Buck v. Paine , 50 Miss. 648 ( 1874 )

Simrall, J.,

delivered the opinion of the court.

Three questions are presented by this record:

First. Whether a mortgage given by a lessee for supplies is superior to the lien of a laborer, employed by the lessee in its production, the mortgage being older than the contract to labor.

Second. Whether a purchaser of part of the crop (1 bale cotton) from the laborer gets a good title as against the mortgagee.

Third. Whether the purchaser (the mortgage not being recorded) had notice of the mortgage.

The mortgage was executed the 14th day of February, 1873, and included the crops to be grown that year by Arlow Mince.

On the 6th of April, 1873, Thomas Mince engaged to labor for his father, Arlow Mince, on the terms that his services were to be valued by two disinterested men, and so much of the crop set apart to him,'as they should think right. Such valuation was made, and a part of the crop in the field was assigned to him, he to pay the rent proportionally to the landlord.

The bale of cotton sued for by the mortgagee was picked from the part set apart to Thomas Mince, and was bought from him by Buck.

Has Thomas Mince a lien on the crop, under his contract of the 6th of April, 1873, superior to the mortgage of February 14th, 1873 ? Thomas had actual notice of the mortgage, although it was not recorded.

The first section of the act of April 5th, 3872, p. 131, gives a “ first lien in law,” upon all agricultural products, to secure payment of the wages of the laborer, whether, as we have held at this term, to be paid in money, or in the “ products.” This lien shall operate against the landlords, * * “ and all other persons interested in such agricultural products.” This statute took effect from its passage, and impressed the lien in favor of the laborer, on the products, against all the acts and contracts of the landlord, lessee, or whatever may be the interest of the employer of such laborer, in the crops. It is denominated “'a first lien in law ;” to give it, therefore, the virtue and force intended by the statute, it must take effect, as a limitation or restriction upon the power of the employer, by contract, mortgage, or by other act to defeat this first lien created by the law, to secure the wages of the laborer, out of the fruits of his industry. Since he contributes his labor to bring the agricultural products into existence, or in gathering them or preparing them for merchantable use, or domestic consumption, or in their transportation, the law imposes a “ first lien” upon them for his wages. The idea is that the crops are produced and made valuable, fit for home consumption or y market, by labor; therefore, labor shall be first paid. Whatever; is over and above the demands of laborers upon it is subject to'-the control and disposition of the employer, whether landlord, lessee, etc., * * in any mode recognized by law. Whatever interest an individual may have in agricultural products, in “ raising, handling, saving or transporting them,” that person’s interest is impressed with a lien for tbe wages of the laborer employed by or for him; and is a “ first lien,” in tbe sense that it is a limitation or restriction, upon tbe power of the employer, to create any other lien which shall be paramount to it. A mortgage for supplies would be inferior to the laborer’s lien, for the intent and effect of the statute is to curtail and limit the dominion of tbe owner, or person interested, over the product, to the extent of liens that may arise in favor of those who bestow labor upon it.

The mortgage was executed after the passage of this statute. We therefore hold that it was subordinate to the right of the mortgagor to employ laborers, and thereby, by operation of law, create the lien in their behalf, and that, although such employment might be subsequent to the date of the mortgage.

We have recently (at this term) held that the act “ for the encouragement of agriculture,” of 18th February, 1867, was in force until repealed in October, 1873. The 13th section of the act under consideration declares, as the sense of the legislature, that all contracts under the act of February 18, 1867, are valid. ■Quite surely, they would be valid without such declaration. But we understand the legislature as saying, that we are introducing a new class of liens, which may come in conflict with those that have been authorized by the previous statute. Our intention is, that all contracts made under that statute shall stand and be valid. Our purpose is not to impair them.

Tbe 7th section of the act of 1867, pp. 571, 572, makes it lawful to mortgage or convey in trust, a crop, * * being produced or to be produced within fifteen months from tbe date of such instruments. The intent of allowing such hypothecation of the crop so long in advance of its “ being produced.,” was to enable the agriculturist, before “sowing the seed,” to make provision to-carry on his business. The purpose of the statute is proclaimed in its title to “encourage agriculture,” then greatly depressed, by enabling those engaged in it to get the means and appliances to prosecute that industry. They should not be required to wait until the seed was sown before making the necessary financial arrangements of the year. The means must be secured beforehand, so that the agriculturist may know how many laborers he can employ, how much food, how many animals to provide, etc. To give effect to that intent which is conveyed by the language,, the mortage or deed of trust takes preference from its date, as to subsequent incumbrances, but subject to this qualification, that if given after the passage of the act of the 5th April, 1872, it is inferior to the liens created by the 1st and 10th sections.

