Court Opinion

ID: 5327524
Source: CourtListenerOpinion
Date Created: 2022-01-08 04:58:21.435292+00
Date Added: 2024-06-11T08:29:24.267539
License: Public Domain

Merrell, J. (dissenting).
Plaintiff sold on March 31, 1931, to Atlantic Beach Apartments Corporation, defendant’s predecessor in title, certain electric light fixtures which were to be installed in a building owned by the purchaser, situated in the county of Nassau. A conditional bill of sale was executed and filed in the office of the register of Nassau county. The office of the purchaser at that time and at the time of the filing of the contract was in Long Island City, in the county of Queens. There was never any filing of the conditional bill of sale in the office of the register of Queens county. The defendant had no knowledge or information of any reservation of title to the fixtures in question. The defendant is the present owner of a mortgage given by the vendee of the electric light fixtures covering the real property where the fixtures were to be installed and. also the personal property therein contained. On June 29, 1931, Atlantic Beach Apartments Corporation executed its mortgage for $24,168 to Island Park Associates, Inc., covering the real property where the fixtures already had been installed. This mortgage was duly recorded July 9, 1931. The mortgage covered real estate, “ together with all fixtures and articles of personal property now or hereafter attached to or used in connection with the premises, all of which are covered by this mortgage.” This mortgage was consolidated with a prior mortgage executed on July 18, 1930, for $70,832, the consolidation agreement creating a single hen for $95,000, and recorded on said July -9, 1931. The consolidation agreement also contained the same clause covering the personal property on the mortgaged premises. On January 15, 1932, Island Park Associates, Inc., the mortgagee, was awarded judgment of foreclosure of said mortgage upon the real property covered thereby. Upon the sale the real estate realized the sum of $1,000, leaving a deficiency of $102,508.72, including the mortgage covering the personal property, amounting to $24,168. The mortgagee received no notice of the plaintiff’s conditional bill of sale at the time the mortgage was made, and advanced the consideration of the mortgage upon the faith and credit of the property and chattels thereon, including the fixtures sold by plaintiff. Defendant claims to be a purchaser of the chattels for value without notice of plaintiff’s claim, and in its answer asserts a counterclaim for the foreclosure of the mortgage on the personal property now held by it. *438The motion of the plaintiff for summary judgment was denied by the court at Special Term.
The only question involved upon this appeal is as to whether or not the filing of the conditional bill of sale in Nassau county protected the rights of the conditional vendor, or whether those rights to the chattels were forfeited by the failure to file the conditional bill of sale in the county ,of Queens where the purchaser had its principal office. The defendant, who now claims to hold these chattels, asserts that it never had any notice or information, either actual or constructive, of the existence of plaintiff’s conditional bill of sale. Section 66 of the Personal Property Law requires that a conditional sale agreement of personal property, other than any chattels covered by section 67 of the Personal Property Law, shall be filed in the city or town of the buyer’s residence. Section 67 of the Personal Property Law provides that such conditional sale agreement relating to chattels affixed or to be affixed to the real estate is to be filed in the office where the deed of the realty would be recorded to affect such realty. Therefore, the question presented by the motion was as to the place where the conditional sales agreement of the electric fixtures should have been filed pursuant to sections 66 and 67 of said law. Whether or not the chattels which plaintiff now claims are determinate or indeterminate was clearly a question of fact to be determined upon the trial. The only real question presented here is as to whether or not the electric fixtures sold by plaintiff to the former owner of the property were in the class known as indeterminate, so that according to the intention of the parties they remained personalty or became a part of the real estate, and the contract, therefore, under the provisions of section 67 of the Personal Property Law was required to be filed with the proper officer in the county where the real estate is situated, or whether, despite any such agreement, they still retained their “ determinate ” character as chattels and, therefore, subject to section 66 of the Personal Property Law. The court at Special Term held that " the most that may be said in plaintiff’s favor is that an issue of fact is presented as to whether the fixtures fall within the class of ' determinate ’ movables or within the category of ' indeterminate ’ movables.” Also, that an issue may be present as to whether or not the mortgage was taken by defendant in good faith and without any knowledge or information, actual or constructive, of the ownership of the chattels by the plaintiff. Those issues can only be determined upon the trial. The question as to whether the electric fight fixtures are personalty, and, therefore, not within the meaning of section 67 of the Personal Property Law, seems to have been thoroughly discussed by the *439Court of Appeals in the case of Madfes v. Beverly Development Corp. (251 N. Y. 12, 15). The court distinguishes the three classes of chattels which may be used in connection with real property, as follows: “ Certain chattels have such a determinate character as movables that they remain personal property, after their annexation to real estate, independently 'of any agreement between the owner of the chattels and the owner of the realty which so provides. (Cosgrove v. Troescher, 62 App. Div. 123; Central Union Gas Co. v. Browning, 210 N. Y. 10.) Other chattels, such as the brick, stone and plaster placed in the walls of a building, notwithstanding an agreement to the contrary, conclusively become real estate after annexation thereto. (Ford v. Cobb, 20 N. Y. 344, 351: Voorhees v. McGinnis, 48 N. Y. 278, 287; Tifft v. Horton, 53 N. Y. 377; East New York El. Co. v. Petmaland Realty Co., 243 N. Y. 477.) ‘ It will readily be conceded that the ordinary distinction between real estate and chattels exists in the nature of the subject, and cannot in general be changed by the convention of the parties.’ (Ford v. Cobb, supra.) ‘ If the property had in its own nature a determinate legal character, either as realty or personalty, the manner in which the parties treated it would not change that character.’ (McRea v. Central National Bank of Troy, 66 N. Y. 489.)
