Feliciana Bank & Trust v. Manuel & Sessions, L.L.C.
| Docket Number: | 2005-CA-01296-COA | |
| Court of Appeals: |
Opinion Link Opinion Date: 11-21-2006 Opinion Author: SOUTHWICK, J. Holding: Reversed and Remanded |
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| Additional Case Information: |
Topic: Contract - Deed of trust - Reservation of timber - Doctrine of waste - Liability of timber broker Judge(s) Concurring: KING, C.J., MYERS, P.J., IRVING, CHANDLER, GRIFFIS, BARNES, ISHEE AND ROBERTS, JJ. Concurs in Result Only: LEE, P.J. Procedural History: Summary Judgment Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 06-14-2005 Appealed from: WILKINSON COUNTY CIRCUIT COURT Judge: Lillie Blackmon Sanders Disposition: SUMMARY JUDGMENT FOR DEFENDANT Case Number: 02-0024 |
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| Party Name: | Attorney Name: | |||
| Appellant: | FELICIANA BANK & TRUST |
JAY MAX KILPATRICK |
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| Appellee: | MANUEL & SESSIONS, L.L.C. | BRUCE M. KUEHNLE |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Contract - Deed of trust - Reservation of timber - Doctrine of waste - Liability of timber broker |
| Summary of the Facts: | Louis Ducote owned approximately fifty-one acres of land in Wilkinson County. In 1995, Ducote borrowed $20,000 from Feliciana Bank & Trust, and in 1998, he borrowed $100,000 from the same bank. Each time he conveyed the Wilkinson County property in trust to Feliciana to secure the loan. In 1999, Ducote signed a piecemeal timber sale contract with Pat Conerly Forestry Services. Ducote warranted the title to the timber and agreed to hold Conerly harmless from any third party claim of ownership. Woodville Logging Services is a Mississippi corporation. Tom Manuel and Jody Sessions are its principals. Woodville contracts with mills and then acts as a broker to acquire timber to be sold to the mills. Woodville Logging Services, Inc. is a corporation owned by Manuel & Sessions, L.L.C., a limited liability company owned solely by Tom Manuel and Jody Sessions. Conerly asked Manuel & Sessions, L.L.C. to find a mill that would purchase the Ducote timber and also asked if it could recommend a logger to cut the trees. Manuel & Sessions recommended Benjamin Groom. Conerly selected the trees to be cut. Groom cut and delivered the trees to a mill. Ducote received $13,500 for the timber. At some point after the timber was cut, Feliciana foreclosed because Ducote defaulted on the loan. Feliciana purchased the property at the foreclosure sale and later sold the property to Bryan Development Company, but Feliciana did not recover the full amount of the debt. Feliciana filed a complaint against Manuel & Sessions, arguing that it had a valid security interest in the timber on Ducote’s property. Feliciana sought $60,000 under the doctrine of waste. Manuel & Sessions filed for summary judgment which was granted. Feliciana appeals. |
| Summary of Opinion Analysis: | When a deed of trust is executed without reserving the timber, it thereby conveys the timber, for ordinarily timber is a part of the land on which it stands. Since growing timber is part of the realty, a conveyance of the realty without excepting the timber will also convey that timber. The deed of trust in issue conveyed to the trustee “the land described,” as well as “improvements and appurtenances now or hereafter erected on, and fixtures,” which is sufficient language to cover everything that is by law part of the realty. The trial court in essence concluded that the Mississippi commercial code displaced the common law on the securing of interests on timber. Under that view, either a deed of trust no longer applies to timber at all, or the security is lost as soon as a conveyance or contract for sale of timber occurs. The proper analysis is not one of cancellation but of priority. Historically, a deed of trust granted a security interest in all property that was part of the realty. Under the UCC, though, if a typical deed of trust is executed after a contract for the cutting of the timber has been executed but before the actual harvesting of the trees, the deed of trust will either not apply to the timber at all because the timber is now personalty, or else the deed of trust will be subordinate to a prior UCC filing. Conversely, if the deed of trust predates any contract to cut the timber, the security interest vests in timber and cannot be divested simply by a contract for sale. The bank had a perfected security interest in the timber. The rights of any subsequent purchasers of that timber were subordinate to the interest of the bank. The bank’s failure to perfect its interests under the UCC was irrelevant to its right to remain secure. Once Feliciana foreclosed on its recorded deed of trust, it could bring suit for devaluation of its recorded security. Liability for diminishing the value of this land is evaluated under the doctrine of “waste,” which is a substantial injury done to the inheritance, by one having a limited estate, during the continuance of his estate. If Manuel & Sessions participated in a legally relevant manner in the timber cutting, then it would be a proper defendant. Whether the defendant committed a tort depends on the evidence. Either Manuel & Sessions or Woodville Logging brokered the timber. The record contains no explanation of what a timber broker does. Manuel & Sessions’ role – if any – as to this timber is unclear. Whether Feliciana may recover from Manuel & Sessions remains to be shown. On remand, the trial court should determine Manuel & Sessions’ factual role and then any legal responsibility for the cutting of this timber, thereby assessing whether compensable damage to this plaintiff was the result of any actions or omissions by this defendant. |
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