Carmichall v. United States, 17823.

• Decision Date: 06 January 1960
• Docket Number: No. 17823.,17823.
• Citation: 273 F.2d 392
• Parties: F. L. CARMICHALL and Ruth Carmichall, Appellants, v. UNITED STATES of America, Appellee. UNITED STATES of America, Appellant, v. F. L. CARMICHALL and Ruth Carmichall, Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

273 F.2d 392 (1960)

F. L. CARMICHALL and Ruth Carmichall, Appellants, v. UNITED STATES of America, Appellee.

UNITED STATES of America, Appellant, v. F. L. CARMICHALL and Ruth Carmichall, Appellees.

No. 17823.

United States Court of Appeals Fifth Circuit.

January 6, 1960.

John A. Kerr, Fort Worth, Tex., for appellants.

Elizabeth Dudley, Roger P. Marquis, Attys., Dept. of Justice, Washington, D. C., Perry W. Morton, Asst. Atty. Gen., W. B. West, III, U. S. Atty., Fred L. Woodlock, Jr., Asst. U. S. Atty., Fort Worth, Tex., S. Billingsley Hill, Atty., Dept. of Justice, Washington, D. C., for appellee.

Before CAMERON, JONES and BROWN, Circuit Judges.

JONES, Circuit Judge.

F. L. Carmichall and Ruth Carmichall, husband and wife, were the owners of a tract of 5.06 acres of land in Tarrant County, Texas, upon which they operated a lumber yard, a builder's supply business, and a concrete block manufacturing plant. The United States took the fee simple title to the land by the exercise of eminent domain for the purpose of providing additional facilities at Carswell Air Force Base. On the property and used in the Carmichall business were two concrete block machines; one of which was designated as the Columbia machine and the other as the Stearns machine. Both were so affixed and used as to make them a part of the freehold under the rules of law generally applicable. 19 Tex.Jur. 707, et seq., Fixtures §§ 3-9; United States v. Becktold Co., 8 Cir., 1942, 129 F.2d 473. The manufacturer of the Stearns machine had taken a mortgage on it and the equipment appurtenant to it from F. L. Carmichall to secure the unpaid purchase price. This instrument is designated as a "chattel mortgage" and it designates the property encumbered as "chattels." A provision is contained in the instrument that the "chattels" "shall not become part of the freehold." The mortgagee was given the right, upon default, to take possession of, remove, and sell the mortgaged property. In the operation of each machine sets of conversion parts and mold boxes could be used in the making of different shapes and sizes of blocks. The sets used with one machine could not be used with the other nor could they be used with any other machine without being adapted by precision machining.

The case was tried before the court with a jury. While on the stand, Carmichall was questioned by the court as to who owned the Stearns machine. He answered,

"I took the machine back, what I considered as salvage, took the machine and sent it back to Stearns and got another machine, a new machine."

He was asked, "Then you have a machine still being referred to as a Stearns machine?" Carmichall replied,

"Well, no sir, it is a new machine but you see, I understand under this business of taking that I have the right to take whatever property I want to if it is not to be used by the Government, as salvage, at their salvage figure, and I thought the taking included the machine because they took one machine and I don\'t see the distinction. But they took one machine and they say the other one they don\'t take. I thought they took both of them, and I considered that they did and when I removed the machines, and as Mr. Stone the appraiser for the Carmichalls said, took it out with a jackhammer, broke it out of the ground and so forth and so on, I considered I could have to pay for it if it was ultimately construed to be Government property under the taking, that obviously I would have to pay salvage value for it."

The court submitted special interrogatories to the jury as to the values of (1) the land, (2) buildings and improvements, (3) machinery and equipment, (4) the Stearns machine, (5) the mold boxes and conversion parts used with the Stearns machine, and (6) the mold boxes and conversion parts used with the Columbia machine. Separate values for each of the specified items were fixed by the jury. The court entered judgment, and in its judgment, recited that the Stearns machine, the Stearns mold boxes and conversion parts and the Columbia mold boxes and conversion parts were not so affixed to the land as to be a part of the realty, but were personal property not taken by the plaintiff. The court entered judgment for the amount found by the jury as the values, deducting from the jury's figure for machinery and equipment the amount of the values found for the Stearns machine, and the mold boxes and conversion parts for both machines. Adjustments were made, in computing the amount of the judgment, for a tax obligation and for stipulated amounts for certain items of property, the title to which had been revested by an order of the court in the Carmichalls. The Carmichalls have appealed from the judgment asserting that it was error to hold that the Stearns machine and the conversion parts and molds were not part of the real estate taken by the condemnation.

Testimony as to the values of the property was given by two witnesses, R. Donald Stone, called by the Carmichalls, and D. L. Donahue, called by the Government. The valuations placed by Stone were, with de minimus exceptions, higher than those given by Donahue. Stone's testimony was given in considerable detail, and the various items of machinery were separately valued by him. His valuation formula was reproduction cost less depreciation, and this basis for determining just compensation is not questioned by the Government. The Government has challenged, however, Stone's total of his itemization of valuations of the machinery and equipment and asserts that an error in addition was made.

Whether the Stearns machine and the mold boxes and conversion parts were real estate or personalty is to be determined by the law of the state where they were located. United States v. Becktold Co., supra. The general rule for making the test in Texas is to be found in an early and much cited opinion of the Supreme Court of that state, in which it is said:

"The weight of modern authorities establishes the doctrine that the true criterion for determining whether a chattel has become an immovable fixture consists in the united application of the following tests:

"(1) Has there been a real or constructive annexation of the article in question to the realty?

"(2) Was there a fitness or adaptation of such article to the uses or purposes of the realty with which it is connected?

"(3) Whether or not it was the intention of the party making the annexation that the chattel should become a permanent accession to the freehold; this intention being inferable from the nature of the article, the relation and situation of the parties interested, the policy of the law in respect thereto, the mode of annexation, and purpose or use for which the annexation is made.

"And of these tests preeminence is to be given to the question of intention to make the article a permanent

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