Williams Co. v. Sav. Loan Assn. , 217 Mo. App. 554 ( 1925 )

^* Headnotes 1. Judgments, 34 C.J., Section 1331; 2. Improvements, 31 C.J., Section 1; 3. Mortgages, 27 Cyc., p. 1145 (Anno); 4. Executions, 23 C.J., Section 825 (Anno); 5. Sales, 35 Cyc., p. 489 (Anno); 6. Landlord and Tenant, 35 C.J., Section 218 (Anno); 7. Executions, 23 C.J., Section 45; 8. Appeal and Error, 4 C.J., Section 3054; 9. Replevin, 34 Cyc., p. 1387. This cause, in replevin, was tried before the court without a jury. The court found for defendants and plaintiff appealed. Plaintiff based its cause on the contention that it is the owner and entitled to the possession of the electric light fixtures in the Drake Hotel at Carthage, Mo. Defendant Farm Home Saving Loan Association claims the title to the fixtures by virtue of being the purchaser at a foreclosure sale under a deed of trust given by defendant Drake Hotel Company. Defendant Ewing was trustee in the deed of trust mentioned, and his interest, if any, is only nominal. Defendant P.C. Remler claims the right of possession of the fixtures by virtue of a lease from the Drake Hotel Company, which lease was recognized by defendant Farm Home Savings Loan Association. For convenience hereinafter defendants Farm Home Savings Loan Association and Drake Hotel Company will be designated respectively as the loan association and the hotel company.

The hotel company, a corporation, in 1921, was constructing the Drake Hotel in the city of Carthage. In September, 1921, said company leased the hotel building to defendant Remler for a term of ten years. October 21, 1921, the hotel company gave a deed of trust on the hotel property to defendant Ewing, trustee, to secure a loan of $82,500 obtained from the loan association. November 17, 1921, the hotel company purchased from plaintiff the electric light fixtures for the hotel, and plaintiff thereafter installed said fixtures. May 19, 1922, plaintiff commenced proceedings in the circuit court of Jasper county to establish a materialman's lien on the fixtures. That case will be hereinafter referred to as the lien suit. The hotel company, the loan association and Ewing, trustee, were the parties defendant to the lien suit. December 18, 1922, the lien suit was disposed of whereby plaintiff was given a general judgment against the hotel company for $1335.25, but was denied a materialman's lien. April 22, 1923, a general execution based on said judgment was issued against the hotel company and on day of issue the sheriff levied or attempted to levy upon the fixtures in controversy as the property of the hotel company. June 8, 1923, the sheriff sold or attempted to sell the fixtures levied upon or attempted to be levied upon as aforesaid, and plaintiff was the purchaser at said sale. The hotel company defaulted in the payment of its obligations to the loan association and on May 24, 1923, the deed of trust above mentioned was foreclosed, and the loan association, the beneficiary therein, was the purchaser at said foreclosure sale. The fixtures were not severed or separated from the building at the time of the alleged levy or at any other time, and when plaintiff demanded possession of said fixtures after the alleged execution sale defendant Remler refused to surrender his possession and this cause in replevin followed whereby plaintiff seeks a judgment for possession or for the value of the fixtures.

Plaintiff's present cause is bottomed on the theory that as between all parties the fixtures are personal property. In other words plaintiff contends that the judgment in the lien suit adjudged the fixtures to be personal property, and that the parties in the present cause are bound by that judgment. In the lien suit plaintiff proceeded on the theory that the fixtures after installation were a part of the realty and was seeking a lien under the Statute, sections 7216 et seq., Revised Statutes 1919. In that suit the loan association and Ewing, trustee, were made parties defendant, and answered by a general denial and a plea that the lien of the deed of trust was a prior lien. Remler the lessee was not a party to the lien suit. In the lien suit the court rendered the following judgment: "Now at this day this cause comes on for trial, the plaintiff appears by B.H. Esterly, its attorney, the defendant, Drake Hotel Company, appears by J.H. W.E. Bailey, its attorneys, and Farm Home Savings Loan Association and Lee B. Ewing, appear by Lee B. Ewing, their attorneys, and all parties announce ready, waive a jury and submit this cause to the court for trial. After hearing all of the evidence and being fully advised in the premises, the court finds the issues in favor of the plaintiff and against the defendant, Drake Hotel Company, on plaintiff's petition herein; that said defendant is justly indebted to said plaintiff in the sum of $1365.25, and the court finds the issues in favor of the defendant, Drake Hotel Company, on its counterclaim herein; that the plaintiff is justly indebted to said defendant in the sum of $30, and the court finds the issues in favor of the defendants, Farm Home Savings Loan Association and Lee B. Ewing, on plaintiff's petition herein; and that the plaintiff is entitled to have and recover of and from the defendant, Drake Hotel Company, the sum of $1335.25, the amount of plaintiff's debt and damages herein, after deducting the sum allowed the defendant, Drake Hotel Company, on its counterclaim herein and the court further finds that the fixtures described in plaintiff's petition herein are not lienable.

