Butler v. Adler-Goldman Commission Co.

35 S.W. 1110, 62 Ark. 445, 1896 Ark. LEXIS 195

• Court: Supreme Court of Arkansas
• Decided: May 23, 1896
• Status: Published

Opinion

Wood, J.,

(after stating the facts). Did the court err in allowing the trustee to pay off the note for the purchase money of the machinery held by Goldman out of the proceeds of the sale of the farm under the mortgage ? The purchase money note for the machinery was not secured by the deed of trust, and the court erred in so holding. But it by no means follows that the error is one of which appellants can complain. Before equity will interpose in their behalf, they must show some injury. If the machinery was actually sold with the land, and enhanced the purchase price to the extent of the unpaid purchase-money note, it is impossible that appellants could have been prejudiced by the transaction.

Now the note shows that it was the “second one of two.” It was dated Sept. 19th, 1890, and was originally for $296.67, but, upon it had been paid $150, leaving a balance due on the day of the transfer to Goldman of $203.30. The machinery for which these notes were given was “one mill and cotton gin and twenty-horse power steam engine, all complete.” The note was transferred to Goldman on the 13th of February, 1893, the day of the sale. The machinery, therefore, was about two and one-half years old, and, as the outstanding note was the “second one of two,” the chancellor might have reasonably concluded that the machinery cost originally $593.34, and, being still comparatively new, enhanced the value of the farm to which it was attached, and increased the purchaser’s bid at the sale (if it was sold) to at least the amount still due upon it,— $203.30.

Then, the only question remaining is, was it sold with the land in the deed of trust? The machinery is specifically described in the deed of trust. But, even if this were not so, a mortgage simply of the land “with its appurtenances” would generally carry with it such machinery, especially where it was firmly attached to the freehold by being “set in masonry,” as was the case here with the engine and boiler.

* And, but for the fact of the title to the freehold and to the machinery being in different persons, such machinery would have passed here under the mortgage. True, this machinery was not a fixture, because in equity the title to it was not in the owner of the land. † And, since the vendor of the of the machinery expressly reserved the title until the purchase price was paid, the vendee could vest no absolute title in another until he had paid the purchase money. ‡ But he did have an interest in it, which he could sell or mortgage. § He testifies that “the property described in the note to Batesville Iron Works Company is a part of the same property described in the mortgage to the Adler-Goldman Commission Company; that he “put it on the land as a permanent improvement, expecting it to remain there,” — thus showing that he intended to and did include the machinery in the deed of trust. Now, appellants’ complaint alleged that the trustee “is proceeding to foreclose said deed of trust on said property, ” and has advertised the said property for sale, and, according to the terms of said advertisement, “said property is to be sold.” It is shown in the answer of appellees that the amount of the purchase-money note was included in the account of Wycough, the mortgagor, with Adler-Goldman Commission Company, which the trustee was foreclosing the mortgage to pay, and the trustee applied the proceeds of the sale to the payment of the account, of which the note was a part. This clearly indicates that the note was treated by the trustee and appellees as an incumbrance, and that the machinery was sold with the land. Notwithstanding this was shown, and in effect alleged in the answer, appellants nowhere in their replication deny this, but impliedly admit it. In this way it was treated in all the subsequent proceedings, without anything to indicate that it was questioned. The appellants except to the ruling of the court in “approving and sustaining the appropriation by the trustee of the proceeds of the sale to the payment of the purchase-money note ;” but that is not an objection that the machinery was not sold. Having treated the machinery as sold in the court below, they are bound by that action here. Appellants do not deny that, if the machinery was sold, it increased the proceeds of the sale as much as was due on it. They evidently proceeded entirely upon the theory that the note was not secured by the mortgage, and not upon the theory that the property was not actually sold. If appellees were the owners of the machinery by reason of the purchase by J. D. Goldman of the purchase-money note for same, — as claimed by appellants, — they were also the owners of the mortgage, and they could certainly have had the machinery sold with the land if they desired. We conclude that the record makes a strong" prima facie case that the machinery was sold with the land, and that it increased the proceeds of the sale to the amount of the outstanding" note. As the burden was upon appellants, and they have failed to make the error of the court, if any, appear, the motion for reconsideration must be overruled, and the decree will stand affirmed.

Farmers L. & T. Co. v. Minneapolis E. & M. Works, 35 Minn. 543; McKim v. Mason, 3 Md. Ch. 186; Burnside v. Twitchell, 43 N. H. 390, and other authorities cited in 8 Am. & Eng. Enc. Law, 50, title, “Fixtures.”

Witherspoon v. Nickels, 27 Ark. 332; Stirman v. Cravens, 33 Ark. 384.

Carroll v. Wiggins, 30 Ark. 402; McIntosh v. Hill, 47 Ark. 363; McRea v. Merrifield, 48 id. 160; Cincinnati Safe Co. v. Kelly, 54 id. 476; Simpson v. Shackelford, 49 id. 63; 1 Jones, Liens, sec. 820 ; 3 Am. & Eng. Enc. Law, 436.

McRea v. Merrifield, 48 Ark. 160.