Union Terminal Co. v. Wilmar & Sioux Falls Railway Co.

Deemer, J. — 1 The. Sioux City Terminal Kailway & Warehouse* Company in the year 1889 leased its property to-the Sioux City & Northern Kailway Company for the period of 100 years, and in January of the year 1890 mortgaged the same to the Trust Company of North America. This mortgage also covered the lease of the Sioux City & Northern Company. In 1893 the latter company failed, and thereafter the terminal company also failed, and the property of each passed into the hands of receivers appointed by the federal court. In 1898 the receivers built the repair shop in question on the site of one that had previously, and during the same year, been destroyed by fire. The trial court was justified in finding that the original shop had been erected by the Sioux City & Northern Company after the mortgage to the trust company. In 1895 the trust company foreclosed its mortgage against the terminal com [395] pany, and, about one year after the present building was erected, there was a master’s, sale of the property under the foreclosure, at which the trust company became the purenaser. In 1900 the trust company conveyed the property purchased by it to the plaintiff, the Union Terminal Kailway Company; The defendant' purchased all the property and assets of the Sioux City & Northern Company from the receivers, so that the plaintiff stands in the shoes of the old terminal company, and the defendant in those of the Sioux City & Northern Company as lessee. The original repair shop was a large frame building on a brick foundation erected by the Sioux City & Northern Kailway Company to expedite its business. The receivers built the present one on the same site, probably from insurance money received by them on the old building — the policy having been taken out by the Northern Company — but it was always regarded by them as a Grade fixture. Shortly before the commencement of this suit, defendant was proceeding to remove part of the buildings and other improvements, including this repair shop, from the premises, and plaintiff brought this action to restrain it from so doing. A writ was issued as prayed, which was subsequently modified so as not to cover the repair shop. The appeal is from this modification order. 2 Plaintiff contends that the shop was a part of the property purchased by it from the trust company, while defendants say that it was erected by the Northern Company originally as a trade fixture, and when rebuilt by the receivers that it was not intended that it should become a part of the real estate, hut was erected and used by them as a trade fixture, and passed to the' defendants as assignees of the Northern Company’s lease and the transfer made by the receivers. As the'trial court was justified in finding that the receivers erected the building out of the funds received by them from the proceeds of the policy of insurance held by the Northern Company on this shop, or with [396] other funds belonging to the original lessees, and that it was erected as a trade fixture, its order modifying the injunction should be .sustained, unless it be for some of the matters to which we will now refer. 3 Plaintiff contends that defendant is estopped by conduct and by the record in the foreclosure proceedings from claiming the property. This claim is without merit. Defendant and its grantors and assignors were at all times in possession of the property in question, and claiming a right thereto, as a trade fixture. The mere fact that plaintiff became the purchaser of the real estate- on which the shop was situated, is not sufficient to support the plea of estoppel, for defendants or their assignors were at all times in possession of the premises, claiming the repair shop as a trade fixture. The building was erected after the decree of foreclosure was rendered, but before the master’s sale; but it is the dacree and not the sale, which operates as the estoppel. Hence, although the Northern Company was made a party to the foreclosure, that decree did not and could not adjudicate the question as to the ownership of property erected after the decree was rendered. 4 The next point made by plaintiff is that the original lease was„forfeited, and that, as the lessee did not remove the property during the continuance of the lease, it cannot claim title thereto as a fixture. True, the original lea. was terminated in 1889, but the building was erectec mder an arrangement made in 1896, whereby the re* 'vers continued in the possession of the property as tenants til the master’s sale in 1899; and from the last-named d > until the beginning of this suit, either the relation of lai lord and tenant existed between the parties, or the proper* was in custodia legis pursuant to the orders of the federa* court. • So that it appears the building was erected by tenants or receivers after the decree of foreclosure was entered, and this right or tenancy had not expired when this action ivas brought. [397] 5 Plaintiff contends, however, that the renewal of the lease terminated the right to remove fixtures erected during the original term. This seems to be the rule in some states, but we have not as yet adopted it in this jurisdiction, See McCarthy v. Trumacher, 108 Iowa, 284. Audit is not necessary to decide the proposition in order to» dispose of this controversy. Appellant asked time, when the case was called for hearing, to produce evidence, and also asked that the parties who»had made affidavits for appellee in support of the motion to modify be called for cross-examination. The testimony that it was sought to have time to produce was not material to the controversy, and the order denying the right of cross-examination was discretionary. We'see no reason to interfere on either ground. Finally, the trial court was vested with a large discretion in the matter in controversy, and the case is not one justifying our interference. Fuson v. Insurance Co., 53 Iowa, 609. The testimony is conflicting, the necessary findings; to support the modification order have sufficient support and, the order is therefore aeeirmed.