McConnell v. Blood.

The fact that a defendant in a particular case has a claim in setoff against the original contracting party shows clearly the injustice of forcing another person upon him to execute the contract without his consent, against whom his set-off would not be available. But the actual existence of the claim in set-off cannot be a test to determine that there is no implied assumpsit or privity between the parties. Nor can the non-existence of a set-off raise an implied assumpsit. If there is such a set-off, it is sufficient to state that, as a reason why the defendant should prevail; but it by no means follows that because it does not exist the plaintiff can maintain his action. The right to maintain an action can never depend upon whether the defendant has or has not a defense to it.

The implied assumpsit arises upon the dealings between the parties to the action, and cannot arise upon the dealings between the defendant and the original contractor, to which the plaintiff was not a party. At the same time, the fact that the right of set-off against the original contractor could not, under any circumstances, be availed of in an action brought upon the contract by the person to whom it was transferred and who executed it, shows that there is no privity between the parties in regard to the subject-matter of this action.

It is, therefore, immaterial that the defendant had no claim in set-off against the Citizens' Ice Company.

We are not called upon to determine what other remedy the plaintiff has, or what would be the rights of the parties if the ice were now in existence.

As between mortgagor and mortgagee, an engine and boiler, steam-gauge, water-tank, steam-pump, and shafting, designed permanently to increase the value of a building for occupation as a manufactory, are fixtures, although removable without injury; not so as to machines not essential or especially adapted to the use of the building as a manufactory, although fastened with nails and bolts.*

* See Ottumwa Woolen Co. v. Hawley, 24 Am. Rep. 719, and note, 726.

TORI

McConnell v. Blood.

ORT for the conversion of machinery. The plaintiff claimed as assignee for creditors; the defendant as mortgagee of real estate used as a shoe manufactory. The facts were agreed on, and the issue was only as to what part of the machinery was personal property, and what fixtures. The machines consisted of a steam engine and boiler resting on a layer of brick on the lower floor, above a water-tank built in the soil to supply the engine, the engine being fastened through the timbers of the floor above by two iron bolts; the boiler was connected with steam-pipes for heating the building, and the exhaust and blow-pipes passed through the floor below; the engine and boiler could be removed without injury to the building by enlarging two doorways; a steam-gauge connected with the engine by an iron pipe, and fastened to a plank nailed to the floor-timbers above; a steam-pump, bolted to a plank bench nailed to the studding and the floor, and connected by pipes with a tank on the upper floor furnishing water for the boiler, and with a tank in the attic furnishing water for general use; also shafting; also a variety of machines for shoe-making, connected with the shafting and belting, some held in place by their own weight, others bolted, nailed, or screwed to the floors or walls, or to benches thus secured, and some of them connected by pipes with the boiler. The court below held the engine and boiler, steam-gauge, steampump, water-tank, and shafting to be real estate; the rest personalty. Defendant had judgment, and plaintiff appealed.

B. Dean, for plaintiff.

W. S. B. Hopkins, for defendant.

SOULE, J. The rights of these parties are determined by the rules which apply between mortgagor and mortgagee. Many things which, as between landlord and tenant, would be removable as chattels, are regarded as part of the realty, in favor of a mortgagee.

In ascertaining what articles have become part of the realty, regard must be had to the manner in which, the purpose for which, and the effect with which, they are annexed. McLaughlin v. Nash, 14 Allen, 136; Pierce v. George, 108 Mass. 78; s. c., 11 Am. Rep. 310. Whatever is placed in a building by the mortgagor to carry out the obvious purpose for which it was erected, or to permanently increase its value for occupation, becomes part of the realty, though not so

Blunt v. Norris.

fastened that it cannot be removed without serious injury either to itself or to the building. On the other hand, articles which are put in merely as furniture are removable, though more or less substantially fastened to the building. So, too, machines not essential to the enjoyment and use of a building occupied as a manufactory, nor especially adopted to be used in it, are removable, though fastened to the building, when it is clear that the purpose of fastening them is to steady them for use, and not to make them a permanent part of or adjunct to the building. Winslow v. Merchants' Ins. Co., 4 Metc. 306; Hellawell v. Eastwood, 6 Exch. 295; The Queen v. Lee, L. R., 1 Q. B. 241; Pierce v. George, above cited. The engine and boiler, which were put in to supply the premises with power; the steam-gauge, which is essential to the safe use of the same; the water-tank, for supplying the building with water for general use; the steam-pump connected therewith, and the shafting, are evidently designed as permanent additions to the realty, and could not be removed without seriously injuring the value of the building for use.

