Opinion
Submitted October 5, 1926
Decided November 16, 1926
Appeal from the Supreme Court, Appellate Division, Second Department.
Theodore Baumeister and David E. Goldfarb for appellants.
Bernard Breitbart for respondent.
The plaintiff had made two contracts in the autumn of the year 1921 with Petmaland Realty Co., Inc., whereby the plaintiff agreed to furnish and install electric wiring and electric fixtures upon real property belonging to Petmaland Realty Co., Inc. Each contract provided that "title to goods to vest in vendor until fully paid for in cash. If said property is retaken by vendor, sums paid thereon shall be deemed to have been paid for use, wear and tear." After the plaintiff had fully or substantially performed its contracts, and the defendant had failed to pay the agreed price of $560 which was due under the contracts, the plaintiff brought this action asking, among other things, that the court "adjudge and decree that the plaintiff has a valid and subsisting lien upon the real property above described for the sum of $560," and that "the said premises may be decreed to be sold according to law." There is no allegation in the complaint which would show that the plaintiff has a mechanic's lien upon the real property of the defendants or that the plaintiff has complied with the provisions of the Lien Law (Cons. Laws, chap. 33) in regard to the creation or enforcement of such liens. The complaint alleges, and after the trial the court found, "that the electric wiring and electrical fixtures so furnished by the plaintiff upon the real property above described, were attached and annexed to, and became part of the real property above described, and became part, parcel and fixture of the same, and that the same could not and cannot be detached from the said real property without substantial injury to the building." From the findings of fact made at the trial, the court drew the conclusion of law "that by the filing of the said conditional agreements and by the furnishing of the said electrical wiring and electrical fixtures, the plaintiff acquired and now has a good and valid lien upon the real property above described and against all the right, title and interest of the defendants."
The statutory provisions regulating "Contracts for the conditional sale of goods and chattels," now article 4 of the Personal Property Law (Cons. Laws, chap. 41), do not in terms or by fair intendment create any new rights in the vendor under a contract of conditional sale. The vendor's rights under the contract are defined by the terms of the contract itself, subject, however, to the provisions of the statute that "every such contract for the conditional sale of any goods and chattels attached, or to be attached, to a building, shall be void as against subsequent bona fide purchasers or incumbrancers of the premises on which said building stands, and as to them the sale shall be deemed absolute, unless, on or before the date of the delivery of such goods or chattels at such building, such contract shall have been duly and properly filed and indexed as directed in this article," etc. (Personal Property Law, section 62.) We need not now decide whether upon this appeal we may review the correctness of the so-called finding of fact, which has been unanimously affirmed, that "all the defendants except the defendant Petmaland Realty Co., Inc. * * * have or claim to have some interest or lien upon the premises above mentioned, which interest or lien has accrued subsequently and is subject, subordinate or secondary to the lien of the plaintiff herein." We assume for the purposes of this appeal that any right or title which under the contract of conditional sale was reserved by the vendor in the personal property furnished by the plaintiff and attached to the real property, may still be enforced, though defendants other than the vendee subsequently may have acquired an interest in the real property. Here the plaintiff is not claiming title to the personal property or seeking to enforce rights to it. It is claiming and has, by judgment of the courts below, been awarded a lien upon the real property to which the personal property has been attached. The vendor has not by contract stipulated for such lien and the statute has not created such lien in the real property.
Unquestionably if the personal property had not been attached to the real property in such manner that it became an integral part thereof, the plaintiff would still retain title to the personal property under the terms of the contract of sale, and would have the right to resume possession of it. The contract of conditional sale of personal property which is to be attached to real property evinces conclusively and as matter of law the intent of the parties that the property should remain personal property until it was paid for. This intent may control the result which would ordinarily flow from the manner in which the personal property is attached to the real property, and "the character of the article as personal property [may] be preserved not only as against the vendee but, also, in the absence of statutory provision, as against the mortgagee, owner and, under certain circumstances, the subsequent grantee of the real estate." ( Davis v. Bliss, 187 N.Y. 77. See, also, DeBevoise v. Maple Avenue Construction Co., 228 N.Y. 496; McCloskey v. Henderson, 231 N.Y. 130.) The opinions in these cases indicated a limitation to the general application of the rule, viz., that regardless of intent, personal property does not retain its character as personal property when attached to real property in such manner that the "property could not be removed without practically destroying it, or where it or part of it is essential to the support of that to which it is attached." ( DeBevoise v. Maple Avenue Construction Co., supra.) Except for such limitation, the plaintiff would still retain its title to the property, and could demand its return; and if its demand be refused, could sue for the conversion of its property. If such limitation applies to the circumstances of the present case the result will be that the plaintiff has lost its title to the personal property, just as any other owner of personal property loses title to his property when he attaches it to real property in such manner that as a matter of law it loses its character of personal property, regardless of the intent with which it was attached. The limitation upon the effect which may be given to the contract of conditional sale cannot result in the creation of a lien on, or interest in, the real property not created by grant, principle of common law, or statute. Here no lien on real property was created by grant. The contract of sale merely provided for retention of title. No lien on the real property exists under the common law, and no such lien is created by the statute. It follows that the judgments should be reversed and the complaint dismissed, with costs in all courts.
HISCOCK, Ch. J., CARDOZO, POUND, McLAUGHLIN, CRANE and ANDREWS, JJ., concur.
Judgments reversed, etc.