Opinion
(September Term, 1895.)
Agricultural Lien — Prior Mortgage — Trust.
Where an owner of crops, having previously given to B. a mortgage thereon, executes to another an agricultural lien upon the same crops, and the latter instrument recites that "there is no encumbrance on said crop except that I am to pay B. out of crop $116 and interest," etc., the lienee, by the acceptance of the instrument with such provision, will be deemed a trustee of the crop, or of the proceeds of its sale, to the amount of B.'s debt.
CONTROVERSY submitted without action in WAKE and heard at chambers, 11 April, 1895, before Starbuck, J., who gave judgment for the plaintiff, and defendants appealed. The facts appear in the opinion of Associate Justice Furches.
Battle Mordecai for plaintiff.
R. O. Burton for defendants.
This case comes before us from a judgment upon a case agreed.
One Bailey, being indebted to plaintiff's intestate, executed to him a mortgage on his crop to be grown in 1894, which was duly probated and registered on 15 January, 1894. Bailey, being indebted to defendants to the amount of $126.19 and desiring to obtain advances to the amount of $185 from defendants to enable him to make and gather his crop for 1894, executed to defendants an agricultural lien under the statute upon his crop to be grown in 1894, to the amount of $185; and in the same instrument a chattel mortgage on his crop and other property, to secure the $126.19 of other indebtedness, which was duly (141) probated and registered on 17 January, 1894.
It has been held that an agricultural lien for advances, properly registered under the statute, has priority over a prior registered mortgage. Wooten v. Hill, 98 N.C. 48. This would give defendants a priority in the crop to the extent of $185 but for the following clause contained in the instrument to defendants, to-wit: "There is no encumbrance on said personal property, and none on said crop, except that I am to pay J. S. Brasfield out of crop $116 and interest on same from 25 December, 1893."
Then there is a lien on the crop to be paid out of the crop, and the defendants accepted this conveyance with this provision in it. And when they did so they accepted it as trustees and are bound to carry out the trust.
Bailey says to defendants: "I will give you a mortgage on my stock and other articles of property, and I will also give you a lien on my crop. But I owe Brasfield $116, which is now a lien on the crop and is to be paid out of the crop."
This, in our opinion, is the same in effect as if Bailey had said: "Brasfield's debt of $116 is first to be paid out of the crop, and then your claim for advances." Hinton v. Leigh, 102 N.C. 28. Defendants admit they have a sufficient fund in hand arising from a sale of the crop to pay plaintiff, but not enough to pay both plaintiff and defendants.
No error.
Cited: Millheiser v. Pleasants, 118 N.C. 243; Range Co. v. Carver, ib., 341; Bank v. Vass, 130 N.C. 593; Piano Co. v. Spruill, 150 N.C. 170.
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