Beardsley v. Ontario Bank

31 Barb. 619 | N.Y. Sup. Ct. | 1859

Allen, J,

The questions litigated in this action are of that character and importance that they will not he definitely settled until passed upon by the court of last resort; especially in view of the fact, that the decisions of the supreme court upon them are not in harmony with each other. The reasons, therefore, which may control my decision, are not important, and will be stated with more brevity than would be proper if it was supposed they were to influence the judgment or action of the parties in interest. There are two cases in our own courts, directly in point, or at least sufficiently so to control this case; and either would be authority obligatory upon me, were the other out of the way. But as the two are antagonistic in all points, I am left to decide which of the two I ought to adopt as a precedent; or, in other words, to decide the case upon my own judgment, without resting upon the authority of adjudicated cases of the like character in our own courts.

The decisions of the courts of other states, upon the effect to be given to mortgages executed by rail road companies of their property and franchises, would not be entirely safe as precedents, for the reason, if there were no other growing out of the peculiar terms of the mortgages and the laws under which they were executed, that the decisions of the several state courts upon the law of fixtures are not uniform. Differences exist in the rules established by the decisions of the courts in the different states for determining what shall, as between the owner of the freehold and third persons, be deemed a part of the realty, and what personalty, removable as such. Many, perhaps most, mortgages given as this was, embrace and include, in terms, much of the property which is here claimed by the execution creditors of the rail road company to.be per-? sonal and subject to their execution. Such was the case in the two cases referred to, in our own courts, in Phillips v. Winslow, (18 B. Mon. 431,) and in Coe v. Mart, decided by Judge McLean, and referred to as reported in Am. Law Reg. for November, 1857. In Cary v. The Pittsburgh, Fort Wayne and Chicago Rail Road Company, referred to by Judge Greene, the mortgage not only included in terms all the property of the company, but that which had been seized by the creditors, or most of it, being rails, had been in use as a part of the superstructure of the road bed, and had been taken up for repair to be relaid again, and the case in that view was directly within the principle by which a mill stone, temporarily removed from its place for sharpening, is held to continue a part of the realty.

The mortgage in this case conveys “ all and singular the rail road of the party of the first part, created and constructed, and to be constructed from the city of Utica, in the county of Oneida, and through the county of Lewis to Claiyton, in the county of Jefferson, in the state of New York, with the appurtenances thereto belonging; and all the real estate and chattels real, acquired, and now owned by said company, party of the first part, or which shall be hereafter acquired by said party of the first part, situate in the said counties of Oneida, Lewis and Jefferson, together with all and singular the franchises of the party of the first part.” It is a mortgage of the “ rail road, real estate, chattels real and franchises of the company.”

By the rail road is intended the road bed and track, with its superstructure—all that enters into and forms a part of a completed road. No more is conveyed under the terms “rail road, real estate' and chattels real," than would have been conveyed under a description of the road way and other lands of the company by metes and bounds, with the appurtenances, except as to the after acquired property, which was not at the time of the mortgage susceptible of a description by metes and bounds, or in any other way.

Under this general description, after acquired property of the company, coming within its terms, would pass. (Seymour v. Canandaigua and Niagara Falls R. R. Co., (25 Barb. 284.) But as a mortgage of real estate, no more would pass than by a description of the same property by metes and bounds; that is, nothing but realty would pass. It matters not whether a mill is conveyed as a mill eo nomine, or the land upon which it stands is conveyed by any apt and proper description with the mill upon it. (Le Roy v. Platt, 4 Paige, 77.) The question is always, whether the particular piece of property in controversy is, under the circumstances, a part of the land, and if so, is it included in the conveyance, unless expressly excepted. (Mott v. Palmer, 1 Comst. 564.) If the property in controversy in this action, when put upon the road and applied to the uses of the company, became a part of the realty, then it is covered by the mortgage, whether acquired before or after the mortgage was given. The mention of the franchises of the company, in the mortgage, does not make that real, which, but for the use of that term, would be personal property, and does not extend the effect or operation of the other terms employed to designate the tangible property intended to be mortgaged. The corporate privileges and powers conferred by law upon the corporation, or rather upon the individuals who are created and made a body corporate and politic, are designated by this term.

