888
FEDERAL REI'ORTER, vol. 48.
tracting fora lien,which, as between themselves. will be good after delivery. So, ordinarily, when the possession of a pledge is relinquished. the rights of the ate gone. In this case. however, Morris was not willing to rely upon thll lien which the law gave him as vendOl', or upon a mere pledge of the property; but'required a special contract on the part of Gregory, securing his rights. This contract created a charge upon the property, not in the nature of a pledge, but of 8 mortgage. The Hen, as between the parties. was not made to depend upon possession, but' upon a contract, which defined the rights both of.Morris and Gregory, and the power of Morris for the enforcement of his lIecurity."
itYV;aB.9Qmpetent for the parties ,here to agree that engine should remain personalty \lntiL paid for, is not to be doubted del' the SheU v. Haywood, 16 Pa. St. 523; Harla'll v. Harlan, 20 Pa. S1. 303. Ip.Shell v. Haywood, 8upra, the court declared that the rule of and removal is Qne subject to the controlltnd modification of the parties representing the property, who may vary, ,same according to their convenience, pleasure, regarg for right;, fQr,(said CHAMBE;RS, J.,) "whether attached to the realty or not, or in whateverlllanner attached, is immatedal, when the parties agree to con'" aidertt personal property." All the Pennsylvania cases(and they deal with poilers:, engines, and machinery generally) concur in the. view that it is not the.charaoter of the physical connection which constitutes the test of /lnnexation, but inteution is the true legal. criterion. Hill v. SewalcJ, 53.Pa.. St. 271; Benedict v. Mar8h, 127 Pa. St. 309, 18Atl. Rep. 26. .It wa$ therefore heJd in Vail v. Weaver, 132 Pa. St. 363, 19 AtL Rep. 138,thl1t the engine, machinery, and appliances of an electric light plant .erected upon and firmly attached to real estate do not pass to a purchaser of the real estate ata sale Qpon a mortgage of the realty, made and recorded before the plant was placed by the mortgagor on the mortgaged prel!Oises, unless it was the intention to make the plant a part of the realty when it was This decision seems to us to be a .decisive answer to the argument that the pumping-engines, as after-acquired property, come within the grasp of the mortgage of April 1, 1887, to the Farmers' Loan & Trust Company, in such a manner that the Holly COmP!lny's lien was This. case belongs rather to that c1asa of cases of which U. S. v. Railroadeo., 12 Wall. 362, is the exponent, than to the class represented by Porter v. Steel Co., 122 U. S. 267, 7 Sup. Ct. Rep. 1206. The subjectmatter of contest in. the former of these two cases was after-acquired rolling stock of a railroad, which by the purchase contractwas charged with a lien for the price. To the proposition that a prior general mortgage which in termS covered after-acquired property attached to this rolling stock as soouas acquired, to the displacement of the contractual lien, the Mr. Justice BRADLEY, said: court, . "That doctrine is. intended to Sll bserva the purposes of justice and not inj,ustice·. A mortgage intended to recover after-acquired property can only attach itself to sllch property in the condition in which it comes into the mortgagor's handll; If that property is already SUbject to mortgages or other liens, the general mortgage does not displace them, though they may be junior to it in point of time." . .
HOLLY l'tIANUF'G CO. fl. NEW CHESTER WATER CO.
889
It was there added that the result would be different in the case of rails or other materials which became a part of the principal thing. In the case of Porter v. Steel Co., supra, railroad bridges were the subjectmatter of controversy. But rails and bridges necessarily become an actual part of the permanent structure of a railroad, and are inseparable from it without destruction to the road. In that respect they are like the stones and bricks of a house. But detachable and removable machinery is susceptible of ownership distinct fr()m the land and buildings; and maybe the subject of particular and separate liens. Harlan v. Harlan, supraj Benedict v. Marsh,supraj Vail v.Weaver, supra. In the,preSentcase iUs clear from the terms' of the contract of August 3,1887, that the parties thereto did not intend that the pumping-engines should be convel'tedfrom personalty into realty until paid for, and the evidence shows beyond any duubt that the engines can be easily detached from their fastenings, and removed without any injury to them or damage to the building. ' , We think 1t would be a work of supererogation to enlarge upon the proposition that,as against Samuel R. Bullock & Co., the Holly pany's contractual lien is good. They at least cannot gainsay its validity; . Has the New Chester Water Company, upon the undisputed facts ofthis case,any better right? That company ,indeed, was notformally ,a party to the contract of August 3, 1887, but, if regard be had to the substance' of things, it must be treated in this matter as subject to the terms of the contract. For the purpose of the erection of the works at Chester, the water company, as we have seen, had put itself in the "absolute control" of Bullock & Co. In the expressive language of Mr. Bullock "the personnel of the New Chester Water Company was subordinated to the management, direction, and control" of his firm. 'To all intents and purposes the directors and other officials of 'the water company were the mere servants of Bullock & Co; It that some of the directors had positive knowledge of the. terms of the contract with the Holly Company, and, under the circumstances, notice thereof' 'is to be imputed to them all. Moreover, the' open control which' Lockman exercised over the pumping-engines was sufficient to affect the water company with notice of his principal's lien. But, in truth, with respect to this transaction, the distinction between BuUock & Co. and the water company is purely formal and fictitious. Bullock &; Co. were the water company in everything but name. They really held the entire capital stock. NoW, no court has ever yet decided that an incorporated company in this artificial capacity can be deemed to be ignorant of a matter affecting the company which is known to every individual stockholder. In our judgment, to treat the water company as a bon(£ fide purchaser or possessor of the engines without notice of the contractual lien of the Holly Company would be unreasonable and unjust. The water company cannot honestly retain the engines with· out paying the balance of the purchase price. But to defeat the Holly 'Company the defendants invoke the decision in v. Fowler, 60 Pa. St. 27,' that the land and buildings of an incorporated wate.r .company
FEDE1RAJ., REPORTER,
vol. 48.
