Red Diamond Clothing Co. v. Steidemann , 169 Mo. App. 306 ( 1912 )

NORTONI, J.

(after stating the facts). — On plaintiff’s appeal, it is argued that both the court and the referee erred in the conclusion that any portion of the property here involved became-that of defendants’ because of the new lease. It is said that all of it was installed in the building by the Milius Company under an agreement with defendants through their agent, Mr. Julius Steidemann, to the effect that it should continue to belong to the tenant and might be removed on the expiration of the lease. There can be no doubt that such was the agreement. The referee so found the fact to be and the evidence reveals it beyond question. Such agreements between landlord and tenant are valid and frequently operate to convert what would otherwise be realty into a personal chattel for the purposes of the case, as the authorities universally declare; for instance, as in the case of a building which may be removed without injury to the freehold. [See Neiswanger v. Squier, 73 Mo. 192; Kuhlmann v. Meier, 7 Mo. App. 260; 13 Am. & Eng. Ency. Law (2 Ed.) 655, 622, 623.] However, these contracts are so construed in this State as to vouchsafe only the right to remove such erections of a permanent character not peculiarly jjarcel of a trade plant as are installed by the tenant during the term and which may be dissevered without material injury to the property of the landlord. [See Powell v. McAshan, 28 Mo. 70; Kuhlmann v. Meier, 7 Mo. App. 250.]

When the agreement is considered under this rule, it appears that it is available to plaintiff and affords a right of removal only as to the boiler, engine, steam pnmp and blow-off tank, for, according to the finding of the referee, these alone conld be removed without substantial injury to the building. Furthermore,, these were peculiarly trade fixtures, in that they were parcel of plaintiff’s manufacturing plant. But this is not true of the heating plant, consisting of pipes, communicating steam to the radiators; neither is it true of the sprinkling apparatus installed in the building. It is true both the heating plant and sprinkling-apparatus were conveniences installed for the beneficial use of the property, but they constituted no part of the plaintiff’s manufacturing plant. They do not fall within the category of trade fixtures, for. the reason the one served no other purpose than that of comfort in providing warmth to the workmen and the other that of protection to the property as against fires. According to the finding of the referee, and the evidence amply supports it, both the heating plant and the sprinkling apparatus were so installed as to preclude their removal without .substantial injury to the landlord’s building. It is unnecessary to point out the facts touching this matter, as the referee’s report is explicit thereon. Because of this, the heating plant and sprinkling apparatus became fixtures, or part of the realty, notwithstanding the agreement, according-to the rule of construction above pointed out pertaining to such contracts. If the heating plant and sprinkling apparatus, which were no part of the tenant’s plant as such, could not be removed without material or substantial injury to the landlord’s property, as the referee finds the fact to be, then the agreement in the first instance availed plaintiff nothing on that score, as decided in Powell v. McAshan, supra, and the tenant must be regarded as having waived the benefits of that agreement .with respect to them through the manner of installing these appliances in the premises.

The referee found the value of the engine, boiler, blow-off tank and steam pump, all parcel of the tenant’s plant, less their cost of removal from the building at the time of the conversion, at $377.50, and allowed interest thereon. On a review, the court disallowed the item of interest, for the reason plaintiff had not in express terms prayed for interest in his petition, but gave judgment for the amount of $377.50. It is argued that the measure of damage thus applied is an erroneous one, for the reason that, in trover as for conversion, the measure of recovery is the value of the property at the time and place of the conversion. Obviously the proposition is sound. Though it appears defendants forbade plaintiff from removing these items of property which were a part of its plant, and retained them in the building, the referee and the court, in determining the amount of plaintiff’s damage, deducted the cost of removal, and treated the property as situate outside of the building thereafter as junk. It would seem that this rule of damages on the facts disclosed allows to defendants benefits accruing from their own' wrong. This impinges the rule that a wrongdoer will not be permitted to advantage himself by his own wrongful act. Obviously defendants should not be allowed to convert this property, remodel it as they did, and let it to another tenant in the building, without compensating the owner for the value at the time and place of the conversion. The proposition has been squarely decided by the Supreme Court, as will appear by reference to Neiswanger v. Sqnier, 73 Mo. 192.

Plaintiff made no complaint in its motion for a new trial touching the ruling of the court on its right to recover interest, and for that reason the matter will not be considered here.

