Opinion
No. 6,606.
Submitted March 7, 1930.
Decided April 11, 1930.
Conversion of Mortgaged Grain — Insufficiency of Description of Land on Which Grown — Actual Knowledge of Mortgage on Part of Defendant — When Immaterial. Chattel Mortgages — Growing Grain — Description of Land on Which Grown Held Insufficient. 1. While the description of personal property in a mortgage will be held sufficient as between the parties to it, and, as to trespassers, if the mortgagee can say with reasonable certainty what property is subject to his lien, where he takes a mortgage on grain growing on a portion of a large acreage without describing the portion and a dispute arises between him and a third party who bought a large portion of the grain grown on the entire tract, the mortgage must be held void for indefiniteness and uncertainty. Conversion of Mortgaged Grain — Insufficiency of Description of Mortgaged Property. 2. Under the above rule held, in an action for conversion of a quantity of mortgaged wheat, that where a farmer mortgaged an "undivided interest in 50 acres spring wheat" on a certain ranch to be harvested in a given year, and the mortgagor raised 100 acres of such wheat and sold the major portion of all the wheat grown thereon to an elevator, that the court erred in overruling a challenge to the validity of the mortgage, the same having been void for uncertainty in description of the property covered by it. Same — Actual Knowledge of Mortgage on Part of Defendant — When Immaterial. 3. The fact that defendant company's agent above mentioned had actual knowledge of plaintiff's mortgage on a portion of the entire crop grown by the mortgagor was immaterial, since his knowledge could impart only such notice as the mortgage itself gave and any further inquiry he might have made could not have disclosed what particular fifty-acre tract of wheat was covered by the mortgage.
Chattel Mortgages, 11 C.J., sec. 78, p. 457, n. 29, 31; sec. 95, p. 468, n. 32.
Appeal from District Court, Fergus County; Edgar J. Baker, Judge.
Mr. Ralph J. Anderson, for Appellant, submitted a brief and argued the cause orally.
Messrs. Belden DeKalb and Mr. Raymond E. Dockery, for Respondent, submitted a brief; Mr. O.W. Belden argued the cause orally.
The chattel mortgage in question was void; no lien was created by reason of the fact that never at any time so far as the record discloses was there any selection made by anyone of any property to which the lien of plaintiff's mortgage could attach. The evidence does not disclose which particular fifty acres of wheat was the wheat mortgaged. One hundred acres of spring wheat were grown in the year 1927. The record is entirely silent as to which portion of the 800 bushels that was delivered to defendant's elevator was produced, and whether it was the fifty acres on which the plaintiff claimed to have a mortgage. No agreement as to a selection of the fifty acres between the parties to the mortgage is disclosed or even suggested by the record. The burden was on the plaintiff to prove that the wheat delivered to the defendant was the identical wheat on which the plaintiff had a mortgage. ( Massachusetts Sheep Co. v. Humble, 36 Mont. 201, 92 P. 527.)
It is quite generally held that where a mortgage is given upon a certain number of acres of crop, and the evidence shows that a greater number of acres of the particular crop attempted to be mortgaged is grown upon the particular land or farm mentioned in the mortgage, and there is no selection made of the particular portion of the crop so grown to which the lien of the chattel mortgage is to extend, that the mortgage is void, particularly where the rights of third persons are concerned, as in the case under consideration. ( Walter A. Wood Mowing etc. Co. v. Minneapolis Northern Elevator Co., 48 Minn. 404, 51 N.W. 378; Wattles v. Cobb, 60 Neb. 403, 83 Am. St. Rep. 537, 83 N.W. 195; Souders v. Voorhees, 36 Kan. 138, 12 P. 526.)
While defendant in his motion for nonsuit attacks the description set forth in plaintiff's mortgage, he makes no allegation in his answer that he was in anywise misled or damaged thereby, or that he was in any sense an innocent purchaser of the mortgaged property. In fact, quite the contrary appears.
The rule concerning the description of property in a chattel mortgage is well stated in Moore v. Crittenden, 62 Mont. 309, 204 P. 1035: "A description of personal property in a mortgage from which the mortgagee can say, with reasonable certainty what property is subject to his lien is sufficient as between the parties to it as well as against a trespasser." (See, also, 11 C.J. 456; Longerbeam v. Huston, 20 S.D. 254, 105 N.W. 743.) "It is only where the rights of innocent third parties have intervened that a defective description in a chattel mortgage can be availed of to defeat the rights of the mortgagee." ( South Omaha Nat. Bank v. Stewart, 75 Neb. 717, 106 N.W. 969.) From this case we quote: "And even as against innocent third parties, a faulty description is sufficient if the mortgage contains such description as would lead to the identification of the chattels intended to be mortgaged on reasonable inquiry." It was needless for appellant to make any inquiry as to the existence of respondent's mortgage; he knew of the chattel mortgage to the Arro Oil Refining Company.
