Penn Mutual Life Insurance v. Semple

1. Certain machines, which were entirely finished before they were brought to and set up in a factory, and. required no particular adaptation for use therein, nor any alteration in the factory itself, and which could be removed therefrom without injury to themselves or to the building, were, as between the mortgagee and a subsequent judgment creditor of the mortgagor, held not to be covered by a mortgage of lands, including' the factory and also “ the steam engines, boilers, shafting, belting, gearing and all other machinery appertaining to said premises, now upon said premises or that shall hereafter be placed or erected thereon.” 2. Other questions touching the validity of respondent’s claim as between the appellant and respondent, not embodied in the petition of appeal, and not the subject of proof or consideration in the court below, ought not to be given a hearing in this court.

On appeal from a decree advised by Vice-Chancellor Bird, whose opinion is as follows : The above-named complainant is also the petitioner, asking for an injunction restraining a judgment creditor from selling certain machinery, which, the complainant insists, is included in its mortgage. The mortgage of the complainant is on “all that certain lot of land with the brick factory thereon erected, * * * together with the steam engines, boilers, shafting, belting, gearing and all other machinery appertaining to said premises, now upon said premises, or that shall hereafter be placed or erected thereon.” As between the contracting parties, this was, unquestionably, a pledge of the land, the brick factory and “all machinery áppertaining to said premises,” then upon said premises, or that may have been placed thereon since. But a judgment creditor makes claim to “a guide, cutting-machine, two spooling-tables, five winding-frames, two spinning-frames, forty spooling-heads, one automatic table, one pounding-machine, fifty-one cards, twelve roving-frames, six drawing frames, one lap-machine, three railway-heads, three dubler-heads, two spreaders and picker, one grinding-machine, twelve mules, four spinning-frames, nineteen dressing-machines, seventeen spindle-frames, one drill-press, forty-seven twisting-machines, eight cap-spools, one re-winder, eight reels, two lap-machines and one cotton-opener,” as personal property, subject to sale under his execution, while the complainants insist that said articles are “ machinery appertaining to the said mortgaged premises,” and subject to said mortgage. “The dressing-machines have four feet each, each foot being surrounded by a wooden cleat three inches and a half, annexing them to the floor, to keep the machine steady and in placethe frames are attached to the floor in the same manner. The carding-machines are attached to the floor by means of four screws, one at each foot; the screw used is about three-eighths of an inch thick by two long. The dubler is screwed to the floor by three common two-inch screws. The railway-heads are fastened in a similar manner to the carding. The mules are attached, to the floor by two-inch screws, one in each foot, each mule having from seventeen to nineteen feet. The ring-frames are attached in the same manner. The rest of the machinery in dispute is fastened to the floor in about the same manner as that above named. Several of these machines have been moved from one place to another, in the same building, without inconvenience. Did these machines pass to the mortgagee, as against a judgment creditor of the mortgagor? What was mortgaged? A brick factory and all the machinery appertaining thereto. In Del., Lack, and W. R. R. Co. v. Oxford Iron Co., 9 Stew. Eq. 452, 455, the chancellor says : “ Mortgage of factory eo nomine includes, ex vi termini, all the machinery and other articles essential to the factory,” citing Ewell on Fixtures 308 and other authorities, all fully sustaining this view. The cases are not similar. In the case cited, after the mortgage was delivered, the mortgagor became insolvent, and his property was given over to a receiver, the mortgage was foreclosed and the mortgaged pr.em-ises sold under the execution issued on the final decree. The controversy as to the title to the machinery arose between the purchaser and receiver. In the case now submitted, the controversy is between the mortgagee and a judgment creditor. In the case cited, it was most manifestly the intention of the parties to give and receive a mortgage on the machinery, as well as the land and factories; in this case, the language used in the conveyance is equally as clear and comprehensive. If the point of difference was between the mortgagee and mortgagor, the former must prevail, as the purchaser in the case cited did against the receiver, who stood in the place of the mortgagor. But in this case, the judgment creditor says, as between him and the mortgagee, all the machinery named is personal property. He insists that the slight means used to connect it with the building was not designed to make it a permanent addition to the building, but only to keep it securely in place while in use. This being so, he urges that it is subject to all the laws of personal property; and since the mortgage of the complainant was not recorded, as a chattel mortgage, under our laws, is required to be, the machine did not pass as against the judgment creditor. The mortgage was recorded as required in case of conveyance of lands, but was neither filed nor recorded as a chattel mortgage. The statute declares that every mortgage of chattels not accompanied by an immediate delivery and continued change of possession of the things mortgaged, shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good faith, unless the mortgage, or a true copy thereof, shall be filed in the clerk’s office (Rev. p. 709), and recorded also (P. L. of 1880 p. 266), which last applied to the mortgage before us, it having been made within a few weeks after the enactment. This mortgage was neither “filed” nor “recorded” as a chattel mortgage, and therefore is not within the purview of the statutes. Williamson v. New Jersey Southern R. R. Co., 2 Stew. Eq. 311. This brings us back to the inquiry whether or not the machinery enumerated and fastened to the floor, as above described, was so attached as to be denominated fixtures, and consequently part'of the realty. The rules by which to form a judgment are, “ first, actual annexation to the realty, or something appurtenant thereto; second, application to the use or purpose to which it is connected, is appropriated; third, the intention' of the party making the annexation to make a permanent accession to the freehold.” Williamson v. New Jersey Southern R. R. Co., 2 Stew. Eq. 311, 329; Quinby v. Manhattan Co., 9 C. E. Gr. 260, 266; Rogers v. Brokaw, 10 C. E. Gr. 496; S. C., 11 C. E. Gr. 567. Notwithstanding the fairness, wisdom and true libei'ality of the rules laid down in these cases, the case last cited seems to be decisive of this one, and to make it my duty to advise a decree against the complainant and petitioner. There seems to me to be the most abundant proof that, in this case, the mortgagor intended to convey, by way of mortgage, all of his machines. It seems to me equally clear that it was the intention of the mortgagor and owner of the land and building to make and to consider the machines in that building a part and parcel of the “factory” itself, as much as the “gearing and shafting.” The latter is admitted, in all cases, to be fixtures, and yet, in hundreds of cases, vast proportions, if not all the shafting and gearing, can be removed from mills and factories, by withdrawing small screws and bolts, and leave scarce a trace behind. But the law has often been declared that a machine, however ponderous or light, and whether attached to the building or not, by bolts and screws, is not a fixture, whilst the slender shafting which gives motion to the machine, although secured no more permanently, is denominated a fixture. In the case last cited, the vice-chancellor declared the law as it had often been declared before, and the court of last resort affirmed his conclusions. In that case, the owner had erected the building for a factory, and purchased and placed therein machinery to carry on the business intended. He then executed a mortgage on the land, and after-wards a chattel mortgage, including two machines. The holder of the first mortgage claimed the machines under his mortgage; the bolder of the chattel mortgage claimed them as chattels. One of the machines was so heavy as to sit securely without fastening to the floor; the other was fastened by screws and bolts. The machines were adjudged to be personal property. Keeler v. Keeler, 4 Stew. Eq. 181 and cases. It therefore appears, quite plainly, to be my duty to conclude that, although this mortgage was intended to include this-“factory” and everything essential to make or constitute it a “ factory,” and, in the law, as between mortgagor and mortgagee, did include everything, yet, as between the mortgagee and a judgment creditor, because the mortgage was not filed nor recorded as a chattel mortgage, did not include the machines enumerated, and to advise a decree accordingly. The petition should be dismissed, with costs.