to furnish a method of relieving an innocent party from expensive litigation, and providing for claimants to the fund or property bearing the burden of ascertaining their own legal rights. We are sati-slied that the judgment of the 'trial court is correct. It is therefore affirmed: