W. J. Savage & Co. v. Mayfield

• Decision Date: 08 December 1928
• Parties: W. J. SAVAGE & CO. v. MAYFIELD.
• Court: Tennessee Supreme Court

11 S.W.2d 855

157 Tenn. 676

W. J. SAVAGE & CO. v. MAYFIELD.

Supreme Court of Tennessee.

December 8, 1928

Appeal from Chancery Court, Knox County; Robt. M. Jones, Chancellor.

Action by W. J. Savage & Co. against P. B. Mayfield. Decree for defendant, and complainant appeals. Affirmed.

Green Webb & Bass, of Knoxville, for appellant.

Mayfield & Mayfield, of Cleveland, for appellee.

CHAMBLISS J.

This is an action of replevin to recover possession of an air compressor sold by complainants to Pioneer Brick Company under a retention of title contract. Defendant Mayfield being the owner of a brick manufacturing plant, located at Oliver Spring, Tenn., sold it in October, 1924, to Pioneer Brick Company, a Tennessee corporation, for a consideration of $20,000, of which $2,000 only was paid in cash; the deferred balance being secured by a trust deed on the plant consisting of a leasehold interest in real estate, buildings machinery, and miscellaneous manufacturing equipment. The trust deed contained an after-acquired mortgage clause, providing that upon the acquisition and installation of other machinery as additions or substitutions, for the effective operation of the plant as a whole, the lien of the trust deed should attach thereto. Pioneer Brick Company expressly obligated itself to make all necessary payments to protect the property from adverse liens. It appears to have been in the contemplation of the parties that all new equipment should become an integral part of the plant and pass under the lien of the mortgage, and thus inure to the benefit of Mayfield by strengthening his security.

Being in possession under these conditions, in April, 1925, Pioneer Brick Company ordered of W. J. Savage & Co., of Knoxville, the complainants, an air compressor, to be manufactured and delivered for installation and use in the plant. This machine was described in the order, which provided for retention of title in the seller until all deferred payments therefor were made, as "One 8x6 Gardner Duplex, Class H. L. compressor with unloader and sub-base." It appears to be an essential part of the equipment, and was duly received and installed in a manner thus described in the stipulation of facts upon which this cause is before us:

"It is also stipulated and agreed that the said compressor was installed by being placed upon a wooden base in the machine room, which in turn was placed upon a concrete base, and concrete placed over the wooden base, but under the sub-base of said compressor, and that the sub-base of said compressor was bolted down with four bolts imbedded in the concrete and attached upward through the wooden beams and through the holes in the sub-base of said machine, with nuts or taps screwed on said bolts, and at present the bolts through said sub-base are bradded or battered so that the nuts cannot be removed without cutting off the tops of the bolts, but that the said sub-base is attached to the compressor by four bolts with nuts or taps screwed down, which said nuts can be easily removed with a wrench as they are not bradded or battered down. It is also agreed that there is an intake pipe 2 1/2"' in diameter, and a discharge pipe 2"' in diameter, and a water line 1/2"' in diameter, which are attached to the said compressor, and that all three of said lines are attached to pipe lines by means of unions, so that the compressor might be removed from the said three attachments without disturbing the said pipe lines. The compressor and attachments so installed is now a working unit of the manufacturing plant in daily use, and its removal would require the installation of a new compressor, or a change in the present process of manufacture of brick, although the said plant had manufactured brick for many years previous to the installation of said compressor."

The brick company defaulted, and a sale was had of the plant as a whole, and defendant Mayfield became the purchaser and was conveyed the property by the trustee. Mayfield meanwhile was without notice of the acquisition of the compressor, or of the credit and conditional sale feature of the purchase. The trust deed had been duly registered prior to the sale of the compressor.

Two defenses were interposed to the replevin: (1) That the description of the property sold was insufficient under our conditional sales statute and judicial constructions thereof; and (2) that the attempted retention of title was ineffective as against mortgage rights passing to defendant Mayfield under his purchase at the trustee's sale, the compressor being installed as a continuous and essential working unit of said manufacturing plant, pursuant to the contract obligations of the brick company, of which Savage & Co. had constructive notice by the registration of the trust deed. The chancellor sustained these defenses, and complainant has appealed. In view of the conclusion reached and hereinafter stated with respect to the second ground of defense, it becomes unnecessary to consider this question of the sufficiency of the description under our conditional sales statute.

This second ground of defense, sustained by the chancellor presents the question of the effect of the installation of this quasi fixture in this mortgaged plant. The element of fixedness of location and use, apparent here, tends to bring this machinery within the scope of the after-acquired clause of the recorded mortgage and the principle applied in Bank v. Wolf Co., 114 Tenn. 270, 86 S.W. 310. In that case certain propositions here pertinent were adjudged. Reviewing the authorities with his accustomed exhaustiveness, Mr. Justice Neil approves and...