Summary
In Endler v. State Bank Trust Co. of Wellston, 352 Mo. 961, 180 S.W.2d 596 this Court stated that in controversies involving the rights of the privies of the original parties to trade fixtures installed by the tenant the trend is to favor the rights of the tenant.
Summary of this case from Blackwell Printing v. Blackwell-Wielandy Co.Opinion
No. 38772.
May 2, 1944. Rehearing Denied, June 5, 1944.
1. EQUITY: Conversion: Injunction Action Changed to Action at Law. While the original petition sought a restraining order to prevent the removal of certain property, the amended petition upon which the case went to trial was an action in conversion for damages. The action should be treated as being at law and not in equity.
2. APPEAL AND ERROR: Sufficiency of Evidence to Sustain Decree For Defendant Not Reviewable. In a law action where the decree was for the defendant the sufficiency of oral evidence to sustain the decree is not open to review on appeal.
3. LANDLORD AND TENANT: Fixtures: Removable Bank Fixtures. A lessee bank had the right to remove bank vault doors and a night depository which had been treated by the parties as trade fixtures.
4. LANDLORD AND TENANT: Fixtures: Covenant Does Not Prevent Removal of Trade Fixtures. A covenant to surrender the lease in as good condition as when received does not prevent the removal of bank fixtures.
Appeal from Circuit Court of St. Louis County. — Hon. Julius R. Nolte, Judge.
AFFIRMED.
Oliver J. Miller and Lashly, Lashly, Miller Clifford for appellants.
(1) The circuit court below having acquired jurisdiction as a court of equity for one purpose, it had jurisdiction to dispose of every issue that arose below in said cause, without a jury. Hogan v. Continental Bank, 182 Mo. 319, 81 S.W. l.c. 77. (2) Where the evidence presented no essential conflicts, the judgment rendered below is a mere legal conclusion. Murphy v. Doniphan Tel. Co., 347 Mo. 372, 147 S.W.2d 616; Eckles v. Ragland, 256 Mo. 424, 165 S.W. 1035. (3) However, since all equity cases are triable de novo in the Supreme Court, that court, while deferring somewhat to any findings below, is not bound by such findings of fact and will reach its own conclusions. Gross v. Byler, 297 S.W. 391. (4) Where the decision below is not sustained by the law and the evidence, the Supreme Court will proceed to make its own findings and judgment as equity and justice require. Uhrig v. Hill-Behan, etc., 110 S.W.2d 412; 5 C.J.S. 1299. (5) Fixtures, even though they might be classified as trade fixtures and even though paid for originally by the tenant, when so firmly attached to the realty that substantial and material damage would be done to the landlord's property in removing them, become the property of the landlord at the end of the leasehold. Powell v. McAshen, 28 Mo. 70; Finney v. Watkins, 30 Mo. 291; 22 Am. Jur. 776; Ambs v. Hill, 10 Mo. App. 108; Taylor v. White, 68 Mo. App. 607; Globe A.S. Co. v. Boester, 95 S.W.2d 825; Graves v. Pierce, 53 Mo. 423; Bank of America v. N.Y. Life, 16 Cal.App.2d 719, 61 P.2d 364. (6) This is likewise true where the character of the building would be changed by the removal of the fixture from that for which the building was designed to serve. Then the fixture likewise becomes the property of the landlord. Globe A.S. Co. v. Boester, 95 S.W.2d 825; Realty Imp. Co. v. Anderson, 164 P. 4; Otis Elevator Co. v. Palmetto Const. Co., 237 F. 769; Interstate Trust Banking Co. v. Warren, 60 F.2d 368; Hanson v. Vose, 175 N.W. 113; Winkle v. Heyman, 185 Iowa 114, 169 N.W. 631; Baker v. McCoy, 198 Ill. 28, 64 N.E. 701. (7) This is likewise true where it was the implied intention of the parties to consider the fixture as a permanent part of the realty. General Motors, etc., v. Farm Home, 58 S.W.2d 342; San Diego Tr. Sav. Bank v. San Diego Co., 16 Cal.2d 142, 105 P.2d 94; Kriegler v. Spokane Mech. Assn., 111 Wn. 179, 189 P. 1004; Greenburg v. Dept. of Financial Institution, 11 N.E.2d 1008.
Taylor, Meyer, Shifrin Willer for respondent.
