Winslow v. Merchants Insurance , 45 Mass. 306 ( 1842 )

Shaw, C. J.

The court are of opinion that the steam engine and boilers, and all the engines and frames adapted to be moved and used by the steam engine, by means of connecting wheels, bands or other gearing, as between mortgagor and mortgagee, are fixtures, or in the nature of fixtures, and constituted a part of the realty ; and that as all these fixtures were annexed to and made part of the realty by the mortgagor, they are part of the mortgaged premises, and passed by the first mortgage to the defendants.

A different rule may exist, in regard to the respective rights of tenant and landlord, tenant for life and remainderman or reversioner, and generally when one has a temporary and not a permanent interest in land. In those cases the rule, as to what shall constitute fixtures, is much relaxed in favor of those who make improvements on the real estate of others, for the purposes of trade or other temporary use and enjoyment. Gaffield v. Hapgood, 17 Pick. 192. But the case of mortgagor and mortgagee stands upon a different footing. The mortgagor, to most purposes, is regarded as the owner of the estate; indeed, he is so regarded to all purposes, except so far as it is necessary to recognize the mortgagee as legal owner, for the purposes of his security. The improvements, therefore, which the mortgagor, remaining in the possession and enjoyment of the mortgaged premises, makes upon them, in contemplation of law he makes for himself and to enhance the general value of the estate, rad not for its temporary enjoyment; whereas a tenant, making the same improvements upon the estate of another, with a view to its temporary enjoyment, must be presumed to do it for himself, and not for the purpose of enhancing the value of the freehold. This rule of course will apply only to that class of improvements consisting of articles added and more or less permanently affixed to the realty, in regard to which it is doubtful whether they are thereby made part of the realty or not, and when that question is to be decided by the presumed intent of the party making them. Take, for instance, the case of a dye-kettle set in brick work, which is for the time annexed to the freehold, but which may be removed without essential injury to the building, and so as to leave the premises in as good a condition, as if it had not been set. If so set by an owner of the fee, for his own use, it would, we think, be regarded as a fixture, an addition made to the realty by its owner, as an improvement, and would pass to the heir by descent, or to the devisee by will. But if the same addition had been made by a tenant for years, for the purpose of carrying on his own business, we think he would have a right to remove it, provided he exercise that right whilst he has the rightful possession of the estate, that is, before the expiration of his term. 17 Pick, ubi sup.

Supposing the point to be clear, on the one side, as between heir and executor, and on the other, as between tenant and landlord, how does it stand as between mortgagor and mortgagee ? In the case of Union Bank v. Emerson, 15 Mass. 159, it was held that such a kettle, set by the owner of the freehold, before the mortgage, could not be removed by the mortgagor, or taken as his personal property, but passed by the deed to the mortgagee. It was considered an immaterial fact, that the mortgage deed did not mention appurtenances ; probably upon the ground, that if the kettle was an appurtenance, and a fortiori, if it was parcel, it would pass without express words; Kent v. Waite, 10 Pick. 138 ; and if it was neither, those words would not aid it We are aware that in giving the opinion in that case, it was stated by the court that if the defendant, after making the mortgage, had put in the kettle, they would have considered him authorized to remove it, before delivering possession to the plaintiffs. There is manifestly some mistake in this statement. It was not the defendant who made the mortgage ; he was a purchaser of the kettle, the same having been removed by the mortgagor, after the plaintiffs took possession, and been sold l<v him to the defendant. But supposing, as is rather to be inferred from the context, that if the kettle had been put in by the mortgagor after the mortgage was made, the mortgagor would have had a right to remove it; it is to be remarked that no such point was decided by the court, nor was it necessary, upon the facts of that case ; and from the whole tenor of this very short report, it seems probable that the point was not much considered.

