HYATT and others, Partners, etc., v. VINCENNES NAT. BANK and others.

113 U.S. 408 (5 S.Ct. 573, 28 L.Ed. 1009)

HYATT and others, Partners, etc., v. VINCENNES NAT. BANK and others.

Decided: March 2, 1885

The Vincennes National Bank, of Vincennes, Indiana, and the Washington National Bank, of Washington, Indiana, having severally recovered judgments against William Helphenstine and others, composing the firm of William Helphenstine & Co., issued executions thereon, under which, and under an execution on another judgment, the sheriff of Knox county, Indiana, at the court-house door, in Vincennes, in that eounty, on a notice advertised for three weeks successively in a weekly newspaper, and notices posted as required by law for 20 days, offered at public sale the rents and profits, for a term not exceeding seven years, of certain real estate and chattels real on which he had levied, and, having received no bid for such rents and profits, exposed to public sale the fee-simple of the real estate and chattels real and the improvements thereon, to-wit: 'one engine and boiler and hoisting-machine, steam-pump, Fairbanks' railroad scales, wagon scales, four screens, blacksmith's shop, one office building, one engine building and dump-house, one stable, one lime-house, two dwelling-houses, track in coalmine, railroad track, switches, and all fixtures belonging to the coal mine on said real estate and leasehold.' The levy and sale included the interest of the judgment debtors for the residue of terms of years unexpired under certain mining leases of real estate, embracing that covered by the Bunting agreement, hereinafter mentioned. The two banks became the purchasers, at the sale, on June 9, 1877, and received a certificate, which stated that they would be entitled to a deed unless the property should be redeemed within one year from the date of the sale. On the twenty-fifth of December, 1877, they filed a bill in equity, in the circuit court of the United States for the district of Indiana, against the members of the firm of William Helphenstine & Co., and the members of the firm of Hyatt, Levings & Co. The latter were judgment creditors of William Helphenstine & Co. The object of the suit was to restrain interference with the purchased property. The bill was afterwards amended by making the sheriff a defendant, and by alleging that Hyatt, Levings & Co. had caused a levy to be made, under an execution on their judgment, on iron rails and other property, which Helphenstine had detached, and on articles which constituted a part of the machinery for operating the mine, and which were firmly attached to the real estate and leasehold, and were part of the property so purchased by the plaintiffs.

The question in the case arises in respect to an agreement or lease in writing, executed by one Bunting and his wife and William Helphenstine & Co., in July, 1874, by which the former conveyed to the latter, their heirs, successors and assigns, for a term of 50 years, 'all the mineral coal, iron ore, fire and potters' clay, limestone, building stone, and other minerals, upon and under the farm or tract of land' described, with the exclusive right to enter on the land to dig for the articles named, and, when found, to remove the same from the land, 'together with all rights and privileges incident to mining and securing the minerals aforesaid, including the right of ingress and egress, and to dig, bore, mine, explore, and occupy with constructions and buildings, as may be necessary and useful for the full development and enjoyment of the advantages of said coal and other minerals as aforesaid.' The lessees were given 'the right to remove all buildings or fixtures placed on said land when said agreement has been forfeited or may have expired;' and they were to pay fixed royalties for the articles mined and removed. The answers of Helphenstine & Co., and of Hyatt, Levings & Co., aver that the property in question was personal property, situated 15 miles distant from the court-house of the county, and was used in and about the operation of the mine under the mining contract.

Before the hearing the parties stipulated in writing 'that the plaintiffs are entitled to a decree as prayed for, unless the property sold should have been sold as personal property, as provided for by the statutes of the state of Indiana; that the sheriff's sale was made at the court-house door, in the city of Vincennes, in Knox county, and more than twelve miles from the property.' The circuit court entered a decree that, by virtue of their purchase and the certificate thereof, the plaintiffs became the equitable owners, subject to the right of redemption, 'of the real estate, fixtures, machinery, and chattels real,' which the decree went on to describe; and of the right, title, and interest of William Helphenstine & Co., being the residue of terms of years unexpired under certain mining leases of specified real estate, including that covered by the agreement with the Buntings; that on said land and leaseholds were situate and sold, as aforesaid, to the plaintiffs, the chattels real before described as sold to them; and that the sheriff had levied on property which, at the time of the sale to the plaintiffs, was annexed to and constituted part of said real estate and chattels real, and was part of the property sold to the plaintiffs, and intended to sell it. The decree enjoined the defendants from selling the property so levied on. Subsequently the defendants moved to modify the decree by striking out so much as enjoined the sheriff from selling the machinery, buildings, fixtures, and improvements situate on the premises held under the agreement with the Buntings, because they were personal property when levied on under the execution of the plaintiffs, and the sale was void because they were not sold as personal property but as real property, and the plaintiffs acquired no title under the sale made at the court-house door. The motion was overruled. The defendants have appealed to this court, setting forth, in their petition of appeal, that they appeal from that part of the decree which relates to the machinery, buildings, fixtures, and improvements situated on the Bunting premises and held under the Bunting agreement, on the ground that it was personal property and not real estate, and was not sold as personal property, in the presence of the officer making the sale.