“ Between the two classes of chattels, those which, after annexation, due to the inherent nature of the subject or the mode of annexation, remain personalty, and those which, due to the mode and purposes of annexation, conclusively become real estate, there was, at common law, a large class of movables which, after attachment, continued to be personal property, or became real estate, accordingly as the owner of the chattels and the owner of the real estate might have agreed (Ford v. Cobb, supra; Tifft v. Horton, supra; Fitzgibbons Boiler Co. v. Manhasset Realty Corp., 125 App. Div. 764; revd. on the dissenting opinion of Scott, J., 198 N. Y. 517; DeBevoise v. Maple Avenue Construction Co., 228 N. Y. 496; East N. Y. El. Co. v. Petmaland Realty Co., supra; Duntz v. Granger Brewing Co., 41 Misc. Rep. 177; 96 App. Div. 631; 184 N. Y. 595). The limitation set to this doctrine was that it should not include a chattel ‘ where the subject or mode of annexation is such that the attributes of personal property cannot be predicated on the thing in controversy ’ (Ford v. Cobb, supra); ‘ as where the property could not be removed without practically destroying it, or where it or part of it, is essential to the support of that to which it is attached.’ (Tifft v. Horton, supra.) At common law, articles of this third class, excepting those within the group excluded by the limitation, when sold under a conditional sale contract reserving title to the seller, after annexation retained their original character *440and continued to be the property of the seller, as against subsequent purchasers for value of the real estate, although, but for the intention of the parties evidenced by the contract, they would have become real property. (Duntz v. Granger Brewing Co., supra; Fitsgibbons Boiler Co. v. Manhasset Realty Corp., supra; DeBevoise v. Maple Avenue Construction Co., supra; East N. Y. El. Co. v. Petmaland Realty Co., supra.)
“ Self-evidently, the provision quoted from section 67 of the Personal Property Law was intended to affect only chattels belonging to the class which we have denominated third. It was the legislative purpose that a condition reserving title in the seller, to be found in a conditional sale contract, should no longer have the effect of impressing upon articles, annexed to a building by the purchaser in such a manner as otherwise to have become real estate, the continuing character of personal property. The provision in terms relates to none other than goodsu ‘ so affixed to realty at the time of a conditional sale or subsequently as to become part thereof but to be severable without material injury to the freehold.’ Goods affixed to realty which, in the absence of an agreement that their original character should be retained, would not have ‘ become part thereof ’ but would in any event have remained personalty, are not affected by the provision [Sec. 67].”
It seems to me that the court was entirely correct in indicating in its opinion that the electric light fixtures in question had not lost their determinate character, and that, therefore, the conditional bill of sale, in order to protect the plaintiff, should have been filed in the county of Queens, and, at most, a question of fact is presented which can only be determined at the trial as to whether or not the fixtures were indeterminate or determinate. Section 66 of the Personal Property Law provides as follows: “ * * * Every other conditional sale contract or a copy thereof, except contracts for the conditional sale of goods specified in section sixty-seven of this article must be filed in the office of the city or town clerk in the city or town in which the buyer resides * * * except that where there is a recording officer’s office in such city or town or borough of a city in which such conditional sale contract or copy thereof is required to be filed as aforesaid, such conditional sale contract or copy thereof must be filed in such recording officer’s office.”
There can be no doubt that the principal office of a domestic corporation is to be regarded as the corporation’s place of residence. (Finch School v. Finch, 144 App. Div. 687.) The defendant, being now the holder of the mortgage in question, is entitled to all the rights of the original mortgagee.
*441I think the order was right and should be affirmed, with twenty dollars costs and disbursements to defendant, respondent, against plaintiff, appellant.
Order reversed, with twenty dollars costs and disbursements, and motion granted, with ten dollars costs.. Settle order on notice with provision for assessment of damages.