Second Nat. Bank of Beloit v. O. E. Merrill Co.

• Decision Date: 11 October 1887
• Citation: 69 Wis. 501,34 N.W. 514
• Parties: SECOND NAT. BANK OF BELOIT, WIS., v. O. E. MERRILL CO.
• Court: Wisconsin Supreme Court

69 Wis. 501

34 N.W. 514

SECOND NAT. BANK OF BELOIT, WIS.,

v.O. E. MERRILL CO.

Supreme Court of Wisconsin.

October 11, 1887.

Appeal from circuit court, Rock county.

William Ruger, for appellant.

A. A. Jackson, for respondent.

TAYLOR, J.

This action was brought to restrain the respondent from committing waste by the removal of certain trade fixtures from the premises occupied by the respondent as tenant of the appellant. A temporary injunction was obtained on the ex parte application of the appellant at the commencement of the action. The respondent answered the complaint, and then moved, upon his answer and affidavits, for a dissolution of the injunction. After a full hearing of the parties the learned circuit court dissolved the injunction. From the order dissolving such injunction the plaintiff appeals to this court.

The leased premises involved in this contract are several lots, and a waterpower connected therewith. In 1881 the lots and water-power were owned by the “Rock River Paper Company.” In that year the paper company built a large stone building on the premises. This building is known as the machine-shop. There was another building on said premises known as the “foundry.” In 1881 the Rock River Paper Company, being as above stated the owner of the lots, the buildings thereon, and the water-power, leased the said premises to O. E. Merrill, individually. At the time O. E. Merrill went into possession as tenant of the paper company, in 1881, there was no machinery of any kind in the stone building, and only a very little in the foundry. None of the machinery which the defendant and respondent now claims the right to remove from said premises was on the premises when they were leased to the said O. E. Merrill in 1881. All the machinery in controversy in this action was placed upon said premises by said O. E. Merrill and the defendant, the O. E. Merrill Company, since 1881, and while they were in possession as the tenants of the Rock River Paper Company or its assignees; and was so placed upon said premises at their expense; no part of such expense was borne either by the paper company or by the plaintiff. That it was always understood between the paper company and O. E. Merrill, its tenant, that the machinery and other trade fixtures placed upon said leased premises, and in the buildings thereon, should be the sole property of the tenant, is fully established by the evidence of Cobb, the superintendent of said company, as well as by the evidence of O. E. Merrill. This right of O. E. Merrill was recognized by Cobb, the superintendent of said company; and on the fourth of October, 1883, he, on behalf of said company, executed the following agreement in writing with said O. E. Merrill, which said written agreement was recorded in the office of the register of deeds of Rock county, viz.:

“This agreement, made and entered into this fourth day of October, A. D. 1883, by and between the Rock River Paper Company, of Beloit, Rock county, Wisconsin, party of the first part, and O. E. Merrill, of the same place, witnesseth: Whereas, the first party is the owner of real estate, water and waterrights, occupied and used by second party for foundry and machine-shop premises, which premises are more particularly described in a deed from J. M. Cobb and wife to first party; and whereas, second party, during his occupation of these premises under and by virtue of a lease from first party, has built, placed, constructed, erected, and put into and upon said premises, and the buildings thereupon fastened to the realty, buildings and otherwise, a boiler, engine, shafting, and various other machinery and tools: Now, therefore, in consideration of one dollar to it in hand paid, and of other valuable considerations, first party hereby covenants and agrees that each and every of the pieces of machinery and tools fastened to the realty or otherwise put, placed, constructed, or erected in or upon said buildings or premises by said party, are, shall be, and remain the property of said second party; and said second party shall have the right and privilege to remove or cause the same to be removed at any time during the time he shall occupy said premises by virtue of any lease from the first party, and within a reasonable time after the expiration of any such lease, unless first party or its assigns shall in the mean time have purchased the same. Second party agrees to construct, erect, place, put in, or remove each and every piece of machinery and tools in such manner as to damage the realty and buildings as little as possible.

In witness whereof the parties have hereunto set their hands and seals the day and year above written.

ROCK RIVER PAPER COMPANY.

