Murray Co. v. Chickasha Cotton Oil Co.

1918 OK 428, 147 P. 1091, 73 Okla. 106, 1918 Okla. LEXIS 55

• Court: Supreme Court of Oklahoma
• Decided: July 30, 1918
• Docket: 9369
• Status: Published

Opinion

Opinion by

PRYOR, C.

On tbe 6tb day of June, 1913, H. W. Branum gave a real estate mortgage to the Chickasha Cotton Oil Company on certain property upon which was located, a cotton gin, to secure the payment of two promissory notes. The Ohick-asba Cotton Oil Company brought an action to foreclose the mortgage.

■Subsequent to the execution of said real estate mortgage, on about the 20th day of August, 1913, tbe said Branum purchased from tbe Murray Company certain ginning machinery and placed 'the same on the premises in the ginhouse covered by. the real estate mortgage. Branum gave his notes in payment and a chattel mortgage on tbe mar chinery to secure tbe payment of said notes. Tbe Murray Company asks for a foreclosure of the chattel mortgage on said machinery.

The purchase contract between Branum and the Murray Company provided that said machinery should not be annexed or become a part of any realty until tbe same bad been fully paid for. Tbe trial court held that the machinery covered by tbe chattel mortgage of tbe Murray Company bad become attached to tbe real property and become a part thereof, and; that tbe company bad lost its lien thereon, and denied tbe said Murray Company tbe right to a foreclosure of its chattel mortgage.

The evidence in this case as to the nature of the annexation of the machinery to the realty and as to the effect of its removal from the realty shows conclusively that the machinery can be removed without injury to the said real property. The legal question presented here for determination is, Where a mortgaged chattel is attached to mortgaged real property, and the same can be removed without injury to tbe realty, has the bolder of tbe chattel mortgage lost his right to bis interest in tbe chattel to tbe mortgagee of tbe real estate mortgage?

On this question there is some conflict of authority; - but,.the .-weight- Of authority'' which-seems to be founded, on sound' priniples óf justice; sustains" the rulé - that' where' a mortgaged chattel is. attached, to mortgaged'realty, and the same'can be re-! moved without injury to. the. real property,, the holder of the chattel mortgage' does not lose his rights in the chattel, and especially this rulé is true where the- vendor off a chattel has an Express agreement with -his tendee that the same shall not be attached to. -the realty and become a part thereof until tbe vendor’s mortgage lien- is discharged. Binkley v. Forkner, 117 Ind. 176, 19 N. E. 753, 3 L. R. A. 33; Sowden v. Craig, 26 Iowa, 156, 96 Am. Dec 125; Grand Island Banking Co. v. Frey, 25 Neb. 66, 40 N. W. 599, 13 Am. St. Rep. 478; United States v. New Orleans Ry. Co., 12 Wall. 362, 20 L. Ed. 434; Will’s et al. v. Munger Imp. Cotton Mach. Mfg. Co., 13 Tex. Civ. App. 677, 36 S. W. 1010; Anderson v. Creamery Mfg. Co. 8 Idaho, 200, 67 Pac. 493, 56 L. R. A. 554; 101 Am. St. Rep. 188; Northwestern Mutual Life Ins. Co. v. George et al., 77 Minn. 319, 79 N. W. 1028. 1064.

This principle is also recognized by this court in tbe case of Lawton Pressed Brick & Tile Co. et al. v. Ross-Kellar Triple Pressure Brick Mach. Co. et al., 33 Okla. 59, 124 Pac. 43, 49 L. R. A. (N. S.) 395, in which it was held:

“Chattels may be annexed to tbe real estate and -still retain the. character of the personal property. Of the various circumstances which may determine whether, in •any case, this character is or is not retained, the intention with wbicb they are annexed is one; and if the intention is that they shkll not by annexation become a part of the freehold, as a general rule, they will not.

“Certain brick-manufacturing machinery was sold upon a written agreement between the parties that the title thereto should not pass to the vendee until the purchase price was fully paid; that the title thereto should not toe affected toy the delivery and erection thereof; that if default should be made in the payment of the purchase money the vendor should have the right to enter upon the premises, ‘wherever said machinery may be found and take possession thereof.’ In an action of replevin to recover possession of said machinery for nonpayment of purchase price, the evidence reasonably tended to show that the machinery was annexed to certain real estate .belonging to the ven-dee, according to the terms of the contract, and that the mode of annexation was such that the removal thereof would not take away or destroy that which was essential to the support of the buildings, foundation, or walls, or other parts of the real estate to which it <w|as attached, and that it would not destroy or of necessity impair the machinery itself. Held, that the agreement between the original vendor and the vendee, fully expressing their distinct purpose that the annexation of the machinery should not make it part of the real estate, was sufficient to that effect, without any concurring intention on the part of a third person, who subsequently purchased the land from the purchaser of the machinery.’’

The machinery was purchased and placed on the premises after the execution of the real’estate . mortgage. The real estate mortgagee will not sustain any loss if such machinery is removed, as the evidence shows that- the same can be removed without injury to the premises. To hold that the chattel mortgagee lost his lien and right in the machinery, and the same vested in the real estate mortgagee, would, it seems, be taking property from one and giving it to) another by legal fiction. Certainly to follow the principles announced in the above authorities, and hold that the Murray Company has a mortgage lien on said machinery, and has not lost the same by reason of the chattels becoming a part of the realty, will do justice in this case.

Therefore the judgment of the trial court as to the issues betwieen the Murray Company and the Chiekasha Cotton Oil Company should be reversed, with directions to enter judgment decreeing that the Murray Company’s lien is superior to that of the Chiekasha Cotton Oil Company.

By the Court: It is so ordered.