Court Opinion

ID: 6965552
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:53:15.813683+00
Date Added: 2024-06-11T16:08:35.778211
License: Public Domain

Mr. Justice Craig delivered the opinion of the Court; The principal, and, indeed, the only, question of any importance presented by this record is, whether the machinery which Day purchased of appellants and placed in the manufacturing building, as shown by the evidence, became fixtures. If the machinery, when attached to the building, became fixtures and a part of the realty, then such machinery passed to the bank under the trust deed executed by Day, and could not be taken under the writ of replevin sued out by the appellants. It will be observed that the deed under which Day acquired title to the lots upon which the factory was erected, provided that the building, improvements and machinery to be placed on said lots shall not be torn down or removed from said premises by said grantee or his assigns for the space of at least five years from the first day of July, 1891, and that said lots shall be used for manufacturing purposes alone. This deed was executed July 15, 1891, and recorded July 25, 1891. When, therefore, appellants, in September, 1891, sold machinery to be placed in the building, they had notice of the contents of the deed, and having such notice they knew that the machinery to be placed therein as a part of the plant could not be removed at such time as they might elect, or at the .will or pleasure of Day, the purchaser. ■ Moreover, the agent of appellants who sold the machinery was at the factory between the first and tenth of September after the factory building had been erected, and learned from Day the nature of the contract between him and the people of Wyanet, under which the factory was established, and hence they knew, or at least were -in law chargeable with knowledge, that the machinery sold by them could not be removed from the factory. But in addition to the provisions of the deed, the manner in which the machines were placed in the building manifests an intention that they should become fixtures, and remain there as a part of the shoe factory. ' Ten of the machines were fastened to the floor, or plank nailed to the floor, by large screws, and belted to the shafting overhead. Six were fastened to benches by wooden screws, and belted to the shafting, the benches having been nailed to the floor of the building. The witness Gass, who had charge of placing the machinery in the factory, testified: “None of the machinery was in at the time I went to Wyanet, and I superintended the placing of all of it, under Day’s direction. It was all put in the building for the purpose of manufacturing shoes, and was all used for that purpose a little. The machinery purchased of Fifield was placed in the building for the purpose of manufacturing shoes, and increases the value of the plant. It was essential to the plant as placed there. The machinery is specially adapted to the manufacturing of shoes. Shoes can be manufactured without it, but it is necessary. I was not employed to superintend a factory other than a shoe factory, and when I put the Fifield machinery in the factory it was not with the intention of taking it out.” Ewell on Fixtures states the rule for determining what are to be regarded as fixtures, as follows: “First, real or constructive annexation of the thing in question to the realty 5 second, appropriation or adaptation to the use or purpose of that part of the realty with which it is connected; third, the intention of the party making the annexation to make it 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 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.” The author also says: “Of these tests the clear tendency of modern authority seems to be to give preeminence to the question of intention to make the article a permanent accession to the freehold, and the others seem to derive their chief value as evidence of such intention.” In Arnold v. Crowder, 81 Ill. 56, it was held that platform scales fastened to sills laid upon a brick wall, for weighing stock or grain, as between mortgagor and mortgagee are to be regarded as fixtures belonging to the realty. It is there said: “It is in the power of the owner of the inheritance to affix any property to it he pleases, and when he does so it becomes a fixture in the general sense of the term, and part of the freehold, and if the inheritance be afterwards sold or mortgaged the fixture goes with the freehold.” In Dobschuetz v. Holliday, 82 Ill. 371, it was held that a steam engine, machinery and fixtures, attached to the soil by a lessee thereof for the purpose of hoisting coal, including all boxes and other necessary appliances connected therewith, became a part of the lessee’s estate therein. In that case it was contended that the engine was personal property, and hence a mechanic’s lien could not be enforced, and it was, among other things, said: “Whatever may have been the private agreement of the parties, it is very clear the engine, when set up and attached to the realty, as it was, became a part of the estate the lessee had in the premises. No doubt the parties could agree among themselves they would treat the