Case ID: ohio-st_45/html/0289-01.html
Source: Caselaw Access Project
Author: {"author": "Minshalu, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Case Manufacturing Co. v. Garven.
    
      Conditional sale — Fixtures—Mortgage—Notice.
    1. Where, prior to the act of May 4,1885, regulating, among other things, “ conditional sales ” of personal property (82 Ohio L. 238), A. sold and delivered to B. the machinery, other than the motive power, used for the manufacture of flour by the roller-system, and stipulated that the title to the property should not pass until paid for; and thereupon the machines were, with the consent of A., and according to the understanding at the time they were sold, placed by B. in his mill, and for the purpose of facilitating their use, were fastened to the floor by bolts, but could readily be removed without injury to the building or the machinery itself, and placed in another building: Held, that the machines were personalty, although so fastened to the building, and that the agreement was valid as against a subsequent mortgagee of the realty without notice of the agreement.
    2. The machinery of a manufactory that supplies the motive poWer, as the engine, boiler and their usual attachments, as contradistinguished from that propelled by it, where permanently annexed to foundations resting upon the freehold, is generally held to be a fixture, though susceptible of being removed without any material injury to the same or the freehold ; and, whilst by the agreement of the parties, the property may be made to preserve the character of personalty, yet, when it is so attached, that, but for the agreement, it would be a fixture, such agreement will be of no avail against a subsequent mortgagee of the realty without notice of it; nor will the filing of a mortgage upon it as chattel property, duly executed and delivered as such, of itself constitute such notice.
    (Decided June 28, 1887.)
    Error to the Circuit Court of Harrison County.
    The questions in this proceeding arise between the plaintiff in error and a cross-petitioner, The Mansfield Machine Works on the one hand, and Hogue & Donaldson and The Farmers’ and Mechanics’ National Bank on the other. All were parties to a suit commenced in the common pleas by the assignee of Ross J. Patton, an insolvent debtor, for the purpose of requiring them to interplead, and settle in that way their respective claims to the fund in his hands, all the property assigned having been sold and converted into money. Upon the trial the court, at the request of the parties, made a finding of facts. From this it appears, that Ross J. Patton, being the owner of a certain lot upon which he had constructed a building to be used as a flouring mill, on April 30, 1883, entered into an agreement with The Case Manufacturing Co., of Columbus, Ohio, by which it was to furnish certain machinery to be used in said mill, the title to which ■ was, by the agreement, to remain in the company until the machines were fully paid for, on which there was due and unpaid at the time of the trial $3,133.45. As to the manner in which the machines had been constructed and fastened to the building for use, the court found as follows:
    
