Opinion ID: 1215594
Heading Depth: 1
Heading Rank: 5

Heading: wyoming law of fixtures

Text: The logical starting point to analyze the Board's issue is § 34-21-942(a)(i), W.S. 1977 (Cum.Supp. 1987), which provides: Goods are `fixtures' when they become so related to particular real estate that an interest in them arises under real estate law. This court has not had occasion to discuss this aspect of the law of fixtures for nearly forty-eight years. See School District No. II, Laramie County v. Donahue, 55 Wyo. 220, 97 P.2d 663, 664 (1940). When presented with this issue, however, we still rely on the three-part test first set forth in the landmark case of Teaf v. Hewitt, 1 Ohio St. 511, 525 (1853): It has been said upon abundant authority that, generally speaking, the proper criterion of an irremovable fixture consists in the united application of three tests, viz: `1st. Real or constructive annexation of the article in question to the realty. `2d. Appropriation or adaptation to the use or purpose of that part of the realty with which it is connected. `3d. The intention of the party making the annexation to make the article a permanent accession to the freehold, this intention being inferred from the nature of the article affixed, the relation and situation of the party making the annexation and policy of the law in relation thereto, the structure and mode of the annexation and the purpose or use of which the annexation has been made.' [Citations.]   . Holland Furnace Co. v. Bird, 45 Wyo. 471, 21 P.2d 825, 827-828 (1933). Although all three parts of this test bear upon classification of chattels as fixtures in any given case, we follow a majority of jurisdictions in placing the most emphasis on the intention of the person making the annexation. Holland Furnace Co. v. Bird, supra at 828; Squillante, The Law of Fixtures: Common Law and the Uniform Commercial Code, Part I: Common Law of Fixtures, 15 Hofstra L.Rev. 191, 195, 201 n. 69 (1987). This intention does not refer to the annexor's subjective state of mind; rather, it is the objective intention the law can infer an ordinary reasonable person to have based on the facts and circumstances in the record. Holland Furnace Co. v. Bird, supra, at 827-828; and Boothbay Harbors Condominiums, Inc. v. Department of Transportation, Me., 382 A.2d 848, 854 (1978). Circumstances bearing on a determination of objective intent include the nature of the article affixed, the way it was affixed, the purpose it serves on the land and the annexor's relationship to the article and to the land. Liberty Lake Sewer District No. 1 v. Liberty Lake Utilities Company, Inc., 37 Wash. App. 809, 683 P.2d 1117, 1120 (1984). We first hold that the gated pipe has never undergone a real annexation to the irrigated land. It was attached to the riser pipes only intermittently during each irrigation season. Whether there has been a constructive annexation depends on the following standard: `   [C]onstructive annexation may be found where the objects, although not themselves attached to the realty, comprise a necessary, integral or working part of some other object which is attached    [Citation]. Rayl v. Shull Enterprises, Inc., 108 Idaho 524, 700 P.2d 567, 571 (1984). Constructive annexation must also be considered in light of the three-part fixture test, which stresses that affixation to the land be permanent in character. Holland Furnace Co. v. Bird, supra, at 827-828. A good example of an article that is constructively annexed to realty is a house key. The key is not permanently attached to the house, but when in physical contact, is a necessary and integral part of the house as a permanent fixture on the land. Apart from the house, the key has little or no value. See Squillante, Common Law of Fixtures, supra, at 206-208. The gated pipe in this case arguably does not have the same kind of relationship to the property as the key does to the house. It is possible that the land could be irrigated without it, and the record is unclear whether other types of irrigation pipe, i.e., sprinkler pipe, could be attached to the rise pipes in the Rumerys' field. The gated pipe is also readily marketable at a substantial value when separated from the land. The Board's argument on part two of the fixture test is that the pipe is necessary for irrigating the Rumerys' semi-arid land, and because irrigating the Rumerys' land increases its value, the pipe is adapted to that use. On its face this argument is logical, taken to its ultimate conclusion; however, it is flawed. Strong reliance on this kind of adaptation argument as evidence of an annexor's intent would allow the Board to classify any item on the farm necessary for irrigation of the land receiving water from the rise pipes as a fixture. This flaw in placing heavy reliance on the adaptation test was recognized long ago in Teaf v. Hewitt, supra, at 529: This rule is in conflict with those authorities which make the mode of the physical annexation the test, and it will not bear examination as a criterion of general application. If adaptation and necessity for the use and enjoyment of the realty, be the sole test of a fixture, then the implements and domestic animals necessary for the cultivation of a farm, and a great variety of other articles subject to the use of the land or its appurtenances, which never have been and never can be recognized as such, would be fixtures. It would utterly confound the rule by which the rights of the vendor and vendee, heir and executor, & c., have been heretofore governed. (Emphasis added.) The real question here is whether the Rumerys showed sufficient objective intent to make the pipe a fixture. Arguably the pipe could be viewed as being both constructively annexed to the irrigated land and adapted to use on the land. Such conclusions, when viewed in light of our search for the Rumerys' objective intent to make the pipe a fixture, however, are of little value. Further, the intent we can infer from the character of the pipe itself is weak. The pipe is specifically designed to be portable and useful in any field with a suitable water hook-up. It is stored on a trailer away from the irrigated land in winter, and has immediate value apart from the land. The Board counters these conclusions by citing the case of Johnson v. Hicks, 51 Or. App. 667, 626 P.2d 938 (1981), for the proposition that the constructively annexed portion of an irrigation system is a fixture. The irrigation pipe at issue in that case, however, was a partially buried portion of the water mainline that fed water to portable sprinkler pipes. Id., at 939, n. 4. Consequently, that case is not on point, and our research finds no other cases directly supporting the Board's assertion. The most convincing evidence of objective intent in this case can be inferred from the way the Rumerys treated the pipe in financial transactions. The two security agreements are illustrative. The 1969 security agreement created an interest in after acquired farm and ranch machinery and equipment as personalty apart from the land. The 1985 security agreement expressly listed the gated pipe similarly as equipment securing their debt to WPCA on a second security agreement. Viewing all of this evidence together, we can only conclude that the Rumerys never showed an objective intent to make the pipe a fixture. Because the pipe is not a fixture, FCSCC has priority to it under the security agreements. Affirmed. URBIGKIT, J., filed a dissenting opinion.