Court Opinion

ID: 9576130
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:21:09.510676+00
Date Added: 2024-06-11T12:59:27.505011
License: Public Domain

CARTER, J.
I in the judgment but desire to state my views with respect to the rights of a crop mortgagee who permits the mortgagor to remove and dispose of the crop.
As the opinion now reads a crop mortgagee loses his security when he consents to the harvesting, removal and sale of the crop. I wish to point out that this statement is entirely too broad.
Where the mortgagor removes crops under the authorization of the mortgagee, in certain circumstances, the mortgagor will be deemed the agent of the mortgagee for the handling of the property after removal from the land. (See Byrnes v. Hatch, 77 Cal. 241, 244 [19 P. 482] ; Campodonico v. Oregon Improvement Co., 87 Cal. 566, 568 [25 P. 763].) To state it another way, the removal of the crop by the mortgagor is, in effect, a removal by the mortgagee, giving rise to a new possessory lien on behalf of the mortgagee. (See Summerville v. Stockton Milling Co., 142 Cal. 529, 542-543 [76 P. 243]; cf., Valley Bank v. Hillside Packing Co., 91 Cal.App. 738, 741 [267 P. 746].)
However, the lien is only preserved where the authorization to remove the crop is given in the form of specific instructions. For example, directing the mortgagor to sell to a specific purchaser, or where appropriate, a warehouse receipt in the mortgagee’s name is obtained. But when the instructions are general, such as a mere consent to remove the crop, the lien will be lost. (I. S. Chapman & Co. v. Ulery, 15 Cal. App.2d 452, 454-455 [59 P.2d 602]; Haber v. J. G. Boswell Co., 130 Cal.App. 514, 517 [20 P.2d 100].) (For a detailed discussion of this problem see Smith, Security Interest In Crops, 10 Hastings L. J. 23, at 38-44.)
*278Applying these rules to the facts of the case at bar, it appears that the mortgagee lost his lien. Although the mortgagee, Knapp, directed the mortgagor to remove the crop, these directions Avere only in the form of a general consent, and not specific enough to establish a possessory lien. Moreover, there Avas no instruction to the Avarehouseman to hold the harArested crop in the mortgagee’s name. Under these circumstances the lien Avas lost.
The petition of defendants and appellants for a rehearing Avas denied December 23, 1958.