Phillips v. Box , 204 Miss. 231 ( 1948 )

In 1944, Box rented certain lands to Lane for a cash rental of $750 a year. Lane paid the first year's rental early in the season of 1944 and likewise in 1945. No rent was paid for the following year although the defendant made a crop thereon. This action was brought by the landlord to enforce an agricultural lien by attachment of three bales of cotton raised on the lands and which had been stored by the tenant in a warehouse. Lane had procured warehouse receipts therefor, which he transferred to appellant Phillips. One bale was released from the attachment, and the contest involved the two remaining bales. At the conclusion of the testimony, both parties requested directed verdicts. The trial court awarded judgment to the landlord for the two bales, or their value up to the amount of the balance due under the landlord's lien.

Although the case went off on a peremptory instruction for the landlord, his decision of necessity involved an appraisal of the facts upon the issue, conceded by both parties to be controlling, whether the landlord by his conduct, whether affirmative or negative, had waived his lien. We therefore cull the following facts relevant to this issue.

Rental having been paid in cash for the years 1944 and 1945, the matter of a landlord's lien was not involved therefor. No rent was paid for 1946. During the summer of that year, the tenant left the lands in order to procure employment in Alabama. His wife remained in charge of the lands, and planting operations continued. The tenant agreed to borrow the money, if necessary, to pay the rent. Landlord made five trips to the lands during September to check on the situation, with a view to securing the rental payment. The wife of the tenant assured Box that they were picking cotton and would have it ginned in a few days. She stated that she planned to move to Alabama after the coming Christmas, but that her husband would return to the lands in a few days. Whereupon, Box returned to the place pursuant to such assurance only to find that the property had been vacated. No agricultural products were found against which a lien would be enforced.

Box finally located the tenant and his wife in Alabama. The tenant asked for additional time, and as part payment on the rent turned over to Box some farm equipment for a credit of $400. This left a balance due of $350. Inquiries led the landlord to certain probable sources from which he sought further property for attachment. He finally located two bales of cotton that had been raised on the lands and stored at the Monroe County Compress at Aberdeen. The warehouse receipts, although issued in the tenant's name, were sold to Phillips, but, at the request of tenant's wife, check therefor was changed so as to constitute her the payee. The sale of the cotton was effected, not at Aberdeen but in Columbus, about thirty miles distant. Box lived some thirty-five or forty miles from the lands in question. During none of the conversations with the tenant or his wife did the latter inform Box that the cotton had been gathered and ginned, or that they held warehouse receipts therefor. Neither the tenant nor his wife were subpoenaed as witnesses. The landlord's trip to Alabama to press his rent demand was about November first. The sale of the cotton was about a week later. Upon his return, he wrote to the tenant and enclosed two promissory notes, each in the sum of $175, due respectively six and twelve months after date. There was no attention paid to these.

The cause was brought to issue by declaration filed in replevin by Phillips against the constable who had levied upon the cotton, and an avowry by the landlord under Code 1942, Sec. 932. The only witness for the plaintiff or claimant was the appellant's bookkeeper who testified to the purchase of the cotton through the receipts. The bill of sale and check to Mrs. Lane were exhibited. Other testimony was of a general nature, relevant chiefly as discloses of the value of the cotton.

Although the attachment was not sued out until January 25, 1947, the testimony of appellee is without dispute that action was taken by him promptly after his efforts to locate the cotton had been rewarded by their discovery in the warehouse at Aberdeen. We are of the opinion that while the conduct of Box after the sale of the cotton could be relevant to corroborate a prior waiver of his lien, materials for such alleged waiver must be gathered from the period preceding November 8th, when the receipts were transferred to appellant.

Regardless of whether the execution and acceptance of the promissory notes tendered by Box would have amounted to a waiver, the fact remains that they were not executed. We are not required to indicate what our conclusion would be if the trial judge had granted a peremptory instruction for the tenant. (Hn 1) Waiver is not susceptible of definition in terms of special instances. Only general principles are stable. One such principle is that(Hn 2) proof of such a waiver must be established by preponderant testimony which affirmatively shows an agreement by the landlord, or conduct tantamount thereto, that the tenant might deal with the cotton as if free of any lien. Tennessee Joint Stock Land Bank v. Bank of Greenwood, et al., 179 Miss. 534, 535, 172 So. 323, 328. The opinion states: "Fryer had the receipts issued in his own name and excluded the landlord without the latter's knowledge and consent. Under the facts of this record, Fryer was not clothed by the landlord with indicia of ownership — therefore no recognized principle of estoppel can be applied here, and the fact that the landlord did not promptly discover the trespass upon his rights by his tenant cannot be said to be negligence which would, on any principle of estoppel, relieve the appellees from liability for their conversion of the cotton."

We are confronted with the duty to steer a straight course between the shoals upon which good husbandry would be wrecked by unwise restriction of sound commercial practices and the negotiability of warehouse receipts undermined by a compelled suspicion, and away from the opposing threat to the established rights of a landlord who may be penalized by his confidence in the tenant. Between these extremes wherein, on the one hand, a purchaser of cotton always buys at his peril, and on the other where the landlord trusts his tenant at his peril, a median course must be found in the rule that the landlord's lien to the agricultural products remains paramount as security for unpaid rent. Code 1942, Sec. 908.

It would be no forbidding task to marshal in opposing array of those cases whose factual patterns have led to protection of the lien on the one hand and its loss on the other by agreement or waiver. Such cases are typified in Tennessee Joint Stock Land Bank v. Bank of Greenwood, supra, citing to support the former conclusion Fitzgerald v. Fowlkes, 60 Miss. 270; Henry v. Davis,60 Miss. 212; Warren v. Jones, 70 Miss. 202, 14 So. 25; Schmidtt, et al. v. Federal Com-Press, etc., Co., 169 Miss. 589,153 So. 815, and to sustain the latter, McGee v. Carver, 141 Miss. 463,106 So. 760; Commercial National Bank of New Orleans v. Canal-Louisiana Bank Trust Co., 239 U.S. 520, 36 S.Ct. 194, 60 L.Ed. 417, Ann. Cas. 1917E, 25.

Commerce, as well as the law which protects it, must be conducted upon an assumption of honest dealing. It is no barrier to such commerce that the peril at which a purchaser buys such negotiable receipts is on occasion consummated in actual loss. It is then alone that such purchaser can save himself by proof that the tenant has dealt honestly with his landlord. If the lien is to remain paramount, a tenant may not clothe himself with the indicia of ownership but it must be done by the hand of the landlord. (Hn3) A landlord does not trust his tenant at peril. In the instant case, Box never saw the cotton nor knew of its whereabouts nor when or whether it had been sold. He placed nothing in the tenants hands but his confidence. It is in this respect that such cases as Weil Brothers, Inc., v. Keenan, 180 Miss. 697,178 So. 90, lose point.

We can find no basis for disturbing the finding of the learned trial judge that the landlord had not consented to a course of which he was not aware.

Affirmed.