Prescott v. Wells, Fargo & Co.

3 Nev. 82

• Court: Nevada Supreme Court
• Decided: July 1, 1867
• Status: Published

Opinion

Opinion by

Beatty,'C. J., Lewis, J.,

concurring.

This case presents the following material facts: In the month of August, 1862, Burton, Kellogg and Uznay owned a quartz mill called the Phoenix Mill, and were conducting the business of crushing quartz, under the firm name of “ Phoenix Mill Co.” At this time their mill property was mortgaged for some $20,000, and the defendants, Wells, Fargo and Co., held the mortgage as assignees of the original mortgagees. The Phoenix Mill Company being anxious to add some pans and other machinery to their mill, applied to the plaintiffs to rent them the necessary machinery. The plaintiffs consented to enter into the arrangement, provided Wells, Fargo & Co. would become parties thereto so far as to protect them against any loss or danger arising from their claim by way of mortgage.

The result of the negotiation was, that two articles of agreement were drawn up and signed. The first is dated August 14th, 1862, and purports to be between II. J. Booth & Co., of the first part, and the Phoenix Mill Company, of the second part. By this agreement the parties of the first part grant, demise and let to the parties of the second part various articles of machinery, to be delivered at the Phoenix Mill at various specified days between then and the first of October following: the said machinery to be leased to the mill company for the period of six months, from the first of October ensuing, at a monthly rent. At the end of six months the parties of the second part agree to surrender the machinery. There is a further promise that the parties of the second part may, at their option, purchase the machinery after the expiration of six months, at a specified price. This instrument concludes with the usual form of sealed instruments, and is signed thus:

H. J. Booth & Co. [l. s.]

Phoenix Mill Co. [l. s.]

By Chas. Uznay.

The second is dated August 15th, 1862. It recites the facts in relation to the mortgage executed by the members of the Phoenix Mill Company, their agreement with Booth & Co. for the machinery, and the fact that Booth & Co. might, under that agreement, require the privilege of removing the machinery, and winds up as follows:

“ Now, therefore, for the purpose of assuring to said Booth & Co., without objection or hindrance on the part of Wells, Fargo & Co., the right to make such removal if they shall require it, as well in consideration of the sum of one dollar, cash in hand, paid by said Booth & Oo. to Wells, Fargo & Co., they the said Wells, Fargo & Co. hereby agree and consent that the said Booth & Co. may have the right and privilege of removing said amalgamating machinery from said mills on the expiration of said six months’ lease ; provided, that the same shall be done without detriment or injury to the said mills or machinery as it now stands.

“ Dated at Virginia City, Nevada Territory, August 16th, 1862.

<£ JEL J. Booth & Co. [seal.]

“ Wells, Fargo & Co. [seal.]

By W. H. Simmons, Ag’t.”

Several months before the expiration of the lease, Wells, Fargo & Co. took steps to foreclose their mortgage. About two weeks after the expiration of the lease the decree of foreclosure was rendered, and in a little less than a month after the decree the sale took place, and Louis McLane — one of the firm of Wells, Fargo & Co. — became the purchaser. In this purchase, it is admitted he was acting for the company. At the end of six months, the Sheriffs deed was executed to McLane.

In the meantime the original owners of the mill remained in possession. After McLane got the deed the mill company attorned to him and they paid rent, but never delivered the actual possession. McLane entered into a contract to resell to the mill company ; but they being unable to pay, this contract was not carried out, and at their request he sold the mill to a third party.

Before this sale was made, Booth & Co. had made a written request of James H. Latham — the agent of Wells, Fargo & Co. at Virginia City, where the property is situated — to be allowed to enter on the premises and remove the leased machinery. To this request the agent made an evasive reply, neither authorizing nor refusing permission to enter on the premises and remove the rented machinery. Such appear to have been the facts proved on the trial.

It is necessary now to revert to the pleadings. The complaint is against a number of parties who are alleged to be partners, composing the firm of Wells, Fargo & Co. The complaint first recites the fact of the execution and transfer of the mortgage by the mill company. That they (plaintiffs) were at a certain time the owners of certain machinery. That they refused to rent it until Wells, Fargo & Co., “for a valuable consideration undertook and faithfully promised and agreed to and with said plaintiffs that they, said plaintiffs, should have the right and privilege of removing said amalgamating machinery above described from the said mill at the expiration of the said proposed lease.” That upon this agreement being entered into by Wells, Fargo & Co., they leased the machinery to the mill company, setting out the terms of that lease and making it a part of their complaint. That before any part of the machinery was delivered they had entered into the contract with Wells, Fargo & Co. for its removal, etc., stating the substance, effect and legal operation, as the pleader seems to have understood it, of that instrument and setting out the instrument itself, and averring that Wells, Fargo & Co. received a valuable consideration for entering into it. That the machinery was delivered in accordance with the terms of the lease. That the mortgage was foreclosed, and defendants obtained possession of the property mortgaged, including the machinery. The concluding part of the complaint is as follows:

“ The plaintiffs further allege upon information and belief, that all of said bottoms, pans, shafting, gearing, etc., are still in said mill, that the said lease has expired, and aver that they, the said plaintiffs, are still the owners of and lawfully entitled to the possession of the said property, and that the same has never been paid for by the said Phoenix Mill Company, or by the said defendants. The plaintiffs further allege that being so the owners, and entitled to the possession of the said property, they did, on or about the 14th day of February, 1865, at Virginia, County of Storey, make demands upon the said Wells, Fargo & Co. to surrender to them all of the said property, or to permit the said' plaintiffs to enter upon the said premises, and permit them to remove the said property, the said plaintiffs offering to effect said removal without detriment or injury to the said mills or other machinery not belonging to them. The plaintiffs finally allege that the said defendants wholly failed, neglected and refused, and still do fail, neglect and refuse, either to deliver the said property, or any part thereof, to the said plaintiffs, or to permit them to enter upon the said premises and effect said removal themselves. But the said defendants have kept, retained, and converted the said property to their own use and benefit, whereby the plaintiffs have sustained damages in the sum of $10,000. Wherefore the plaintiffs bring suit and demand judgment against the said defendants for the said sum of $10,000 and costs of suit.”

The answer denies that there was any consideration for the contract entered into by Wells, Fargo & Co.; denies some of the legal effects alleged by the plaintiffs to arise upon the execution of the contract; denies that Wells, Fargo & Co. ever got possession of the mortgaged property or had control of the machinery, and closes with the following denial:

“ And defendants further deny that they have kept, retained, or converted the said property, or any part thereof, to their own use or benefit, or that by any act of defendants, plaintiffs have sustained damages in the sum of $10,000, or any other sum whatever.”

Upon these pleadings the parties went to trial, and plaintiffs offered to prove, by one Tyrel, the value of the machinery in the month of February, 1865, the time that the plaintiffs demanded permission to remove it. This the Court refused, on the ground that there was no allegation in the complaint of its value at that time. The plaintiffs then offered to prove by the same witness the amount of damages they had sustained by failure and neglect of defendants to surrender the property. The Court refused also to admit this evidence, and then granted a nonsuit on the ground that plaintiffs had failed to prove a conversion by defendants.

To each of these rulings plaintiffs excepted, and now allege that they were erroneous, and the judgment should be reversed.

The first. question to be determined is : What is the nature of this action ? The respondents contend that it is trover, and that there was no proof of conversion, and therefore the action cannot be maintained, and the nonsuit was right. The complaint seems to have been framed as an action on contract. Whether in assumpsit or covenant it would be hard to say. And from the peculiarities of the instrument, (signed with the firm or partnership name of the contracting parties, and having a seal annexed to and following their signatures) it is perhaps equally hard to say whether the contract should be treated as a covenant or a mere written agreement not under seal. But treating it as one or the other, the facts are all set up in the complaint which it would be necessary to set up either in an action of covenant or assumpsit. As our statute does away with all mere form, it is allowable to treat it as one or the other. In addition to all the allegations necessary to sustain the complaint as one on contract, there are also other allegations sufficient to make it a good complaint in trover. If we treat this as an action of trover, at least nine-tenths of the complaint are surplusage. The allegations necessary to maintain that action are simple and few. All the allegations about the contracts, etc., would in such case be surplusage. It is true that the facts stated in the complaint would have to be proved; but if the action is to be treated as one in tort, they ought not to be stated in the pleadings.

On the other hand, if we treat this as an action on contract, then all that part about conversion, etc., which pertains particularly to . the action of trover, is to be treated as surplusage. But whatever the action may be, it is for a single object: to obtain damages done to plaintiffs by depriving them of their machinery. Under our very liberal system, the pleading must be sustained, and the plaintiffs will be entitled to recover, if all the facts stated in the complaint, and which are sustained on the trial, either by proof, the admissions of defendant in open Court, or the want of denial in the answer, show that plaintiff has a good cause of action to recover in damages. Let us see first whether the plaintiff is entitled to recover in trover. To determine this, it is necessary to make some investigation as to the nature of what I shall, in this opinion, call fixtures. /This word “ fixture ” is used in a variety of senses. In its broadest signification it is sometimes used to designate anything which is by artificial means attached permanently or substantially to the soil or freehold. But there is another and more technical meaning sometimes given to the word. That is, something substantially affixed to the land, but which may afterwards be lawfully removed therefrom by the party affixing it, or his representative, without the consent of the owner of the freehold. It is in this latter sense that the word is used in this opinion. Fixtures of this kind have been held by many Courts in the United States as personal property, even whilst attached to the soil. As they are the personal property of the party attaching them to the soil before they become fixtures, and as he has the right to remove them at any time, and again convert them into personal property, some Courts have seen proper to hold them all the time as such. Under this view of the case, Courts in Maine, Massachusetts and New York have sustained actions of trover for fixtures that were never removed or detached from the freehold. (See Russell v. Richards, 1 Fairchild, 429; Ford v. Cobb and others, 20 N. Y. (6 Smith) 344; Smith et al. v. Benson et al., 1 Hill, 176; Wells v. Bannister, 4 Mass. 514; Ashmun v. Williams, 8 Pick. 402.)