Franchises are classed among the incorporeal hereditaments, although they have no inheritable quality. These special privileges, to the extent authorized by law, may be transferred by way of mortgage; but they are not transferable, except in virtue of some statute. But whatever may be the effect of the word in this conveyance, as conferring any right upon a grantee under the mortgage, it is evident that nothing tangible, no corporeal hereditament, is included within or conveyed by that term. Aside from the right of eminent domain, which, to a certain extent, and to enable them to acquire the title to real property, is delegated to rail road corporations, I jihink of no privilege enjoyed by them which might not be exercised by individuals without express permission from the government. The carriage of persons and property, by railway, is a business open to all who can acquire title to the roadway, and construct and equip the road, and the fact that a rail road for the purposes to which they are applied, is deemed to be so far public, or for public purposes, as to justify the delegation of this right of acquiring property upon making just compensation to the owner, without his consent, does not affect the character of the property which a rail road company may acquire.

There is no public policy or public interest involved, which would call upon courts to hold that to be land or a part of the realty, which would not be land owned and used by an in-? dividual under the same circumstances. The special privileges of the companies constructing rail roads under a charter or corporate organization, are prescribed and defined by the laws under which they are formed; and none are to be taken by them by implication, or from any real or supposed necessity or public interest, unless the powers are necessary to the accomplishment of the main purpose for which they are incorporated. No powers, and no privileges, other than those expressly conferred or necessarily implied, can be exercised by them, The power to take from the owner, against his consent, upon making compensation, property, which is ordinarily treated and considered as personal, in order to construct or equip the road, would not exist, unlegs expressly conferred. It does not necessarily result from tine power given to take land, and construct and operate a road. So, too, the privilege of holding property as real property, and thus exempt from sale as personal property on executions, which, in other hands, when used for a like purpose, would not be so considered, is not conferred by any statute, and therefore does not exist. If public policy, or the public good, requires a departure from the rules of the common law in the classification of property owned by individuals or corporate proprietors of rail roads, it is for the legislature, not for the courts, to make the innovation.

All that the courts can do, is to apply the principles of the common law to new species of property, as they come into existence, and to members and business enterprises as they arise. In this state, courts are admonished, if not enjoined, by the legislature, not to interfere with what of uniformity there may be in the classification of property into real and personal, or add to the exceptions which have already been engrafted upon “the general rule by which personal is distinguished from real property. It was deemed essential by the revisers that the same legal character should be given to an article, without reference to the parties in controversy, and with that view the rule was altered as between heir and executor, to the prejudice of the former, to conform to that existing between landlord and tenant, which was the most liberal in favor of holding articles that were not firmly annexed to the realty, to be personal and removable, without the consent of the owner of the freehold. To carry out this view, “ things annexed to the freehold, or to any building, for the purpose of trade or manufacture, and not fixed into the wall of a house, so as to be essential to its support,” go to the executor and not the heir. (2 R. S. 82, § 6, sub. 4. 3 id. 2d ed. 639, App.)

The rule, as between vendor and vendee, and mortgagor and mortgagee, had been the same, if not taken from that which had existed between heir and executor, and this statute, if it did not work a corresponding change as between those parties, “ certainly indicates any thing but a legislative intent to enlarge the rights of freehold.” (Per Cowen, J. 20 Wend. 654.) Johnson, (Ch. J.) of the court of appeals,, in speaking of the same statute, says, “ When the statute gives a particular species of property to the executor, and gives lands, tenements and hereditaments to the heir, it should be regarded, at least, as furnishing very clear proof that in the legislative mind, that kind of property is considered as not being in any sense included iff lands, tenements or hereditaments.” (Murdock v. Gifford, 18 N. Y. Rep. 32.) Judge Strong is of the opinion that the common law, as between vendor and vendee, is not altered by that statute. (Farmers’ Loan and Trust Co. v. Hendrickson, (25 Barb. 489.) The chancellor, in applying and giving effect to the statute, in House v. House, (10 Paige, 158,) held that it was still necessary to go back to the common law, to the decisions of the courts, for the purpose of ascertaining what is a substantial part of the freehold, or what is a mere fixture or thing annexed to such freehold. Property of the latter description he would have held as personal, and as belonging to the executor. If the property in controversy here is “ annexed to the freehold,” either actually or constructively, for the purposes of trade or manufacture, then within this statute it is not subject to the mortgage as real property; if the statute does not apply and control, but simply prescribes a rule of adjudication to cases within the same reason, it would seem the same conclusion should follow. / If not annexed in some way, then it certainly cannot be included in the mortgage as a part of the land.") The property claimed by the mortgagees, in hostility to the judgment creditors of the Black Biver and Utica Bail Boad Company, as included in the mortgage and as a part of the realty, consists mainly in the locomotives and tenders, passenger, mail and baggage, freight, platform and gravel cars, snow plows, materials procured and on hand for renewing and repairing the superstructure of the road and repairing cars, &c., engines, machinery, tools in the shops of the company, and in and about the making and repairing cars, and generally in doing the work of the company, and articles necessary to the repairing, running and operating the road, and the rolling and other machinery, engines, cars, &c. With the exception of the stationary engine and some of the property in the shops of the company, which appear to be annexed in some way to the bujlding and land, a literal reading of the statute would give the property to the execution creditors, as against the naortgagees. The property, if annexed at all, is so annexed for the purposes of trade. But as the statute does not in terms embrace the case of vendor and vendee, and may not have been authoritatively decided to apply to that class of cases, although that would seem to be the mind of the court of appeals, the decision may perhaps more properly be placed upon the common law rules. The inquiry will be then, whether the articles seized and claimed by the sheriff, are chattels, fixtures, or a part of the realty. If they are chattels or fixtures, then they were removable, as against the owner of the land, by any one having a claim to them, and were subject to execution against the company as personal property.

