2 S.W.2d 662 | Ky. Ct. App. | 1928
Affirming.
On January 1, 1924, Mrs. Emma Blair and others, the owners of a coal mine in Henderson county, executed to the Ohio Valley Banking Trust Company mortgage upon the property to secure a debt of $44,000. After this they sold the property to the Race Creek Coal Company. The Race Creek Coal Company, on October 25, 1924, bought from the Morrow Manufacturing Company an improved shaking screen, etc. It was stipulated in the contract that the title to the property should remain in the Morrow manufacturing Company until paid for. The contract, which was not acknowledged by any one, was improperly recorded in the county clerk's office. The trust company brought this suit to foreclose its mortgage, which was duly recorded when made. The Morrow Company *808 set up the claim of its right to remove the screen, etc., which it sold the coal company and had been used by it in delivering its coal; there being a balance due the Morrow Company of about $8,000 on it. The whole property was sold, and brought $27,000. It was appraised at $40,000.
Upon final hearing the circuit court entered judgment dismissing the petition of the Morrow Company, and adjudging the lien of the trust company, under its mortgage, superior. The judgment of the court finds as a fact that the property in question "became and is now a permanent fixture, and was and is so attached to the freehold as to become, and all of it has become and is now, a part thereof, and cannot be removed therefrom without damaging the said mine, nor without greatly depreciating the value of the remainder of said coal mine property, and impairing the value of the security of the defendant, Ohio Valley Banking Trust Company." The Morrow Company appeals.
It is well settled that contracts like that made by the Morrow Company only operate as a mortgage in Kentucky. It is shown from the proof that the Race Creek Coal Company was operating its mine with a gravity screen. The agent of the Morrow Company came to the premises. The condition of the old tipple was poor, and for that reason he recommended a steel subframe for supporting the self-contained screening unit. The property was sold to be put just where it was. The sellers sent an experienced man along to install the machinery. The Race Creek Coal Company paid him for his services, and also made some payments on the price of the property. They took out the timbers that were holding up the shed. They put in a concrete base, after digging down in the ground for a foundation, and while the concrete was soft put bolts in the concrete by means of which the steel subframe was fastened to the concrete foundation. On this foundation the shaker screen and other parts of the structure were placed, and steel posts were set to hold up what was above. The structure, when placed in position, was an integral part of the machinery by which the coal was taken from the bottom of the shaft, and, after passing through the screen, was dumped in the railroad cars. There was no other way to operate the mine after this structure was put in. To take it away would be simply to stop the operation of the mine until another tipple could be built, at a cost of $10,000. *809
In Clore v. Lambert,
"The intention of the party making the annexation to make the articles a permanent accession to the freehold, this intention being inferred from the nature of the article affixed, the relation and situation of the party making the annexation, and the policy of the law in relation thereto, the structure and mode of the annexation, and the purpose or use for which the annexation has been made."
In that case it was held that the engine was not a fixture. The case turns on these words, as stated by the court:
"What evidence is there then that Clore and Clay intended to make this machinery a permanent accession to the realty? The burden was upon appellee to show that his lien reached this property, and in this we think he has failed."
In Bank of Louisville v. Baumeister,
"It will scarcely be said that the machinery in a factory, that may be removed at any time without an injury to the building, would not pass by a sale of the factory; on the contrary, it has often been held otherwise, and the purposes for which the machinery is put into the building will determine whether or not it becomes a fixture and passes to the purchaser."
The same rule was recognized in United States Cast Iron Pipe Foundry Co. v. Henry Vogt, etc., Co.,
"Besides, the law is well settled that property added to the plant of a street railroad, and which becomes an essential and integral part of its road, passes under a mortgage previously executed and recorded covering its entire property and road constructed and to be constructed, although furnished under a contract by which the title was to remain in the seller until payment (was) made. See Porter v. Steel Co.,
122 U.S. 283 ,7 S.Ct. 1206 ,30 L.Ed. 1210 , and Phœnix Iron-Works Co. v. New York Security Trust Co., 28. C.C.A. 76, 83 F. 759."
There can be no substantial distinction between the case of the street railway and the case before us. The structure here was placed upon the property as a permanent addition. It was an essential part of the machinery for getting the coal out of the mine, and when fixed to the land became a part of it. While there is a conflict of authority on the question, the conflict is in a large measure due to the difference in the facts or the statutes before the court. In some states, such contracts by law pass no title to the purchaser until the price is paid. In others, the statutes are not the same as ours as to the effect of a prior recorded mortgage; and the weight of authority supports the rule that the lien of the mortgage is superior, where the structure is a necessary part of a plant and intended as a permanent annexation to the property, and its removal will impair the security of the mortgage. Planters Bank v. Lummus, etc., Co.,
While the judgment was entered on the last day of the term, and not signed until the first day of next term, it is valid when so signed. Union Gas Co. v. Indian, etc., Co.,
Judgment affirmed. Whole court sitting.