H. & C. Newman, Inc. v. Delta Grocery & Cotton Co. , 144 Miss. 877 ( 1926 )

I emphatically dissent from the majority opinion in this case. The trouble in this case is that the Delta Grocery Cotton Company secured no right by its deed of trust against the crop of Mix, and could not have enforced its demand against Collier under its deed of trust against Mix's crop, had H. C. Newman, Inc., never collected anything, or even if it had no demand; in other words, the Delta Grocery Cotton Company must stand upon its deed of trust for its rights. There is nothing to show that it had any knowledge whatsoever of Mix's tenancy or any knowledge of a rent note given by Mix. This note had passed to H. C. Newman before the deed of trust was given by Collier, and there is nothing in the deed of trust given by Collier to desribe any specific note or lien. It could obtain nothing by virtue of the language used in the deed of trust in reference to liens or claims, except such as Collier then had. It might be a different proposition, had the rent note of Mix been specifically described. The Delta Grocery Cotton Company furnished Mix nothing, and H. C. Newman did not get any of the agricultural products grown on the place by Mix, but Mix paid them money in settlement of his rent note. Certainly a waiver of a lien is not an assignment of a debt.

H. C. Newman waived their landlord's lien, and, if the Grocery Company had obtained a lien upon the crops grown by Mix, then they would have had a prior right to resort to the producegrown upon the premises by Mix to the same extent that they would have, had the title been in Collier at the time. Had Collier owned the notes at the time of giving the deed of trust, the deed of trust would have been sufficient, as between Collier and the Grocery Company, to have carried Collier's interest in the crop.

I know of no decision holding that a mere waiver of a lien precludes a party from collecting his debt, so long as he does not resort to his lien to do so. I think the authorities cited by the majority opinion wholly fail to support the decision now rendered.

Dreyfus v. Gage, 84 Miss. 219, 36 So. 248, is a case where the appellee obtained a lien, and, further than that, appellant had been active in inducing the party who took the lien to do so, and had represented that, if he took such lien, it would be a first lien. I quote from the statement of facts as follows:

"During the course of the dealings between Moore and the attorneys for appellees, and before the final consummation of the transaction, Dreyfus urged the attorneys of appellees to make the loan to Moore, giving reasons why he personally could not continue the business, and, concealing the fact that he was the assignee of the rent notes, he represented that a waiver from Mrs. F.S. Hicklin, the owner of the land, would give appellees a prime lien on all the crops produced, and would make the loan absolutely secure. Acting on these representations, and in complete ignorance of the fact that Dreyfus was the holder of the rent notes, appellees' attorney demanded and received a waiver to the amount of one thousand two hundred dollars from Mrs. F.S. Hicklin, had the securities held by Dreyfus transferred to appellees, took a trust deed from Mooreon crops and work stock, closed the loan, and forwarded the papers to the appellees. The waiver of Mrs. F.S. Hicklin not being in form satisfactory to appellees, they demanded and received another waiver of rent, signed by her, and thereupon advanced Moore a portion of the one thousand two hundred dollars agreed on. Afterwards they required Moore to furnish additional security, which being done, other moneys were advanced during the year, aggregating a sum in excess of the one thousand two hundred dollars agreed on." (Italics mine.)

It will be seen from this quotation, and from the rest of the statement in the court's opinion, that appellee took a deed of trust on the property, and, after obtaining that lien, there was an effort to assert a landlord's lien by reason of the rent notes held at the time, etc.

Of course, it is familiar law that, where a person had a lien upon property, and another person, with knowledge thereof, converts that property, he is liable for the conversion. But there is no fact in the case before us showing that the Grocery Company ever acquired any lien as against the crop grown by Mix, and it specifically disclaims conversion as a ground for recovery.

The case of Chism Bros. v. Alcorn, 71 Miss. 506, 15 So. 73, was also a case where the party furnishing tenants took security upon the crop, and the landlord, after waiving her lien, took charge of the crop. That case, however, supports my view, because, upon this waiver by Mrs. Alcorn, Chism undertook to assert prime liability against Mrs. Alcorn on the waiver. The court held, as she had not agreed to pay the account, that a right of action would not lie against her upon the account.

The court did intimate that, under another form, there might be liability, but that was not predicated upon the idea that Chism Bros. had acquired a lien on the crop, and that the landlord had taken charge of the crop. I quote the following from the statement of facts in that case to show the importance of having a lien as the foundation of the right of action:

"The testimony for plaintiffs tended to show that, in consideration of a waiver by appellants of her landlord's lien, and an agreement that the proceeds of the tenant's crop should be first applied to the payment of the debt, the goods were sold to the tenant to enable him to make a crop on the leased premises; that they were sold upon the security of the crop; and that plaintiff looked to that source for payment. There was enough cotton raised by the tenant to pay the account, and it was received and sold by appellee, who applied only one hundred dollars of the amount to the credit of the debt, appropriating the remainder to her own claims against the tenant.

In the case before us there is an attachment in chancery against a party waiving a lien founded on an action for money had and received. The Chism v. Alcorn case, supra, holds that there is, in a waiver, no personal liability for the debt. That is precisely what is being sought in the present case; but in this case no part of the produce grown by Mix passed to H. C. Newman. The Delta Grocery Cotton Company had no kind of lien on the produce, and the appellants H. C. Newman took the currency of the country in payment of their note, and certainly there can be no kind of lien upon currency of the country, and no liability imposed by law for receiving currency of the country in payment of a debt. It is legal tender and passes from hand to hand, and H. C. Newman were under legal duty to accept money in payment of their demand.

There is nothing whatsoever in the record to show that H. C. Newman became personally liable for Collier's debt, or were liable in any personal way therefor. As stated above, the Grocery Company secured no lien, and Mix was a stranger to the transaction between Collier and the Grocery Company.

The decision in this case is far reaching and mischievous and will make it exceedingly difficult and dangerous for any landlord or lienholder to waive a lien. It, in effect, will make them surety for payment of a debt.

When this case was here before, it came on appeal allowed to settle the principles of the case. One of the questions involved in that litigation was the effect of a waiver by H. C. Newman. On first considering the case, we took the view that it was not necessary to decide the question now presented on the allegations of the bill. But a suggestion of error was filed, in which it was insisted earnestly, by able counsel, that we ought to decide this proposition, and the court did decide it.

Under the practice of this court, when a suggestion of error is filed, it first goes to a member who did not write the opinion, and that practice was followed when the case was here before, and, although I wrote the opinion on the suggestion of error, as well as the main opinion, it was done because the division, as a whole, thought it was proper and necessary to decide the point. It was certainly proper to so decide it in that appeal.