New York Life Ins. Co. v. Allison

• Decision Date: 27 February 1901
• Docket Number: 80.
• Citation: 107 F. 179
• Parties: NEW YORK LIFE INS. CO. v. ALLISON.
• Court: U.S. Court of Appeals — Second Circuit

107 F. 179

NEW YORK LIFE INS. CO. v. ALLISON.

No. 80.

United States Court of Appeals, Second Circuit.

February 27, 1901

Edward E. McCall, for plaintiff in error.

A. J Dittenhoefer, for defendant in error.

Before WALLACE, LACOMBE, and SHIPMAN, Circuit Judges.

WALLACE Circuit Judge.

The plaintiff in error was the defendant in the court below, and brings this writ of error to review a judgment for the plaintiff entered upon the verdict of a jury in an action brought to recover for the conversion of personal property. 101 F. 1007.

One Hammerstein on the 20th day of April, 1896, executed to the defendant a mortgage upon certain real estate situate in the city of New York, which included the building known as the 'Olympia Theater.' Default having been made in the payment of the mortgage debt, a foreclosure action was brought, and upon a decree rendered in that action the defendant purchased and became the owner of the mortgaged premises. After the execution of the mortgage, and before the decree of foreclosure, the mortgagor executed a bill of sale to one Lissner of all the goods, chattels, and fixtures within the theater building, described in a schedule annexed to the instrument; and thereafter Lissner, by a bill of sale transferred the personal property in controversy to the plaintiff.

The principal issues litigated upon the trial were as to the title and value of the property; the defendant contending that most of the articles were fixtures, and passed as part of the realty by the purchase under the foreclosure decree. The jury, under the instructions of the court, rendered a special verdict specifying the particular articles which they found to be chattels as distinguished from fixtures, their respective values, and the aggregate value. As to some of these articles they were instructed by the court to find in favor of the plaintiff. As to others the question whether the articles were fixtures was left to them as one of fact, under general instructions as to the law applicable to the evidence. These instructions of the trial judge are impugned by the assignments of error.

A general statement of the facts as disclosed by the evidence and the rules of law applicable, should preface a consideration of the assignments of error. It appeared upon the trial that the theater building had been fully equipped by Hammerstein prior to the date of the mortgage. It was subdivided into four places of amusement,-- the music hall in the northern half of the first floor, the theater proper in the southern part of the first floor, the concert hall in th center, and the roof garden over all. The building was lighted by its own electric plant, being lighted throughout, and provided with chandeliers wherever needed, including the electrolier, 35 feet in length, and having a spread of about 20 feet, suspended in the concert hall. The electric current was supplied by dynamos located in the basement, driven by steam engines. The building was also piped and prepared for being lighted by gas. It was heated by steam, both the direct and the indirect systems being used. Electric signs were fastened to the outside of the building, equipped with letters for use to advertise the name of the theater and the plays being presented. As the city water could not rise to the top of the building, two large tanks were constructed there, supplying standpipes with water for protection against fire, and for supplying pipes leading to the stages for the production of water effects. The tanks were supplied with water by two pumping engines connected with boilers in the basement,-- one under the stage of the music hall, and the other under the stage of the theater. The music hall was provided with ventilating fans for cooling purposes, and there was a ventilating fan in the basement, all actuated by electricity. The concert hall was fitted up with 10 large mirrors, the walls of the room being nearly covered by them. Throughout the building there were chairs and seats for the accommodation of the audiences. The stages were supplied with scenery, draperies, movable platforms, and stage properties.

