Twin Falls B. T. Co. v. Weinberg , 44 Idaho 332 ( 1927 )

This action is brought by respondent against appellants to recover the value of an apple crop purchased by appellants from one W.A. Claudin, October 15, 1921. In order to secure a promissory note for $1,478.74 and interest, on February 2, 1921, Claudin and wife executed and delivered their chattel mortgage to respondent bank upon the following "chattels located in Twin Falls County, State of Idaho, to-wit: All cropsgrown during the season of 1921 of whatsoever nature, butestimated to consist of approximately 12 acres of alfalfa, 3acres of potatoes, and one acre of onions. Said crops to begrown on Lot One of Section Thirty-one (31), Township Ten (10),Range Seventeen (17) E. B. M. Said above enumeration and description being intended to cover and include all of said property and all additions and accretions and increase thereof, including wool and the wool to grow on the increase."

The italicized portion of the description quoted is in type-writing; the balance is printed on the mortgage form.

Appellants purchased the entire apple crop for the year 1921, without permission or knowledge of respondent. The purchase price was deposited in the bank to W.A. Claudin's account, and checked out by him in payment of other debts.

Appellants contend that the court erred in holding that the mortgage by its terms covered the apples purchased by them, and advance two general propositions.

First, that an apple crop is not property subject to mortgage under the provisions of C. S., sec. 6373, which reads in part as follows:

"Chattel mortgages may be made upon all property, goods or chattels, not defined by statute to be real estate, upon growing crops, and upon crops to be sown and grown in the future."

It is contended that an apple crop is not "sown and grown," under the terms of the statute, and that in the instant case, the mortgage, being made in February, was not upon a growing crop. If it be considered that the phrase, "to be sown and grown," is not sufficiently broad to include crops to be sown or grown, then the appellants' contention would perhaps be sound, provided the description of crops in this section of the statute is intended to limit the kind of future crops that may be mortgaged to those "sown and grown." If the statute does not so intend, then such mortgage is authorized by the preceding portion of the section, "Chattel mortgages may be made upon all property, goods or chattels not defined by statute to be real estate." Real estate is declared to consist of "land, possessory rights to lands, ditch and water rights," mining claims, that which is affixed to the land, and that which is appurtenant thereto. (C. S., sec. 5325.) The term "real property" is coextensive with lands, tenements and hereditaments, possessory rights and claims. (C. S., sec. 9456.) "Every kind of property that is not real, is personal." (C. S., sec. 5326.)

That an apple crop is personal property and would be subject to chattel mortgage in the absence of statute is no doubt the modern rule, and notwithstanding earlier decisions to the contrary, we think is supported by the sounder reasoning. Crops were divided into two general classes: Fructus naturales, crops produced by the powers of nature alone, and fructusindustriales, annual crops that must be planted or sown each year, and require the attention of man to produce them, such as planting, necessary manurance, etc. It was formerly held that where "the root or tree was perennial, living for a number of years, the fruit produced by it while growing was fructus naturales." This doctrine now finds little support, and "the correct test to apply is to ascertain whether the annual fruit is produced by the annual labor of man, such as necessary manurance or other industry, or whether the fruit is referable to the industry of man only at the period when its seed or root was first planted, and therefore owes its continued existence to nature. In the former case, the fruits of the plant are fructus industriales, although the plants themselves are fructus naturales. Of such character are hops, the root from which the vine grows being perennial, but their production necessitating the annual industry of man in making of hills and setting of poles; and peaches, apples, or other fruits cultivated for the market." (17 C. J. 380.)

It is common knowledge that apple and other fruit trees require annual pruning, spraying and cultivation in order to produce marketable crops. We are of the opinion that an apple crop is clearly fructus industriales, and, as such, the subject of chattel mortgage.

Nor is the objection that it is a crop to be grown but not sown in the future, a valid objection. The rule has always been, even at law, that a crop sown but not yet grown or harvested, is the proper subject of a chattel mortgage, if the mortgagor, at the time of giving the mortgage, has the ownership or right to the continued possession of the soil, since he has then a potential interest in the crops grown. There is some conflict in the authorities as to whether such potential interest exists in future annual crops, where the seed has not yet been sown (5 Rawle C. L. 407), but what seems to be the better rule is that the right to the soil gives an existing right to the future potential products of it. (Note, 109 Am. St. 522; Jones on Chattel Mortgages, 5th ed., secs. 140-143; 11 C. J. 443.) This consideration is not material here, because the trees on which the fruit was to be grown being in existence when the mortgage was given, the owner of the soil would have an existing interest in the potential crop under either of those rules. However, under the rule of equity permitting the mortgage of future acquired property, which has been adopted in this state (Dover Lumber Co. v. Case, 31 Idaho 276, 170 P. 108), it would seem that in any event, a mortgage upon crops to be grown in the future is valid, and attaches as a lien upon such interest as the mortgagor has in the crops, when they come into existence. A chattel mortgage on crops to be sown or grown in the future under this rule is upheld on the same principle as a mortgage upon goods not owned by the mortgagor. (McMaster v.Emerson, 109 Iowa, 284, 80 N.W. 389.)