Plaintiff, as the mortgagee of a chattel mortgage on a wheat crop, brought this action to recover damages for conversion of the wheat by defendant. The cause was tried to the court without a jury, resulting in judgment for the plaintiff. Defendant has appealed from the judgment.
Under appropriate pleadings, evidence was introduced showing the following facts: On May 4, 1927, M.O. Ratliff executed and delivered to plaintiff a promissory note in the sum of $100, due October 1. At the same time, to secure the payment of the note, he gave a chattel mortgage, verified and acknowledged as required by law and which was filed in the office of the county clerk of Fergus county on the same day. The mortgage, in addition to securing payment of the note, was given "also as security for such further payment and additional sums of money as may, from time to time, hereafter, during the life of this instrument, be advanced and loaned by said mortgagee to said mortgagor, together with interest thereon * * * but for no greater amount, however, than $250." The property covered by the mortgage was described as follows: "Undivided interest in 50 acres spring wheat on the Al Sullinger ranch 8 miles west of Grass Range, Montana, to be harvested in 1927." At the time the mortgage was executed, M.O. Ratliff owed plaintiff the sum specified in the note, and thereafter, and during the life of the mortgage, plaintiff made further advances to him in the form of merchandise to the extent of $250, none of which has been paid; M.O. Ratliff raised 100 acres of spring wheat on the Sullinger ranch in 1927. At the time the mortgage was executed, Ratliff advised plaintiff's agent that he had 100 acres of spring wheat on the Sullinger ranch and that he would give a mortgage on 50 acres if the credit would be extended. Clancy, defendant's agent in charge of its elevator at Grass Range, admitted that he knew of the existence of plaintiff's mortgage when the wheat was delivered in the elevator. The evidence shows that 1,283 bushels of spring wheat were grown on the Sullinger place in 1927, and that there were delivered to defendant between 800 and 900 bushels. There was evidence by plaintiff that M.O. Ratliff stated to a witness that he had sold all the wheat on the Sullinger place to defendant and received the money for it. In the view we take of the case other evidence in the record need not be alluded to.
Defendant, by objecting to the introduction of plaintiff's mortgage in evidence and by motion for nonsuit, challenged its validity upon the ground that the description of the property claimed to be covered by the mortgage, was so indefinite and uncertain as to render it void. Error is assigned in denying the motion for nonsuit on that ground.
As before stated, the record discloses that 1,283 bushels of spring wheat were raised on the Sullinger ranch in 1927. Only between 800 and 900 bushels were delivered to defendant. The record does not disclose what interest M.O. Ratliff had in the wheat that was delivered to defendant or whether he had any interest therein, except his statement to one of plaintiff's witnesses that he received the money for the wheat. What was done with the balance of the wheat, amounting to about 400 bushels, the record does not disclose. Whether the 800 bushels delivered to the defendant were grown on the 50 acres covered by the mortgage, or on the 50 acres not embraced in the mortgage, does not appear. In fact, there is nothing to indicate, either from the mortgage itself or from the oral evidence, which 50 of the 100 acres was covered by the mortgage.
We think the mortgage is void for uncertainty in the [1, 2] description of the property attempted to be covered by it. We recognize the rule that the description of personal property in a mortgage is sufficient as between the parties to it and, as to trespassers, if the mortgagee can say with reasonable certainty what property is subject to his lien. ( Moore v. Crittenden, 62 Mont. 309, 204 P. 1035.) But here even the mortgagee could not determine which particular 50 acres of the crop out of the 100 acres was subject to the lien of its mortgage. Examination of the authorities in like cases demonstrates the correctness of the conclusion we have reached.
In Krone v. Phelps, 43 Ark. 350, a mortgage covering "all of a crop of ten acres of cotton to be grown" in a field containing 40 acres in cotton was held void for uncertainty as to strangers to the mortgage.
A mortgage on "35 acres of growing wheat on the J.M. Franklin farm, 35 acres on S.E. 1/4, sec. 1, Rossville Township," was held void as against an execution creditor and not binding as to him or the sheriff levying the execution, when it appeared that the mortgagor was the owner of an undivided one-half interest in about 65 acres and the full owner of about 10 acres on the S.E. 1/4 of section 1, Rossville township, and the owner of an undivided one-half interest in about 70 or 80 acres on the Franklin farm. ( Martinek v. Carlson, 125 Kan. 434, 264 P. 735, 736.) The court in that case said: "The mortgage did not correctly describe the interest in the wheat owned by the plaintiff. The mortgage described 70 acres of growing wheat. The plaintiff had an interest in about 150 acres of growing wheat. The description of the wheat should have been such as would enable any one interested to find it or to have enabled any one with that description to find the wheat on proper inquiry. The mortgage directed any one interested to wheat growing on two separate tracts of land. Any one interested could have gone to the land and found the wheat growing thereon, but would have found, instead of the number of acres described, almost double that number of acres. There was nothing in the mortgage to suggest what part of the wheat on the land was covered by the mortgage. The description of the wheat was so indefinite and uncertain that it could not be identified." To the same effect, under facts very similar, are Souders v. Voorhees, 36 Kan. 138, 12 P. 526; Clark v. Voorhees, 36 Kan. 144, 12 P. 529.