It is therefore ordered and adjudged by the court that the plaintiff take nothing by means of this suit against the Farm Home Savings Loan Association and Lee B. Ewing, and that the plaintiff have and recover of and from the defendant, Drake Hotel Company, the said sum of $1335.25, the amount of debt and damages so found due by the court as aforesaid, together with the costs of this suit and that execution issue therefor."

The judgment in the lien suit was not appealed from and became final. It recites that the court found that the fixtures were not lienable. Defendants in their brief in the cause at bar make the contention that by the language in the judgment — "the court finds that the fixtures described in plaintiff's petition herein are not lienable" — when considered with the whole judgment, does not justify the contention by plaintiff that the court held that the fixtures were personalty and not a part of the realty. It was practically admitted, however, on oral argument that the lien sought by plaintiff in the lien suit was refused because the court was of the opinion that the fixtures were not a part of the realty. Such also is the clear import of the judgment when considered in the light of the pleadings in that cause, which pleadings are before us. If the fixtures were personalty and were not included in the deed of trust the title thereto did not pass by the deed of trust or the sale thereunder. As to whether the fixtures were included and embraced in the property described in deed of trust we will hereinafter consider. The question now in hand is: Are defendants, the hotel company, Ewing, and the loan association barred by the judgment in the lien suit from interposing the defense in the cause at bar that the fixtures are so attached as to be a part of the realty.

The character of the light fixtures, as to whether mere personalty or a part of the realty, was clearly in issue in the lien suit. The judgment was that they were personalty and not a part of the realty. Therefore the parties to that suit are bound by that adjudication and cannot in a subsequent cause between the same parties and their private dispute the former adjudication on that question. [Case v. Sipes, 280 Mo. 110, 217 S.W. 306.]

In Case v. Sipes, supra, the court quotes with approval from Southern Pac. R.R. v. United States, 168 U.S. loc. cit. 48, 49, 18 Sup. Ct. 27, 42 L.Ed. 355, as follows: "The general principle announced in numerous cases is that a right, question or fact distinctly put in issue and directly determined by a court of competent jurisdiction, as a ground of recovery, cannot be disputed in a subsequent suit between the parties or their privies; and even if the second suit is for a different cause of action, the right, question or fact once so determined must, as between the same parties or their privies, be taken as conclusively established, so long as the judgment in the first suit remains unmodified. This general rule is demanded by the very object for which civil courts have been established, which is to secure the peace and repose of society by the settlement of matters capable of judicial determination. Its enforcement is essential to the maintenance of social order; for, the aid of judicial tribunals would not be invoked for the vindication of rights of person and property, if, as between parties and their privies, conclusiveness did not attend the judgments of such tribunals in respect of all matters properly put in issue and actually determined by them."

Many authorities are cited in Case v. Sipes, supporting the general rules applicable to the law of res adjudicata. The purpose and necessity of such rules are well stated in the excerpt quoted. In view of these rules we are clearly of the opinion that as between plaintiff and defendants, the hotel company, Ewing, and the loan association, the light fixtures were adjudicated in the lien suit to be mere personalty and that said judgment is binding on said parties last mentioned in the case at bar.

