Abernethy v. Uhlman , 52 Or. 359 ( 1908 )

Mr. Justice Eakin

delivered the opinion of the court.

1. The question involved is whether plaintiffs’ claim for such advances is superior to defendants’ mortgage. Charles Abernethy testifies that Gilbertson, who was the agent for the defendants, S. and F. Uhlman, throughout this transaction, s'ent for him to come over to the Eldriedge yard on September 6, and while there Gilbert-son gave him instructions to go ahead and gather the hops. He asked Gilbertson about picking money, and the latter. said he would be on hand to pay the pickers when the work was finished. This is corroborated by Go Sun, who was present, and by Mrs. Eldriedge, who had a conversation with Gilbertson on the morning of that day. Gilbertson admits part of the conversation with Abernethy, but does not remember any of the conversation with him as to picking money for his place, and claims that his talk with Go Sun and Mrs. Eldriedge referred only to the Eldriedge yard, which was also cropped by Go Sun. Gilbertson'was undoubtedly anxious that the crop should be harvested, and used this plan to interest Abernethy; and we conclude from the evidence and circumstances that Gilbert-son did, on September 6, promise Abernethy and Go Sun, that he would be on hand at' the close of the picking to pay the hands, and requested Abernethy to assume the liability of the harvesting and he would repay him. The general rule as to the effect of a mortgage given to secure advances, even where the mortgagee agrees to advance a definite amount, if only a part of such amount is advanced, the mortgagee may nevertheless foreclose the mortgage for the amount due, subject to a set-off for any damages the mortgagor may have suffered by reason of the failure of the mortgagee to advance the whole sum: Coleman v. Galbreath, 53 Miss. 303; Watts v. Bonner, 66 Miss. 629 (6 South. 187). But there are additional elements involved here which preclude the application of that rule. This promised advancement was for the accomplishment of a particular thing, namely, cultivating and harvesting the crop covered by the mortgage.

2. Plaintiffs were interested in the crop to the amount of their one-third as rental, and the mortgagees were int'erested to the extent of Go Sun’s two-thirds interest. Go Sun’s contract with the plaintiffs was to make a crop for plaintiffs’ benefit, and defendants were aware of this duty and agreed to make the advance for that purpose, and in case of any default by Go Sun, if necessary for their own protection, they must take his place. Plaintiffs were not compelled to remain indifferent and see the crop. lost. Nor were they compelled, for the purpose of protecting their interests, to care for the crop in fulfillment of Go Sun’s agreement in the mortgage for the Uhlmans’ benefit. Even if the mortgagees were not under obligation to advance the money to harvest the crop, they had the right, upon the failure or inability of Go Sun, to furnish the money, in order to prevent waste, and thus protect their security; but, if they failed to do so, then plaintiffs, to save themselves, had a right to advance the money to care for the crop, and to be first reimbursed therefor out of the crop. The case is much stronger in plaintiffs’ favor, by reason of the fact that the defendants, the mortgagees, were under obligation to do this, and had requested plaintiffs to incur the liability, and that they would reimburse them. Plaintiffs’ interest was an undivided one, and could not be segregated until the crop was harvested, and to protect themselves they must care for the whole crop. It is the law in Oregon that the lessor and lessee are tenants in common in the crop (Cooper v. McGrew, 8 Or. 327; Messinger v. Union Warehouse Co. 39 Or. 546: 65 Pac. 808) ; and, although the lessee may mortgage his interest, the mortgagee is subrogated only to the lessee’s rights and interest; and, to the extent of his mortgage, is also a tenant ,in common with the lessor (Sunol v. Molloy, 63 Cal. 369; McGee v. Fitzer, 37 Tex. 27; Jones, Chattel Mortgages, § 47). To claim any interest under the mortgage as against the lessor the mortgagee must stand in the shoes of the lessee and fulfill his contract. The Abernethy’s rights and remedies are the same against the mortgagee as against the lessee.

