Thompson v. Hill , 147 Miss. 489 ( 1927 )

^* Corpus Juris-Cyc. References: Bankruptcy, 7CJ, p. 403, n. 46; Landlord and Tenant, 36CJ, p. 522, n. 29; p. 523, n. 36; Sales, 35Cyc, p. 489, n. 45. The appellant, C.H. Thompson, filed his original bill of complaint in the chancery court of the second judicial district of Tallahatchie county against A.J. Hill, the Tutwiler Compress Company, the Planters' Bank, and the Planters' National Bank of Clarksdale, and the Stewart-Gwynne Company, seeking to locate certain cotton raised on a certain plantation, situated in Sunflower county and known as the "Edmondson place," and to enforce a landlord's lien on said cotton. The bill alleged that the complainant had leased this plantation from E.J. Edmondson at an annual rental of six thousand dollars, and that he subleased it to the defendant A.J. Hill under a written lease contract, at and for an annual rental of seven thousand five hundred dollars, evidenced by a promissory note for six thousand dollars, due and payable November 15, 1923, and a note for one thousand five hundred dollars, due December 1, 1923, and that the six thousand dollar-note had been paid, but no part of the one thousand five hundred dollar-note had been paid. The Tutwiler Compress Company was made a party defendant to the bill of complaint for the purpose of securing a discovery of the cotton produced on said premises during the year 1923, it being alleged that said cotton was stored in the warehouse of said company. The Planters' Bank and the Planters' National Bank were made parties defendant upon the allegation that the defendant Hill executed to each of these banks a deed of trust on the cotton grown on the premises during the year 1923, and turned over to them compress tickets or receipts for cotton grown thereon. The Stewart-Gwynne Company was made a party defendant, it being alleged that this company was the holder of two notes for one thousand dollars each, which had been transferred to it by the complainant, and which evidenced the balance due on the purchase price of certain live stock and farming implements sold by the complainant, Thompson, to the defendant Hill for use in the cultivation of said plantation, said note being secured by a chattel deed of trust on the personal property so conveyed; and it was further alleged and claimed that these two notes were also secured by a landlord's lien on the crops raised on the leased premises during the year 1923.

Thereafter the complainant filed an amended bill of complaint, alleging that the cotton produced on said leased premises during the year 1923 had been sold by the defendant Hill to W.R. Humphrey, who was doing business under the firm name and style of Humphrey Co., and made the said Humphrey a party defendant to the bill of complaint.

The defendant Hill filed an answer to the original and amended bill of complaint, alleging that the complainant was holding the premises under a lease from the owner, Edmondson; that by the conditions of the lease between Edmondson and Thompson, the said Thompson had agreed to make certain improvements on said premises; that the complainant had failed to perform the terms of the lease under which he held said premises; that in order to protect his lease on said premises, he (Hill) was forced to perform the conditions of the lease existing between his landlord and the said Edmondson, and in so doing he was forced to expend one thousand four hundred eighty-five dollars, leaving a balance of only fifteen dollars due on the rent for the year 1923, and this sum was tendered with his answer. He further pleaded his adjudication and discharge in bankruptcy as a bar to his individual liability for the one thousand five hundred dollar rent note and the two one thousand dollar-notes held by the Stewart-Gwynne Company, and made exhibits to his answer the petition, schedule, and oath filed in the bankruptcy court, together with the order adjudicating him a bankrupt and his final discharge in bankruptcy.

The defendant Humphrey filed his answer to the original and amended bill, and made the same a cross-bill against his codefendant, Hill, making substantially the same allegations as contained in the answer of the defendant Hill in regard to the payment of the rent note by making improvements upon the premises; and he further alleged that the cotton produced on said premises during the year 1923 was purchased by him by the purchase of negotiable warehouse receipts evidencing the same, in the due course of trade, for a valuable consideration without notice; that prior to the purchase of said warehouse receipts by the said Humphrey, the said Thompson had waived his landlord's lien thereon and had constituted his tenant, Hill, as his agent for the purpose of selling and disposing of said cotton, and had clothed him with the indicia of ownership of the negotiable warehouse receipts evidencing the cotton, and, consequently, was estopped to assert any lien thereon against the defendant Humphrey, who had purchased the cotton as aforesaid.

