This is аn action in replevin brought by the plaintiff, Swift Lumber & Fuel Company, a corporation, vendor under contracts of conditional sale, against the defendants, Arnold C. Koenig, vendee in default, ai\d Clemma Hunt Elwanger, to recover one Frigidaire compressor, seven cabinets and coils, pipes, tubes, brackets and fittings; one triple service boiler, oil burner, thermostat, pipes, tubes and fittings; and one 600-gallon oil tank; the defendant
There is little dispute in the evidence. In July, 1931, a written contract was made between the defendant Clemma Hunt Elwanger and one Maud Koenig, wife of the defendant Arnold C. Koenig, in which the former agreed, upon the latter making the payments and performing the covenants therein contained, to convey to her a certain residence property in the city of Lincoln. As part of the consideration the grantee assumed a $6,000 mortgage on the real estate and gave the grantor her note with interest for the balance. Thе contract empowered the grantee to take possession of the property and remodel it according to certain plans and specifications and the grantor advanced $4,000 for this purpose on grantee’s note with interest therefor, receipt of which advancement is acknowledged in the contract. If additional funds were needed, grantor had the option of furnishing same, or, if secured elsewhere and grantee had then faithfully performed her contract, grantor agreed that a second mortgage covering said loan, but not to exceed $2,000, could be placed on the property, which would take precedence over her rights in the premises. It was also provided that grantee should pay all taxes assessed against said property; that she should not permit any mechanics’ liens to be filed against it and that the remodeling would be completed before October 1, 1931, at which time grantee agrеed to refinance the premises and pay the grantor the amount then due her, with interest. The contract also stated that, upon failure to complete the improvements or otherwise perform its
The negotiations leading up to said contract were conducted with the defendant Koenig, and it is conceded by all parties that he was the real purchaser, the contract running to his wife becаuse of a judgment outstanding against him. The contract was never filed or recorded, but Koenig immediately took possession of the premises, changing partitions and stairways, and otherwise made alterations and improvements therein, according to plans, converting the residence into an apartment house with seven apartments, and superintending the work himself. During the course of the remodeling he purchased from the plaintiff for installation in said building the articles in dispute, under twо contracts of conditional sale, which provided that title should remain in the plaintiff until payment was made in full. Payments of approximately 10 per cent, of the purchase price were made upon signing the contracts. No other payments were made. Installation was made by plaintiff and was pompleted November 25, 1931.
November 9, 1931, the defendant Koenig solicited and the defendant Elwanger advanced $500 additional under said contract, and on November 18, 1931, she made another advance of $300. Shortly thereafter several mechanics’ liens were filed against the property by parties from whom Koenig had purchased materials used therein and for which he had failed to make payment. Whereupon, after some negotiations, Mrs. Elwanger declared a forfeiture of the contract, and on December 30, 1931, a written cancelation and rescission thereof were entered into between the parties; the grantee’s notеs were returned and possession was restored to the grantor. Apparently all the money advanced was expended in making the improvements except $1,000, which it later developed Koenig had retained for his own services. After the contract was canceled, an instalment on the articles now in dispute being past due, plaintiff made demand of each defendant
In its petition, plaintiff claims, among other things, that the defendant fraudulently obtained the articles in dispute by pretending and representing to it that Koenig was the owner of the building in which they were installed and that the defendants later fraudulently canceled the muniments of title. It is also alleged that, in making the alterations and contracting for such articles, Koenig was acting as Mrs. Elwanger’s agent.
The articles in question were sоld to Koenig with full knowledge of the location of the property in which same were to be installed and without any investigation by plaintiff of the record title thereto. Koenig did not represent himself to plaintiff as acting for Mrs. Elwanger; neither did she hold him out as such. In fact, plaintiff never even talked with Mrs. Elwanger about these articles until after Koenig had defaulted under both contracts. We have carefully examined the evidence and it wholly fails to establish either agency or fraud and сonnivance. The principal question presented by the record has to do with the plaintiff’s right to recover in replevin from the defendant Mrs. Elwanger, the vendor under an executory contract of sale of the real estate in which the articles were installed, who, upon default by the vendee under said real estate contract, has enforced cancelation thereof and has reentered. Mrs. Elwanger contends that, so far as she is concerned, the artiсles became a part of the real estate when they were installed and that, therefore, replevin does not lie.
