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 — Candy machinery and equipment in candy manufacturing plant — Rights of conditional vendor and of purchaser under mortgage.
In a proceeding to determine title to 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. 259, March T., 1934, by Commonwealth Trust Company, from order of C. P. Allegheny Co., Oct. T., 1933, No. 655, in case of Central Lithograph Company v. Eatmor Chocolate Company. Order of court below reversed.
Petition and rule for reclamation. Before ELDER MARSHALL, J.
The opinion of the Supreme Court states the facts.
Rule made absolute. Commonwealth Trust Company appealed.
Error assigned, inter alia, was order, quoting record.
Albert C. Hirsch, with him John M. Freeman, Ralph H. Demmler and Watson Freeman, for appellant.
George Walter Smith, with him Campbell, Wick, Houck Thomas, for appellee.
This case is similar to the preceding one (Central Lithograph Co. v. Eatmor Chocolate Co., No. 1). The Minneapolis Securities Corporation filed a reclamation petition for a machine known as a Huhn Dryer, which had been installed in the plant of the Eatmor Chocolate Company under a conditional sale agreement. The holder of the mortgage had no knowledge or notice of the installation of the machine or of the conditional sale agreement until after the filing of the petition to reclaim. The machine has been continuously used in the plant ever since its installation. It manufactures 25,000 pounds of candy per day, or 33 1/3% of the total output. The manufacture of candy cannot be carried on without this machine. It is connected with the steam and electrical systems of the plant and is fastened on the floor and on the ceiling with three-inch bolts. If the machine were removed, the building structure could be repaired for about $75. The court below by its order adjudged the machine to belong to the petitioner and permitted its removal. The ruling made in the preceding case is applicable here.
The order of the court below is reversed at appellee's cost, and the machine in question is awarded to the Commonwealth Trust Company.