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Keywords

summary judgmentforeclosure

contracthabitability

Related Cases

Merchants & Mechanics Federal Sav. & Loan Ass’n of Springfield v. Herald, 120 Ohio App. 115, 201 N.E.2d 237, 28 O.O.2d 302

Facts

Alonzo R. and Evelyn Herald owned a property where Alonzo, as a builder, installed wall-to-wall carpeting and padding purchased from L.C. Gaier Furniture Company. A chattel mortgage was executed for the carpeting, which was later assigned to the First National Bank of Springfield. The property was sold at a sheriff's sale to Taggart Coal and Supply Company, who filed for summary judgment against the bank's cross-petition for foreclosure of the chattel mortgage. The court found that the carpeting and padding were fixtures and part of the real estate.

The Merchants and Mechanics Federal Savings & Loan Association brought proceedings to foreclose a real estate mortgage given by Alonzo R. and Evelyn Herald, and the mortgaged premises, upon which stood a dwelling house, were sold at sheriff's sale to The Taggart Coal and Supply Company, a lien claimant. Alonzo R. Herald, d. b. a. A. R. Herald, was the builder and general contractor in the erection of the house. He purchased from the L. C. Gaier Furniture Company 120 square yards of carpeting and padding and installed it wall to wall.

Issue

Did the wall-to-wall carpeting and padding installed in the house constitute fixtures, thereby affecting the rights of the chattel mortgagee against a bona fide purchaser of the real estate?

Rule

A fixture is determined by considering the annexation of the chattel to realty, its application to the use of the realty, and the intent of the owner to make it a permanent part of the realty.

A fixture is to be determined by the consideration of a combination of the following tests: (1) To become a fixture it is essential that the chattel in question be annexed to some extent to realty. (2) The chattel must have an appropriate application to the use or purpose to which the realty to which it is attached is devoted. (3) There must be an actual or apparent intention upon the part of the owner of the chattel in affixing it to realty to make such chattel a permanent part of such realty.

Analysis

The court applied the tests for determining whether the carpeting and padding were fixtures by examining their annexation to the real estate, their application to the use of the property, and the intent of the owner. The court concluded that the method of installation and the intention of the owner indicated that the carpeting and padding were intended to be permanent fixtures, thus satisfying the criteria for fixtures.

We proceed to apply these tests in their numerical order to the facts in the present case. (1) Concerning annexation of a chattel to real estate, the court said in the course of its opinion, ‘[T]he annexation may be very slight.’ … (2) It is doubtful that the carpeting and padding were as vital to the habitability of this house as was the furnace to that in the case cited. Nevertheless, these items ‘have an appropriate application to the use or purpose to which the realty to which it is [they are] attached, is devoted,’ … (3) The intent of the owner to make these chattels part of the realty, to be sold with it, is apparent and consistent throughout except for his execution of the chattel mortgage.

Conclusion

The court affirmed the judgment that the carpeting and padding were fixtures and ruled in favor of the purchaser, Taggart Coal and Supply Company, as they had no actual notice of the chattel mortgage.

The judgment is affirmed.

Who won?

Taggart Coal and Supply Company prevailed in the case because they were a bona fide purchaser without actual notice of the chattel mortgage, and the court found that the carpeting and padding were fixtures.

The judgment entry contained a finding that the carpeting and padding were fixtures and part of the real estate.

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