3. It appears from the testimony that Go Sun was unable to pick the hops without the money .promised by defendants. He went to Portland to employ pickers, but came back without them, saying to Charles Abernethy that he was unable to get pickers. They would not come for him, so he asked Abernethy to go and get them, with the assurance that defendants were to advance the money to pay them. Plaintiffs did go to Portland, and got pickers, pursuant to this request, viz., about 45, and brought them to the.yard on or before September 6. When Charles Abernethy. came over to the Eldriedge yard upon the request of Gilbertson, the latter gave him instructions about picking the hops and looking after the books, saying that he would be on hand to pay the pickers when harvesting was completed. He instructed Abernethy not to let the tickets go out of the yard, that he, Abernethy, should have money on hand to take care of them in the meantime, thus clearly recognizing that Abernethy was in charge of the harvesting. Abernethy himself says that plaintiffs did the picking, that they employed the pickers, worked in the yard, and paid the help. It does not appear that Go Sun had anything to do with the harvesting. When asked how he got possession of the hops, Abernethy said that after they were baled they were put in the storeroom and stayed there; that they did not separate their third, but all were put in together; and that he kept them. When asked what Go Sun said as to Abernethy taking charge of the hops and having a lien upon them, the latter says that it was with his consent; thus showing that the plaintiffs understood that they themselves had charge of the crop during the harvesting, and that Go Sun so recognized it. In Hughes v. Johnson, 38 Ark. 285, 296, it is said:

“It is further a well-settled principle in equity that one who has an interest in a security, may advance what is fairly necessary to its preservation, and may retain the advances out of the proceeds before crediting any portion of his debt. There can," at least, be no doubt of that where such advances are made by the consent of all parties interested in the property or fund. * * This is not upon the idea that the security of the mortgage is thereby extended to other advances, but rather upon the consideration that the proceeds of the property have been diminished by the expenses of preservation.”

That was a case of a chattel mortgage upon a growing cotton crop; a suit being brought by the mortgagor to compel an accounting of the crop and a cancellation of the mortgage, without payment of the advances to harvest it. Wheat v. Watson, 57 Ala. 581, was a case where the landlord had a lien by statute for the rental. The defendant Watson had a cropper’s lien for $500 advanced to the tenants to enable them to make the crop. In July the tenants abandoned the crop. The landlord offered to permit the defendant to take the place -of the tenants and to complete .the crop, which he declined to do. The landlord then took charge of the crop and harvested it; and the question was whether the landlord was entitled to be reimbursed from the crop for such expenses, in preference to the defendant’s lien for prior advances to the tenants.

It is held that if the defendant; when given the opportunity, fails' to cultivate and gather the crop, he relinquishes to the landlord the whole crop, and, if he has any remedy, it is only for the surplus after the landlord is fully paid for the expenses of making the crop. It is held in Caldwell v. Hall, 49 Ark. 508 (1 S. W. 62: 4 Am. Rep.) that it is a well-settled principle in equity that one who has a lien on a growing crop may advance what is fairly necessary to prevent waste or destruction of the security, and may retain the advances thus made out of the proceeds of the sale before crediting any portion of his debt. That was the claim of a mortgagee of a growing crop made for advances to care for and harvest the crop. We-conclude, therefore, that plaintiffs were justified in taking care of the crop for their own protection, and may hold the crop for their' expenses thus incurred.

4. It is insisted by defendants that, by the allegations of the complaint, Go Sun was in possession of the hops and yard at the time of the picking and baling, and that plaintiffs cannot now claim that they were in possession during the harvesting. The complaint does allege that after the picking, Go Sun delivered the hops to the plaintiffs as a pledge to secure the repayment of the money so advanced and expended by them; but it is also alleged that Go Sun was unable to procure the labor required to take care of the crop, and requested plaintiffs to assist him, and. that plaintiffs rendered their services, hired and employed the laborers to pick and' care for the crop, and that defendants directed and requested plaintiffs' to cause the hops to be' picked and baled, and they would pay the expenses therefor. In view of these allegations, we do not deem it a variance from the pleading for plaintiffs to prove that they harvested the crop with Go Sun’s consent, and are holding the crop accordingly.

5. However, if the harvesting was done by Go Sun, that fact could not defeat plaintiffs’ rights where it is alleged and proved that it was necessary for plaintiffs to advance the money to preserve the crop for the safety of their own interest therein.

Therefore the decree is reversed, and a decree rendered here that the proceeds of Go Sun’s share of the crop be applied, first, in the payment of the costs and disbursements of this suit; and, secondly, to the payment of the claim of the plaintiffs, $841.51; and, thirdly, to the payment of the mortgage debt of defendants, S. and F. Uhlman; and that the said Uhlmans have judgment against Go Sun for any balance remaining unpaid. Reversed.

[97 Pac. 540.]