Murray v. Bender

MORROW, Circuit Judge, after stating the foregoing facts, delivered the opinion of the court. It is again contended on this appeal that the court below was in error in holding that Bender was entitled to redeem from the execution sale to King, and from the redemption made by O’Rourke. This part of the decree of the Circuit Court was before this court in King v. Bender, 116 Fed. 813, 54 C. C. A. 317, and the decree was there affirmed. This affirmance has become the law of the case, not only by the final judgment of this court, but by the decision of the Supreme Court of the United States, refusing to grant a writ of certiorari to review that judgment. 187 U. S. 643, 23 Sup. Ct. 843, 47 L. Ed. 346. This question is therefore not open to review on this appeal. Whether the property awarded to Bender by the decree of the court below included personal property owned by the appellant, depends upon the question whether the articles in controversy, consisting of stage fixtures, appliances adapted to the stage, drop curtain, and chairs, had, by being annexed or affixed to the property, become accessory to and part and parcel of it. This is mainly a question of fact, depending upon the character of the articles, and the use and purpose for which they were placed in position; and, this fact having been determined by the court below, its finding will receive careful consideration, and will not be disturbed unless it clearly appears that the finding was not justified by the evidence. The court found, in its opinion, that the building erected upon the land redeemed by Bender was erected, constructed, and used as an opera house front the very beginning, and that it was being used for that purpose at the time of the decree; that it was suitable for and adapted to such purpose, and could not well be used for other purposes without considerable changes and alterations in its interior arrangement and condition as it then stood and was being used; that it contained a stage and stage fixtures and appliances to facilitate the expeditious handling of scenery during the-atrical perform [710] anees; that it contained a large amount of theatrical scenery, a drop curtain, also a number of opera chairs and seats attached to the floor by means of screws and nails. The court also found that the scenery in controversy was attached to the stage only as needed, and was capable of being moved without injury to the stage and stage fixtures or to itself, and for the most part was lodged and stored in certain storerooms in the basement of the building. This scenery, together with the pianos in the building, and the loose, unattached chairs, were found not to be fixtures, and by the decree were awarded to the appellant, and are therefore not involved in this appeal. The court also found that Murray’s claim to title to the articles in controversy was derived from his redemption from the decree entered in the proceedings instituted for the purpose of foreclosing the mechanics’ liens upon the property; _that this redemption was made for the purpose of protecting a small judgment which had been assigned to him. The court found further that there was a disclaimer of ownership of the chairs on the part of the Opera House Company, and a declaration by the company that Murray was the owner thereof, and that a resolution of the board of trustees or directors of the company allowed Murray a monthly rental for the chairs. But the court also found that this was all done at a time when Murray, by purchase or otherwise, had obtained control of a majority of the stock of the company; that he elected a majority of the trustees or directors of the company; that the trustees, acting at the time the resolution was adopted, were all of them in some way identified with Murray’s interest, and subject to his control; that none of the minority stockholders of the corporation were present or represented in the transaction, and that their rights did not appear to have been considered or deemed worthy of consideration. The court found further that a lease of this property was executed by and in the name of the Opera House Company to one MacFarland; that this lease was executed by Murray, who was cognizant of the fact that the Opera House Company was being held out to MacFarland as the owner of the property; that Murray stood by and helped to clothe the Opera House Company with the apparent ownership and title of this property to a stranger to the title. The court also found that the opera house would have been incomplete as an opera house without chairs, and that those chairs, or similar chairs, were absolutely necessary in its use and occupation for theatrical performances, and that said chairs, affixed as they were, were a part of the building itself, and passed to King under his deed to the premises; that the stage and stage fixtures and drop curtain attached thereto were also fixtures. The findings of the court are supported by the evidence. Upon the examination of Murray with regard to the agreement or understanding under which he was to be repaid for his expenditures, he testified that he was to be repaid from the net proceeds of the business of the building; that the account was carried on in the name of the Opera House Company; that he controlled the whole thing, and, when there was enough money on hand to pay him, he had it placed to his credit; that with respect to the property in controversy, after it was removed from the opera house building he had it hauled back, [711] and at that time there was no agreement or understanding between