+--------------------------------------+
                ¦By J. M. COBB, Superintendent.¦[Seal.]¦
                +------------------------------+-------¦
                ¦O. E. MERRILL.                ¦[Seal.]¦
                +--------------------------------------+
                

In presence of B. M. MALONE.

A. M. MALONE.

State of Wisconsin, Rock county--ss.: On the fourth day of October, A. D. 1883, came before me personally J. M. Cobb and O. E. Merrill, known to me to be the persons who signed and executed the above and foregoing instrument, and acknowledged that they executed the same freely, for the uses and purposes therein mentioned.

B. M. MALONE, Notary Public for Wisconsin.”

On the twenty-sixth of June, 1883, the paper company mortgaged the leased premises to the Second National Bank of Beloit, Starkweather, and L. Holden Parker, to secure the payment of $22,546.90. This mortgage is not relied upon by the plaintiff as a source of title to the premises in question, or to the fixtures and machinery. On the third day of November, 1883, the Rock River Paper Company executed and delivered to John Hackett a voluntary assignment of all its property for the benefit of its creditors. By virtue of this assignment, and under an order of the circuit court of Rock county, duly made in said assignment proceedings, on the twenty-ninth day of November, 1884, said leased premises were sold at public auction on the thirtieth day of December, 1884, for the sum of $20,000, to the plaintiff in this action. On the eighth day of January, 1885, the said sale was confirmed by the court, and a deed executed by the said assignee to the plaintiff. The $20,000, the bid for the property on this sale, was credited upon the mortgage held by said bank. At the time of said sale and after, the said Merrill remained in the actual possession of said premises as the tenant of said assignee, and after the sale agreed to hold the premises as the tenant of the plaintiff; and thereafter, and on the twenty-eighth day of February, 1885, the said plaintiff and the said O. E. Merrill duly executed in duplicate a written lease, the term of said lease to expire on the first day of January, 1886. The rent to be paid was at the rate of $1,600 per annum, payable in monthly installments in advance. On the twenty-third day of November this lease was assigned by the said O. E. Merrill to the defendant, the O. E. Merrill Company. This assignment was made with the written consent of the plaintiff, and the plaintiff, also in the same writing, extended the lease for six months from the first day of January, 1886; and thereupon the said O. E. Merrill Company took possession under said lease and its extension, and have remained in possession up to the commencement of this action, paying monthly rent as stipulated in said lease. It is admitted that the defendant is about to remove some of the machinery and fixtures from said leased premises, and the plaintiff brings this action in equity to restrain it from so removing the said machinery and fixtures, or any part thereof, claiming that the same are a part of the realty, and are owned by the plaintiff under its purchase from the assignee of said “Rock River Paper Company.” The learned circuit judge held that the plaintiffs were not the owners of said machinery and fixtures; or, if he did not hold that, he held that it had not shown such a clear legal title to the same as to justify a court of equity in enjoining the defendant from removing the same.

It is hardly contended by the learned counsel for the appellant that the title to this machinery and fixtures passed to the plaintiff by the conveyance of the assignee of the paper company. But if such be the contention, it is very clear to us that such contention cannot be sustained. We think the evidence clearly shows that, from the time the paper company became the owners of the property upon which this machinery and fixtures are located, down to the time of the sale by its assignee, O. E. Merrill, of whom the defendant is assignee, he was in the continued possession as the tenant of the paper company, and not as a trespasser; and that as such tenant he placed said machinery and fixtures upon the leased premises. We think, also, that the evidence shows a tenancy from year to year, and not a tenancy at will, or by sufferance. The testimony of Cobb, the superintendent of the paper company, is quite conclusive upon this point. He testifies that when the paper company became the owner of the premises, in 1881, O. E. Merrill was in possessionas the tenant of the former owner, and it was then agreed, between the paper company and O. E. Merrill, that he should remain in the possession, as the tenant of the paper company, for the same rent he was paying for said premises before the company purchased, which was $300 per annum. He also testifies that after the company had built the large stone building on the premises, it was understood that the rent should be increased; and that Merrill agreed that, if the company would erect a wooden building on the premises, he would pay rent at the rate of $1,000 per year. He also testifies that no agreement for renting said premises to O. E. Merrill for any definite term was ever made after the new stone building was erected. He also testifies that it was always...