Thereafter the Stewart-Gwynne Company filed its answer and made the same a cross-bill against the defendant Humphrey, and alleged substantially the same facts as charged in the original and amended bills, and also alleged that it was the holder of two notes of A.J. Hill for one thousand dollars each, evidencing the purchase money of certain live stock and farming implements sold by Thompson to Hill for use on the leased premises, such notes having been assigned by Thompson to the defendant Stewart-Gwynne Company, and that said notes were secured by a chattel deed of trust on the personal property conveyed; and also sought to assert a landlord's lien on the cotton produced on said premises which had been purchased by the defendant Humphrey.

The defendant Humphrey filed a demurrer to said answer and cross-bill, which demurrer was sustained with leave to amend. Subsequently thereto the Stewart-Gwynne Company filed its amended answer and cross-bill, to which the defendant Humphrey filed his answer, making the same a cross-bill against his codefendant, Hill, in which answer he alleged that the Stewart-Gwynne Company was not a bona-fide holder of said notes, for value, in due course; that the said Thompson by taking the chattel deed of trust on the personal property conveyed to secure said notes had thereby waived his landlord's lien on the crops; that prior to the assignment of the said notes to the Stewart-Gwynne Company, Thompson had also waived his landlord's lien on the agricultural products produced on said premises by constituting his tenant, Hill, his agent for the purpose of selling and disposing of said cotton, and therefore that the said Stewart-Gwynne Company had no landlord's lien on said agricultural products and on the cotton purchased by the defendant Humphrey; that he, the said Humphrey, purchased the said cotton by the purchase of negotiable warehouse receipts representing the cotton, for a valuable consideration, in due course and without notice; and that prior to the purchase of said negotiable warehouse receipts, the said Stewart-Gwynne Company had also waived its lien on said cotton, and had constituted the said Hill as its agent for the disposal thereof, and had clothed him with the indicia of ownership of the said warehouse receipts.

There were numerous motions, demurrers, and amendments to the pleadings, which are unnecessary to be here set forth, and the cause came on for final hearing on the original and amended bills of complainant and the answers thereto, and the cross-bills and answers thereto, and, upon the proof offered, the chancellor rendered a final decree dismissing the original and amended bills of complaint and the cross-bill of the Stewart-Gwynne Company, and from this decree, the complainant, Thompson, and the cross-complainant, Stewart-Gwynne Company, have appealed to this court.

Over the objection of the complainant the court below admitted testimony to show that during the negotiations leading up to, and prior to, the execution of the written lease contract the complainant entered into an oral agreement with the tenant, Hill, constituting him the agent of the complainant to sell the cotton raised on the leased premises, and thereby waived his landlord's lien thereon. This testimony was objected to on the ground that it changed, altered, or varied the terms of the written lease contract, and we are of the opinion that this objection was well taken.

The rule that evidence of prior oral agreements is not admissible to contradict, alter, vary, or change the terms of a subsequent written contract which is plain, unambiguous, and complete on its face, is too well settled to require the citation of authority; and it is equally well settled that the legal effect of a written instrument cannot be contradicted, altered, or changed by parol evidence of prior agreements. Campe v.Renandine, 64 Miss. 441, 1 So. 498; 22 C.J. 1075, and authorities there cited. Section 2832, Code of 1906 (section 2330, Hemingway's Code), gives to every lessor of land an absolute and paramount lien on all agricultural products grown on the leased premises for the payment of the rent and money advanced to the tenant for supplies, and this statute enters into and forms a part of the lease contract as fully as if written therein; and the effect of this testimony as to an oral agreement between the landlord and tenant giving the tenant the right to dispose of the crops at will was to change or alter the legal effect of the written lease contract. Consequently, we are of the opinion that the admission of this testimony was erroneous.