(1) The facts tried in this case were purely legal, and for a court to retain jurisdiction in a case which started as an equity case equitable rights must be not only averred but proved at the trial of the case before legal rights will be determined. Chicago, R.I. P.R. Co. v. State Highway Comm., 17 S.W.2d 535; Wimer v. Wagner, 20 S.W.2d 650; Modern Woodmen of America v. Cummins, 268 S.W. 383; England v. Barnes, 70 S.W.2d 69. (2) Where the facts in the lower court are conflicting the appeal court is bound by the finding and judgment of the trial court below. Murphy v. Doniphan Tel. Co., 347 Mo. 372, 147 S.W.2d 616; Kansas City v. Boyer, 202 S.W. 1086. (3) This is not an equity case, but even if it were, this court could not apply the rule contended for by appellants that the case be tried de novo, since the court would be at a loss to do so with the record before it as it is at this time. Bueker v. Aufderheide, 136 S.W.2d 281. (4) As between landlord and tenant, a tenant may remove trade fixtures which were added to the leased premises for the purpose of carrying on the business for which the premises were leased. The intention of the parties is the governing point regardless of the extent of the affixation of the articles to the freehold. Beicher v. Parker, 40 Mo. 118; Finney v. Watkins, 13 Mo. 291; Rogers v. Crow, 40 Mo. 91; Matz v. Miami Club Restaurant, 127 S.W.2d 738; Handlan v. Stifel, 232 S.W. 245; Thomas v. Davis, 76 Mo. 72; Tyler v. White, 68 Mo. App. 607; McLain Investment Co. v. Cunningham, 875 S.W. 605; Bennett v. Taylor, 49 S.W.2d 608; President Directors of Manhattan Co. v. Mosler Safe Co., 299 N.Y.S. 417; Woods v. Bank of Hayward, 10 Cal.App. 93, 106 P. 730; Inge v. First State Bank, 57 S.W.2d 317. (6) Where a grantor, or person claiming under him, transfers title to property to another, he or those claiming under him are estopped from thereafter asserting that he or they are the owners of such property. White v. Hughes, 88 S.W.2d 268; Bankers Trust Co. v. Maxson, 100 N.J. Eq. 1; Continental Bank Trust Co. v. Webster Hall Corp., 4 F. Supp. 337; 31 C.J.S., p. 198.
The issue as assigned for determination is whether certain vault doors and a night depository of a bank were removable trade fixtures or a permanent part of the real estate as between landlord and tenant in the circumstances hereinafter narrated. The judgment was for the tenant, State Bank Trust Company of Wellston, a corporation, and against the owners, Marguerite K. Endler, Renee Bradshaw and Marie Mathieson (hereinafter frequently designated landlord), plaintiffs nisi and appellants here. We have jurisdiction by reason of the amount involved.
At the threshold of the case we inquire into the landlord's contentions, presented in the main brief, that the proceeding was in equity and, having acquired jurisdiction, equity retains it to dispose of every issue arising, without the aid of a jury; and that the proceeding is triable de novo here. The landlord's abstract of the record contains a recital by counsel (not facts of record) that the suit was instituted to enjoin the tenant removing certain fixtures and that before a permanent injunction had been secured, the fixtures had been actually removed, "whereupon the cause was converted into a suit for damages for the removal of said fixtures." There are recitals in the tenant's brief that after the filing of the first petition an application for a temporary restraining order against removal was filed and, upon hearing, granted upon condition the landlord file a $5,000 bond; that, upon failure to file the bond, the order was dissolved, and that the tenant removed the trade fixtures here involved. The third amended petition, upon which the case went to trial, was a simple action in conversion for damages. No relief in equity was asked. The tenant's pleading embraced a general denial, affirmative defenses, and a counterclaim. The reply was a general denial. At the time the case went to trial there was no attempt to state a cause of action in nor any prayer for equitable relief of any nature in any of the pleadings. We have said and good practice requires that "equitable rights must be both averred and proved before purely legal rights will be determined by a court of equity." Chicago, R.I. P. Ry. Co. v. State Highway Comm., 322 Mo. 419, 434, 17 S.W.2d 535, 541[7]. Consult England v. Barnes (Mo. App.), 70 S.W.2d 69, 71[3]; Modern Woodmen of Am. v. Cummins, 216 Mo. App. 404, 410, 268 S.W. 383, 385 [2]; 30 C.J.S., p. 427, Sec. 73; p. 432, n. 73; p. 426, n. 28. We hold the action sounds in tort for conversion, and is not a suit in equity.
The landlord's assertion, on the theory the evidence presented no essential conflicts, that the judgment nisi was a mere legal conclusion (citing Murphy v. Doniphan Tel. Co., 347 Mo. 372, 147 S.W.2d 616; Eckle v. Ryland, 256 Mo. 424, 165 S.W. 1035), has no application because the facts are not agreed. Facts essential to the landlord's case are disputed by the tenant and the landlord's brief recognizes [598] factual disputes exist. See the cases cited. The landlord, being the plaintiff and having the burden of proof, is hard put to stand, as he does, on the oral testimony adduced; because, technically, the contention is that in this action at law there is no evidence supporting the verdict for the defendant. The sufficiency of oral evidence to sustain a verdict in defendant's favor is not an open question upon review in a law action. If a defendant offers no evidence whatsoever, the credibility of plaintiff's witnesses remains a factual issue for the jury or the court sitting as a jury. Cluck v. Abe, 328 Mo. 81, 84 [1-4], 40 S.W.2d 558, 559 [1-5]; McClellan v. St. Louis (Mo. App.), 170 S.W.2d 131, 134 [8], citing cases.
