Case ID: ky_123/html/0395-01.html
Source: Caselaw Access Project
Author: {"author": "John D. Carroll, Commissioner.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Case 51 — ACTION BY B. W. BOLES’ EXECUTOR AGAINST ROBERT S.‘ JONES AND OTHERS ON A RENT NOTE,
    OCT. 2.
    Bowles’ Ex’r. v. Jones, &c.
    Appeal from Christian Circuit Court.
    Thomas P. Cook, Circuit Judge.
    Judgment for Plaintiff, granting insufficient relief and he appeals.
    Reversed.
    1. Chattel Mortgages — Priority—Failure to Record — Attachment. The lien acquired by the levy of an attachment has priority over an unrecorded mortgage of which the attaching creditor had no notice at the time the debt was created.
    2. Landlord and Tenant — Landlord’s Lien — Priorities.—A landlord’s lien on the crop was superior to that of an insurance company to whom the tenant gave a mortgage, but inferior to the lien of attaching creditors of the tenant; and the lien of the insurance company was superior to that of the attaching . creditors, hut inferior to the lien of the landlord. Held, that, as against the insurance company, the landlord was entitled to the proceeds of the crop, hut out of such sum, as between the landlord and the attaching creditors, their claims must be first paid, the landlord being entitled to the remainder.
    
      3. Chattel Mortgage — Lien Priorities. — Where a mortgage executed by a tenant on the crop expressly referred to a rent claim on the crop, the mortgagee could not subsequently be heard to assert that hi» lien was superior to that of the landlord.
    F. L. WILKERSON and C. II. BUSH for appellant.
    POINTS AND AUTHORITIES.
    1. It is admitted that appellant’s written agreement with Jones by which a mortgage was to be given on the-tobacco to secure the rent; was made prior to the mortgage of the Giant Insurance Agency, and prior to the attachments of the other appellees herein. But it is contended by the appellees that this written agreement to mortgage the tobacco did not give to appellant any lien on it, or the proceeds of the tobacco in contro ven y.
    .The court below held that the written agreement to mortgage the tobacco to appellant did give to it a lien, on the tobacco, and its proceeds. But in the judgment appealed from the court gave the appellee’s liens priority over the lien adjudged to appellant.
    To which former rulings of the court appellees did not except. But to which latter ruling of the court appellants did except and now contend was erroneous. (Baldwin & Co. v. Crow, 86 Ky. Page 680; Cincinnati Leaf Tobacco Warehouse v. Combs, etc., 22 Ky. L. R. Page 523; Earing v. Cox, 78 Ky., page 528; Pierce v. Hall, 12 Bush, Page 209; J. L. Lowe & Sons v. Stahl, etc., 19 Ky. L. R. Page 210. '
    2. That the court erred in taxation of and judgment to appellees in too large amounts of costs, which was objected to and excepted to by appellants.
    FRANK RIYES, Atty. for appellee, H. C. McGEHEE.
    J. J. HANBERY, Atty. for appellee, WALL BROS.
    POINTS AND AUTHORITIES.
    1. A mere agreement to mortgage given in the face of a note or contract is not valid as against creditors and creates no lien on the property that is superior to that of attaching creditors and can not be treated as an unrecorded mortgage.
    Schmidt v. Carter’s Admr. 95 Ky. Reports, page, 1.
    2. An agreement to give a mortgage to secure a debt long after same is made and not based on any consideration is not enforceable even as between the parties.
    G. CLIFTON LONG and R. W. HARRISON for -appellees, JONES and OTHERS.
    (No brief.)
   Opinion by

John D. Carroll, Commissioner.

Reversing.