W. H. Calkins and A. C. Harris, for appellants.

Argument of Counsel from pages 411-413 intentionally omitted

F. W. Viehe, for appellees.

Mr. Justice Blatchford deliverd the opinion of the court. He recited the facts as above stated, and continued:

The only question for decision is, by the stipulation of the parties, whether the property in question should have been sold in the manner in which personal property was required by the statute of Indiana to be sold.

The statute in force at the time, in regard to the sale of personal property on execution, (2 Rev. St. Ind. 1852, pt. 2, c. 1; Act June 18, 1852, art. 22, §§ 468, 469, vol. 2 Davis' Ed. 1876, p. 218,) provided as follows: 'Sec. 468. Previous notice of the time and place of the sale of any personal property on execution shall be given for ten days successively, by posting up written notices thereof in at least three of the most public places in the township where the sale is to be made. Sec. 469. Personal property shall not be sold unless the same shall be present and subject to the view of those attending the sale; and it shall be sold at public auction in such lots and parcels as shall be calculated to bring the highest price.'

The Revised Statutes of Indiana of 1852, in force at the time, in regard to the sale of real estate on execution, (2 Rev. St. pt. 2, c. 1; Act June 18, 1852, vol. 2 Davis' Ed. 1876,) provided as follows, (article 24, § 526, p. 232:) 'Sec. 526. The following real estate shall be liable to all judgments and attachments, and to be sold on execution against the debtor owning the same, or for whose use the same is holden, viz.: First. All lands of the judgment debtor, whether in possession, reversion, or remainder. Second. Lands fraudulently conveyed with intent to delay or defraud creditors. Third. All rights of redeeming mortgaged lands; also, all lands held by virtue of any land-office certificate. Fourth. Lands, and any estate or interest therein, holden by any one in trust for or to the use of another. Fifth. All chattels real of the judgment debtor.' Article 22, § 463, p. 215: 'Sec. 463. The estate or interest of the judgment debtor in any real estate shall not be sold on execution until the rents and profits thereof, for a term not exceeding seven years, shall have been first offered for sale at public auction; but, if the same shall not sell for a sum sufficient to satisfy the execution, then the estate or interest of the judgment debtor shall be sold by virtue of the execution.' Article 22, § 466, p. 217: 'Sec. 466. Real estate, taken by virtue of any execution, shall be sold at public auction at the door of the court-house of the county in which the same is situated; and, if the estate shall consist of several lots, tracts, and parcels, each shall be offered separately; and no more of any real estate shall be offered for sale than shall be necessary to satisfy the execution, unless the same is not susceptible of division.' Article 22, § 467, as amended February 2, 1855, p. 217: 'Sec. 467. The time and place of making sale of real estate, on execution, shall be publicly advertised by the sheriff, for at least twenty days successively, next before the day of sale, by posting up written or printed notices thereof, in three public places in the township in which the real estate is situated, and a like advertisement at the door of the court-house of the county; and also by advertising the same, for three weeks successively, in a newspaper printed nearest to the real estate, if any such newspaper be printed within the jurisdiction of the sheriff.'

In the rules prescribed by the act (article 48, § 797, p. 313, vol. 2 Davis' Ed. 1876) for its construction, it is enacted that such rules shall be observed 'when consistent with the context.' Among those rules are these: That 'the word 'land,' and the phrases 'real estate' and 'real property,' include lands, tenements, and hereditaments;' and that 'the phrase 'personal property' includes goods, chattels, evidences of debt, and things in action.' But no definition or construction is given of the phrase 'chattels real.'