Defendant loan association in effect contends that by the description in the deed of trust the light fixtures were included whether a part of the realty or not. The description in said deed of trust so far as pertinent here is as follows: "All of the north half of lots 41 and 42 in the original town or city of Carthage, Missouri, except a strip six feet wide off the west side of said lot number 42, together with all improvements thereon." It is urged that the language "together with all improvements thereon" includes the fixtures, even though they are mere personalty and not a part of the realty. Where the term "improvements" is used without language defining or extending the ordinary meaning the courts with substantial uniformity have held that such term relates to improvements to the realty. [In re Howard Laundry Co., 203 Fed. (C.C.A.) 445, and cases there cited.] That this is the general rule will not be controverted. There is no language in the description or elsewhere in the deed of trust which defines or extends the term "improvements" as used in the description, hence we hold that the term had reference to improvements to the realty. Since as to the loan association, the hotel company and Ewing the fixtures are personalty the term "improvements" in the description does not include the fixtures. Since they were not included in the trust deed the loan association acquired no interest in them by being the purchaser at the foreclosure sale.

Assuming that the levy and sale passed the title to the fixtures to plaintiff, the question arises: Is plaintiff entitled to possession as against Remler, the lessee? As stated above Remler was not a party to the lien suit. Plaintiff's judgment was general and therefore no lien in its favor attached to the fixtures when considered as personalty prior to the levy. As stated the levy was on April 27, 1923, Remler leased in September, 1921. There is no question but that, as between the hotel company and the loan association on the one hand and Remler on the other, the light fixtures were included in the lease regardless of the character of property they in fact may have been or may be. Remler was in the possession of these fixtures from the date of installation in November, 1921, until the levy on April 27, 1923. He was in possession when plaintiff filed the lien suit and when the general judgment in favor of plaintiff and against the hotel company was rendered. As to his right of possession of the light fixtures during the term of his lease Remler's position is analogous we think to that of a purchaser, or mortgagee. If two creditors have a claim against a common debtor, one for the purchase price of personal property and the other as a general creditor with knowledge that the purchase price is not paid, the general creditor if he obtained a first lien by execution, attachment or mortgage on personal property will prevail over the creditor for the purchase price. [Kane v. Manley, 63 Mo. App. 43; Straus v. Rothan, 102 Mo. 261, 14 S.W. 940; Corning v. Rinehart Medicine Cc., 46 Mo. App. 16; Barbee Co. v. Crawford, 132 Mo. App. l.c. 7, 111 S.W. 614.] We can perceive no difference as to the position of Remler as lessee than if he were a mortgagee so far as concerns his right to prevail over plaintiff respecting the right to possession of the light fixtures. Also plaintiff's judgment in the lien suit being only general, and the property levied upon so far as this suit is concerned, being personalty, there was no lien, in favor of plaintiff, prior to levy as above stated. This being true the sale of the landlord's interest in the leased fixtures would not terminate the lease as to said fixtures. [Smith v. Aude,46 Mo. App. 631.] But we do not regard the lessor's interest in the fixtures in possession of the lessee as not subject to execution as is the interest of a pledgor in pledged personalty in the possession of the pledgee, and the interest of a mortgagor of personalty after condition broken. [See Evans Howard Fire Brick Co. v. Gammon, 204 S.W. (Mo. App.) loc. cit. 835; Pollock v. Douglass, 56 Mo. App. 487; Ottumwa Nat. Bank v. Totten, 94 Mo. App. loc. cit. 602, 68, S.W. 386.]

The sufficiency of the levy is challenged. If there was no levy, there was no sale. If no sale plaintiff acquired nothing by the attempted levy and attempted sale, and therefore would have no support in this cause in replevin. The conclusion we have heretofore reached we think justifies us in assuming, without deciding, that the levy was valid. If we hold that the levy was not valid plaintiff could cause to be issued another execution and levy again. The levy at bar may have been rendered of doubtful sufficiency because of plaintiff's uncertainty as to the correctness of the course being pursued, or the sheriff may have of his own accord proceeded as he did. But whatever be the cause the result was to accommodate and favor Remler who had the light fixtures in possession and was then using them in the conduct of the hotel. To hold the levy valid will not deprive any party of any right. To hold it void would merely add to plaintiff's burdens and nothing more. In this situation we shall consider the levy a valid one. The sale which followed the levy conveyed the title to the fixtures to plaintiff, but that did not carry the right of possession. The right of possession remained in Remler under his lease.

Since plaintiff is not entitled to possession there can be no recovery in the cause at bar. The judgment should, therefore, be affirmed, and it is so ordered. Cox, P.J., concurs; Bailey,J., not sitting.