Ice, Light & Water Co. v. Lone Star Engine & Boiler Works

• Citation: 41 S.W. 835
• Court: Court of Appeals of Texas
• Decision Date: 20 March 1897
• Parties: ICE, LIGHT & WATER CO. et al. v. LONE STAR ENGINE & BOILER WORKS.

41 S.W. 835

ICE, LIGHT & WATER CO. et al. v. LONE STAR ENGINE & BOILER WORKS.

Court of Civil Appeals of Texas.

March 20, 1897.

Appeal from Hunt county court; W. H. Ragsdale, Judge.

Suit by Lone Star Engine & Boiler Works against the Ice, Light & Water Company and M. A. Joy. From a judgment in favor of plaintiff, defendant Joy appeals. Reversed as to appellant.

M. M. Brooks and Robt. L. Warren, for appellant. Perkins, Gilbert & Perkins, for appellee.

LIGHTFOOT, C. J.

This suit was brought by appellee, in the county court of Hunt county, Tex., against the Ice, Light & Water Company, on two notes, for $230 each, dated April 4, 1895, and against appellant, Joy, to foreclose a chattel mortgage given by the Ice, Light & Water Company upon one "sixty-inch by sixteen-foot stationary tubular boiler, known as the make of the Lone Star Engine & Boiler Works, of Greenville, Texas." The ice company failed to answer, and there was a judgment by default against it, from which it has not appealed. Appellant, M. A. Joy, answered, setting up, in substance, that the boiler was and is a permanent fixture, and is attached to other machinery on lot No. 13 in block 74 in Terrell, Tex.; that in a suit in the United States circuit court, at Dallas, Tex., entitled "Ft. Wayne Electric Co. v. John L. Terrell et al.," judgment was rendered on March 7, 1895, in favor of the plaintiffs therein, and against certain defendants, including the Ice, Light & Water Company, foreclosing a valid vendor's lien existing on said lot No. 13, and also lot No. 12, in block No. 74, by virtue of a deed dated March 31, 1891, from the Terrell Electric Light Company to said Ice, Light & Water Company, as evidenced by certain vendor's lien notes aggregating $10,380.77; that under said judgment such vendor's lien was foreclosed, and the property sold under decree of the court to W. L. Crawford, on November 7, 1895, who on the same day sold to appellant, Joy, who is an innocent bona fide purchaser of all of said property, without notice of plaintiff's claim. The case was tried by the court, without a jury, and judgment was rendered for plaintiff against the ice company for the amount of the debt, interest, and attorney's fees, and foreclosing the mortgage on the boiler against both defendants. From this judgment, Joy appeals.

The testimony is uncontroverted that prior to March 31, 1891, lots Nos. 12 and 13 in block 74, together with the electric light plant thereon, were owned by the Terrell Electric Light Company, and were sold by it on that day to the Ice, Light & Water Company, the latter giving vendor's lien notes for the purchase money, and that the deed showing such vendor's lien was duly recorded in Kaufman county; that the Ft. Wayne Electric Light Company became the owner of such notes, which were foreclosed by the decree of the United States circuit court at Dallas on March 7, 1895, against the Ice, Light & Water Company and others, and that said property was duly and legally sold under such decree on November 7, 1895, and purchased at such sale by W. L. Crawford, who on the same day sold to appellant, M. A. Joy, who paid the purchase price, and had no actual notice of any claim of appellee to a lien upon the boiler. It also appears from the undisputed evidence that about April 5, 1895, the appellee sold to the Ice, Light & Water Company the boiler in question, taking in payment $230 in cash and the notes which are described in plaintiff's petition, and a chattel mortgage on the boiler, which was promptly registered in the chattel mortgage records of Kaufman county. At the time of such sale, appellee knew that the boiler was to be put down as a stationary boiler to run the said electric light plant in Terrell. It was securely fastened and attached as a stationary boiler to the realty, is appropriate and necessary to the electric plant, and cannot be detached without damage to the realty.

There are numerous assignments of error in the record, but the leading and controlling question for our determination is whether the boiler is a permanent fixture or a chattel, as between the parties before us on this appeal. There has been much discussion of the question, and many nice distinctions drawn upon the subject, and the authorities to some extent are conflicting. We have found no case where the exact question involved has been directly determined by our courts, nor have the learned counsel cited us to one. It has been decided that a purchaser of a chattel may, at the time of the purchase, execute a valid mortgage thereon to secure the purchase money, and, even though such chattel may subsequently be attached to the realty in such a manner as would ordinarily make it a permanent fixture, that, as between the parties, it is still a chattel, and subject to the chattel mortgage. Harkey v. Cain, 69 Tex. 150, 6 S. W. 637; San Antonio Brewing Ass'n v. Arctic Ice-Mach. Manuf'g Co., 81 Tex. 99, 16 S. W. 797. Our courts have gone still further, and held that "if the mortgagor in possession, by agreement with the mortgagee, annex a mortgaged chattel to his own land, the mortgagee's rights are not affected, and he may still treat it as a personalty." Harkey v. Cain, above, citing Tifft v. Horton, 53 N. Y. 377; Eaves v. Estes, 10 Kan. 314; Tibbetts v. Moore, 23 Cal. 208; Cullers v. James, 66 Tex. 494, 1 S. W. 314. In the case of Willis v. Manufacturing Co. (Tex. Civ. App.) 36 S. W. 1010, where a chattel mortgage was retained upon certain gin machinery, which was not permanently attached to the realty, and which could be removed without injury to the freehold, it was held by this court that such chattel mortgage could be foreclosed, even as against the holder of a prior vendor's lien on the realty. Some of the authorities in other states have held that where chattels are annexed to real estate, by agreement between the owner of the chattels and the owner of the realty that they shall not thereby become a part of the freehold, as a general rule the intent will control, that such chattels will retain their character as personalty, and neither a prior nor subsequent mortgagee of the realty can deny the right of the owner of such chattels to remove them. Tifft v. Horton, 53 N. Y. 377; Hendy v. Dinkerhoff, 57 Cal. 3; Smith v. Waggoner, 50 Wis. 155, 6 N. W. 568; Ford v. Cobb, 20 N. Y. 344. Mr. Ewell says that this rule has not been generally adopted. See Ewell, Fixt. pp. 384-386.

In determining the question whether articles of personalty have acquired the character of real estate, there are several tests to be applied: (1) Whether there is an actual annexation of the chattel to the realty, so as to make it a permanent fixture;...