SAMPSON t'. CAMPERDOWN 'COTTON MILLS.
SAMPSON et at v. CAMPERDOWN, COTrON Ex parte McBEE. (Circuit Court, D. South Carolina.
December 21, 1894.)
LANDLORD AND TENANT-ASSIGNMENT OF LEASE-STATUTE OF FRAUDS.
M. leased certain lauds in South Carollna to the C. Mills, a corporation, the lease giving express permissiou to the lessee to erect buildiugs, aud pull dowu or chauge the same duriug the term. The C. became insolveut, aud its property, iucluding the lease, was sold by a receiver to H. and his associates, who organized a new corporation, the C. Cotton Mills, which took possession of the property of the former corporation and of the leased premises, but without any assignment of the lease or other writing from H. aud his associates. Subsequently. the C. Cotton Mills made a mortgage of its personal property to S., minutely enumerating sundry machines, furniture, etc., and iUcludiug "all persoual property of whatever nature, on the premises of the C. Cotton Mills, or in auy mauner belouging to them." S. brought his actiou to foreclose the mortgage, in which a receiver was appoiuted, who notified the lessor of his intentiou to surrender the lease, aud subsequently advertised the personal property for sale, followiug the enumeration in the mortgage of machines, etc., and addiug, after such euumeratiou, "aU other persouai property ou the premises belouging to the C. Cotton Mills, aud covered by the mortgage." S., having purchased the mortgaged property at the receiver's sale, was proceeding to tear dowu and remove a warehouse erected on the leased premises by the C. Cottou Mills for use iu its busiuess. M., the lessor, filed his petition in the cause to restraiu such removal. Held, that the C. Cottou Mills was uever a tenaut of M., uo written assigument of the lease haviug been made as required by the statute of frauds of South Caroliua.
Held, further, that while, under the general rule as to trade f1.xtures or under the prOVision in the lease as to pulling dowu buildings, the lessee might have removed the warehouse during the term, and while in possession of the premises, its right to do so did not continue after its possession ceased and was terminated, as to any right of the C. Cotton Mills, by the receiver's notice of his iuteution to surreuder the lease.
TRADE FIXTURES-WREN REMOVABLill.
SAME-'VREN. REALTY AND WHEN PERSONALTY.
Held, further, that, even if the right existed to remove a bUilding erected on the leased premises, such buildiug, until the right was exercised by au actual removal, was part ofthe'l.'ealty, and not included in the mortgage or sale of personal property. . Held, further, that the form of the advertisement was uot such as to give notice to persoUs, not otherwise informed, that a bUilding ou the leased premises was iutended to be included in the sale, aud a sale, made under such advertisement, would not be held to include such buildiug.
JUDICIAL SALE-!:lUFFICIENCY OF ADVERTISEMENT.
This was a suit by O. H. Sampson & Co. against the Camperdown Cotton Mills for the foreclosure of a mortgage. Vardry E. lVlcBee filed an intervening petition. A rule to show cause was issued to the plaintiff, purchaser at the foreclosure sale, to which he filed a return. Cothran, Wells, Ansel & Cothran, for complainants. Julius H. Heyward, for petitioner. SIMONTON, Circuit Judge. The Camperdown Cotton MilIs, a corporation,executed to the complainant in March, 1893, a mortgage of its personal property. The descriptioD of the property mortgaged
begins thus: "125 H. P. Buckeye automatic cut-off engine, two steam boilers, on!stelUn pipe, one two,beater opener, 56 364nch Wellman cords, with railway, troughs, and fixtures complete;" going on and giving in minute detail, article by artide, the machinery and appliances used'ili a cotton milt After this long and miJitite detail come these a separate paragraph: "All personal property of whatever nature on the premises of the Camperdown Cotton Mills, or in to them, including property loaned to others any or heldb.Y o.t.her ·parties on commission or storage for Camperdown Cotton Mill!!!