Strobel v. Northwest G. F. Mut. Ins. Co.

• Decision Date: 19 September 1967
• Docket Number: No. 8384,8384
• Parties: Gottlieb STROBEL, Plaintiff and Respondent, v. NORTHWEST G. F. MUTUAL INSURANCE COMPANY, a corporation, Defendant and Appellant. Civ.
• Court: North Dakota Supreme Court

Page 794

152 N.W.2d 794

Gottlieb STROBEL, Plaintiff and Respondent, v. NORTHWEST G. F. MUTUAL INSURANCE COMPANY, a corporation Defendant and Appellant.

Civ. No. 8384.

Supreme Court of North Dakota.

Sept. 19, 1967.

Syllabus by the Court

1. In determining whether a building, which has been purchased and moved on to land of the purchaser, becomes a fixture under Section 47--01--05, N.D.C.C., the court will look to the intention of the purchaser, the manner in which the building is annexed, and its adaptation to the use of the realty.

2. The evidence is examined and it is held that a barn purchased and moved from other land on to land owned by the purchaser was placed on blocks, where it remained until consumed by fire, was not affixed to the land as a fixture but remained a chattel and the purchaser had an insurable interest therein, although the land had been lost on execution sale before the barn was destroyed by fire.

3. Where a barn is purchased and moved on to land and placed on blocks and is not attached or affixed to the land so as to be permanently resting thereon, it is prima facie personal property and the burden to prove it has become a fixture, and thus a part of the land, is upon the party asserting it has become a fixture.

Kretschmar & Kretschmar, Ashley, and Paul O. Kretschmar, Eureka, S.D., for defendant and appellant.

Max A. Wishek, Ashley, for plaintiff and respondent.

TEIGEN, Judge.

This is an appeal from a judgment in a case tried to the court without a jury and trial de novo is demanded.

The judgment appealed from allows the plaintiff to recover on a fire insurance policy, against the defendant insurance company, for the fire loss of a barn located on premises owned by another but occupied by the plaintiff's assignor, who was the named insured. The trial court allowed recovery on the theory that the insured had an insurable interest in the barn in excess of the face amount of the policy.

The named insured was Duane Harter. He assigned the proceeds from the insurance policy to the plaintiff, who brought this action.

The defendant admits that Harter had an insurable interest in the barn at the time the defendant issued its policy because Harter owned the land upon which it stood. However, Harter subsequently lost title to the land by sheriff's deed on execution sale and, at the time of the fire, the land was owned by Goebel Brothers, Inc., the purchaser at the execution sale.

The plaintiff, on the other hand, claims the insured barn was never a part of the real estate but it was personal property and that Harter owned the barn when it was destroyed by fire.

The trial court found that the plaintiff established a prima facie case of ownership of the insured property in Harter at the time of the fire and that the evidence introduced by the defendant was insufficient to overcome plaintiff's prima facie case. The case being before us for trial de novo, it requires this court to try anew the questions of fact. Section 28--27--32, N.D.C.C. In doing so, we are not bound by the findings of the trial court, either as to law or the facts. Englert v. Dale, 25 N.D. 587, 142 N.W. 169. However, the trial court's findings are entitled to appreciable weight although not with the same presumption of correctness as in a case not triable de novo. Pauly v. Haas, N.D., 84 N.W.2d 302.

The only issue is: Did Harter have an insurable interest in the barn when it burned?

Our laws on insurance provide that the object of insurance is indemnity of the insured, and if the insured has no insurable interest, the contract is void. Section 26--02--04, N.D.C.C. An interest insured must exist when the insurance takes effect and when the loss occurs. Section 26--02--05, N.D.C.C. An insurable interest is defined by Section 2l--02--06, N.D.C.C., as follows:

Every interest in property, or any relation thereto, or liability in respect thereof, of such a nature that a contemplated peril might damnify directly the insured is an insurable interest, and may consist in:

1. An existing interest;

2. An inchoate interest founded on an existing interest; or

3. An expectancy coupled with an existing interest in that out of which the expectancy arises.

The first question we shall decide is whether Harter had an existing interest in the barn when it was destroyed by fire. We shall approach this question from the standpoint of whether the barn was personal property or fixed to the real estate and thus real property.

Section 47--01--02, N.D.C.C., defines property as:

1. Real or immovable; or

2. Personal or movable.

Real property consists not only of land which is immovable but also that which is affixed to the land, that which is incidental or appurtenant to the land, and that which is immovable by law. Section 47--01--03, N.D.C.C., Mueller v. Mercer County, N,D., 60 N.W.2d 678. Fixtures, such as a barn when permanently attached to the soil, are a part of the real estate. Woolridge v. Torgrimson, 59 N.D. 307, 229 N.W. 805. Fixtures are defined by statute as:

A thing is deemed to be affixed to land when it is attached to it by roots, as in the case of trees, vines, or shrubs, or imbedded in it, as in the case of walls, or permanently resting upon it, as in the case of buildings, or permanently attached to what is thus permanent, as by means of cement, plaster, nails, bolts, or screws.

Section 47--01--05, N.D.C.C.

Under thjis statute, we have held that buildings resting permanently upon the land are real property, under the provisions of the above statute providing 'A thing is deemed to be affixed to land when it is * * * permanently resting upon it, as in the case of buildings, * * *.' See also Nelson v. Murton and Nelson v. Kloster, 68 N.D. 108, 277 N.W. 390.

Personal property is defined by statute to mean and include every kind of property that is not real. Section 47--01--07, N.D.C.C.

We said in Gray v. Krieger, 66 N.D. 115, 262 N.W. 343, that in making a determination as to whether personal property became a fixture under the statute, the court will look to the intention of the person making the annexation, the manner in which the building is annexed, and its adaptation to the use of the realty. We have also held that by agreement of the parties interested, buildings located upon land may be considered personal property. Kittelson v. Collette, 61 N.D. 768, 240 N.W. 920; Newell v. McMurray, 51 N.D. 901, 201 N.W. 845; Mathews v. Hanson, 19 N.D. 692, 124 N.W. 1116.

In this case there is no contest between Harter, who claims ownership of the barn and Goebel Brothers, Inc., who is the owner of the land. This contest is between the assignee of Harter, who claims ownership of the barn, and Harter's insurer. Walter Goebel, president, testified that Goebel Brothers, Inc., makes no claim to the barn nor insurance proceeds. Goebel Brothers, Inc., however, had been owner of the land under a sheriff's deed on execution sale for only a few months when the barn burned. Prior thereto Harter was first a purchaser on a contract for deed and then owner by warranty deed.

The evidence establishes that Harter had purchased this land on contract for deed in February of 1957. The contract provided for seven annual installment payments, the last payment being due October 15, 1962. In November of 1958, Harter mortgaged the land to Kulm Credit Union for $4,000. The mortgage was payable in installments, the last installment due in November 1962. In December of 1959, Harter mortgaged the land to John Harter for $9,000 due in five years. In October of 1960, he purchased the barn in question and caused it to be moved from the land where it formerly stood to the land which he was purchasing on contract. He testified that he had it placed on blocks. This was corroborated by Walter Goebel, who testified that he saw the barn in 1962 or 1963 and that it was then standing on blocks. The only description in the record of the blocks is that they consisted of used railroad ties sawed into blocks. It also appears that some cement blocks were used on...