Summary
implying court might uphold conveyance if the grantor's intended beneficiary had been sufficiently disclosed to constitute constructive notice of the deed's contents
Summary of this case from United States v. StubbsOpinion
No. 31991.
March 8, 1937. Suggestion of Error Overruled April 19, 1937.
1. LANDLORD AND TENANT.
Landlord's general and absolute waiver of lien on leased plantation for advances made to enable tenant to conduct his farming operations during term of lease held to operate in favor of one making advances as trustee of decedent's estate for such purpose, so that receiver of leased property, levied on under attachment for rent, was properly directed to repay such trustee amount of rent paid him by subtenants in repayment of advances and turned over to receiver.
2. DEEDS.
Conveyance to deceased or fictitious person is void.
3. EXECUTORS AND ADMINISTRATORS.
Deceased person's estate is not "person" recognized by law.
4. CHATTEL MORTGAGES.
Recorded trust deed, conveying chattels to trustee as security for indebtedness to estate of named decedent, did not sufficiently disclose beneficiary to constitute constructive notice of its contents (Code 1930, sec. 2156).
5. CHATTEL MORTGAGES.
Tenant's goods and chattels, which he conveyed by recorded trust deed to trustee as security for indebtedness to decedent's estate, held subject to payment of rent, where landlord had no actual notice of such deed, which did not sufficiently disclose beneficiary to constitute constructive notice of its contents, and tenant represented throughout that goods were free from any lien (Code 1930, sec. 2156).
6. LANDLORD AND TENANT.
Tenant subleasing land to Secretary of Agriculture under Agricultural Adjustment Act held not entitled to amount of United States Treasury check for rent installment to exclusion of landlord after termination of government's right and interest therein by final delivery of check to tenant and payment thereof in full (Agricultural Adjustment Act, 48 Stat. 31).
7. LANDLORD AND TENANT.
Surplus cotton tax exemption certificates, received by tenant as trustee under declaration executed by him pursuant to federal Cotton Control Act and regulations of Secretary of Agriculture, held exempt from levy to satisfy landlord's claim for rent (Cotton Control Act, 48 Stat. 598).
8. LANDLORD AND TENANT.
Tenant's shares of production credit association's stock, purchased by him with money realized from sale of agricultural products raised on leased land, should have been subjected to payment of rent due landlord by decree in latter's suit against tenant, association, and others.
APPEAL from chancery court of LeFlore county. HON. R.E. JACKSON, Chancellor.
John W. Crisler, of Clarksdale, for appellant.
Complainant is entitled to lien on proceeds of treasury check and exemption certificates.
We say that complainant has both the statutory landlord's lien and an equitable lien upon all of this money and property. It is not necessary that a landlord shall be in the forum of a justice of the peace court in order to enforce his statutory landlord's lien. This lien may be enforced in equity. We further say that equity will follow the proceeds of the crop no matter what form they may take. This we believe is the well settled rule, and the rule appears to be universal where the tenant is shown to be insolvent.
36 C.J. 500, sec. 1478; 16 R.C.L. 880; 1916E Ann. Cas. 826; Young v. Wyatt, 197 S.W. 575; Brown's Executor v. U.S. Trust Co., 215 S.W. 815; Newman v. Bank, 66 Miss. 323, 5 So. 753; Paine v. Sykes, 72 Miss. 351, 16 So. 903.
We submit that complainant was entitled to have the income from the land subjected to the payment of its rent; that the proceeds of the treasury check and exemption certificates were in no sense a bounty since the sub-lease expressly destroyed the company's security on 270 acres of land; and that the government by its intervention is attempting to set up for defendants a right which they do not claim for themselves and which their own course of conduct shows they did not intend to invoke.
The company did not waive in favor of H.G. Kitchell.
There was no publication of an offer to the public. The Life Insurance Company of Virginia simply obligated itself to give a waiver at the proper time, as it did in favor of the Greenwood Production Credit Association. No waiver of any kind was executed in favor of H.G. Kitchell in any capacity.
