Dickey v. Waldo , 97 Mich. 255 ( 1893 )

Grant, J.

The contract and the findings of the court in this case are found in the statement.

This contract and the judgment should be sustained unless there are some inexorable rules of.law which stand in the way. Two rules are invoked to defeat the plaintiffs' action:

1. That the land upon which the peach trees were planted was a homestead; that Schultz' wife did not sign the contract; that it interfered with the homestead right, and was therefore void.

'2. That the crop which the plaintiffs agreed to take in payment for the trees was not in esse at the time, and therefore not the subject of sale.

1. We think there is no force in the first proposition. Schultz’ land consisted of 40 acres. The trees were planted upon only a portion of it. The occupation and possession of the buildings and land were not interfered with. During the growth of the trees, the land could be cultivated and crops raised. If the trees proved valueless, neither Sohnltz nor -his wife had suffered; if they proved valuable, which was the fact, then the homestead itself was increased in value. Under these circumstances, we see no reason in holding that either Schultz or his wife had parted with any homestead right, or that their possession was in any manner interrupted.

3. Such contracts are reasonable, and beneficial to both the vendor and the vendee. They are especialty beneficial to the vendee. He avoids all expense, except his labor, runs no risk, and, if in indigent circumstances, he may obtain gains which would otherwise be beyond his reach. Such contracts ate of common occurrence, and, if the rigid rules of law are against their validity, there is a necessity of legislative action to render them valid.

The rule of law is well established that things having no potential existence cannot be the .subject of mortgage and sale. There are, however, exceptions to this rule, as where a merchant mortgages his stock of goods, and all future additions thereto. It is unnecessary to cite authorities to this proposition. The difficulty seems to arise in determining what comes within the definition of the term “potential existence.” The definition of the word “potential” is, “having latent power; endowed with energy adequate to a result; efficacious; existing in possibility, not in act.” Sir W. Hamilton said: “Potential existence means merely that the thing may be at some time; actual existence, that it now is.” In the legal sense, things are said to have a potential existence when they are the natural product or expected increase of something already belonging to the vendor. When one possesses a thing from which a certain product, in the very nature of things, may be expected, such product, we think, has a potential existence. The following rule appears to be well established both by reason and authority, viz.,' that, when one owns property from which such product naturally arises, such product may be the subject of sale and mortgage. The authorities which thus hold also recognize the other rule above stated. The authorities are by no means uniform, but we think the conflict in them has arisen from a failure to make a proper distinction.

In Grantham v. Hawley, Hob. 132, it was held that a grant of that which the grantor has potentially, though not actually, is good; as a grant by the lessor of all the corn that shall be growing on the land at the end of the term. It was there said:

“Though the lessor had it [the corn] not actually in him, nor certain, yet he had it potentially, for the land is the mother and root of all fruits. Therefore, he that hath it may grant all fruit? that may arise upon it after, and the property shall pass as soon as the fruits are extant. A parson may grant all the tithe wool that he shall have in such a year, yet, perhaps, he shall have none; but a man cannot grant all the wool that shall grow upon his sheep that he shall buy hereafter, for there he hath it neither actually nor potentially.”

Powell, in his treatise on Contracts, says:

“Although it be uncertain whether the thing granted-will ever exist, and it consequently cannot be actually in the grantor or certain, yet it is in him potentially, as being a thing accessory to something which he actually has in him. * * * Such potential property may be the subject of a contract executed, as a grant, or the like. * * * So, a tenant for life may sell the profits of his lands for" three or four years to come, and yet the profits' are not then in esse.”

It is held that a lease of land, reserving rent, and which provides that all the crops raised on the land during the term are to be the property of the lessor until the rent is paid, is valid, and will entitle the lessor to hold such crops against the creditors of the lessee. Smith v. Atkins, 18 Vt. 461. Justice Redfield, in delivering the opinion, said:

“It is, without doubt, true, that the sale of a thing not in existence is, upon general principles, inoperative, being merely executory, — that is, it confers no title in the thing bargained. But when the thing thereafter to be produced is the produce of land or other thing, the owner of the principal thing may retain the general property of the thing produced, unless there be fraud in the contract, and it be entered into merely to defeat creditors.”

