Beebe v. Pioneer Bank & Trust Co.

• Decision Date: 24 October 1921
• Citation: 201 P. 717,34 Idaho 385
• Parties: O. C. BEEBE, Appellant, v. PIONEER BANK AND TRUST COMPANY, Respondent
• Court: Idaho Supreme Court

201 P. 717

34 Idaho 385

O. C. BEEBE, Appellant, v. PIONEER BANK AND TRUST COMPANY, Respondent

Supreme Court of Idaho

October 24, 1921

WRITTEN CONTRACT-PAROL EVIDENCE RULE-FIXTURES-INTENT.

1. When a contract is reduced to writing and signed, it constitutes the final agreement of the parties as to its subject matter and prior or contemporaneous oral agreements or statements varying its terms, are not admissible.

2. When a mortgage expressly covers a lot and all improvements situate thereon, it includes fixtures which have become part of the realty, and a contemporaneous oral agreement that the mortgage does not cover fixtures is not admissible as between the parties and their privies.

3. Personal property, in order to lose its character as a chattel and become a fixture, must be annexed to the realty either actually or constructively; must be appropriated to the use of that part of the realty with which it is connected, and must be intended as a permanent accession to the freehold.

4. When the question as to whether or not a fixture has become part of the realty arises between the person who annexed it and another, the secret intention of the former, not disclosed to the latter, is not material, but the inquiry is as to what intention must be imputed to the former in the light of all the circumstances, tested by common understanding.

APPEAL from the District Court of the Sixth Judicial District, for Lemhi County. Hon. F. J. Cowen, Judge.

Action for conversion. Judgment for appellant for one dollar damages. Reversed and new trial ordered.

Reversed and remanded. Costs awarded to appellant.

Quarles & Cherry, for Appellant.

The admission of evidence showing preliminary negotiations leading up to the execution of the deed to Slaughter by the First National Bank was erroneous; the negotiations were merged into the deed, and the evidence was contradictory to the terms of the deed. (Jacobs v. Shenon, 3 Idaho 274, 281, 29 P. 44; Stein v. Fogarty, 4 Idaho 702, 43 P. 681; First Nat. Bank v. Bews, 5 Idaho 678, 51 P. 777; Newmyer v. Roush, 21 Idaho 106, Ann. Cas. 1913D, 433, 120 P. 464; 10 R. C. L., secs. 208-214, and notes.)

The court's instructions 11 and 12, intimating in effect that statements made during the pendency of negotiations for the loan, were manifestations of intent to fix the character of personalty upon the fixtures in question, and notice of their character were misleading, contrary to law, and prejudicial. (Jacobs v. Shenon, supra; Josslyn v. Daly, 15 Idaho 137, 96 P. 568; Whitney v. Dewey, 10 Idaho 633, 80 P. 1117, 69 L. R. A. 572; McIntosh etc. Co. v. Rice, 13 Colo. App. 393, 58 P. 358; Irving v. Cunningham, 66 Cal. 15, 4 P. 766; Liverpool etc. Ins. Co. v. T. M. Richardson Lumber Co., 11 Okla. 585, 69 P. 938; Turner v. Gumbert, 19 Idaho 339, 114 P. 33; Tyson v. Neill, 8 Idaho 603, 70 P. 790.)

Instruction 13 given by the court was erroneous in that it did not distinguish between furniture not attached to a building and fixtures permanently attached thereto for the purposes of the business for which the building was constructed; it overlooked and ignored the language and effect of the mortgage and decree foreclosing same. (22 Cyc. 5; Warvelle on Vendors, sec. 11; In re Beeg, 184 F. 522; McFadden v. Allen, 134 N.Y. 489, 32 N.E. 21, L. R. A. 446.)

Instruction 14 was clearly error. Plaintiff's requested instructions 1, 2, 3 and 4 correctly stated the law applicable to the proven facts of the case and should have been given. (Warvelle on Vendors, secs. 10, 11; Rogers v. Crow, 40 Mo. 91, 93 Am. Dec. 299; McFadden v. Allen, supra.)

E. W. Whitcomb, for Respondent.

With regard to things personal annexed to the realty by agreement between the mortgagor and mortgagee, it may be provided that such chattels shall retain their character as personalty or chattels, although attached to the realty in such a manner that, without such agreement, they would lose their character as personal property. (Teaff v. Hewitt, 1 Ohio St. 511, 59 Am. Dec. 634; Edwards & B. Lumber Co. v. Rank, 57 Neb. 323, 73 Am. St. 514, 77 N.W. 765; Henkle v. Dillon, 15 Ore. 610, 17 P. 148; Ferris v. Qwimby, 41 Mich. 202, 2 N.W. 9; Myrick v. Bill, 3 Dak. 284, 17 N.W. 268; Foster v. Mabe, 4 Ala. 402, 37 Am. Dec. 749; Dobschuetz v. Holliday, 82 Ill. 371; Binkley v. Forkner, 117 Ind. 176, 19 N.E. 753, 3 L. R. A. 33; Tyson v. Post, 108 N.Y. 217, 2 Am. St. 409, 15 N.E. 316; Freeman v. Leonard, 99 N.C. 274, 6 S.E. 259; Pond Machine Tool Co. v. Robinson, 38 Minn. 272, 37 N.W. 99; Burrill v. Wilcox Lumber Co., 65 Mich. 571, 32 N.W. 824; Second Nat. Bank v. O. E. Merrill Co., 69 Wis. 501, 34 N.W. 514; Harkey v. Cain, 69 Tex. 146, 6 S.W. 637; Boise-Payette Lumber Co. v. McCornick, 32 Idaho 462, 186 P. 252; Fratt v. Whittier, 58 Cal. 126, 41 Am. Rep. 251.)

