Wickes Bros. v. Hill

Grant, J.

(after stating the facts). 1. It is insisted by the plaintiff that these contracts were not conditional, but that they were leases for a fixed term, at a fixed rental, with an option in the lessee to purchase the property at a fixed price; and that, therefore, this case is ruled bj Couse v. Tregent, 11 Mich. 65 ; Powell v. Eckler, 96 Mich. 538 . Both of these cases involved personal property which, under no circumstances, could become real estate. We are therefore of the opinion that they have no application to a case like the present, involving property which, as is well known, is liable to be so attached to the realty as to become a part thereof. It follows that this provision of the contract leasing this property can stand upon no other or different basis than that of a conditional sale. The same acts that will estop *337 the vendor from setting up title in the one case will also estop him in the other.

2. It is next insisted by the plaintiff that this case comes within Adams v. Lee, 31 Mich. 440 , and Robertson v. Corsett, 39 Mich. 777 , upon the ground that there was no unity of title to the land and personalty. We cannot concur in this view. Collyer says: “Where partners purchase real estate for the purposes of the partnership, it is usually conveyed to them as tenants in common.” 1 Colly. Partn. § 113. See, also, Pepper v. Pepper, 24 Ill. App. 316 . While the record is not as complete upon this point as it might be, it is evident that this real estate was purchased by the partners for partnership purposes, and that it was so used. The partners, the tenants in common, purchased the personalty, and attached it to the real estate. As we read Robertson v. Corsett, supra, we understand that the title to the real estate was in two of the three partners, in which case there would, of course, be no unity of title.

3. All these parties except the shingle company have •acted in good faith, and the difficult question presented is, Whom does the law protect ? It is insisted by the defendants that the case falls within the following decisions of .this court: Knowlton v. Johnson, 37 Mich. 47 ; Ingersoll v. Barnes, 47 Mich. 104 ; Coleman v. Manufacturing Co., 38 Mich. 30 ; Detroit, etc., R. Co. v. Busch, 43 Mich. 571 ; and several other cases cited from other courts. It is contended on the part of the plaintiff that the case falls within that of Lansing Iron & Engine Works v. Wilbur, 111 Mich. 413 , and authorities there cited, wherein it is stated:

“It is well settled in this State that the vendor may retain title to personal property sold until paid for, 'and that the vendee cannot, before his title becomes absolute, pass a good title, and that the good faith of a purchaser from the vendee is immaterial; nor is the question of notice of the vendor’s rights material.”

*338 This language must be construed with reference to the facts of that case, which were that the defendant had taken a chattel mortgage upon the machinery in dispute, and afterwards purchased the real estate. All the parties had treated it as personal property, and the trial court, in his charge, said that the chattel mortgage “was notice to her of the character of the property,” and it was immaterial whether she purchased in good faith, and without notice of the vendor’s rights. The question now before us was not involved in that case. In Knowlton v. Johnson, supra, the lessee bought and attached the waterwheel, which was the subject of the controvery, in such a manner that it was impossible to remove it without injury to the mill. The lessor protested against removing the old wheel and putting in the new one. The vendors of the new wheel knew where the wheel was to be placed, and contracted with reference to it. They were held estopped to set up a claim of title as against the mill owner. That case differs from this in that the plaintiff here had no knowledge of the manner in which this machinery was to be attached to the land, except that which is to be inferred from its knowledge of the usual construction of shingle mills, and the manner in which the engine, boilers, and machinery must be fixed therein in order to run properly and successfully.

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 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, *339 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. Haven v. Emery, 33 N. H. 69; Voorhees v. McGinnis, 48 N. Y. 278 ; Taylor v. Collins, 51 Wis. 123 ; Bass Foundry & Machine Works v. Gallentine, 99 Ind. 525 ; Jenks v. Colwell, 66 Mich. 428 ; Davenport v. Shants, 43 Vt. 546 ; Ewell, Fixt. 316 et seq.; Porter v. Steel Co., 122 U. S. 267 ; Fryatt v. Sullivan Co., 5 Hill, 116 ; Hunt v. Iron Co., 97 Mass. 279 .

We may take judicial notice of the fact that some of such machinery as was here sold is usually attached so as to become a part of the realty, and a deed of the realty carries with it the title to the machinery. In fact, it is necessary to so attach it in order to make it useful. This machinery was sold to be used in the construction of a shingle mill. It was so used. Without it the mill was of little value. There was nothing to give notice to the defendant mortgagees that there was an agreement between plaintiff and the shingle company that it was personalty. They examined the title, and the records in the town clerk’s office, to ascertain if there was anything there to indicate such intent. Nothing appeared. They also asked the members of the partnership, and they informed them that they held the title absolutely. We think this was an exercise of good faith, and of all the precaution the law requires on the part of a purchaser or mortgagee. 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.

*340 Some of tbe articles mentioned in the declaration are not real estate, and the testimony is not sufficient to enable us to determine what part is realty and- what is personalty.

The judgment is reversed, and a new trial ordered.

The other Justices concurred.