Sec. Trust Co. v. Temple Co.

• Decision Date: 25 August 1904
• Citation: 67 N.J.E. 514,58 A. 865
• Parties: SECURITY TRUST CO. v. TEMPLE CO. et al.
• Court: New Jersey Court of Chancery

58 A. 865

67 N.J.E. 514

SECURITY TRUST CO.

v. TEMPLE CO. et al.

Court of Chancery of New Jersey.

Aug. 25, 1904.

Suit by the Security Trust Company against the Temple Company and others. Decree directed.

H. A. Drake and J. Willard Morgan, for complainant.

Norman Grey, for defendant Penn Mut. Life Ins. Co., and Conrad Ott, for defendants M. W. Taylor and M. W. Taylor Amusement Co.

BERGEN, V. C. The question to be determined is whether certain property, personal in its character, has been so annexed to the realty as to become a part of it. In 1891 the Masonic Temple Association, of Camden, N. J., was duly incorporated under the laws of this state, and by two deeds of conveyance, one dated July 20, 1891, and the other May 9, 1892, became the owner of certain real estate on Market street in the city of Camden, and caused to be erected thereon a large and substantial building, the portion of it fronting on Market street being finished for stores and shops, with rooms suitable for office purposes on the stories above, and in the rear a large room, capable of seating about 1,100 people, was fitted and completed in a manner suitable for public exhibitions, and commonly called a "theater." In this part of the building there was also provided a room, called in this case "a banqueting room." The partition wall between the store and office part of the building and the theater was substantially built of brick, in which there was an opening of considerable size permitting ingress and egress to the theater from a passageway leading from Market street, between the stores, to this entrance, which could be and was closed by doors when the theater was not in use. The articles over which this controversy has arisen were furnished under separate contracts and by different persons during the construction and finishing of the building, and the various contracts, so far as the articles to be furnished were applicable, related to the whole of the building. During the course of the construction, and on August 15, 1892, the Masonic Temple Association mortgaged the property to the Penn Mutual Life Insurance Company to secure the payment of $50,000, payments on account of which it was admitted at the hearing were advanced as the building progressed until the whole sum had been paid. The description contained in this mortgage described only the real estate with its appurtenances in the usual form, and contained no reference to the machinery or other articles in controversy as distinct therefrom. On July 1, 1893, the Masonic Temple Association mortgaged to the Security Trust & Safe Deposit Company the same lands, "and also" the furniture, stage fittings, and other articles, some of which are the subject of this investigation, to secure the payment of $30,000. On May 21, 1894, another mortgage was executed between the same parties, describing the same real and personal property, to secure the payment of $8,000, and on July 8, 1896, the said Security Trust Company filed its bill in this court for the foreclosure of said mortgages, making all persons having interests in said property subsequently acquired parties defendant. Thereafter such proceedings were had in said cause that on the 23d day of September, 1896, a final decree was made therein adjudging the amounts due to the respective parties, and also that an execution should issue to the sheriff of the county of Camden, directing him to sell "the mortgaged premises" for the purpose of raising the sums of money so found to be due. In pursuance of this decree an execution was issued to said sheriff, directing him to sell "all that certain lot or piece of land and premises," following which appears a description of the land and also of the furniture and other articles contained in the mortgage. In pursuance of this execution the sheriff of the county of Camden sold the mortgage premises to the Security Trust Company, the complainant, and delivered a deed therefor. On December 21, 1896, the Temple Company was incorporated, and on January 30, 1897, in consideration of $1, the Security Trust Company conveyed to the Temple Company the real and personal property by the same description contained in the sheriff's deed to it, subject, however, to the mortgage of the Penn Mutual Company. On the same day the Temple Company executed and delivered to its grantor, the complainant, a mortgage on the same property, real and personal, to secure the payment of $41,540 of bonds of one class and $22,880 of bonds of another class. Subsequent to the foregoing occurrences the Penn Mutual Life Insurance Company caused its mortgage, which was a prior lien upon the mortgaged premises, to be foreclosed, under which proceedings a sale was had, and on May 26, 1900, the real estate was conveyed by the sheriff of Camden county to the Penn Company, the present owner of the property; the result of this foreclosure being to extinguish all incumbrances and titles acquired after the execution and registry of that mortgage. The title of the Penn Company to the real estate is not in dispute, but the complainant insists that all of the property, personal in its character and described in its mortgage of January 30, 1897, is yet subject to that mortgage as a chattel mortgage, and that the conveyance by the sheriff to the Penn Company did not pass this personal estate, although all of these alleged chattels remain in the possession of the Penn Company.

Whether a chattel has become a part of the freehold, so as to pass with it under a conveyance thereof containing only a description of the land, has been a fruitful source of judicial discussion and determination, with results so various in different jurisdictions as to render hopeless any attempt to reconcile them. Such an effort, however, is not required so far as this state is concerned; for our court of last resort in Knickerbocker Trust Co. v. Penn Cordage Co. (N. J. Err. & App.) 58 Atl. 409, has laid down a broad and liberal rule for the protection of freehold rights against technical construction or fanciful distinctions. There must be an actual annexation of the chattel to the realty, with an intention of making a permanent accession to the freehold, and the application of the chattel to the use for which the realty in connection with which it is used is appropriated; and in determining the question of annexation more weight is to be given to the intention of the...