
    Central Union Gas Company, Appellant, v. Edward W. Browning, Respondent.
    First Department,
    November 3, 1911.
    Sale — contract of conditional sale under form of lease — effect of failure to file contract — when purchaser on foreclosure gets title to chattels annexed to freehold as against conditional vendor — fixtures — constitutionality of Lien Law.
    Although gas ranges were installed in an apartment house under an agreement in the form of a lease whereby the vendee was required to pay “rent,” the agreement in law amounted to a contract of conditional sale if the vendee upon paying the contract price was to be entitled to a bill of sale from the vendor.
    As section 113 of the Lien Law and' section 63 of the Personal Property Law provide that if such contract of conditional sale of chattels attached to a building be not filed it shall be void as against subsequent bona fide purchasers or incumbrancers of the premises, one who purchased the building on the foreclosure óf a mortgage obtained a good title as against the conditional vendor, although the vendee had not fully paid the purchase price, where the contract was not 'filed and no notice of it was given to the mortgagee or to the bidders at the foreclosure sale.
    As the statute makes the contract void unless filed it is immaterial whether the gas ranges annexed to the building became part of the freehold, although, aside from the statute, the question as to whether the ranges became fixtures and were So annexed would depend upon the intention of the parties at the time, and such contract would be competent, if not conclusive, evidence of an intention that they should not become fixture's so as to pass under a conveyance.
    
      It seems, that in the absence of such contract of conditional sale, or of evidence of an intention that a range was not to become a fixture, it became such when it was annexed to the kitchen of an apartment having no other means of cooking by placing it hi a recess in a wall built to receive it, and was connected with gas pipes and furnished with a stovepipe leading to the chimney.
    The statutes aforesaid are not unconstitutional, even where they relate to chattels not so affixed as to become part of the realty, for if affixed the sale becomes absolute as against innocent purchasers, unless the contract of conditional sale was filed.
    Miller and Laughlist, JJ., dissented, with opinion.
    Appeal by the plaintiff, the Central Union Gas Company, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 17th day of March, 1911, upon the dismissal of the complaint by direction of the court at the' close of plaintiff’s case' on a trial at the New York Trial Term.
    
      John A. Garver, for the appellant.
    
      Clarence E. Thornall, for the respondent.
   Ingraham, P. J.:

This action was brought for the conversion of certain gas ranges which had been delivered by the plaintiff for installation in certain apartment houses in course of construction in East One Hundred and Thirty-seventh street in the city of • New York. The defense is that these gas ranges had been affixed to the realty; had been purchased bythe defendant upon a sale of the property -under a decree of foreclosure; and that the plaintiff had neglected to file the conditional bill of . sale as required by section 112 of the Lien Law (Gen. Laws, chap. 49 [Laws of 1897, chap. 418], as amd. by Laws of 1904, chap. 698).

Upon the trial it appeared that a corporation known as- the Ignatz Florio Company was in September, 1907, engaged in constructing apartment houses in East One Hundred and Thirty-seventh street, and made a contract with the plaintiff by which the plaintiff delivered to the Florio Company certain gas ranges to. be installed in the kitchens of the apartments erected upon the property. The buildings were designed for rental to separate tenants, each tenant renting one of the apartments. These ranges constituted the only method of cooking in the apartments and without them the apartments would clearly have been ..unrentable.- These gas ranges were set up on a cement hearth connected with the gas pipe and a flue connection was made between the range and the flue leading from the apartment. What was called a lug was constructed in the wall of the building, the ranges were set into the lug and then rested upon the legs of the range. After being thus inserted they are connected with the gas pipe running through the building by certain elbows and joints screwed to the range and the gas pipe. There was then a flue connection made of stovepipe between the range and the-flue; one end of the stovepipe was set on top of the range with the flue connection and the other set into the flue of the building. These ranges were delivered in January and February, 1908, and were affixed to the building in the manner stated by employees of the plaintiff during that period. One installment of what was called rental but what was really the purchase price for these ranges was paid, but the Florio Company failed to make any further payments. A mortgage had been placed upon this property by the Florio Company which was subsequently foreclosed and a judgment was entered under which the premises were sold on June 2, 1909, and a deed delivered by the referee to the defendant, the purchaser, who thereupon acquired possession of these apartment houses which included these gas ranges fitted to the buildings as aforesaid without notice of any claim of the plaintiff or any one else until March Í9, 1910, when the plaintiff served a demand upon the defendant for the return of these gas ranges^ These facts appearing upon the trial the Trial Term dismissed the complaint, holding that the defendant acquired a good title to this property under the provisions of section 112 of the Lien Law, the same provision being re-enacted in section 62 of the Personal Property Law (Consol. Laws, chap. 41; Laws of 1909, chap. 45).

