Court Opinion

ID: 9745829
Source: CourtListenerOpinion
Date Created: 2023-08-27 13:34:08.630307+00
Date Added: 2024-06-11T07:25:04.894784
License: Public Domain

*660Dissenting Opinion
Mote, J.
Respectfully, I must dissent to the majority opinion in this appeal. Much of the law and the facts set forth in the majority opinion we are willing to, and do, adopt. However, for a proper understanding of the issues presented by the pleadings we deem it advisable to set out the amended complaint which, omitting the formal parts, is as follows:
“1. On the - day of March, 1958, plaintiff and defendant entered into a contract by which plaintiff agreed to furnish the material for, and to perform all the necessary labor in, the installation of a fire prevention sprinkler system in and for the main manufacturing plant building on the real estate in Allen County, Indiana, described as follows:
All that part of the northwest quarter of Section 17 and the northeast quarter of Section 18, Township 30 North, Range 13 East, in Allen County, Indiana, which lies east of the highway known as Wayne Trace, south of the Pennsylvania Railroad right-of-way, and north of the Moeller Road, together with all easements and appurtenances thereto appertaining,
which real estate was then and is now owned by said defendant, for which defendant agreed to pay to plaintiff the sum of Eighteen Thousand Eight Hundred Fourteen Dollars.
2. In pursuance of said agreement, plaintiff thereafter began the installation of said sprinkler system and continued therewith until said building, including said sprinkler system, was completely destroyed by fire of unknown origin on June 16, 1958, at which time such installation was approximately forty per cent (40%) completed.
3. In compliance with said contract, plaintiff furnished all the necessary material and performed all the labor in the installing of said sprinkler system to and including said 16th day of June, 1958, on which last mentioned date plaintiff last furnished material and performed labor pursuant to said contract.
*6614. Plaintiff has been prevented from completing such installation and from further complying with said contract by the complete destruction of said building as aforesaid, all of which occurred without fault of plaintiff.
5. The portion of said sprinkler system so installed by plaintiff prior to the destruction of said building, as above alleged, was permanently attached to said building by nails, screws, hangers, clips, and other permanently attached devices, and became a part of said building and said real estate immediately upon installation as the work progressed, and said installed portion of said sprinkler system, at the time of its destruction by fire as aforesaid, belonged to and was owned by the defendant as part of the real estate above described.
6. As further indication of the permanence of such installation and its becoming a part of said building and said real estate, said contract included, as a part of said sprinkler system to be constructed in accordance with said contract, the furnishing and laying of a new underground water supply (consisting of pipes, valves and fittings) in and through said real estate to carry water to the sprinkler heads of said system in said building from the public water main in the public street adjoining said real estate. Said underground water supply had not been laid at the time of said fire, but the same was to be constructed and laid so as to become and be a part of said real estate owned by defendant.
7. Prior to July 16, 1958, plaintiff demanded payment from defendant for the completed portion of said contract, but defendant refused and continues to refuse to pay for the same.
8. On the 13th day of August, 1958, and less than sixty (60) days after the performance of said work and the furnishing of said materials, as hereinabove alleged, plaintiff filed in the office of the Recorder of Allen County, Indiana, a notice of its intention to hold a lien on said real estate for the amount of its said claim in the sum of Seven Thousand Dollars ($7,000.00), specifically setting forth the amount claimed and a descrip*662tion of said real estate, a copy of which notice is filed herewith, marked ‘Exhibit A’, and made a part hereof.
9. The reasonable value of work and labor done and materials furnished, represented by the portion of said sprinkler system installed in and attached to said building and said premises, prior to the time of said fire, is the sum of Seven Thousand Five Hundred Twenty-Five and 60/100 Dollars ($7,525.60), which sum is justly due and owing from defendant to plaintiff, and plaintiff is entitled to interest thereon at the rate of six per cent (6%) per annum from July 16,1958.
10. Plaintiff has been compelled to employ, and has employed, attorneys to enforce said lien and to bring and prosecute this action, and a reasonable attorney fee for their services is Two Thousand Dollars ($2,000.00).
WHEREFORE, plaintiff asks judgment against defendant for Ten Thousand Dollars ($10,000.00) and the costs of this suit; that plaintiff’s lien be foreclosed and that the same be declared superior to any interests of the defendant in and to the above described real estate; that said real estate be sold and the proceeds be applied first to the payment of plaintiff’s judgment and the balance as the court may find is just and equitable, and for such other and further relief as may be proper in the premises.”
The notice of mechanic’s lien attached to the said amended complaint, marked “Exhibit A”, is omitted herefrom, since the contents thereof are not deemed to be important for our consideration.