Conceding for the purpose of this decision only that the sublessee, Hill, in order to protect his rights to and possession of the leased premises, would have been entitled to discharge his landlord's obligations, or covenants to repair, under the original lease, and to set up the expenditures made for that purpose as a payment pro tanto of his rent, still, we are of the opinion that the evidence in this record is insufficient to support a finding that the tenant, Hill, was forced to make the asserted expenditures to protect his rights under the sublease, or to show with any degree of certainty the amount expended in the discharge of the complainant's obligations under the original lease. Consequently, the dismissal of the original and amended bills of complaint cannot be sustained upon the theory of payment of the one thousand five hundred dollar-rent note. A landlord's lien "is superior to the rights of the purchaser of the cotton" grown on the leased premises "or of the cotton warehouse receipts, whether he had notice of the landlord's interest or lien or not" (Campbell v. Farmers' Bank, 127 Miss. 668, 90 So. 436); and therefore, for the error in admitting testimony, as above indicated, the decree dismissing the original and amended bills of complaint must be reversed. Likewise, for the same error, the decree dismissing the cross-bill of Stewart-Gwynne Company must be reversed unless the landlord's lien to secure the two notes assigned to it was waived by the taking of a chattel deed of trust on the live stock and farming implements sold by the appellant Thompson to his tenant, Hill.

Appellant Thompson sold to his tenant, Hill, certain live stock and farming implements for a consideration of four thousand dollars; two thousand dollars cash, and the balance evidenced by two promissory notes for one thousand dollars each, which were afterwards assigned to the Stewart-Gwynne Company; and for the payment of the balance due on these notes this company, as cross-complainant, is asserting the statutory landlord's lien on the cotton produced on the leased premises for the year 1923, and purchased by the appellee Humphrey. When appellant Thompson sold his personal property, he took from the purchaser a chattel deed of trust thereon, and the appellee contends that by so doing he carved out an additional and inconsistent security and thereby waived and extinguished the statutory landlord's lien.

It is the established doctrine in this state that a statutory lien is not waived by taking other security, as would be the case of the equitable vendor's lien, unless the security taken is inconsistent with that given by law. In the case of Smith v.Butts, 72 Miss. 269, 16 So. 242, the court, speaking through Chief Justice COOPER, said:

"The weight of authority seems to be, and probably the better view is, that, where a lien is given by law, but the person entitled thereto, in making his contracts, takes other and different security, he thereby waives the lien given by law, and must rely upon the security he has stipulated for. In most of the courts these statutory liens are held not to differ essentially from the equitable lien of a vendor, and the same rules are applied to them. But in this state a different rule prevails, for, in Parberry v. Johnson, 51 Miss. 291, it was held that the lien of a mechanic was not waived by taking other security, as would be the case of the equitable vendor's lien. Nearly twenty years have elapsed since this decision, and our laws have twice since been codified without changing the rule. We are therefore unwilling to disturb it, and in cases in which the security taken is not inconsistent with the existence of the statutory lien, the mere fact that other security is taken does not afford a presumption of a waiver of the statutory lien."

When the landlord sold this personal property to his tenant for use on the leased premises, he had both the statutory landlord's lien on the crops raised on the leased premises, and the statutory purchase-money lien or the property itself for the balance of the purchase price thereof; and the chattel deed of trust taken upon the property sold was not such additional and inconsistent security as would constitute a waiver of the statutory liens.

On behalf of the appellee A.J. Hill, it is contended that his adjudication and discharge in bankruptcy, which were pleaded and proven on the trial of the cause, relieve him of all personal liability on the rent note due appellant Thompson, and also on the notes held by Stewart-Gwynne Company. The record discloses that the one thousand five hundred dollar-rent note was listed by the appellee Hill in his schedule of liabilities filed with the petition in bankruptcy, and that proper notice of the pendency of this bankruptcy proceeding was given to the appellant Thompson; and it is conceded by counsel for the appellants that the appellee Hill is thereby discharged from personal liability for this indebtedness and that no personal decree can be taken against him thereon. The record affirmatively shows that the two notes held by the appellant Stewart-Gwynne Company were not listed in the schedules filed with the petition in bankruptcy, and it fails to show that any notice of the pendency of this bankruptcy proceeding was given to the Stewart-Gwynne Company, the holder of these notes in due course. Consequently, the appellee Hill was not relieved of personal liability on these notes. Section 9601, U.S. Comp. Stat. 1918.

The decree of the court below will therefore be reversed and the cause remanded.

Reversed and remanded.