Adamson v. Sims

• Decision Date: 03 March 2004
• Docket Number: No. CA 03-840.,CA 03-840.
• Citation: 151 S.W.3d 23,85 Ark. App. 278
• Parties: Don ADAMSON v. Jimmy B. SIMS, As Trustee of the Jimmy B. Sims Farm, Inc., Pension Trust.
• Court: Arkansas Court of Appeals

151 S.W.3d 23

85 Ark. App. 278

Don ADAMSON v. Jimmy B. SIMS, As Trustee of the Jimmy B. Sims Farm, Inc., Pension Trust.

No. CA 03-840.

Court of Appeals of Arkansas, Division III.

March 3, 2004.

Gill Elrod Ragon Owen & Sherman, P.A., by: W.W. Elrod, II and Matthew B. Finch, Little Rock, for appellant.

Holleman & Associates, P.A., by: John T. Holleman, IV and Stacey D. Fletcher, Little Rock, for appellee.

JOHN MAUZY PITTMAN, Judge.

Following a bench trial, appellant Don Adamson was held liable for conversion of an airplane hangar that the Jimmy B. Sims Farm, Inc., Pension Trust claimed to own. The Trust was awarded $10,000 in compensatory damages. On appeal, appellant argues that the trial court erred in finding him liable for conversion. We agree and reverse and remand.

The hangar in question was located on the Cottonwood Plantation in Lonoke County. It was constructed approximately thirty years ago by John McRae for the purpose of housing his personal airplane. In June 2001, McRae decided to sell his airplane. He contacted appellant and orally conveyed the hangar to him in exchange for appellant's repairing and selling the plane. Appellant's plan was to disassemble the hangar, move it to his own airstrip, and erect it there. He expected it to cost him $3,000.

On August 31, 2001, appellee purchased the Cottonwood Plantation from the Mary S. Pemberton Trust for approximately two million dollars. The purchase price included all attached fixtures and equipment. Trustee Jimmy Sims would later testify that he understood the price to include the hangar; he apparently had no knowledge that McRae had sold the hangar to appellant.

In late December 2001, appellant and several other workmen arrived at the Plantation with lifting equipment, a trailer, and other tools and began dismantling the hangar. However, after the structure had been partially disassembled, Jimmy Sims protested, claiming that the hangar was owned by appellee. Appellant eventually left the hangar partially torn down.

On March 27, 2002, appellee sued appellant for trespass and for conversion of the hangar, and appellant counterclaimed for conversion of the hangar. The trial court ruled in appellee's favor on the conversion count and awarded it $10,000 in damages. Appellant appeals from that verdict.

When a case is tried by a circuit court sitting without a jury, our inquiry on appeal is whether the trial court's findings are clearly erroneous, or clearly against the preponderance of the evidence. Buck v. Gillham, 80 Ark.App. 375, 96 S.W.3d 750 (2003). Recognition must be given to the trial judge's superior opportunity to determine the credibility of the witnesses and the weight to be given to their testimony. Gosnell v. Independent Serv. Fin., Inc., 28 Ark.App. 334, 774 S.W.2d 430 (1989).

The key issue on appeal is whether the hangar is a fixture. If it is a fixture, it is owned by appellee by virtue of its purchase of the Cottonwood Plantation; if it is not a fixture, it is owned by appellant as his personal chattel. The trial court determined that the hangar was a fixture based on the following findings: 1) John McRae was a beneficiary of the Pemberton Trust and constructed the hangar for the Trust's benefit; 2) the hangar was affixed and annexed to the Plantation realty; 3) there was no agreement between McRae and the Pemberton Trust as to ownership of the hangar.

Appellant first challenges the trial court's finding that McRae constructed the hangar for the benefit of the Pemberton Trust. This finding was made by the court sua sponte, relying on the case of Corning Bank v. Bank of Rector, 265 Ark. 68, 576 S.W.2d 949 (1979). Appellant argues that the trial court's finding is erroneous on this point, and we agree.

The court's finding was based on testimony by Joe Pennington, the farm manager for the Pemberton Trust, that McRae was a "minority" beneficiary of the Trust and had managed the Plantation sometime before 1998. However, no further evidence was adduced regarding McRae's relationship to the Pemberton Trust or any benefit that the Trust enjoyed in the hangar. By contrast, there was considerable evidence that the hangar had not been constructed for the Trust's benefit. McRae, who did not testify at trial, signed a written memo on March 1, 2002, in which he stated that he had personally paid for the hangar and had built it "over twenty years ago for $9,000." Pennington testified that McRae had constructed the hangar thirty years earlier for storage of McRae's airplane; that it was Pennington's understanding that the hangar was not the Pemberton Trust's property; that McRae had insured and maintained the hangar; that Pennington never expended any Trust money to maintain the hangar and did not insure it, although the Trust insured other buildings on the Plantation; that the Pemberton trustee, Marilyn Houston (McRae's sister) was aware that the Trust was not insuring the hangar; and that the trustee never instructed Pennington to exercise any dominion or control over the hangar. On January 4, 2002, after the controversy in this case began, Pennington wrote a letter to appellee stating that the hangar had been paid for thirty years ago by McRae, was used to shelter McRae's airplane, and that insurance coverage for the hangar was paid for by McRae and "not included under the farm's other insurance coverage."

The evidence points inescapably to the conclusion that McRae, Pennington, and the trustee were all of the opinion that the hangar belonged to McRae and was of no interest to the Trust. The trial court therefore erred in finding that the hangar was built for the Trust's benefit.¹

As for the trial court's reliance on the Bank of Corning case, we believe it is not well founded in this instance. Corning involved the question of whether certain grain bins were fixtures on real property. In holding that they were, the supreme court stated that the inference that a structure is a fixture is strong "where the party attaching the `fixture' is the owner of the soil." Id. at 74, 576 S.W.2d at 953. The court in the case at bar must have considered McRae an "owner of the soil" by virtue of his being a beneficiary of the Trust. Although a trust beneficiary may have an equitable interest in trust property, see generally 76 Am.Jur.2d Trusts § 281 (2d ed.1992), in this case, we do not know the terms of the trust nor the extent of McRae's interest; we know only of Pennington's understanding that McRae was a "minority" beneficiary. Given the lack of evidence on this matter, the language in Corning was not applicable.

We turn now to appellant's argument that the trial judge erred in characterizing the hangar as a fixture. The question of whether particular property constitutes a fixture is sometimes one of fact only but usually is a mixed question of law and fact. Corning Bank v. Bank of Rector, supra. A fixture has been defined by our supreme court as property, originally a personal chattel, that has been affixed to the soil or to a structure legally a part of the soil and, being affixed or attached to the realty, has become a part of the realty. See Continental Gin Co. v. Clement, 176 Ark. 864, 4 S.W.2d 901 (1928). It is annexed to the freehold for use in connection therewith and so arranged that it cannot be removed without injury to the freehold. See id. The courts have devised a...