Chicago Pneumatic Tool Co. v. Arnold

282 F. 43, 1922 U.S. App. LEXIS 2585

• Court: Court of Appeals for the First Circuit
• Decided: April 11, 1922
• Docket: No. 1539
• Status: Published

Opinions

JOHNSON, Circuit Judge.

This is an appeal from a final decree of the District Court for the District of Massachusetts denying the right of the appellant to intervene in a suit in equity in said district in which the Winnisimmet Ship Yard, Inc., was defendant, and receivers had been appointed. The petitioner asked to intervene to recover the unpaid balance due upon the sale of an air compressor, or in the alternative for its return.

The Winnisimmet Ship Yard, Inc., hereinafter referred to as the Shipyard, received upon July 25, 1919, a proposal in writing from the Chicago Pneumatic Tool Company, hereinafter referred to as the Company, to furnish it with an air compressor, to be set up in its yard at Chelsea in the state of Massachusetts. This proposal contained the following paragraph:

“It is understood and agreed that we retain the exclusive rights of possession to any and all machinery included in this contract until payment in full contract price is made in cash. In the event of failure of purchaser to make any and all payments as herein provided for, we may retain all partial payments in liquidation of damages, and may remove such machinery without prejudice to any other claims because of damage which may have suffered from failure on the part of purchaser to complete payment as agreed in this contract.”

This proposal was accepted by the Shipyard on July 28, 1919.

The compressor was received at Chelsea in the early part of November, 1919, and placed upon a concrete base specially prepared for it in one of the buildings of the shipyard. This base extended six feet below the surface of the ground and three or four feet above it. The compressor was secured to it by bolts set to correspond with holes in the machine. Conduits and piping were installed in this foundation for electric wiring and the passage of air. After the machine was set upon the base and the bolts fastened concrete was piled up around the edges of the machine.

On February 24, 1920, a mortgage was executed by the Shipyard to the Fidelity Trust Company of all its real and personal property to secure an issue of bonds. The Liberty Trust Company, one of the appellees, is a successor in title to the Fidelity Trust Company as trustee under this mortgage.

[ 1 ] The questions raised upon this appeal are:

First. Whether the contract was one of conditional sale.

Second. If it were a conditional sale, was it recorded as required by chapter 271 of the Acts of 1912 of Massachusetts, in force at the time the contract was made?

Third. Was the air compressor so attached to or wrought into the real estate that it became a part of the same and was conveyed under the mortgage ?

The Massachusetts statute then in force was as follows:

“Section 1. No conditional sale of heating apparatus, plumbing goods, ranges or other personal property which are afterward wrought into or attached to real estate shall be valid as against any mortgagee, purchaser or grantee of such real estate, unless within ten days after the making of the contract of conditional sale, such contract, or a memorandum thereof signed by both parties thereto, is recorded in the clerk’s office of the city or town in which the real estate is situated.”

While the language of the contract is not that usually employed in conditional sales, in which the title to property is to be retained by the seller until the purchase price is fully paid, with the right to take possession upon default, yet it clearly conferred this right upon the seller and provided that it was to continue until the payment of the full purchase price. This made it a contract of conditional sale. It was recorded in the office of the city clerk of Chelsea on November 13, 1919.

It is contended by appellant that the words ‘other personal property,” in the statute, should be construed to mean property of the same kind as that specifically described, and that the requirement in regard to recording does not apply, unless the property is of the same general class as that specifically described. The language employed is too broad and comprehensive to permit us to apply the rule for which the appellant contends, and we must hold that it includes all personal property that is "wrought into or attached to real estate.”

It is further contended that, even if the contract was a contract of conditional sale, it was not completed until the air compressor was delivered to the appellee and that the ten days in which the record should be made would begin to run from the time of delivery; and our attention is called to the fact that the statute has since been amended, so that the ten days, as the Massachusetts law now is, does not begin to run until the personal property has been delivered upon the real estate to which it is to be attached.

It was doubtless the intention of the Legislature to protect innocent purchasers of real estate against fraudulent claims to personal property which had become attached thereto, and it would seem as if this intent would be fully served by the statute as amended. But the statute, as it was in 1912, required that in order to render a conditional sale valid as against a subsequent mortgagee, purchaser or grantee, the contract must be recorded within ten days after it was made.

The language of the statute is plain and we do not feel authorized to place a construction upon it so much at variance with its ordinary meaning as that contended for by the appellant. No decision of the Supreme Judicial Court of Massachusetts is cited which would authorize any such interpretation and the fact that the Legislature deemed it necessary to make an amendment to the statute in order to fix the date of delivery on the property, as that from which the ten days should begin to run, conclusively shows that it had not placed such a construction upon it.

It is elementary that the contract was made when the proposal of the company was accepted by the Shipyard, which was July 28, 1917, and under the statute, in order to render the right of the Company to resume possession of the air compressor valid as against a subsequent mortgagee, it was necessary that it should have been recorded within ten days after that date.

The District Court has found that the compressor had been so wrought into and attached to the real estate' of the Shipyard Company that it became a part of it and passed under the mortgage. This finding is fully sustained by the evidence.

The decree of the District Court is affirmed, with costs to the appellees in this court.