Cherokee Carpet Mills, Inc. v. Manly Jail Works, Inc.

• Decision Date: 21 April 1975
• Docket Number: No. 74--343,74--343
• Citation: 521 S.W.2d 528,257 Ark. 1041
• Parties: CHEROKEE CARPET MILLS, INC., Appellant, v. MANLY JAIL WORKS, INC., Appellee.
• Court: Arkansas Supreme Court

Page 528

521 S.W.2d 528

257 Ark. 1041

CHEROKEE CARPET MILLS, INC., Appellant, v. MANLY JAIL WORKS, INC., Appellee.

No. 74--343.

Supreme Court of Arkansas.

April 21, 1975.

Mays & Landers, El Dorado, for appellant.

Arnold, Arnold & Lavender, Ltd., Texarkana, for Manly Jail Works, Inc.

BYRD, Justice.

The sole issue on this appeal is whether a contract with appellee, Manly Jail Works, Inc., ¹ to design and construct a 12,122 gallon water tank for use in the carpet plant of appellant, Cherokee Carpet Mills, Inc., is subject to the 5 year statute of limitations set forth in Ark.Stat.Ann. § 37--237 (Supp.1973). That statute provides:

'No action in contract (whether oral or written, sealed or unsealed) to recover damages caused by any deficiency in the design, planning, supervision or observation of construction or the construction and repair of any improvement to real property or for injury to property, real or personal, caused by such deficiency, shall be brought against any person performing or furnishing the design, planning, supervision or observation of construction or the construction or repair of such improvement more than five (5) years after substantial completion of same.'

Upon a demurrer to the complaint as amended, the trial court held the statute applicable and dismissed the cause of action. We agree with the trial court.

The complaint alleges that appellee, pursuant to a contract attached to the complaint, manufactured the tank and shipped it to appellant's plant at Lewisville, Arkansas, on or about March 1, 1967, and that upon arrival the tank was installed in appellant's plant by Westrock Mechanical Contractors, Inc. That while using the tank in the operation of the plant, under the conditions set forth in the contract, on May 25, 1970, the tank ruptured causing the dyes contained therein to be sprayed into other parts of the plant and resulting in the damages prayed for. The specific allegation as to appellee was as follows:

'That the rupture of said baffle or wall within the storage tank and the resulting rupture in the exterior of the tank were caused by the failure of the defendant, Manly Jail Works, Inc., to perform its agreement as contained in Exhibit 'A' attached hereto with the plaintiff in that said tank was improperly designed, improperly manufactured and otherwise deficient to be operated under the conditions and specifications set forth in the contract between the plaintiff and the defendant, Manly Jail Works, Inc., as contained in Exhibit 'A' attached hereto; . . .'

The contract attached to the complaint shows an order for the tank containing three different compartments with mixing motors and turbines and with internal pipe and couplings in the tank wall. The tank was to be shop tested at 55 PSI for a working pressure of 27 PSI.

Thereafter appellant filed an amendment to its complaint wherein it was alleged:

'THAT said storage tank was subsequently manufactured by the Defendant, MANLY JAIL WORKS INC., and shipped from the plant of said Defendant to the plant of the Plaintiff at Lewisville, Arkansas, on or about March 1, 1967; that upon the arrival of said tank at the plant of the Plaintiff, it was placed upon a cradle in the plant of the Plaintiff by the Defendant, WESTROCK MECHANICAL CONTRACTORS, INC.; that said tank was not bolted or otherwise attached to the cradle or any other part of the building or real estate of the Plaintiff, but was interconnected with other parts of the machinery and equipment of the Plaintiff; that said tank was, at the time of installation and has been ever since a part of the machinery and equipment of the Plaintiff;'