      “ The roller mills and the large machines built of wood, for convenience of putting up and taking down, were made in pieces or sections, and when put together and fastened to their places in the mill and attached thereto, could be easily detached and taken apart, removed and set up again in another building, without material injury to the machines themselves or to the building from which they were removed.
    “ And the other machines, although not made in pieces or sections, to-wit: The purifiers, scalping-chests, reels, etc., when fastened to their places in the mill and attached thereto, could be easily detached, removed and set up again m another building, without material injury to the machines themselves or to the building from which they were removed.
    “ The usual way of fastening them and of fixing them to the building and premises where» used, was by iron bolts passing through the floors of the building and then up. through the frames of the machines and secured by nuts, except that the bulirs were supported on upright iron frames called ‘ hursts, ’ which rested on brick foundations imbedded in the ground floor of said building. The ‘hursts’ extended up through openings in the floor, left for that purpose, and the buhrs rested on the top of the same. None of said machines were to be or were fastened to the walls, foundation or superstructure of said building. One machine was sufficient weight to be kept in its place without any fastening to the floor by bolts or otherwise, its own weight being sufficient for that purpose. ”
    As to the claim of the Mansfield Machine Works, the court found that on May 10, 1883, the company entered into an agreement with Patton to furnish the motive power of, his mill, a steam engine and boiler with the usual attachments, at the agreed price of $1,650, a part, $450, to be paid “when the engine should be started, ” the residue to be evidenced by notes of $300 each at six months intervals, and be secured by a chattel mortgage on the engine, boiler and attachments. It. was also stipulated that the title to no part of the property should pass until the notes with the interest should be paid.
    The engine, boiler, etc., were furnished according to the agreement, and were placed in the building and adjusted and fastened by a “ hand ” furnished by the company itself; and as to the manner in which this was done, the court fouud:
    “ That said engine and boiler were taken into said building through an opening left in its foundation wall for that purpose, and said opening was afterward weather-boarded over to close it up, and the removal of such weather-boarding, which could easily be done and with trifling expense, would be the only injury that said building would necessai’ily sustain in taking out said engine and boiler. The boiler was encased by two brick walls on each side, and each about six feet high, and was suspended and secured between the same, and held in position by suitable appliances adapted to that purpose. The engine rested on and was fastened to a stone foundation about 2J feet high above the ground, in which it was imbedded, by bolts passing through the iron plate of said engine and into said stone foundation. Neither the stone foundation on which the engine rested, nor the walls encasing the boiler were attached to, or formed any part of the foundation or superstructure walls of said building; said engine and boiler were connected in the usual way and manner of making such connection, and also with a main shaft, from and by which all the machinery of said mill was driven. Said engine and boiler, with all their attachments, fixtures, shaftings, etc., could be easily taken down and apart, and removed from said building, without any material injury to said engine, boiler and all their said attachments, fixtures, etc., and put into another building suitable for the same, or without any other inconvience or damage to said building other than the removal of the weather-boarding as aforesaid. ”
    The stipulation as to the title was carried into the notes; and, on August 10, 1883, Patton executed and delivered the chattel mortgage as he had agreed, which was duly filed in the proper office on the 31st of the same month, and afterward duly refiled at the proper times for keeping a chattel mortgage in force; and at the time of the trial there was due the Machine Works on the purchase money, $663.80 and interest.
    And the court further found, that the machinery furnished by each of these parties, “were designed and intended for said mill, and were adapted to the same and said milling business, and intended by said Patton when placed in said building, to be permanent and to become a part and parcel of his said premises.” But, it is also found, that it was not the intention of either party furnishing it, that the part furnished by it, should become a part of the realty and the property of Patton until fully paid for.
    Subsequently, Patton sold and conveyed to one Collins an undivided interest in the property; and, on January 29, 1884, they executed to Hogue & Donaldson a real estate mortgage, including the mill property, to secure the payment of certain loans amounting to $4,000. It was recorded February 21, 1884.
    In December following a like mortgage was executed in favor of the Farmers’ & Mechanics’ National Bank of Cadiz, Ohio, to secure a loan of $600. It was taken to indemnify a surety on the loan, and was recorded at once. As to each of these mortgages it is found, that it was taken in good faith by the mortgagee, and without any notice of the agreement with the Manufacturing Company or the Machine Works.
    From other findings it appears, that if, upon the facts, the claim of the Manufacturing Company is prior in right, as it is in time, to either that of Hogue & Donaldson or that of the bank, it should be paid from the funds in the hands of the assignee before either of those claims; and that the claim of the Mansfield Machine Works should next be paid, if found to be prior in right, as it is in time, to the mortgagees of the' realty.
    The judgment of the court was in favor of the priority of mortgagees of the realty, and, upon error, was affirmed by the circuit court.
    
