Walker, P. J. Com. App.
The sale of the machinery by the plaintiffs to Comparet was a conditional sale. The terms of the contract between them were substantially the same as those stated in the case of Griffith & Wedge v. Morrison & Matthews, 58 Tex., 51, where it was held that the sale was a conditional sale; which case see and the authorities there cited. The machinery was sold and delivered to Comparet under an express stipulation that the vendors parted with no title, nor was any acquired by Comparet, until payment was made of the price agreed to be paid as evidenced by the notes given by the purchaser. The contract provided that in case of non-payment the plaintiffs were entitled to take possession of the machinery and sell the same at public sale on thirty days’ notice, the proceeds to be applied to the payment of amount remaining due, and the remainder, after defraying expenses of sale, to be paid to said Comparet. It is remarked in a note in Benjamin on Sales, 3d Amer. ed., p. 288, that “ It has been suggested that this class of contracts may be treated either as conditional sales, by which the property was not to vest in the purchasers until they should pay or give security for the price, or as executory contracts of sale to be completed on the performance of the same condition. Upon either construction the property in the goods is not changed.” See Wilde, J., in Dresser Manuf. Co. v. Waterston, 3 Met., 9, 17; Grover, J., in Ballard v. Burgett, 40 N. Y., 314; Ferguson v. Clifford, 37 N. H., 86; Adams v. O’Connor, 100 Mass., 515, 518.
It is held, it seems, by very numerous authorities, that “ where goods are sold at a fixed price, to be paid on a certain day, and delivery is made upon an agreement, express or implied, that until the price is paid the title is to remain in the vendor, payment is a condition precedent, and until performance the property is not vested [475] in the purchaser. The vendor in such case, if guilty of no laches, may reclaim the goods, where the price has not been paid, even from one who has purchased them or taken a mortgage of them from his vendee in good faith and without notice.” Benj. on Sales, note (3d Amer. ed.), p. 286 (note to sec. 320).
The operation and effect of this rule in some of the states is qualified by statutory provisions, as in Maine, Iowa and Vermont. See note, supra. The doctrine stated is not, however, uniformly recognized. In Illinois the doctrine is, that loria fide purchasers, and even attaching creditors without notice, of the conditional vendee, acquire a right superior to that of the vendor. See note above cited and authorities there referred to. The Kentucky doctrine is, that as between vendor and vendee the condition as to title is good, but as to innocent purchasers the condition is inoperative. Vaughn v. Hopson, 10 Bush (Ky.), 337; Green v. Church, 13 id. (Ky.), 430.
The lien of the defendants Habenicht and Kuhne was protected under our statute of frauds.
Article 2468, Rev. Stat., provides that „ . . “ where any reservation or limitation shall be pretended to have been made of a use of property by way of condition, reversion, remainder or otherwise in goods and chattels, the possession whereof shall have remained in another as aforesaid, the same shall be taken as to the creditors and purchasers of the persons aforesaid so remaining in possession, to be fraudulent within this chapter, and that the absolute property is with the possession, unless such loan, reservation or limitation of use of property were declared by will, or by deed or other instrument of writing duly acknowledged or proved and recorded.”
The contract in writing between the plaintiffs and Comparet was one clearly embraced within the statute. In it was contained, “ by way of condition,” a “ reservation ” of the ultimate beneficial use and ownership of the property thus sold, for the benefit of the plaintiffs;and according to its terms the possession was to be in Comparet, the purchaser. Comparet received the machinery, took and kept possession of it from June, 1878, under the contract, until he was dispossessed of it under the sale made by the sheriff under an order of sale in February, 1881; and this action was not brought until August 6, 1881. During all this time, the contract relied on by the plaintiffs was unrecorded, nor did Habenicht and Kuhne have actual notice or knowledge of its terms until about the time of filing their suit against Comparet to foreclose their mortgages on the 28th day of August, 1880.
