Dutro v. Kennedy

Liddell, J. In order to correctly understand the points at issue in this case it is necessary to state at some length the facts involved. On the 28th of July, 1879, one Seheurman and George Kennedy were the owners in indivisión of a certain mining claim situated in Lewis and Clarke County, and designated in the official survey thereof as lot “ No. 54 C,” in sections 9 and 16, in township 9 north, range 4 west, commonly known as claim No. 5 east from discovery claim on Park lode. Kennedy’s interest in the claim was standing in the name of R. S. Hale, either to protect it from the pursuit of his creditors, or to secure the payment of a certain sum then due to Hale. At the same time we find that Kennedy’s wife, who was a sole trader, also owned three mining claims in her own right, and they were all engaged in mining in Lewis and Clarke County. For the purpose of conducting the business, Kennedy and wife, by power of attorney, authorized Seheurman to borrow money either on sale or mortgage of the property owned by either of them at the date of the instrument. Under this power of attorney Seheurman borrowed $3,500 from one Branch on the 28th of July, 1879, and executed a note therefor, signed by himself, and with the names of Mr. and Mrs. Kennedy. The money so obtained was used by George Kennedy in paying off his creditor, Hale, who on the 1st of August, 1879, at the former’s request, made a title of Kennedy’s undivided half interest in the claim (No. 5) to Seheurman; and on the 12th of August, 1879, the latter executed a mortgage on that lot and the property of Mrs. Kennedy for the purpose of securing the note which Branch held for $3,500. The mortgage was intrusted to Seheurman for registry in Lewis and Clarke County, and he in turn allowed Kennedy to [105] obtain possession of the instrument, by whom it was destroyed. Branch instituted suit against Scheurman, Kennedy, and his wife, but during the pendency of the litigation transferred his interests therein to Dutro, the present plaintiff, who successfully prosecuted the suit to a final judgment. Now, the act of mortgage being destroyed, it became necessary to establish the contents, and upon what property it operated; and to that end the trial judge found that “the mortgage was executed in the usual form, upon the whole of claim No. 5, and embraced and covered the tools and machinery thereon, consisting of a steam-engine for operating, and the hoisting works, pumps, etc., and also lots 1, 2, and 3, belonging to Mrs. Kennedy.” After the execution of this mortgage the defendants placed a lot of new machinery upon claim No. 5, consisting of a boiler, engine, pump, drum, hoisting works, and connecting pipes. The boiler was set in brick and stone work, and the engine was placed upon a foundation of masonry and timber let into the ground about six feet, and securely fastened thereto by sixteen iron bolts, which passed through the foundation. The pump does not appear to have ever been securely fastened to the realty, but the rest of the machinery was all in place, and used for the purpose of working the mine. This machinery was on the mine when the decree was rendered foreclosing the mortgage, and it was also on the property and in place when the mine was sold at sheriff’s sale to the plaintiff for $5,502.03 on the 12th of August, 1885, and at that time no objection was made to the sale of the machinery, either because it was not specifically mentioned in the mortgage, or for the reason that it was not a fixture. Matters remained in this condition until a short time before the delays expired within which the right of redemption might have been exercised, when the defendant, George Kennedy, caused the masonry around the boilers to be torn down, with a view to removing the same, and actually removed the engine, first cutting the sixteen bolts by which it was moored to its foundation, taking also two joints of steam-pipe and other fittings connected with the engine, the drums, the pump, and a lot of wire cable used for hoisting. [106] The present suit of claim and delivery was instituted to recover this machinery, and damages for unlawfully withholding the same, and resulted in a judgment for the defendants. From an order denying a motion for a new trial, as well as from the judgment, the plaintiff prosecutes the present appeal. Several errors of law are assigned in the motion, but, under the view which we have taken of the case, it will only be necessary to examine one of them. The case was tried without a jury, and the judge found that the machinery, except the pump, were fixtures, and could not be removed without injury to the realty; that it would