DocketNumber: 1; Appeal, 258
Citation Numbers: 175 A. 697, 316 Pa. 300, 1934 Pa. LEXIS 715
Judges: Schaffer, Frazer, Simpson, Kephart, Sohaeeer, Maxey, Drew, Linn
Filed Date: 10/4/1934
Status: Precedential
Modified Date: 11/13/2024
This controversy grows out of the same sheriff's sale as the preceding case (Pennsylvania Chocolate Co. to use of Commonwealth Trust Co. v. Eatmor Chocolate Co.). Here we have to do with the claim of Eline's, Inc. to certain machinery which it had sold to Eatmor Chocolate Company under a conditional sale contract. Its right thereto was denied by the Commonwealth Trust Company, holder of the mortgage on the plant of the chocolate company and purchaser at the sale, and by the receivers of the chocolate company. The court below awarded the machines to the conditional vendor. The trust company appeals.
The conditional sale agreement is dated December 19, 1930. It covered certain candy making machinery, consisting of enrobers for chocolate coating candies, a mogul machine for casting candy centers, a plow machine for drying milk paste for chocolate, copper kettles, marshmallow beaters, conveyors and trucks, together with other appurtenant equipment. The machines constitute the major portion of the candy department of the chocolate company and, since installation, have been used in the manufacture of about half of the total output. The machines cover considerable space and are located on the second and fourth floors of the building. Some of this equipment extends from one building to *Page 303 another through a wall. Parts of it are quite heavy, the plow machine weighing 16,000 pounds. The heavy machinery is kept rigid by its own weight. The lighter portions are bolted to the floor. It is connected with the water, gas, steam and electric lines of the plant. The trucks and trays are used for the transportation of materials and are a necessary part of the manufacturing process. If the machines should be removed, the building itself could be repaired at an expense of about $125.
The trust company had no notice or knowledge that the machines had been installed in the plant until the filing of the petition to reclaim. In its answer to the petition the trust company set forth that the machinery and equipment claimed were installed for permanent use as a necessary part of the manufacturing plant and could not lawfully be removed as against the prior mortgage. It was also alleged that Eline's, Inc., had failed to comply with the requirements of the Conditional Sales Act of May 12, 1925, P. L. 603, as amended,
The court below decided that the machinery and equipment in question were severable from the freehold without material injury thereto, because the building itself, after the removal, could be repaired at a small cost. It overruled the contention of appellant that the words "realty" and "freehold" in the act, in the case of a manufacturing plant, mean every necessary part of it, including all its machinery and equipment, and that therefore the removal of a part would constitute a material and irreparable injury. It also held that, inasmuch as there would be no material injury to the freehold as defined, the conditional sale contract was not within the provisions *Page 304 of section 7 of the Conditional Sales Act, and that appellant, as prior mortgagee, had no standing to complain of the failure to comply with the filing requirements of the statute.
We think that the lower court's view of what is included in the terms "realty" and "freehold" as used in the act* is too restricted, and the fact that the machinery can be removed without material injury to the building, not the controlling consideration. In this connection the court said the words used in the act "severable without material injury to the freehold" have reference to injury to the physical structure of the building. We think they imply much more, that the word "freehold" as used in the act embraces the entire operating plant and is used as Chief Justice GIBSON used it in Voorhis v. Freeman, 2 W. S. 116, when he said: "Whether fast or loose, . . . . . . all the machinery of a manufactory which is necessary to constitute it, and without which it would not be a manufactory at all, must pass for a part of the freehold."