When Payne & Baines took the mortgage from Arlow Mince,, it was subject to his right to employ laborers, and subject to the “ first lien,” which this act of 1872 created “in their behalf.

This mortgage operated on Arlow Mince’s crop, subject to the-lien in favor of Thomas.

But there was testimony which tended to show that Thomas waived his prior right in favor of the mortgagee. In that aspect of the case, without expressing any opinion on the weight of that testimony, it becomes necessary to consider the claims of Buck as a purchaser, for value, without notice of the mortgage, and whether his rights, in that character, were fairly presented to the jury under the instructions of the court.

2d. Is Buck a bona fide purchaser without notice of the mortgage to Paine & Baines?

The testimony on the point is to the effect, that when Didlake, the clerk of Buck, was negotiating to levy the cotton, the witness, James, “told him that there was some claim of some sort upon it, that [be had better look out. Didlake then went off and consulted a lawyer, returned and said he would take the risk.”

The rule is, that whatever will put a party upon inquiry, which, if pursued with ordinary diligence and understanding, would lead to knowledge of the requisite fact, is notice of it. McLeod v. First Nat. Bank, 42 Miss., 112. subsequent purchaser or creditor, about to deal with the property, if thév have notice of a prior claim or equity, or of facts, which, if followed up, will discover the truth, are put under a duty to make the investigation; and if they fail to do so, are chargeable with knowledge which the inquiry would have disclosed. Parker v. Foy & Florer, 43 Miss., 260.

It is laid down as a rule by 2 Sugden on Yendues, 528, “ that the puchaser isJ not bound to attend to vague rumors, to statements by mere strangers; the notice must proceed from some person interested in the property.” In Wailes v. Cooper, 24 Miss., 228, the notice' of the unregistered mortgage was given by Hale, the vendor. “The notice thus communicated is (say the court) all the notice required by the statute.” “ It was not a. mere floating rumor, circulated by irresponsible persons, which, perhaps, the party might have disregarded.”

The mortgage takes effect as to creditors and purchasers, from the date it is filed for record, and is void as to subsequent creditors and purchasers without notice, unless recorded. The fact which must be brought home to the subsequent purchaser, is notice that the unrecorded mortgage exists. When, therefore, the cases refer to knowledge of “circumstances” which shall put a party on inquiry, the circumstances themselves must come from a responsible source, and be of a character which, if followed up, will lead to the requisite information. Such is the effect of the open, visible possession by the vendee. As possession presumptively follows the right, a purchaser or creditor is thereby warned to inquire “ by what right the occupant holds.” The information which Buck’s clerk had was, “ that there was some claim of some sort upon upon the cotton.” The witness had no interest in the cotton, and from the vague and indefinite language used, did not know the nature of the claim, whether by judgment, mortgage or joint ownership, etc., nor to whom the claim belonged. He disclosed no circumstance which pointed to the mortgage, nor did he indicate any person who asserted any sort of claim. If Did-lake had examined the judgment roll or the registry books, he would have found neither judgment nor mortgage. Was he under an obligation to search farther ? If so, to whom should he go ? It is not necessary -to the exigencies of this case, to go as far as to hold that notice of an unregistered deed may not be given to a purchaser or creditor by a stranger who has no interest in the property, as laid down by Mr. Sugden. That doctrine in the breadth stated by him has been questioned, and we make no committal on the subject. Dart on, V. & P., 402, 408, chap. XV.

This vague information to Buck’s agent was not of the character to put him on inquiry, and did not amount to notice.

We have already said that the mortgage of Arlow Mince was subordinate and subject to a right in him to employ labor, and that for the wages, the law raised a “first lien,” which would be superior to the mortgage. There was in this case testimony tending to show that Thomas Mince engaged to work with his father, with knowledge of the extent and scope of the mortgage, and with a recognition on his part of its terms ; and an acquiescence of the rights conferred by the mortgagee, and a waiver of his own. The instruction granted for the mortgagees, Paine & Baines, was in effect, that the mortgage was superior to the lien of the laborer. That view of the law is not in accordance with the views herein-before expressed. It is also erroneous in not distinctly presenting to the jury (in view of the testimony of waiver by Thomas Mince), the further proposition that if Buck was a Iona fide purchaser, without notice, that is ample protection of his right to the cotton.

If, therefore, the jury should be satisfied from testimony, that Thomas Mince waived his right, in favor of the mortgagee, nevertheless he was the owner of the cotton subject to the mortgage, and a sale of it to Buck, an innocent purchaser, would pass to him a good title.

For these errors the judgment is reversed, and the cause is remanded for a new trial.