The mortgagees occupy the same position that the rail road company would occupy, had there been an attempt to separate this property from the land and sell it as personal property, and no mortgage had been given. If the company in that case could not maintain that it had become and was a part of the land, then the plaintiffs cannot, now. That is, if it is land, as between the mortgagee of the debtor and the execution creditor, then it is as between the debtor and creditor; and yet had the controversy been always between the pursuing creditors and the debtor company, there would hardly have been any conflict in the decisions. That all the articles were chattels personal before they were brought to, and placed upon the road, or the lands of the company, is not disputed; and if they have not by annexation, actual or constructive, lost that character, they must be so treated, for I know of no other way in which personal property can become real and a part of the land; and there may be an annexation without making this change in the legal character of the property. If it is annexed as a mere fixture, then it is removable, and to be treated as personal for all purposes. Fixtures are personal chattels annexed to land, which may be severed or removed by the party entitled to them, against the will of the owner of the freehold. “ The term fixtures is one denoting the reverse of its name.” The general rule is that all things whicn. are attached to the freehold or annexed to the land, become a part of it, if the annexation be made firmly and with an intention that it shall be permanent. Exceptions have been engrafted upon the rule, for the benefit of trade and manufacture, from time to time, and these have been most usually in ■ favor of tenants as against their landlords. Annexation in some form is necessary to constitute that a part of the land which is ordinarily personal property. The annexation in some cases is by gravitation alone> but then the thing so annexed is, in most cases, either a part of some machine, the principal part of which is actually annexed to some building, fastened or let into the soil, or is necessary to complete a building, or to the occupation of the land for the purposes of the trade to which it is adapted and has been appropriated. With a few special exceptions, such as locks, keys, bars, movable shutters, blinds, &c. which are all necessary to complete the building to which they are fitted; charters, deeds, &c., and the box or chest in which they are contained; fish in a fish pond; rabbits^ &e., in a warren; deer in a park, &c., which all go with the inheritance as heir looms, and which are considered as annexed and necessary to the enjoyment of an inheritance; chattels in order to lose their characteristics as personal property-, must at least be so far fixtures that they are permanent in one place. C The very idea of a fixture is of a thing fixed or attached to something as a permanent appendage, and implies firmness in position.) But that which becomes by annexation a part of the soil is something more than a fixture, and requires at least as much permanence as to constitute a fixture. The maxim, Quicquid jolantatur solo, solo cedit, which tersely expresses the principle, makes the affixing of the chattel to the soil the test by which it is declared to belong to the soil. ^ Hence, courts, in determining the questions that have arisen, have looked at the mode and intention of annexation, the object and customary use of the thing annexed, and in determining the intention, the character of the claimant has had its weight^ But fitness and adaptation and intention to annex, without actual or constructive annexation, does not make a chattel a part of the realty. A man may have the rafters, doors and windows made to fit precisely his house and the positions they are respectively to occupy, and brought to the ground; hut until actually put and affixed in and to the house, and thus made a part of it and the land upon which it stands, they remain personal property. When once attached, they may be removed for temporary purposes without destroying their character as a part of the realty. It would be a vain work for me to undertake that which more able judges have avowed an inability to do, to wit, to review all' the cases in which the question has arisen under' greatly differing circumstances, and in almost every variety of form, and reconcile the apparent conflict of decisions, and deduce-from all a certain rule, easy of application, and to which every case may be made to conform.