An answer was filed by appellee which alleged:
“ 1.
That it admits that in the month of March, 1958, plaintiff and defendant entered into an oral agreement whereby the plaintiff was to furnish the material for and perform the necessary labor for the installation of a fire prevention sprinkler system iii this defendant’s manufacturing plant *663at a price of Eighteen Thousand Eight Hundred Fourteen Dollars ($18,814.00), payable as and when said installation was completed to the satisfaction of this defendant and when said work was acceptable to the Indiana Rating Bureau, as alleged in plaintiff’s grammatical paragraph number 1.
2.
Defendant admits that the plaintiff commenced the installation of said sprinkler system and that said work continued until defendant’s building was completely destroyed by fire of unknown origin on June 16th, 1958, but denies that said installation was approximately forty per cent (40%) completed at that time as alleged in plaintiff’s grammatical paragraph number 2.”
The remainder of the answer denied the other material allegations of the complaint.
In addition to a statement of the evidence contained in the majority opinion, I consider it important to include other evidence set forth in the condensed recital of the evidence in appellant’s brief, to which appellee has acceded. The record additionally reveals that the work to be done and the material to be furnished was a part of the contract between appellant and appellee; that the over-all plans for the project were approved by the Indiana Rating Bureau on April 25, 1958, prior to the commencement of the performance of the contract. It seems apparent that from and after March 17, 1958, appellant was engaged in drawing plans and specifications and securing the approval of the Indiana Rating Bureau and of appellee for the project, although, as conclusively shown by the letter from appellant to appellee, dated March 5, 1958, set forth below, negotiations for the work began as early as 1957. It seems also apparent that on May 13, 1958, appellant began the fabrication of parts to be installed as part of the *664sprinkler system, and on May 17, 1958, actual installation began. The building upon which the work was done and the material furnished by appellant and which became an integral part of the building and freehold owned by appellee, was either totally consumed or ruined by fire of an unknown origin on June 16, 1958, when the installation was from thirty-five (35) to forty (40) percent completed.
On March 11, 1958, appellee executed its purchase order No. 27380, appellee’s Exhibit No. 9, calling for “The installation of a sprinkler system per specifications in attached letter dated March 11,1958 and quoted in your letter March 5, 1958.”, which said letter of March 5,1958, is as follows:
“ HIPSKIND FIRE PROTECTION COMPANY COMPLETE AUTOMATIC SPRINKLER SYSTEMS
AND
FIRE CONTROL APPARATUS
FORT WAYNE 4, INDIANA
March 5, 1958
1725 Winter Street Anthony 7139
(5/9/58 Base 12,394
Add 80 heads $15
$1200
“ 1 tap
Change 8” tap from St. vs
General Industries, Inc. 6” tap from
3033 Wayne Trace South 2900
Fort Wayne, Indiana 4,100
16,500
Attention: Mr. E. J. Disser
Vice-President and Comptroller
Gentlemen:
Pursuant to and in compliance with your presumedly final requirement, bearing on the exterior Paint Building, shown located beyond the *665northeast corner of your main manufacturing plant; and which, we now understand, you intend to maintain in operation for the present time, our survey of this date, effected through the courtesy of your Mr. Richard Schemehorn, Chief Engineer, discloses that this work shall require a separate dry-pipe antifreeze system of nine (9) sprinklers [sic], same to be an extension from the wet-pipe system of your main plant.
We hereby propose to perform the above-named work for the additional net sum of
THREE HUNDRED SIXTY-TWO DOLLARS ........
$362.00
Our total proposals, to date, embrace:
1. Basic Proposal, dated December 9,1957
$16,514.00
2. Alternate Proposal dated February 28,1957
627.00
3. Alternate Proposal, dated March 5,1958
362.00
Proposed Total Contract $17,503.00
(O’R---phrasing
for P.O. Respectfully submitted,
Saving - - Ann.
Prem.) HIPSKIND FIRE PROTECTION COMPANY
(Signed)
LMN :ak Lou M. Nagelsen, Manager
(General Industries Mar. 6,1958)”
Attached to said purchase order, appellee’s Exhibit No. 9, is appellee’s Exhibit No. 10, as following:
“ GENERAL HOMES
Division of General Industries, Inc.
Fort Wayne, Indiana
March 11, 1958
Mr. Lou M. Nagelsen, Manager
Hipskind Fire Protection Company
1725 Winter Street
Fort Wayne, Indiana
*666Dear Mr. Nagelsen:
This letter contains the specifications for our purchase order #27380.