In determining what annexations to real property, of chattels, constitute a part of the realty, the federal courts ascertain the local law of real property by the decisions of the courts of the states in which the property is situated, and, when these decisions are explicit and uniform, adopt them as the rule of decision. Davis v. Mason, 1 Pet. 503, 7 L.Ed. 239; Hinde v. Vaitter, 5 Pet. 398, 8 L.Ed. 168; Suydam v. Williamson, 24 How. 427, 16 L.Ed. 732; Williams v. Kirtland, 13 Wall. 306, 20 L.Ed. 683. The general rule derived from the decisions of the courts of New York is that unless the annexation is one of a permanent character, so that the machine or other chattel cannot be removed without substantial injury to the freehold, or unless the annexation is of a machine or chattel especially adapted for use in the particular place where it has been put, the purpose of the annexation and the intention with which it has been made are the most important considerations, and are the determining criterion, whether it is a fixture or a chattel. In McRae v. Bank, 66 N.Y. 489, the court of appeals used this language:

'If the article is attached for temporary use, with the intention of removing it, a mortgagee cannot interfere with its removal by the mortgagor. If it is placed there for the permanent improvement of the freehold, he may.

The mode of annexation may, it is true, in the absence of any proof of intention, be controlling. It may be in itself so inseparable and permanent as to render the article necessarily a part of the realty, and, in case of less permanent mode of attachment, may afford convincing evidence that the intention was that the attachment should be permanent; as, for instance, where the building is constructed expressly to receive the machine or other article, and it could not be removed without material injury to the building, or the article would be of no value except for use in that particular building, or could not be removed therefrom without being destroyed or greatly damaged. ' 'These are the tests which have been frequently applied in determining whether the annexation was intended to be temporary or permanent, but they are not the only ones. Nor is it indispensable that any of these conditions should exist.'

After reviewing some of the leading cases which discuss the criterion of a fixture, the court said:

'The object, and not the method of the attachment, appears to be the controlling factor.'

The decisions of the New York courts are in harmony with the general trend of the adjudications elsewhere, and are to the effect that a machine does not become a fixture by merely attaching it to a building, without the intention to make it a permanent accession, when it is not so incorporated with the building as to lose its identity, or render it difficult or injurious to the building to remove it, or when it is not essential to the use to which the part of the building in which it is connected is appropriated. Murdock v. Gifford, 18 N.Y. 28; Potter v. Cromwell, 40 N.Y. 287. The annexation is treated as of a permanent nature when the building is to be devoted to the purposes for which the machinery is to be used, and is not complete in the absence of the machinery.

Error is assigned of the instructions of the trial judge in respect to the dynamos and engines, their belts and connections. The jury found that the plaintiff was entitled to recover the value of 'four dynamos,' $5,510; 'wiring from the dynamos to the main switch board in the cellar,' $380; 'two engines in celler,' $5,700; 'engine belts,' $380; 'connections, consisting of pipes, valves, drip pans, etc.,' $570. The dynamos were used solely for producing the electricity used in lighting and ventilating the building. They were connected to the engines by belts, and with the wiring of the building by wires running to the cellar switch board. They weighed about one ton each, rested on iron rails having wooden slips, and were bolted to the rails. The rails rested on a foundation of masonry. The engines wo which the dynamos were connected rested on slabs of granite supported by a foundation of masonry, and were bolted to the slabs. The dynamos and engines were removable by unfastening the nuts of the bolts. There was a conflict of evidence as to whether the engines were used solely to run the dynamos, some evidence being given tending to show that they were also used to furnish exhaust steam for the heating system. It was proved that the building was originally wired for obtaining the electricity from one of the lighting companies whose wires were in the adjoining street; that electricity was obtained from this source for a time, but for economic reasons the street supply was discontinued and the dynamos and engines were substituted. The trial judge instructed the jury, in substance, that the dynamos and their connections were chattels, not fixtures, and that the engines and their connections were chattels, not fixtures, unless they found that they were to some extent a part of the heating system of the building, and if they so found they were fixtures.

The dynamos and engines were not especially adapted for use in this particular building, were susceptible of use either singly or jointly with their connections in any other building or place where such machines are operative, and could be removed without difficulty and without any injury to the building was prepared to be lighted with gas, that its electric lighting system was prepared for connection with the street supply and that the dynamos and engines were introduced into the building upon considerations of temporary economy, and...