Humes v. Higman , 145 Ala. 215 ( 1906 )

HABALSON, J.

1. On the former appeal, the equities of the original bill, assailed on demurrer, Avere fully sustained. In its final decree the court holds that the complaijiant Avas entitled to relief under the original bill; that the evidence sustained the averments that it Avas not the intention of the parties in making the agreement of September 10, 3905, or by the foreclosure proceedings of complainant’s mortgage, made in pursuance of said agreement, to discharge and release the. lien of the first mortgage to complainant and others, hut was intended merely to effectuate an extension<%f the debt of the defendant H. C. Higman to complainant; that complainant Humes did not thereby lose his priority over the lien of the junior mortgage to John Higman, who acquired no right., nor suffered any detriment by reason of the transaction between the complainant and said H. C. Higman, and that John Higman did not, by virtue of his mortgage from IT. C. Higman, of October 7th, 3889, nor by virtue of the transaction between complainant and H. C. Iligman, and the chancery proceedings in consummation thereof, acquire any right, title or encumbrance in and to said real estate, which is superior'to the title of complainant. The title to complaiiant was confirmed and quieted and vested absolutely in him. We find no • fault with the conclusions of the court, and it seems supported by the evidence and the manifest intention of the parties. — Higman v. Humes, 127 Ala. 404, 30 South. 733.

2. The main controversy in the case arises over the question whether or not the saw mill and machinery on the land are fixtures, and passed to the complainant by tile original mortgage; or whether they are personal property so as to render the complainant liable for their conversion, as John Higman, bj7 his cross-bill, seeks to do. The court below was of the opinion that the machinery mentioned in the pleadings, and especially in the cross-bill of John Higman, was not a part of the land, and that complainant Humes was chargeable therewith. In this, we apprehend, the court fell into error.

. No precise rule can be laid down, applicable to all cases, defining the boundary between movable chattels from immovable fixtures. It varies with the different relations of the parties, and is largely dependent on their intention either express or implied. - Rogers v. Pratt-ville Mfg. Co., 81. Ala. 483, 1 South. 643, 60 Am. Rep. 171.

In Tillman v. DeLacy, 80 Ala. 106, it was said: “The permanency of the attachment does not depend on the strength, or force, or manner of the annexation 'to the freehold, so much as-upon its constancy, and upon tluw. use to which the attached chattel is adapted, the purpose for which designed, and the intention of the party in at-, taching it. The current of modern decision is, ‘in favor of viewing evqfything as a fixture, which has been attached the realty with a view to the purpose for which it is held or employed, however slight ¡" or temporary the. connection between them.’ 2 Smith’s 11 Leading Cases, 221. The general tendency of decisions 3 regards the use for which the chattel is designed, its | adaptability to the part of the realty where it is placed, / and the intention of the. parties, whether for temporary use, or a permanent accession to the freehold, as a leading test.”

.In 1 Jones on Mortgages, § 429, the author observes, “The intention with which the article is attached to the realty, whether for temporary use or for permanent improvement, has within certain limits quite as much to do with the determination of the question whether it has thereby become a permanent fixture, as has the way and manner in which it is attached. In the modern cases the intention with which a chattel is attached .to the realty has become more and more the decisive test whether or not the chattel has become a part of the realty. If the article is something necessary for the proper enjoyment of the estate, it may be presumed that it was annexed for its permanent improvement, and therefore, that it goes to the benefit of the mortgagee. The fixtures may be so adapted to the building in which they are placed, and to the purpose for which the building is to be used, as to show clearly that they were designed to be permanent.” Such, for instance, as the fixtures in a manufactory necessary for furnishing the motive power, or for the proper carrying on of the business, etc. As sustaining the text, many decisions from the different states, including Alabama, are cited in the uote.