At no time did Kitchell or Page or anyone else communicate to the company that Kitchell was making advances and relying upon the waiver stipulated in the lease contract, and the company had no notice or knowledge of anything of the kind until the time for settlement arrived. Then comes the claim of H.G. Kitchell, agent, for $1177.08.
A party has a right to know with whom he is contracting. This was not an offer made to the public where acceptance is completed by performance on the part of some member of the public. The contract nowhere contains a stipulation which can be so construed, and nothing is mentioned of any parties to the lease contract except the lessor and the lessee. The parties to a contract must be designated with certainty.
13 C.J. 262, sec. 45C; Pioneer Box Co. v. Price, 132 Miss. 189, 96 So. 103; Murphree v. Ins. Co., 168 Miss. 667, 150 So. 534.
It will be noticed also that there is no language in this lease contract which says that the company has waived in favor of any party. It is simply an agreement to waive, which the tenant might enforce at the proper time by securing a waiver in favor of the party willing to make advances.
St. Louis Brewing Assn. v. Nieder Luecke, 76 S.W. 645.
It was error to disallow complainant's claim to goods and chattels.
Section 2156 of the Code of 1930 requires that the beneficiary in a deed of trust be specifically named if the instrument is to impart notice to anyone. The beneficiary in the deed of trust was not named at all, as the estate of V.G. Kitchell was not a person recognized by law. The name is a nullity insofar as its being a beneficiary is concerned. No person recognized by law can be said to be included in the term, "Estate of V.G. Kitchell."
30 Cyc. 1526; 13 Cyc. 538; 18 C.J. 159; Simmons v. Spratt, 20 Fla. 495; Morgan v. Hazlehurst Lodge, 53 Miss. 665.
Defendants cannot make the answer that this deed of trust was to a trustee and not to the estate of V.G. Kitchell, deceased. Section 2156 would not recognize this nor does the law aside from this statute.
Robinson v. State, 139 S.W. 978.
An executor, administrator or trustee of an estate may be estopped by his conduct from asserting a right belonging to the estate.
18 Cyc. 211K; 23 C.J. 1178, sec. 397; Pittman, Admr. v. Pittman, 59 Miss. 203; Caldwell v. Kimbrough, 91 Miss. 877, 45 So. 7. H.C. Mounger, of Greenwood, for appellees.
We contend that the treasury check and the exemption certificates were not subject to the landlord's lien and were not the subjects of attachment under the statute.
Sections 2191 and 2186, Code of 1930.
It certainly cannot be successfully maintained that the treasury check issued by the United States and that the exemption certificates issued by the agricultural department were agricultural products. They were neither corn, cotton, wheat, oats nor other things usually raised on the land. It would be a great stretch of the imagination to hold that these were agricultural products.
The fact that the complainant went into the chancery court did not give it a lien. The chancery court can only enforce a lien that already exists.
A lien arises by contract or by implication.
37 C.J., pages 315-319.
This treasury check was levied on in the hands of the Greenwood Production Credit Company, one of the government agencies, and the exemption certificates were levied on in the hands of the county agent, one of the government agricultural employees. Neither of these officials or employees were subject to the writ, nor were the checks levied on the subject of the attachment.
The complainant has no claim to these funds. It did not contribute anything to them. These were a gift by the United States to Page, or a bonus or whatever they might be called. The United States had a right to give them to Page, as far as the complainant is concerned.
2 Hughes on Procedure, pages 1088, 1089.
The United States is not complaining.
The whole proceeding is one to enforce the landlord's lien by a proceeding in chancery. We are contending that, not having any lien under the landlord and tenants act, on the treasury check and the exemption certificates, it cannot acquire one by going into chancery.
It has been a common practice for landlords to give a waiver in order to enable the tenant to get supplies. Otherwise the land was liable to lie out. This was done in this instance. The waiver was a general one.
Dreyfus v. W.A. Gage Co., 84 Miss. 219, 36 So. 250; Newman v. Delta Grocery Co., 138 Miss. 683, 103 So. 373; Somerville v. Delta Grocery Cotton Co., 159 Miss. 252, 130 So. 95.
