MOLLER v. WILSON

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District Court of Appeal, Second District, Division 1, California.

M. P. MOLLER, Inc., v. WILSON et al.†

Civ. 9834.

Decided: May 19, 1936

Walter F. Haas, Stanley F. Maurseth, and Gerald E. Kerrin, all of Los Angeles, for appellants. Craig & Weller and Paul A. Amos, all of Los Angeles, for respondent.

This is an appeal by defendants from a judgment in favor of plaintiff in an action to recover possession of a pipe organ which had been installed in a residence under a conditional sales contract purporting to reserve title in plaintiff, the seller.

On May 4, 1929, plaintiff agreed to build a pipe organ and to install it in the residence of one Ferguson, the purchaser. The purchase price was $8,500, of which $2,784.21 was paid, and the balance was to be paid at the buyer's option in two or three annual payments, beginning one year after date of acceptance. The initial payment only was made. The organ was installed and thereafter defendants purchased the real property and took title as joint tenants for value, and without knowledge or notice that the organ had been sold on a conditional sales contract or that plaintiff had or claimed title thereto or any interest therein. The judgment was for the return of the organ to plaintiff or, if possession could not be delivered, for its value in the sum of $4,500, the basis of the judgment being, as found by the court, that the pipe organ was not a fixture and that title thereto did not pass to defendants by their deed. The sufficiency of the evidence to sustain this finding is the sole point involved on the appeal.

The following facts are established by the findings: That the pipe organ consisted of two motors and a blower situated in the laundry room of the residence, with wiring and switches, the same being connected by a steel pipe designated as the “blower pipe,” 14 inches in diameter and approximately 48 feet long, with a chest and pipe situated in the organ chamber, which organ chamber had been specially constructed for the purpose of the installation of a pipe organ chest and pipes, and being without any economic use other than for storage; that the organ chamber was connected by a specially constructed shaft 2 x 5 x 8 feet with the living room which shaft contained a cable of approximately 500 wires, extending from the chest in the organ chamber to the console or keyboard situated in the living room, which console weighed about 1500 pounds and was held in place by gravity; that certain features of the residence were specially constructed to receive and to have installed in the same a pipe organ unit; that the organ chest was constructed to fit and be installed in said organ chamber; that in the installation of the organ unit there was a hole cut in the wall of the bedroom opposite the door at the head of the stairway leading to the organ chamber for the purpose of bringing into said organ chamber and installing therein two of the many organ pipes which were installed in said organ chamber, the said organ chest having theretofore been cut into two sections; that said hole in the wall in said bedroom was made and cut by an employee of plaintiff; that the organ could have been installed by cutting some of the organ pipes, but that the hole in the wall was cut instead because Ferguson desired not to have the pipes cut; that after the chest and pipes were installed and the two sections of the chest joined together, masonite partitions were erected around and entirely inclosing the same and similar partitions were erected dividing the so–called “swell” and great organ; that all of said portions of the organ were furnished by plaintiff under the contract save and except the blower pipe and the masonite partitions, which were furnished by Ferguson, but which were connected with the organ proper and erected with the consent and under the directions of plaintiff; that the blower pipe ran under the living room floor through several concrete walls and was attached in the organ chamber by means of a flexible joint bolted on the pipe and the other end thereof was fastened directly to the bellows by means of screws; that after said organ unit was installed the hole in the bedroom wall was closed and plastered; that thereafter the portions of the unit so installed were removed from the premises and in so doing a hole was again cut in the bedroom wall in order to remove said two sections of the organ chest and certain of the organ pipes, said hole thereafter being again closed and plastered; that prior to the removal of said chest and pipes from the said organ chamber, the said masonite partitions were taken down and demolished. Upon the above findings the court concluded as a matter of law that the organ was not a fixture.

