Hunt v. Bay State Iron Co.

97 Mass. 279

• Court: Massachusetts Supreme Judicial Court
• Decided: October 15, 1867
• Status: Published

Opinion

Foster, J.

There can be no doubt that the rails when laid upon the road-bed and fastened there so that engines and cars could pass over them would have become annexed to the realty and ceased to be personal property, in the absence of any agreement changing the ordinary rule of law.

It was held in Pierce v. Emery, 32 N. H. 484, and Haven v. Emery, 33 N. H. 66, that rails delivered under an agreement that they should be laid down on a specific part of the railroad and continue the property of the vendors until a specified price was paid for them, remained the personal property of the vendors until payment, and were not, when laid, so inseparably annexed to and incorporated with the realty that they could not be removed for non-payment of the price. The agreement of the parties was held to supersede the general rule of law, and to be binding likewise upon subsequent mortgagees with notice. Notice to the trustees was held to be notice to the bond holders under such a mortgage. But without notice it was considered that the mortgagees would not be affected by a private agreement changing the natural and legal character of the property from real to personal, but would have a right to suppose that they acquired all the incidents and appurtenances which by the general rules of law would result from such a purchase. We are satisfied with the principles and follow the authority of these cases. Strickland v. Parker, 54 Maine, 263.

Our own adjudged cases fully support the position that the rails when laid became a part of the realty in the absence of any agreement to the contrary. Peirce v. Goddard, 22 Pick. 559. Winslow v. Merchants’ Insurance Co. 4 Met. 306. Butler v. Page, 7 Met. 40. Richardson v. Copeland, 6 Gray, 536. They likewise recognize the doctrine that buildings and other erections or fixtures so attached to the realty as to become ordinarily a part thereof may, by agreement between the parties, remain personal property. Curtis v. Riddle, 7 Allen, 185. Both of these propositions seem to be everywhere accepted as sound law.

Upon the question whether the character of property can be changed by agreement from realty to personalty as against a bond fide purchaser without notice, there is not entire harmony of the authorities; but we regard the better opinion as being that such a purchaser must have notice of the agreement before he acquires title, or he will be entitled to claim and hold everything which appears to be and by its ordinary nature is a part of the realty. Elwes v. Mawe, 3 East, 38; 2 Smith Lead. Cas. 99, and notes. To hold otherwise would contravene the policy of the laws requiring conveyances of interests in real estate to be recorded, seriously endanger the rights of purchasers, afford opportunities for frauds, and introduce uncertainty and confusion into land titles.

Nor do we suppose that a mortgagor in possession is competent to bind existing mortgagees by any arrangement to treat as personalty annexations to the freehold. The legal character of the rails when once laid down is determined by the law to be that of real estate. Mortgagees, as well as all other parties in interest, are entitled to the benefit of this rule of law, which can be taken from them only by their own waiver. Land owners, having a lien upon the location for their damages and a right to take possession for default of payment, stand in the same position so long as their right remains to enforce payment by entering on the land.

Whether the mortgage of the railroad executed before these rails were laid, but then invalid, and afterwards confirmed by the legislature, should be treated as a security prior or subsequent to the laying of the rails, will probably not prove a material question in this case. By the agreement of the parties it must be sent to a master to ascertain all the facts as to notice; upon the coming in of his report we can more conveniently and intelligently determine whether the agreement with Mr. Slater is still capable of being enforced.

It is valid between the parties, Slater and the original corporation, but binding upon prior mortgagees and the land owners (if they remain entitled to possession as security for their damages,) so far only as they have consented that the rails shall remain personalty. It is binding upon such subsequent incumbrancers and grantees as had notice of it when they acquired title, but upon no others.