Kruse Metals Manufacturing Co. v. Utility Trailer Manufacturing Co.

A hopper which was included in plaintiff’s claim was a separate movable work stand for use in sandblasting and it was not connected with the floor or anything else.

The claim of an improvement to respondent’s property rests upon the manner of construction of the bag house. It had been purchased by plaintiff from the manufacturer and when installed rested upon a frame with four legs that were bolted to the cement floor of the shed. On the day of its installation Commercial Heat Treating Company gave to “E B & Associates” a chattel mortgage for $1,362.94 upon the bag house, blower and motor and controls,—a clear admission on its part of their continued status as personalty. These things remained on the Commercial area only from June until October when the chattel mortgage was foreclosed and the bag house, blower, etc. removed from the premises.

The court’s memorandum says that the installation of the bag house did not improve or add value to defendant’s property nor did its removal injure the same; the evidence is not to the contrary. The bolts were easily removed and a hole in the roof which was made so that the bag house could extend above it was closed by placing a standard size corrugated tin sheet over the opening through expenditure of one hour of a workman’s time. The shed has since that time been used for storage by defendant. The trial judge said in his memorandum opinion: “The machinery and equipment . . . constitute machinery and equipment used in manufacture which could be and were removed without injury to the premises. We had to search for 15 or 20 minutes to find the location of the former bolts in the cement floor. (Portions of the floor were covered with dirt a fraction of an inch thick.) The hole in the tin roof could be located, although there was some debate as to its whereabouts. The hole was readily patched and was no worse than other portions of the building, the walls and roof of which were in a state of disrepair and decomposition.” Also: “The machinery and equipment could have been set up in an open field. As a matter of fact the two bag houses which the Court observed on adjacent property were erected and operating outside of the adjacent buildings.” These seem to have been bag houses which respondent has on its foundry property, all located outside of buildings and moved from time to time.

The question of whether a chattel which has been attached to realty becomes a fixture turns upon method of

to be determined upon the evidence of that case. [Citations.] As a general rule, the intent of the parties is a controlling criterion in ascertaining whether property is permanently attached to the land or retains its identity as personalty; the character of the annexation to the land or other realty and the use made of the property are important considerations, but in most eases are subsidiarily employed for the purpose of testing the intention of the parties.” M. P. Moller, Inc. v. Wilson, 8 Cal.2d 31 , 37 [ 63 P.2d 818 ] : “We find a growing tendency in the decisions to modify the common-law test of technical affixation to the structure. In one direction the modification as noted in the text cited and as illustrated by the decision in City of Los Angeles v. Klinker, 219 Cal. 198 [ 25 P.2d 826 , 90 A.L.R. 148 ], tends to include as fixtures articles such as machinery whose permanent annexation is not manifested by the use of bolts, screws and the like, but which are of such weight and nature that the mere retention in place by gravity is sufficient to give them the character of permanency and therefore affixation to the realty. In another direction, however, there is a tendency to hold that even as against a subsequent purchaser without notice articles which technically would became fixtures within the common-law rule are not such where their nature and the use for which they are intended do not indicate a permanent connection with the realty, and they can be removed without serious injury to themselves or to the realty. [Citations.] This divergence, however, is apparent merely and is the result of the application of what has come to be recognized as the test of whether an article becomes a fixture when physical annexation fails as a sufficient and adequate test. This court has recognized the test of intention to make the article a permanent addition to the realty as manifested by the physical facts, and has accepted the character of the annexation and the use for which the article is designed as subsidiary elements employed for the purpose of testing the intention of permanency.” See also Grupp v. Margolis, 153 Cal.App.2d 500 , 503 [ 314 P.2d 820 ].