The complainant cannot question the waiver now.
Complaint is made that Kitchell loaned the Pages money under these deeds of trust without getting an order of court. In the first place the will gives him power to do this, and in the next place, how can the complainant raise this question? It was done long before the complainant appeared on the scene, and for an estate in which the complainant had no interest. The heirs are the only ones that can complain, and we hear no complaint from them.
The chancellor adjudged that these instruments were perfectly valid, and the objection that the word "Estate" were used in describing the beneficiary is entirely too technical, in a court of chancery. The estate was to be kept together until Kitchell should see fit to divide it.
The complainant gave the waiver and should be held to it.
Lester G. Fant, of Holly Springs, and Lester M. Sack, of Clarksdale, for appellee, United States of America.
The attachment of a creditor levied against cotton tax exemption certificates in the hands of the assistant in cotton adjustment of the Agricultural Adjustment Administration of the United States Government and held in trust by him in his official capacity and their subsequent conversion into cash by the receiver was contrary to law.
Buchanan v. Alexander, 4 How. 20; White v. Wright, 1 P.2d 668; Clark v. Board of Commissioners, 161 P. 790; Dow v. Irvin, 21 N.M. 576, 157 P. 490; Addystone Pipe Steel Co. v. City of Chicago, 170 Ill. 580, 48 N.E. 967; In re Nagle, 135 U.S. 1; Ohio v. Thomas, 173 U.S. 276; Johnson v. Maryland, 254 U.S. 51; U.S. v. Kirby, 74 U.S. (7 Wall.), 482.
That the administration of public business should not be hampered by process against funds in the hands of government agents in the interest of private parties has also been recognized by judiciaries in many other jurisdictions.
Bank of Tennessee v. Dibrell, 3 Sneed 379; Hines v. Minor, 105 S.E. 851; Porter Blair Hdw. Co. v. Perdue, 105 Ala. 293, 16 So. 779; Weiser v. Payne, 294 P. 407; The Principality of Monaco v. Mississippi, 292 U.S. 313; Tucker v. Pollock, 21 R.I. 317, 43 A. 368.
Benefit payments to a producer for acreage reduction under the Agricultural Adjustment Act and Cotton Control Act cannot be diverted by judicial process from the producer to the payment of his creditors.
The Agricultural Adjustment Act of May 12, 1933, Title 7, U.S. Code, sections 601, 602, 608, 701; Buchanan v. Alexander, 4 How. 20; Wilson v. May, 152 So. 878; DeBaum v. Hulett Undertaking Co., 153 So. 513; Bullard v. Goodno, 50 A. 544, 73 Vt. 88; Wilson v. Sawyer, 17 Ark. 492, 6 S.W.2d 825; Manning v. Spry, 121 Ia. 191, 96 N.W. 873; Yates Co. National Bank v. Carpenter, 119 N.Y. 550, 23 N.E. 1108; City of Atlanta v. Stokes, 165 S.E. 270; Crow v. Brown, 81 Ia. 346, 46 N.W. 993, 11 L.R.A. 110, 25 Am. St. Rep. 501; Marquardt Sons v. Mason, 87 Ia. 136, 54 N.W. 72; Folschow v. Werner, 51 Wis. 85; Payne v. Jordan, 152 Ga. 367, 110 S.E. 4, 36 Ga. App. 787, 138 S.E. 262; Words Rhea v. Shaw, 156 So. 81.
The cotton tax exemption certificates issued to a producer under the Cotton Control Act are not subject to regular process to satisfy the claims of a creditor.
Title 7, U.S. Code, sections 701, 703 (c), 704 (a) (e2) (g), 706, 709 (a) (b) (d).
The benefit payment check in the hands of the Greenwood Production Credit Association which disclaimed all interests therein was the property of the United States and therefore immune from judicial process.
The Siren, 74 U.S. 152.
The United States has an interest in the disposition of the proceeds of the government check and tax exemption certificates and is a proper party to this suit.
