Reed v. Swan

Gantt, P. J.

Action of replevin for corn on stalk. The land upon which the corn was grown originally belonged to respondents. On June 30, 1887, they conveyed the land to J. A. Hays and Gr. I. Eeed, who, on the same day, executed a deed of trust on the land to W. H. Seeger as trustee for Missouri A. Eeed, securing unpaid purchase money. J. A. Hays and Gr. I. Eeed conveyed the land, July 24, 1888, to the Eeed Springs Town Company, subject to said deed of trust, and the defendant was a tenant under said Eeed Springs Town Company. On July 5,1893, the land was sold by W. H. Seeger, as trustee, under said deed of trust, executed by J. A. Hays and Gh I. Eeed, and a. *105 trustee’s deed, dated July 5, 1893, executed to Missouri A. Reed, the purchaser. At the date of the sale under the deed of trust, July 5, 1893, the corn in controversy was a growing crop on the land sold. Missouri A. Reed and Allen G. Reed, her husband, being very old, their business was transacted by their son, James F. Reed, clerk of the Clay circuit court.

In February, 1892, the Reed Springs Town Company rented the land to C. A. Swan, and in July, 1892, renewed the lease for the crop of 1893; on the rent for 1893 Swan paid about $90 cash, and assumed a note of about $200 due from G-. I. Reed to J. D. Swan. Neither the respondents nor their son, James F. Reed, had any acquaintance with any of the Swans, •nor did a word ever pass between them, upon any subject, prior to the trustee’s sale. After the trustee’s sale, James F. Reed, acting for respondents, suggested to Swan that, ' as purchaser of the land, the respondent was the owner of the crop growing upon the land, at the time of the sale, but that if the usual rent was paid, no claim would be made to the crop. Swan stated that they would entertain no proposition of any kind for a settlement; and thereupon this suit was brought.

No interest had been paid on the mortgage debt since April, 1891, and the taxes for 1891 and 1892 were unpaid;,in October, 1892, James F. Reed, representing respondents, stated to Gr. I. Reed, that if he would pay the taxes for 1891 and 1892 and turn over to him the rents for 1893, he would not foreclose. James F. Reed, at that time, did not know that any part of the rent for 1893 had been paid to G. I. Reed. G. I. Reed neither paid the taxes, nor turned over any part of the rents, and the trustee sold the premises as herein stated.

The contentions of the defendant are: First, that *106 although a foreclosure sale under a mortgage conveys all growing crops of a mortgagor standing on the mortgaged lands, it will not convey the growing crops of a tenant under the mortgagor with full notice of the' mortgage and its conditions;' second, that even if it should be held that by the law of this state prior ta the act of March 20, 1893, which took effect June 21, 1893, that a tenant’s crops passed by a sale of the land under a mortgage or deed of trust that act changed the law and reserved the growing and unharvested crops to the tenant and governs this case; third, that plaintiff was estopped to claim said crops by the conduct and knowledge of her agent and son, J. E. Reed.

I. Prior to the act of March 30, 1893, Laws of Missouri, 1893, page 210, it was the settled law of this state that a sale of land under a mortgage or deed of trust in the nature of a mortgage conveyed the title to the purchaser or grantee to all crops of the mortgagor growing upon the mortgaged land at the date of sale. The reason of the law being that the deed conveyed the land and by the common law growing crops-are a part of the freehold and pass by the deed with the land. Boyer v. Williams, 5 Mo. 335 ; McIlvaine v. Harris, 20 Mo. 458 ; Steele to use v. Farber, 37 Mo. 72 ; Pratte v. Coffman’s Ex’r, 27 Mo. 425 ; 2 Jones on Mortgages, sec. 1658; Ivy v. Yancey, 129 Mo. 501 .

In Hayden v. Burkemper, 101 Mo. 644 , the rule was held to apply as well to the crops of the purchaser of the land from the mortgagor with notice as against, the mortgagor himself.

A distinction is now endeavored to be drawn between one who purchases the fee from the mortgagor subject to the mortgage and a lessee from the mortgagor with notice of the mortgage and after condition broken. "We are not impressed with the soundness of such *107 distinction. On the contrary we think it is plain that a lessee of the mortgagor under a lease made subsequently to the mortgage, with notice of the terms-thereof, without the concurrence of the mortgagee, has-no greater right to the crops, growing and unsevered, than the mortgagor himself would have after condition broken. The rights of the tenant can rise no higher than those of his landlord. 2 Taylor on Landlord and Tenant, sec. 537; Lane v. King, 8 Wend. 584 ; Walmsley v. Milne, 7 C. B. N. S. 115.

This has been uniformly so ruled by the Kansas-City court of appeals in a number of well considered' cases. Salmon v. Fewell, 17 Mo. App. 118 ; Fischer v. Johnson, 51 Mo. App. 157 ; Vogt v. Cunningham, 50 Mo. App. 136 ; Watson v. Menteer, 59 Mo. App. 387 .

We are satisfied with the prior adjudications of this court and the Kansas City court of appeals upon this point. They express the policy of the state from its organization. They relate to the ownership of real property and should not be disturbed save for the-gravest reasons, and accordingly the first point must be-ruled against the defendant.

II. But it is insisted that the act of March 30, 1893 (Laws, 1893, p. 210), must control the disposition of this case. The circuit court held that act was prospective, otherwise it would be a clear violation of section 15, article 2, of the constitution of Missouri of 1875, which prohibits retrospective legislation. In the construction of legislative enactments the uniform ruléis that they must be held to operate prospectively only, unless the intention of the legislature is clearly expressed that they shall act retrospectively, or unless the. language of the law admits of no other construction. State ex rel. v. Auditor, 41 Mo. 25 ; State ex rel. v. Ferguson, 62 Mo. 77 ; State ex rel. v. Hays, 52 Mo. 578 ; Leete v. Bank, 115 Mo. 184 .