>" This mortgage was foreclosed in the main cause, and theJ.'eCeiver appointed thereunder was instructed to sell at publio auction; aftel"' due advertisement, the property mortgaged on a day fixed })y the..Court. This. sale took place. In his advertisement of the receiver followed the description of the property in the mortgage in its minute detail, changing, however, the punctuation, and as follows: "Two watchman's clocks, two sets ending the harness, .sundry· carpentefil' and masons' tools, six wheelbarrows, all other property on the premises belonging to the Camper'down Cotten Mills, and covered by the mortgage foreclosed in this case." At this sale, under this advertisement, O. H. Sampson became the highest bidder, and was declared the purcha.ser. The date of the sale was 31st of October, 1894. On the 24th of November thereafter, O. H. Sampson sent certain workmen to tear down the princi· pal warehouse on the premis,es, heretofore occupied by the Camperdown Cotton Mills, claiming· that he had purr.:hased it as a part of , the mortgaged property. Thereupon this petition was filed. The .warehouse was put up by the Camperdown Cotton Mills for the purpose of storing cotton, used in its business of manufacture, and is affixed to the freehold. If it passed at this sale, it did so because it was included in the words "all personal property of the Camperdown Cotton Mills." The Cal:nperdown Cotton Mills conducted its business upon certain leased premises in Greenville, S. C. 'l:he lease was executed by Alexander Mc·Bee and Vardry E. McBee, in 1876, to the Camperdown,Mills, another corporation, for a term' beginning March 1, 1876, and ending March 1, 1906. The lease is to that corporation and its successors .and assigns, and does not require the assent of the lessees to any 'assignment of· the lease. The Camperd6wn Mills Mcame insolvent, passed into the hands of a receiver appotntedinthe.liltate court; and all its property, including this lease, was sold in 1885 at public auction by the receiver to H. P. Hammett and his associates. The deed, executed 3d August, 1885,conveys the entire prope,;&, including the lease, to H. P. Hammett and his associates, naming each of them and his proportion of ioter,est, habendum to the said H.P. Hammett and his associates above named, according to their respective interest as above set forth, and their and each of their executors, etc., forever. At the session of the general assembly held in November following this purchalile and conveyance, Hammett and his associates were incorporated as the Camperdown CQttoll,MiIl8, the the above.namedpurcb,ase by them. C. The new cprporatioo ,was placed in pOllot all oftlle old cODlpany and of the pram.;
SAMPSON t'. CAMFERDOWN COTTON MILLS.
ises. No deed was made, and, as far as this record shows, no writing whatever attended this transfer. When, in its turn, the Camper· down Cotton Mills failed and went into the hands of a receiver, the reo ceiver, within a month after his appointment, notified Vardry E. Mc· Bee, the petitioner, who in the meantime had become sole owner of the fee in the leased premises and the lease, that he did not intend to undertake the lease, and, as far as lay in his power, he surrendered it, notifying him of his intention to turn over the possession of the leased premises as soon as practicable and the court shall direct. V. E. McBee to this, in substance, replied, denying the right of the receiver to destroy the validity of the lease, and notifying him that he would insist on his rights thereunder. 'fhe matter comes up on. a rule issued upon the petition of O. H. Sampson to show cause why, etc., and on his return thereto. The return claims that all the buildings erected by the Camperdown Cotton Mills on the leased premises for the purposes of its business were trade fixtures, and so personal prop· erty, included in the very terms of the mortgage; that, being so in· duded, they were all, sold at the sale for foreclosure, and passed to and are the property of the respondent, the purchaser at that sale. On the other hand, the intervener, owner of the fee in the land, denies that these buildings of a permanent character let into the free' hold, became and are personal property; that, whatever may be the general law on the subject of trade fixtures, the erection of buildings and the interest of tenants in them were controlled by the terms of the lease, which permitted the erection of buildings and the pulling down and changing them, as may be deemed necessary and convenient, the term of the lease only. He further denies that the Camperdown Cotton Mills ever were his tenant, or occupied towards him the relation of lessee and lessor, there never hmdng been any assign· ment to it of the lease in writing; that, whatever may be the conclu· sion on these points, these buildings were not sold at the sale, and did not pass to the purchaser, because nothing in the advertisement