Homeseekers' Realty Co. v. Silent Automatic Sales Corp.

• Decision Date: 10 January 1933
• Docket Number: 45.
• Citation: 163 A. 841,163 Md. 541
• Parties: HOMESEEKERS' REALTY CO. v. SILENT AUTOMATIC SALES CORPORATION, TO USE OF TIMKEN SILENT AUTOMATIC CO. [a1]
• Court: Maryland Court of Appeals

163 A. 841

163 Md. 541

HOMESEEKERS' REALTY CO. v. SILENT AUTOMATIC SALES CORPORATION, TO USE OF TIMKEN SILENT AUTOMATIC CO. ^[a1]

No. 45.

Court of Appeals of Maryland

January 10, 1933

Appeal from Superior Court of Baltimore City; Eugene O'Dunne Judge.

Action by the Silent Automatic Sales Corporation, to the use of the Timken Silent Automatic Company, against the Homeseekers' Realty Company. Judgment for plaintiff, and defendant appeals.

Affirmed.

Argued before BOND, C.J., and URNER, ADKINS, OFFUTT, DIGGES, PARKE and SLOAN, JJ.

Walter C. Mylander and Nathan Patz, both of Baltimore, for appellant.

Edward L. Putzel, of Baltimore (Julius H. Wyman, of Baltimore, on the brief), for appellee.

PARKE J.

On July 16, 1930, Peter Hall and Neruda J. Hall, his wife, entered in a contract with the Welsh Construction Company, a body corporate, by which the latter agreed to sell to the husband and wife a leasehold interest in a lot of land which was improved by a dwelling house. The purchase price was $6,425 on which $500 was paid at the time of the sale; and it was stipulated that the purchasers were to procure an additional payment of $4,290 from a specified building association which was to be given a first lien under a mortgage deed which would require of the purchasers a weekly payment to the mortgagee of $18.20 to cover dues, interest, and weekly proportion of taxes and ground rent charged against the leasehold estate. The vendor was to take a second mortgage lien on the property for the residue of $1,635, payable in four years. The date of the transfer of the property was on or before October 1, 1930.

The husband was a seafaring man, and unemployed, so the vendor temporarily waived the performance of the contract and agreed to give the vendees possession on their paying $12.50 a week on the contract price until the husband would go to sea. Accordingly, the vendees went into possession on September 28, 1930, without the deed for the leasehold interest and, consequently, without the mortgage liens having been executed. The vendees on July 26, 1930, had agreed with the Silent Automatic Sales Corporation for the installation of an oil burner in the premises which they had agreed to buy; and, in performance of this contract, the installation was made in September, 1930.

The nature of the subject-matter was not such that by its being merely placed in position for service, it, necessarily, became incorporated into and a part of the realty by the act and manner of annexation, but left the question whether or not it was a fixture for determination upon the particular circumstances of the installation. The intent of the parties and the manner of the annexation to the freehold are of major importance in the solution of this problem. The stipulation in the agreement between the sales corporation and the buyers is that the burner and equipment should be and remain personal property, no matter how attached to the premises; and that, meanwhile, the title and ownership of the apparatus remained in the seller, until the entire purchase price had been paid; and that if the purchasers should default in any payment when due, the seller had the option to take possession of the burner and its equipment, or any of its parts, and, afterward, to hold them absolutely free of all claims of the purchasers, and to retain all payments made as rental and as compensation for the use, wear, and tear of the burner and its equipment.

By these explicit provisions the contracting parties make clear that, notwithstanding its adaptation or application to the use or purpose to which that part of the realty to which it is connected is appropriated, the apparatus sold was not to lose its quality of personalty, so far as the contracting parties were concerned, until the purchase price had been fully paid. Baldwin v. Francis, 118 Md. 177, 181, 84 A. 346.