What has been said disposes, we think, of this review. But whether it does or not, in every instance wherein there exists a conflict in the testimony on a determinative factual issue, the jury, or the court sitting as a jury, of necessity believes or rejects the whole or part or none of the testimony of a given witness thereon as it believes the same to be true or false in the light of all the testimony, facts, and circumstances in the case. The instant trial was to the court, sitting as a jury, and we think there was substantial evidence sustaining the court's findings in the tenant-defendant's favor; and briefly thereof:
The case involves the rights of the privies of the original parties to trade fixtures installed by a tenant on the real estate of his landlord; the trend in such controversies being to favor the rights of the tenant. We do not construe General Mtrs. Accept. Corp. v. Farm Home S. L. Ass'n, 227 Mo. 832, 838, 58 S.W. 338, 342[2], to constitute a holding, as we understand the landlord (relying upon quoted observations therein) contends, to the effect that the law will not enforce as between the parties thereto or their privies an agreement that chattels, such as are here involved, remain pensonalty notwithstanding their incorporation into the realty as a part thereof (consult l.c. 844 and 345[10], respectively). That this is not the Missouri law see, among others, Goodman v. Hannibal St. J. Rd. Co., 45 Mo. 33; Union Cent. L. Ins. Co. v. Tillery, 152 Mo. 421, 425, 54 S.W. 220, 221; Denvir v. Crowe, 321 Mo. 212, 220, 9 S.W.2d 957, 959[3]; Kolb v. Golden Rule Baking Co., 222 Mo. App. 1068, 1075, 9 S.W.2d 841, 844 [9-12] citing cases; Wayne Tank P. Co. v. Quick Service Laundry Co. (Mo. App.), 29 S.W.2d 161, 165[4]; Grinnell Co. v. Farm Home Savs. L. Ass'n. (Mo. App.), 75 S.W.2d 409, 410[3]; Cowgill v. Little Persimmon Min. Co. (Mo. App.), 183 S.W. 346, [599] 347 [2, 3]. We are unadvised of any public policy prohibiting such contracts or, for that matter, prohibiting contracts respecting the removal of the realty itself. The majority opinion in Powell v. McAshan, 28 Mo. 70, as we read it, apparently ruled the issue upon the theory that the contract authorized only the removal of "temporary" improvements. Scott, J., based his dissent upon the law of contracts; the majority opinion treated the issue as governed by the law of fixtures. Consult Tyson v. Post, 108 N.Y. 217, 15 N.E. 316; Davis v. Emery, 61 Me. 140, 14 Am. Rep. 553.
"The general rule of the common law certainly is, that whatever is once annexed to the freehold becomes part of it, and cannot afterwards be removed except by him who is entitled to the inheritance. The rule, however, never was, at least, as far back as we can trace it in the books, inflexible and without exceptions. It was construed most strictly between executor and heir, in favor of the latter; more liberally between tenant for life or in tail, and remainderman or reversioner, in favor of the former; and with much greater latitude between landlord and tenant in favor of the tenant. But an exception of a much broader cast, and whose origin may be traced almost as high as the rule itself, is of fixtures erected for the purposes of trade. Upon principles of public policy, and to encourage trade and manufactures, fixtures which were erected to carry on such business were allowed to be removed by the tenant during his term, and were deemed personalty for many other purposes." Van Ness v. Pacard (1829), 2 Pet. (U.S.) 137, 143, 7 L.Ed. 374. See also Poole's case, 1 Salk. 368; Teaff v. Hewitt, 1 Ohio St. 511, 59 Am. Dec. 634; Bircher v. Parker (1867), 40 Mo. 118, 120; Rogers v. Crow. (1867), 40 Mo. 91, 93; Tyler v. White (1896), 68 Mo. App. 607, 609; McLain Inv. Co. v. Cunningham (1905), 113 Mo. App. 519, 524, 525, 87 S.W. 605, 607; Handlan v. Stifel (Mo. App., 1921), 232 S.W. 245, 246[2]; 22 Am. Jur., p. 748, Sec. 40 et seq.; 36 C.J.S., Fixtures, p. 970, Sec. 34, 38.
