Court Opinion

ID: 6544951
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:18:50.233755+00
Date Added: 2024-06-11T15:55:56.470628
License: Public Domain

Wood, J. (after stating the facts). We are asked to decide two questions: 1. Was the description in the mortgage too general to constitute a lien upon the lumber sold to appellant? The clause, “all the lumber and logs now on the ground, and all that may be put on the ground and sawed by us until final settlement of our account with Williamson Bros.,” created a lien upon the lumber that was sold to appellant. Judge Story in Mitchell v. Winslow, 2 Story, 630, says: “It seems to me the clear result of all the authorities, that wherever the parties, by their contract, intend to create a •positive lien or charge, either upon real or personal property, whether it is then in esse or not, it attaches in equity as a lien or charge upon the particular property as soon as the assignor or contractor acquires a title thereto.” This language has been often quoted in our decisions, and declares the doctrine long ago approved by this court. Apperson v. Moore, 30 Ark. 56; Little Rock & Fort Smith Ry. Co. v. Page, 35 Ark. 321; Williamson v. Cunningham, 52 Ark. 441; Martin v. Schichtl, 60 Ark. 595. The lumber, though not in existence when the mortgage was executed, was clearly in contemplation of the parties to the mortgage. Wright v. Bircher, 72 Mo. 179. There is no reason for any distinction between a mortgage of future crops to be grown by the mortgagor and a mortgage of lumber to be manufactured in the future. In Missouri there was a mortgage on “all spelter made after said date from ore then on hand, or which should thereafter be purchased for use at said works,” and the supreme court held that “a manufacturer may make a valid mortgage of raw material to be purchased in the future, and the product to be made therefrom.” Frank v. Playter, 73 Mo. 672; Jones, Chattel Mortgages, 305. That is good, and applies here. 2. Was the mortgage fraudulent by reason of the fact that the mortgagors were allowed to remain in possession of and to sell the lumber as it was manufactured? The mortgage was of record, and therefore was constructive notice to the appellant of appellee’s lien upon the lumber. The mortgage contained this provision: “But in default of payment by the time specified, or should we suffer to be removed or disposed of, or attempt to remove or dispose of, any of said personal property, then said Williamson Bros, are hereby empowered to take immediate possession of any or all of such property,” etc. This was notice to appellant that the mortgagors had no right to “remove or dispose of any of the lumber without the consent of the mortgagees, and it was sufficient to put appellant upon inquiry as to the right of the mortgagors to make the sale to him. Such inquiry would have revealed to appellant the fact that the mortgagors, in- selling the lumber to him, were acting as the special agents of appellees, under special directions and limitations. The proof showed that the mortgagors were allowed by the mortgagees to ship and sell lumber to other parties only when such parties would give more than the mortgagees for such lumber. But it was the express understanding between the mortgagors and mortgagees that in such cases the mortgagees were to be the shippers, and the lumber was to be shipped in their name, and the proceeds were to be sent directly to them by the purchaser. This is not the case of a mortgagor left in the possession of merchandise which he had mortgaged, and selling same in the tegular course of business. Here the mortgagors were not allowed to sell to any one except the mortgagees, unless upon certain conditions, which showed clearly that the mortgagees were to get the proceeds of such sales to apply on the mortgage debts. In making such sales the mortgagors acted as the agents of the mortgagees. Herein this case differs materially from the case of Fletcher v. Lund, 39 Ark. 325; Martin v. Ogden, 41 Ark. 186; Gauss v. Doyle, 46 Ark. 122, and all other similar cases where the mortgagor, by express provision in the instrument, or by extraneous proof, is shown to have been left in possession of the mortgaged merchandise with power to sell same in due course of trade, on his sole account, and not as the agent or trustee for the mortgagee. According to the rules prescribed by our own court, and the authorities generally for determining the fraudulent or nonfraudulent character of such instruments, this mortgage was valid. There was no inherent vice upon its face, and the chancellor, upon the facts, found that there was no fraud in its execution that would protect the appellant as an innocent purchaser, and the chancellor was right. See Arkansas cases supra, and Ephraim v. Kelleher, 18 L. R. A. 604, and authorities cited. Affirmed.