It is suggested that the articles claimed under the mortgage passed as incident to and accessory to the principal thing granted, and as a part of the means to obtain it and all the fruits and effect of it. It is well settled that where any thing is granted, all the’ means to enjoy it and the incidents and accessories pass with it. As by a grant of ground, a grant of way to it; by a grant of trees, the power to cut them ; by a grant of mills, the waters, flood gates, and the like, that are of necessary use to the mill. (1 Shep. Touch. 89, 90. House v. House, 10 Paige, 158. Babcock v. The Western Rail Road Co., 9 Met. 553.) But divers things, that, by continued enjoyment with other things, are only appendant to others, as warrens, leets, waifs, estrays, and the like, will not pass by the grant of those other things. (1 Shep. Touch. 89. Archer v. Brumul, 1 Lev. 131.) If the thing claimed is a means of enjoyment of the thing granted, as a right of way or other easement over the other lands of the grantor, the only question is whether the right claimed is necessary. If it is claimed as a part of the thing granted, because necessary to the usual and profitable employment of the thing granted, and adapted to its use, the question is whether it is affixed and made a substantial part of the freehold, or is a mere annexation for the purpose of trade or manufacture,- as in the latter, case, it would not be included in the grant. (Murdock v. Gifford, 18 N. Y. Rep. 28.) Actual physical annexation is not claimed here, as to most of the property in controversy, but a constructive annexation resulting from the fitness and necessity of the articles, to the right use of the main thing. The examples given of constructive annexation, which alone will supply the want of actual annexation, are the stone of a mill taken out to pick it; keys, locks, doors, &c., .sails of. a wind mill, windows, &o. (Grady’s Law of Fixtures, 15.) These examples, take the place of a definition, in terms, of a constructive annexation, and-the chattels which become realty by constructive, annexation must belong to the same class or come within the reasons which control in such cases. “ They must be such as go to complete, the building Or machinery which is affixed to the land, and which, if removed, would leave the principal thing incomplete and unfit for use.” In order to pass as an accessory of that which, is confessedly realty, it- would be accessory to it, ..and" not to a matter of a personal nature. A fire engine -wa.s considered as an accessory to the carrying on of the. trade of getting and vending coals from the land, a matter of a. personal nature, and therefore is not á part of the realty., (Lawton v. Lawton, 3 Atk. 13. Lord Derby v. Lord Ward, 1 Amb. 13.) The carrying of passengers and freight is ,a matter of a personal nature, to which, and not to the rail road as realty, the “ locomotives, cars, &c., are accessory.” 0. J\ Shaw, in Winslow v. Merchants’ Ins. Company, (4 Met. 314,) after speaking of the difficulty of laying down a general- rule, says, “ In general terms, we think it may be said that where a building is erected, as a mill, and the water works of steam works, which are relied upon to move the mill, are erected at the same time, and the works to be driven by it are essential parts of the mill, adapted to be used in it and with it, though not at the time of the conveyance, attachment or mortgage, attached to the mill, are yet parts of it, and pass with it hy a conveyance, mortgage or attachment." In the same case it was decided that all articles of stock, such as iron and coal, and all materials to be wrought, and the hand tools and all implements not driven by the steam engine, and articles not annexed to the building nor embedded in the ground, nor constituting parts of such mill, were to be deemed personalty, and not realty. This is, I think, the extent of the rule of constructive annexation. Broom, in his Legal Maxims, page 190, says, “ It is not sufficient that the article in question merely rests upon the soil, or upon such foundation; unless there be annexation, no difficulty can under any circumstances occur." Lord Mansfield held that salt pans, put in salt works by the ancestor, went to the heir as part of the inheritance, and not to the executor. He put the decision upon the ground that the owner erected them for the benefit of the inheritance, and could never have intended to give them to the executor. These salt pans were fixed with mortar to a brick floor, and there were furnaces under them. (Lawton v. Salmon, 1 H. Black. 259 in notes.) This has been called a mixed case of an erection, for the benefit of trade, as well as of the inheritance, and effect was sought to be given to the intent of the owner. The cases of Farrar v. Stackpole, (6 Greenl. 157,) Voorhees v. Freeman, (2 W. &. S. 116,) and Pyle v. Pennock, (Id. 300,) so far as they dispense with annexation of chattels to the soil or building, as an essential requisite to change the character of a personal. chattel, and make such change to depend upon the fitness and adaptation of the article to the purposes for which the real estate is used, are opposed by the decision of our own courts. Perhaps they may be reconciled to our decisions, but not upon any principle which could affect this case. The American editor of Smith’s Leading Oases, is of the opinion that the doctrine of the Pennsylvania court must prevail, if at all, by its own authority, since in all the cases in which chattels have been elsewhere treated as fixtures, there has been some ánnexation, although in some instances slight in its character, to the prémises on which they were placed. (2 Smith’s Lead. Cases, Law Lib. ed. 169, top paging.)- The cases of water wheels, mill stones, running gear and bolting apparatus of a grist and flouring mill, which in House v. House, (supra,) were held to be constituent parts of the mill, is not an exception to the rule requiring some" annexation. The frame work and foundation upon which the water wheel rests, and upon which it turns upon its axle, is necessarily a part of a building, or embedded in the soil, and that and the wheel are made for each other, and both are parts of the completed building arid essential to it, and all the gearing connected with it form a part of the same machinery. It all has a permanent and fixed position. It is stationary, not movable, in one place to-day and s another to-morrow ; and see Le Roy v. Platt, (4 Paige, 77.) While rails, before made into a fence, are personal property, when in a fence attached to the land, they become a constituent part of it, as do hop poles,- although temporarily removed' from the ground to gather the crops. But in both cases they are deemed attached to the land. (Mott v. Palmer, 1 Comst. 564. Bishop v. Bishop, 1 Kern. 123. Goodrich v. Jones, 2 Hill, 142.)

