Nw. Mut. Life Ins. Co. v. George

• Decision Date: 25 July 1899
• Citation: 79 N.W. 1028,77 Minn. 319
• Parties: NORTHWESTERN MUT. LIFE INS. CO. v. GEORGE et al.
• Court: Minnesota Supreme Court

77 Minn. 319

79 N.W. 1028

NORTHWESTERN MUT. LIFE INS. CO.

v.GEORGE et al.¹

Supreme Court of Minnesota.

July 25, 1899.

Appeal from district court, Ramsey county; Hascal R. Brill, Judge.

Action by the Northwestern Mutual Life Insurance Company against William George and others. Judgment for defendants, and plaintiff appeals. Affirmed.

Syllabus by the Court

A building, subject to a mortgage as part of the real estate, being constructed and used for cold-storage purposes, the natural system of refrigeration being in use, the owner or mortgagor in possession made a contract (to which the mortgagee was not a party) with H., by which the latter was to put, and did put, into the building, for an agreed price of over $12,000, a plant or apparatus for a system of artificial refrigeration; the same to remain the personal property of H., and the title not to pass until paid for. In putting in the new apparatus, the drip pans and cold-air pipes used in connection with the old natural system of refrigeration were removed, and certain other minor changes made in the building. All the apparatus pertaining to the new artificial system of refrigeration can be removed without material injury to the building or the apparatus, but, if removed, the building cannot be used for cold-storage purposes without putting in another apparatus for artificial refrigeration, or restoring the old natural system. The latter could be done at a cost of $1,700 or $1,800. But the artificial systems of refrigeration are more satisfactory than the natural system, and are coming into general use, to the exclusion of the natural system formerly in use in the building. If the present apparatus should be taken out, the building would be in condition for putting in another like system, or, with certain necessary changes (the extent of which does not appear), any other mechanical system for refrigerating. In view of these facts, it does not appear, and there is no finding, that, if the present apparatus should be removed, the building would be worth any less for cold-storage purposes than it would have been had the changes never been made, and the natural system remained intact. The apparatus has not been paid for. Held, that the trial court was right in holding, as between the mortgagee and H., or assigns, that the apparatus for artificial refrigeration did not become a part of the realty, or subject to the lien of the mortgage, but might be removed. Edmund S. Durment, for appellant.

Morphy, Ewing & Gilbert and Clapp & Macartney, for respondents.

BUCK, J.

On the 6th day of October, 1892, one William H. Patterson was the owner of the real estate described in the complaint, and in the possession thereof, and he then borrowed of this plaintiff $50,000, and promised to repay plaintiff the same on the 6th day of October, 1897, with interest thereon at the rate of 5 1/2 per cent. per annum; and, to secure the payment of said principal sum and interest, he then duly executed a mortgage to plaintiff on said premises, which mortgage was on the 10th day of October, 1892, duly recorded in the office of the register of deeds of Ramsey county, wherein said premises are situate. On said last-named day, Patterson duly conveyed said real estate to the Thurston Cold-Storage Company, subject to said mortgage; and said company forthwith went into possession of said premises, and continued in possession thereof until the year 1897, when it became insolvent, and made an assignment of all its property for the benefit of its creditors, and it has been ever since, and still is, insolvent. At the time of making said loan and the execution of said mortgage there was, and at all times since there has been, situated upon said real estate, a large brick building, which had been built and arranged to be used as a cold-storage warehouse, and which then and now constitutes a considerable part of the value of said premises, and, if not used for the purposes of a cold-storage warehouse, is of considerably less value than if so used. At and prior to the execution of said mortgage the business of cold storage was carried on in said building under the natural system of refrigeration, and said building was arranged so that the cold air necessary to keep the temperature in the various rooms in said buildings at the proper stage was largely furnished from natural ice stored in the upper part of said building, and the air was conducted to various portions of said buildings through certain flues built in or upon the walls of said buildings, and extending through the floors, and in some part was furnished by packing ice and salt in flues or tubes built in said building for that purpose. Shortly after the execution of said mortgage, and in the fall and winter of 1892, the Thurston Company changed a portion of said building from the natural to an artificial system of refrigeration, known as the ‘brine system,’ in which cold is generated by means of machinery consisting of an engine, compressor, tank, and pipes, and the use of ammonia and brine forced through pipes into coils placed in rooms where needed; and in making said change the Thurston Company placed in said building appropriate machinery, called a ‘Fifteen-ton plant.’ Thereafter the business of said cold storage was carried on in said building by the Thurston Company partly by the natural and partly by the artificial system of refrigeration, until the installation of the 60-ton apparatus now in controversy. It appeared that on March 22, 1895, the Hercules Ice-Machine Company made an agreement in writing with the Thurston Company whereby the former company would construct for and deliver to the latter company on said premises by March 1, 1895, a complete 60-ton refrigerating apparatus, for the sum of $12,327, payable in various sums and at different intervals,-the first payment due January 10, 1896, and the last one due January 10, 1898,-evidenced by several notes. This agreement provided that the title and ownership of the 60-ton plant and its appurtenances should remain in the Hercules Ice-Machine Company until paid for; nor was the title to said plant to vest in the Thurston Company until the apparatus proved satisfactory to the latter company, nor until it accepted said apparatus or plant. Pursuant to said agreement, the Hercules Company furnished and put into said building said 60-ton refrigerating apparatus, the work upon the same being closed some time later than May 1, 1895 (the exact time not appearing); and said Thurston Company, at the request of said Hercules Company, executed and delivered to it the notes provided for in the agreement,-a portion of them prior to, and a portion after, May 1, 1895. None of said notes, nor the purchase price of said apparatus, was ever paid. On April 27, 1895, the Hercules Company, for value, executed and delivered to the old Second National Bank of Aurora, Ill., all its interest in said agreement, including sums due and to become due, and the notes given for the purchase price of said machinery, including the right to remove said apparatus or machinery from said building in case of default of payment on the part of said Thurston Company, as provided in said agreement. Subsequently, and on March 18, 1896, said bank, for value, executed and delivered to the defendant William George all its rights in said agreement and the money due or to become due thereon, and the purchase-money notes, and the right to remove said machinery as provided in said contract. Thereafter, and in March, 1896, the defendant William George entered into an agreement with the Thurston Cold-Storage Warehouse Company, wherein was recited the fact that said Hercules Ice-Machine Company had placed this 60-ton refrigerating plant in said warehouse building, and that said Thurston Company had given notes therefor, and that no part thereof had been paid, and that said Thurston Company had never accepted said refrigerating plant, and had paid no consideration therefor, and that said George had purchased all of said Hercules Company's rights in said contract and plant, and was the owner of said notes, and that differences and controversies relating to the performance of said contract by the Hercules Ice-Machine Company and the Thurston Company had...