engine and other fixtures as personalty, hut their private agreement could not change the character of the property, so far as third parties were concerned.” So here, when the machinery was placed in the factory and became attached, the private agreement made between Day and appellants, to the effect that the machinery should remain the property of the vendor until paid for, could not change the character of the property, so far as the rights of mortgagees or other lien creditors were concerned. See, also, Wood v. Whelen, 93 Ill. 153; Thielman v. Carr, 75 id. 385. First Nat. Bank of Joliet v. Adam, 138 Ill. 483, is a case in point. There certain real estate and water power were leased, and the lessee erected a paper mill and placed therein all necessary machinery. After the mill was erected and properly equipped with the necessary machinery, the lessee executed a trust deed on the property. The lessee failing to pay the rent, the lessor instituted proceedings to collect, relying on a clause in the lease which provided for the reservation of a valid and first lien to the lessor upon any and all goods, chattels or other property belonging to the lessee, as security for the rent. But it was held that the mill and buildings and machinery all formed a part of the leasehold estate, and were chattels real, and were a proper subject matter of a real estate mortgage, which, when made, creates a valid lien on the property. See, also, Knapp v. Jones, 143 Ill. 375. The rule established in this State is fully sustained by the decisions in other States. In Winslow v. Merchants' Ins. Co. 4 Metc. 306, in discussing the question in regard to what part of the property of a machine shop would pass by a mortgage, the court said “that the steam engine and boilers, and all the engines and frames adapted to be moved and used by the steam engine, by means of connecting wheels, bands or other gearing, as between mortgagor and mortgagee, are fixtures, or in the nature of fixtures, and constitute a part of the realty, * $- * and passed by the mortgage.” The same doctrine was declared in Pierce v. George, 108 Mass. 78. It is there said: “Articles placed in a mill by the owner to carry out the obvious purpose for which it was erected, and adapted to that purpose, are generally part of the realty, notwithstanding the fact that they could be removed and used elsewhere.” The same rule has been adopted in Maine: Parsons v. Copeland, 38 Me. 537. So in Iowa: Ottumwa Woolen Mill Co. v. Howey, 44 Iowa, 57. Michigan adopts the same rule: Togle v. Palmer, 42 Mich. 314. See, also, Taylor v. Collins, 51 Wis. 123, and Dudly v. Hunt, 67 Md. 44, where the same doctrine is declared. In Hill v. Farmers’ Nat. Bank, 97 U. S. 450, the question arose whether machinery in a paper mill was part of the realty, and in deciding the case the court, among other things, said: “By placing it in the building, in constructing the mill, every part and parcel of it, as between mortgagor and mortgagee, became a fixture, and á part of the freehold.” Sword v. Low, 122 Ill. 487, has been cited, and is relied upon by the appellants. In the case cited an engine and boiler attached to the realty were held to be personal property. ^ But upon an examination of the case it will be found that it was agreed between the vendor and purchaser, when the engine and boiler were sold, that the purchaser should execute and deliver a chattel mortgage on the property to secure the payment of the purchase money. In pursuance of this agreement a chattel mortgage was executed and placed upon record, as required by statute, thereby giving notice to third persons that the property was to be regarded as personal property. But here, however, no chattel mortgage was given to appellants. They relied solely upon a secret agreement, made between Day and themselves, that the property should belong to them unless paid for by Day. In the sale of a chattel where the possession of the property passes to the purchaser, a secret lien in favor of the vendor is not valid as against creditors or subsequent purchasers. Chickering v. Bastress, 130 Ill. 216. Some importance is attempted to be placed on the fact, in the argument, that appellee the Farmers’ National Bank took a chattel mortgage on the property. We do not regard this as an important element in the case. The fact that the bank may have been advised that the machinery was personal property, and attempted to secure its debt by taking a chattel mortgage thereon, would not impair the validity of the deed of trust or mortgage subsequently executed, nor would the acceptance of a chattel mortgage prevent the bank from resorting to any legal remedy it might have to secure its indebtedness. The real question was, whether this machinery, purchased by Day to be placed in the factory, and placed therein as a part and parcel of the plant, became a fixture. If it did, then it became a part of the realty, and was subject to the mortgage executed on the real property. Upon this question, under the authorities, we are satisfied that the machinery, after being attached to the factory, became a part and parcel of the plant, and could not be taken on a writ of replevin. The judgment will be affirmed. Judgment affirmed.