Matter of City of New York (Allen St.)

In England, it is the undoubted opinion of textwriters and judges alike, that chattels annexed by a tenant to real estate and removable by him during his term, pending the annexation, are part and parcel of the freehold. According to the former, a tenant's fixtures are "interests in land, defeasible by the act of the tenant who has the right to remove them" (Brown on Fixtures, p. 83); they are "part and parcel of the frank-tenement or freehold, so long as they continued annexed to it" (Id.); "the circumstance of the property being subject to a right of removal, and of being reconverted to a personal chattel, does not affect the nature and condition it has acquired by being incorporated with the realty" (Ferrard and Hogan [2d ed.], p. 8); tenant's fixtures which may be removed by the tenant "have always been considered as part of the land, though severable by the tenant." (Ewell on Fixtures, p. 33.) According to the latter, a tenant may, by severance, reconvert fixtures into chattels, but "until they are severed, they are a part of their freehold" (per GIBBS, Ch. J., in Lee v. Risdon, 7 Taunt. 188); trade or tenant's fixtures "have always been considered as part of the land, though severable by the tenant" (per BLACKBURN, J., in Holland v. Hodgson, L.R. 7 C.P. 328, 336); removable fixtures, while annexed, "are not goods and chattels at all, but parcel of the freehold, and as such not recoverable in trover" (per PARKE, B., in Mackintosh v. Trotter, 3 M. W. 184); "They cease to be chattels as long as they remain affixed to the freehold, and they become a part of the freehold" (per KINDERSLEY, V.C., in Gibson v. Hammersmith City Ry. Co., 32 L.J. Ch. 337); the interest of the tenant "is so far connected with the land that it may be considered a right or interest in it" which, if the right be granted by the tenant, he may not destroy by his surrender. (Per WILLIAMS, J., in London Westminster Loan Discount Co. v. Drake, 6 C.B. [N.S.] 798.)

In America the contrary opinion, that removable fixtures remain chattels during the period of annexation, seems to prevail. Thus in Carpenter v. Walker (140 Mass. 416) Mr. Justice HOLMES deplored the fact that we had not, in this country, adhered to the English rule that whatever is annexed to the freehold becomes a part of the realty, stating: "The right of a tenant to sever chattels which he has attached to the realty might be admitted, and yet the property might be regarded as land until severed, as it seems to be in England." Nevertheless, it was held that machines annexed to mill property during the period of annexation continued to be chattels. In so holding the court said that it was "more important to respect decisions upon a question of property than to preserve a simple test." In Prescott Booth v. Wells-Fargo Co. (3 Nev. 82, 90, 91) the court, dealing with fixtures removable by the party affixing them, made this statement concerning the decisions in this and other States of the Union: "Fixtures of this kind have been held by many Courts in the United States as personal property * * * of the party attaching them to the soil before they become fixtures, and as he has the right to remove them at any time, and again convert them into personal property, some Courts have seen proper to hold them all the time as such. Under this view of the case, Courts in Maine, Massachusetts and New York have sustained actions of trover for fixtures that were never removed or detached from the freehold. (See Russell v. Richards, 1 Fairchild, 429; Ford v. Cobb, 20 N.Y. [6 Smith] 344; Smith v. Benson, 1 Hill, 176; Wells v. Bannister, 4 Mass. 514; Ashmun v. Williams, 8 Pick. 402.)"

That the rule so stated to prevail in this jurisdiction does so obtain is shown by the New York cases cited, as well as by many others. In Smith v. Benson (supra) it was held that a building affixed to land under an agreement that it might be removed by the person affixing it, and that meanwhile it should remain a chattel, did so remain, and that, if removal were refused, its value might be recovered in an action for conversion. In Ford v. Cobb (supra) it was held that a chattel mortgagee of machines and utensils, annexed by their purchaser, under contract, to lands of which he was the beneficial owner under contract, upon the default of the vendee upon both contracts, was entitled to recover their value in conversion from a subsequent purchaser of the land, who refused to deliver them up. The court said: "All the cases upon this branch of the law of fixtures proceed upon the idea that erections which would clearly be a part of the realty under ordinary circumstances, are personal chattels as regards the rights of a tenant who has put them up for the purpose of trade and manufacture." In Tifft v. Horton (53 N.Y. 377) it was held that the chattel mortgagee of machines, affixed to real estate by the owner, might recover their value in conversion from a mortgagee of the real estate, who had taken possession and refused to deliver up the machines. The court said that the owner of the fee and the owner of the chattels having agreed that they should remain chattels during annexation, they did so remain. "The language of the authorities is, that the chattel in such case is personal property, for which an action of trover for the conversion of it may be maintained." Among other authorities to the same effect are Davis v. Bliss (187 N.Y. 77); DeBevoise v. Maple Ave. Constr. Co. (228 N.Y. 496); East N YEl. Co. v. Petmaland Realty Co. (243 N.Y. 477); Madfes v.Beverly Development Corp. (251 N.Y. 12).

It is true that none of these cases relate to tenant's fixtures. If, however, a private agreement, between others than lessor and lessee, that chattels annexed to real estate shall be detachable and removable therefrom, is sufficient to make them personalty during annexation, then an implied or express agreement between landlord and tenant to the same effect must equally make them chattels. Clearly the action of conversion would not lie unless they were chattels. Moreover, circumstances, such as the relationship of the parties, and the nature and implied purpose of annexation, may be sufficient from which to infer that the right of removal is retained by the person annexing. These circumstances would be known to the grantee of the land. Under the English rule, the grantee, having implied notice, would take subject to the right of removal, even if that right was an interest in real estate. Such could not be the case, if the right were given, not through implication from circumstances known to him, but through a private agreement between the parties of which he is unaware. Yet it is the law in this State, as will be seen from the cases cited, that the agreement, in such a case, will prevail to defeat the grantee's interest. An explanation can only lie in the fact that the things attached to real estate, under such an agreement, continue as chattels, so that a grant or mortgage of the land does not comprehend them.

We may agree that the English rule is better grounded in logic and common sense than is our own. Nevertheless we are dealing with a rule of property well established in this jurisdiction. That rule calls for a holding that the tenant fixtures of this claimant were at all times personalty, and, therefore, not subject to appropriation by the city which may condemn real estate and no other property.

I, therefore, favor a reversal, and dissent.

CARDOZO, Ch. J., POUND and HUBBS, JJ., concur with LEHMAN, J.; CRANE and KELLOGG, JJ., dissent in opinions, in which O'BRIEN, J., concurs.

Order affirmed.