It appears from the evidence that the bulk of the ar-: tides were put there with the intention of being used" permanently, or as long as there was necessity for their , use, in connection with the saw mid., and that the, grounds and buildings Avere not adapted to any other use than saAV mill' purposes; that tlies^ articles AArere necessary and used as parts of the saAV mill machinery, and .dependent upon each, other for the operation of the mill. /A. D. Jarvis, for instance, a witness for the defendant, 'on his cross-examination by complainant, said: “The building in which this machinery was placed and to j which it was attached, was erected for the purpose for ‘which it was used, that is, for operating the saw mill; 1 it would not be properly adapted for any other use than for saw mill purposes. It was a permanent building.” [He fllso testified, that the machinery which he had testified about that was not attached to and a part of the saw mill, was a double surfacer, a matcher, a dry ldln and a re-saw machine, and that all the balance was in connection with the saw mill. All those, except probably, the dry ldln, he stated were necessary to thé saw mill, were- in the building, and. the saw mill could not do saw mill work without them! As to the dry kiln, he stated it was not a necessity. Several of the witnesses for the complainant testified substantially to the same thing, and some of thpm that the dry kiln was affixed to the land as a- part of it, and other evidence for the defendant tended to corroborate them. On the whole, the evidence is reasonably satisfactory-^ that all the machinery connected with the niffl, under the principles announced, was attached or appended to it in such a way as to make it fixtures, with the exception of a lot of machinery stored in an old store house, consisting of odds and ends, only valuable, as the evidence of a number of witnesses shows, for scrap iron. It is not pretended that the lot of old machinery had any connection proper with the saw mill. To such of this old scrap machinery as it may appear the complainant disposed of or converted to his own use, he is properly chargeable.

3. It may be added, as much has been said on the subject, by the defendant, that the fact that the mill site was subject to overflow from the river, and was unfavorable and unsuited for a permanent • enterprise of this character, and that the buildings were not of the most permanent and suitable character, has but little if any weight, in determining_fche character ok the machinery ' on the lot and in the buildings. The witnesses differ as to these matters, some stating'that the lot and improve-meats were suitable, and others that they were not; but whatever may have been the character of the site and the buildings erected, they were such as the parties choose as suitable to the purposes they had in hand, and Avhether they might not have acted more Avisely in selecting the lots aud erecting the buildings, cannot be made a test as to Avhether the machinery became fixtures, as a part of the realty or was personal chattels. If the parties had established their million the banks of a river subject to OA'erflow's, as they did in this case, or had established it near the crater of a live volcano, and attached their machinery thereto in such a manner as to make it fixtures to the realty, could it be said that owing to the unsuitableness of the site for the mill, they did not intend to make''the machinery fixtures? What.they did must be looked to as displaying their^ intentions, Avhether they acted with good business sense or not.

4. The defendant, John Higman, seeks by his cross-bill to charge the complainant Avith the value of the old and unfixed machinery; for this purpose, the cross-bill Avas properly sustained by the court, and under it the complainant may be held to a personal liability for such part of said machinery, if any, as it may be shoAvn he disposed of or converted. — Code 1896, § 720; 3 Brick. Dig. 383, § 253.

5. The complainant seeks to hold John Higman lia- ' ble for the balance of his debt remaining after the land mentioned in the bill, when sold at foreclosure sale under the H. C. Higman'mortgage, Avas not paid thereby. This claim proceeds on the aArerments of the bill, that H. C. Higman, George E. Smith and Newton B. Hall, Avere the original OAvners of the land in question; that they purchased the same for partnership purposes and that thereupon John Higman purchased the interest of said Smith and N. B. Hall in this partnership and agreed Avith them to pay all the partnership debts, including as a part thereof the original purchase money for the land. That John Higman ever made such agreement is denied by him as well as H. C. Higman. John Higman, it is shoAvn, did purchase the interest of said Smith and Hall in said, partnership. N. B. Hall deposed in his direct examination, that said Higman, when he purchased his and Smith’s interest in the firm, as a part of the consideration therefor assumed the pajnnent of the balance of the indebtedness due for the land to complainant and others. But, on his cross-examination, he distinct^ states that he was not present when said Higman bought said Smith’s interest; that the trade Avas made between them in Michigan, when AA-itness Avas in Alabama and that aaTicu he stated that said Higman assumed said indebtedness, the statement was made from hearsay; that he never saAV any writing or evidence of the trade, and John Higman never told him about it; that of his oaati knoAAdedge, he did not Ioioav an3r thing about. AAiiether John Higman bought, all the interest of Smith in the firm, and as a part of the consideration for said purchase, agreed to pajr the debts of the old firm, or the balance of-the purchase money on the land. He makes the same statement touching the sale of his own interest to said Higman, haAdng stated that he did not sell directly to him, but that he had sold his interest to Pear ley ,W. Hall, and Higman acquired, his interest from Pearley IV. Hall:

