Buck v. Payne

Simrall, C. J., delivered the opinion of the court. This case was once before in this court, and turned upon the question whether the mortgage executed by Arlow Minice to Payne & Raines was superior to the laborer’s lien of Thomas Minice. The circuit court had instructed the jury that the mortgage, having been executed 14th February, 1873, was superior to the lien of the laborer, which resulted from the contract of employment entered into by the mortgagor with Thomas Minice the 6th April, 1873. It was held by this court that a mortgage on the crop, executed after the passage of the act of the 5th of April, 1872, was subordinate to the right of the mortgagor to employ laborers, and thereby by operatiop of law create a lien in their behalf, although such employment might be subsequent to the date of the mortgage. . When Payne & Raines took the mortgage from Arlow Minice . it was subject to his right to employ laborers, and subject to the first lien, which the act of 1872 created in their behalf. The case must be remanded for that error. It Avas also to be considered on the second trial, on the question whether Buck was a bona fide purchaser of the cotton. Testimony went-to the point that Thomas Minice had waived to the mortgagees his rights, and that Buck did not have notice of the mortgage. See report of case, Buck v. Payne & Co., 50 Miss., 650. — 276 — The only .additional fact introduced on the second trial was that the mortgage was recorded a day or two after its date. The case is now before us to review the judgment in favor of Payne & Raines. The laborer’s lien is implied by law. It exists altogether in pais, resting on no matter of recoi’d, requiring no writing to evidence or uphold it. It is purely secret and tacit. Buck, the purchaser from Thomas Minice, the laborer, is protected to the same extent that Thomas Minice was. He becomes the assignee of Thomas’ rights as respects the cotton, and stands in his place. It was incumbent on him, therefore, to make inquiries and ascertain their extent. And in this the laborer’s lien is distinguishable from those which are express, manifested by writing, and registered. A recorded moi'tgage is notice to creditors andpurchasei’s, from the mortgagor, of its contents, and no more. It does not, and in the nature of things cannot, impart notice of secret equities. Registration contemplates no purpose of that sort. But when a right is asserted under a tacit lien it involves a concrete of circumstances out of which it arises. If Thomas Minice were contesting with Payne. & Raines about the bale of cotton, it would be competent for them to show that when his employment began, in April, 1873, he agreed to waive the lien in favor of his employer’s mortgage in consideration that they would furnish him directly, as through his father, with provisions and other necessaries. A lien which the law implies for the benefit of a party may be waived or surrendered by him. It may arise out of parol contract (verbal contract). So it may be waived or surrendered in the same way. If the laborer engages to rely upon the promise of the employer to pay his wages, and not upon the lien, he is at liberty to do so. He may waive the security which the law provides, and accept the personal liability of his employer. A purchaser of cotton or other agricultural products from a laborer acquires just such title as he has and is able to give. If he has secured it for wages the presumption of law is that his right is protected by the lien conferred by the act of 1872. — 277 — Whether it be so or not is purely a question of fact, and it is open to inquiry and proof whether he did not abandon his lien by this contract. A purchaser from him acquires no larger or better right than he had. He cannot shield himself on the plea that he was an innocent purchaser, without notice that the lien has been surrendered or abandoned. He must at his peril inform himself of the terms of the laborer’s contract. The policy of the statute is to make sure to the laborer his wages. That is accomplished by impressing on the entire agricultural crop a privilege to be paid in preference to other creditors or incumbrancers. If, as we have said, he chooses to .give up this advantage, his vendee of any part of the crop cannot. protect himself by proof that he did not know of such waiver. To hold otherwise would be to affirm that, although the laborer may have worked under a written contract expressly waiving the lien, yet if a purchaser of cotton from the laborer did not have notice of such waiver he is not bound by it, but becomes an innocent purchaser. And, further, if the employer has mortgaged the entire crop to be produced, and filed with his mortgagees the contracts with his laborers containing such waiver, such mortgagees could not prevail against a purchaser of part of the product from a laborer unless the purchaser had notice of such waiver. On the contrary, we think that a purchaser from a laborer must inform himself of the facts, and can claim no better right or greater protection than the laborer himself. A party under a duty to make inquiry must use reasonable diligence that directs him to the primary source of information. Now, what were they in this case. Buck is held to have notice of the contents of the mortgage. He would there have read that, for supplies advanced and to be advanced to the mortgagor, his family, and hands under his control, to enable them (us) to cultivate a plantation, “ the mortgagor pledged his entire crop of cotton and corn to be raised and gathered •by us the present year.” — 278 — The entire supplies to be consumed bj all persons engaged in the production of the crop were to be furnished, and the whole crop to be raised by them is pledged. If ho had consulted Arlow Minice, the employer, he would, in all probability, have been informed that Thomas had waived his privilege to the mortgagees. The mortgage itself embraces the whole crop, because the mortgagees were to advance to Arlow for all the laborers. The plan was this : the supplies were to be on the credit of Arlow, for all the hands. They may have been debtors to