ADDITIONAL CONDITIONS OF CONTRACT
1. The automatic sprinkler system must be installed to conform to regulations of the National Board of Fire.Underwriters and devices listed by the Underwriters’ Laboratories must be used.
2. Before work is begun, complete, working plans of installation must be submitted to the Indiana Rating Bureau for approval.
3. Upon approval of plans by the Indiana Rating Bureau, the installation must be carried out accordingly. No deviation from approved plans will be permitted unless first approved by the Indiana Rating Bureau.
4. It is a condition of this contract that the installation of the automatic sprinkler system will not be accepted or paid for until the installing company shall furnish a written statement to the effect that the work covered by its contract has been completed and tested in accordance with the approved specifications and plans. It is a further condition that the completed work must be completely acceptable, in every detail, to the Indiana Rating Bureau.
INSURANCE PROVISIONS
1. Public Liability and Property Damage
The Contractor shall, at his own expense, effect and maintain comprehensive $100,000/$3000,00 Public Liability and $50,000/850,000 Property Damage Insurance, including Contractors Protective, and Comprehensive Auto $100,000/$300,000 Liability and $50,000 Property Damage. Ten day written cancellation notice to the Owner shall be provided. Prior to starting work, certificate of such insurance shall be delivered to the Owner. The Contractor shall not permit any Subcontractor to commence work on his subcontract until said Subcontractor has obtained similar insurance.
*6672. Compensation and Occupational Disease
Prior to starting work, the Contractor shall provide the Owner with a certificate showing Compensation and Occupational Disease coverage in the name of the Contractor, as required by the laws of the state in which the work is to be performed. Ten days’ cancellation notice to the Owner shall be provided. The Contractor shall not permit any Subcontractor to commence work on his subcontract until such insurance required by the Subcontractor has been obtained.
3. The Contractor shall be responsible for, and shall indemnify and hold harmless the Owner against any and all expenses, claims, demands, suits, and proceedings arising out of any injury to or death of any persons (including without limitation employees of the Contractor, the Owner, and Subcontractor, other Contractors or any other person, as well as the public) and any damage to any property (including without limitation any work or materials of the Owner, any Subcontractor, other contractors or any other person, as well as the public and owners of property adjacent to the building site) caused by any act or neglect, of the Contractor, or any of his Subcontractors or the agents or employees of either.
4. If any legal proceedings shall be brought against the Owner on account of any injury to person or to the property described herein, the Owner shall give notice thereof to the Contractor who shall, at his own expense, defend such proceedings, pay to satisfy any judgment that may be entered against the Owner in any such proceedings and pay all costs or expenses whatever incurred by the Owner in any such case in which judgment is rendered against him.
GENERAL HOMES
Div. of General Industries, Inc.
(/s/) Bruce H. McLennan
Bruce H. McLennan
BMcL/dl Purchasing Agent ”
*668We have not found anything in the record which discloses that appellant accepted the conditions set forth in Exhibit No. 9 and Exhibit No. 10. On the other hand, it appears that by defendant’s Exhibit No. 8, and particularly that part of same which has to do with a letter from appellant to appellee, dated May 8,1958, Edward J. Disser, Vice President of appellee, made this notation thereon:
“Dick Schem — ” (meaning Schemehorn, Chief Engineer of appellee) “If this will get it going, give Lou” (meaning Lou Nagelsen, Manager, who carried on negotiations for the contract in- behalf of appellee) “the word and tell him to send the contract. E.J.D.” (Meaning E. J. Disser, Vice President and Comptroller of appellee) “5/9/58”
“Called Hipskind 5/13” (meaning 1958) “told him to go ahead. RS 5/13”
Appellant submitted a form of contract generally referred to as standard form of agreement between contractor and owner (Appellant’s Exhibit No. 7) dated May 14, 1958, which, among other things, contained the final total contract price of $17,503.00, this by way of amendment, and for progress payments, “on or about the 10th day of each month, to the extent of ninety (90%) percent of the value based on the contractor’s prices of labor and materials incorporated in the work, and of materials suitably stored at the site thereof, up to the first day of that month, as estimated by the contractor, less the aggregate of previous payment; and upon substantial completion of the entire work, a sum sufficient to increase the total payments to —% of the contract price----”
Article 5 of said.agreement provided as follows:
“Article 5. Acceptance and Final Payment— Final payment shall be due 15 days after substantial completion of the work provided the work *669be then fully completed and the contract fully performed.