In the recent case of Noble v. Bosworth, 19 Pick. 314, it was held that such kettles, erected by the owner, were to be deemed part of the realty and to have passed by a general deed of the estate, unless specially excepted. There the case of Union Bank v. Emerson was alluded to ; but the point was not then material, and the court expressly avoided giving any opinion, either affirming or calling in question its authority as to the present point of inquiry, by stating that whatever doubt there might be as to such fixtures, erected by a tenant on leased premises, or by a mortgagor, after the estate had been mortgaged, there was none when erected by an owner.

It is obvious that this question cannot arise where there is any express stipulation in the mortgage deed, declaring either that such improvements to be made, and which are in their nature equivocal, shall, or not, be deemed fixtures, and be bound as part of the realty. The question is, what is the reasonable and legal construction of a deed, granting an estate in mortgage, in the usual terms, where there is no stipulation on the subject. Such a deed must of course include all additions which become de facto part of the realty, and which are not in their nature equivocal ; because a title to the whole, includes every part.' In regard to articles doubtful in their nature, we have already stated as our opinion, that if added by the mortgagor, it is to be considered as done by way of permanent improvement, for the general benefit of the estate and not for its temporary enjoyment. Hunt v. Hunt, 14 Pick. 386; One of the objects, and indeed one of the most usual purposes of mortgaging real estate, is to enable the owner to raise money to be expended on its improvement. If such improvements consist in actual fixtures, not doubtful in their nature, they go of course to the benefit and security of the mortgagee, by increasing the value of the pledge. The expectation of such improvement and such increased value often enter into the consideration of the parties, in estimating the value of the property to be bound, and its sufficiency as security for the money advanced. And we think the same rule must apply to those articles which in their own nature are doubtful, whether actual fixtures, or not, on the ground of the presumed intention of the parties. A presumption arises from the relation in which they stand, that such improvements are intended to be permanent and not temporary, and that the freehold and the improvements intended to be made upon it are not to be severed, but to constitute one entire security. The mortgage is usually but a collateral security for money which the mortgagor binds himself to pay, and is therefore a hypothecation only, and not an alienation of the mortgaged estate. And in this respect the distinction, between the tenant for years and the mortgagor, is broad and obvious. The tenant for years can have no benefit from his improvements after the expiration of his term, but by his right to remove them, when they are capable of removal, but the mortgagor has only to pay his debt, as he is bound to do, and as it is presumed he intends to do, and then he has all the benefit of his improvements, in the enhanced value of the estate to which they have been annexed. The latter, therefore, may be presumed to have intended to annex the improvements to the freehold and make them permanent fixtures ; whilst the former must be presumed, from his obvious interest, to erect the improvements for his own temporary accommodation during his term, intending to remove them before its expiration.

The case of Gale v. Ward, 14 Mass. 352, is not, we think, an authority opposed to this opinion ; because it is manifest that the court, in that case, regarded the carding machines, though ponderous and bulky, as essentially personal property which might have been attached and removed as the personal property of die owner, even though there had been no mortgage; and they had been erected by the owner in his own mill, for his own use.

As to what shall be deemed fixtures and part of the realty, when the question does not arise as between landlord and tenant, or tenant for life and remainderman, in regard to improvements made by the tenant, it is difficult to lay down any general rule, which shall constitute a criterion. The rule that objects must be actually and firmly affixed to the freehold, to become realty, or otherwise to be considered personalty, is far from constituting such criterion. Doors, window blinds and shutters, capable of being removed without the slightest damage to a house, and even though at the time of a conveyance, an attachment or a mortgage, actually detached, would be deemed, we suppose, a part of the house, and pass with it. And so, we presume, mirrors, wardrobes, and other heavy articles of furniture, though fastened to the walls by screws, with considerable firmness, must be regarded as chattels. The difficulty is somewhat increased, when the question arises in respect to a mill or manufactory, where the parts are often so arranged and adapted, so ingeniously combined, as to be occasionally connected or disengaged, as the objects to be accomplished may require. In general terms, we think it may be said, that when a building is erected as a mill, and the water works, or steam works, which are relied upon to move the mill, are erected at the same time, and the works to be driven by it are essential parts of the mill, adapted to be used in it and with it, though not at the time of the conveyance, attachment or mortgage, attached to the mill, are yet parts of it, and pass with it by a conveyance, mortgage or attachment. Powell v. Monson & Brimfield Manuf. Co. 3 Mason, 466. Farrar v. Stackpole, 6 Greenl. 154. Gray v. Holdship, 17 S. & R. 415. Voorhis v. Freeman, 2 Watts & Serg. 116.