*108 The enactment in question is an amendment of section 7091, Revised Statutes, 1889, and consists of this proviso: “Provided, that nothing herein shall be construed to affect in any way the rights of a tenant to the growing and unharvested crops on land foreclosed as aforesaid, to the extent of the interest of said tenant under the terms of contract or lease between such tenant and the said mortgagor or his personal representatives.” There is obviously nothing in these words which expressly requires a retrospective effect to be given to them and it is plain that without violence to the language, we can with propriety construe the words as applicable to prospective leases of mortgaged lands, and sales thereof under mortgages or deeds of trusts thereafter made and delivered.

Accepting, as we do, Mr. Justice Story’s definition of a retrospective law, namely that, “every statute which takes away or impairs vested rights acquired under existing laws, or creates a new obligation, imposes a new duty, or attaches a new disability, in respect to transactions or considerations already past, must be deemed retrospective” (Society v. Wheeler, 2 Gall. 139 ; Sedgwick on Construction of Stat. and Const. Law [2 Ed.], p. 160), it seems to us that if the construction put by defendant on this amendment is correct it is clearly a retrospective enactments in respect to the plaintiff’s rights under her mortgage.

Prior to its passage, by contract she had obtained a valid deed of trust to secure two notes, one for $7,500 and the other for $15,000. Prior to the passage of this act both of these notes were past due and unpaid. By the terms of this deed of trust she was then authorized to require the trustee therein to sell said lands to satisfy said notes, and the interest thereon from April 30, 1891. This deed of trust was duly recorded.

In the spring of 1893 defendant, under an agree *109 ment with Gr. I. Reed, as president of the Reed Springs Town Company, which owned the land subject to plaintiff’s deed of trust, planted a corn crop on this mortgaged land and it was up and growing, prior to the passage of this law. Under the then existing law of Missouri, plaintiff’s deed of trust became at once a lien upon all of said land and all crops growing thereon. She was entitled upon condition broken to the possession, and rents, issues and products. It was a vested right. It was her absolute right as the law stood up to June 21, 1893, to have the luhole of said land sold, not a part merely.

By operation of law the growing crops became a part of the freehold, but if this law of March 30, 1893, is to be held applicable to a mortgage executed long prior to its passage and the condition of which was also broken prior to its enactment, then the legislature has deprived her of her right to foreclose her mortgage on a part of the land upon which she previously had a lien. That the protection of the constitution applies as fully to a part as to the ivhole of her vested rights, and protects every part from injury or diminution, follows as a necessary consequence.'

That a mortgage is a vested interest and its main incident a right to have the land applied in discharge of the debt, was affirmed by the supreme court of the United States in Gantly’s Lessee v. Ewing, 3 How. (U. S.) 707.

So a state law passed subsequently to the execution of a mortgage which declares that the equitable estate of the mortgagor shall not be extinguished for twelve months after a sale under a decree in chancery, and which required the land to bring two thirds of its appraised value, was held to be in violation of the constitution of the United States, in Bronson v. Kinzie, 1 How. (U. S.) 311. So a law which takes away from *110 the mortgagees the right to possession under their mortgages, until after foreclosure, is void because depriving them of the rents and profits which was a valuable right secured by the contract. See, also, Mundy v. Munroe, 1 Mich. 68; Cooley on Const. Limitations [6 Ed.], p. 352; Collins v. Collins, 79 Ky. 88 ; Edwards v. Kearzey, 96 U. S. 595 ; Ins. Co. v. Brouse, 83 Ind. 62 ; Robards v. Brown, 40 Ark. 423 ; McNichol v. U. S., etc., Agency, 74 Mo. 457 .

Accordingly, we hold that the act of 1893 is prospective only in its operation and did not and could not, under the constitution of this state, affect the vested rights of plaintiff as mortgagee in the land on which the corn was growing and that defendant planted the corn on said lands at his own risk after the breach of the conditions in the deed of trust; that the crops passed by the trustee’s deed as part of the land.

III. As to the estoppel, there is none in the case. It appears that plaintiff was disposed to be lenient and give the Reed Springs Company an opportunity to sell on condition it would pay the taxes and rent for the premises. This was the condition upon which a foreclosure would be waived, but the proposition was never acceded to, and in no manner estopped plaintiff from proceeding to enforce her deed of trust. As between plaintiff and defendant not a word ever passed until after plaintiff had purchased the land on July 5. After obtaining the deed the son of plaintiff endeavored to arrange with defendant whereby defendant could pay plaintiff rent, but this offer was spurned. It is clear that defendant took his lease from a mortgagor after the mortgage was forfeited, and with full knowledge. Plaintiff did not know that Gh I. Reed had told defendant of her proposition not to foreclose if the springs company would pay the tases and rent, but if she had, her promise was only *111 •conditional and defendant knew this and yet took tke lease and planted the crop without requiring Gr. I. Reed to comply with the conditions upon which they knew the foreclosure was to be stayed. Plaintiff’s rights were of record and notice to the world. Upon these facts no estoppel can be based. The dictates of common prudence would have suggested to defendant to have plaintiff join in the lease, or satisfy himself that the conditions had been complied with, but he did neither.

To hold that a defaulting mortgagor can resort to a scheme like this, and deprive the mortgagee of her rights to possession and the rents, and products, would be to invite parties to have recourse to sharp practices to reap the benefits of the mortgaged property after their rights have been foreclosed. The judgment of the circuit court is affirmed.

Shebwood and Bubgess, JJ., concur.