Upon receipt of written notice that the work is ready for final inspection and acceptance, the Indiana Rating Bureau shall promptly make such inspection, and when they find the work acceptable under the Contract and the Contract fully performed they shall promptly issue a final certificate, over their own signature, stating that the work provided for in this Contract has been completed and is accepted by them under the terms and conditions thereof, and therefore the entire balance shall be due the Contractor.
Before issuance of final certificate the Contractor shall submit evidence satisfactory to the Owner that all payrolls, material bills, and other indebtedness connected with the work have been paid.
If after the work has been substantially completed, full completion thereof is materially delayed through no fault of the Contractor, and the Contractor so certifies, the Owner shall, upon certificate of the Indiana Rating Bureau, and without terminating the Contract, make payment of the balance due for that portion of the work fully completed and accepted. Such payment shall be made under the terms and conditions governing final payment, except that it shall not constitute a waiver of claims.”
The record reveals that appellee did not execute the form of contract submitted to it by appellant, and that by the notation of appellee on appellant’s letter of March 5, 1958, as above set forth, appellant was told to proceed with the work; and by undisputed oral testimony at the trial by Richard Schemehorn, Chief Engineer of appellee, that he called Hipskind and orally told him to go ahead.
It follows, therefore, that neither appellant’s Exhibit No. 7, as modified by its Exhibit No. 8, nor appellee’s Exhibit No. 9, as modified by Exhibit No. 10, was for*670mally accepted by either of the other parties. The fact that Hipskind testified that work was started on the project after receipt of the above mentioned purchase order does not, in our opinion, properly lead to a conclusion that appellant accepted the provisions thereof. We think the only proper conclusion is that from the standpoint, of time, work was begun after that. This statement is fortified by appellee’s objection to admission of its Exhibits 9 and 10 into the evidence “on the grounds that the same has no bearing on this case, is immaterial and irrelevant and tends neither to prove nor disprove any issue in the case, and . . . there is no showing whatever that any of the terms and conditions included therein were accepted or agreed upon by the plaintiff.” (Appellant.)
The query then arises: What is the contract situation between the parties to this appeal ?
It seems to us from the record that appellant has made a prima facie case in reference to the allegations of its complaint; contrariwise, appellee has not shown any defense thereto, and particularly is this true when we consider the affirmative allegations of appellee’s answer. We find nothing in the record which leads to a legitimate conclusion or inference that appellant, as appellee charges, was to furnish the material for and perform the necessary labor for the installation of a fire prevention sprinkler system “ . . . payable as and when said installation was completed to the satisfaction of this defendant and when said work was acceptable to the Indiana Rating Bureau, as alleged in plaintiff’s grammatical paragraph No. 1.”, and we would suggest that said rhetorical paragraph number one does not allege that the contract price would be payable “as and when said installation was completed to the satisfaction of *671this defendant and when said work was acceptable to the Indiana Rating Bureau.”
There has not been revealed to us any evidence or any legitimate inference to be drawn from any evidence which in any wise would support or lend credence to the contention or assertion that appellant was not to be paid for the installation of the sprinkler system in appellee’s building until and unless the installation was finally completed, inspected and approved by Indiana Rating Bureau.
It must be remembered that the plans and specifications, according to the undisputed record, prior to the commencement of the performance of the contract, had already been approved by the Indiana Rating Bureau and, after complete installation, the only prerequisite to approval of the project was testing the system under pressure.
While we are mindful of the excellent and careful attention given to this case at the trial level, both by counsel for the parties and by the trial judge, we likewise are mindful of the opportunity easily to err in respect to the finding of facts in this particular case without the entire written record available for study. We suggest that if the trial judge had found the facts specially and stated his conclusions of law, as seasonably requested by appellant, our task herein would have been simplified, if indeed, not unnecessary.
As stated in the majority opinion, the motion tendered at the conclusion of appellant’s evidence had the same effect as a demurrer to the evidence; hence, the sole and only question now before this court is whether such evidence, assumed to be true, or any legitimate inference therefrom, proves, or tends to prove and estab*672lish appellant’s case within the framework of the amended complaint.
If we have gleaned from the record and set forth herein a substantially correct statement of the controlling evidentiary facts, it becomes apparent to us at least that we are facing a proposition of law wholly different from the proposition upon which the said motion was predicated and sustained, in pursuance of which judgment was entered.
Appellee relies heavily upon the case of Krause et al. v. Board of Trustees of the School Town of Crothersville (1904), 162 Ind. 278, 70 N. E. 264. A careful reading of this case leads us to conclude that it has no significant application to the case now before us, for the simple reason that appellant, by its oral contract, did not engage itself to an obligation similar to the obligation of contractor Krause, namely, as here, to install a sprinkler system in toto according to the plans and specifications approved by appellee and by the Indiana Rating Bureau, with liability thereafter attaching to :pay the contract price therefor.
