Home Owners' Loan Corp. v. Gotwals

• Decision Date: 18 March 1941
• Docket Number: 8376.
• Citation: 297 N.W. 36,67 S.D. 579
• Parties: HOME OWNERS' LOAN CORPORATION v. GOTWALS et al.
• Court: South Dakota Supreme Court

297 N.W. 36

67 S.D. 579

HOME OWNERS' LOAN CORPORATION v. GOTWALS et al.

No. 8376.

Supreme Court of South Dakota.

March 18, 1941

Appeal from Circuit Court, Jerauld County; Vernon R. Sickel, Judge.

Action by the Home Owners' Loan Corporation against Amos Gotwals and another, in claim and delivery to recover possession of a cupboard which had been installed in a dwelling owned by defendants but subsequently conveyed to plaintiff. Judgment for defendants and plaintiff appeals.

Affirmed.

Walter Conway, of Sioux Falls, for appellant.

Charles R. Hatch, of Wessington Springs, for respondents.

PER CURIAM.

The Home Owners' Loan Corporation brought this action in claim and delivery against Amos Gotwals and Martha E. Gotwals to recover possession of a cupboard which had been installed in a dwelling owned by them, but subsequently conveyed to the plaintiff. The deed was in the usual form, and made no reference to the cupboard. Defendants removed from the dwelling the cupboard, claiming that it was personal property by reason of an agreement entered into between the defendants and an agent of the plaintiff prior to the execution and delivery of the deed. Defendants testified that at the time of the execution of the deed a lease was given by the plaintiff to the defendants as part consideration for the deed and that the matter of the removal of the cupboard was discussed and it was agreed that it belonged to the defendants and that they could detach this fixture during their occupancy of the premises. This testimony was denied by the plaintiff, but the issues were found in favor of the defendants.

Plaintiff objected to the introduction of testimony with reference to the agreement, moved for a directed verdict, and excepted to the instructions of the court on the ground that such an agreement would violate the statute of frauds. The question to be decided is whether this was a contract within the terms of that statute. The question whether the so-called parol evidence rule would apply is not involved. Defendant Martha E. Gotwals was asked: " Q. Was there any conversation with Mr. Ochsner before the deed was signed?" " Q You may state that conversation." The court overruled the following objection by counsel: " Objected to if it has any bearing on the severance of this cupboard for the reason that it is an attempt to establish a parol contract in violation of the statute of frauds, being an attempt to transfer an interest in real property by parol contract." The same objection and ruling were made with reference to the testimony of Amos Gotwals.

Fixtures may become personal property by agreement. Myrick v. Bill et al., 3 Dak. 284, 17 N.W. 268; see also Curran v. Curran, S. D., 289 N.W. 418. The cupboard was not such an inseparable part of the house that an agreement that it be given the legal character of personal property could not be made, and it becomes unnecessary to determine the limitations, if any, to this doctrine that parties may make an agreement to give to property annexed to realty the legal character of personalty. The agreement in question did not involve a transfer of an interest in land. At a time when the defendants were owners of the premises the parties agreed that the cupboard should be reimpressed with the character of personalty, and because such agreement does not constitute a transfer of real property it is not within the ambit of the statute of frauds. SDC 10.0605; 2 Tiffany, Real Property, 3rd Ed., 621.

The judgment appealed from is affirmed.

ROBERTS, RUDOLPH, and SMITH, JJ., concur.

POLLEY, P. J., and WARREN, J., dissent.

POLLEY, Presiding Judge (dissenting).

The testimony leading up to the conveyance of this property by the defendant was as follows:

" Q. Did you later give a deed to this property? A. I did.

" Q. This signature which is attached to this deed marked Exhibit G, that is your signature? A. Yes.

" Q. This bears date the 13th of December, 1938. That is about the time it was executed? A. Yes.

" Q. And the Notary was William Ochsner? A. Yes.

" Q. Is that William Ochsner, the attorney in this case? A. Yes.

" Q. Where was this deed signed? A. In our kitchen.

" Q. And who was present? A. Amos, Bob and myself.

" Q. Who is Bob? A. Our boy fifteen years old.

" Q. Was there any conversation with Mr. Ochsner before the deed was signed? A. There was.

" Q. You may state that conversation."

To this question counsel for plaintiff interposed the following objection: " Objected to, if it has any bearing on the severance of this cupboard, for the reason that it is an attempt to establish a parol contract in violation of the Statute of Frauds, being an attempt to transfer an interest in real property by parol contract."

The objection was overruled, and the witness testified as follows: " A. Well he said he was the attorney for the Home Owners' Loan Corporation and wanted me to sign the deed. I told him I wouldn't want to sign any deed until I got my cupboards. He said 'Those cupboards are personal property and you can remove them any time before the six months expires'."

This conversation was intended to be, and under the per curiam opinion herein was, a conveyance of a portion of this property by a parol agreement. But conceding, (which I do not do), that owners of real property could segregate and convey real property by parol, the " parties" between whom the conversation took place were not the parties to the transaction involved. The Notary Public, William Ochsner, had no title to the property nor interest therein, and no authority to make a contract for the owners of the property. He was as much a stranger to the title to the property as any other party who could have taken defendant's acknowledgment to the deed.

In overruling the above objection the court committed error for which a reversal should be had.

WARREN Judge (dissenting).

At the trial the defendants were allowed, over the objection of the plaintiff, to enter the oral agreement concerning the cupboard in evidence. The Trial Judge found as a matter of law that the cupboard was a fixture, and the jury found that appellant's attorney did make such an agreement and gave a verdict in favor of the defendants.

A fixture is personal property which has had its character changed to that of real property by affixation to real property in such a manner that it becomes a part thereof. SDC 54.0207; 2 Tiffany Real Property, 3rd Ed., p. 557, § 606. Since the above is true any agreement involving this cupboard would be an agreement involving real property which under the Statute of Frauds SDC 10.0605 must be in writing. A written conveyance of the house and lot would convey the cupboard in the absence of a written reservation to the contrary. Pattison v. Hull, 1828, 9 Cow., N.Y., 747. In this case the warranty deed signed by the vendors, the Gotwals, conveyed the property to which the cupboard was attached with no written reservation of the cupboard.

The appellant contends, among other assignments of error, that the evidence of the oral agreement was inadmissible on the grounds (1) that it is an attempt to change the terms of a written contract by the introduction of parol evidence in violation of the parol evidence rule, and (2) it is an attempt to convey real estate orally in violation of the Statute of Frauds.

There are authorities which hold that a grantor may introduce parol evidence to show an oral agreement between himself and the grantee to the effect that fixtures that had become realty were by agreement between the parties to become personalty again and be excepted from the operation of a deed passing the realty to which the fixture was attached. See Frederick v. Devol, 15 Ind. 357; Strong v. Doyle, 110 Mass. 92; Pea v. Pea, 35 Ind. 387. The Trial Judge in the case at bar may have had this in mind when he admitted the evidence on which this appeal was taken.

There is, however, an abundance of authority which holds that where an owner attaches a fixture to the land and it thereby becomes realty, an oral agreement between a grantor and grantee of the land reserving the fixture to the grantor and excepting it from the operation of a deed conveying the realty of which the fixture has become a part, cannot be shown by parol evidence.

" As to whether fixtures, while annexed to the land, may be by parol excepted from the operation of a deed conveying the land upon which they are situated, there is a conflict of authority. If fixtures, while annexed, are to be considered as partaking of the nature of...