      David K. Watson, for Case Manufacturing Company.
    The contract between the Case Manufacturing Company and Patton amounted to a conditional sale, and the right of the vendor to retake the property, in such a case, is clearly sustained in this state, even as against innocent purchasers of the property from the vendee. Call v. Seymour, 40 Ohio St. 670; Sage v. Sleutz, 23 Ohio St. 1; Sanders v. Keber, 28 Ohio St. 630.
    The machinery, did not pass under the mortgage because it did not cease to be personal property, and this independent of the agreement. Annexations to the freehold, for the purpose of trade and manufacture are of a personal character. The machinery was not attached to the mill in such a manner as to bring the articles within the denomination of fixtures. Hunt v. Mullanphy, 1 Mo. 508; Vanderpoel v. Van Allen, 10 Barb. 157; Keeler v. Keeler, 31 N. J. Eq. 181; Hutchinson v. Kay, 23 Beav. 413; McKim v. Mason, 3 Md. Ch. 187: 1 Schoul. Per. Prop. 155; Hill v. Wentworth, 28 Vt. 428; Sweetzer v. Jones, 35 Vt. 317; Fullam v. Stearns, 30 Vt. 443; Gale v. Ward, 14 Mass. 352; Hubbell v. East Cambridge Sav. Bank, 132 Mass. 447; Blancke v. Rogers, 26 N. J. Eq. 563; Teaff v. Hewitt, 1 Ohio St. 511; Herman on Executions, 171.
    An article attached to the land may be a fixture or a chattel according to the special agreement of the parties. Under the agreement here the machinery could not become fixtures until the contract of purchase had been complied with. Eaves v. Estes, 10 Kan. 314; Cochran v. Flint, 57 N. H. 514; McKim v. Mason, 3 Md. Ch. 186; Fortman v. Goepper, 14 Ohio St. 566; Marquette Man. Co. v. Jeffery, 49 Mich. 283; Smith v. Lozo, 42 Mich. 6; Goddard v. Gould, 14 Barb. 662; Tifft v. Horton, 53 N. Y. 377; Sinker v. Comparet, 62 Tex. 470.
    
      L>. A. Hollingsworth, for the Mansfield Machine 'Works.
    Conditional sales of chattels are recognized as valid by the supreme court of the United States. Myer v. Car Company, 102 U. S. 1; Fosdick v. Schall, 99 U. S. 235; Fosdick v. Car Company, 99 U. S. 356; Huidekoper v. Locomotive Works, 99 U. S. 258. The court, .in these cases, fully sustains the doctrine that, as against a previous real estate mortgage, a conditional sale of a chattel which, being affixed to the real estate, becomes a part thereof, is valid and binding, and such chattel may be reclaimed unless the price is paid.
    The validity of conditional sales of personal property is no longer a subject of controversy in Ohio. They are good not only between the parties but as against subsequent bona fide purchasers. Kanaga v. Taylor, 7 Ohio St. 134; Sage v. Sleutz, 23 Ohio St. 1; Sanders v. Keber, 28 Ohio St. 630.
    
      The same rule obtains in other states. Bailey v. Harris, 8 Iowa, 331; Baker v. Hall, 15 Iowa, 277; Knowlton v. Redenbaugh, 40 Iowa, 114; Luey v. Bundy, 9 N. H. 298; Herring v. Willard, 2 Sandf. 418; Barrett v. Pritchard, 2 Pick. 512; Buckmaster v. Smith, 22 Vt. 203; Sawyer v. Fisher, 32 Me. 28; Russell v. Richards, 10 Me. 429; Mott v. Palmer, 1 N. Y. 564; Tifft v. Horton, 53 N. Y. 377; Goddard v. Gould, 14 Barb. 662; Morrison v. Berry, 42 Mich. 389; Ferris v. Quimby, 41 Mich. 202; Strokoe v. Upton, 40 Mich. 581; Robertson v. Corsett, 39 Mich. 777.
    A personal chattel cannot be converted into real estate without the consent of the owners, and when attached to the real estate its further character may be controlled by the agreement of the parties. The execution of a chattel mortgage on such fixtures is evidence of an agreement that it shall be and remain personal property. Jones Chat. Mort., sec. 125 et seq.; Teaff v. Hewitt, 1 Ohio St. 511; Fortman v. Goepper, 14 Ohio St. 558; Simons v. Pierce, 16 Ohio St. 215; Tyler on Fixtures, 129.
    The record of a chattel mortgage is as effectual as an actual notice to protect the rights of the mortgagee. Sowden v. Craig, 26 Iowa, 156; Hine v. Morris, 3 Week. L. Bull. 515.
    
      W. G. Shohoell and J. M. Estep, for Hogue & Donaldson.
    The facts show every element of a complete fixture in real estate: (1) Actual annexation to the realty; (2) application to the use and purpose of the building; (3) the intention to make a permanent accession to the freehold.
    The mill was designed and completed as a real' estate flouring mill — not a portable one — and after it was thus completed’ and in operation, Hogue & Donaldson, in good faith and without» notice, took a mortgage upon. it as real' estate. We claim that beyond question their mortgage is á valid lien and the first lien on the entire mill as a mill.
    
