In Sisson v. Hibbard (supra) the findings did not "disclose such a permanent annexation of the machinery to the freehold as to preclude the owner of the land from making a valid agreement with the vendors of the machinery that it should continue, as between the parties, to be personal property, and that the vendors should have a lien thereon for the price and the right to remove the same on default in payment" (75 N.Y. 542, 545).Summary of this case from Matter of City of N.Y
Argued November 21, 1878
Decided January 21, 1879
W.J. Townsend, for appellant. Angus McDonald, for respondents.
The engine and boiler in controversy were sold by Lamberton Macks to Hibbard in 1869 for the purpose, understood at the time by both parties, of being put up and used by Hibbard in a cheaply constructed building, inclosed with boards, situate on land owned by Hibbard, wherein was machinery for the manufacturing of staves and heading. This building was used for no other purpose and of little value without the machinery. The purchase-price of the engine and boiler were secured by a chattel mortgage containing the usual stipulation that upon default in the stipulated payments the mortgagees should have full power to enter upon the premises of the mortgagor, or any other place where said chattels might then be, and take possession of the same, etc.
The engine and boiler were removed to the wooden building before mentioned and set up therein, in place of another engine and boiler which were at the same time removed therefrom.
The referee finds that they were so secured and fastened that, but for said chattel mortgage, they became part of the real estate, but that at the time of the execution of said mortgage it was mutually understood by the parties thereto that the mortgage should be valid against the property, notwithstanding any annexation to said premises or use therein.
The mortgage was kept regularly renewed on file until November, 1873, when Hibbard, having made default in his payments, retransferred the engine and boiler to Lamberton Macks, but in pursuance of a previous understanding permitted them to remain on his premises until they should desire to remove them.
In March, 1874, Lamberton Macks having sold the engine and boiler to the defendants Crary Clark, they together with Hibbard removed them from the before mentioned building. In so doing they necessarily removed part of the boards from one side of the building and partially tore down the arch which supported the boiler, but the referee finds that the same could be and were removed without serious damage to the freehold, or injuring or impairing their own character or value.
For these acts the plaintiff now brings his action against Hibbard and Clark Crary, alleging that the engine and boiler had, by being put up in the building, become part of the realty. That before their removal the land had been sold, under execution against Hibbard, to one William J. Townsend whose right of action had been transferred to the plaintiff.
The findings show that the judgment was recovered in 1870 and revived in 1873. The sale under the execution was made on the 15th of November, 1873, when a certificate of sale was given by the sheriff to Townsend. After the expiration of fifteen months, viz., in June, 1875, Townsend received the sheriff's deed. The removal of the property took place before the expiration of the fifteen months, and while Hibbard was entitled to possession of the land, but before such removal Townsend forbade Hibbard from effecting it.
The findings of the referee do not in our judgment disclose such a permanent annexation of the machinery to the freehold as to preclude the owner of the land from making a valid agreement with the vendors of the machinery that it should continue, as between the parties, to be personal property, and that the vendors should have a lien thereon for the price and the right to remove the same on default in payment. All the acts of the parties show that such was their agreement and understanding, and it is expressly found by the referee. The so-called building does not appear to have been itself a permanent structure, or much more than a temporary shelter for the machinery. Had there been no sale under execution, and had Lamberton Macks undertaken to enforce their chattel mortgage against Hibbard, he would not have been permitted to set up that the machinery had become real estate, and thus defeat the security upon the faith of which the property had been obtained by him. The plaintiff who claims, not as a bona fide purchaser without notice, but simply under an execution sale, by which his assignor acquired only the right, title and interest of Hibbard, cannot claim any greater rights than Hibbard would have possessed. The case is stronger for the defendants in this respect than Ford v. Cobb ( 20 N Y, 344) and Tifft v. Horton (53 id., 377). At the time when Hibbard, in compliance with his agreement, permitted the removal of the machinery, the possession and legal title to the land were still in him, the plaintiff's assignor having merely a sheriff's certificate of sale under a judgment recovered subsequently to Hibbard's agreement that the machinery should be treated as personalty as between him and his vendors. The judgment creditor clearly had no equities superior to those of the vendors of the machinery, nor could a purchaser on the execution issued under such judgment acquire any. The criticisms upon the case of Ford v. Cobb cited by the plaintiff's counsel from the cases of Brenan v. Whitaker ( 15 Ohio, 446) and Fortman v. Goepper (14 id., 565) apply to the question whether the filing of a chattel mortgage can be regarded as equivalent to notice to a subsequent purchaser of the land, that fixtures, apparently part of the realty, are to be regarded as personalty, so as to affect the title of a subsequent mortgagee without notice, and the citations from elementary works in regard to the power of the judgment debtor to change the character of fixtures by agreement, refer to agreements made after the lien of the judgment has attached, and in derogation of such lien. In the present case the rights and equities of Lamberton Macks, under whom the defendants claim, existed even before the recovery of the judgment under which the plaintiff claims. The annexation must be deemed to have been made by Hibbard in pursuance of and subject to his agreement with Lamberton Mack and not as a permanent accession to the freehold.
We think the judgment below is sustained by the cases of Ford v. Cobb (20 New York Reports, 344); Tifft v. Horton (53 id., 377), and the later case of McRea v. Central National Bank of Troy (66 id., 489), and does not necessarily conflict with Voorhees v. McGinnis (48 id., 278).
The judgment should be affirmed.