Wood Hydraulic Hoist & Body Co. v. Norton

• Decision Date: 10 December 1934
• Docket Number: No. 15.,15.
• Citation: 257 N.W. 836,269 Mich. 341
• Parties: WOOD HYDRAULIC HOIST & BODY CO. v. NORTON et al.
• Court: Michigan Supreme Court

269 Mich. 341

257 N.W. 836

WOOD HYDRAULIC HOIST & BODY CO.

v.NORTON et al.

No. 15.

Supreme Court of Michigan.

Dec. 10, 1934.

Action by the Wood Hydrulic Hoist & Body Company against R. J. Norton, the Gleaner Life Insurance Society, formerly the Ancient Order of Gleaners, a corporation, and another. Judgment for plaintiff, and the last-named defendant appeals.

Reversed and remanded, with directions.Appeal from Circuit Court, Oakland County; Glenn C. gillespie, judge.

Argued before the Entire Bench.

Schmalzriedt, Frye, Granse & Frye, of Detroit (Herbert P. Orr, of Detroit, of counsel), for appellant.

Frank Day Smith, of Detroit, for appellee.

BUTZEL, Justice.

Wood Hydraulic Hoist & Body Company, plaintiff herein, furnished a Gar Wood heating system for a residence in Birmingham, Mich., under two title retaining contracts, one made directly with the owner of the premises for a portion of the equipment, and the other with the heating contractor for other parts thereof. The oil burner, boiler, tank, aquastat, etc., constituting the system, were so installed that they could easily be removed by the use of a wrench, without damage to the realty. The title retaining contract with the owner contained a provision that if, upon the sale of the residence, the heating apparatus should not be acceptable to the purchaser, plaintiff would remove the equipment and return all money paid thereon. Subsequent to the installation of the system, the owner of the premises gave a first mortgage of $8,000 on the property to the Gleaner Life Insurance Society, defendant and appellant herein. Before making the loan, defendant, through a search of the title, ascertained that there were no liens against the property. The trial judge refused to admit into evidence a waiver of lien, signed by the heating contractor, and an affidavit, complying with the mechanic's lien law, signed by the mortgagor at the time the mortgage was given, and listing the contractor's claim as paid. The mortgage was foreclosed by advertisement, and, after the property had been bid in by defendant, plaintiff brought replevin proceedings to regain possession of the heating apparatus. The trial court, in rendering judgment for plaintiff, held that the equipment was personal property, on the ground that it could be removed without material injury to the building, and that the title retention contracts negatived any intention on the part of plaintiff and the owner of the premises that the heating system should become a fixture until paid for.

In reaching this decision the trial court relied largely upon the case of Woodliff v. Citizens' Building & Realty Co., 240 Mich. 413, 215 N. W. 343, which involved an elevator installed in an apartment building. In that case the owners of the fee had sold the property on land contract. Subsequently an assignee of the vendee's interest purchased an elevator for the building under a title retaining contract. The controversy arose between the vendor of the elevator and the owners of the fee, who, as vendors in the land contract, were prior equitable mortgagees. The court held that the intention of the parties, as expressed in the title retaining contract, was controlling, and that the elevator therefore retained its chattel character in spite of its annexation to the freehold. However, in reaching this decision, the court called attention to the fact that the owners were not subsequent purchasers or lienholders. The opinion refers to the case of Harris v. Hackley, 127 Mich. 46, 86 N. W. 389, 390, where a like result was reached, and where the court again called attention to the fact that the claims o a subsequent bona fide purchaser were not involved. It stated: ‘It is true that Hackley stood in the position of an equitable mortgagee of the real estate, being a contract vendor; but he was a prior mortgagee, and did not take his security upon the faith of any appearance that this property was a part of the real estate.’

Unlike the above cases, the instant case involves the claims of a subsequent bona fide mortgagee of the property without notice. The principle applicable in such a case was laid down by this court in Wickes Bros. v. Hill, 115 Mich. 333, 73 N. W. 375, 376, where a controversy arose between a vendor under a conditional sales contract of certain machinery, including an engine, boiler, shafting, and other articles used in a shingle mill, and a subsequent mortgagee without notice. The court therein said:

‘The rule is settled beyond controversy in this state that, as to conditional sales of personal property retaining the title in the vendor until paid for, no subsequent vendee obtains the title while the property remains personalty. This is upon the theory that the possession of movable property, known as chattels, is not conclusive of ownership or right of possession, and that he who buys takes subject to the title of the real owner. When personal property is attached to, and becomes a part of, the realty, a...