A refusal to allow the defendant to show what was the intent between the parties at the time of the making of the mortgage would result in wrong to the defendant and would defraud it of property to which it was legally and equitably entitled. (Oliver v. Oliver, 4 Rawle (Pa.), 141, 144, 26 Am. Dec. 123; Pierce v. Robinson, 13 Cal. 116; Miller v. Fichthorn, 31 Pa. 252, 261; Urich v. McPherson, 27 Idaho 319, 149 P. 295; Frederick v. Devol, 15 Ind. 357; Straw v. Straw, 70 Vt. 240, 39 A. 1095; Noble v. Sylvester, 42 Vt. 146; Westheimer v. Thompson, 3 Idaho 560, 32 P. 205.)

Even though the annexation is such that the articles annexed cannot be removed without injury to the building, it does not conclusively show an intent that they shall be a part of the realty. (Allen v. Mooney, 130 Mass. 155; Quinby v. Manhattan Cloth etc. Co., 24 N.J. Eq. 260; Voorhees v. McGinnis, 48 N.Y. 278.)

MCCARTHY, J. Rice, C. J., and Budge and Dunn, JJ., concur. Lee, J., did not sit at the hearing and took no part in this opinion.

OPINION

MCCARTHY, J.

Appellant sued the respondent bank for the value of a bank vault door with its facings and certain furniture and fixtures removed by respondent from a bank building formerly occupied by it, which had been acquired by appellant through sheriff's sale, after foreclosure of a mortgage. The building was originally constructed by Langsdorf & Co., bankers, for their own banking purposes. When it was near completion, at a time when the fixtures in question had been partly installed, the First National Bank took over the Langsdorf banking business and the real estate. It completed the installation of the fixtures, which consisted of railings, counters, shelves, and partitions with marble bases, glass and grill work, which were ordered by the architect of the building, designed by him, for this particular building, and matched the other interior woodwork of the structure. They were set flush against the walls and fastened to them, the baseboard being cut and fitted around the partitions, which were attached to the floor with angle iron braces. It took two carpenters one day and three hours to remove them, and their removal left marks upon the walls and gaps in the baseboard. The vault door was built into the wall of the vault, imbedded in cement. It took an expert stone mason and concrete worker fifteen hours to get it out of the wall by cutting away the concrete built around it.

For the purpose of securing a loan, the First National Bank mortgaged this real property to C. S. Burton, trustee for James D. Murdock, the transaction being accomplished through Carl D. Slaughter, to whom the property was deeded by the bank, and who executed a mortgage to Burton, and then deeded the property back to the bank. The mortgage was foreclosed, and appellant bought the property at the sheriff's sale, receiving a certificate of sale and later a sheriff's deed. The mortgage described the lot upon which the bank building was situated and contained the words "with the improvements thereon situated. The sheriff's certificate of sale and sheriff's deed gave this same description. Subsequent to the sheriff's sale and the delivery of the certificate, respondent bought the property in question from one L. who had bought it from the receiver of the bank, and without appellant's consent, respondent removed it.

At the trial, the court, over the objections of the appellant, allowed respondent to introduce testimony that H. G. King, an officer of the bank, who negotiated the loan for the bank, had a verbal understanding with Burton that the mortgage was to cover the real estate, not including the furniture and fixtures, also testimony that the property in question was carried on the books of the bank as "furniture and fixtures."

The verdict and judgment were for the appellant in the sum of one dollar. All the evidence as to value makes it clear that this was a verdict adverse to appellant so far as the conversion is concerned, and that the one dollar is nominal damages for injury to the building caused by detaching and removing the property in question.

Appellant's principal assignments of error are the admission of the above evidence over his objections, the giving of certain instructions, and the refusal to give certain instructions requested by him.

The mortgage was a written contract between respondent's predecessor in interest and the mortgagee. It described the property as the lot "with the improvements thereon situated." This would include any fixtures which had become part of the realty; it would not include fixtures which had not become part of the realty. Whether the fixtures in question had or had not become part of the realty would depend upon the application of established rules of law to the particular circumstances of the case. A parol agreement between King, who negotiated the transaction for the mortgagor, and Burton, who took the mortgage as trustee, to the effect that the mortgage...