Commercial Credit Corp. v. Commonwealth Mortg. & Loan Co.

• Decision Date: 14 July 1931
• Citation: 276 Mass. 335,177 N.E. 88
• Parties: COMMERCIAL CREDIT CORPORATION v. COMMONWEALTH MORTGAGE & LOAN CO., Inc., et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

276 Mass. 335

177 N.E. 88

COMMERCIAL CREDIT CORPORATION

v.COMMONWEALTH MORTGAGE & LOAN CO., Inc., et al.

Supreme Judicial Court of Massachusetts, Suffolk.

July 14, 1931.

Report from Superior Court, Suffolk County; Elias B. Bishop, Judge.

Action by the Commercial Credit Corporation against the Commonwealth Mortgage & Loan Company, Incorporated, and trustees. Decision for the defendant. On report from the Superior Court.

Judgment for the defendant.J. G. Kelly, of Boston (T. L. Thistle, of Boston, of counsel), for plaintiff.

J. M. Hogan, of Boston (F. W. Falvey, of Boston, of counsel), for defendant.

CARROLL, J.

The plaintiff's declaration alleges that the defendant converted to its own use two Copeland refrigerating machines, two electric motors, fifty-six Copeland cooling coils, fifty-six refrigerators. The answer is a general denial. The refrigerating equipment was installed in premises of which the defendant was the mortgagee.

There was evidence that the Beaudette and Graham Company sold on May 17, 1929, the equipment, including piping, on a conditional sales contract, to the Middlesex Apartments, Inc., the installation to be performed by the vendor, the title, and ownership to remain in the vendor until paid. The purchase price has not been paid. The vendor assigned the conditional sales contract to the plaintiff on August 29, 1929. The Middlesex Apartments, Inc., the land owner, mortgaged the real extate to the defendant in the sum of $180,000. The mortgage was dated and recorded February 12, 1929. The mortgagee entered to foreclose for breach of conditions on November 7, 1929. A construction loan agreement accompanied the mortgage. It was specified in the loan agreement that a payment should be made when electric refrigeration was installed. The full principal sum has been advanced by the mortgagee.

The premises consisted of two adjoining buildings each containing twenty-eight apartments. The manner of installation, according to the evidence, is very similar to that described in Commercial Credit Corp. v. Gould, (Mass.) 175 N. E. 264. There was evidence that in the design of the building a space was allowed in the kitchen of each apartment for the installation of a refrigerator to be connected with the piping running through the partitions. Each refrigerating machine is composed of a compressor and an electric motor. It is installed in the basement of each building and is not attached to the floor. It rests on two pieces of lumber, two by four inches, which are under the compressor and remain there to deaden the noise. The refrigerating boxes containing the cooling coils are in the apartments. They are removable and attached to the ‘take-offs' in the wall by flexible copper tubing.

There was conflicting evidence on the question whether the piping could be removed without cutting into the walls. There was testimony that refrigerating equipment is economically essential in a building of the type in question, that apartments without such equipment are not readily rentable.

The case was tried before a judge without a jury. He ruled that the plaintiff could not recover; that the refrigerating equipment is essential for an apartment building of the character in question, if the owner is to rent the apartments to tenants of the class for which such building is designed; and he reported the case to this court.

As we interpret the record, the plaintiff did not include the piping in his declaration and the defendant in its brief concedes that the action is not brought for the conversion of the piping. Rulings were asked for by the plaintiff. The trial judge denied its requests that the finding should be for the plaintiff, that the equipment did not become a part of the realty and it was not essential to the premises, that the equipment is personal property, that it has not been wrought into the building and did not become a part of the building. He gave the fifth request of the plaintiff, which is in these words: ‘That the conditional vendor and the vendee did not intend that the refrigerating equipment should become a part of the realty.’ The defendant requested certain rulings. The judge ruled that the property described in the plaintiff's declaration was placed in the buildings by the plaintiff's assignor for the purpose of providing for the tenants a permanent system of refrigeration and it became a part of the realty; that the refrigerating systems are designed and constructed to provide refrigerationfor each apartment and are adapted for permanent use by the tenants and are fixtures in the building; that it was the obvious purpose of the mortgagor ‘by placing in those buildings the electrical refrigeration systems of which the property described in the plaintiff's declaration forms a part to permanently increase the value of those buildings for occupation by tenants of the individual apartments.’

Some of the so called rulings were findings of fact and we treat those rulings which were findings as such. See Medford Trust Co. v. Priggen Steel Garage Co. (Mass.) 174 N. E. 126; Commercial Credit Corp. v. Gould, supra.

The question whether such equipment as that here considered belongs to the real estate or is personal property is usually a mixed question of law and fact. The mode of annexation, the object and effect of the installation, the nature of the articles as well as the intention of the parties as shown by their acts, are to be considered. Hopewell Mills v. Taunton Savings Bank, 150 Mass. 519, 23 N. E. 327,6 L. R. A. 249, 15 Am. St. Rep. 235; Medford Trust Co. v. Priggen Steel Garage Co., supra. ‘The tendency of the modern cases is to make this a question of what was the intention with which the machine was put in place * * * only it should be noted that the intention to be sought is not the undisclosed purpose of the actor, but the intention implied and manifested by his act.’ Hopewell Mills v. Taunton Savings Bank, 150 Mass. 519, 522, 23 N. E. 327, 330,6 L. R. A. 249, 15 Am. St. Rep. 235. It was said in Smith Paper Co. v. Servin, 130 Mass. 511, 513: ‘Whatever is placed in a building subject to a mortgage, by a mortgagor or those claiming under him, to carry out the purpose for which it was erected, and permanently to increase its value for occupation or use, although it may be removed without injury to itself or the building, becomes part of the realty, as between mortgagor and mortgagee, and cannot be removed or otherwise disposed of while the mortgage is in force.’

Applying these principles, we are of opinion thta the judge was justified in finding for the defendant. The buildings were designed for modern apartments. In each kitchen a space was reserved for the refrigerator; electrical refrigerating equipment was economically essential if the apartments were to be rented to tenants for whom the building was intended. The purpose of the...