In the present case, we are of opinion, upon the evidence submitted to the court, that the engine and boilers, and the machines for working iron, upon which they operated, considering the manner in which they were fitted and adapted to the mill, were fixtures, and part of the realty, and were of course covered by a mortgage of the real estate.

We are also of opinion that all articles of stock, such as iron and coal, and all materials to be wrought, and the hand tools, and all implements not driven by the steam engine, and articles not annexed to the building, nor embedded in the ground, nor constituting parts of such mill, are to be deemed personalty, and not realty, and did not pass by the first mortgage to the defendants.

In regard to the second mortgage, as far as it is a mortgage of real estate, it is not material whether the first registration was good, or not: because the plaintiffs have no claim to the real estate. But it is contended on the part of the defendants, that the mortgage deed to them, of May 26th 1836, was a mortgage both of real and personal property ; that it was duly registered as a mortgage of personal property, in the city clerk’s office, long before the plaintiffs’ mortgage, and was therefore sufficient to bind the personal property.

We think there is a satisfactory answer to this claim, furnished by the facts. This deed purported to be a second mortgage of the real estate before mortgaged to the defendants with all and singular, the machinery, tools, goods, chattels and other property therein contained, together with all the machinery, tools, apparatus and other property, whether fixtures or otherwise, now being or remaining on the premises, and also all other machinery, engines, tools and other property, now contemplated to be placed in said building ; said Pond, the mortgagor, warranting and agreeing, that said instrument should be effectual to create a lien or mortgage on the machinery and tools afterwards to be placed in said building ; and he moreover stipulated, to remove all doubt, after the machinery and tools should have been actually placed therein, to execute any instrument which should be effectual and sufficient to create a lien and mortgage thereon.

In point of fact, at the time of executing this instrument, the building had not been erected, and no machinery or tools whatever were then placed in it In truth, a considerable part of those claimed in this action were not then in existence, but were manufactured afterwards. “ Articles contemplated to be placed therein,” though then in existence, without any schedule, enumeration or specification whatever, is, as a description, far too indefinite and uncertain to constitute a lien upon the articles afterwards actually placed in the building. The circumstance that some of the articles were in use by the mortgagor, at a shop occupied by him in Water Street, and were afterwards removed to the shop in Hawley Street, cannot bring them within the description, vague as it is ; because many of the articles, so used at the shop in Water Street, were not removed; others were purchased or manufactured afterwards ; and therefore it still remains wholly uncertain which of them were “ contemplated ” to be put into the new building. The stipulation of the mortgagor to execute a further instrument of hypothecation, when the articles should be put in, and thus made certain, was a good executory contract, binding upon the covenantor personally, and for a breach of which he might have been liable in damages, but not an executed contract, constituting a lien de facto upon articles not then bound by the mortgage.

It was objected to the plaintiffs’ mortgage, that it was invalid, because there was no schedule annexed, according to a stipulation contained in it. But the court are of opinion that it was good and available for all the articles which were in the shop at the time it was executed, so far as they remained and could be identified, although no schedule was annexed. The reference to a schedule to be annexed was not to limit or restrain the generality of the previous description of the property, but it was to be inserted for greater certainty and exactness, and the better to enable the mortgagee to identify the articles. It was not, therefore, essential to the validity of the mortgage.

[This case was adjusted by the parties, on the principles of the foregoing opinion, and judgment was entered for the plaintiffs, for the sum of $ 1161-05.]