Court Opinion

ID: 6511162
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:22:29.385635+00
Date Added: 2024-06-11T15:54:52.953640
License: Public Domain

STONE, J.,
dissenting. — I differ with the majority of the-, court in this case.
Pendergrast had rented lands for the year 1880, on which he. proposed to make a crop. On the 5th of February, 1880, he executed a mortgage to C. IT. Taylor & Co., and therein conveyed to them “ the crop of cotton which he .might raise or procure to be raised” on said rented land during that year, to-secure payment to them for a horse and other things advanced to him to make a crop. The mortgage was recorded in the-proper probate office, February 18, 1880. It is common know!.*408edge that crops of cotton, are not planted in this State until after February 5th. Under our rulings this was a valid mortgage (the cotton then having a potential existence), and bound the crop afterwards planted and grown, to the extent expressed in the mortgage. The difference between such a mortgage, and one which conveys chattels which have an actual existence, is in the character of the title it confers. The former creates a mere lien, or equity; the latter a legal title. This changes the remedy, but, in other respects, does not impair the right. In each event, the mortgage-interest will prevail over rights or liens afterwards acquired, with actual or constructive knowledge of the prior mortgage. — Booker v. Jones, 55 Ala. 266; Rees v. Coats, 65 Ala. 256; Grant v. Steiner, 65 Ala. 499.
After the execution of the mortgage described above, but before the crop was planted, Pendergrast formed a partnership with Mrs. Kelley in the lease of said land, and in the crop to be grown thereon; and the crop was made by means and labor furnished by each — a son of Mrs Kelley laboring for her. This partnership was to be equal in profits and losses; and each furnished the same amount- of team and labor.
On the 14th of May, 1880, the firm or partnership of Kelley & Pendergrast executed a mortgage on their crop, to defendants, Mayer & Co., to secure them for advances the latter merchants made to the firm, to eirable them to make the crop. The present contention is over the cotton grown by said firm of Kelley & Pendergrast on said rented land. The Circuit Court ruled that Taylor & Co., the mortgagees of Pendergrast, had a paramount lien on the whole crop grown, over Mayer & Co., the mortgagees of the partnership; and my brothers have affirmed the judgment of the Circuit Court.
My own judgment is, that Taylor & Co. have a prior lien on Pender^rast’s half of the cotton, and only on that half. This lien, I think, is paramount to that of Mrs. Kelley, the co-partner, and to that'of Mayer & Co., the mortgagees of the firm. In the absence of prior liens, and of stipulations to the contrary, each partner has a lien on the partnership effects for any balance that may be due him, for excess of disbursement’s by him, and for the liquidation of partnership liabilities. But this lien has its inception in the formation of the partnership. It can not override fonner liens, created by the individual before he entered into the partnership. Coming in with a lien uj>on it, that encumbrance remains upon the share of assets the encumbrancer bi’ings into the firm, until it is discharged; and the lien the co-partner acquires in the formation of tire partnership, is subordinated to this prior lien, if there was notice, actual or constructive, of its existence. All would admit this to be the rule, if the stock put in and made common by the formation of the *409■partnership, consisted of chattels having an actual existence. 'The fact that the stock put in has only a potential existence, can not vary this question. It is alike subject to mortgage, and a proper registration of such mortgage gives notice of its existence, having the same legal effect as if the subject of it were property having actual existence at the time of the mortgage. So, if the question were material, I would hold that Mrs. Kelley, forming the partnership with constructive notice that Pendergrast had previosuly mortgaged the crop to be grown by him, must be understood as agreeing that the prior mortgage shall dominate the lien she would otherwise acquire as a partner.
IIow does this question affect the parties to this suit? The mortgage to Taylor & Co. was of the crop of cotton which Pendergrast might raise, or cause to be raised. The meaning of this language evidently is, that he conveyed the cotton that should he raised by him and/b?’ him on that land. It can not mean more. He might surrender, forfeit, or sell his lease. He might dispose of a part of it. In the one case he would raise or procure to be raised nothing; in the other, only a partial crop. Suppose he had sublet a separated part of the land to Mrs. Kelley. Could Taylor & Co. claim a lien on the crop then raised by Mrs. Kelley ? Can the fact that Pendergrast sublet to her an individual half interest, or a common interest in the lease, instead of a separate interest, make any difference ? He could not, and did not dispose of her earnings. It was the crop he might raise or procure to be raised, which he mortgaged. He neither raised, nor procured to he raised Mrs. Kelley’s share of the crop. Consequently Taylor & Co. acquired no interest in it under Pendergfast’s mortgage. They took the mortgage with all 'these risks, and, in my judgment, have a lien on Pendergrast’s half. Mayer & Co. should have the other half, under their mortgage from Kelley and Pendergrast.