      1. Leaving out of consideration, for the present, the .special agreements, it is- quite clear that the machinery became fixtures. 1 Jones Mort., secs. 428, 435; 1 Wash. Real Prop. 9, 21, 23, 24; 2 Smith Lead. Cas. (3d ed.) 250, 251, 259, 261; 
      Teaff v. Hewitt, 1 Ohio St. 543; Brennan v. Whitaker, 15 Ohio St. 446; Potter v. Cromwell, 40 N. Y. 287; Voorhees v. McGinnis, 48 N. Y. 278; McRea v. Central National Bank, 66 N. Y. 489; Winslow v. Merchants’ Ins. Co., 4 Met. 306; Tyler on Fixturss, 561, 589, 591, 603; Allison v. McCune, 15 Ohio, 726, 732; Fortman v. Goepper, 14 Ohio St. 565; Davenport v. Shants, 43 Vt. 546; Fryatt v. Sullivan Company, 5 Hill, 116; Union Bank v. Emerson, 15 Mass. 159; Green v. Phillips, 26 Gratt. 752.
    The mode of annexation alone, or the circumstance that the machinery might be removed without much injury to the building is not now controlling. Adaptability and fitness for the thing as a complete whole, has more to do with it. Brennan v. Whitaker, 15 Ohio St. 452; 1 Wash. Real Prop. 21; Voorhees v. McGinnis, 48 N. Y. 278; Teaff v. Hewitt, 1 Ohio St. 528; 1 Jones Mort., sec. 429.
    2. That these special agreements or conditional sales were binding, as between the parties, prior to the act of May 14, 1885 (82 Ohio L. 238), was, no doubt, well settled. Call v. Seymour, 40 Ohio St. 670; Sanders v. Keber, 28 Ohio St. 630.
    '3. But the further material question is, were these special agreements binding,' not only upon the parties, but also upon Hogue & Donaldson, bona fide purchasers without notice?
    “ Actual severance before the making of the real estate mortgage, or notice of a binding agreement to sever, is required in such case, to deprive the mortgagee of the freehold of the right to fixtures.” Brennan v. Whitaker, 15 Ohio St. 445, 454. We consider this case decisive of every question made in the case at bar.
    The controlling question is one of good faith and want of notice. Fortman v. Goepper, 14 Ohio St. 565; Fryatt v. Sullivan Company, 5 Hill, 116; Hunt v. Bay State Iron Co., 97 Mass. 279; Pierce v. George, 108 Mass. 78; Southbridge Sav. Bank v. Exeter Machine Works, 127 Mass. 542; Davenport v. Shants, 43 Vt. 546; 1 Wash. Real Prop. 24; 1 Schoul. Per. Prop. sec. 124, and note 2; Bringholf v. Munzenmaier, 20 Iowa, 513; Frankland v. Moulton, 5 Wis. 1; Watertown Steam Engine Co. v. Davis, 5 Hous. (Del.) 192; Ridgeway 
      
