Hankins v. Wiechers (48 Ohio App. 214, 1933)

Kunkle, J.

Christie Wiechers, as administrator of the estate of Henry Wiechers, filed an application in the Probate Court of G-reene county asking instructions from the court in reference to the claim of Jesse Hankins.

This application states that Henry Wiechers died July 7, 1932; that at the time of his death said Wiechers was a tenant on the farm of Jesse Hankins; that an agreement between Henry Wiechers and Jesse Hankins, for the lease by Jesse Hankins to Henry Wiechers, was entered into by the parties February 23, 1932.

This lease or contract is set forth in said application and shows that the rental period was for the term of one year from March 1, 1932, to February 28, 1933, inclusive; that said Henry Wiechers agreed to pay as rental for the said premises the sum of $1500, payable $750 on or before September 1, 1932, and $750 on or before January 1, 1933; that to secure the payment of said rental said Wiechers executed and delivered to Hankins his two promissory notes secured by a chattel mortgage on the chattel property therein described, and that said Wiechers further agreed with said Hankins that when the crops on said farm were sown or planted for the crop season of 1932 he would execute and deliver to said Hankins his further chattel mortgage on said crops to further guarantee payment of said rental.

The portion of the contract in dispute relates to the agreement upon the part of Wiechers to execute and deliver to said Hankins his further chattel mortgage on the crops sown or planted for the crop season of 1932.

The application states that a mortgage was executed and delivered upon certain chattel property by Wiechers before entering upon the premises, which chattel property consisted of farm implements and stock; that on the second day of February, 1933, a public sale was had of all of the assets of said Henry Wiechers and the property covered by the chattel mortgage was sold, and that after deducting the proportion of the costs of the sale the balance amounted to $880.50, which was paid to said Hankins. This paid the first note of $750 for rent and also gave a credit of $106.04 upon the second note for $750.

The application further shows that there was sold a crop of corn grown on said premises for which the sum of $376.74 was realized; that the said Hankins by reason of the rental contract claims a lien upon the proceeds realized from the sale of said corn, now in the hands of the administrator, for the payment of the balance due on the rent; that said claim is made by said Hankins by reason of the provision in the lease that Wiechers would execute and deliver to Hankins his further chattel mortgage on said crops to further guarantee payment of the rent; that neither the decedent nor the said Hankins ever filed the contract of lease with the recorder of Greene county, which is the county in which the farm in question is located, nor was there any mortgage executed by said Wiechers to said Hankins on said growing corn.

The administrator therefore prays that the court shall determine:

1. Whether or not the said Hankins has a lien upon said crop of corn or the proceeds derived therefrom by reason of the condition in the rental agreement, and

2. That the court may order and direct said administrator how to proceed in reference to the disposition of said claim as it relates to said lien or pretended lien upon said crop of corn or the proceeds therefrom as set forth therein.

To this application a joint answer was filed by Jesse Hankins and The Colnmbns Mutual Life Insurance Company. In brief, this joint answer pleads the contract of lease referred to in the application, and avers that the administrator of Henry Wieehers recognized the validity of the lease and entered upon the premises and sold the corn raised thereon; that the administrator recognized the validity of both notes and paid the first note in full and a substantial credit on the second note; that the said Hankins is indebted to The Columbus Mutual Life Insurance Company in an amount more than the balance due on said note, and deposited said note with The Columbus Mutual Life Insurance Company as collateral security for the amount which the said Hankins owed said insurance company; that said administrator entered into the possession of said premises under the lease and received the proceeds from the sale of said corn, and the estate thereby became liable under the terms of said lease to said Hankins on said notes, and that the claim of said Hankins under said notes is a preferred claim and should be protected as if a mortgage had been executed and delivered as agreed in said lease; that the lease in question was for a period of one year, and under the statutes of Ohio it was not necessary to record a lease unless the term thereof is for three years or more, and that by reason of the death of said Wieehers he did not execute the mortgage covering the crops. Said Hankins and the said insurance company therefore ask that the administrator be ordered to pay the amount received from the sale of said corn upon the balance due on said note.