Daniger v. Hunter, 114 Cal.App.2d 796 [ 251 P.2d 353 ], an action to foreclose a mechanic’s lien, involved sink units consisting of a gas stove, a sink and a refrigerator, the three fitting together as one unit. “The stove was not connected to the sink and was not connected to the building in any manner except by a gas pipe connection. The sink was connected to the building by the usual plumbing connections

and the refrigerator by an electric ping. The unit was so constructed that the drainboard of the sink extended over the refrigerator and was supported by it.” (P. 797.) It was held that these sink units were chattels and not fixtures, the court saying, at page 797: “The principal question here involved is whether the sink units were fixtures. In Andrews v. First Realty Corp., 6 Cal.App.2d 407 [ 44 P.2d 628 ], it was held that refrigerator equipment in an apartment house was not a fixture where it could be removed without damage and the coil was affixed to the refrigerator box by four removable bolts.” At page 798: “While ordinarily a sink is ‘built in’ and made a part of the building, in the instant ease it is part of a unit which is so constructed as to be easily disconnected and removed without damage to the realty or the article itself. Under such circumstances we conclude that these units were chattels and not fixtures.”

The relation of the parties to the transaction plays a large part in determining whether a chattel when attached to realty becomes a fixture (22 Cal.Jur.2d, § 9, p. 268), and the rule applicable to vendor and purchaser or mortgagor.and mortgagee applies to mechanics liens, not the rule governing trade fixtures. In such.a ease the law and facts will be liberally construed in favor of the existence of a fixture, an interest in the realty, as the result of affixation of personalty. R. Barcroft & Sons Co. v. Cullen, 217 Cal. 708 , 714 [ 20 P.2d 665 ], establishes this proposition. It is there said: “The next question to be determined is what test is to be applied in determining whether an article has become annexed to the realty, in a controversy between a mechanic’s lien claimant and the conditional vendor of the article. The uniform weight of authority in other jurisdictions is to the effect that in determining whether or not a disputed item, attached to real estate, is personalty or realty, the rules governing the subject between vendor-vendee, or mortgagor-mortgagee, are applicable and not those which govern the subject between landlord and tenant. (Security Stove & Mfg. Co. v. Stevens, supra [ 222 Mo.App. 1029 ( 9 S.W.2d 808 ) ]; Fehr Construction Co. v. Postl System of Health Building, 288 Ill. 634 [ 124 N.E. 315 ]; note, Ann. Cas. 1912B, p. 21, and cases cited.) . The reasoning in the above cases seems to embody a fair and just rule and one that is in accord with the general rules applicable to mechanics’ liens.” See also Bell v. Bank of Perris, 52 Cal.App.2d 66 , 73 [ 125 P.2d 829 ].

The question of fixture or chattel remains one of fact, as shown by the above authorities. And the question of intent in affixing the chattel to the realty does not disappear under the Bar croft rule. However, it becomes one of objective intent rather than subjective. Hammond Lumber Co. v. Gordon, 84 Cal.App. 701 , 705 [ 258 P. 612 ] : “Of course it is true, as said in Gosliner v. Briones, 187 Cal. 557 [ 204 P. 19 ], that generally the intent of the parties is a controlling criterion in ascertaining whether property is permanently attached to the land or retains its identity as personalty. This applies between the immediate parties to a transaction, such as mortgagor and mortgagee, vendor and vendee, etc., and their successors in interest. But where, as here, the rights of a person unconnected with that transaction are concerned, and who is without actual or constructive notice concerning the intent of the parties responsible for annexing the personalty to the realty, the question is not so much the intent of such parties as the apparent intent as it would reasonably appear to such third person.” (Emphasis added.)

The intent of installing the bag house and blower must have been apparent to plaintiff as it was to the trial judge when viewing the premises. Equally adaptable to use outdoors as inside a building, they were placed in a dilapidated shed in one corner of a large foundry plant and were attached in such manner as to be easily removed without injury to the property. This was done at the instance of a person other than the owner, one whose occupancy bore the earmarks of brief tenure. Commercial gave objective proof of its intent when it covered these appliances with a chattel mortgage on the day of their installation. Appellant has not successfully challenged the court’s formal finding of truth of the following averment in the answer to the complaint: “ That any purported improvements or work by plaintiff during the period referred to in plaintiff’s complaint were not an improvement to the real property, but that the same were only work upon moveable personal property, no part of which ever became or is now a part of the real property.”

The judgment is affirmed.

Fox, P. J., and Herndon, 3,, concurred.