cost $500 to replace the same; that it was all put upon the claim after the mortgage; and that the pump was worth $150; finally, that this machinery was not specified in the original decree of foreclosure, from which he concludes that the title thereto did not pass by the foreclosure sale, and the sheriff’s deed made in pursuance thereof. We agree entirely with the judge a quo in his findings, but his conclusions of law are erroneous, and the order and judgment appealed from must be reversed. The trial judge misconstrued the scope and effect of the decree in the case of Dutro v. Scheurman. Under the pleadings in that case it devolved upon the plaintiff to show the power of attorney, the execution of the note, and its consideration, the mortgage, its destruction, its terms, and the property upon which it was imposed; and when this was done the trial judge correctly found the property upon which it was intended to operate, to wit, the mining claim No. 5, and the machinery upon it at the date of its execution. And when, after his conclusions of law, the judge decreed that the plaintiff “ was entitled, by virtue of such mortgage, to a lien upon the mining claim, and all the machinery and buildings which were upon and attached to the claim on the 12th of August, 1879,” he merely reiterated the terms of the mortgage as it originally existed, and ordered the sale of the real property to satisfy the debt, and mortgage. We have carefully searched the pleadings in that case, and can find no issue raised as to the right of the mortgage creditor to sell such machinery and buildings as may have been placed upon the real estate after the execution of the mortgage, in such a way as to become fixtures, and by designation a part of the real estate. Since the decree was [107] silent in tliis respect, and no such issue having been made, the right to sell such fixtures must be governed by the general rule which applies between mortgagor and mortgagee under such circumstances. Had the judge found and so decreed otherwise, the findings would have been disregarded as being outside of the issues. (Marks v. Sayward, 50 Cal. 57; Gregory v. Nelson, 41 Cal. 279.) In the foreclosure of a mortgage it is the undoubted right of the creditor, not only to sell such real property and fixtures as may be mentioned in the act, but also any improvements and persona] property permanently attached to the realty, in such a way as to make it a fixture, and not excepted by the terms of the act. (Sands v. Pfeiffer, 10 Cal. 259; Merritt v. Judd, 14 Cal. 60; Union Water Co. v. Murphy Fluming Co. 22 Cal. 621; 2 Kent Com. 346; 2 Hilliard on Mortgages, p. 382, § 11.) Whenever the mortgagor endeavors to remove the fixtures or improvements upon mortgaged property, he may be enjoined, or the creditor may have his choice of an action for damages, or one of claim and delivery, after he has become the purchaser of the property at sheriff’s sale, as in the present instance. Our conclusion is that the plaintiff was entitled to recover the machinery or its value, except the pump, which does not appear from the evidence ever to have been attached to the freehold in such a way as to enable us to say that it was a fixture. Had the plaintiff framed his complaint properly, he would undoubtedly have been entitled to a judgment for $500 on account of damages; for that is the amount proven to have been necessarily expended in replacing the machinery at the mine. But, upon examining his complaint, the demand for damages is for unlawfully withholding and detaining the goods, which is nothing more than a demand to be paid for the use of the property of which he has been deprived. No evidence was adduced under this demand, but the judge found that the cost of replacing the machinery was $500. Any judgment for damages would therefore be outside of the issues, unless the proof supported the allegations in the complaint. The successful plaintiff in a claim and delivery suit, if in possession of the property, is entitled to a decree fixing his title, and to a judgment for such damages as he may have been occasioned by the acts of the defendant. But [108] where tbe latter is in possession the plaintiff is entitled to a judgment for tbe specific property, and, in default of its delivery, then to a moneyed judgment for the value of such machinery as it stood upon the mine, and not when severed from the realty. (Rhoda v. Alameda Co. 58 Cal. 357; Whitbeck v. N. Y. Cent. R. R.. Co. 36 Barb. 644.) It is therefore ordered that the order and judgment appealed from be reversed, and the cause remanded for a new trial, respondents paying costs of this appeal. Blake, C. J., and Bach, J., concur.