Stanley v. Schwalby, 162 U.S. 255; Booth v. Clark, 17 How. 322; Great Western Mining Co. v. Harris, 198 U.S. 561; Export Oil Corp. v. U.S., 64 Ct. C. 342, 350.
Argued orally by John W. Crisler, for appellant, and by H.C. Mounger, for appellee.
This is an appeal from a decree of the chancery court of LeFlore county, awarding a personal decree against the appellee Jackson W. Page, and dismissing the appellant's bill of complaint in all other respects.
The Life Insurance Company of Virginia leased to the defendant Jackson W. Page a plantation in LeFlore county, consisting of 978 acres, for a rental of $2,700 for the year. The lease contract contained a waiver of the landlord's lien reading as follows:
"In order that the lessee may obtain funds to enable him to conduct his farming operations during the term of this lease, the lessor has simultaneously herewith and does hereby agree to waive its landlord lien for any advances up to an amount not to exceed, in any event, Four Thousand ($4,000.00) Dollars."
After the execution of this lease contract, the tenant, with the knowledge and consent of the insurance company, subleased 270 acres of the leased land to the Secretary of Agriculture of the United States for the sum of $1,368.90, payable in two installments of $684.45 each, to be paid by checks drawn payable to the Greenwood Production Credit Association of Greenwood, Miss.
After the execution of the original lease, the Greenwood Production Credit Association agreed to furnish the tenant to the amount of $2,137, which bore interest amounting to $43.79, but before making these advances, it required a separate and independent waiver to be executed by the insurance company and delivered to it. In addition to the amount secured from the Production Credit Association to conduct his farming operations, the defendant Page contended that he secured more than $1,100 for that purpose from his father-in-law, H.G. Kitchell, trustee of the estate of Vesta G. Kitchell, his deceased wife, and when the time arrived for the payment of the rent, it was contended that all the crops produced on the leased premises were used in repayment of the advances made by the Production Credit Association and H.G. Kitchell, trustee, for the purpose of carrying on farming operations on the land.
On November 30, 1934, the insurance company, in the exercise of its landlord's rights under the statute (Code 1923, section 8799), sued out a distress for rent against certain agricultural products produced on the land; also certain goods and chattels of said Page found on the leased premises; also a United States treasury check or warrant for $684.45 for the second installment of government rent, which was payable to and then in the hands of the Greenwood Production Credit Association, and also cotton tax exemption certificates covering 25,000 pounds of lint cotton.
On December 7, 1934, the Life Insurance Company, the landlord, filed its bill of complaint against the tenant, Jackson W. Page, H.G. Kitchell, trustee of the estate of V.G. Kitchell, deceased, J.M. Weeks, assistant in cotton adjustment under the United States Agricultural Adjustment Act (48 Stat. 31, see 7 U.S.C.A. 601 et seq.), Oscar Wade, a subtenant on the leased premises, the Greenwood Production Credit Association, and others. The bill alleged that the rent was unpaid, and set forth the facts in reference to the pending attachment for rent, and prayed for the appointment of a receiver to take charge of the property levied on under the attachment, for a mandatory injunction to require the proper indorsement of the government check, and the cotton tax exemption certificates and the delivery thereof to the receiver, and for the subjection of all of said property to the payment of the complainant's claim for rent.
After proper notice of the application for the appointment of a receiver and the issuance of a mandatory injunction, without apparent contest, a decree was entered appointing a receiver and granting an injunction. Thereafter the receiver qualified and took charge of the property under levy, and, in compliance with the injunction, the tenant, Page, indorsed the cotton exemption certificates, and the government check, which was payable to the Greenwood Production Credit Association, was indorsed by it and delivered to the receiver, as was also certain stock in said association of the par value of $115 which had been issued to said Page when the loan to him was consummated. The receiver sold the tax exemption certificates for $500, and the government check for $684.45 was duly cleared through the United States Treasury, and the proceeds placed to the credit of said receiver. In addition, the defendant H.G. Kitchell, trustee, paid to the receiver $303 of rent from subtenants which had been paid to him for the repayment of alleged advances.