disclosed, and no notice was given at the sale, that structures on the land were a part of the property ofl'('red for sale. Finally, he claims a lien for rent to accrue. On this last point no reason is seen to change the conclusion heretofore reached in tbis same case. The law of South Carolina gives no lien for rent to accrue. At the threshold of this case it is best to ascertain the precise relations which the petitioner, the owner of the fee, and the Camper· Cotton Mills occupied towards each other. Were tbese relations tbose of lessor and lessee? The original lease was to the Camperdown Mills. It was assigned by deed to Hammett and his associates, to their and each of their executors, etc. No assignment in writing was made to the Camperdown Cotton Mills. The statute of frauds of force in South Carolina (Gen. St c. 73) forbids the assignment, grant, or surrender of a lease unless by deed or note in writing. Gen. St. § 2018. See Charles v. Byrd, 29 S. O. 544, 8 S. E. 1; Davis v. PollOCk, 36 S. C. 544, 15 S. E. 718. McBee could not, under the terms of tbis lease, comp}ain of any assignment by his lessee. The law, however, proteCted him in prescribing a mode of assignment. The Camper· .down Cotton Mills, a corporation, was an entity distinct from Ham·
mett amd.::l:tisassociates. It couldeontraet with .them..!twas not bon,ndbY.dmyof their aets, except in a corporate capacity. Mor. Corp; Property held by ltbem in cotenancy did not, 'by the mere fact.of incorporation, becomeJts property. A deed was peewhich.cowd only pass by the observance of deed or writing. A lease is of this character. The . conclusion' is evident that the relation of lessor and lessee never existedbetweeIi McBee and the ,Oam.perdown Cotton Mills. There.canbe no doubt that,asr;between lessor and lessee, buildingsput·up ()n the leased premiaeS.fotthe purposes of trade, distinct from the fut.eof the land by the less.ol't do not become a part of the land and vest absolutely in the owner'of the,,:soil, but are removable by the lessee during the term. Van Freeman v. Dawson,.l10U. S. 264, 4 Sup. Ot.94; Wiggins.Ferry Co. v. Ohio & M;RYi 00., 142 U. S. 396,' 12 Sup. Ct. 188. This last case, after quo,ting;theapnclusion reached in: Van :Nessv. Pacard, "that whatlessee for the purpose of trade, whether;Wbemade of. brick or wood, is removable at the end of the aIld&: ''It is difficult to conceive that any fixture, however solid,.perxnMlent, and :closeJ,y ,attl'l;chedto the realty, placed the.re for. the: mew purpO$eil-:of . trade, may pot be removed at the. end of the terJ;J;l.\'itTh $ecases. declare the right of removal only dn,ring thetel'DU >In oue calle quoted, in Van Ness v. Pacard, the right of removal is extended beyond the:temn, the still remaining in po.ssefl$ion.. Pentoll-y.Robart,.2.East, 88., The llliW' ,as laid down by the supreme court of the UnHed,States is in wIth the law in' South. Carolina. Evans v. McLucas. 15 S.:'Odl(l:;., :IDominioky. FM'r,22S. 0. 585; De ,Laine v. Alderman, 31 S. 0;,..267, 9,13. E. 950; Padgett v. Cleveland, 33 S. C·.339, 11 S. E. lQ.69.iiaut,: althougb tbis is true, ii by no .means follows that wbilertb,e'bllildings remain on the land, fixed in the soil, theY are personalt>llOperty.They can be remOived, and can then become pers<Jnal,pWlffirty; but, so long as they remain undisturbed, they are a part tlle realty. and are in fact realty. They can become per· of all eXpress; agreement with the owner of the sonalty by soil, or of. aD:; agreement, implied by law, .that they can be sE}vered from the realty, andthus: regain their status as personal It is a long anq.wellsettled rule of the common hLW that everything which isanllt;!xed to the freehold beqomes a part of the realty, and Can onlylle severed froIl};.it, and reinvested with the character of personalalld rem()vable property, by the act of the owner of the v, },fliLwe, 2 Smith, r,elitd.Cas. (6th Am. Ed.) 267, and ca$8S cited-tV an instrument expressly creating a mortgage in·peJ,"li!,OJ:!.iU property only will not create a lien on buildings not relll()Yet'l,and·,pemovqble.only, , . . . .The law the: of buildings erected by lessees for trade :apply :to the! case liLt bar? The rights of'Q.:B.,San:!.psl};[l,'the,pV-lic4aser, deWIld OJ:}. the rights of the CamC.otton MillE.!·.. ShOl;tlyafte.r,his appointment, in May, 1894, ,fficeiv;eri'no,tifiedtb;e lessor that p.eWOl1ld not be b()und the fill' Ail<S lay in bis power,. surrendered it. He repres«;,nted
SAMPSON V. CAMpERDOWN aOT'!'ON MILLS.
