Anderson v. Perpetual Building & Loan Ass'n

⁹⁶ Johnson, J., delivered the opinion of the Court. This is an appeal from a decree passed by the Circuit Court for Baltimore County, in equity, sustaining exceptions filed by the Perpetual Building & Loan Association of Granite, Baltimore County, to the sale of certain machinery made and reported to James C. L. Anderson, assignee, appellant herein, upon the ground that the articles referred to in the report of sale were fixtures and subject to the lien of exceptant’s prior mortgage. The mortgage under which said articles were sold was executed by Oliver C. Putney Granite Corporation to the Baltimore County Bank on June 20th, 1930, to secure the repayment of $30,000. It was a lien on 3.22 acres of land and improvements located at Carroll Station, in Baltimore County.

In addition to the land and improvements, there are also described in the mortgage certain units of machinery. Shortly before the sale on April 30th, 1936, the mortgage was assigned by Warren F. Sterling, receiver of the bank, to appellant, for the purpose of foreclosure and collection; the amount due thereon being approximately $24,000. Appellant’s report shows that, after advertising the property described in the mortgage, as required by the terms of the latter, he attempted, on May 5th, 1936, to sell it at public auction, but received no offer for the real estate which he considered adequate. He did, however, undertake to sell the machinery and equipment as a Whole for $3,535.

To this sale, exceptions were filed by appellee, alleging: (a) That it was the holder of a first mortgage upon the premises, and by virtue thereof had a first lien upon the machinery and equipment referred to in the report of sale; (b) that the chattels referred to in the report were a part of the realty and therefore covered by its first mortgage; (c) that said articles were affixed to the realty and could not be removed without destroying the same, and their sale as reported, not being a sale of the reality, should be set aside. It is admitted that appellee is the holder, by virtue of an assignment from the Second National Bank of Towson on February 6th, 1929, of a first $10,000 mortgage, dated ⁹⁷ February 10th, 1925, upon the tract of real estate with improvements hereinbefore described, but in which mortgage no specific reference is made to the machinery and equipment sold by appellant. Therefore, the correctness of the decree appealed from must be determined from a consideration of (a) the actual or constructive annexation of the machinery to the realty, (b) its adaptation to the use of that part of the realty with which it is connected, and (c) the intention of the party in making such annexation to make the article a permanent accession to the freehold, which intention must be ascertained and inferred from the nature of the annexed articles, the situation of the party who annexed them, and the manner and extent of their annexation; but in determining this question of intention, the acts and declarations of a grantor made after execution of the deed cannot be received to invalidate it. Dudley v. Hurst, 67 Md. 44, 53 , 8 A. 901, 903 ; Dudley v. Hurst, supra; Warren Mfg.

Co. v. Baltimore, 119 Md. 188 , 86 A. 502 ; Heating & Plumbing Finance Corp. v. Glyndon Permanent Building Assn., 167 Md. 222 , 173 A. 198 ; 11 R. C. L., Fixtures, p. 1085; 26 C. J. pp. 663 to 670, inc.; 2 Devlin on Real Estate, (3rd Ed.) secs. 1208, 1209. We quote from the last-cited authority as follows: “Machinery in Mills—Upon the question whether machinery in mills will pass by a deed of the premises, there is perhaps an irreconcilable conflict in the authorities. The law may be stated with a reasonable degree of certainty up to a certain point, and then, beyond that, all becomes confusion. In accordance wiith the general rule, that, as between grantor and grantee, the firm and substantial annexation to the freehold by the owner of articles intended for the use of the realty and requisite to its enjoyment, constitutes them fixtures, which pass by a conveyance of the land, it is generally agreed that machinery which is permanently attached to the realty, such as boilers, steam-engines, and gearing, are parcels of the realty, and will pass to the purchaser by a deed of the land.

This question frequently arises be ⁹⁸ tween mortgagor and mortgagee. In these cases, as we have seen, the same rules apply as would if the controversy were between vendor and vendee. “Removal without injury.—A distinction is sometimes made between the fixtures placed in a mill which are indispensable to its operation as such, and those which are used temporarily or-for particular classes of work. The former may pass by a conveyance or mortgage where the latter would not. * * *” In accordance with the views last cited, this court has held that while, as between landlord and tenant, the rule has been gradually relaxed and articles affixed to the premises by the tenant for purposes of trade, domestic convenience, or ornament may be removed by him, if such removal can be accomplished without serious injury to the realty (Homeseekers’ Realty Co. v. Silent Automatic Sales Corp., 163 Md. 541 , 163 A. 841, 843 ), but Judge Parke, there speaking for the court, was careful to add: “The law, however, is not the same when applied to other relations; such as, for example, vendor and vendee, mortgagor and mortgagee. Bankers’ & Merchants’