      Stove Co. v. Way, 141 Mass. 557; Jones Chat. Mort. secs. 127, 128, 130, 134, 135; Coman v. Lakey, 80 N. Y. 345; Potter v. Cromwell, 40 N. Y. 287; Voorhees v. McGinnis, 48 N. Y. 278; 2 Smith’s Lead. Cas. 259.
    Mortgagees in good faith are bona fide purchasers. Roxborough v. Messick, 6 Ohio St. 448; Anketel v. Converse, 17 Ohio St. 11; Brennan v. Whitaker, 15 Ohio St. 452; 1 Wash. Real. Prop. 9—21, 23, 24; 2 Smith’s Lead. Cas. 250, 251, 259—261; Teaff v. Hewitt, 1 Ohio St. 543; Curtis v. Leavitt, 15 N. Y. 13, 179; Voorhees v. McGinnis, 48 N. Y. 278; McRea v. Central Nat. Bank, 66 N. Y. 489; Winslow v. Merchants’ Ins. Co. 4 Met. 306; Cary v. White, 52 N. Y. 138; 2 Lead. Cas. Eq. 32, 82, 84, 85; 2 Am. Lead. Cas. 225; Smith v. Worman, 19 Ohio St. 145; Erwin v. Shaffer, 9 Ohio St. 43; City of Cleveland v. State Bank of Ohio, 16 Ohio St. 236, 269; Holzworth v. Koch, 26 Ohio St. 33; Brownell v. Harsh, 29 Ohio St. 631; Pitts v. Foglesong, 37 Ohio St. 676.
    A chattel mortgage, though filed, is not constructive notice to a subsequent bona fide mortgagee of real estate without notice. Brennan v. Whitaker, 15 Ohio St. 446, 453; 1 Schoul. Per. Prop. sec. 124; Bringholf v. Munzenmaier, 20 Iowa, 513.
    It is a very familiar principle that “ where one of two innocent persons must suffer from misplaced confidence in a third person, the one of the two who confided in such third person the means of practicing the fraud, will be selected to bear the loss. ” The Case Manufacturing Company and The Mansfield Machine Works themselves fastened the machinery in the mill in the usual manner of doing so, and jrrecisely as if it had been paid for in cash, made it a perfect system and every piece necessary to constitute a complete mill. They then left the vendees in possession of it as the apparent absolute and unconditional owners of it, and went off with their secret agreements in their pockets. See Bringholf v. Munzenmaier, 20 Iowa, 513.
    
      E. Cunningham, for Farmers’ and Merchants’ National Bank.
    Was the machinery in question so attached as to become a part of the freehold ?
    
      Articles placed in a mill to carry out the obvious purposes for which it was created are generally a part of the realty notwithstanding the fact they could be removed and used elsewhere. Parsons v. Copeland, 38 Me. 537; Jones Mort. sec. 429; Winslow v. Merchants’ Insurance Co., 4 Met. 306; Pierce v. George, 108 Mass. 78; s. c. 11 Am. Rep. 310; Teaff v. Hewitt, 1 Ohio St. 511; Brennan v. Whitaker, 15 Ohio St. 446.
    All the requisites necessary to constitute the machinery a fixture and a part of the freehold are present in this case, to wit: That it was actually attached; that it was adapted to the purpose for which it was placed in said building, and that the owner intended it to be permanent and a part of the premises, and not a mere temporary attachment.
    Actual severance before the making of the real estate mortgage or notice of a binding agreement to sever is required to deprive the mortgagee of the freehold of the right to fixtures. Fortman v. Goepper, 14 Ohio St. 565; Jones Chat. Mort. secs. 134, 135.
    The mortgage to the bank, if it should be held that it was given in security of an antecedent debt, is not, on that account, void. Cooley v. Hobart, 8 Iowa, 358. Nor would it make any difference that it was executed by one of the members of a partnership to secure a debt of the firm. Jones Mort. sec. 611. The real estate, while it was in the name of Patton, was really partnership property. The real estate mortgage in Brennan v. Whitaker, 15 Ohio St. 446, was given for an antecedent debt, and is, in all respects, on all fours with the case at bar.
   Minshalu, J.

By the agreement of the parties the title to the property out of which the controversy arises in this case, was, in both instances, to remain in the vendor, until it was paid for by the purchaser. The validity of such agreements as to personalty, even as against innocent purchasers, was recognized as the law of this state at the time they were made, (Sage v. Sleutz, 23 Ohio St. 1; Sanders v. Keber, 28 Ohio St. 630; Call v. Seymour, 40 Ohio St. 670); it has been changed by statute (82 Ohio L. 238),. but the rights of the parties in this case must be determined by the law as it existed at the time their contracts were made.

The property sold and transferred by The Case Manufacturing Company under its contract with Patton embraced the machinery employed in the manufacture of flour by the roller-system; that furnished by The Mansfield Machine Works supplied the motive power of the mill, and consisted of an engine and boiler with the usual attachments.