The amended complaint alleged an oral contract and the answer of appellee, in rhetorical paragraph 1 “admits that in the month of March, 1958, plaintiff and defendant entered into an oral agreement whereby the plaintiff was to furnish the material, and perform the necessary labor, for the installation of a fire prevention sprinkler system in this defendant’s manufacturing plant” at a certain price, “payable as and when said installation was completed to the satisfaction of this defendant and when said work was acceptable to the Indiana Rating Bureau, as alleged in plaintiff’s grammatical paragraph 1:” (Emphasis supplied.) •
*673The fact is apparent that appellant did not allege in its amended complaint anything regarding the contract price being payable as stated in said answer. And there has not been called to our attention any substantial evidence to support such allegation of facts in said appellee’s answer. There is some language on this subject in appellant’s Exhibit No. 7 and appellee’s Exhibits Numbers 9 and 10, neither one of which, as above stated, was accepted and signed by the other party. Hence, we express the opinion that none of these exhibits removed the contract of the parties from the category of an oral contract to a contract partly by way of parol and partly by way of writing. We express the further opinion that the evidence at the close of appellant’s case presented a prima facie case and that the motion of appellee should have been overruled.
Appellant also relies heavily upon the case of Rossville Alc. & Ch. Corp. v. Steel Constr. Co. (1937), 104 Ind. App. 515, 8 N. E. 2d 1016. This case indicates that the storage tanks which were being constructed for installation in a building had not, in fact, been placed in said building and were not attached to the real estate. Furthermore, as in the Krause case, even though payments on the contract price in each instance had been made, there was definite provision that the contract price in each instance would not be paid until the work was completed, tested and accepted. The opinion in the Krause case and the opinion in the Rossville case do not suggest to us an enlargement upon and applicability thereto of the legal principle therein announced. Rather, we express the opinion that their applicability should be limited to that class of cases which by the nature of the contract require an adherence thereto. As we perceive the matter, the scope of applicability is not to be extended and applied except when and wherever ab*674solutely necessary in the enforcement of contract provisions specifically requiring the same. Such is not the case before us.
Both parties to this appeal assert the application to the case at bar of the maxim res periit domino, when a thing is lost or destroyed, it is lost to the person who is the owner of it at the time. I agree with this assertion. However, in view of the allegations of the pleadings, the evidence in the majority opinion and that which is set forth herein, and the assertions of the parties, I am of the opinion that the law of fixtures applies to the case at hand. From our investigation, and already having determined that appellant is not shown to have contracted, as claimed by appellee, to deliver in toto a completed sprinkler system to be by it approved and to be approved by the Indiana Eating Bureau, we have the opinion that the partly installed sprinkler system was, in its nature, under the classification of a fixture. There was actual annexation; it was adapted to the use of the building on the realty; and would serve the purpose for which it was designed, and there was an evident intention to make the sprinkler system a permanent accession to the freehold. Citizens Bank of Greenfield v. Mergenthaler Linotype Co. (1940), 216 Ind. 573, 25 N. E. 2d 444. The opinion in that case cited Ochs v. Tilton (1914), 181 Ind. 81, 85, 103 N. E. 837, as follows:
“‘A general rule, recognized by the weight of authority, is that the true test of a fixture requires the united application of the following requisites: (1) annexation of the article, which may be either actual or constructive; (2) adaptation to the use of the realty, or part thereof, with which the article is connected; (3) the party annexing must have intended thereby to make the article a permanent accession to the freehold.’ ”
*675We may add that in the Mergenthaler case our Supreme Court, in affirming the lower court, decided that there was no intention of the parties to make the linotypes a permanent accession to the realty. However, from the evidence in the case at bar, that part of the sprinkler system already installed through the use of adjustable steel device hangers, U-hangers, steel hanger rod clips, coach screw hanger rods, gimlet pointed, threaded and not threaded, pipe cut to dimensions, all following detailed plans and specifications for such installation, designed particularly for appellee’s building, approved by appellee and the Indiana Rating Bureau, it seems to us that the removal of the installation not only would make the various and divers parts used in the installation almost completely worthless, but damage to the freehold and building likewise would result from an attempted removal. For these reasons and the further fact that material men and laborers on the job might suffer irreparable injury, harm and damage should a contractor become insolvent or bankrupt during the process of installation, I conclude that this cause should be reversed and remanded for a new trial.
Note.—Reported in 194 N. E. 2d 738. Transfer denied in 204 N. E. 2d 339.