There are peculiar reasons why fences should be deemed a part of the freehold, without regard to the particular mode of their attachment to the soil. Immemorial custom, if nothing else, would make a fence, whether a Virginia fence or a fence actually embedded in the soil, a pdrt of the realty. Fences have always, and by universal consent, passed with the land, as much as the houses upon it. But not so as to the rolling stock of a rail road. There is no- such custom, and in a grant of a rail road with its stock a careful conveyancer would schedule the rolling stock, and grant it as such. Walker v. Sherman, (20 Wend. 636,) is a leading case in our own courts, and after a full review of the reported cases, it was held that the parts of a machinery belonging to another party, which were not in any manner affixed or fastened to the building, or do the land, was personal and not real property. The genera! rule to be deduced from that case is, that whatever its use or object, unless the thing be physically annexed to the freehold in some way, it will not pass under a grant of the land from vendor to vendee, while the cases of constructive annexation, where the article is seldom or never corporeally attached to the realty, are few, and may be set down as exceptions to the general rule. (Id. 646, per Cowen, J. Whiting v. Braston, 4 Pick. 311.) The Virginia fence, and manure in the barnyard, are placed among the exceptions. Murdock v. Gifford, (18 N. Y. R. 28,) reaffirms and applies the doctrine of Walker v. Sherman, and holds that looms in a woolen factory, connected with the motive power by leathern bands, not otherwise annexed to the búilding than by screws holding them to the floor, which kept them steady while working, and which could be removed without injury to themselves or to the building, are chattels, and not a part of the realty. If that case was well decided, (and it was well considered, and at least is binding upon me,) then but little of the property in controversy here was or is a part of the realty, and covered by the mortgage. The looms are distinguishable from the cars and rolling stock of the rail road in this, that they were permanently placed, although not strongly affixed, while the rolling stock of the road was incapable of permanence, or of being affixed or annexed in any one place, but was intended for locomotion. Its whole use is in its locomotive facilities. The term by which it is ordinarily designated, “ rolling stock,” implies the very reverse of annexation and a permanent fixture. It is essential to the successful operation of the rail road, but not a part of the rail road itself. It is an accessory to the trade and business of the road, and not to the road itself. The road is completed when the bed is graded, the superstructure laid, the rails put down, and every thing is ready for the reception of the locomotives and cars ; it is equipped when the rolling stock and all other necessary appliances and faóilities for business are finished and put upon it for use. The compapy can then commence the trade of carrying passengers, to which the cars are necessary and accessory. The road and its equipments are as distinct as the store .of the merchant and the stock of goods upon the shelves. I concur fully in the manuscript opinion of Greene, J. in Stevens v. The Buffalo and N. Y. City R. R. Co.^(a) presented me. The locomotives, therefore, and all the other rolling stock of the company—all the stock, materials, rails, ties, and other things on hand for running or repairing the road, the platform scales, and all the loose tools and implements levied upon, and all the articles not constituting a part df the road bed, or firmly affixed to the land or some building which is itself a fixture, including such articles as are usually denominated chattels, but which are annexed by a screw or the like to some building, and which can be removed without detriment to the building—were properly seized by the sheriff. The steam engine, with the boiler and machinery connected therewith, and making a part of it and necessary to it as an engine, is real property, and subject to the mortgage. (Richardson v. Copeland, 6 Gray, 536.)

[Oneida Special Term, December 27, 1859,

Judgment will be given accordingly, to be settled in detail upon a further hearing of the parties as to particular articles claimed by them respectively.

Allen, Justice.]

(a) Reported, ante p. 590,

Case Details

Case Name: Beardsley v. Ontario Bank

Court Name: New York Supreme Court

Date Published: Dec 27, 1859

Citation: 31 Barb. 619

Court Abbreviation: N.Y. Sup. Ct.