are not subject to a lien under the mechanic's lien act. The Holly Company, however, claims nothing under the mechanic's lien law, nor a lien of the character therebr given. It is asserting a contractual lien, which binds a certain removable piece of machinery, which was not delivered absolutely, but 8'Uh modo. It would, then, be a misconception of the principle of that decision to apply it here. If a water companysbould contract for a pumping-engine, to be paid for when set up and satisfactorily tested, would anyone contend that, having got the engine within its walls, it could hold on to it witbout paying for it? But wbat difference does it make that a shott credit of 60 days is given, the contract reserving to the vendor a lien witb a possessory rigbt as further security? We fail to see tbat anyone has equities superior to tbose of the Holly Company. No rights .of tbird persons have intervened. When William G. Hopper & Co. and R. D. Wood & Co. first acquired knowledge of the contrac.t of August 3, 1887, is the subject of dispute; and the testimony is conflicting. Those firms, however, stood in close, relations to Bullock&·Co., and the facts about the contract for the pumping-engines were easily discoverable by them. The tripartite agreement of :October26, 1887, discloses that they were not unmindful of the possible existence of "liens ahead of the securities held by William G. Hopper & Co.," and it was thereby agreed that the firm should be protected by Wood & Co.a.gainst all such liens. Certain it is that neither of those firms advanced any money on the faith of' the pumpNeither did:the water company itself part with any of its bonds or stock on the faith thereof. Finally, it appears that the bonds of the water company are still in original hands, Hopper & Co. and Wood & Co., between them, owning substantially all of them, and really representing the whole issue. But the jurisdiction of the court is challenged because of the joinder as co-plaintiffs with the Holly Company of Samuel R. Bullock & Co., whose true place the defendants contend is on tbeir side; and it is insisted tbat when so' placed the jurisdiction is gone, tbey being citizens of the same state with the Holly Company. Bullock &Co. were brought upon the rec,ord after tbebill was filed by an amendlnent, whicb set forth that they as parties plaintiff, "not. as seeking any special or distinctrelief in the premises in this proceeding, but in affirmance of the rights of their co:plaintiff, tbe Holly Manufacturing Company, and in Qrder to invest the court with full jurisdiction in the premises, so that a complete decree protecting the rights of all parties can be mad.e." Their voluntary joinder, 'with respect to the Holly Company's supposed equitable rights against Wood &Co., is put upon the ground that Bullock &Co. stood to the Holly Company in .the relation of trustees, holding the legal title to the contract; and, their interest being with that company, they might arrange themselves on, the same side with it, agreeably to the principle recognized in Railroad (]o. v. Ketchum, 10iU. S. 299. Th:s· position we need not discuss, our conclusion upon that branch of the case being adverse to the Holly Company, upon a consideration of the merits of the controversy. So far as the bill seeks to enforce the Holly Company's
HOLLY
CO;
'v.
NEW
CO.