The case was submitted to the Probate Court upon the facts as above agreed upon, with the result that the Probate Court found the claim of said Hankins was merely a general claim and not entitled to a preference.

From such judgment of the Probate Court, the said Hankins and the insurance company appealed to the Court of Common Pleas, where the case was submitted upon the pleadings and an agreed statement of facts.

The same decree was rendered in the Court of Common Pleas as in the Probate Court.

From such judgment of the Court of Common Pleas error is prosecuted to this court.

In brief, it is admitted that a lease for one year for the farm in question was entered into in February, 1932, between the owner Hankins and Henry Wieehers ; that Wieehers died in July of 1932; that before Wieehers entered into possession of the premises he executed and delivered to Hankins a chattel mortgage upon certain personal property, as provided in the lease, and that said personal property has been sold and the proceeds arising therefrom have been paid upon the notes held by Hankins.

It is further admitted that no mortgage was executed by Wieehers to the said Hankins upon the corn which was planted after the execution of the lease, which, as a matter of common knowledge, must have been so planted for several months prior to the death of Wieehers.

It is also admitted that the administrator entered upon the premises upon his appointment as such, and cared for and harvested this crop of corn, and sold the same at public sale with the other assets of said Wieehers, and that the fund in controversy was realized from the sale of the said corn.

In addition to the briefs of counsel there have been filed with us the written opinion of the Probate Judge and the written opinion of the Judge of the Court of Common Pleas, in passing upon this case. These opinions discuss the pertinent authorities and also the facts in considerable detail.

We have examined the same, and in view of the fact that the authorities are discussed in such written opinions we will not attempt to review the same in detail, but will content ourselves with announcing the conclusion at which we have arrived after a consideration of such authorities.

It is conceded that this lease was never recorded. To have the same operate as a chattel mortgage would require a compliance with the law regulating chattel mortgages. This has not been done. Has the lessor, under the admitted facts, a preferred claim against the fund in question?

It will not be necessary to discuss the question as to whether the lessor could have demanded and obtained from Henry Wiechers a chattel mortgage under the provisions of the lease. It is sufficient to say that he did not do so.

The estate in question is doubtless insolvent. This is not expressly shown, but it is averred in the application of the administrator that all of the assets of the deceased were sold at the public sale so held by him, and the inference is that there are not sufficient funds in the hands of the administrator to pay the balance due on the note of Hankins.

We think the burden would be upon Hankins to establish a preference. The record does not show the amount, if any, due other creditors, nor does it show Avhether such creditors, if any, were creditors subsequent to or prior to the execution of the lease in question.

We think the reasoning of our Supreme Court, as found in the case of Kilbourne v. Fay, Exr., 29 Ohio St., 264, is applicable to the case at bar. The first paragraph of the syllabus of the Kilbourne case reads :

“Where a chattel mortgage is declared void by the statute, ‘ as against the creditors • of the mortgagor, ’ and the mortgagor dies in possession of the mortgaged property, leaving an insolvent estate, such property becomes assets in the hands of the executor or administrator of the mortgagor,-whose duty, as well as right, it is to defend his possession against the claim of the mortgagee, notwithstanding such mortgage was valid as against the mortgagor.”

The method for securing a lien by means of a chattel mortgage is defined in Sections 8560 et seq., General Code, and it is admitted that such provisions were not complied with.

The duties of an administrator in reference to growing crops are defined by Sections 10642 and 10643, General Code.

The duty of the administrator in reference to the distribution of funds coming into his hands is also clearly defined by statute.

From the reasoning found in the opinion of Judge Mcllvaine, in Kilbourne v. Fay, supra, and the other authorities cited, we are of opinion that the said Hankins does not have a preferred claim upon the fund in question, but that he is merely a general creditor in this estate. The claim will therefore be allowed as a general and not as a preferred claim.

Finding no error in the record which we consider prejudicial to plaintiffs in error, the judgment of the lower court will be affirmed.

Judgment affirmed.

Hornbeok, P. J., and Barnes, J., concur.