Opinion ID: 1159187
Heading Depth: 2
Heading Rank: 3

Heading: Intention of the real property owner

Text: The parties agree that of the three elements to be considered in determining whether the whey dryer is real or personal property, the most important is intention. Concerning this element, this Court has stated: In order to qualify under these [mechanic's lien] statutes it is necessary that there must be annexation to the land ... and this must have been done with the intention of making [the personal property] a permanent part thereof. [Emphasis added.] [5] Factors to be considered in determining whether such an intention exists include annexation and adaptation, discussed above, as well as the relation and situation of the party making the annexation, the policy of the law in relation thereto, the structure and mode of the annexation, and the purpose or use for which the annexation has been made. [6] In the present case, testimony by respondent's general manager tends to show an absence of intent on the part of respondent to incorporate the whey drying equipment into its real property: [T]he building was designed specifically so that we could house that piece of equipment, so that we could get that piece of equipment into the building, so that we could get that piece of equipment out of the building without any particular problem if at some time down the line in the future we decided that the economies in whey drying justified us going into some other drying operation.       The reason we chose a metal building was because of its versatility. It's a construction which is bolted together, it's very easily unbolted, and it provides maximum flexibility and the moving in and moving out of equipment. Testimony by a salesman of dairy equipment showed that it is common practice to transport used whey drying equipment from its original location for purposes of sale or use in another locality: Q Do you have an opinion as to whether or not those tanks could be moved from Cache Valley Dairy to another place? A Certainly they could be moved. Q And are they a merchantable type item that might be purchased by some other individual in the same business somewhere else in the country? A Yes. Q Would there be a problem with selling that type of equipment? A Not very, no. Q Is there a demand for that type of equipment? A You bet.       ... I particularly am not adaptable to whey drying equipment, but I'm familiar with it and it's bought and sold, used and new. Q And I assume when it's bought and sold it has to change places and locations and everything? A Oh, yes. Respondent's attachment of lifting lugs to the whey drying cylinders and its provision for relatively easy disconnection of the equipment also tend to show an absence of intention to annex the equipment. In addition to the above structural and testimonial evidence as to the character of respondent's equipment, the trial court admitted as evidence a lease agreement between respondent and First Security Leasing Company by which respondent had acquired the whey drying equipment. In that agreement, respondent and First Security Leasing Company characterize the whey drying equipment as personal property. Appellants complain that the provisions of the agreement are irrelevant to the present issue and that the trial court should not have admitted the agreement. Appellants claim that by doing so, that court imposed upon appellants the terms of a contract to which they were not parties. The findings of the trial court do not indicate that the characterization of respondent's property contained in the lease agreement in any way influenced the court's own decision concerning the nature of the property. Even assuming that the court did consider provisions of the lease as evidence, the lease constituted only one of many items of evidence presented on the issue of respondent's intent. If the court had excluded the lease from other such evidence, that which remained still would not preponderate against that court's findings. Therefore, we need not consider the propriety of the court's admission of the lease. Appellant Dahle claims that because the trial court did not find the manlift and walkways to be personal property, the court should have enforced a lien against these items for a portion of the total balance owed to Dahle. However, Dahle presented no evidence as to what percentage of its total labor had been expended towards construction of the manlift and walkways other than a rough guess by the company's managing partner. Nor did Dahle attempt to establish the percentage of its current balance due which represented such labor. The evidence shows that Dahle received partial payment for its installation labor prior to Maxum's bankruptcy and that the manlift was the first item installed by Dahle. The trial court reasonably may have concluded that the portion of Dahle's labor for which early payment was made included much or all of the labor incurred in construction of the items which it determined to be fixtures. The court therefore did not err in refusing to recognize in Dahle a lien against these items.