The agreement under which these goods were delivered was executed by the Florio Company and by it the Florio Company agreed to hire from the Central Union Gas Company for a period of not. less than one year from the date of delivery of the appliances mentioned therein and pay a rental of seventy-five dollars per annum in advance, it being understood that the title to such appliances should at all times remain in the company regardless of sale, lease or transfer of" the said premises. It was further provided in the event of the company removing the said appliances by reason of the consumer’s failure to comply with the conditions of the contract all sums paid by the consumer under the agreement should be retained by the company as reasonable compensation for rent, injury to and wear and tear upon the said appliances up to the period when the last payment so made was due and payable; that the appliances should not be removed from the premises without the consent of the company. It was further understood and agreed that <£ within one year from the date hereof the consumer has the option of purchasing from the Company the appliance described above at the rate of $12 each; or when six consecutive yearly payments have been made, aggregating four hundred and fifty dollars, the appliances above mentioned are to become the property of" the consumer and the Company will furnish a hill of sale for same.” Although in the form of a lease; this was. clearly a contract for a conditional purchase, for by complying with the conditions and paying the contract price therefor the gas ranges became the property of the purchaser, fío copy of this contract was filed in any public office and no notice was given to the mortgagee, to the bidders at the sale under the decree of foreclosure or to the defendant, the purchaser at said sale, until nearly a year after the sale had been completed and the defendant had taken possession of the property.