In all these cases the Courts call the things which are the subject of litigation personal property, although they are, technically, fixtures; that is, things attached to the land, but with a privilege on the part of some one other than the owner of the land to remove them. If these eases be law, then we have no doubt of plaintiffs’ right to recover in this action, for these pans, etc., clearly became fixtures under the contracts with the Phoenix Mill Company and Wells, Fargo & Co. The sale of the property and purchase thereof by McLane for Wells, Fargo & Co., did not change their status. There can be no doubt but that as long as either the one or the other of these parties held the mill, the plaintiffs had a right to take off the pans. McLane, acting for Wells, Fargo & Co., converted the pans by. selling them with the mill. No other proof of conversion but the sale of the mill with its fixtures, was necessary. Under these authorities, Booth & Co. could either treat the sale by McLane as a conversion and sue Wells, Fargo & Co., or might demand the pans, etc., from the present owners of the mill, and on their refusal to surrender, sue them.

But whilst these authorities, highly respectable in character, support this view of the case, the writer of this opinion cannot but dissent from the views expressed in all these cases. In my opinion, property is either real or personal, according to its nature. Contract cannot make a chattel realty, nor realty a chattel. The case cited from 1 Fairfield shows the danger of such departures from common law principles. In that case, a man buys a piece of land with a saw-mill on it. He knows nothing about anybody but the owner of the freehold having any claim to the mill. But after the purchase, he is sued for the mill, and its value recovered from him. If such a doctrine is tenable,' then the man who buys a lot covered by a brick house may, without any negligence on his part, be compelled, after having paid the owner of the soil for lot and house, to pay somebody else for the house. Such a doctrine appears to me extremely dangerous. The New York Courts seem to hesitate in following the Maine case to its legitimate result. They seem only willing to apply the principles of this case when the property in controversy approaches the character of personalty in its-nature. But if mere contract can convert potash kettles built into a wall in such a manner as to be firmly attached to the freehold, then it can also convert saw-mills and granite walls into personalty. In my opinion all fixtures whilst attached to the freehold are, for the time being, a part of the realty. No contract can change their nature. It is true there may be a contract allowing some one to take them off. Indeed, unless' there be some contract, law or custom allowing such' removal, they are not technically fixtures. But a contract that something may be converted into personalty at a future day, does not make it so from the time of the contract. The owner of the land might make a contract allowing another to take off all the soil to the depth of ten feet for making brick; but the contract alone would not convert the surface of the soil into bricks or other personal property. It would still be a part of the freehold. In my opinion this complaint should be treated not as a declaration in tort, but as one on contract. As such I believe it to be sufficient.

The necessary preliminary facts appear by the pleadings; the instrument which is the foundation of the action is set out, and we think a breach is well assigned. Among other things, defendants agreed that plaintiff might “ have the right and privilege of removing said amalgamating machinery from said mills,” etc., etc.

The breach assigned is, that defendants wholly failed, neglected and refused, and still do neglect and refuse to deliver said property (amalgamating machinery) * * * * or to permit them (plaintiffs) to enter upon the said premises (the premises where the machinery is fixed) and effect said ■removal themselves. The breach is not in the same language of the contract, yet it seems to be sufficiently stated. The answer does not negative this breach. There are indeed but few material allegations or denials in the answer. It denies any consideration for the agreement, but ample consideration is proved. It denies any damage, and denies that defendants were ever in actual possession of the mill and machinery. These are all the material denials therein contained. The denials of any damages arising from the action of defendants, put the plaintiffs on the proof of these damages, and we think one of the best methods of proving these damages was to prove what the machinery was worth when plaintiff asked permission to remove it. Of course the value would have been diminished by the cost of removal, but that cost would have been a proper subject of cross-examination. There is nothing in the point that plaintiff did not aver the value of the machinery at the time he offered to remove it. Such an averment would have been unnecessary, treating this action as in tort, or on contract. The proper averment was the amount of damage sustained by the tort or breach of contract; proving the value of the property was only one of the many methods of proving the damage. We are not by any means satisfied that the fact that defendants never were in the actual possession of the mill is a sufficient excuse for refusing to permit plaintiffs to enter and remove the machinery. Non constat, but that if defendants had consented, their tenants who were the original lessors of plaintiffs, would also have consented to the removal of the machinery. As the pleadings stand, it appears to us the plaintiffs should have been allowed to prove their damages.

The cause is reversed, and remanded for a new trial.