Whether an article annexed to the realty is a fixture is a question of fact to be determined upon the evidence of the particular case. While the court did not make a specific finding on the question, it did conclude as a matter of law that the organ did not become a fixture, and we shall regard this as the equivalent of a finding of fact. This finding, in our opinion, is not supported by the evidence, the substance of which is set forth in the findings. Whether, upon the facts thus established, the organ became a fixture presents to this court a question of law. The general rules which govern in the determination are not only well established in this state, but are also universally recognized. They are stated in Breyfogle v. Tighe, 58 Cal.App. 301, 305, 208 P. 1008, 1009, as follows: “In determining whether personal property attached to land becomes a part of the realty, there are––‘three general tests which may be applied: * * * First, annexation to the realty, either actual or constructive; second, adaptation or application to the use or purpose to which that part of the realty to which it is connected is appropriated; and, third, intention to make the article a permanent accession to the free–hold.’ 11 R.C.L. 1059. ‘The test of intention is to be given a broad and comprehensive signification. It does not merely imply the secret action of the mind of the owner of the property, nor need it be expressed in words; but it is to be inferred from the nature of the article affixed, the relation and situation of the party making the annexation, the structure and mode of annexation, and the purpose or use for which the annexation has been made, which, obviously, suggests that the other tests are really part of this comprehensive test of intention, and that they derive their chief value as conspicuous evidence of such intention.’ 11 R.C.L. 1062.” Approval of these general rules has been given in Fisher v. Pennington, 116 Cal.App. 248, 2 P. (2d) 518; Gosliner v. Briones, 187 Cal. 557, 204 P. 19; Bianchi v. Hughes, 124 Cal. 24, 56 P. 610; Miller v. Waddingham, 91 Cal. 377, 27 P. 750, 13 L.R.A. 680; Lavenson v. Standard Soap Co., 80 Cal. 245, 22 P. 184, 13 Am.St.Rep. 147; Hogan Lumber Co. v. Oakland, 25 Cal.App. 130, 142 P. 1084; City of Los Angeles v. Klinker, 219 Cal. 198, 25 P. (2d) 826.

When these rules are applied to the admitted facts, the conclusion is inescapable that the organ became a fixture. It may be conceded that it was not fastened to the building by any substantial means, but this fact is of slight importance. Annexation to the realty does not require an actual attachment, and conversely attachment is not annexation in a legal sense unless it is permanent. Civ.Code, § 660. Heavy bodies held in place upon land by gravity are considered as fixtures where from the nature of their use and the circumstances of their installation an intention is manifest to use them permanently with the land. Excavations upon the land or extraordinary construction of buildings to fit them for the particular use intended are commonly recognized as furnishing evidence of permanent annexation. 26 Cor.Jur. pp. 660–663.

The first question here is whether the organ was placed in the building for permanent use with the building, and this is primarily a question of the intention of the owner as disclosed by the admitted facts. Inferentially the court has found from the undisputed circumstances that the organ was installed temporarily and not permanently and in this we find ourselves unable to agree with the learned trial judge. It was in evidence and not disputed that the residence was designed for a pipe organ, including an excavation of a room under the library floor 13 x 15 feet in size. The 48–foot blower tube between the motors and the organ chamber which extended through and was sealed into concrete walls of the foundation, and a large shaft between the chamber and the living room, and the openings for the same and for the wire cable, were permanent. The units were very heavy and required no fastenings to keep them firmly in place. Everything was done which was necessary for a permanent installation. Nothing suggests a temporary one. The fact that the permanently affixed blower tube was threaded into the unit at one end and connected by a flexible rubber coupling at the other is of slight moment as tending to prove or disprove that the organ was a fixture. The building would have been incomplete without the organ, and those features of the building specially designed to accommodate the organ would have been useless without it. Assuming, although it is not to be conceded, that the organ could have been removed without substantial damage to the building, this would be a mere evidentiary and not a conclusive fact. Fratt v. Whittier, 58 Cal. 126, 41 Am.Rep. 251. If it was placed in the building temporarily, when and why and under what circumstances was it to be removed? Without an answer to these questions we can find no support for the theory that there was any intention that it should not be permanent addition to the building. The evidence furnishes no answer and we are unable to supply one. In this connection, the fact that the seller reserved title is not material; it will be presumed that the buyer intended to fulfill his contract and that the seller expected him to do so.