The Kansas City court of appeals had this question before it in Klebba v. Missouri Meerschaum Co., (Mo.App.) 257 S.W. 174. There the mortgage, after covering certain articles of personal property, contained this clause: "Also about 75 acres of corn to be planted in the spring of 1921 on said Salmon farm." The evidence in that case disclosed that there were planted 100 acres of corn on the farm described. In holding the mortgage void for uncertainty, even as between the parties to it, the court said: "There was no way for the mortgage to attach to any part of the corn, for there is no way of telling which 75 acres of the 100 acres planted the mortgage was intending to cover. (See Lafayette County Bank v. Metcalf, 29 Mo. App. 385; Estes v. Springer, 47 Mo. App. 99, 104; Stonebraker v. Ford, 81 Mo. 532.) The record is devoid of any testimony tending to show to which 75 acres of corn it was intended that the mortgage should attach, and it is apparent, regardless of the assignment, that it never became a lien upon any part of the crop even as between the parties themselves."
In Norman v. S.L. Joseph Mercantile Co., 153 Ark. 127, 239 S.W. 728, the mortgage involved described the property as "6 acres of cotton grown on the John Moore lease." It appeared from the evidence that the mortgagor had an undivided one-half interest in the cotton grown on 12 acres of land in the John Moore lease. Defendants purchased from the mortgagor the cotton grown on the John Moore lease after being told that plaintiff had a mortgage on it. The court, in holding the mortgage void, said: "The mortgage was void because of uncertainty in the description. It furnishes no data by which it can be ascertained what particular 6 acres of cotton, grown on the John Moore lease of 12 acres, was intended." The court further held that as between the parties to the action, defendants "only had to take notice of the description in the mortgage that was on file in the office of the circuit clerk of Greene county."
A mortgage on 340 acres of corn out of a crop of 425 acres was held void for uncertainty of description, in Wattles v. Cobb, 60 Neb. 403, 83 Am. St. Rep. 537, 83 N.W. 195.
In Walter A. Wood Mowing etc. Co. v. Minneapolis etc. Elevator Co., 48 Minn. 404, 51 N.W. 378, 379, a chattel mortgage embraced 40 acres of wheat to be grown on a described quarter-section. The evidence disclosed that 75 acres of wheat were sown on that quarter-section. The supreme court of Minnesota held that the instrument never took effect as a mortgage because of the uncertain description of the property. The court said: "As already suggested, the mortgage could not take effect until the crop was sown, and as he sowed, not 40 acres or less, but 75 acres, and the mortgage was limited to 40 acres (but no particular 40 acres was designated or described), it is impossible to determine which part of the larger tract the mortgagee is entitled to. There is nothing in the mortgage to connect it with any particular 40 acres; so that it did not, in fact, take effect at all. Suppose, after it was harvested and in shock or stack, the whole product of the 75 acres had been levied on, what part of it could the mortgagee identify and demand as his? Clearly he was not entitled to claim a lien on the whole till he could select the product of 40 acres. Under these circumstances, the mortgagee cannot invoke the aid of the court to enforce his mortgage. It was the mortgagee's own folly to take a mortgage so loosely drawn."
Other cases illustrating the same principle are the following: Massachusetts Sheep Co. v. Humble, 36 Mont. 201, 92 P. 527; First State Bank of Leipzig v. Kellogg Commission Co., 41 N.D. 269, 170 N.W. 635; Hagen v. Dwyer, 36 N.D. 346, 162 N.W. 699; Commercial State Bank v. Interstate Elevator Co., 14 S.D. 276, 86 Am. St. Rep. 760, 85 N.W. 219; Wichita Mill Elevator Co. v. Farmers' State Bank of Tipton, 102 Okla. 83, 226 P. 870, 871.
The mortgage of plaintiff being void for uncertainty in the [3] description of the property, defendant's actual knowledge of its existence was immaterial. Actual knowledge of the existence of the mortgage would impart only such notice as the mortgage itself gave, and such other information as might have been obtained upon pursuing the inquiry which the mortgage itself suggested. ( Norman v. Mercantile Co., supra.) The most careful inquiry that might have been made would not and could not have revealed the particular 50 acres of wheat covered by the mortgage in question.
The court erred in denying the motion for nonsuit. Other questions presented require no consideration.
The judgment is reversed and the cause remanded, with direction to enter judgment for defendant.
MR. CHIEF JUSTICE CALLAWAY and ASSOCIATE JUSTICES MATTHEWS, GALEN and FORD concur.