The defendant Page answered the bill and alleged that in pursuance of the general waiver of the landlord's lien in the lease contract, he borrowed from the Greenwood Production Credit Association the sum of $2,137, and from H.G. Kitchell the sum of $1,177, for the purpose of making a crop, and that $303 of the proceeds of the crops raised by subtenants and paid as rent had been paid to the said Kitchell on the indebtedness due to him. It was further averred that the United States Treasury check for $684.45 was not subject to the attachment for rent, for the reason that it was not proceeds derived from agricultural products, but there was no claim that it was exempt from levy by reason of being government funds.
H.G. Kitchell answered the bill, and asserted a right to the $303 which had been paid to him out of the proceeds of the crop, on the ground that it was in part payment of money advanced by him under the waiver of the landlord's lien for the purpose of enabling the tenant to produce a crop. He further asserted a superior lien on personal property and agricultural implements that had been levied on, by virtue of the lien of a deed of trust thereon executed to him, as trustee for the estate of V.G. Kitchell, deceased, on March 1, 1933, but he asserted no right or claim to the United States government check or the tax exemption certificates.
The Greenwood Production Credit Association answered disclaiming any interest in the controversy or in the proceeds of the government check payable to it, and it indorsed the check and delivered it to the receiver, and also delivered 23 shares of its stock of the par value of $5 each, which had been issued by it to Jackson W. Page in consummating its loan to him.
The J.I. Case Company also intervened and asserted a prior lien on a certain piece of the agricultural machinery, under a conditional sales contract, and the right of this petitioner does not appear to have been contested.
After the answers had been filed and the cause had been set for hearing in vacation, the United States of America filed a petition to intervene, which was granted, and it thereupon filed its petition setting up at length the contract that had been entered into between the tenant, Jackson W. Page, and the Secretary of Agriculture of the United States under the authority of the act of Congress known as the Agricultural Adjustment Act, under and by virtue of which the Secretary of Agriculture agreed, on behalf of the United States, to rent from said tenant 270 acres of the leased land, and alleging that the proceedings under which the government check for $684.45, and the tax exemption certificates, had been seized were in effect a suit against the United States, and its officers and agents acting in their official capacities, and that, consequently, such proceedings were illegal and unauthorized. It was further alleged that the said check and exemption certificates were issued as a special benefit, for the use and enjoyment of said Jackson W. Page, and were, therefore, exempt from process of the court, and could not lawfully be diverted to satisfy the debts owing by said Page. It was further alleged that said government check had been issued and delivered to the Greenwood Production Credit Association in pursuance of a contract so to do, to be applied in the discharge of the indebtedness of said Page to said association, but that when the check was so delivered, the government had no knowledge of the fact that said indebtedness to the association had previously been fully paid and satisfied. It was further alleged that, at the time of the levy thereon, the surplus cotton tax exemption certificates had been surrendered by Page to J.M. Weeks, assistant in cotton adjustment of LeFlore county, to be disposed of for the benefit of said Page.
The appellant answered the intervention petition, and thereupon the cause proceeded to trial, resulting in a decree awarding a personal recovery against Jackson W. Page for the amount of the rent due, but dismissing the bill as to all the property involved. It was further adjudged therein that the United States government check and the tax exemption certificates were exempt from attachment, and that the levy thereon was illegal and invalid, and that the receiver should pay the proceeds thereof to the defendant Page. It was further adjudged that the claim of H.G. Kitchell to the $303 he surrendered to the receiver was valid, and that this sum should be repaid to him by the receiver. It was also adjudged that the claims of the J.I. Case Company, and H.G. Kitchell, trustee of the estate of his deceased wife, Vesta G. Kitchell, to the farming implements levied on were also valid.