We are cited to numerous cases in which the question has arisen between a conditional vendor of an organ and a lessor of the land, where the organ has been installed by a lessee. These cases are of little assistance. The rules of trade fixtures are not applicable here. Neither do we have the potent evidence upon the question of intention furnished by the temporary nature of the lessee's occupancy of the real property, nor the presumption which would naturally arise, in the absence of a special contract, that the lessee did not purchase the organ to enhance the value of the land. The annotator in 62 A.L.R. at page 368 states that the courts have generally found pipe organs to be fixtures where they have been installed in buildings by the owners thereof, and have reached a contrary conclusion where they have been installed by lessees for purposes of trade. Rogers v. Crow, 40 Mo. 91, 93 Am.Dec. 299; Denvir v. Crowe, 321 Mo. 212, 9 S.W.(2d) 957.

Here we have an owner installing a pipe organ in his permanent home at large expense. That the installation was not experimental or temporary is evidenced by the fact that the residence and the organ were specially constructed to carry out the plan. In the absence of evidence even suggestive of an intention contrary to that which is forced upon us by the admitted facts, we are unable to find an acceptable basis for the contention that the organ was not permanently added to the building.

As between plaintiff and Ferguson, the reservation of title in the former would control, even though the organ became a part of the realty. Civ.Code, § 1013; Dauch v. Ginsburg, 214 Cal. 540, 6 P.(2d) 952. But where personal property has been sold for use with realty on which it is placed, under circumstances which may result in its becoming a part of the realty, and it becomes converted into realty, a reservation of title in the vendor is ineffectual as against an innocent purchaser of the realty. Oakland Bank of Sav. v. California P. B. Co., 183 Cal. 295, 191 P. 524.

As said in Peninsula Burner, etc., Co. v. McCaw, 116 Cal.App. 569, 3 P.(2d) 40, 41: “The reason for the rule has been stated to be based on two grounds. The first is that the seller, voluntarily placing personal property in the possession and control of his vendee with knowledge that it would be affixed to the land if put to the use for which it is designed, is presumed to have agreed that it should be or might be converted into realty. The second reason is that where one of two innocent persons must suffer, he should bear the loss who caused the deceitful appearances. Oakland Bank of Savings v. California P. B. Co., 183 Cal. 295, 191 P. 524; 12 Cal. Jur. 568.”

In such cases the personal property, with the vendor's consent, has been brought under the operation of the laws for recording contracts affecting realty and for the protection of innocent purchasers, and the purchaser of the land, having no notice of the secret title, is entitled to conclude that the property affixed to the land is a part of the realty. Bell v. Mortgage Guarantee Co., 109 Cal.App. 203, 292 P. 660. The rule has been applied in numerous other cases. Dauch v. Ginsburg, supra; Patch v. Mortgage Guarantee Co., 126 Cal.App. 563, 14 P.(2d) 856; Hammel Radiator Corp. v. Mortgage Guarantee Co., 129 Cal.App. 468, 18 P.(2d) 993; Frick v. Frigidaire Corp., 119 Cal.App. 707, 7 P.(2d) 321; Byron Jackson Iron Works v. Hoge, 49 Cal.App. 700, 194 P. 45; 13 A.L.R. 448.

Where it is not clear whether personal property sold on conditional sales contract has been permanently attached to the realty, the doubt should be resolved in favor of an innocent purchaser. Such doubts are always resolved in favor of vendees as against vendors and in favor of mortgagees as against mortgagors. R. Barcroft & Sons Co. v. Cullen, 217 Cal. 708, 20 P.(2d) 665; Commercial Bank, etc., v. Pritchard, 126 Cal. 600, 59 P. 130. The rule should have even stronger application as between a conditional vendor and an innocent purchaser of the realty. Such is the effect of the decision in Hammond Lumber Co. v. Gordon, 84 Cal.App. 701, 258 P. 612, in which it was held that as between such parties the question is not so much the actual intent that property attached to realty should or should not become a fixture, as the apparent intent as it would reasonably appear to a purchaser of the realty.

It is not questioned that at the time defendants purchased the residence the organ was and for a long time had been completely installed and in usable condition. The defendants were justified in believing it to be a part of the building, and having purchased without knowledge or notice of the reservation of title their rights must prevail over those of plaintiff.