On defendants’ appeal, it is argued that, though the several items of property involved were installed in the building originally under an agreement that the tenant might remove the same, the entire became the property of defendants through the operation of law, by the then owner entering into the new lease, of date July 31, 1899, without expressly reserving in such lease the right of removal. There can be no doubt that the renewal of a lease without any stipulation as to the removal of fixtures on the prem-. ises has been generally held to be an abandonment by the tenant of his right of removal. However, the authorities in this country are not entirely in accord on this proposition. [13 Am. & Eng. Ency. Law (2 Ed.) 651; 2 Tiffany, Landlord & Tenant 1593, 1594.] The rule seems to be a harsh one and the most enlightened courts have receded from it in a measure, now and then, until it is somewhat modified in its application under modern conditions. Judge Cooley examined it on principle and repudiated the doctrine entirely,- as did the court of which he was a member. [See Kerr v. Kingsbury, 39 Mich. 150.] This court has heretofore declared the full measure of the doctrine with all its attendant rigors. [See Williams v. Lane, 62 Mo. App. 66.] More recently the court has treated it as an established rule of decision with us, as will appear by reference to Champ Spring Co. v. B. Roth Tool Co., 103 Mo. App. 103, 77 S. W. 344; St. Louis v. Nelson, 108 Mo. App. 210, 83 S. W. 270.

But in this jurisdiction, the case of Williams v. Lane, 62 Mo. App. 66, alone- asserts the doctrine against the right of removal of mere trade fixtures which are peculiarly a portion of the plant of the tenant. In that case, it was declared that, through entering into a new lease for the premises without reserving the right of removal, the tenant abandoned such trade fixtures as his shelving in the store. The court followed Loughran v. Ross, 45 N. Y. 792, 6 Am. Rep. 173. In a more recent case, Lewis v. Ocean Nav., etc. Co., 125 N. Y. 341, the Court of Appeals of New York, through Justice Peckham, criticized the earlier decisión as follows: “The decision in that case was placed upon quite technical reasoning, supported, it is true, by some authorities, but it is not one of those cases whose principle should be extended.” In a still more 'recent case in New York, the appellate division of the Supreme Court considered the authorities and declared that the rule of the Loughran case should apply only to such fixtures as are distinctively realty, which may not be removed without substantial injury to the property. The opinion says, too, “We think the Loughran case should further be limited, and that it should be deemed not applicable to trade fixtures not distinctively realty, designed to retain their character as personal property and capable of removal without material injury to the freehold.” [See Bernheimer v. Adams, 70 App. Div. (N. Y.) 114, 123, 124.] The judgment in that case was affirmed by unanimous decision of the Court of Appeals May 19,1903, without an opinion, however. [See 175 N. Y. 472, 67 N. E. 1080.]

The same question -came before the United States Circuit Court of Appeals for the second circuit in Bergh v. Herring-Hall-Martin Safe Co., 136 Fed. Rep. 368. The property involved in that case resembled that involved here very much. The court, in an opinion prepared by Judge Cox®, considered the authorities and approved the distinction declared by the New York courts in Bernheimer v. Adams, supra, saying: “With this distinction observed, no injustice can be done. ’ ’ Furthermore, in considering the doctrine that a new lease without a reservation on the part of the tenant of the right to remove fixtures operates as an abandonment of those he had installed, Mr. Tiffany says as follows: “Since this doctrine is based upon the theory that the new lease includes the fixtures, as constituting a part of the realty, it necessarily follows that it has no application to articles not so annexed, or not of suck character, as to constitute fixtures.” [See 2 Tiffany, Landlord & Tenant, 1594.]