Among others, the appellant assigns as error the action of the court in "disallowing complainants claim to the $303.00 paid to H.G. Kitchell, and by him turned over to the receiver." Upon this point, it is contended that the waiver quoted in full above did not operate in favor of the H.G. Kitchell, or any member of the public who made advances to enable the tenant to conduct his farming operations, but was a mere obligation on the part of the landlord to give a waiver to some particular person or persons upon request. We do not so construe this waiver. The waiver was general and absolute in its terms with the sole condition that advances made should be for the purpose of enabling the tenant "to conduct his farming operations during the term of this lease." Dreyfus v. W.A. Gage Co., 84 Miss. 219, 36 So. 248. The evidence fully supports the finding of the chancellor that the said H.G. Kitchell made advances for the purpose of enabling the tenant to conduct his farming operations to an amount largely in excess of the value of the proceeds of the crop received by him as part payment thereof, and no error was committed in directing the receiver to repay the $303 received from Kitchell.
Appellant also assigns as error the action of the court in disallowing its claim to the goods and chattels of the tenant which had been subjected to levy. The defendant H.G. Kitchell's claim to these goods and chattels, consisting principally of agricultural implements, which was sustained by the court, is based upon the following facts: On June 22, 1931, Jackson W. Page and his wife executed a deed of trust on this property to H.G. Kitchell, as trustee, with power of sale, to secure an indebtedness due to the estate of Vesta G. Kitchell, deceased. The property conveyed by this deed of trust was then located in Claiborne county, and the deed of trust was duly recorded in that county. On March 1, 1933, the said Page and wife executed a new deed of trust on said property, conveying it to H.G. Kitchell, as trustee with full power of sale, to secure an indebtedness to the "estate of Mrs. Vesta G. Kitchell," in the sum of $9,291.69, evidenced by a promissory note of even date therewith, payable March 1, 1934, which deed of trust was duly recorded in Claiborne county on March 1, 1933, and in LeFlore county on November 8, 1934.
Upon this assignment it is here contended that no beneficiary is named in this deed of trust who is capable of taking, or that no person recognized by law is named therein as beneficiary, and, in view of section 2156, Code 1930, the record of the deed of trust did not impart notice, and, consequently, the lien thereof was subordinate to the lien acquired by the distress proceedings herein. Section 2156, Code 1930, provides that the clerk of a chancery court "shall not record any mortgage or deed of trust in which the name of the beneficiary is not disclosed therein, and if such instrument is recorded it shall not impart notice to any one."
By reference to the will of Vesta G. Kitchell, deceased, which was offered in evidence on the trial of this cause, we find that the testatrix devised and bequeathed her property to her husband, H.G. Kitchell, as trustee for the use and benefit of her children, but that fact is not disclosed on the face of the deed of trust. While the property was conveyed therein to H.G. Kitchell, as the trustee named to execute the trust, the beneficiary attempted to be named therein, as well as in the note evidencing the indebtedness secured thereby, is merely "estate of Vesta G. Kitchell." A conveyance to a deceased person or a fictitious person is void, Morgan v. Hazlehurst Lodge, 53 Miss. 665, and the estate of a deceased person as such is not a person recognized by law, Simmons v. Spratt, 20 Fla. 495. The estate of a deceased person vests in his heirs or legal representatives, and the attempted designation of a beneficiary in the deed of trust here involved does not sufficiently disclose the beneficiary to cause the instrument to constitute constructive notice of its contents. It was shown that the appellant had no actual notice of the deed of trust, and that the tenant represented throughout that the goods and chattels were free from liens of any character. We conclude, therefore, that the goods and chattels levied on should have been subjected to the payment of rent.
It was also contended that the court erred in holding that the United States Treasury check for $684.45, and the proceeds of the cotton tax exemption certificates of the value of $500, were exempt from levy, and in disallowing the appellant's claim thereto.