The appellant both here, and in the trial court, contends that the issue of whether the storage tank was an improvement to real property, within the meaning of Ark.Stat.Ann. § 37--237 (Supp.1973), supra, is a factual question. In doing so appellant places much stress upon the allegation that 'said tank was not bolted or otherwise attached to the cradle or any other part of the building or real estate of the plaintiff.' Appellant's emphasis, however, ignore that part of the amended complaint which admits that the tank . . . 'was interconnected with other parts of the machinery and equipment of the plaintiff; that said tank was, at the time of installation and has been ever since a part of the machinery and equipment of the plaintiff.' In Alwes v. Richheimer, 185 Ark. 535, 47 S.W.2d 1084 (1932), the issue was whether the furniture and fixtures in a theater went with a mortgage to the real estate or a mortgage on personalty. In holding that it was an appurtenance to the real estate and after pointing out that the furniture and fixtures were a part of the improvements in the building for the purpose for which it was constructed, we said: 'the tendency of modern decisions, both English and American, 'is against the common-law doctrine that mode of annexation is the criterion, whether slight and temporary, or immovable and permanent, and in favor of declaring all things to be fixtures which are attached to the realty with a view to the purposes for which it is held or employed. " Appellant does not contend that its entire installation of machinery and equipment was not 'an improvement to real property' and when we consider that the tank in question was put into position and interconnected with other parts of the machinery and equipment, we can think of no fact situation that would differentiate the design and fabrication of the tank from the design and installation of the other machinery and equipment for purposes of preventing the statutory bar of Ark.Stat.Ann. § 37--237 (Supp.1973), supra.

Affirmed.

FOGLEMAN and JONES, JJ., dissent.

FOGLEMAN, Justice (dissenting).

This case was disposed of by the trial court on a demurrer asserting the statute of limitations. I cannot agree that there is no question of fact involved in determining the application of the pertinent statute of limitations in this case when we give appellant the benefit of every reasonable inference that may be drawn in the pleader's favor, as we must. See McKim v. McLiney, 250 Ark. 423, 465 S.W.2d 911. Appellant concedes that the issue turns upon the question whether the installed storage tank was 'an improvement to real property.' This term has not been construed or defined in applying the statute involved here. We have determined in other cases what the term meant, but the meaning may vary, depending upon the relationship of the parties.

For example: In an attachment in a suit on a note, a defendant claimed that the note was given in consideration for a contract for the erection of valuable improvements upon the land upon which the attachment was levied, and for supplies. The alleged improvements were a portable steam engine, mill and cotton gin. The court ordered the steam engine and machinery attached to be sold as personal property under the levy. It had been purchased from the plaintiffs by a partnership of Maddox & Toms, the defendants in the action. The engine furnished the motive power for a gin and even though it was constructed so it could be readily moved from place to place, it had never been moved after it was put upon the property. It rested upon sills, under a rough plank shed which protected it from the weather. It might be moved without substantial damage to it or the freehold. The machinery was not attached to the soil. A shed was erected over the machinery. The question was whether the note was an obligation for the erection of improvements upon real property claimed to be exempt as the homestead of one of the partners, who was a tenant in common with his two sisters. The court said:

The remaining question is whether the note, sued on, is an 'obligation contracted for the erection of improvements' on the land in question, within the meaning of the third section of the 12th article of the Constitution? The engine, etc., for which the note was in part given, was purchased of appellants, by Maddox & Toms, as partners, and placed on the premises as a motive power to the gin, etc., to be used in their partnership planting business. Maddox had no interest in the land. As between him and Toms, it did not become part of the realty, but remained personalty, and was subject to their partnership debts. Toms was only a tenant in common with his sisters, and they could not have claimed that the portable engine, placed on the land by him and his partner, for purposes connected with their planting business, became part of the realty. If Toms had been the sole owner of the land, and purchased the engine and placed it on the premises for his own purposes, and the controversy had arisen between him and a vendee to whom he had sold the land, there might be a question whether it was not a fixture, and passed with, and as part of the realty. 1 Wash. on R. Prop., top pages, 16, 17.

Upon the facts of this case, the engine, etc., was surely not an improvement erected on the property within the meaning of the clause of the Constitution in question. As held by the court below it was no permanent betterment of the property.

Greenwood & Son v. Maddox & Toms, 27 Ark. 648.

In Bemis v. First National Bank, 63 Ark. 625, 40 S.W. 127, the question presented was whether a complete sawmill and planing mill outfit and attached machinery consisting of five boilers, two engines, a sawmill with saw, shafting, pulleys, belting, fixtures, a planing machine, etc. were real property or personal property as between an attaching creditor and the holder of a vendor's lien on the real estate on which the mill was located. All were attached to the buildings on the grounds in the usual way. In holding that this property was real estate subject to the vendor's lien, this court then said:

* * * The difficulty, in any case, is in determining whether a piece of property, where movable, and yet attached, is the one or the other species of property; and the general rule has never been...