In Jones v. Webster, 48 Ala. 112, it is said:

“If the mortgagors had undertaken to convey the future crops they might make, without possessing any land upon which to make them, and especially without the contemplation of the immediate acquisition of some, then, certainly, their conveyance would be without operation. In this case they had the land, and the crops conveyed were to be grown upon it during their possessory interest. Tlie crops were an accretion or addition to the land which might very reasonably be expected to be made. They were therefore proper subjects of mortgage."

In McCaffrey v. Woodin, 65 N. Y. 464, it is said:

“It is well settled that a grant of the future produce of land actually in possession of the grantor at the time of the grant passes an interest in such future crop as soon as it comes into existence.”

It was held in Andrew v. Newcomb, 32 N. Y. 417, Chief Justice Denio rendering the opinion, that crops to be raised by the owner of the land are an exception to the general rule that the “title to property not in existence cannot be affected so as to vest the title when it comes into being;" and that “ the owner of land may lawfully contract for its cultivation, and may provide in whom the ownership of the product shall vest."

In Watkins v. Wyatt, 68 Tenn. 250, Wyatt agreed to furnish one McCain with supplies, on condition that .McCain, who was a farmer, should execute to him a mortgage of his cotton crop for the then current year, as security for the supplies so furnished “ to enable him [McCain] to make said crop.” The crop was not then sown. This case cites many of the above authorities, and others. It recognizes that there is a seeming conflict in the adjudged cases upon the subject, but sustains the validity of the mortgage. It is there said:

“The right in the proprietor of the soil to plant, cultivate, and gather his crops, to the exclusion of all others, is an absolute legal right, and an incorporeal property; and incorporeal property is' as well the subject of valid sale and mortgage as any other kind of property. The mortgagor, in this case, was the proprietor of the land on which he proposed to raise the crop in controversy. The crop had a potential existence, because it was to be the natural product and expected increase of the land then owned and occupied by him."

The like contract was sustained in Butt v. Ellett, 19 Wall. 544. This doctrine is also sustained, by the following authorities: Arques v. Wasson, 51 Cal. 620; Conderman v. Smith, 41 Barb. 404; Van Boozer v. Cory, 34 Id. 9; Senior & Co. v. Mitchell, 16 Fed. Rep. 206. In McKnight v. Robbins, 5 N. J. Eq. 229, 642, the contract was in all essential features identical with the one here involved, and it rvas sustained by the court.

In the present case the trees were in existence at the time of the contract, and were transferred to and became the property of Schultz, the vendee, subject to a share of the crops for the years specified. The contract rvas executed by the plaintiffs, and operated to the great benefit of Schultz and his grantee, the defendant. This contract is one that the law ought to delight in sustaining. If it cannot be sustained, then no executed contract can be where a party furnishes seed and puts in the crop upon shares. The same reason that would defeat the right to recovery for the crop of peaches in this case would defeat the right to recover a crop of corn, wheat, or other grain, or strawberries, and other fruits of like character. The defendant purchased with notice, and the purchase price was reduced on account of the plaintiffs'’ rights in the crop. We tliinjc that, under the authorities above cited, as well as in reason and justice, plaintiff's and Schultz became tenants in common of the peaches for the years which plaintiffs should select, and that defendant, having purchased with notice, stood in the same relation to plaintiffs that did his grantor.

Defendant's counsel cite Bates v. Smith, 83 Mich. 347, smd insist that it controls this case in their favor. The .language of that case is broad, and, if strictly followed, -would seem to include the present one; but we think the authorities above cited clearly distinguish the natural products, of the soil, wool from sheep, milk from cows, and the like, from the case that was then under consideration, and we are disposed - to follow them. The language of that case must be construed in connection with its facts.

Judgment affirmed,

The other Justices concurred.