Opinion
No. 29792.
March 28, 1932. Suggestion of Error Overruled, May 9, 1932.
1. CHATTEL MORTGAGES.
Evidence held to justify chancellor's finding that mortgagee authorized mortgagor to sell mortgaged cotton, so as to preclude recovery of its value from purchaser.
2. CHATTEL MORTGAGES.
Mortgagee expecting mortgagor to sell mortgaged cotton cannot recover value thereof from purchaser without actual notice of mortgage, though recorded.
APPEAL from chancery court of Clay county. HON. J.A. FINLEY, Chancellor.
Frank A. Critz, and B.H. Loving, both of West Point, for appellant.
A waiver will not be implied from slight circumstances but must be evidenced by an unequivocal and decisive act clearly proven. If the act is not of such a character or is not inconsistent with the enforcement of the rights claimed to have been waived, or an intention to rely upon it, no waiver is established; or if, notwithstanding an apparent waiver, there is an expressed reservation of one's legal rights there is no waiver.
29 Am. Eng. Ency. of Law, page 1105; 27 R.C.L. 908, sec. 5.
In accordance with the general law as to the burden of proof it devolves upon the party claiming the waiver to prove the facts on which he relies for such waiver.
27 R.C.L., page 510, section 6.
There are no facts here by express agreement, or by any proven custom, or by any established custom of the Bank of West Point, which would estop it from protecting its vested rights under said deed of trust.
Campbell v. Farmers Bank of Boyle, 127 Miss. 668, 90 So. 436; Marine Bank Trust Co. v. Greenville Savings Banks Trust Co., 97 So. 526.
It is a well-settled rule that the representation or act relied on to constitute an estoppel must be certain to every intent and is not to be sustained by argument or inference; it must be clearly inconsistent with the evidence which is proposed to be given or the right or title to be set up by the party to be estopped.
11 Am. Eng. Ency. of Law, pages 388, 424; Roach v. Brannon, 57 Miss. 490.
Estoppel must arise from some word spoken, act done, or failure to speak when called on to speak, and it cannot depend upon an "intention" or "expectation."
Canal-Commercial Trust, etc. Bank v. Brewer, 143 Miss. 146, 108 So. 424.
A waiver, strictly so called, is the result of an intentional relinquishment of a known right.
29 Am. Eng. Enc. of Law, page 1091.
McClellan Tubb, of West Point, for appellees.
Not only would the appellant have ratified the sale of the cotton by Nash had he accounted to it for the proceeds thereof, but it expected and therefore authorized him to sell the cotton and to account to it for the proceeds thereof, and with this complaint the purchaser of the cotton has no concern. He received the cotton because of the bank's consent to its sale, free from the lien of the bank's deed of trust.
Tonnar v. Washington Issaquena Bank, 105 So. 750.
A mortgagee can by custom, acts, or dealings waive its lien on mortgaged property, especially cotton, in favor of one who purchases.
Phillips v. Thomas, 128 Miss. 729, 91 So. 420; Judd v. Delta Grocery Cotton Company, 133 Miss. 866, 98 So. 243; McGee et al. v. Carver, 141 Miss. 463, 106 So. 760; Williams v. Delta Grocery and Cotton Co., 132 So. 732.
Appellant, as trustee in a deed of trust in favor of the Bank of West Point, filed his bill against appellees in the chancery court of Clay county praying an injunction against appellees from disposing of or removing three bales of cotton, and from disposing of the warehouse receipts therefor. On the fiat of the chancellor an injunction bond was given, and a writ of injunction issued and served on the appellees. On motion of appellees F.M. Crump Co. and Federal Compress Warehouse Company, the injunction was dissolved. The cause was tried on motion to dissolve, on original bill, answers, cross-bills, answers thereto, and proofs. The decree dissolving the injunction dismissed the bill and awarded appellees damages on the injunction bond. From that decree appellant prosecutes this appeal.