himself and the Opera House Company, or its officers, with reference to the future use of the property, but that afterwards he did have such an understanding; that, being the principal owner of the stock of the Opera House Company, he had the property put back to benefit himself, and to get back the money he had expended in the construction of the building;' that without that or some other furniture the house would have been valueless; it could not have been run as a playhouse without furniture; that when he replaced the furniture in the opera house, he had no agreement with the managers of the Opera House Company until the first meeting of the' new board in January, 1897, when he had a tacit understanding that he was to be paid after he got his money back; that prior to that time it was. all under his own control, and there was nobody to consult; he managed the opera house, and owned the house and furniture. Maguire, who was familiar with the transaction, testified that the agreement with Murray was that he should furnish the money and fix up the house again, and repay himself from the receipts; and, when that money was paid, the furniture was to be paid for at so much a month. But it appears from the evidence that it was not until June 28, 1899, that the board of trustees of the Opera House Company adopted a resolution declaring Murray the owner of the furniture,- scenery, etc., and allowing him a rental therefor. From this testimony it appears that Murray detached the furniture from the opera house as personal property, and afterwards, becoming the owner of the majority of the stock of the corporation owning the realty, he replaced the furniture in the opera house for his own benefit, and completed the building for the purpose for which it was to be devoted, but without any agreement with the corporation itself at that time that the furniture was to remain as personal property. There can be no doubt that, upon general principles of law, such an annexation of personal property is to be treated as of a permanent nature. New York Life Ins. Co. v. Allison, 107 Fed. 179, 182, 46 C. C. A. 229. In Ewell on Fixtures, p. 57, the law is stated as follows : “It has been often held that a building or other annexation placed upon the land of another without his previous consent, and without any contract with him, express or implied, that it may remain the property of the builder as a personal chattel, becomes a part of the realty, and may not be removed by the party erecting it, or his vendee, as against the owner of the soil; and the doctrine holds as well with respect to joint owners as to strangers. One joint tenant or tenant in common cannot erect buildings or make improvements on the common property without the consent of the rest, and then claim to hold until reimbursed the proportion of the money expended.” This principle is clearly applicable by analogy to a case where the owner of a majority of the shares of stock of a corporation, for his own benefit and advantage as a stockholder, annexes personal chattels to real property owned by such corporation. The absence of a previous agreement in such a case that the property was to remain the personal chattel of the party making the annexation is evidence of a legal intention that the property was to be regarded as a fixture, [712] which must prevail over the secret intention that the property was to remain separate and removable. The resolution of the trustees of the Opera House Company on June 28, 1899, declaring that the property belonged to Murray, and allowing him a rental therefor, cannot be considered as evidence of any great value in favor of Murray. That evidence shows that the trustees of the corporation were acting in the interest of Murray, who held a majority of the stock. The resolution was therefore nothing more, practically, than a declaration by his representatives in interest. Moreover, the adoption of the resolution was more than a year' after title to the property had become vested in Bender, and more than two months after the commencement of this suit. It is therefore open to the suspicion that it was passed by the trustees for the purpose of supporting Murray’s claim to title. The court below found that Murray had received the rents, issues, and profits of the property from March 11, 1899, to February 1, 1900, with full knowledge and notice of Bender’s rights in the premises, and by the decree Murray was required to make restitution thereof and pay the same, with legal interest. There is no question but that Murray received the rent of the premises from McFarland, the trustee, during the time mentioned, and, upon the evidence establishing this fact, the decree of September 4, 1901, was entered, and the matter referred, to the master to state an account. Upon this reference evidence was offered for the purpose of showing that the rent so received by Murray was paid over to the Opera House Company. But, objection being made to the evidence, it was excluded by the master, and exception taken; but the exception was not brought to the attention of the court below, as provided by the rules of the court, and the final decree of March 20, 1902, was entered, following the decree of September 4, 1901, and adjudging Murray liable therefor. We are of opinion that, having determined that Bender’s title to the property is valid, it follows, upon the record before the court, that he is entitled to the rents, issues, and profits derived therefrom, as determined by the decree of the court below. The decree of the Circuit Court is therefore affirmed.