More v. Lane

Robinson, J. Tbe plaintiff brings this action, claiming title to certain crops of grain under a chattel mortgage made to them by Charles Procise. Tbe plaintiff appeals from a judgment in favor of tbe defendant. Tbe mortgage was on all grain crops to be grown during tbe year 1913 on section 1, township 133, range 95. A prior mortgage was made to Hart-Parr Company to secure five promissory notes each dated August 19, 1912, to wit: $500 due October 15, 1912; $400 due September 15, 1913; $400 due October 15, 1913; $400 due September 15, 1914; $400 due October 15, 1914. Interest at 8 per cent. Tbe mortgage was duly witnessed, acknowledged, and filed for record. This mortgage was on a gasolene engine and on some crops, and on foreclosure of tbe same there was due about $1,300. [568] On February 4, 1913, Charles Procise made another mortgage to secure payment of $1,300, on all crops to be grown during the year 1913 on sec. 1-133-95 according to the conditions of three promissory notes, executed to More Brothers, dated August 19, 1912; $500 due October 15, 1912; $400 due September 15, 1913; $400 due October 15, 1913. Manifestly this second mortgage was made to secure three of the notes described in the first mortgage, which notes had been transferred to More Brothers by Hart-Parr Company. The notes were made payable to the order of Hart-Parr Company, and were indorsed by them to the plaintiffs, and when so indorsed they were in reality made and executed to the plaintiffs. In the brief of counsel for defendant it is claimed that the second mortgage is fatally defective because it describes the notes as executed to More Brothers, and not as made to Hart-Parr Company and by them indorsed to More Brothers. The point amounts to nothing. No person was deceived by the description of the notes, and when indorsed by Hart-Parr Company to the plaintiffs the legal effect was precisely the same as if the notes had been made payable to the plaintiffs. The receiver stands in the shoes of the mortgagor. He is in no position to assert any claim as a purchaser in good faith and for value. The mortgage needed no reforming. It sufficiently described its notes, and it covered the crops in question and gave notice to every person. It is also claimed that a mortgagee of land which is insufficient to secure the mortgage debt may, by a receiver, take the crops grown on the land regardless of any mortgage. That is not the law. The yearly crops are produced at a great expense, and the party producing them has a perfect right to mortgage the crops, and the right of a receiver is necessarily subject to the rights of any prior mortgage. In other words, a valid mortgage lien is not in any way devested by the appointment of a receiver, and when a receiver wrongfully takes property subject to the lien of a third party, of course he must pay for the property to the extent of the lien. When a receiver is appointed in a suit to foreclose a mortgage, the court has no right or jurisdiction to order him to take the property of third parties. In this ease the plaintiff malms no collateral attack on the order appointing the receiver. That was a matter entirely within the juris [569] diction of the court, but when direction is given to a receiver, by inadvertence or otherwise, to take property not belonging to the mortgagor nor subject to the mortgage lien, then the court surpasses its jurisdiction. A party is not protected in wrongdoing because he is a receiver or an officer of a court. But it is claimed that a receiver should be dealt with very gently, and that when acting under the order of a court he cannot be held in an action of tort. The answer is that, under our modern practice, the twilight distinction between actions in tort and the contract is of little consequence. This is an action to recover money which the receiver has wrongfully put into his pocket. When a receiver takes and sells property of a third party, the purpose of any action that can be brought against him is to recover the property, or its value, or the money received -for it. He should not be permitted to sell the property of others, and to retain its price, and to malee nice distinctions regarding the procedure to recover the property or its value. The remedy of the plaintiffs was by a summary motion to the court or by a civil action, and hence, with the express permission of the court, this action was brought. On the record and proceedings it is hard to conceive of any ground for denying plaintiffs’ right to recover. In regard to the labor liens, if they were valid liens against the crop, and the plaintiffs paid them under the mortgage or took an assignment of such liens, of course they are entitled to recover the same from the proceeds of the crop. It seems the defendant has sold the crops of grain, and now he refuses to pay either the mortgage liens or the hire of the laborers who produced or harvested the crops. To make the crops available it was necessary for the mortgagee, the receiver, or some party to pay the expense of harvesting, threshing, and hauling the same to market; and the receiver, paying such necessary expenses, must be permitted to prove the same and to retain it from the proceeds of the crops. And the same is true of a purchaser from the receiver. Judgment reversed.