Maltbie v. Olds

Olds and Whipple assign as error the conclusion of the trial court vesting in the trustee of Batterson Brothers the proceeds of the tobacco crop raised on their farm. They insist that the ownership of the crop and proceeds thereof was in them, since the relation between Batterson Brothers and them, arising out of their agreement, was either that of cropper, or landlord and tenant, and either relation would vest in them the title and right of possession of the crop and its proceeds.

The intention of the parties, gathered from their agreement as read in the light of its surrounding circumstances, controls the relation established. The finding shows that Batterson Brothers owned the farm upon which the crop was raised, and continued in the actual possession of their farm both before and after the raising of the crop and of the execution of the agreement, Exhibit A. Olds and Whipple had no interest in the farm of Batterson Brothers except such as arose out of Exhibit A, or of the agreement entered into, and were never in its actual possession or occupancy. Exhibit A purported to lease and farm let unto Olds and Whipple the farm of Batterson Brothers for one year. In terms the instrument was a lease. The transaction, which culminated in Exhibit A and the agreement entered into, contains no single characteristic of a "cropper" contract. A "cropper" is one who cultivates the land of another in consideration of the receipt by him of a portion of the crop raised. The cropper has no interest in the land, hence none to the crop raised until it be divided. His possession is that of the owner. Steel v. Frick, 56 Pa. 172, 175;Harrison Son v. Ricks, 71 N.C. 7, 11; 12 Cyc. 979. Batterson Brothers continued in the ownership and possession of their farm. Olds and Whipple never cultivated the farm or had possession of the same. The parties very clearly never intended that Batterson Brothers should become the croppers of Olds and Whipple.

The trustee contends that Exhibit A did not create the relation of landlord and tenant between the parties to it, for the reason that a lease is personal property and title to personal property cannot be transferred without a change of possession, and hence an actual entry was indispensable to the operation of the lease.

We agree that, under the circumstances before us, Exhibit A did not create between the parties to it the relation of landlord and tenant, but we disagree with the reasons given by counsel for the trustee for this conclusion. The common law did require an entry upon land leased in order to give a lessee an estate in the land. The statute of uses has dispensed with this requirement; if the lease is by way of bargain and sale, the constructive possession conferred by the statute supersedes the necessity for an actual entry. Minor Wurts on Real Property, § 318, p. 272. There was no need of entry under Exhibit A.

If the transaction comprised nothing more than the execution and delivery of Exhibit A, a different question would have been presented. The agreement made contemplated at no time a change of possession, but always the continuance of the lessors in possession. The constructive possession conferred by the statute of uses must give way to the actual agreement of the parties. The law cannot presume the existence of a fact when the agreement of the parties excludes the presumption by expressly providing the contrary. Exhibit A, taken in connection with the agreement then made, was not a lease except in form. It did not convey to Olds and Whipple an interest in the farm, and therefore the crop did not, as a part of the realty, vest in Olds and Whipple. Neither did the agreement purport to give them an interest in the crop.

Olds and Whipple, in addition, contend that Batterson Brothers held the proceeds of the sale in trust for them, either as a resulting or a constructive trust, and that Maltbie and Maltbie received the proceeds under the same trust. None of the classes into which resulting trusts are divided are found in the facts of this agreement. Bispham on Equity (7th Ed.) § 79. The agreement clearly shows a contrary intent. Equally ineffective are these facts to raise a constructive trust. Fraud, actual or constructive, is the foundation on which the law raises a constructive trust, and the finding discloses that neither at the time of the agreement, nor of the sale, were Batterson Brothers acting in fraud, or under circumstances from which the law would find fraud. Since Batterson Brothers did not hold the crop or its proceeds as trustees for Olds and Whipple, Maltbie and Maltbie, the agents and attorneys of Batterson Brothers, did not receive the proceeds charged with any trust other than a trust for the benefit of all the creditors of Batterson Brothers.

Whether or not Batterson Brothers were bound under this agreement to turn over to Olds and Whipple these proceeds, and whether their failure so to do was a breach of their agreement, are not the questions here. While they had the title to and possession of these proceeds, they turned them over to Maltbie and Maltbie for a specific purpose, but the ownership remained in them. Had Maltbie and Maltbie, prior to the adjudication in bankruptcy, in compliance with the terms of the order, turned over to Olds and Whipple these funds, we should have had for decision a different issue. The order on Maltbie and Maltbie for a part of these proceeds was invalid against the trustee in bankruptcy. The order did not affect the title to the proceeds, and being made within four months of the adjudication in bankruptcy, and no present valuable consideration having been given therefor, it was not binding on the trustee. Bankruptcy Act (1898) § 67 e (30 U.S. Stat. at Large, p. 564).

Olds and Whipple, under the agreement and Exhibit A, were not the owners of either the crop or its proceeds as against the creditors of Batterson Brothers, and the proceeds of the sale in the hands of Maltbie and Maltbie are the property of the trustee of the bankrupt estate of Batterson Brothers and applicable to all creditors alike, including Olds and Whipple.

There is no error.

In this opinion the other judges concurred.