the Camperdown Cotton While, therefore, if the corporation was not the owner of the lease, and his action could not affect the existence 00' the lease as between the lessor and his original lessees, yet it did end the tenancy of the Camperdown Cotton Mills some months before the sale. Even then, if it be assumed that there had been a right of removal in the Camperdown Cotton Mills, that right was lost by the termination of its occupation. In the note to Elwes v. Mawe, 2 Smith, Lead. Cas. (6th Am. Ed.) 280 (*257), the learned annotators say:
"Notwithstanding the liberal interpretation which the courts put on the right of the tenant to remove fiXtures, it is well settled that, if he fail to exercise it during the continuance of ihe term or before surrendering the premises, he cannot re-enter for the purpose of exercising it afterwards, nor sustain an action against the landlord or those claiming under nim for the recovery of that which he has voluntarily abandoned;" quoting many cases on this point.
In Wood, LandI. & Ten. § 532, the same doctrine is stated, and sustained b.r numerous authorities. Mr. Justice in Kutter v. Smith, 2 Wall. 497, addressing himself to this question, says:
"The doctrine concerning this class of fixtures [buildings], which is a strong innovation upon the common-law rule that all buildings become a part of the freehold as soon as theY are placed. upon the soil, has extended no further than the right of removal while the tenant is in possession."
Further, if we were to conclude that, notwithstanding the nonexistence of a written assignment of the lease to the Camperdown Cotton Mills, that corporation, entering as it did, was entitled to the protection of the lease during its holding, we must come to the same conclusion. If parties enter into a contract without express reference to the general law controlling contracts of that character, the law enters into and becomes a part of the contract. But if the contract, in its terms, departs from the general law, the terms of the contract control. In the contract between the lessors and the lessee we find two provisions, one permitting the lessees to remove any and all the machinery in the mill within three months after the end of the term. This express provision, giving a qualified right of removal, would seem to exclude the idea of a general right. ''Expressio unius," etc. The other provision permits the erection of buildings upon the premises, and during the term the pulling down or changing them, as may be deemed convenient or necessary. This is a distinct recognition of the right of the lessee to declare his assent to the erection of buildings, and also of his right to give such consent with modifications; that is, to erect, pull down, or change buildings during the term. This cannot mean to remove them. after the term has ended. There is another view of this case bearing on the question made by the intervention. The advertisement is so worded and punctuated toot no notice whatever was given to those of the public who attended the sale at auction that the purchaser would get these buildings. Prima facie, they were a part of the freehold, inseparable therefrom. Reid v. Kirk, 12 Rich. Law, 54, 64. The only part of the advertisement which is now supposed to cover them are the words "all other personal property on the premises belonging to
the, Caplpel'down, Cotton Mills and covered by the mortgage foreThese words come after, and are separated i by8l1OOmma; :onJy from, a long list of !mill apparatus' and machinery, chairs, and other office furniture." ''Noscitur a sociis."';[r1$uranM Co. v. Hatnilton, 12 App. Oas. 484, 38 Moak, 433. TlienaturaI conclusion is that they embrace the, odds and ends of similar articles to those 'mentioned before them. A sale under. if the mortgage could cover buildings not severed from the freehold in the term "perSonal property," was to the advantage of the well-advised mo'rtgagee, and to the disadvantage of every one else. Sales made under judicial . proceedings "are always regarded as under thl'J control of the court, and subject to the power to set them aside for good cause shown, and to' them at allY time before they are confil'qled, if, the cir· cumstances of the case require the exercise of that power." v. Railroad 00., 3 Wall. 207; Mayhewv. Land eo., 24 :Fed. 215. The sale under this advertisement did not carry any buildings erected on the
WELLS,FARGO & CO. v. VANSICKLE.