891
lien, it fs manifest that there' is nO dispute betwMu the company and Bullock & Co. Samuel R., Bullock, indeed, waS one of the principal witne8ses in the case on, behalf of the Holly Company to establish its lien, and hence a decree in its favor would conclude him and his firm, if there were any open question on that subject affecting them. But there is no such open question. The Holly Company is not seeking inany relief, and needs no decree against Bullock & Co. It is that that company is. proceeding as 10r a foreclosure without making its debtor, who is the owner of the property, a party defendant. But .this is a mistaken view. The ownership of the engines is not in Bullock & Co., and, in truth, was never intended to be in them, for in the purchase they acted in the interest and behalf of the New Cheater Water ,Company. But there can be no longer any pretense of ship in Bullock & Co., for Samuel R. Bullock, by his deed, has con:veyed the title to the real estate to the water company. It is laid down in 2 Jones, Mortg. § 1404, that in an equitable suit for foreclosure the mortgagor, after he has conveyed the whole of the premises mortgaged, is not l\ necessary party to the suit. Moreover, Bullock & Co. have assigned ,all their interest in the bonds and stock of the water company to Wood & Co. Therefore they have no longer any interest. near or remote, in this particular controversy. They are altogether formal paroust the jurisdiction of the court, coming ties, whose presence does within the rule laid down in Wormley v. Wormley, 8 Wheat. 451, where the applied test was whether a decree was sought against the party. Here the Holly Company seeks to enforce a charge in rein, and Bullock & Co. have neither title to nor interest in the thing. To the objection that the Farmers' Loan & Trust Company is not joined as a defendant in this suit, it is sufficient to say that, as substantially the whole body of bondholders is before the court, the presence of their trustee is wholly unnecessary. Moreover, the enforcement of the Holly Company's specific lien does not involve the validity Qf the trust mortgage, nor affect its standing as respects the principal mortgaged thing, the controversy relating to a mere incidental matter. Again, as the joinder of the trust company might oust the jurisdiction of thEl court, the omission to make it l\ party defElodant is fully warranted by equity rule 47. That equity has jurisdiction to enforce liens, whether upon real or personal property, is clear. 2 Story, Eq. Jur. § 1216; 1 White & T. Lead. Cas. Eq. 1108, note to Ouddee v. Rutter. In &lrot8ma1l8 v. Railway Co., L. R. 2 Ch. App. 332, it was declared that a bill in equity will lie to enforce the claim for the price of goods of a vendor by the exercise of his right of stoppage in tran8itu, had reinvested himself with the legal title. Lord CAIRNS there said (page 340:) "I be prepared to hold this to be a case entirely within the province of this court, and depending on the ordinary principles which regulate in eqUity the relations of mortgagor and mortgagee, whether of real or personal property, although, for obvious reasons, cases of this kind are more generally and more conveniently brought iuto a court of law."
nDDAL REPORTER,
voL 48.
It wiUoo remembered thl!.t in Gregory v.MO'f"1"iA, (flJpra, Chief Justice WAITE observed that the contract there created a charge upon the cattle for the purchase-money in the nature of a mortgage. In Fletcher v. M(lf'f!]J, 2 Story, 555, 565, Judge STORY said: "In equity there is no difficulty in enforcing a lien or any other equitable a charge not only against real estate, but upon perl!onal estate;, or' upon money in the hands of a third person, whenever the lien or other claim is a matter of agreement against the party himself and his personal representatives, and against every person claiming under him, volunt8rilyorwlth noUae; ... ... ... for every such agreement for a lien or constitutes a trul'lt, and is, accordingly, governed by the general do<:trine applicable to trustl!."
We have only to add that this case seems to be peculiarly one for a court of equity, in of the situation of the property; and because the court can grant a reil.'Jonable time for the payment of the lien, and, in the event of a sale, may prescribe equitable terms. Upon'the whole case. then, we are of the opinion that the contractual lien of the Holly'Manufacturing Company upon the pumping-engines here inquestion is valid and binding, and is enforceable in this suit. Counsel may prepare and submit the draft of a decree in accordance. with the ,viewaexpressed in this 'opinion.
lETNA INS.
Co. ".
BRODINAX el
ale
'({j(rcuit OOUrt, S. D. Georgia. April Term, 1888.)
Ii
*-
" .Code, § declares that "the wife is a feme as to her separate estate, UDlesscontrQlle'Q'by the settlement. Every restriction on her power must be com:plied with. :'But, while a wife may contract, she cannot bind her separate estate bt , IIony contraqt,ot securityship, I\or bv any assumption of the debts of her .husband. ., thatM\.ere '110 busband settllid property on his wife free front all his liabilities, , except such.inoumbrances as .the two together shall request the trustee to make,a, " . given tpereon. to secure a debt of theb,usband is valid. SAME.
WiPlIl'S BBl-AltA,TB' ESTATB-,-POWER TO ClIARdE-INSTRUMENT OJ' SETTLlumN'J!.
, Such an' exception Is not repugnant to the grant, but is merely a qualification .thereof.A1Ilr!Jl!3d,in {I Sup. Ct. Rep. 61.
'
Equity. Spft by Insurance Company against Martha :Brodinax and. others to foreclose a mortgage. Decree for plaintiff. Joseph Gano,hl, for complainant. J. B. Cumming and Geo. A. Mercer, for defenilants. MCCAY, J. On the 11th day of June, 1866, Benjamin E. Brodinax,. of the county of Richmond, Ga., executed a deed in due form under the 'laws of Georgia, and inconsideration of his love for his wife, Martha Brodinax, to a certain parcel ofland in said county to William E. Brod,jDax, in trust for the said Martha during her life, with other limitations not here important ,to be considered. The deed contained'various other
In