Montana Electric Co. v. Northern Valley Min. Co.

MR. JUSTICE HOLLOWAY delivered the opinion of the court. In November, 1909, the Amazon-Montana Development Company held an option to purchase from Samuel Myhre the Silver Star quartz lode mining claim. It hired an electric hoist from the Montana Electric Company at a rental of $50 per month, and agreed to return it to the owner in Butte at the expiration of the term of hiring. The hoist was shipped to Amazon, placed upon a substantial foundation on the Silver Star claim, an en271 gin e-house or shed was placed over it, and it was thereafter used in the prospecting operations carried on. The Amazon company failed to make the payments as prescribed in the option contract, and some time in 1911 ceased its activities. In October, 1911, Myhre sold the Silver Star claim to Mallette for the use and benefit of the Northern Valley Mining Company, which was organized about the same time. Early in 1912, when the Montana Electric Company undertook to regain possession of the hoist, it was made aware of the mining company’s claim of ownership and this action followed. The trial of the cause resulted in favor of plaintiff, and the defendant has appealed from the judgment and from an order denying its motion for a new trial. The question before us is: Did the hoist become a fixture and pass by deed from Myhre to Mallette, and from Mallette to the Mining Company? Section 4424, Revised Codes, classifies all property as real or personal. Section 4425 defines real property as consisting of land, that which is affixed to land, that which is incidental or appurtenant to land, and that which is immovable by law. Section 4427 specifies the manner in which a thing may be affixed to land, within the meaning of section 4425; and section 4428 declares: “Sluice-boxes, flumes, hose, pipes, railway tracks, ears, blacksmith-shops, mills and all other machinery or tools used in working or developing a mine are to be deemed affixed to the mine.” These provisions are identical with like provisions found in the Civil Code of California since 1872, and, with the exception of section 4428, were copied from the proposed draft of a Civil Code prepared for the state of New York by David Dudley Field and his collaborators. The purpose of the Code was not to introduce new rules or definitions into the law, but rather to reduce to concise form the rules of law as they were then recognized and applied by the courts. Reference to New York and California decisions aids in determining the scope which the provisions of our Code above, were intended to have, and from those decisions we deduce the fol[1-3] lowing: (1) Whether what would/otherwise be personal — 272 — property has become a fixture by reason of its attachment to the soil, is primarily a question of intention on the part of the person attaching it; (2) .the attachment in the manner indicated in our Code sections above, raises a presumption that the one who made the attachment intended the thing affixed to become a part of the realty; this presumption, however, is a disputable one; (3) as a general rule, the manner in which the attachment is made, the adaptability of the thing attached to the use to which the realty is applied, and the intention of the one making the attachment, determine whether the thing attached is realty or personalty. (Ford v. Cobb, 20 N. Y. 344; Voorhees v. McGinnis, 48 N. Y. 278; Tifft v. Horton, 53 N. Y. 377, 13 Am. Rep. 537.) The California courts have quite uniformly followed the New York decisions. (Hendy v. Dinkerhoff, 57 Cal. 3, 40 Am. Rep. 107; Lavenson v. Standard Soap Co., 80 Cal. 245, 13 Am. St. Rep. 147, 22 Pac. 184; Miller v. Waddingham, 91 Cal. 377, 13 L. R. A. 680, 27 Pac. 750; Jordan v. Myres, 126 Cal. 565, 58 Pac. 1061.) The same test has also been applied in Oregon (ATberson v. Elk Greek Min. Co., 39 Or. 552, 65 Pac. 978), and in Washington (Gasaway v. Thomas, 56 Wash. 77, 20 Ann. Cas. 1337, 105 Pac. 168), and appears to be recognized generally (19 Cyc. 1033; 13 Am. & Eng. Eney. Law (2d ed.), 594). — 273 — tion with which the fixture is attached or affixed to realty is always a pertinent inquiry in determining the status of what seems to be realty or personalty, as the case may be.” The relation of the parties to the property may affect the application [4] of the rule stated above. The innocent purchaser or mortgagee who acquires an interest in the realty after the thing has been attached may be entitled to consideration not accorded to others. In