257 N.W. 836 | Mich. | 1934
Wood Hydraulic Hoist Body Company, plaintiff herein, furnished a Gar Wood heating system for a residence in Birmingham, Michigan, under two title-retaining contracts, one made directly with the owner of the premises for a portion of the equipment, and the other with the heating contractor for other parts thereof. The oil burner, boiler, tank, aquastat, etc., constituting the system, were so installed that they could easily be removed by the use of a wrench, without damage to the realty. The title-retaining contract with the owner contained a provision that if upon the sale of the residence the heating apparatus should not be acceptable to the purchaser, plaintiff would remove *343 the equipment and return all money paid thereon. Subsequent to the installation of the system, the owner of the premises gave a first mortgage of $8,000 on the property to the Gleaner Life Insurance Society, defendant and appellant herein. Before making the loan, defendant, through a search of the title, ascertained that there were no liens against the property. The trial judge refused to admit into evidence a waiver of lien, signed by the heating contractor, and an affidavit, complying with the mechanics' lien law, signed by the mortgagor at the time the mortgage was given, and listing the contractor's claim as paid. The mortgage was foreclosed by advertisement, and after the property had been bid in by defendant, plaintiff brought replevin proceedings to regain possession of the heating apparatus. The trial court, in rendering judgment for plaintiff, held that the equipment was personal property, on the ground that it could be removed without material injury to the building, and that the title-retention contracts negatived any intention on the part of plaintiff and the owner of the premises that the heating system should become a fixture until paid for.
In reaching this decision the trial court relied largely upon the case of Woodliff v. Citizens Building Realty Co.,
"It is true that Hackley stood in the position of an equitable mortgagee of the real estate, being a contract vendor; but he was a prior mortgagee, and did not take his security upon the faith of any appearance that this property was a part of the real estate."
Unlike the above cases, the instant case involves the claims of a subsequent bona fide mortgagee of the property without notice. The principle applicable in such a case was laid down by this court in Wickes Bros. v. Hill,
"The rule is settled beyond controversy in this State that, as to conditional sales of personal property retaining the title in the vendor until paid for, no subsequent vendee obtains the title while the property remains personalty. This is upon the theory that the possession of movable property, known as chattels, is not conclusive of ownership or right of possession, and that he who buys takes subject to the title of the real owner. When personal *345 property is attached to, and becomes a part of, the realty, a different rule applies. Title of record and possession of real estate are usually conclusive, and a bona fide holder takes title free from any existing equities. As between the original vendor and vendee, no title passes, and as between them the vendee cannot make it realty contrary to his agreement. In such cases the intention of the parties must govern. When, however, the vendor sells machinery which it is well understood may, and, in the absence of agreement, does, become part of the realty by being so attached that it cannot be removed without injury, and thereby places it in the power of his vendee to so attach it, and sell or mortgage to innocent third parties, the better and more just rule is that he must suffer. * * *
"We do not think that any case in this court has gone to the extent of holding that one who makes such a conditional sale, having good reason to believe that the property may become realty, can maintain his title to the property as against a purchaser or mortgagee of the realty in good faith."
To like effect see also: Knowlton v. Johnson,
The only remaining question therefore becomes whether, disregarding the agreement between plaintiff and the vendee, of which defendant had no knowledge, the heating apparatus became a fixture upon its annexation to the realty, by the very nature of the equipment, the manner of its annexation, and the purpose for which it was installed. In Kent Storage Co. v. Grand RapidsLumber Co.,
"It is a salutary rule that whatever is affixed to a building by an owner in complement, to facilitate its use and occupation in general, becomes a part of the realty, though capable of removal without injury to the building."
In Peninsular Stove Co. v. Young,
The judgment of the trial court is reversed and the case remanded with directions to enter judgment for defendant Gleaner Life Insurance Society, which will recover costs in both courts.
NELSON SHARPE, C.J., and POTTER, NORTH, FEAD, WIEST, BUSHNELL, and EDWARD M. SHARPE, JJ., concurred. *348