The other articles named in the agreed facts are in no way essential to the enjoyment of the estate; they are incidental merely to the particular business carried on at that time; and though some of them are affixed to the building by nails or bolts, it is clear that the object of affixing them is only to secure them so that they may be advantageously used, and not to make them permanent parts of the building. They are therefore chattels; and for their value, to be ascertained by an assessor, there must be

Judgment for the plaintiff.

BLUNT V. NORRIS.

(123 Mass. 55.)

Collateral securities - Equities as between claimants.

Without

A, to enable B to borrow money for him, executed his promissory note, to B's order, and a real mortgage as collateral, which was recorded. A's knowledge, and to secure his own debt, B delivered the note unindorsed to C, and afterward assigned the mortgage, and another note, which he procured from A, by artifice, to D for value, who received the same in good faith Held, that C was not entitled in equity to an assignment of the mortgage.

Blunt v. Norris.

BILL

ILL in equity for assignment of a mortgage to plaintiff, or that it might be declared to be held in trust for him, and for an injunction against the transfer of the same. George W. Gerrish executed a real mortgage to Samuel W. Jackson, to secure a promissory note of even date, for $2,500, made by Gerrish to Jackson's order, and stating that it was secured by mortgage of land. The mortgage was duly recorded. The note and mortgage were given to Jackson, who was a real estate broker, to enable him to borrow money for Gerrish. Shortly after, Jackson, being indebted to plaintiff, delivered to him, without the knowledge of Gerrish, the note indorsed as collateral security for $1,500. Plaintiff received it

in good faith, and Jackson paid him the same annual interest on the $1,500 and indorsed it on the note, for more than three years. Soon after this transfer, Gerrish was induced by Jackson to execute another note to accompany the mortgage, on his representation that none had been executed. Afterward, defendant having agreed to lend Gerrish $2,000 on the mortgage, Gerrish got from Jackson an assignment of the mortgage to the defendant, and the last-named note indorsed by Jackson without recourse, and delivered them to defendant as security for a note for $2,000 at three months, and defendant received them in good faith and in ignorance of the other claim on the mortgage. He did not record his assignment until more than three years had elapsed. Neither plaintiff nor defendant ever received his advances. The case was reserved for the full court.

R. D. Smith, for plaintiff.

W. A. Herrick, for defendant.

AMES, J. The claim of the plaintiff is that, as he acted in good faith, and received the note without notice of any fraud or want of authority on the part of Jackson, the transfer of the note operated as an equitable assignment of the mortgage also. But, as the note was not indorsed to the plaintiff, it could only be sued in the name of Jackson, and was subject to all equities against him; and, even upon the supposition that, so far as it was a matter between the plaintiff and Jackson, the mortgage might be considered as subject to a trust in favor of the plaintiff to the extent of the money which he had advanced, yet he acquired no right as

Blunt v. Norris.

against the defendant, who was a purchaser for a valuable consideration, and without notice of any claim of the plaintiff.

It appears that, although the mortgage had remained for about five months in the hands of Jackson, nothing had been done in the way of raising money for the use of the mortgagor, until the defendant agreed to advance the money upon it. As Jackson at that time was unable to produce the original note, he was driven To the subterfuge that the note intended to go with the mortgage had never been signed at all. The mortgagor in this way was induced to give what was in fact a new note. There can be no doubt that this new note was the one, and the only one, which the mortgagor intended to secure by the mortgage, and that he did not suppose that there was another note of the same tenor and date in existence. We see no ground for the plaintiff's claim that this new note so given was a spurious note. Up to the moment of the assignment to the defendant, the mortgage was subject to the control of the mortgagor. Jackson was his agent or servant for the purpose of negotiating or transferring it to the actual lender of the money, and with no authority to do any thing more. The defendant was dealing with a mortgage which, so far as the public records furnished any indication, was one which the assignment from Jackson would transfer to him, absolutely and free of any incumbrance. While acting in good faith and paying a valuable consideration, he had a right to rely upon the record. "In the absence of fraud, a conveyance by the party who appears on the record to be the owner of the mortgage should be sufficient to pro tect a purchaser who has no actual or constructive notice of title in any other." Welch v. Priest, 8 Allen, 165. See, also, Young v. Miller, 6 Gray, 152; Warden v. Adams, 15 Mass. 233; Wolcott v. Winchester, 15 Gray, 461.

Bill dismissed.