See also, among other references: Tiffany, Real Property, Vol. 2, Sec. 617; Tiffany, Landlord Tenant (1910 Ed.), Vol. 2, Secs. 238, 243, 244, and 26 C.J., Tit., Fixtures, Secs. 4, 5, 83, 84, 103; 36 C.J.S., Fixtures, Secs. 2, 15, 37, 38; Brown, Personal Property (1936), Ch. XVI; Bennett, Landlord Tenant (1939 Ed.), Secs. 113-116; 3 Mo. L.B. 42; 2 K.C.L.R. 99; 11 N.Y.U.L.Q. 560; 12 N.Y.U.L.Q. 66; Annotations, 77 A.L.R. 1400, Intention as a factor; 133 A.L.R. 427, Depositories for valuables as trade fixtures, including vault doors; 107 A.L.R. 1153, Buildings as trade fixtures; 91 A.L.R. 539, expressed provisions of lease; 62 A.L.R. 211, 253, 368, Electric range, electric fan, and pipe organ, respectively, as fixtures.
The landlord's brief here discusses only the vault doors and the night depository of the several trade fixtures specifically enumerated in the petition. The time lock vault door, weighing thirty-five thousand pounds, the removal of which necessitated cutting reinforced concrete, is the trade fixture stressed. The tenant's answer sets up the defense, among others, that the intention of the landlord and tenant at all times was that the chattels were to be considered personal property; that they were so dealt with, and that they were considered as trade fixtures to be removed at the time the tenant vacated. Consider the evidence favorable to this defense: Mr. Julius Kessler was the original landlord. He was also president of the State Bank of Wellston, the owner of two-hundred-thirty-seven shares (thirteen less than half of the total) of its stock. He owned a two-store two-story building in Wellston. In 1921 he leased one of the store buildings to the bank for ten years at a monthly rental of $100. The other store building and the second story had other tenants. In July, 1926, an offer was made to construct a new building especially for the bank on another location upon condition that the building be leased for twenty-five years at $650 a month. Mr. Kessler thereupon offered to construct a sixty-foot addition to the building occupied by the bank; the bank to enter into a twenty-five year lease at a monthly rental of $500 per month and to reject the other offer. The bank accepted Mr. Kessler's offer. The bank's minutes of August 30, 1926, authorized, upon the completion of the addition, the execution of a lease with Mr. Kessler for fifteen years at $500 a month, and with option in the bank for an additional ten years; the cancellation of the old lease and the making of the new, et cetera. Mr. Kessler had the sixty-foot extension constructed, together with the vault. The bank, the banking house being enlarged, purchased and installed entirely new equipment and the time lock vault door in question. This door was at all times carried as an asset of the bank on its books. Mr. Kessler, the president and chief executive officer of the bank, knew this. Thereafter, in 1929, the bank purchased and installed the night depository and it too was carried as an asset on the bank's books. The bank experienced financial difficulties and in June, 1930, sold, transferred, and delivered its assets to defendant, the State Bank Trust Company of Wellston, its successor tenant. This sale was made with the written authority and consent of the holders of record of more than two-thirds of the outstanding capital stock of the vendor bank, including Mrs. Julius Kessler, representing two-hundred-thirty-seven of the three-hundred-fifty-four shares authorizing the sale in writing. (Mr. Kessler had died. Mrs. Kessler died in 1939 and the plaintiffs, children of Mr. and Mrs. Kessler, inherited the building.) Among the assets specifically enumerated as passing to the new bank were the time lock vault door, the night depository, and other trade fixtures. The original lease, Mrs. Kessler — the then landlord — consenting in writing, was assigned. This showing established, if believed, that as between the original landlord and tenant the trade fixtures here involved were personal property, owned by the tenant bank. Mrs. Kessler sanctioned and approved this when she authorized the sale of these and other trade fixtures by her old tenant to her new tenant, taking over the original lease. Thus, by their acts and conduct, the landlord and tenant constituted these trade fixtures personalty, the property of the tenant; and the inference of an agreement implied from such acts and conduct (as effective in the circumstances here as an expressed agreement) authorizing their removal by the tenant upon vacating the premises was justified in a controversy concerning only the rights of the landlord and tenant.
The covenant in the lease that the premises be surrendered "in as good condition as when received", excepting natural wear etc., does not defeat the right of removal in the circumstances shown. Consult 36 C.J.S., p. 928, nn. 8-10; 22 Am. Jur., p. 753, n. 20; 2 Tiffany, [600] Landlord Tenant (1910 Ed.), p. 1607, n. 205; 26 C.J., p. 714.
Respondent filed a motion to dismiss. Let it be overruled, without prejudice.
The judgment is affirmed. Westhues and Barrett, CC., concur.
The foregoing opinion by BOHLING, C., is adopted as the opinion of the court. Tipton and Ellison, JJ., concur; Leedy, P.J., dubitante.