Nor do we think the legislature intended to limit mortgages on future crops to the kinds described in the statute as "sown and grown." This statute as originally passed merely provided that a chattel mortgage could be made upon all property not defined by statute to be real estate. (Sess. Laws 1885, p. 74.) Under the statute as it then existed, future crops not yet sown were held the proper subject of mortgage. (Pierce v. Langdon,3 Idaho 141, 28 P. 401; Shields v. Ruddy, 3 Idaho 148,28 P. 405.) Those cases involve the question of priority between the mortgagee under such a mortgage and a third person, the third person in one case being one to whom a purported sublease of the premises had been made after the mortgage was given, and in the other case, the mortgagor's lessor to whom the property had been released after the mortgage was given. In those cases, the sublease and the release were both apparently fraudulent as to the mortgagee, and the mortgage was given priority.

The legislature in 1897 (Sess. Laws 1897, p. 7) added:

"Upon growing crops, and upon crops to be sown and grown in the future; but, should the persons executing mortgages upon crops, to be afterwards sown, fail to sow or cause the same to be sown, no lien, of such mortgages, shall attach to crops sown by other persons upon the lands described in said mortgages, except in so far as the mortgagor in said mortgages have or retain interest in said crops . . . ."

It was perhaps to set at rest a doubt which might have arisen as to what would be the rule if the sublease or release had been made in good faith, that the amendment was enacted for the purpose of declaring what is no doubt the correct rule, in the absence of statute, that a mortgage on a future crop attaches only to such interest as the mortgagor may have in it when it comes into being. (Jones on Chattel Mortgages, 5th ed., sec. 143a; Isbell v. Slette, 52 Mont. 156,155 P. 503; Simmons v. Anderson, 44 Minn. 487, 47 N.W. 52;McMaster v. Emerson, 109 Iowa, 284, 80 N.W. 389.)

The objection that the crop in question was a crop to be subsequently grown and not to be sown is not valid.

We are aware that the supreme court of Washington, in a recent case, Stuhlmiller v. Stuhlmiller, 140 Wash. 175,248 P. 393, construing a statute authorizing a mortgage "upon growing crops and upon crops before the seed thereof shall have been planted," has held void a chattel mortgage executed in November, 1923, on the fruit crop of 1924, against the contention that the crop developed from the buds had formed before the execution of the mortgage. We do not think the reasoning of the opinion in that case, or that quoted from the prior Washington case of Kennewick Supply Storage Co. v. Fry,133 Wash. 341, 233 P. 658, 236 P. 808, convincing, or that it should be followed in interpreting our own statute.

It is contended by appellants that the expressions, "but estimated to consist of approximately 12 acres of alfalfa, 3 acres of potatoes, and one acre of onions," following the general statement, "All crops grown during the season of 1921 of whatsoever nature," must be construed as limiting the mortgage to the kinds of property specifically mentioned.

Primarily, it is our duty to ascertain from the contract itself the intention of the parties, so far as is possible, and give it effect. (6 Rawle C. L., p. 835, sec. 225. See, also, 13 C. J. 521.)

"If the contract, taken as a whole, shows that effect was intended to be given to both the general and the specific term, such effect must be given by the court. If the contract shows that the general words were intended to control, or if an absurd result would follow from permitting the specific words to control, effect will be given to the general words." (4 Page on Contracts, 2d ed., p. 3496.)

See, also, 2 Elliott on Contracts, sec. 1532, pp. 814, 815;Verbeck v. Peters, 170 Iowa, 610, 153 N.W. 215.

We have been cited to no case where the description is in language approximating that employed in this mortgage, nor have we found any. Had the mortgage read, "All crops grown during the season of 1921 of whatsoever nature, but consisting of 12 acres of alfalfa, etc.," appellant's argument might have great weight. Here, however, the general statement embracing all crops is followed by, "but estimated to consist of approximately 12 acres of alfalfa, etc." The use of "estimated" and "approximately" shows, we think, the intention of the parties not to limit the kinds of crops to those introduced by "but," which is used in its conjunctive sense. "But," as used here, does not indicate an intention to limit the sense or effect of "all crops of whatsoever nature," which precede it. It serves to introduce a rough approximation, not a schedule or exact enumeration, of what crops were intended to be covered by the mortgage.

As to the understanding placed upon the contract by the parties, the evidence is conflicting, and therefore the finding in that regard will not be disturbed.

It was not error to exclude the testimony of W. A. Claudin regarding inquiries made of him by appellants as to whether the apples were mortgaged.

The mortgage covered the apple crop grown during the year 1921, and the description contained in the mortgage was sufficiently definite to enable appellants on inquiry to identify it. This was enough. The mortgage being duly recorded was notice to appellants, whose purchase occurred after the recording of the mortgage. (Adams v. Caldwell M. E. Co.,33 Idaho 677, 197 P. 723; Shields v. Ruddy, 3 Idaho 148,28 P. 405; Pierce v. Langdon, 3 Idaho 141, 28 P. 401.)

It therefore follows that appellants are liable in conversion for the reasonable value of the apple crop for 1921, found by the court to be $1,850, having purchased the crop from Claudin after severance, with notice of respondent's mortgage, and without the mortgagee's consent. (Adams v. Caldwell M. E.Co., supra.)

We recommend that the judgment be affirmed.

Johnson and Brinck, CC., concur.

The foregoing is approved as the opinion of the court, and the judgment is affirmed. Costs to respondent.

Wm. E. Lee, C.J., and Budge, Taylor and T. Bailey Lee, JJ., concur.

Givens, J., concurs as to the right to mortgage crops to be grown in the future but dissents as to the interpretation of the language of the chattel mortgage construed, holding that the apple crop was not covered thereby.

Petition for rehearing denied.