Section 112 of the Lien Law, as amended by chapter 698 of the Laws of 1901, provides: “Every such contract.for the conditional salé of any goods and chattels "attached, or to he attached, to a building, shall be void as against subsequent bona fide purchasers or encumbrancers of the premises on which said building stands, and as to them the sale shall be deemed absolute, unless, on or before the date of the delivery of such goods or chattels at such building, such contract shall have been duly and properly filed and indexed as directed in this article. ” If this is a conditional sale, and I think it clearly is, then this section applied, and notwithstanding the condition the same became, as to bona fide purchasers or incumbrancers,' absolute. I think it is quite immaterial to inquire whether by the annexation' of these ranges they became a part of the freehold. It is undoubtedly true that but for this provision of the Lien Law, as re-enacted by the Personal Property Law, the question as to whether these ranges became fixtures and so annexed fco the freehold would depend upon the intention of the parties at the time of the annexation, and that the contract under which they were delivered to the building would be competent if not conclusive evidence of the intention that they should not become fixtures and not pass under a conveyance of the property. (See Fitzgibbons Boiler Co. v. Manhasset Realty Corp., 198 N. Y. 517; Herzog v. Marx, 202 id. 1; New York Investment Co. v. Cosgrove, 47 App. Div. 35.) In the absence of such a contract or such evidence of such intention I am inclined to think that such gas ranges affixed to the kitchen of an apartment in an apartment house designed to rent would become fixtures. As between landlord and tenant the inclusion of such gas ranges in the kitchens by a landlord would evidently be part of the demised premises. Some appliance for cooking becomes necessary in such an apartment, and an apartment would be incomplete without some appliance for such purpose.. The tenant certainly would acquire the right to use these gas ranges, and when a building is thus leased to tenants, including such ranges which are necessary to make the apartments rentable, it would seem to me that a purchaser of the premises acquiring the rights of lessor to the premises would become a purchaser of the ranges and appliances necessary to make the apartments rentable and complete as part of the building itself. I think, therefore, that by the purchase of these premises at the sale under the judgment1 of foreclosure the defendant as the grantee in that deed became the purchaser of these gas ranges as an appurtenance to the property purchased, and that the mortgagor who had affixed one of these gas ranges to each apartment could not have recovered them from the purchaser at the sale under foreclosure as not being covered by the mortgage and not included in the purchase. The provisions of the section of the Lien Law before referred to applied to the transaction as between the plaintiff and the Florio Company.. The plaintiff attempted to sell to the Florio Company these gas ranges for annexation to the building under the condition that title should pass only upon the payment of the consideration named in the agreement. The provisions of this section of the Lien Law are that the conditional sale should be void as against subsequent bona fide purchasers or incumbrancers of the premises upon which such building stands. These provisions do not make the conditional sale void as to a purchaser of personal property covered by the conditional sale but as to bona fide purchasers or incumbrancers of the premises upon which such building stands; i. e., a building to which the goods and chattels covered by the conditional sale are attached or are to be attached. Thus, when the sale was made of the goods or chattels either attached or to be attached to a building the conditional sale as to such property was to be" void as against a bona fide purchaser or incumbrancer of the premises on which the building stands and as to them, i. e., such bona fide purchasers or incumbrancers, the sale shall be deemed absolute unless the contract was duly and properly filed. What is necessary to appear is that the goods or chattels were sold to be attached to a building, and then the statute expressly provides that as to such goods and chattels the sale shall be deemed absolute as to any purchaser or incumbrancer of the building in good faith. The object, of this statute was plainly to require a person attempting to enforce such a conditional sale to file the contract therefor so that purchasers or incumbrancers of the building should have notice that certain personal property therein 'contained had not become a part of the building so as to pass to a purchaser upon the sale or incumbrance thereof. It seems to me that it was just such a case as the present that the statute was intended "to affect. . This conclusion is in accordance with, the decision of this court in Kirk v. Crystal (118 App. Div. 32, affd., 193 N. Y. 622). Plaintiff, however, claims that the act would be unconstitutional if it related to articles not so affixed as to become part of the real estate. But undoubtedly the Legislature could provide what articles should become part of the building and pass by a conveyance of the premises on which it was erected, and an owner of personal property, after such a provision of law, could hot complain if he lost the property by reason of its attachment to the realty. The effect of this statute was that where property was actually attached to a building a sale of it to the owner of the building should be deemed absolute unless the contract embodying the conditions of such sale was properly filed. . It seems to me this was clearly within the. power of the Legislature, and that by the attachment of the gas ranges to the building with the knowledge of the plaintiff the sale became an absolute sale as to bona fide purchasers or incumbrancers of the premises. Plaintiff had notice as to the actual attachment of these gas ranges to the premises and did itself attach them. I, therefore, think the sale became an absolute one; that these gas. ranges became attached to the building; that the defendant, as a bona fide purchaser of the premises without notice of the contract, became the owner of. the gas ranges; and the complaint was properly dismissed.

It follows that the judgment appealed' from should be affirmed, with costs.

SCOTT and DOWLING, JJ.,concurred; LAUGHLIN and MILLER, JJ., dissented.

MILLER, J.

(dissenting):

I dissent. ~is court in this department decided that gas ranges placed in apartment houses in. practically, if not precisely, the 1~ame way in which the ranges in question were placed re~'ained their character as chattels as matter of law. (Cosgrove v. Troescher, 62 App. Div. 123.) The statute, sectiOn 67of the Personal Property Law (Consol. Laws, chap. 41; Laws of 1909, chap. 45), did ndt in terms or effect change the rule of law declared in that case. Indeed, it only indirectly mftolved the law of fixtures. Its plain purpose was to prod t?ct bona fide. purchasers, pledgees or mortgagees of chattels ~ulject to contracts of conditional sale. In its original form (Lien Law [Gen. Laws, chap. 49; Laws of 1897, chap. 418], § 112) it applied only to purchasers, pledgees or mortgagees of chattels as such. But' it was amended .in 1904 (Laws of 1904, chap. 698, § 1) so as to protect purchasers or incumbrancers of premises having thereon a building containing fixtures. The provision, added by the said amendment, can have no application to the case of chattels which from their nature remain such, though attached to a building, as these ranges were attached, for the reason .that the purchaser of the real property would get no title to them, even as against his vendor. The said provision was doubtless intended to apply to the class of cases in which the intention of the party attaching the chattel determines whether it retains its character as such; e. g., Fitzgibbons Boiler Co. v. Manhasset Realty Corp. (198 N. Y. 517). We cannot hold that this case falls within that class without overruling Cosgrove v. Troescher (supra).

Laughlin, J., concurred.

Judgment affirmed, with costs.  