Knapp v. Jones

Upton, J. This was a bill in equity filed in the Circuit Court of La Salle County to foreclose a trust deed executed by Geo. L. Blanchard and his wife to Almeron K. Knapp, as trustee, dated July 30, 1885, and duly recorded in La Salle county. It was given to secure an indebtedness to Moble Jones, for the sum of $32,000. The property in the trust deed described was a large amount of real estate in La Salle county, together “ with the grain elevator and the leased ground upon which it was erected, owned by the grantor, and situate upon the right of way of the Illinois Central Bail way f at Lostant, in said county.” The grain elevator in the trust deed described was erected upon a portion of the right of way of the said railway company, pursuant to a lease by such company to said Blanchard, bearing date June 18, 1884; the demise was for a period of one year, and required the lessee, Blanchard, to erect thereon a grain elevator or warehouse, and to operate and conduct the same in the manner provided in said demise. Blanchard erected the grain elevator upon stone foundations set in the ground below the frost line, placed therein all requisite machinery and facilities for handling grain, which were intended to be permanent, as much so as stone and iron could be. On the expiration of the first term of one year the lease was twice thereafter extended in' writing, the last extension terminating July 1,1888. By the terms of the lease, the railway company had the right to terminate it at any time, upon giving sixty days’ notice, and the lessee, Blanchard, had the right at any time before the termination of "the lease, to remove all buildings by him erected on the leasehold premises. The lessee, Blanchard, continued to use, occupy and operate the elevator by the acquiescence if not the actual consent of the railway company, lessor, until August 23,1887, when possession thereof was taken by the creditors of Blanchard upon writs of attachment, which subsequently were merged into judgment, and the leasehold interest of Blanchard was thereunder sold to Andrew J. O’Connor, who subsequently sold and conveyed the same to appellant Knapp. Thereupon this bill was filed for the purpose stated, alleging the insolvency of Blanchard, and that the property in trust deed described was inadequate security, etc., and asking for a receiver, etc. After amendments to the original bill and making new parties thereto, the cause was heard in the court below, and a decree passed for appellee Noble Jones, therein finding that appellant Knapp’s title to the elevator derived under execution sales was subject to the lien of the trust deed, and directing a sale of the mortgage estate by the master, etc. The decree directed that one-lialf of the costs be paid by Doyle (the constable), and the balance by Knapp. From that decree this appeal is prosecuted. The principal question presented upon this record as stated by appellant’s counsel, is whether the elevator in question, built by Blanchard upon the right of way of the railroad company under a lease for one year (and subsequently renewed in writing for two years), with a provision therein that the lessor may terminate such lease at any time upon sixty days’ notice, and that the lessee may remove the buildings by him erected thereon, at any time before the lease expires, is personal property within the meaning of Chap. 95, R. S., title, Chattel Mortgages, so that at the expiration of two years from the date of the mortgage upon it, if possession is not taken by the mortgagee, it becomes subject to sale upon execution, free from the mortgage lien. The answer to this question must depend upon the legal classification to which property of the kind here in question is in law assigned, whether chattels real or chattels personal. That the leasehold in question and the right of the lessee therein, with buildings erected thereon under the lease, is a chattel, none will deny. If this elevator and leasehold of Blanchard is to be classified and regarded as a chattel real, as held by the court below, then there was no error in the trial court holding the lien of the trust deed paramount to the right of the purchaser thereof at execution sale upon subsequent judgments against the lessee, Blanchard. We think that question settled, at least in this State, and that the property in question is a “ chattel real,” and under our statute is classed as real estate. Bouvier Law Diet, title, Chattels Real; Blackstone’s Com., Vol. 2, 387; Kent’s Com., Vol. 2, 342; Washburn on Real Property, Vol. 1, Chap. 1, See. 17; Griffin v. Marine Co., 52 Ill. 130; Conklin v. Foster, 57 Ill. 105; Dobschuetz v. Halliday, 82 Ill. 373; Willoughby v. Lawrence, 116 Ill. 11; Kankakee Coal Co. v. Crane Bros. Mfg. Co., 28 Ill. App. 371. Chap. 30, R. S. 1874, Sec. 38, provides “that the term ‘ real estate ’ as used in that act, shall be construed as co-extensive in meaning with lands, tenements and hereditaments and as embracing ‘ chattels real,’ and Sec. 31 of the same chapter provides that deeds, mortgages and other instruments in writing relating to real estate, shall be deemed, from the time of being filed for record, notice to subsequent creditors and purchasers, although not acknowledged or proven according to law.” It is apparent, therefore, that by the express terms of the statute the elevator and leasehold interest of Blanchard was a “ chattel real,” and the deed of trust was valid as a real estate mortgage and the Circuit Court properly so held. The case of C. & A. R. R. Co. v. Goodwin, 111 Ill. 81, and Sword v. Low, 122 Ill. 487, cited by appellant’s counsel, we do not regard in point. The holding in this court being in appellee’s favor, the appointment of a receiver in the court below in no way concerns the appellant, and the costs were in the discretion of the chancellor in the trial court. Perceiving no error in the proceedings in the trial court or in the decree as rendered therein, the decree is affirmed. Decree affirmed.