Whether an article annexed to the real estate has become a part thereof is a mixed question of law and fact. President and Directors of Ins. Co. v. Buckstaff,
Moreover, under the view that intention constitutes the chief criterion, it is now generally held that unless the articles are of such a nature as to lose their identity by incorporation in the real estate, such as nails, lath, plaster, etc., or unless there is a complete merger with the realty by incorporation of the chattels so as to prevent removal without material injury to the realty, the parties may agree that such articles shall retain their personal character and be removable, and such contract is binding between the parties. It is also held that such an agreement may be and is implied where articles of an ambiguous nature, such as the articles involved in this case, are sold with the reservation that title shall not pass until they are paid for, ór where a mortgage is given on articles before their annexation. In such case their annexation to the realty of the purchaser does not render them a part of the realty and irremovable as between the parties. 26 C. J. 676, 678, 679, and cases cited; 11 R. C. L. 1064, sec. 8; Edwards & Bradford Lumber Co. v. Rank, supra; Arlington Mill & Elevator Co. v. Yates,
A more difficult question arises when the interest of third persons is involved. When the rights of such persons, without notice, relying on the apparent character of
In Arlington Mill & Elevator Co. v. Yates, supra, this court held: “Articles, such as machinery, of an ambiguous character, and which may or may not become attached to the freehold according to the circumstances, will retain their character of personalty by virtue of a contract between vendor and vendee to that effect, when the rights of innocent purchasers relying on their apparent character are not involved.”
In Edwards & Bradford Lumber Co. v. Rank, supra, an engine was purchased and placed in a flouring mill to propel the machinery therein. It was placed upon a suitable brick foundation embedded in the ground, being securely attached to the foundation by bolts. The tank was set upon a similar foundation and 40 feet of gas pipe was buried in the ground. Purchaser executed a chattel mortgage on the engine to secure the payment of purchase price. The court held that the giving of the mortgage evinced an intention that the engine should retain its status as personalty, even though physically attached to the freehold by the owner. The court further found that it could be removed without substantial injury to the
In Holland Furnace Co. v. Bird,
The same reasoning and rule is held to apply to a vеndor of land under an executory contract of sale. In Harris v. Hackley,
In Hendy v. Dinkerhoff,
In Davis v. Bliss,
These authorities also state a well-established excеption to the rule set out, where the vendor, relying upon their apparent character and without notice otherwise, has made advances by reason of the annexation. To the same effect is Dauch v. Ginsburg,
Do the facts in the case at bar bring the parties within this exception?
While assuming that, as to innocent third parties relying on their apparent character, the boiler, burner and tank would be classed as permanent fixtures, yet we think the evidence discloses that they can be removed without material injury to the basic structure in which installed. During the remodeling, the old boiler was removed, leaving a depression in the concrete in the basement floor. The new boiler was set on a сast iron base across this depression, facing in a different direction and resting upon bricks to make it level. Concrete was filled in underneath and up around the edges, possibly three-eighths of an inch, to make it tight, but it was not fastened by bolts or otherwise. It was hooked up with the old radiators and pipes already there. The burner itself is set in the fire box in the boiler and the operating mechanism, including the fan, pump and electric motor, rest on the floor in front
The real estate contract provided that the alterations and improvements should be made in accordance with definite plans. The evidence clearly shows that the heating plant was not included therein. After the construction was nearly completed, Koenig found that the old boiler was not serviceable and he then purchased the heating equipment in question. The contract for it was made October 30, 1931, and it was installed November 25, 1931. The money which Mrs. Elwanger loaned the Koenigs was all advanced prior to the date of such installation. Koenig, who was called as a witness for the plaintiff, testified that he told Mrs. Elwanger about the purchase price and the contract, but is indefinite as to the date on which these conversations took place. At two points in her testimony Mrs. Elwanger says, without fixing the time, that Koenig told her that he had ordered a furnace. At another point
If prior to the time she made the last advancement she knew these articles were to be installed and that they were being purchased under contract of conditional sale, then no doubt she would be liable for their detention. However, we think she is equally liable under her own statement that she did not even know that the boiler and tank were to be furnished and did not learn of it until they were installed, for without such knowledge, since there was no contractual duty imposed on Koenig to install them, it cannot be said that she made any of the advances on the appearance of these articles as a part of the real estate or in reliance upon the value of such articles annexed as a part of her security. In view of the nature of the articles, the evidence and the authorities citеd, we think the plaintiff may assert its right to such articles under its contract of conditional sale as against both defendants as was held by the trial court.
In the installation of the refrigerating system, the compressor was set on concrete blocks on the basement floor and connected with the wiring and water system. Two tubes ran from the compressor to a manifold board which was set in an upright position immediately behind it, said board resting on the floor and being nailed to the joist overhead. From this board two tubes branched to each refrigerating unit, being carried up in the walls and coming out through the plaster at about twenty-four inches above the floor, at which points they were connected to the cabinets, which, together with the coils, were^ placed in the several apartments. These tubes are one-half and one-fourth inches in diameter and one carries the refrigeration fluid to the units and the other carries gas back to the compressor. In some instances the cabinets, or ice boxes, were placed in recesses built in the kitchenets for the purpose of housing them and the top of each cabinet forms a base for a gas stove.
The plans and specifications covering the alterations and the improvements to be made were not offered in evidence
Having failed to place their contract of conditional sale on file prior to the installation or before the last payments were made, or to advise with Mrs. Elwanger in whose name was the record title, thus permitting her to make additional advances totaling almost as much as the complete cost of the Frigidaire, in the belief that such equipment would be a part of her security therefor, they ought not now, having permanently affixed sаme to the real
Affirmed as modified.