the present instance, however, we are relieved of any difficulty which such a condition might present. Upon the evidence before it, the court was warranted in finding that Myhre, the owner of the Silver Star, did not assume to own the hoist. Before he disposed of the claim he explained to Mallette fully the conditions under which the Amazon company had been operating at the Silver Star claim; that the Amazon company had installed the machinery, and that he (Myhre) was merely holding the hoist as security for money which he deemed to be owing to him from the Amazon company. These findings are sufficient to strip the mining company of the claim that it was an innocent purchaser without notice. A bona fide purchaser is defined to be “one who at the time of his purchase advances a new consideration, surrenders some security, or does some other act which leaves him in a worse position if his purchase should be set aside, and purchases in the honest belief that his vendor had a right to sell, without notice, actual or constructive, of any adverse rights, claims, interest, or equities of others in and to the property sold.” (Foster v. Winstanley, 39 Mont. 314, 102 Pac. 574.) “It is a general rule that whatever puts a party on inquiry amounts in judgment of law to notice, provided the inquiry becomes a duty, and would lead to a knowledge of the facts by the exercise of ordinary intelligence and understanding.” (29 Cyc. 1114.) The facts disclosed by Myhre were sufficient [5] to put Mallette on inquiry, and the knowledge which Mallette possessed will be imputed to the Northern Yalley Mining Company, which was organized by him who owned the entire capital stock until a portion was transferred to Myhre in part payment of the property purchased by Mallette to be turned — 272 — That the mere attachment in the manner indicated by the statute will not always determine the character of the thing attached is apparent. A cannot, by wrongfully attaching B’s personal property to his (A’s) realty, thereby acquire B’s property, if it can be removed without destroying it. (Eisenhauer v. Quinn, 36 Mont. 368, 122 Am. St. Rep. 370, 14 L. R. A. (n. s.) 435, 93 Pac. 38.) In that case we said: “The question, When does a chattel become a part of realty so that it passes as a part of such realty? is one most difficult of solution. It depends upon such a variety of considerations that every case must necessarily depend upon its own state of facts.” In Mattison v. Connerly, 46 Mont. 103, 126 Pac. 851, we gave recognition to the element of intention in the following language: “The inton — 274 — over to the mining company. Mallette was one of the principal officers of the newly formed company, and his knowledge, under the eireumstanees, was the knowledge of the company. (State Bank v. Forsyth, 41 Mont. 249, 28 L. R. A. (n. s.) 501, 108 Pac. 914; 10 Cyc. 1059; Hoffman Steam Goal Co. v. Cumberland Goal (& Iron Co., 16 Md. 456, 77 Am. Dec. 311.) As between the original owner of the hoist and a subsequent purchaser with notice, the former was rightfully awarded the property. The manner in which the hoist was attached to the mining claim is not of consequence (sec. 4428, above). It could be removed without material injury to the realty and without injury to the hoist itself. Applying to our Code sections above, the rule of construction adopted in New York and California, and the correctness of the court’s conclusion cannot be questioned. The element of intention to cause the hoist to become a part of the mining claim is altogether wanting. The agreement between the electric company and the Amazon company is susceptible of but one construction — that it was not the intention of either that the hoist should become a part of the mining claim. It belonged to the electric company, which was not interested in the mining claim. It was hired by'the Amazon company for temporary use, to be returned to the owner upon the expiration of the term of hiring. Some contention is made by appellant that the electric com-[6] pany is estopped to assert a claim of ownership. The finding that the defendant knew, or was chargeable with knowledge of, plaintiff’s outstanding claim of ownership disposes of this [7] contention. We do not know of any statute which requires one who lets personal property for hire to file or record the instrument which evidences the contract of hiring. The judgment and order are affirmed. Affirmed. Mr. Chief Justice Brantlt and Mr. Justice Sanner concur. Rehearing denied January 5, 1916..