John Higman testified that he purchased the interest of George E. Smith in the saAV mill in the spring of 1889, at Avhich time he became interested Avith II. 0. Higman and N. B. Hall; that the land was purchased earl3r in 1888, and there was no partnership formed at that time; that when H. 0. Higman executed his mortgage to witness, said IT. C. Higman Avas the sole owner of the mill property, including the machinery; that he did not assume the one-third partnership indebtedness of G. E. Smith; that the purchase money debt for the land neArer became the debt of any partnership of which he Avas a member and no such debt was mentioned on the books of the company as a partnership liability, and that he did not make any agreement between himself and others to pay any debts of the partnership or of the members thereof, other than those shown by the books of the concern.

IT. 0. Higman testified that the land was purchased in January, 1888, and the partnership had not been formed at that time; that he, II. C. Higman, at the time he executed his mortgage to John Higman, ivas the sole owner of the Higman saiv mill and all the machinery and appurtenances; that the partnership had dissolved immediately preceding the giving of this mortgage by him to John Higman and witness had previously owned a one-third interest in the partnership; that John Higman took the place of E. Gf. Smith in the partnership between witness, Smith and Hall; that the lands included in his mortgage to Humes and John Higman were deeded to the individuals composing the firm, before a partnership was formed; that the purchase money involved in this suit never become the debt of any partnership of which he was a member, and no such entry ivas ever made on the books of the Alabama Land Company or the Alabama Lumber & Fruit- Backing Company, and that he kept the books of the company and ivas familiar with its business.

There is a vast amount of evidence introduced in various shapes, — record evidence of partnership in other causes as well as parol, — to show that John Higman assumed this land debt, and agreed to pay it, at the time he bought out Smith’s interest in said partnership. To review it as counsel on each side have done, would extend this opinion to an extraordinary and unprofitable length. The chancellor held, to quote from his opinion, that, “the alleged purchase money debt, which is preferred against John Higman by one of the amendments of the bill, was not a partnership debt. The mere fact of the use of the land by the firm does not make it partnership property. As was said in Hatchett v. Blanton, 72 Ala. 433, it is not an uncommon occurrence that a partnership uses the property of its several members, or of a preceding partnership but in the absence of any agreement that the property shall be joint property, its title and character is unchanged.” To the same, effect see Robinson Bank v. Miller, 153 Ill. 244, 38 N. E. 1078, 27 L. R. A. 449, 46 Am. St. Rep. 883. The evidence of the Higmans is direct and positive and has not been overcome by the evidence offered by complainant. To charge John Higman with this land debt, even if it were a partnership liability, the fact that he bought the interest of Smith in the partnership would not be sufficient of itself, in the absence of evidence that he assumed it as such, and agreed to pay it. As a purchaser of partners interest he could be required to do no more than comply with the terms of his purchase; and if he did not agree to pay the partnership debt he cannot be compelled to do so by a creditor of the old firm. He simply agreed, as the evidence tends to show, to be liable for the debts of the firm so far as the books showed them, and this was done. — 17 Am. & Eng. Law (1st Ed.) 112, 1115, 1116.

In this decision we concur with the court below. The evidence of the two Higmans is direct and positive to sustain it.

The foregoing covers all the material questions in issue necessary to a full settlement between the parties on another trial.

The decree in the main case, number 868, must be reversed in part and affirmed in part; and the decree of the cross-appeal, case number 868a in which John Higman is cross-appellant is affirmed.

868 reversed in part and affirmed in part.

868a, affirmed.

All the justices concur.