In view of the modern tendency to relax the operation of this severe rule in the law of landlord and tenant, it would seem that the principles of natural justice alone forbade its application to these items of property, such as the engine, boiler, steam pump and blow7off tank, which were essentially trade fixtures and part of the tenant’s plant. It oug'ht not to be that a tenant, by the mere act of renewing his lease without reserving the right of removal, shall forfeit to his landlord those trade fixtures which are an essential part of his plant, the very property for which he leased the premises to house. The technicalities which inhere throughout the law of landlord and tenant are not always well understood by lawyers without thoughtful investigation, much less by laymen, who are too frequently the victims of their severe application. While every person is presumed to know the law, . everyone knows that the average tenant is not advised as to his rights concerning this matter when he enters into a new lease. This being true, why should the courts adhere to the broad application of a rule that serves to transfer the property of one man to another without compensation, when the parties are acting in the utmost good faith without a thought on the subject at the time the new lease is entered into? Whatever reasoning may be put forward in support of the doctrine, in so far as it applies to such things as become a part of the realty and may not be removed without substantial injury thereto, we see none to support it as against the trade fixtures of a tenant which are essentially a part of its plant. We conclude, therefore, that the distinction above pointed out should be observed in this jurisdiction, and that the tenant in the instant case did not abandon the engine, boiler, steam pump and blow-off tank by entering into a new lease without reserving the right therein to remove them.

But it is argued that, though such be a proper application of the rule to the ordinary lease, in this case there is an express covenant on the part of the tenant to deliver to the landlord the possession of “all fixtures” on the premises, and this covenant alone includes and covers the engine, boiler, steam pnmp and blow-off tank, even if they are trade fixtures and a part of the tenant’s plant. That portion of the lease referred to is as follows: “Said lessee will quit and deliver up the possession of said premises to lessors, their heirs or assigns, when this lease terminates by limitation or forfeiture, with all keys, locks, bolts, window fastenings, all fixtures, and window glass replaced, if broken, in as good order and condition as the same are now, or may hereafter be made by repair, save only the wear thereof from reasonable and careful use. ’ ’ Prom the context of the words ‘ ‘ all fixtures,” it would seem that the parties contemplated the surrendering up only of such things as were par-' cel of the realty, for it is employed in connection with the words, “keys, locks, bolts, window fastenings and window glass replaced” by the tenant, etc. The rule ejusdem generis for the construction of instruments obtains and is to be applied here. However this may be, unless it is manifest that the parties intended the words “all fixtures” should cover and include mere trade fixtures as well, it must be understood that they used the words in the sense which the law annexes to them. Our Supreme Court has expressly determined the meaning of the word “fixtures” in this State. The 'court says that word is “now used in this State to describe a chattel which has become so annexed to the freehold as to become a part of it and cannot be removed without the owner’s consent.” [Brown v. Baldwin, 121 Mo. 126, 131, 25 S. W. 863.] It appears from the finding of the referee that the engine, boiler,. steam pump and blow-off tank were not so annexed to the building as to render them irremovable without the owner’s consent, for, besides these articles being a part of the plant, it is expressly found that they could be removed without material damage to the premises. We concur in the view of the referee that the covenant which required the tenant to surrender up “all fixtures” included those articles only which the tenant so annexed to the property as to preclude their removal without substantial injury to the building — that is, the heating plant and the sprinkling apparatus. The Supreme Court of Tennessee interpreted a like covenant in a lease with respect to rendering up fixtures as we have here. It declared that the word “fixtures” should not apply to mere trade fixtures but rather to such as became parcel of the realty only. [See Cubbins v. Ayres, 4 Lea (Tenn.), 329, 72 Tenn. 329.] We, therefore, conclude that, notwithstanding the provision of the lease above quoted, the engine, boiler, steam pump and blow-off tank continued to be the property of the tenant, with the right of removal during the term.

> It is urged on the part of defendants that the judgment should be reversed for the reason the referee received, over their objection and exception, certain incompetent evidence pertaining to the value of the property involved. But we are not persuaded this error was harmful to defendants. Though some evidence on the question of values may have been received that should have been excluded, it is obvious that the referee was not influenced thereby. No one can read the record and study the report of the referee without being convinced that the whole matter was conscientiously sifted by him and only competent and material evidence considered on the final award. - Under the statute (Sec. 1850, R. S. 1909) it is the duty of the court to disregard any error committed in any stage of the action which shall not affect the substantial rights of the adverse party. By section 2082 Revised Statutes 1909, we are commanded that no judgment should be reversed unless the court shall believe error was committed against the appellant materially affecting the merits of the action. We do not believe the error in receiving this testimony materially affected the merits of the action or impinged the rights of defendants, for the entire report of the referee suggests the contrary.

To the end that the proper measure of damages may be applied touching the engine, boiler, steam pump and blow-off tank, which it appears were converted by defendants, the judgment should be reversed and the •cause remanded. It is so ordered.

Reynolds, P. J., and Caulfield, J., concur.