[476] It appears, therefore, that the possession of the machinery remained in Comparet, the purchaser, for the space of more than two years, under a contract which we characterize as being within the statute of frauds, and which was not recorded, nor of the terms of which did Habenicht and Kuhne, the creditors of Comparet, have notice during that period of time. It follows, that such possession of the property in question, as to said creditors, “ shall be taken to be fraudulent.”
Habenicht and Kuhne took and relied upon their mortgages on said machinery under the facts thus shown to exist during and before the period of time when Comparet thus held possession and the apparent ownership of the machinery, and they will be protected against the claim of the plaintiffs to assert title to or lien upon it; and notice given to the former by the latter, subsequent to the time limited by the statute within which the contract shall have -been recorded, as to the terms of the same, cannot affect the question. See Grace v. Wade, 45 Tex., 526, 527.
It is assigned as error that the judge erred in his conclusions of law that the machinery sued for became fixtures, and the title thereto passed under the foreclosure of Habenicht and Kuhne.
The evidence applicable to this subject was, that the mills and machinery in the mill-house, bought of Sinker, Davis & Co., was attached to the engine by a belt, and could be detached and moved without injuring the house or the machinery purchased of said Habenicht and Kuhne, but that the mill could not be operated with out that or like machinery.
Free access — add to your briefcase to read the full text and ask questions with AI
Walker, P. J. Com. App.
The sale of the machinery by the plaintiffs to Comparet was a conditional sale. The terms of the contract between them were substantially the same as those stated in the case of Griffith & Wedge v. Morrison & Matthews, 58 Tex., 51, where it was held that the sale was a conditional sale; which case see and the authorities there cited. The machinery was sold and delivered to Comparet under an express stipulation that the vendors parted with no title, nor was any acquired by Comparet, until payment was made of the price agreed to be paid as evidenced by the notes given by the purchaser. The contract provided that in case of non-payment the plaintiffs were entitled to take possession of the machinery and sell the same at public sale on thirty days’ notice, the proceeds to be applied to the payment of amount remaining due, and the remainder, after defraying expenses of sale, to be paid to said Comparet. It is remarked in a note in Benjamin on Sales, 3d Amer. ed., p. 288, that “ It has been suggested that this class of contracts may be treated either as conditional sales, by which the property was not to vest in the purchasers until they should pay or give security for the price, or as executory contracts of sale to be completed on the performance of the same condition. Upon either construction the property in the goods is not changed.” See Wilde, J., in Dresser Manuf. Co. v. Waterston, 3 Met., 9, 17; Grover, J., in Ballard v. Burgett, 40 N. Y., 314; Ferguson v. Clifford, 37 N. H., 86; Adams v. O’Connor, 100 Mass., 515, 518.
It is held, it seems, by very numerous authorities, that “ where goods are sold at a fixed price, to be paid on a certain day, and delivery is made upon an agreement, express or implied, that until the price is paid the title is to remain in the vendor, payment is a condition precedent, and until performance the property is not vested [475] in the purchaser. The vendor in such case, if guilty of no laches, may reclaim the goods, where the price has not been paid, even from one who has purchased them or taken a mortgage of them from his vendee in good faith and without notice.” Benj. on Sales, note (3d Amer. ed.), p. 286 (note to sec. 320).
The operation and effect of this rule in some of the states is qualified by statutory provisions, as in Maine, Iowa and Vermont. See note, supra. The doctrine stated is not, however, uniformly recognized. In Illinois the doctrine is, that loria fide purchasers, and even attaching creditors without notice, of the conditional vendee, acquire a right superior to that of the vendor. See note above cited and authorities there referred to. The Kentucky doctrine is, that as between vendor and vendee the condition as to title is good, but as to innocent purchasers the condition is inoperative. Vaughn v. Hopson, 10 Bush (Ky.), 337; Green v. Church, 13 id. (Ky.), 430.
The lien of the defendants Habenicht and Kuhne was protected under our statute of frauds.
Article 2468, Rev. Stat., provides that „ . . “ where any reservation or limitation shall be pretended to have been made of a use of property by way of condition, reversion, remainder or otherwise in goods and chattels, the possession whereof shall have remained in another as aforesaid, the same shall be taken as to the creditors and purchasers of the persons aforesaid so remaining in possession, to be fraudulent within this chapter, and that the absolute property is with the possession, unless such loan, reservation or limitation of use of property were declared by will, or by deed or other instrument of writing duly acknowledged or proved and recorded.”