By the evidentiary facts found by the court, which are fully supported by uncontradicted evidence, and under the rules we have stated, the pipe organ was shown to be a fixture, title to which was vested at the time of trial in defendants. The case has been fully tried and should be finally disposed of upon this appeal. The judgment is reversed, and the trial court is directed to make a new and different finding of fact upon the evidence heretofore received, to the effect that the pipe organ became a fixture and a part of the realty, and a new conclusion of law to the effect that defendants became and are the owners of said pipe organ, and thereupon to enter a judgment in favor of the defendants.

I dissent. I do not believe it to be the function of the appellate court to disturb the judgment of the trial court in the determination of the question as to what is the justice of the case when, as in the instant case, that question is susceptible of honest differences of opinion, and when, according to my understanding but wherein I appear to differ with my colleagues, it is not a question of law but a question of mixed law and fact.

The trial judge is charged with the important duty of determining such issues. In the case at bar, it seems to me, the conclusion of the trial judge was just, and was supported by the law and the facts, and therefore should not be disturbed on appeal.

The fact that the residence was designed for a pipe organ is not necessarily conclusive of the question as to whether the particular pipe organ involved became a fixture. The fact that everything was done which was necessary for a permanent installation appears to me to be of little importance; such an installation was to be expected under the circumstances. With the conclusion in the prevailing opinion that nothing suggests a temporary installation, I cannot agree; on the contrary, the contract to my mind constitutes the very essence of what was in the minds of the parties on this subject, and is positive proof that the organ was installed conditionally. Nor can I agree with the prevailing opinion wherein it holds that the building would have been incomplete without the organ. The recess, or room, especially constructed to receive an organ, might have been incomplete without one, but it does not follow that the usefulness of the building as a dwelling was destroyed or even seriously affected, if indeed it was affected at all, by its absence; in fact, the evidence reveals that the building was complete in every other respect and was occupied before the organ was installed, and, although the organ has been removed, is still occupied.

The inquiry in the prevailing opinion, namely, “If it [the organ] was placed in the building temporarily, when and why and under what circumstances was it to be removed,” and the reply of my learned associates that “the evidence furnishes no answer and we are unable to supply one,” presents a pertinent inquiry but overlooks the obvious answer, of which this very lawsuit is the result.

With the proposition stated in the prevailing opinion that “whether the organ was placed in the building for permanent use with the building, * * * is primarily a question of the intention of the owner,” I also do not agree. According to my understanding of the law, as applied to the case at bar, it would be a question of the intention of both seller and buyer. It may have been the buyer's expectation that the organ would become permanent, but that such was his intention without reservation is difficult to reconcile with the execution of a conditional sales contract, a contract reserving title in the seller until receipt of the final installment payment on the purchase price. Ultimate permanency depended upon the fulfillment of a condition of which the purchaser had knowledge; how, then, could the purchaser have intended that the organ should, ipso facto, upon its installation, become permanent. Moreover, the sales contract further provided that if the organ was not satisfactory, and the seller did not make the same satisfactory within a reasonable time after a written notification, the seller agreed to remove the organ and release the second party from all obligation. By no process of reasoning could the conclusion be reached that the pipe organ was installed conditionally and permanently at the same time.

Referring to the subject of the reservation of title in the seller, the prevailing opinion declares: “In this connection, the fact that the seller reserved title is not material; it will be presumed that the buyer intended to fulfill his contract and that the seller expected him to do so.” The fact that the seller reserved title, in my opinion, equals, if indeed it does not exceed in importance, all other facts and circumstances in the case, and I cannot, therefore, share the opinion that it is “not material.” Nor does it appear to me that there is any justification for the presumption “that the buyer intended to fulfill his contract and that the seller expected him to do so.” It was expected that the contract would be fulfilled, but nevertheless the seller took the precaution to protect itself by means of an agreement, the form and substance of which the courts have consistently and universally respected and enforced.

Referring to the organ, the prevailing opinion declares that, “It may be conceded that it was not fastened to the building by any substantial means,” but concludes that “this fact is of slight importance.” It is my understanding of the law of fixtures that the manner of annexation is always important. If this is so, then the fact that it was not fastened to the building by any substantial means becomes doubly important, because such fact is in perfect harmony with the terms of the agreement under which the organ was installed, and which agreement, as elsewhere stated, provides for the performance of certain conditions, the failure of which could result in the removal of the organ by either the buyer or the seller.

