Summary
regarding removal of refrigeration machinery used to facilitate manufacture of all of the company's products
Summary of this case from In re Barto Technical Services, Inc.Opinion
October 4, 1934.
November 26, 1934.
Fixtures — Chattels in manufacturing plant — Permanent installation — Necessity for functioning of complete plant — Mortgage — Lien of — Machinery and equipment installed after execution of mortgage — Removability without injury to building alone — Effect of — Refrigerating machinery and equipment in refrigerating manufacturing plant — Rights of conditional vendor and of purchaser under mortgage.
In a proceeding to determine title to refrigerating machinery as among the holder of a mortgage on a candy manufacturing plant and purchaser at the sale under such mortgage, the receivers of the mortgagor and owner of the plant, and the conditional vendor of the machinery, installed in the plant under a conditional sales contract entered into after execution of the mortgage and without notice to or knowledge of the mortgagee, for permanent use and necessary for the functioning of the plant as a complete plant, the machinery was held to be a part of the freehold, and as such subject to the lien of the mortgage, without right of severance by the conditional vendor, though removable with only slight injury to the building alone.
Argued October 4, 1934.
Before FRAZER, C. J., SIMPSON, KEPHART, SCHAFFER, MAXEY, DREW and LINN, JJ.
Appeal, No. 275, March T., 1934, by The Ball Ice Machine Company, from order of C. P. Allegheny Co., Oct. T., 1933, No. 655, in case of Central Lithograph Company v. Eatmor Chocolate Company. Order affirmed.
Petition and rule for reclamation. Before ELDER MARSHALL, J.
The opinion of the Supreme Court states the facts.
Rule discharged. Petitioner appealed.
Error assigned, inter alia, was order, quoting record.
Stephen Stone, of Stone McCandless, with him George F. Hall, for appellant. Albert C. Hirsch, with him John M. Freeman, Ralph H. Demmler and Watson Freeman, for appellee.
This proceeding grows out of the same sheriff's sale as the preceding cases (Pennsylvania Chocolate Co., to use of Commonwealth Trust Co., v. Eatmor Chocolate Co. and Central Lithograph Co. v. Eatmor Chocolate Co., Appeals of Commonwealth Trust Co.). Here, under a conditional sale agreement entered into subsequent to the date of the mortgage to the Commonwealth Trust Company, the Ball Ice Machine Company, appellant, sold to the Eatmor Chocolate Company certain refrigerating machinery and equipment consisting of a refrigerating machine with direct synchronous motor for driving the same, an ammonia condenser, and ammonia liquid receiver, a motor starter and motor general exciter, together with the necessary appurtenances. The mortgagee had no notice or knowledge of the reservation of title by the conditional vendor until after the sheriff's sale. Immediately after the purchase the machinery and equipment were installed in the chocolate company's plant. There had previously been a refrigerating system in the plant operated by steam. The engine connected with it had been in use for a period of eighteen years and, even prior to the time of the increase in capacity of the factory, it was insufficient to furnish the amount of refrigeration required by the plant.
To facilitate the manufacture of all the products of the company, the refrigerating machinery in question was installed. The Eatmor Company erected the foundations and supports and properly prepared the building for the reception of the new machinery. The old system of refrigeration was rearranged and the new refrigerating machinery and equipment installed in such a way that it all now constitutes one continuous system. The machinery is so arranged that the system may be operated by the old steam engine alone, or by the new electric motor alone, or by the use of both together. The plant cannot be operated to full capacity with either engine alone. The system is used generally in the chocolate manufacturing process. If the refrigerating machinery in question were removed, it would reduce the manufacturing capacity of the plant 50%, and would also injure the remaining portion of the refrigerating system and increase the cost of its operation. The machinery and equipment are quite heavy and occupy considerable space. Some of the machinery is bolted to concrete foundations and grouted in; some is otherwise attached to the foundations. The various parts are connected with the electrical power lines in the plant and all parts are connected by heavy iron pipes with the ammonia system which feeds the entire plant. The removal of the machinery and equipment might not cause great physical damage to the building as a building, but would result in material and irreparable injury to the plant as a manufacturing establishment. The court below determined that this machinery and equipment were so attached to the realty as not to be severable without material injury thereto and dismissed the appellant's reclamation petition. From such action we have this appeal.
The principal argument of appellant is that the court below decided against it on a mistaken idea as to the damage which would be done by the removal of the machinery. Appellant contends that the lower court estimated that the damage would amount to as much as $2,000, because that was the amount of a bond given by appellant to cover the damage, whereas in fact the damage to the building would be very much less.
We have stated in the preceding cases we do not regard as solely controlling the damage which would be done by the removal of the machinery as that suffered by the building alone, but the damage that would ensue to the plant as a plant. As to that, from our reading of the record there can be no question that it would result in most material damage, and, this being so, for the reasons stated in the preceding cases, the order of the court must be affirmed.
Wickes Bros. v. Island Park Assn., 229 Pa. 400; Ridgway Dynamo Engine Co. v. Werder, 287 Pa. 358; National Theatre Supply Co. v. Mishler, 312 Pa. 250; Moller, Inc., v. Mainker, 314 Pa. 314, while cases of conditional sales and a bailment lease in which we decided that the conditional vendor or lessor had the right to remove the property, are none of them cases of manufacturing establishments in which the removal of the property sold would impair the integrity of the plant.
Order affirmed at appellant's cost.