The contract in writing between the plaintiffs and Comparet was one clearly embraced within the statute. In it was contained, “ by way of condition,” a “ reservation ” of the ultimate beneficial use and ownership of the property thus sold, for the benefit of the plaintiffs;and according to its terms the possession was to be in Comparet, the purchaser. Comparet received the machinery, took and kept possession of it from June, 1878, under the contract, until he was dispossessed of it under the sale made by the sheriff under an order of sale in February, 1881; and this action was not brought until August 6, 1881. During all this time, the contract relied on by the plaintiffs was unrecorded, nor did Habenicht and Kuhne have actual notice or knowledge of its terms until about the time of filing their suit against Comparet to foreclose their mortgages on the 28th day of August, 1880.
[476] It appears, therefore, that the possession of the machinery remained in Comparet, the purchaser, for the space of more than two years, under a contract which we characterize as being within the statute of frauds, and which was not recorded, nor of the terms of which did Habenicht and Kuhne, the creditors of Comparet, have notice during that period of time. It follows, that such possession of the property in question, as to said creditors, “ shall be taken to be fraudulent.”
Habenicht and Kuhne took and relied upon their mortgages on said machinery under the facts thus shown to exist during and before the period of time when Comparet thus held possession and the apparent ownership of the machinery, and they will be protected against the claim of the plaintiffs to assert title to or lien upon it; and notice given to the former by the latter, subsequent to the time limited by the statute within which the contract shall have -been recorded, as to the terms of the same, cannot affect the question. See Grace v. Wade, 45 Tex., 526, 527.
It is assigned as error that the judge erred in his conclusions of law that the machinery sued for became fixtures, and the title thereto passed under the foreclosure of Habenicht and Kuhne.
The evidence applicable to this subject was, that the mills and machinery in the mill-house, bought of Sinker, Davis & Co., was attached to the engine by a belt, and could be detached and moved without injuring the house or the machinery purchased of said Habenicht and Kuhne, but that the mill could not be operated with out that or like machinery.
The history concerning the procurement of this machinery, as well as its subsequent continued use, shows that it was obtained and put into the mill with the intention of establishing a permanent flouring and grist mill in the building where it was placed. Quoting from 3 Wait’s Act. & Def., 377, it is there said: “The true rule in determining what are fixtures in a manufacturing establishment, where the land and buildings are owned by a manufacturer, is in a recent case stated to be, that where the machinery is permanent in its character, and essential to the purposes for which the building is occupied, it must be regarded as realty, and passes with the building; and that whatever is essential to the purposes for which the building is used will be considered as a fixture, although the connection between them be such that it may be severed without physical or lasting injury to either. Green v. Phillips, 26 Gratt. (Va.), 752; 21 Amer. Rep., 323. In other words, it is the permanent and habitual annexation, and not the manner of fastening, that de[477] termines when personal property becomes a part of the realty. Brennan v. Whitaker, 15 Ohio St., 446; Laffin v. Griffiths, 35 Barb., 58; McRae v. Cent. Wat. Bank, 66 N. Y. (21 Sick.), 489; 50 How. (N. Y.), 51; Pierce v. George, 108 Mass., 82; Parsons v. Copeland, 38 Me., 537. And see Voorhees v. McGinnis, 48 N. Y. (3 Sick.), 278, where it was held that, where the facts disclose that machinery is intended to be a. permanent accession to the freehold, the execution of a chattel mortgage on it is not sufficient to overcome this presumption or raise the contrary one by an intent to preserve its personal character; it may nevertheless become a part of the freehold and pass to the purchaser with it.
[Opinion adopted November 25, 1884.]
Subjected to the test of the rules which are thus stated, we think the machinery in question was a fixture which passed with the freehold, and there was no error.
We report for the affirmance of the judgment.
Affirmed.