Cherokee Carpet Mills, Inc. v. Manly Jail Works, Inc.

Conley Byrd, Justice. The sole issue on this appeal is whether a contract with appellee, Manly Jail Works, Inc.,(1) to design and construct a 12,122 gallon water tank for use in the carpet plant of appellant, Cherokee Carpet Mills, Inc., is subject to the 5 year statute of limitations set forth in Ark. Stat. Ann. § 37-237 (Supp. 1973). That statute provides: “No action in contract (whether oral or written, sealed or unsealed) to recover damages caused by any deficiency in the design, planning, supervision or observation of construction or the construction and repair of any improvement to real property or for injury to property, real or personal, caused by such deficiency, shall be brought against any person performing or furnishing the design, planning, supervision or observation of construction or the construction or repair of such improvement more than five (5) years after substantial completion of same.” Upon a demurrer to the compalint as amended, the trial court held the statute applicable and dismissed the cause of action. We agree with the trial court. The compaint alleges that appellee, pursuant to a contract attached to the complaint, manufactured the tank and shipped it to appellant’s plant at Lewisville, Arkansas, on or about March 1, 1967, and that upon arrival the tank was installed in appellant’s plant by Westrock Mechanical Contractors, Inc. That while using the tank in the operation of the plant, under the conditions set forth in the contract, on May 25, 1970, the tank ruptured causing the dyes contained therein to be sprayed into other parts of the plant and resulting in the damages prayed for. The specific allegation as to appellee was as follows: “That the rupture of said baffle or wall within the storage tank and the resulting rupture in the exterior of the tank were caused by the failure of the defendant, Manly Jail Works, Inc., to perform its agreement as contained in Exhibit “A” attached hereto with the plaintiff in that said tank was improperly designed, improperly manufactured and otherwise deficient to be operated under the conditions and specifications set forth in the contract between the plaintiff and the defendant, Manly Jail Works, Inc., as contained in Exhibit “A” attached hereto; ...” The contract attached to the complaint shows an order for the tank containing three different compartments with mixing motors and turbines and with internal pipe and couplings in the tank wall. The tank was to be shop tested at 55 PSI for a working pressure of 27 PSI. Thereafter appellant filed an amendment to its complaint wherein it was alleged: “THAT said storage tank was subsequently manufactured by the Defendant, MANLY JAIL WORKS INC., and shipped from the plant of said Defendant to the plaint of the Plaintiff at Lewisville, Arkansas, on or about March 1, 1967; that upon the arrival of said tank at the plant of the Plaintiff, it was placed upon a cradle in the plant of the Plaintiff by the Defendant, WESTROCK MECHANICAL CONTRACTORS, INC.; that said tank was not bolted or otherwise attached to the cradle or any other part of the building or real estate of the Plaintiff, but was interconnected with other parts of the machinery and equipment of the Plaintiff; that said tank was, at the time of installation and has been ever since a part of the machinery and equipment of the Plaintiff. ...” The appellant both here, and in the trial court, contends that the issue of whether the storage tank was an improvement to real property, within the meaning of Ark. Stat. Ann. § 37-237 (Supp. 1973), supra, is a factual question. In doing so appellant places much stress upon the allegation that “said tank was not bolted or otherwise attached to the cradle or any other part of the building or real estate of the plaintiff.” Appellant’s emphasis, however, ignore that part of the amended complaint which admits that the tank . . . “was interconnected with other parts of the machinery and equipment of the plaintiff; that said tank was, at the time of installation and has been ever since a part of the machinery and equipment of the plaintiff.” In Alwes v. Richheimer, 185 Ark. 535, 47 S.W. 2d 1084 (1932), the issue was whether the furniture and fixtures in a theater went with a mortgage to the real estate or a mortgage on personalty. In holding that it was an appurtenance to the real estate and after pointing out that the furniture and fixtures were a part of the improvements in the building for the purpose for which it was constructed, we said: “the tendency of modern decisions, both English and American, ‘is against the common-law doctrine that mode of annexation is the criterion, whether slight and temporary, or immovable and permanent, and in favor of declaring all things to be fixtures which are attached to the realty with a view to the purposes for which it is held or employed.”’ Appellant does not contend that its entire installation of machinery and equipment was not “an improvement to real property” and when we consider that the tank in question was put into position and interconnected with other parts of the machinery and equipment, we can think of no fact situation that would differentiate the design and fabrication of the tank from the design and installation of the other machinery and equipment for purposes of preventing the statutory bar of Ark. Stat. Ann. § 37-237 (Supp. 1973), supra. Affirmed. Fogleman and Jones, JJ., dissent. Footnotes [(1)] Westrock Mechanical Contractors, Inc., has gone into bankruptcy and the cause has not been revived in the name of the trustee in bankruptcy.