For the purpose of keeping them in place when in use, some of the machines were fastened to the floor with bolts, others were held in place by their own weight, and, as found by the court “all could easily have been detached, removed and set up in another building without material injury to the machines themselves or to the building.” Of the motive power, the boiler was inclosed by brick walls between which it was suspended and held in place by suitable appliances in the usual way; the engine rested upon a stone foundation imbedded in the ground, to which it was fastened by bolts passing through an iron plate — part of the engine — -into the foundation; and, as found, all could have been removed without any material injury to the machinery, or to the building, other than the removal of some weather-boarding inclosing an opening in the foundation wall through which it had been imtroduced.

All the machinery furnished by these two parties under their agreements with the mill-owner is readily distinguishable into two classes, namely, (1), that which supplied the motive power of the mill, and (2), that which was propelled by it. It is a distinction generally recognized by those who run and operate mills as well as by the courts, being founded in the general character of the machinery of each class, and the mode in which it is usually placed upon the premises for use.

The machinery furnishing the motive power is generally more closely annexed to the freehold, and of a more permanent nature, as the power furnished by it may be adapted to the propulsion of the machinery of a variety of mills without any substantial change in the motive power itself or in the building other than by substituting one kind of machinery for another; whilst the machinery that is propelled, has more of the general character of personalty, is not as a rule so closely annexed to the freehold, and may be removed, and frequently is, from one mill to another, as any other article of personalty; and is more properly accessory to the business” carried on upon the realty than to the realty itself. Goepper v. Fortman, 14 Ohio St. 567.

PIcnce, it has generally been held in this country that articles of machinery used in a factory for manufacturing purposes, only attached to the building to keep them steady in their places, so that they may be more serviceable when in use, and that may be removed without any essential injury to the freehold or the articles themselves, are personal property and do not pass by a conveyance or mortgage of the freehold. Ewell Fix. 294. On the other hand, steam engines and boilers with their appliances, that supply the motive power of machinery, and, for purpose of use, are usually stably attached to the realty, pass by a conveyance or mortgage of the land. 1 Sch. Per. Prop. 155; Ewell Fix. 290; 1 Wash. R. P. 8.

In Teaff v. Hewitt, 1 Ohio St. 511, this distinction in the charter of the property and in the mode of its use and annexation to the realty, was taken and applied to the facts of that case. It is there said that <£ the machinery and implements in a manufacturing establishment, although useful and even essential to the business carried on, which are not permanently affixed to the ground or the structure of the building, and which can easily be removed without material injury to the building or articles themselves, and their places supplied by other articles of a similar kind, are not. fixtures, but personal property. But that portion of the machinery in such an establishment, which is firmly affixed to the earth orto the structure of the building, and which from its nature, mode of attachment, use, and the relative situation of the. party placing it there, was plainly intended to be permanent, is parcel of the freehold.” So it was there held that the carding machines of a woolen factory, attached to the building by cleats to coniine them to their proper places, and subject to removal whenever convenience or business required, were not fixtures, but chattels; whilst the steam enginfe and boiler, used to supply the motive power, permanently fixed upon a foundation laid in the earth, were regarded as realty.

The difficulty of prescribing a rule that may be applied to cases in general* has been confessed both by courts and writers upon the subject; various tests have been adopted, none of which have been applied with anything like uniformity. It may however, be admitted that the distinction .between the motive power of a factory and the machines driven by it, is somewhat arbitrary; still it is one based uptin a physical difference, easily perceived, if not dictated by any well defined principle, and is no more illogical than many distinctions to be found in other branches of the law. That which divides all property into real and personal, is quite as wanting in anything like scientific classification; but, from its general recognition wherever the common law prevails, is found to bo very convenient in practice ; and it is such considerations that have always more or less influenced the adoption of definite rules of property.

It remains to be considered whether the result, as to either of these claims, indicated by the discussion, is to be varied by the finding of the court that all the machinery furnished by either of said parties were designed and intended for said mill, and were adapted to the same and to the said milling business, and intended by Patton when placed in said building, to be permanent and to become a part and parcel of said premises.” But that it was not the intention of either of them “ that said machinery so furnished by them, respectively, should become a part and parcel of said real estate, and become the property of the said Patton, and remain permanently attached to said mill unless they were fully paid for.”

