United States Construction Company v. Hamilton National Bank of Fort Wayne
| Decision Date | 06 April 1920 |
| Docket Number | 10,305 |
| Citation | 126 N.E. 866,73 Ind.App. 149 |
| Parties | UNITED STATES CONSTRUCTION COMPANY v. HAMILTON NATIONAL BANK OF FORT WAYNE, INDIANA, ET AL |
| Court | Indiana Appellate Court |
From Allen Circuit Court; J. W. Eggeman, Judge.
Action by the United States Construction Company against the Hamilton National Bank of Fort Wayne, Indiana, and others. From judgment for defendants, the plaintiff appeals.
Affirmed.
T. E Ellison and Chatty Bros. & Flatau, for appellant.
Vesey & Vesey and Barrett, Morris & Hoffman, for appellees.
The complaint in this action was in two paragraphs, the first averring wrongful possession and conversion of a fire extinguishing apparatus and sprinkling system, located on certain real estate in the city of Fort Wayne, Indiana, to appellant's damage in the sum of $ 12,000, with a prayer for recovery of that amount, and the second paragraph alleging substantially the same facts with a prayer for recovery of possession or of $ 12,000 damages. Appellees' answer was in three paragraphs: The first being a general denial; the second pleading an estoppel to the effect that by appellant's act the sprinkler system was so attached to and built into the building on said real estate as to become a part thereof, and that appellees had no knowledge of appellant's claim at the time they accepted a mortgage interest in said real estate; and the third alleging appellant to be a foreign corporation which had not complied with the laws of Indiana relative to doing business in the state, and that, therefore, it could not maintain its action. Appellant's demurrer was overruled to the second and third paragraphs of answer. There was a trial, and judgment for appellees. After motion for a new trial, which was overruled, this appeal.
The facts that must control the decision of this case, both as to the ruling on the demurrers to the answers, and as to the motion for a new trial, briefly stated, are that: The Kerr Murray Manufacturing Company was the owner and in possession of certain real estate, with the buildings thereon, in the city of Fort Wayne, Indiana, on September 7, 1911, and for many years prior thereto, and continued to own the same until May 27, 1912, when, by due course of law, a receiver was appointed for it and its property in the Allen Circuit Court. Appellant is a foreign corporation for profit, organized for the purpose, and with the power, of selling, constructing, erecting and leasing sprinkler systems. It never complied with the provisions of the act of March 9, 1907, § 4085 et seq. Burns 1914, in relation to foreign corporations. On December 26, 1908 appellant entered into a written agreement with said manufacturing company to equip its factory buildings with the General Fire Extinguisher Company's system of automatic sprinklers, furnishing all labor and material therefor, and to keep the sprinkler equipment in good order during the term of the agreement, for which said manufacturing company was to pay $ 16,411 in four annual payments. Such agreement is called a lease, but it expressly provides that, upon full payment of said annual installments, the sprinkler should become the property of the manufacturing company constituting a part of its plant, and that the instrument should then be released of record. The sprinkler system was to remain the property of appellant, and upon failure of said company to pay, appellant might take out and remove said equipment, and it might also collect the annual installments the same as any other mature obligation. In case the company should cease to operate the premises, or should become insolvent, or the premises should be destroyed otherwise than by fire, the company should remain liable the same as if the event had not occurred. No provision was made for the return of any payments made; and $ 9,900 was paid on the contract, none of which was ever repaid or tendered back. Specifications described the various kinds of work and material, including a 40,000-gallon steel gravity tank upon a seventy-five-foot tower, and also including the excavating, filling back trenches, carpentry, masonry, and other work to be done at the site of the factory buildings. This instrument was never recorded. On the same day the contract was sublet to the General Fire Extinguisher Company, except the coal, coke and sandsheds, the earth, carpenter and masonry work, including all foundations, supports, staging, and inclosures, which was done by appellant. By the specifications the owner was to furnish the 40,000-gallon tank and seventy-five-foot tower and box tank riser valves and hydrants; and, on December 5, 1908, appellant contracted with the manufacturing company to erect the tank and tower, including foundation and supports, to box the tank riser, to excavate and back fill the trenches, and to do all necessary carpenter work for $ 2,500, to be paid by appellant. The material to be used by appellant was shipped from Ohio in several carload lots, and consisted of several thousand separate and distinct parts which were fabricated and constructed into a sprinkler system, in Fort Wayne, and for the work of which six to eight men were engaged for from two and one-half to three months. The large pipes were laid underground from four to five feet beneath the surface and under the foundations of the buildings, and under the concrete floors, attached to the six-inch tank riser and to the mains of the city works. The small distributing pipes were firmly attached to the walls and rafters by bolts, screws, and metal hangers. The large controlling valves were firmly set upon heavy concrete foundations built for them and firmly attached thereto and were inclosed in separate rooms made therefor. The tank and the tower were built by the manufacturing company from its own material then on hand at its own plant, as was also the boxing and the tank riser; the inclosing of the large valves by wooden partitions, and the excavating and filling of the trenches were done by its employes. The tower was supported by a base eight or ten feet in the ground, which, with a well eight feet square and six feet deep, with concrete walls and foundation, for the large controlling valve, was constructed by the manufacturing company. The sprinkler system was more firmly attached to the soil than the buildings themselves, was adapted to the use of the buildings, added value thereto, and appeared to all intents and purposes to be a permanent fixture and a part of the real estate. Appellant had a short time before constructed another sprinkler system in the city of Fort Wayne. On September 7, 1911, the manufacturing company executed a mortgage on said real estate and buildings to the Tri-State Loan and Trust Company, to secure an issue of 300 bonds of $ 1,000 each and, being then indebted to each of appellee banks in excess of $ 40,000, then due, each bank then extended the time of payment one year and increased their respective loans to $ 60,000, including the existing indebtedness, in consideration of the pledge to each of said banks of sixty-five of said bonds so secured by mortgage as aforesaid. The mortgage was duly recorded. Appellee banks extended the time of such payments and increased the loans without any knowledge of any claim or title, ownership or lien of the appellant in or to said sprinkler system or any part thereof. This last statement is disputed, but the court by its general finding has so found, and we do not weigh the evidence. The receiver, so appointed as aforesaid, filed his petition to sell all of the property of the manufacturing company, alleging its insolvency and a necessity for such sale, to which petition said company and appellee banks were made parties, and the banks set up their claims against the company and their security, asking that the mortgage be declared a first lien on the property and on the proceeds of the sale, and that such proceeds be first applied to the payment of their claims. Judgment was rendered in favor of each of appellee banks in the sum of $ 65,000, the mortgage was decreed a first lien upon said real estate, buildings, fixtures and attachments thereto, and the same was ordered sold, and the proceeds to be applied pro rata to the bonds outstanding and secured by the mortgage. After due advertisement, the property was sold, July 21,...
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