Lawrence v. Phy

Opinion by Mr. Justice Wolverton. There are numerous assignments of error, but from the view we take of the case it is only necessary for us to consider two questions, which arise upon the court’s instructions to the jury. Plaintiff’s contentions are: First, that the provision in the lease “that the crop so raised shall be and remain the crop of the said E. J. Couper, receiver, or his successor in interest, until the payment of all expenses necessary to care for said crop, and put the said one third rental in sacks, as herein provided for, and to cover any liens of hands or otherwise incurred in caring for, harvesting, or threshing thereof, together with the payment of said one third rental” constituted E. J. Couper the sole owner of the crop, and until it was raised and harvested, and the expenses paid by the Tinkham Brothers, they had no interest therein subject to mortgage or sale; and, seeojid, that such provisions of the lease created an equitable lien upon Tinkham Brothers’ interest in the crop in favor of the laborers to the extent of their wages remaining due and unpaid and which had — 510 — accrued on account of the production and harvesting thereof. Both these propositions are controverted by-defendants. The law is settled in this state that the lessor may retain within himself the ownership of the crop to be grown upon premises leased by him until the rent is paid: Fox v. McKinney, 9 Or. 498. But what the nature and extent of the lessees interest is, and to what extent he may deal with it, are the questions here. 1. The lease expressly prohibits Tinkham Brothers from subletting any portion of the premises, but it contains no provision against the assignment of the lease, or disposition of their interest in the crop. It has been said (Jones on Chattel Mortgages, § 114,) that “if there be an agreement that the crops shall belong to the owner of the land, and that the tenant, after paying him for certain advances, should have a certain undivided portion of the crop, the tenant has no interest which he can sell or mortgage,” citing Ponder v. Rhea, 32 Ark. 435, and Leland v. Sprague, 28 Vt. 746. The former of these cases went upon the ground that the party claiming as tenant was only a cropper, had no interest in the land, and was to receive his share of the crop as the price of his labor; and the latter simply holds that the landlord may maintain trover against an attaching creditor of the tenant, or one who purchases from him with notice of the landlord’s right. The same thing may be said of other cases cited in respondents brief. In Lewis v. Lyman, 22 Pick. 437, it is held that the tenant’s remuneration was in the nature of wages, and ownership of the crop remained with the lessor, and this was independent of any stipulation that the ownership should remain in the landlord. So in Wentworth v. Miller, 53 Cal. 10, it was held that purchasers holding from lessees under such an agreement for leasing could assert no right of possession as against the lessors. So, also, in Howell v. Foster, 65 Cal. 169. It — 511 — appeared that the lease there provided that all grain should be and remain the property of the lessor until certain advances made by him were fully paid, and then that he should deliver to the lessee his three fourths interest of the grain raised, and it was further stipulated that prior to the payment of the advances the lessee “shall have no right to dispose of any portion thereof.” It was held that under this agreement the crop was in no way subject to the disposal of the lessee. These cases do not support the text of Jones on Chattel Mortgages, nor the contention of respondents; but Andrew v. Newcomb, 32 N. Y. 419, and Smith v. Athins, 18 Vt. 461, do, apparently. The former of these two cases was an action in the nature of replevin by a purchaser of the crop from the lessor against one who had bought under an attachment and sale on execution against the lessee, and it was held that the action would lie, the court saying, among other things, that the crop “could not be taken under a process of fieri fiadas which only authorizes the levying the debt on the goods and chattel of the debtor. ” The latter case was an action in trespass for taking a quantity of hay under a purchase of the lessor’s interest in the lease against a party who had purchased the lessee’s interest in the property at a sheriff’s sale. It was considered that the action would lie, but the court said, in the course of the opinion, that the lessee “at the time of the levy and sale had no attachable property in the hay.” But the remarks here quoted were not necessary in either case to the decision. Upon the other hand, in Dworak v. Graves’ 16 Neb. 706, (21 N. W. 440,) Cobb, C. J., speaking for the court, said: “I have come to the conclusion that the law is quite clear that, while the landlord has the right to bind the tenant or cropper not to sell or sublet his lease, or the crops while growing or standing on the premises, without the consent of the lessor, yet, without such term — 512 — or stipulation in the lease or contract, the tenant would have the right to sublet the land or sell his interest in the crop at any time.” Yates v. Kinney, 19 Neb. 275, (27 N. W, 132,) is much in point. This was a suit in equity to restrain Kinney, a tenant of plaintiff, and Carey, a mortgagee of the crop, from committing waste, and appropriating to their own use the crops grown on the land of Kinney. The lease under which Kinney went into possession contained a provision as follows: “The crop is considered the property of the first party until it is divided.” The court, after stating the holding in Dworak v. Graves, 16 Neb. 706, (21 N. W. 440,) said: “It would logically follow that the same rights or interests might be mortgaged. But it is insisted that as, by the terms of the lease, the crop is considered the property of the plaintiff until