There is no question but that the character of things which would otherwise be fixtures, may be changed to that of personalty by the agreement of the parties, and conversoly, so as to be binding upon them. And the stipulation of the vendor in each of these cases, that the title to the property furnished by it should not pass until it had been paid for by the purchaser, precludes the idea that either of them intended that the machinery furnished by it, should become a part of the realty until payment had been made, as, to impute a different intention, would be to suppose that neither intended the benefit of a stipulation exacted with the greatest care in its own behalf. In such case the intention of the purchaser must be regarded as subordinate to the prior intention of the vendor, expressed in the agreement by which he has possession of the property. Tifft v. Horton, 53 N. Y. 377.

But the question remains, as to the Mansfield Machine Works whether it can have the benefit of its stipulation, that the title to the property furnished by it should not pass, nor, by inference,' become a part of the realty, until paid for. Here the question is not whether the character of the property may bo changed by the agreement of the parties, as between themselves; of this there is no doubt; but, when the property is such that from the manner of the annexation it would, but for the agreement, ordinarily be regarded as a fixture, whether it can be made by the agreement of the parties to preserve the character of personalty so as to avail against innocent purchasers without notice ? This must, we think, upon principle and authority, be answered in the negative. The point, though not directly presented by the record, was considered in Fortman v. Goepper, 14 Ohio St. 558, where the doctrine of Ford v. Cobb, 20 N. Y. 344, holding the affirmative, was disapproved. It was, however, directly presented in the subsequent case of Brennan v. Whitaker, 15 Ohio St. 446, upon a state of case very similar to that presented by the record before us: B. sold an engine and boiler to F., and, after they had been placed by himself upon the premises of F. as the motive power of his saw-mill, took a chattel mortgage thereon to secure the purchase-money; the property was described in the mortgage as the steam engine and boiler sold to, and then in the possession of, F., and designed to be used in his saw-mill; ” and it was stipulated in the condition, that in case payment was not made when the money became duo, the vendor might enter upon the premises of the purchaser and retake the property wherever it might be found, whether the same should be áttached to the freehold and in law a part of the realty or not,” and remove the same. But it was held that neither the mortgage, nor the stipulation in it, was available as against a subsequent mortgagee of the freehold without actual notice thereof. And White, J., again disapproving the case of Ford v. Cobb, said, it seems to us to be the sounder rule, and more in accordance with principle, and the policy of our recording laws, to require actual severance, or notice of a binding agreement to sever, to deprive the purchaser of the right to fixtures or appurtenances to the freehold.”

The fact that the Machine Works took a chattel mortgage upon the engine and boiler, in addition to the stipulation as to the title, does not seem to help its case. It caused the property to be annexed to the realty of the purchaser in such manner, that, but for the agreement, it would become a part of it. The subsequent mortgagees of the realty had no notice of the agreement or of the chattel mortgage. And to use the language of White, J., in the case above cited, it then devolved upon the vendor, if it sought to change the legal character of the property, and create incumbrances upon it, either to pursue the mode prescribed by law for incumbering the kind of estate to which it appeared to the world to belong, and for giving notice of such incumbrance, or, otherwise, take the risk of its loss in case it should be sold and conveyed as a part of the real estate to a purchaser without notice.”

Nor, so far as we see, is there any want of consistency in the ruling as to the two cases. The machinery furnished by The Case Manufacturing Co., did not, from the manner of its use and mode of annexation, become a part of the realty. The effect of the agreement was, not to preserve its character of personalty — it would have retained this character without the agreement — but to prevent the title passing from the vendor to the purchaser until the property had been paid for; and if there is any apparent want of justice in giving effect to the agreement as against a purchaser without notice, it is in the rule itself, and not in the application of it. Not so however, as to the machinery that constituted the motive power; this, as we have shown, was so annexed, that, but for the agreement, it would have been a fixture, and so a part of the realty • and the agreement could not take effect without that being regarded as personalty which would otherwise be realty; and it is giving effect to such agreement as against innocent purchasers, that, as said in the case just referred to, is regarded as against the policy of our registration laws.

Judgment modified so as to give priority to The Case Manufacturing Company over the mortgages of the realty in the distribution of the fund, and affirmed as to all else.