Whitaker-Glessner Co. v. Ohio Savings Bank & Trust Co. , 22 F.2d 773 ( 1927 )

MOORMAN, Circuit Judge.

Suits were brought to foreclose mortgages on canning plants in Ohio, Michigan, Illinois, Indiana, and Kentucky. The mortgages purported to cover all property, real and personal, used in connection with the plants. The lower court held that they were effective in Ohio, Michigan, and Illinois only as real estate mortgages; but decreed that certain parts of the machinery in the plants in those states were such fixtures as wore subject to the mortgages. Appellant contends' that these parts were personalty. They were attached to.the buildings by bolts or screws and connected together; but they could he separately removed without injury to themselves, the building, or any other part. It sometimes happened that one part was replaced by another, depending upon the vegetable being canned.

In Ohio personalty becomes a fixture, under Teaff v. Hewitt, 1 Ohio St. 511, 59 Am. Dec. 634, cited with approval in Coleman v. Manufacturing Co., 38 Mich. 30, upon the concurrence of its annexation to the realty or something appurtenant thereto, its application to the use or purpose to which the realty is appropriated, and an intention on the part of the party, annexing it to make it a permanent accession to the freehold. It is also held in Ohio, as generally elsewhere, that, where the chattel may be removed without injury to it or the realty, the manner of its annexation and other circumstances and facts, including its possible uses, a,re to be considered in determining the intention of the party annexing it. We have not been referred to any decision of the courts of Michigan or Illinois which militates against these rules; and, despite the dictum of Manwaring v. Jenison, 61 Mich. 117, 27 N. W. 899, we find nothing different therefrom in Hill v. National Bank, 97 U. S. 450, 24 L. Ed. 1051, Firth Co. v. Trust Co. (C. C. A.) 122 F. 569, and In re Russell Falls Co. (D. C.) 249 F. 260, which counsel for appellant say are inapplicable, because decided under the “Massachusetts rule.”

The annexation being shown, each case, as to the other conditions necessary to the conversion, must obviously turn on its own factg. The case here is between mortgagees and one standing in the place of the mortgagor, in which ease the law looks more favorably upon conversion than in a case between landlord and tenant, or life tenant and remainderman. However, in such case, the mortgage itself may be evidence of the intention of the mortgagor in affixing the chattel. Appellant contends that these mortgages disclose an intention not to make the machinery a fixture.¹

There are mortgages in which a specific reference to machinery or chattels, following the description of the real estate, would indicate that the mortgagor intended to treat the two as different classes of property; and there would be' reason, under Fortman v. Goepper, 14 Ohio St. 559, for the inference here, did not the mortgages also specify buildings, dwellings, structures, and fixtures included in the theretofore described real estate. This further specification shows that no such inference can be based on the cumulative description. Nor is it to be drawn from the provision requiring that the mortgages, be filed both as real estate and chattel mortgages, for both kinds of property were embraced in the mortgages, it being the intention of the parties to incumber both, which was a sufficient reason for the provision requiring the two recordations.

The authority given the mortgagor to sell a part of the apparatus, machinery, equipment, or material of a movable or consumable nature upon substituting therefor other property of equal value, and the further provision, probably applying only to the real property, authorizing the company to sell “any other of its property upon procuring a release of the lien from the trustees,” do not, in our opinion, throw any light on the intention of the mortgagor in affixing the machinery to the buildings.

Although some of the machinery could be and occasionally was removed to meet the exigencies of the business, all of it that the lower court held to be fixtures was annexed to the realty and was a part of the fixed equipment of the plants. The fact that it was carried on the books of the mortgagor separately from the real estate is evidence of lack of intention to make it a fixture. On the other hand, the mortgagor was engaged in tbe canning business and no other; it owned the buildings, and all the land on which they were located, except the plant in Kentucky; it had acquired these properties for the sole purpose of establishing canning plants; and the buildings were thereafter constructed, or reconstructed, so that the machinery could be placed in them and used for the purpose for which they were acquired. The machinery was in the plants at the time the mortgages were given, and was being devoted to the use to which the real estate was appropriated. We think it was a part of the realty. Pflueger v. Lewis Foundry & Machine Co. (C. C. A.) 134 F. 28.

The judgment is affirmed.

1 For example: After describing the several tracts of land by metes and bounds, the mortgages include: “All the buildings, dwellings, structures, and improvements constructed and to be constructed on said lands hereby conveyed, and all engines, boilers, machinery, belting, shafting, steam and beating apparatus', and all fixtures, implements, and apparatus used or useful in carrying on the company’s business, together with all the appurtenances and appliances connected with and appurtenant thereto, and any and all increase of or to any of the above denominated items, whether by replacement, repairing, or adding to the aggregate thereof of new appliances or items as above denominated.” They provide that upon their delivery they shall be filed for record as real estate and also as chattel mortgages, and that the mortgagor from time to time may sell or otherwise dispose of such “apparatus, machinery, equipment, or material of a movable or a consumable nature,” and acquire other property of equal or greater value, so as to keep the security unimpaired, and all the property so acquired shall become “subject to the operation and lien of this mortgage.”