it is divided, a different rule would have to be applied, and that no such transfer or mortgage could be made which would not violate the property rights of plaintiff.. It is evident that Kinney had some interest in the crops. The fact that the extent of that interest depended upon his compliance with the terms of his lease could not deprive him of the right to sell or mortgage it. ” In Farnum v. Hefner, 79 Cal. 575, (12 Am. St. Rep. 174, 21 Pac. 955,) the leasehold interest of the lessee, with like condition, was levied upon and sold; and it was held that it carried his interest to the purchaser, who could go forward with the performance of the conditions of the lease, and thereby become entitled to the lessee’s interest in the crop. Poland, C. J., in Bellows v. Wells, 36 Vt. 599, says: “The reasoning upon which our decisions go is that the owner of the land, being also the owner of the fruits or products of it, in parting with the use of it to another, may make such conditions and reservations in relation to the land itself, or the products grown from it, as he chooses, — 513 — instead of parting with the full right. The principle is the same as that upon which conditional sales of personal property are upheld.” The buyer under a conditional sale of personal property immediately acquires an interest therein. Defeasable though it may be, it is such an interest that, until breach of the condition, he may sell, convey, or mortgage: Benjamin on Sales (6th ed.), 283; Vincent v. Cornell, 13 Pick. 294 (23 Am. Dec. 683); Chase v. Ingalls, 122 Mass. 381; Currier v. Knapp, 117 Mass. 324; Day v. Bassett, 102 Mass. 445. It would seem that under these authorities Tinkham Brothers had an interest in the crop that they could sell or mortgage prior to condition broken, especially as there are no conditions in the lease in contravention of an assignment thereof, or of the sale of their interest in the crop, and we think this is the better doctrine as applied to cases of like nature. After condition broken, Tinkham Brothers and, a fortiori, the persons holding under them, had no right to possession as against E. J. Couper. Most of, if not all, the authorities cited by respondents in support of their contention are actions either by the lessor or his successor in interest. But this is an action by third parties also claiming under Tinkham Brothers, and unless they have a right superior in law to that of the mortgagee they cannot prevail. 2. We come now to the second proposition. Testimony was produced at the trial tending to show that on the eighteenth day of October, eighteen hundred and ninety-four, Tinkham Brothers turned over to plaintiffs the possession of the crop, which was then cut and in the stack, with authority to thresh and deliver to E. J. Couper his one third interest, and to sell the balance, and out of the proceeds retain the wages due for labor in producing and harvesting the crop; they to account to Tink ham Brothers for any balance that might remain. Now — 514 — it is claimed that under the terms of the lease Tinkham Brothers’ two thirds interest in the crop was expressly charged with the payment of the laborers’ wages. The lease provides that the crop shall remain the property of E. J. Couper until the payment of all expenses necessary to care for the crop and to put the one third rental into sacks, and to cover any liens of hands, or otherwise, incurred, together with the payment of the one third rental. The evident central object of this provision was to secure the payment of the one third rental to Couper, and, as a means to that end, Tinkham Brothers were required to pay all expenses and liens of hands before they should become entitled absolutely to their two thirds interest. The laborers were not parties to the lease or agreement, nor was the crop constituted a fund in the hands of Couper for their payment. Couper is not charged with the duty or obligation of paying them out of the crop, or of holding it for their security. If he had received his rent and relinquished to Tinkham Brothers their proportion prior to the plaintiffs obtaining possession, undoubtedly they could not have had any recourse against him to obtain the amount due for wages from Tinkham Brothers, nor could they have followed the grain into the hands of third parties who had purchased even with full knowledge of the terms of the lease. Under these conditions, we think that no lien, either equitable or otherwise, was created by the terms of the lease in favor of Tinkham Brothers employes. See Dillon v. Barnard, 88 U. S. (21 Wall.), 430. The test as to whether the employes of Tinkham Brothers had acquired an equitable lien upon the ■ crop or upon Tinkham Brothers interest therein is, could they have proceeded against such crop or interest prior t© their having obtained possession, in an equitable proceeding, and subjected it to the payment of their wages?”: Pomeroy on Equity Ju — 515 — risprudence, § 1233. It is apparent that they could not. Whatever lien, therefore, plaintiffs acquired upon the crop or grain was by virtue of the possession they obtained from Tinkham Brothers under their alleged agreement with them to thresh it and pay themselves from the proceeds thereof. But such lien was acquired long subsequent to the execution of Couper’s mortgage, and is inferior thereto. As between the mortgagee and the plaintiffs, if the conditions of the mortgage have been broken, he has the right to possession. The instructions of the court proceeded upon the theory contended for by counsel for respondents, and hence were erroneous in these particulars. We think the assignments of error contained in the notice of appeal sufficiently specific under Niekum v. Gaston, 24 Or. 388 (33 Pac. 671, 35 Pac. 31). The judgment of the court below will be reversed, and the cause remanded for such action as may seem proper, not inconsistent with this opinion. Reversed.