Bergh v. Herring-Hall-Marvin Safe Co.

• Decision Date: 27 February 1905
• Docket Number: 40.
• Citation: 136 F. 368
• Parties: BERGH et al. v. HERRING-HALL-MARVIN SAFE CO.
• Court: U.S. Court of Appeals — Second Circuit

136 F. 368

BERGH et al. v. HERRING-HALL-MARVIN SAFE CO.

No. 40.

United States Court of Appeals, Second Circuit.

February 27, 1905

John L Cadwalader and William Greenough, for plaintiff in error.

John A Garver, for defendant in error.

Before WALLACE, TOWNSEND, and COXE, Circuit Judges.

COXE Circuit Judge.

Prior to December 23, 1897, the Herring-Hall-Marvin Company was engaged in the business of making safes upon premises owned by the defendants and leased to said company, situated on South and Front streets in the city of New York. These premises had originally been leased for eight years from February 1, 1881, to Nichols & Co., who, in 1883, sublet the same to Herring & Co. and from that time until the termination of the last lease, in November, 1900, the premises were occupied by the said company, or its predecessors, under leases from the defendants, for the business of manufacturing safes. On December 23, 1897 receivers of said company were appointed who took possession of said premises, under the existing lease from defendants together with all the property pertaining thereto, and continued in possession until the termination of the lease on November 19, 1900, the receivers being dispossessed for the nonpayment of rent. The receivers attempted to remove from the premises the property in controversy, insisting that the articles were trade fixtures which could be removed without substantial injury to the building. They were prevented from doing so by the defendants upon the ground that the articles were not trade fixtures but were essential parts of the realty. The right of action of the receivers for this alleged conversion was duly assigned to the plaintiff, the Herring-Hall-Marvin Safe Company. The jury found that the two boilers were worth $1,000, the two engines $1,200, the shafting, hangers, pulleys and appliances $1,100 and all the other items $335. Although inclined to the opinion that there could be no recovery for the boilers the trial judge directed a verdict for the full amount, $3,635, in order t at the entire controversy might be finally disposed of in this court. One of the engines (the Corliss), with some of the shafting and heating apparatus was in the building when Herring & Co. purchased the plant of Nichols & Co., in 1883. The parties agreed upon the value of this engine at $850. The other engine (the Gamble), the agreed value of which is $350, was placed in the building during the existence of the last set of leases. The boilers were put in in 1894; they were new at that time and replaced the old boilers, purchased from Nichols & Co., which were worn out. They were used to run the engines and the exhaust steam was used for heating. As to the other property in question the major part was placed in the building by Herring & Co. With the exception of the boilers, the Gamble engine, the Worthington pump and the dynamo all of the articles passed upon by the jury were placed upon the premises during the leases to Nichols & Co. of 1881 and to Herring & Co. of 1889. The leases provided that at the end of the respective terms the premises should be surrendered in good condition and none of them referred specifically to any of the articles which are the subjects of this controversy.

The principal question argued is whether there was error in the refusal of the court to direct a verdict for the defendants. The defendants insist that the articles in question were not the property of the plaintiff or its assignors, the right of removal, if it ever existed, being lost by taking new leases without any reservation permitting such removal.

The law of the state where the property is situated, when explicit and uniform, is taken as the guide in deciding what annexation to the freehold of a chattel makes it a part of the realty. In New York the rule is that if the article be attached for temporary use with the invention of removing it and in such a manner that its removal can be effected without substantial injury to the freehold it will be regarded as a chattel and may be removed by the tenant. If, on the other hand, the annexation be permanent in character or the article be specially adapted for use in the place where it is annexed it becomes a fixture and cannot be removed. N.Y. Life Ins. Co. v. Allison, 107 F. 179, 46 C.C.A. 229. Articles annexed to the realty for the purpose of carrying on a trade are known as 'trade fixtures' and are removable by the tenant during his term if the removal will not materially injure the premises. Am. & Eng. Enc. of Law (2d Ed.) vol. 13, p. 642. It seems, therefore, that all of the articles in controversy were trade fixtures and, with the possible exception of the boilers and a part of the shafting, could be removed without injury to the building. The testimony is clearly to this effect and the court so finds. We see no reason why the boilers and shafting should be excepted. Boilers have frequently been held to be trade fixtures under similar circumstances to those disclosed by the present proof.

In Livingston v. Sulzer, 19 Hun, 375, the court, at page 380, says:

'We are at a loss to see why the ranges and boilers, and other fixtures, would not have been properly removable by an outgoing tenant who had placed them there for the purposes of trade and business.'

See, also, Smith & Whitney, 147 Mass. 479, 18 N.E. 229; Holbrook v. Chamberlin, 116 Mass. 155, 17 Am.Rep. 146; Globe Mills v. Quinn, 76 N.Y. 23, 32 Am.Rep. 259.

The same is true of the shafting, pulleys, etc. Cook v. Trans. Co., 1 Denio, 91.

We are pointed to no testimony which establishes the fact that the removal of these articles would have materially injured the freehold. The plant of the lessees was put in the building for the purpose of 'manufacturing safes'; the lessors knew this and it was expressly stated in the leases. The boilers were there to generate steam for running the engines. This was their paramount use; incidentally the exhaust steam was used for heating purposes. It appeared that the steam pipes and radiators were old and out of order and that the heating plant 'had not been used latterly by Herring & Co., or Herring-Hall-Marvin Company to any great extent. It was in pretty bad order; pretty bad repair.' The building was a factory where the workmen were constantly engaged in physical exercise and it certainly does not satisfactorily appear that a heating plant was a necessity in a building of this character or that the pipes and radiators were so attached to the realty as to make them fixtures. The claim for these articles was abandoned at the trial because they were found to be valueless. As originally constructed there seems to have been no heating plant provided for the building, the one in question having been put in by Nichols & Co. There is nothing to show that such a plant was essential or that the owners did not desire to have the building in a condition where it could be used for purposes where a general heating plant would not only be unnecessary but objectionable.

Regarding the shafting the proposition is advanced that a...