Appellee Nat Nash was a tenant on the farm of A.B. Norris. He gave a deed of trust to the Bank of West Point to secure an indebtedness to the bank of between three hundred dollars and four hundred dollars. By the deed of trust he conveyed certain personal property, and in addition the agricultural products to be grown by him on Norris' farm during the year 1928. Appellant was named as trustee in the deed of trust. Appellee Nat Nash sold three bales of the cotton produced by him, which was covered by the deed of trust, to appellees F.M. Crump Co. Before selling the cotton he had it deposited in warehouses at West Point and Aberdeen and held warehouse receipts therefor. Appellees F.M. Crump Co. bought the cotton and paid appellee Nash for it and took up from him the warehouse receipts. At the time appellees F.M. Crump Co. purchased the cotton and paid appellee Nash for it, they had no actual knowledge of the existence of the deed of trust in favor of the Bank of West Point. However, the deed of trust was on record, and they were affected with constructive notice thereof.
Appellant's contention is that appellees F.M. Crump Co. bought the three bales of cotton subject to the deed of trust of the Bank of West Point, and they were therefore liable to deliver the cotton up to appellant for foreclosure under the deed of trust, or, failing to do so, they were liable for the value of the cotton. Appellees F.M. Crump Co. contend, and the chancellor so found, that the three bales of cotton were freed from the deed of trust in favor of the Bank of West Point because the bank had authorized appellee Nat Nash to sell the cotton and pay the proceeds of sale on his indebtedness secured by the deed of trust. The issue of fact, therefore, was whether or not appellee Nash was authorized by the Bank of West Point to sell the cotton and turn over the proceeds thereof to the bank on his indebtedness secured by the deed of trust. The chancery court found that issue of fact in favor of appellees F.M. Crump Co., and based such finding of fact on the testimony alone of Mr. Yates, president of the Bank of West Point, as shown by the opinion of the chancellor made a part of the record in the case.
Appellant argues that the chancellor's findings of fact were against the overwhelming weight of the evidence. Mr. Yates testified that, shortly after the indebtedness secured by the deed of trust was due, appellee Nash came in to see him about the matter. On cross-examination, Mr. Yates testified, in part, as follows:
"Q. When he came in and talked to you about this note, and you told him to get out his cotton and pay the note, what did you expect him to do? A. I expected him to pay the note.
"Q. Did you expect him, if when you told him to go out and sell his cotton, to bring his check to you? A. I couldn't tell you just what I had in my mind at the time.
"Q. I understand, I know you have a great many of these things? A. Cases like that, the landlord frequently comes in and pays the note and sometimes the man comes in, but I am honest in saying if Nat had come in and asked to take this cotton down and sell it, I think we would have allowed him that privilege.
"Q. Isn't that what you intended for him to do when you told him to go and get his cotton out and then go ahead and pay the note? A. Yes, sir, that would have been all right with us.
"Q. That is what you expected him to do and that is what you intended to convey to him? A. I don't know.
"Q. Isn't that what that language would mean? A. Well possibly so, yes, sir.
"Q. Did you expect, to the contrary, that he would bring the cotton in to you? A. I did not expect the bales of cotton, no, sir.
"Q. Were you expecting anything else but that Nat Nash would carry that cotton, either to the warehouse and store it, and get the receipts, or else sell the cotton and in turn, bring the money to you. You did not expect anything else but that, did you? A. Unless it might come through the landlord. . . . I expected the note to be paid out of the proceeds of the cotton."
We agree with the chancellor that Mr. Yates meant that he agreed for the Bank of West Point that appellee Nash should sell the cotton and account to the bank for the proceeds thereof. Where a mortgagee does not expect the mortgagor to whom he has loaned money, secured by mortgage on cotton to be grown, to turn the cotton over to him, but expects the mortgagor to sell the cotton and account to him for the proceeds thereof, the mortgagee cannot recover the value of the cotton from the purchaser from the mortgagor who has no actual notice of the mortgage, although he has constructive notice by virtue of the fact that the mortgage is duly recorded. Tonnar v. Washington Issaquena Bank, 140 Miss. 875, 105 So. 750. We think that case is in point and decisive of the question in favor of the appellees.
Affirmed.