The fact that the organ was not connected to the dwelling in such manner that it became embraced by the building as an appurtenance thereof, under the circumstances, is of genuine importance, even though other substantial evidence of the intention of the parties is not lacking, and this, together with the conditional sales contract executed by the parties, was sufficient evidence in itself to support the finding of the trial court to the effect that the installation of the pipe organ was temporary.

The doctrine of innocent purchaser referred to in the prevailing opinion is of no assistance whatever in determining whether or not the pipe organ is a fixture, and is therefore entirely beside that issue. The innocent purchaser doctrine becomes important only when the object or article in question is, or has become, a fixture. The rule is stated in Oakland Bank of Savings v. California Pressed Brick Company, 183 Cal. 295, 191 P. 524, cited in the prevailing opinion. It is as follows: “The owner of personal property has the right to make an agreement to sell the same and deliver possession thereof to the buyer, upon the condition that the title thereto shall nevertheless remain in the seller until the price agreed on has been fully paid, and the title so withheld by the owner will until full payment, be superior to that of a subsequent mortgage or purchase of such personal property from the buyer, even if such subsequent mortgage or purchase was made without knowledge or notice of the reservation of title and paid full value for the property. * * * The above rule prevails so long as the property retains its character as personalty and the cases cited state the rule applicable in such case. The case at bar raises the question what the rule is or should be when the personal property which is the subject of the conditional sale has become affixed to the land of the buyer, so as to become a part of the realty, after its delivery to him, and the buyer has thereafter made a mortgage or trust deed to one who has no knowledge or notice that such title remains in the seller on condition, and money has been loaned on the faith of such security, also without knowledge of the secret title.” The same decision further declares: “The exact question has often arisen in other states, and the overwhelming weight of authority is to the effect that the title of the seller of personal property of this character, which title is to be held by him until the price thereof is paid, and which is afterwards affixed to land of the vendee, so as to become part of the realty, is subject to the lien of a subsequent mortgagee in good faith without notice of the reserved title.” (Italics added.)

The decisive question, therefore, in the case at bar is: Was the pipe organ affixed to the land so as to become a part of the realty? If it was, the appellants herein should prevail, for their claim as innocent purchaser then is controlling. If it was not, the respondent should prevail, for then appellants' claim as innocent purchaser is unavailing.

In my opinion the pipe organ did not become a part of the structure in which it was placed, and, for the other reasons hereinbefore stated, did not become a fixture. A pipe organ, installed as the evidence shows the one in the instant case to have been installed, is but a part of the household furnishings and, as I view the law and the facts, is no more a fixture than the gas range installed in a recess, especially designed to receive it, in the kitchen. Moreover, it should be emphasized that as to the respondent, the sale of the organ was the dominant transaction; the purchase price has not been paid in full and respondent now stands to suffer a total loss of the balance due. As to the appellants, on the other hand, the purchase of the dwelling was the dominant transaction and the pipe organ was definitely incidental, indeed, in a degree that is clearly evident from the fact that appellants removed the organ shortly after they occupied the premises.

It does not, therefore, appear to me to be just to apply the doctrine quoted in the prevailing opinion, namely, “where one of two innocent persons must suffer, he should bear the loss who caused the deceitful appearances.” There is nothing in the evidence that even suggests that appellants bought the residence because it had a pipe organ; on the contrary, it appears that the property was purchased in spite of that fact.

The sale of the pipe organ was typical and characteristic of such transactions in business and industry, and it should be noted in this connection that the law makes no provision for the recording of conditional sales contracts of the kind and character herein involved, that operates as notice to the world of the existence of such contracts. The holding, therefore, under the circumstances presented herein, that the pipe organ is a fixture, in effect renders a contract invalid and worthless that was executed in good faith and was valid in every respect. Such a rule suggests consequences that are by no means limited.

In my opinion the findings of the trial court were abundantly supported by the evidence, and the judgment should be affirmed.

SHINN, Justice pro tem.

I concur: HOUSER, P. J.

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