The contract of purchase and sale of the oil burner and equipment was subsequent to the sale and purchase of the leasehold estate whose vendor was, however, not a party to the agreement to buy the oil burner and neither consented nor acquiesced in its making, so it is not bound by the terms of the agreement with respect to the apparatus installed. Northern Cent. Ry. Co. v. Canton Co., 30 Md. 347, 353; Walker v. Schindel, 58 Md. 360, 364; Central Trust Co. v. Arctic Ice Machine Mfg. Co., 77 Md. 202, 26 A. 493; Bankers' & Merchants' Credit Co. v. Building & Loan Ass'n, 160 Md. 230, 153 A. 64; Dudley & Carpenter v. Hurst, Miller & Co., 67 Md. 44, 49, 8 A. 901, 1 Am. St. Rep. 368; Warren Mfg. Co. v. City of Baltimore, 119 Md. 188, 200, 201, 86 A. 502; Solter v. Macmillan, 147 Md. 580, 587, 128 A. 356.

These were the relations of the several interested parties when the vendees of the leasehold estate found they could not maintain their reduced weekly payments on the purchase price and surrendered possession to the vendor in August, 1931, and notified the representative of the Silent Automatic Sales Corporation that they could not continue to pay the weekly installments undertaken when they bought the oil burner, and gave a key of the house to an agent of the sales corporation so that access to the premises might be had for the purpose of removing the oil burner. When the sales corporation received the key, the vendees owed $164.14 on the purchase price of $395.70 for the oil burner and accessories, and the agent of the sales corporation attempted to have the owner of the leasehold estate assume the payment of this residue and thereby acquire title to the chattels. The proposition was taken under advisement, and rejected on the theory that the chattels had become fixtures by annexation. Shortly thereafter the sales corporation brought an action of replevin against the Homeseekers' Realty Company of Baltimore to recover the chattels sold; the sheriff seized and removed the oil burner, tank, and equipment burner from the premises and delivered these articles to the plaintiff. The next step was a petition by the realty company moving for a return to it of the chattels upon the filing of a returno habendo bond. The plaintiff assented to the granting of the prayer of the petition, without prejudice to its rights, and the court so authorized the return; the bond was filed and the chattels returned to the realty company, which filed pleas of non cepit; of property in the defendant and of property in the original buyers, Peter Hall and Neruda Hall.

The contract of sale of the leasehold estate was by the Welsh Construction Company as the owner, and no explanation is afforded by the record of how or when the Homeseekers' Realty Corporation acquired title, although the two corporations occupied the same office, and the realty company asserted in the motion that it was the owner of the leasehold estate. If the realty corporation was the successor in title of the construction company, the vendees were in actual possession of the premises, and this put the realty corporation on inquiry and notice of the vendees' occupancy and its nature; and, so, its rights are not superior to those of the construction company, and, therefore, it will be assumed, in the consideration of this phase of the case, that there is testimony on the record that the realty corporation is the successor in title to the construction company.

The rights of the vendor and its assignee were not shown to have been waived nor to be denied by any principle of estoppel, and are unaffected by the contract of sale of the chattels because this contract is binding only upon the parties to the contract and their privies. The question after the vendees had made default in the performance of their contract of purchase of the leasehold estate and, also, in the payment of the price for the articles bought, is thus narrowed to whether or not the articles, which had been annexed by the vendees of a leasehold estate while in possession of the term by virtue of their contract of purchase, but who have not yet obtained title to the leasehold estate, can be removed by one who sold to the vendees and installed the articles so annexed, with a reservation of title until the purchase price was fully paid. The vendor or his assignee resisted the removal of the articles annexed, and, from the interest of the vendees under their contract and their expectation of acquiring a leasehold estate by assignment in an improved lot, the burden of proof was upon them or the seller from whom they purchased the articles to show that these articles were not so actually or constructively annexed to the realty as to constitute a fixture.

The important problem on this record is, therefore, the rights of a third party, which happens to be the vendor of the leasehold estate in the land upon which the articles sold have been annexed. The rigor of the common-law rule that any article that had become a fixture was considered as part of the freehold has been gradually relaxed as between landlord and tenant, so that articles which have been affixed to the premises by a tenant for the purposes of trade, of domestic convenience, or of ornament...