(Circuit Court, D. Nevada. No. 580.
December 12, 1894.)
ApromU:!sory note 18;nol; complete untO It has been delivered. and the placeot,t:\1e by such note does not depend upon Where, tjlenote Is dated" but upon the place Where It is delivered, which maybe shown by parol evidence, though the note Is dated elsewhere. ,
Thiswa$an action by 'Wells, Fargo & 00. against P. W. Vansickle upon a promidSOry note. The case was tried by the coul"!; without a jury. J. kWines, fOl' plaintiir. ,. D. W. Virgin and Trenmor Coffin, for defendant. HAWJ:.EY, .District (orally'). Tills is an action at law upon a note which reads as follows:
' . San Francis<:o, CliI., March 29, 1887. "Two yearS hfter date,for value receiY:ed, I promise tO'Day to the ordel' of W. W.Lapham, at Welts,Fargo & Coo's Bank,ln this city, in gold coin, four thousan4 dollars, with Interest, In like coin, from the date hereof, at the:: rate of one per cent, month until paid; payable monthly, and, if not so paid, to become part of the principal, and bear like rltte of interest. . . "P. W. Vansickle." "$4,000.00.
This note, ,before was, ·for value received, transferrw and assigned to plainqff.·· Two defenses are made to this note: J,imitations; (2) payment. . 1.'l'b..e ftnilt contention. of defendant is that the nllte sued upon is. upon itl!! a. note; it is barred by the statuteof limitations of the filtate of Califorma (13ection 337, Oode Oiv. Proc.), an,q by the i:ltatute of limitations :ot state of Nevada (sectioD
WELLS, FARGO & CO. 'V. VANSICKLE.
3661, Gen. St. Nev.), and that no evidence is permissible to change or vary the terms of the note, as to its place of execution, etc. The statute of this state provides that:
"An action upon a judgment, contract, obligation, or liability for the payment of money, or damages obtained, made, executed, or incurred out of this state can only be commenced as follows: ... ... ... Third. Within two years ... ... ... after the cause of action accrued."
The amended complaint alleges that at the time of the execution and delivery of the note the defendant was a resident of the state of Nevada, and that W. W. Lapham was a resident of the state of California; that the note, although dated "San Francisco, Ca!.," was actually drawn up, signed, executed, and delivered in Carson City, Nev. W. W. Lapham testified, in relation to the blank form and of the execution and delivery of the note, as follows:
"We made the arrangements in Genoa, and went down to Carson City to get the paper executed. The indebtedness was contracted at Carson City. I was dealing with Wells, Fargo & Co., and borrowing money of them, etc., and I had those blanks with me. It was a Nevada contract. I said to him [defendant], 'You will have six years after maturity.' The law there is six years. So he must have understood it to be a Nevada contract. ... ...... I used the blanks as a convenience, because I had dealings with Wells, Fargo & Co.'s Bank, and in case I was not at Carson he could send the money to Wells, Fargo & Co.!s Bank, in San Francisco, where the note was made payable. It was understood that this was a Nevada contract. ... ... ... I wanted the note payable in San Francisco, at Wells, Fargo & Co.'s, and so used the bank's form of note."