In the preceding case the court below found, and we have adopted its finding, that "as the entire plant is now constituted, all of the machinery and equipment which have been installed therein since 1925 is indispensable to operations presently conducted." In Commonwealth Trust Co. v. Harkins,
In Clayton v. Lienhard,
In Bullock Elec. Mfg. Co. v. Lehigh Valley Trac. Co.,
In American Laundry Machinery Co. v. Miners Trust Co.,
If the machinery here involved can be taken away from the plant and from the lien of the mortgage, then it is possible to remove what may be said to be the very heart of the plant, so far as the manufacture of candies and confections is concerned, machinery which produces almost one-half of its capacity. Were we to so hold, then through the means of conditional sales agreements the integrity of manufacturing establishments can be completely destroyed, and mortgagees who had loaned their money on the faith of what they purported to be, manufacturing concerns, capable of producing the kind of materials for which they were designed, will find themselves confronted with an empty shell or a scrap heap as their security, in cases where machinery has been installed under such contracts after a mortgage is given, and when the mortgagee has no way in which he can protect himself, as he is not a party to the contracts. *Page 309
Our holding as we do now can work no hardship on conditional sellers. Before they make delivery of their property to a purchaser whose plant is bound by a mortgage, all they need do to protect themselves, is to get the assent of the mortgagee to the removal of the articles in the event of default by the purchaser in his payments.
Holt v. Henley,
To give to the language used the meaning for which appellee contends and to which the court below assented would be to change our common law and "a change from the common law cannot be presumed; it must appear to have been meant, or it will be held not to have been made": Jessup Moore Paper Co. v. Bryant Paper Co.,
We, therefore, hold that the words "realty" and "freehold" in the act mean the plant in its complete integrity, and that the words "material injury to the freehold," mean material injury to the operating plant and are not confined to injury to the physical structure of the building alone.
In view of the decision on the main question, others raised drop out of consideration.
The order of the court below is reversed at appellee's cost, and the machinery in question is awarded to the Commonwealth Trust Company.
Jessup & Moore Paper Co. v. Bryant Paper Co. , 283 Pa. 434 ( 1925 )
Merrick v. Dupont , 285 Pa. 368 ( 1926 )
Commonwealth Tr. Co. of Pbg. v. Harkins , 312 Pa. 402 ( 1933 )
March v. Philadelphia & West Chester Traction Co. , 285 Pa. 413 ( 1926 )
Clayton v. Lienhard , 312 Pa. 433 ( 1933 )
American Laundry MacHinery Co. v. Miners Trust Co. , 307 Pa. 395 ( 1932 )
Harrison's Estate , 322 Pa. 532 ( 1936 )
Defense Plant Corp. Tax Assessment Case , 350 Pa. 520 ( 1944 )
Prudential Insurance Co. of America v. Kaplan , 330 Pa. 33 ( 1938 )
McClure v. Atlantic Rock Co., Inc. , 339 Pa. 296 ( 1940 )
Gottus v. Allegheny County Redevelopment Authority , 425 Pa. 584 ( 1967 )
Commonwealth v. Iafrate , 527 Pa. 497 ( 1991 )
Northampton County Area Community College v. Dow Chemical, ... , 528 Pa. 502 ( 1991 )
In Re Rodriguez , 587 Pa. 408 ( 2003 )
Redevelopment Authority v. Yee Kai Teung , 5 Pa. Commw. 65 ( 1972 )
Noll v. Paddock Pool Builders, Inc. , 416 Pa. Super. 284 ( 1992 )
Barto Technical Services, Inc. v. Lawrence (In Re Barto ... , 1995 Bankr. LEXIS 541 ( 1995 )
Medical Tower Corporation v. Otis Elevator Co. , 104 F.2d 133 ( 1939 )
Kaplan v. I. Kaplan, Inc. , 422 Pa. Super. 215 ( 1993 )
Jones & Laughlin Tax Assessment Case , 405 Pa. 421 ( 1961 )
CANON-McMILLAN SCH. DIST. v. BIONI. , 110 Pa. Commw. 584 ( 1987 )
Holland Fur. Co. v. Suzik Et Ux. , 118 Pa. Super. 405 ( 1935 )
Continental Bank & Trust Co. of New York v. American ... , 350 Pa. 300 ( 1944 )
York Ice MacHinery Corp. v. Kearney , 344 Pa. 659 ( 1942 )
Williams Patent Crusher & Pulverizer Co. v. Reily , 118 Pa. Super. 64 ( 1935 )
Peoples-Pittsburgh Trust Co. v. Security Peoples Trust Co. , 133 Pa. Super. 18 ( 1938 )