On October 27,1902, Robert S. Jones executed to J. W. Bowles, Ms landlord, a rent note for $450, due on or before January 1, 1904, for tbe rent of a farm for the year 1903. In September, 1903, Jones entered into a contract with tbe executor of Bowles to rent tbe farm for tbe year 1904, and as a part of this contract he agreéd “to mortgage tbe live stock and implements and tbe present crop of tobacco to secure tbe rental for tbe present year in addition to the rent for next year.” On February 3, 1904, Jones executed a mortgage to appellee, tbe Giant Insurance Company, on tbe tobacco raised on tbe rented farm in 1903 to secure a note for $165 due tbe insurance company. Tbis mortgage recites “that tbe said first party (Jones) hereby expressly warrants bis title in and to tbe same against tbe claim' of all persons whatever except $450 rent claim on tobacco.” Tbe 1903 rent was due on January 1, 1904, but tbe landlord did not take any steps to enforce bis landlord’s lien on tbe tobacco raised in 1903 by Jones on tbe rented premises within tbe time permitted by tbe statute, and it conceded that tbe landlord has no statutory lien on tbe tobacco. In June, 1904, and before all of tbe 1903 tobacco crop was sold, the appellees "Wall Bros, and McGee obtained attachments and bad them levied on tbe tobacco. Afterward, tbe appellant landlord, brought tbis suit in equity against tbe tenant, tbe attaching creditors, and tbe insurance company, setting up that be bad a lien on tbe tobacco and on tbe proceeds of that part of it which bad been sold, and asked that bis lien be adjusted priorly over the mortgage of tbe insurance company and tbe liens of the attaching creditors. Tbe insurance company and tbe attaching creditors denied that tbe landlord bad a superior lien, and asserted by appropriate pleadings their claims and liens. Pending the litigation, the tobacco was all sold and the proceeds paid to the court receiver. On a hearing of the case, the court adjudged the landlord a lien on the proceeds as against the tenant but held his lien to be inferior to the liens of the insurance company and the attaching creditors — giving to the insurance company priority over the attaching creditors, and directing the receiver to pay the claims in the order mentioned, including the costs of McGee and Wall Bros., which costs amounted to about $140. Under this judgment, there was only left . for the landlord $17.19, and he appeals.

The principal question to be determined is whether or not the landlord by virtue of the contract made in September, 1903, had a lien on the tobacco raised on the rented premises in that .year. At the time this contract was entered into the landlord had a lien on this crop for the rent of 1903 which was not due until January, 1904, and although this contract was not recorded, it is the contention of the landlord that it created an equitable lien upon the crop of 1903 to secure the rent for 1903, and that, in a contest between the equities of the attaching creditors and the landlord, the oldest equity must prevail. The Giant Insurance Company insists that its mortgage lien is superior to the lien of the landlord, but this position is not tenable because in the mortgage executed to the insurance company the rent claim for $450 on the tobacco mortgaged to it is expressly mentioned and as between it and the landlord it had actual notice of the landlord’s claim for $450, it must be held to have taken its mortgage subject to this claim, and will not be permitted in the face of the recitals in the instrument under which it asserts a lien to say that its lien is superior to that of the landlord. On June 15, 1904, and while the tobacco or most of it was on the rented premises, the tenant executed to the landlord a mortgage which was put to record on the day of its execution. This mortgage recites that “in order to secure the rent for 1904, which is evidenced by a promissory note of the party of the first part of this date, for $450 due December 1, 1904, and any balance that may remain due on the rent for 1903, after exhausting his present crop of tobacco which has already been mortgaged for the rent of 1903, the party of the first part has this day mortgaged,” etc. It appears that the claim of the attaching creditor, H. C. McGee was created on April 11, 1904, and the account of the attaching creditor Wall Bros., was created during the year 1904; therefore both of these claims were created subsequent to the agreement between the tenant and the landlord made in September, 1903, and the attachments obtained by these creditors which were issued before the mortgage of June 15, 1904, was lodged for record take precedence to the unrecorded and hidden lien of the landlord in the contract made in 1903. Wicks v. McConnell, 102 Ky. 434, 43 S. W. 205, 20 Ky. Law Rep. 86.

The respective priorities and liens of the parties then are as follows: The landlord’s lien is superior to that of the Giant Insurance Company, but inferior to the lien of the attaching creditors. The lien of the Giant Insurance Company is superior to that of the attaching creditors, but inferior to the lien of the landlord; and as to the landlord, the attaching creditors have a prior lien, as to the Giant Insurance Company a junior lien. There is, however, no doubt that the landlord’s lien is superior to that of the insurance company, and the mere fact that the lien of the attaching creditors is superior to that of the landlord ought not to prejudice the rights of the landlord as between him and the insurance company. The amount in the hands of the receiver to be distributed among these lienholders was $295.91, and as the landlord’s lien is greater than this sum, the landlord, as against the insurance company, is entitled to the whole of it, but, out of this fund as between the landlord and the attaching creditors, their claims must be first paid, and when paid .the landlord is entitled to the remainder of the fund. A question is made about the costs taxed in this action, but this must be settled by the lower court.

The judgment is reversed for proceedings in conformity to this opinion.

On motion to correct opinion as to costs.

Carroll. — The judgment'rendered herein is so cor-, rected that all the costs shall be taxed against appellees Robert S. Jones and the Giant Insurance Company.