Bank of Woodland v. Heron

California Supreme Court Apr 16, 1898 No. Sac. No. 326Published

Before: McFarland

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Holding. A mortgagee has no lien on or right to crops growing on mortgaged land prior to foreclosure; therefore, a mortgagor may validly assign such crops to a third party before a receiver takes actual possession of them.

Issues

Whether a mortgagee has a lien on growing crops prior to foreclosure and sale.
Whether the mere appointment of a receiver, without actual possession, creates a lien on crops not covered by the mortgage.

Disposition. affirmed

Quotations verified verbatim against the opinion

“a mortgagee of land has, by virtue of his mortgage alone, no right to the possession of the land mortgaged or to its rents and profits, and no lien upon or right to the crops not growing thereon at the time title passes after foreclosure”

“the mortgagor being in possession of the land and entitled as of right to the crops grown thereon, it was competent for him to sell, or mortgage, or otherwise dispose of them”

Synopsis

Mortgage—Right to Crops—Assignment.—The owner of land in possession thereof subject to a mortgage is entitled of right to crops grown thereon prior to foreclosure of the mortgage; and he may transfer title thereto as against the mortgagee of the land, who has no right to the possession of the land, nor any lieu upon or right to crops not growing thereon when title passes after foreclosure and sale. - Id.—Tithe of Assignee—Receiver—Order for Possession.—An assignee of the owner of the crop who took title prior to the taking possession thereof by a receiver appointed ex parte in a suit for foreclosure of the mortgage, without knowledge of such ex parte appointment, is entitled to an order directing the receiver to deliver the crops to him, rather than to the mortgagee plaintiff in the foreclosure suit.

Id.—Order Appointing Receiver—Time of Possession.—An order appointing a receiver does not constitute ipso facto a possession of any property which the party at whose instance the appointment is made has no estate in, or right to, or lien upon, prior to and independent of the appointment of the receiver; and such an order made in a suit for the foreclosure of a mortgage of land which creates no lien upon the growing crops confers no possession thereof upon the receiver prior to an act upon his part taking possession of the crop.

Id,—Transfer of Crop to Attorney for Defendant.—The circumstance that the assignee of the crop was an attorney for the owner who made the transfer is immaterial. The owner of the crop has the right to dispose of it to whomsoever, and in whatever manner, he may please.

McFARLAND, J. This is an action to foreclose a mortgage on certain described land, executed to plaintiff by David Heron, now deceased, to secure his promissory note for nine thousand dollars. He died before the commencement of the action, but before his death he conveyed the mortgaged premises to his wife, Sophia Heron, now his widow, who is a defendant in the action. There was no administration of the estate of David Heron, but it is averred that demand was made, on Sophia Heron for payment of the note, and the case seems to have been tried on botli sides as if she stood in the place of and represented the deceased. Certain other persons who are averred to be heirs of the deceased are also made defendants, as claiming some interest in the mortgaged premises. During the pendency of the action the premises were in the possession of one Morris, to whom they had been leased by Sophia Heron for the -purpose of raising a crop of wheat thereon during the season ending with the summer of 1896, and he was to give her one-third of the grain raised. The mortgage was upon the land only, no mention being made of the rents, profits, issues, or crops.

The action was commenced on August 10, 1895, at which time it may be presumed that the wheat for the crop of 1896 had not been sowed; on February 1, 1896, an amended complaint was filed, in which there were averments of the depreciation of the mortgaged premises, with intent to show that they were probably insufficient to discharge the mortgage debt within the meaning of subdivision 2 of section 564 of the Code of Civil Procedure, and a prayer for the appointment of a receiver under said section of the code. On that day—February 1, 1896 —the court appointed P. C. Fenner receiver, “to take possession of the premises and receive the rente, income, and profits thereof [616]pending litigation, and to apply the proceeds thereof, under the order of the court, as the court may direct”; and on February 13th the receiver qualified by giving the undertaking required by the court and taking the oath of office. The appointment of the receiver was made ex parte. The receiver never took, nor attempted to take, possession of the mortgaged land; and he took no action as receiver until the fourteenth day of March, 1896, on which day he, for the first time, served a notice of his appointment as receiver upon Morris, the tenant, and “demanded that said tenant turn over to him the rents, income, and profits from the above-described premises.” But previous to that day, viz, on the seventh day of March, 1896, Sophia Heron had sold and assigned to Walter H. Linforth, by a bill of sale, all her interest in the crop of wheat growing on the premises. The tenant Morris did not know of said assignment to Linforth until the twenty-sixth day of March, when it was recorded.

Bank of Woodland v. Heron

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