Defendant testified that the note was executed and delivered in CaI'$On City, Nev., but that it was the understanding that it should be a California contract, so as to enable Lapham, in the event the interest was not promptly paid, to collect cOOlpound interest there· on, which was not allowable upon contracts made in the state of Nevada. I am of opinion that parol evidence is admissible to show that, notwithstanding the printed words, "San Francisco, Oa!.," upon the face of the note, the note was actually made, executed, and delivered in Carson City, Nev. A promissory note is not complete until it has been delivered, and it takes effect only from the time of its delivery. The place of a contract evidenced by a promissory note does not depend upon where the note is dated, but upon the place where it is delivered. It is the delivery of the note that consum· mates the contract. 1 Daniel, Neg. Inst. § 865; 1 Pars. Bills & N. 48; 2 Am. & Eng. Ene. Law, 330; Lawrence v. Bassett, 5 Allen, 140; Overton v. Bolton, 9 Heisk. 762; Gay v. Rainey, 89 Ill. 225; Woodford v. Dorwin, 3 Vt. 82; Fritschv. Heisler, 40 Uo. 555; Flanagan v. Meyer, 41 Ala. 132; King v. Fleming, 72 m. 21; Tied. Com. Paper, §§34b, 34c. "Commercial paper takes effect only from the time of delivery, and where there is a date given in the paper the delivery is presumed to have been made * * * on that date. * * * But this presumption may be rebutted, and it may be shown by parol evidence that the paper had been delivered on some other day." Jd. § ,3ib. In Davis v. Coleman, 7. Ired. 424, a note v.64F.no.8-60
1'IlWll:l\AL REPORTERj. :\'DI.64.·
made, inl Nbfth .Carolina . was delivered· :in. Geongiafora ·Ioan there made, and ilkwas held. to. be a contract made iIi Georgia.. In Hyde v. Goodnow, 3 Y. 266, two notes signed in Ohio were void by the tp.atstatej deliv red.in New York, it was held that thep1alceof delivery controlled the contract, as to!its validity. The contract in the case under consideration was not "obtained, made, executed, or incurred out of this state," and does not come within the of of limitations of Nevada, her,etofore quotEtll·;,:, .... ' .' 2. l':.l1e (iefense Pl1yment is I;lot sustained by the evidence. The .of evidence on the merits are in favor ofplain;U:f(.·, is tll,erefore ordered in 1avor of plaintiff for the sum of $4,000, with interest thereon from March 29, 1887, at payable in gold coin,-and for costs.
'(OltcUit Court. m.D; Missoud, E. D. December 17, 1894.)
Co." 'Which wll:$engaged ip. the manufacture of Qone tartar. Ri.?-dequipment; Ui!led to W. for ,W f$12,OOOpeJ:'·. 'rMll.,Chial. re:ntal value of, .the Ul.nd and building' was between $2,000 and $2,500' per year, but th'eprofits derived by the U. Co. from the business conducted'on tbepremiseS' with the leased ;trO,ID $,lO,OOOjo$\2,OOO per year. 'rile a cove .'. t'thll.t; l'j.uring its continuance, the U. Co. in the li!J1Ufil.Cture of bOne tartar, aJid other provisionS which, it was claimedj:, showed, that tbe intention walil not, to operate, but 'to' close, the ·. 011 ti;le, da,y the lease was. p1ade, it was assigned, with . t;J. Q.o.; totheP.90., which was engaged the same bUSiness, and had for many years been the chief producer '6f 'bone tartar. It appeared that the lease had been made with the intention that it should be'assigned to' the P.:()o.; and that it: was made for the ,purpose of remoyl11g U. Co.'scompetition frpm the market.. Other competitors after:wtlids sprUng up.'.l'he price of bone tartar declined. The P. Co. ceased .to pay the .1'ent, .and, being sued, set up in defense that the lease #as void, as being itl restraint of trade, and tending to create a monopOly. .Held, that·lis . the .contract conferred no special or exclusive .privilege,but left thettl;\de open to the competition of any-other parties, it had l1o,tllndency to .cl,'e8.te a monopoly; that it WRsno more than a lawful e:x;erhise of the power to contract for the protection of the business of the P,Co., and not against public policy, nor void.
This was. an action by the United States Ohemical Company against the Provident CheWical Company for rent, on a lease. Trial by the court, without a jury.
Action i.or that the is void, because antagonistic to pubUc policy. 'On the 2.5th of September, 1888, the plaiJ;ltifl company leased to Henry H; Welch, for the term of 10'years, from the'lst of September of that year, at&: monthly rental of $1,000 per 'moJ;lth, In advance, the bUilding and then used by it for the lDanufacture of bone tartar in camden, N. J..··. TJ1e mutual covenants are expressed in seven paragraphs. 'rhe first stipulatel( the right of entry fl>rdefault in the .payment of rent, and is of character. The secondp'rbbibits the. l.!-ssignment of the leasehold: :orlUl Underletting without the written consent of the lessor.