Under the contract between the tenant and the Secretary of Agriculture of the United States, it was agreed that all rental payments thereunder should be payable to the Greenwood Production Credit Association, which, of course, was for the purpose of repaying the amount which as the result of the waiver of the landlord's lien, the association had agreed to advance for the purpose of enabling the tenant to conduct his farming operations. However, before the final installment of the government rent became payable, the tenant utilized the agricultural products grown on the leased premises, which, in the absence of a waiver, would have been subject to the statutory landlord's lien, in paying the balance due to the Production Credit Association. Without knowledge of that fact, the government, in pursuance of its contract so to do, issued and delivered to the Production Credit Association its check in final and full discharge of its obligations under the contract. Should the tenant then be allowed to utilize the agricultural products grown on the leased premises to release the government check for his exclusive use and benefit and free from any claim thereon for rent? Neither the tenant, nor H.G. Kitchell who advanced money to enable the tenant to produce crops, has asserted any claim that this check was exempt by reason of the fact that it constituted government funds, and the government asserted no such claim until after the check had been delivered to the proper payee, and paid by the United States Treasury.
The rule is recognized by the decisions of this court that a county warrant is subject to levy as personal property after it has been finally delivered to the proper payee, and this rule if not controlling is certainly persuasive here, where the warrant or check had been finally delivered to the proper payee under the government contract, and paid in full by the United States Treasury.
This check in effect represented the rent of 270 acres of the leased land which had been taken out of cotton production, and after the government's rights and interest therein have ended, the tenant should not have the right to this rent to the exclusion of the landlord whose land was utilized for the purpose.
The Greenwood Production Credit Association is not here shown to be such a governmental agency as falls within the rule prohibiting legal process against government agencies, and furthermore we think the government's attempted assertion of exemption came too late. The tenant asserted no claim to the check by reason of any such exemption, and when the government issued the check and delivered it to the proper payee under its contract, and the check was paid by the Treasury, we think the government's interest therein was at an end. In reaching this conclusion, we have not considered as material the fact that in United States v. Butler, et al., Receivers of Hoosac Mills Corp., 297 U.S. 1, 56 S.Ct. 312, 80 L.Ed. 477, 102 A.L.R. 914, the Agricultural Adjustment Act has been held to be unconstitutional. We think the decree should have directed the receiver to apply the proceeds of this check toward the payment of rent due to the landlord.
As to the surplus cotton tax exemption certificates, we think the decree of the court below is correct. The tenant originally received the certificates as trustee under a declaration of trust executed by him under the requirements of the Cotton Control Act of April 21, 1934 (48 Stat. 598), and the regulations thereunder prescribed by the Secretary of Agriculture of the United States. This declaration of trust set forth very stringent regulations as to the use and disposition of these certificates, and required that they should not under any circumstances be mingled with or treated as a part of the tenant's assets or estate, and further required that any surplus certificates should be delivered to the assistant in cotton adjustment for the county in which the farm was located, to be dealt with by him in accordance with prescribed regulations. The regulations under the Cotton Control Act of April 21, 1934, governing allotments and tax exemption certificates set forth in lengthy detail the duties and liabilities of trustees under the declaration of trust required to be executed upon the delivery of certificates to such a trustee, and as to the disposition of surplus certificates by the assistant in cotton adjustment. These certificates were not purchased or acquired by the use of agricultural products raised on the leased premises, and were not subject to any statutory lien, and under the regulations of the Agricultural Department they were subject to its control, through its agent, the assistant in cotton adjustment, at the time they were levied on, and, therefore, they were not subject to levy to satisfy the landlord's claim for rent.
By an amendment to its bill of complaint, the appellant averred that the defendant Page was the owner of 23 shares of stock of the Greenwood Production Credit Association; that this stock was purchased with money realized from the sale of agricultural products raised on the leased land during the year; that it was entitled to an equitable lien on this stock; and that it should in equity be subjected to the payment of complainant's demand. In his answer, the defendant Page did not deny the averments of this amendment to the bill of complaint, and asserted no right or claim to or interest in this stock, and the decree should have subjected this stock to the payment of the rent of the leased premises.
The decree of the court below will, therefore, be reversed, and a decree modified to the extent herein directed will be entered here, and the cause remanded to be proceeded with in accordance with the decree so entered.
Reversed and modified decree entered.