him, and therefore he pledges all the rights he had against the laborers for payment. Among-these was his lien on their part of the crop for what he might advance them. To that extent the mortgage would be operative, and, after this claim was satisfied, the surplus would beat the disposal of the laborer. It does not appear that Buck instituted any inquiry, either of the employer, or the state of accounts, or claims of the mortgagees. For his own' safety, before he bought the cotton, he ought to have ascertained by inquiries, at least of the employer, and, being charged with notice of the contents of' the mortgage, prudence would have suggested that he should have learned from Payne & Raines why it was that Arlow Minice assumed to mortgage the whole crop. But there is a point not brought to the notice of the court when formerly before us, aud which seems to have escaped the attention of counsel on both trials in the circuit court; that is, that a default or breach of the contract with the mortgagees did not occur until after the 1st of November, whereas this suit of replevin was brought 31st October, 1873. The statute, Code, § 2295, in accordance with the prevailing-professional and judicial opinion, declares the mortgagor the owner of the property as against all the world until a foreclosure, and owner also against the mortgagee until after breach of the contract. Here the mortgagees elected to sue at law before a breach — 279 — of the condition, and before a legal right was complete in them. The utmost of their claim was an equity on the property for payment of their debt. If they had resorted to a court of equity, and sought its aid to have preserved the property and prevented its removal or sale so that it might have been held amenable to the debt, adequate relief would have been afforded. There was error. Judgment reversed and cause remanded. Chalmers, J., having been of counsel, takes no part in this decision. Simrall, C. J., delivered the following opinion on application for reargument: A serious and novel question, not heretofore agitated by counsel nor considered by the court, is presented in the petition for a reargument, viz. : whether if it has been proved that Thomas Minice waived his privilege or lien in favor of the mortgagees, the subsequent sale of the cotton to Buck or his clerk was not, under the circumstances, a conversion which authorized them to proceed at once to g;et possession, although there had not occurred a breach of the condition of the mortgage. The last clause of § 2295 of the Code (reenacted from former statutes) makes the grantor or mortgagor the owner of the legal title, except’ as against the mortgagee and his assigns, after the breach of condition. The effect of the statute has been to ‘ ‘ naturalize into the common law ’ ’ the equitable doctrine concerning the rights of the mortgagor. That was that he is, as respects third persons, and the mortgagee also, until after forfeiture, the owner of the legal estate, capable of transmitting it by descent, devise, or deed, and that the mortgage is but the security for the debt, which passes as an incident to the assignee of the money. The legal title may be asserted, by the mortgagee, but only for the protection of his debt, and to make the security available for its payment. — 280 — The clause of the statute applies to personal as well as real estate, the mortgage operating as Testing title absolutely. After condition broken, the mortgagee may pursue his legal remedy by reducing the chattels to possession, in any appropriate action, for the purpose of converting them into monej* by a sale to discharge his debt, but not to hold as absolute owner. For when the possession is obtained he holds still as mortgagee, subject to the equity of redemption, until that has been cut off bjr a sale. Carpenter v. Bowen, 2 S. & M., 48, et seq.; O’Reily v. Hendricks, 2 ib., 388; Thornhill v. Gilmer, 4 ib., 153. It is axiomatic that a party who sues in replevin must have the right of immediate possession, either in virtue of a general property as owner, or a special property as bailee, at the time he sues. This is the ordinary mortgage in use in this state, giving the right to the mortgagee to move against the property after the day appointed for performance. We are not to be understood by this observation as at all denying or putting in doubt the preventive and restraining justice which a court of chancery may exert if the property is in danger of loss by the act, procurement, or negligence of the mortgagor before forfeiture. We mean that the mortgagor cannot, because of risks or dangers of that sort, in a court of law, recover before his right of possession, as stipulated in the mortgage, has accrued. In some of the states, especially the Now England, the courts have adhered with more or less strictness to the earlier doctrines of the common law respecting mortgages. They regard the instrument as passing at once the legal title to the mortgagee, subject to the defeasance, as a condition subsequent, which will divest or defeat the estate on performance. Treating the mortgagee as having the legal title, they correctly hold that a sale of the property in defiance of, and in repudiation of, the rights of the mortgagee will give an action at law. Such, on careful examination, will be found to be the — 281 — cbaracter of tbe cases cited in tbe petition of counsel. Tbe principle is illustrated by tbe case of Chadwick v. Lamb, 29 Barb. (N. Y.), 521. After stating ‘£ that trover can be maintained by one wbo bas tbe right to tbe possession at the time of tbe conversion,” tbe court say that tbe plaintiff took every interest, including tbe right of possession, ‘‘ except tbe equity of redemption.” In that case there was a clause in tbe mortgage ‘ ‘ which ■authorized tbe mortgagee to take possession and sell * * * ■at any time be shall deem himself insecure.” His right of possession was not contingent on a default made. As observed, in those states where tbe title passes immediately by the mortgage an action may be maintained in trover by tbe mortgagee. See Pickard v. Love, 3 Me., 49. Reargument denied.