The Revised Statutes of Indiana of 843 (Ace February 11, 1843, pt. 2, c. 29, art. 1, § 1) provided as follows: 'Section 1. When, by any law of this state, real estate is authorized or directed to be sold by virtue of any execution, the same shall be construed to mean and include (1) all the lands, tenements, and hereditaments of the judgment debtor, whether in possession, reversion, or remainder; (2) lands, tenements, and hereditaments fraudulently conveyed with intent to defeat, delay, or defraud creditors; (3) all rights of redeeming mortgaged lands, tenements, or hereditaments, and also all lands held by virtue of any land-office certificate; (4) lands, tenements, and hereditaments, and any estate or interest therein, holden by any one in trust for or to the use of another, on execution issued on any judgment against the person to whose use, or for whose benefit, the same are holden.' The provisions of these four clauses were substantially retained in the Revision of 1852, and the provision as to 'chattels real of the judgment debtor' was added as a fifth clause. Although, by the Revised Statutes of 1843, (part 2, c. 29, art. 1, § 3, p. 454), judgments were made a lien on real estate and chattels real of the judgment debtor, which provision is contained in the Revision of 1852, (part 2, c. 1, art. 24, § 527, vol. 2 Davis' Ed. 1876,) chattels real were not specifically made liable to sale on execution as real estate till 1852, when the fifth clause was added. That clause must be interpreted according to the accepted meaning of the words 'chattels real.' Blackstone defines chattels real, according to Sir EDWARD COKE, (1 Inst. 118,) to be such as concern or savor of the realty,—as terms for years of land,—and says they are called real chattels as being interests issuing out of or annexed to real estates, of which they have one quality, viz., immobility, which denominates them real, but want the other, viz., a sufficient legal indeterminate duration, which want it is that constitutes them chattels. 2 Black. Comm. 386. Chancellor KENT says, (2 Comm. 342:) 'Chattels real are interests annexed to or concerning the realty, as a lease for years of land; and the duration of the term of the lease is immaterial, provided it be fixed and determinate, and there be a reversion or remainder in fee in some other person.' The interest of the judgment debtors in this case in the land covered by the Bunting agreement was a chattel real, and as the dispute here relates to machinery, buildings, fixtures, and improvements situated on the Bunting premises and held under the Bunti g agreement, it follows that that property had impressed on it, by the statute, for the purposes of a sale on execution, the character of a chattel real, and became, for those purposes, real estate, and therefore was not required to be sold as personal property, present and subject to the view of those attending the sale, but was property sold as real estate, at the door of the county court-house. The estate for years, or the interest in the land, could not be subject to view. The machinery, buildings, fixtures, and improvements were created under the privilege given by the agreement to occupy the land with constructions and buildings for mining coal and other minerals, and although Helphenstine & Co. had the right to remove the buildings and fixtures at the expiration of the agreement, yet, so long as they were held under the agreement, on the premises, and were of the character referred to, they followed the term for years and partook of its character.

In Barr v. Doe, 6 Blackf. 335, in 1843, it was held that a parol lease for three years was a chattel interest, and could be sold as a chattel, on an execution issued by a justice of the peace. But that decision does not apply to the statute now under consideration, and no case is cited or found in the courts of Indiana which holds to the contrary of the views above expressed. Indeed, in the Revised Statutes of 1843, (part 3, c. 47, § 347, p. 992, form No. 10,) the form prescribed for an execution by a justice of the peace was against 'goods and chattels,' while in the Revision of 1852, (vol. 2 Davis' Ed. 1876, pt. 5, c. 1, § 127, form No. 4,) the form runs against 'goods' only.

The case of Buhl v. Kenyon, 11 Mich. 249, is cited for the appellants. It was there held that an estate for years in land was to be sold on execution as personal estate, and that a sale of it in accordance with the statutory provisions for the sale of real estate was void. The court proceeded on the ground that, as the statute of Michigan provided that the words 'real estate,' 'when not inconsistent with the manifest intention of the legislature,' 'shall be construed to include lands, tenements, and real estate, and all rights thereto and interest therein,' and also provided that 'all the real estate of a debtor, whether in possession, reversion, or remainder, including lands fraudulently conveyed with intent to defeat, delay, or defraud his creditors, and the equities and rights of redemption hereinafter mentioned, shall be subject to the payment of his debts, and may be sold on execution, as hereinafter provided;' and also enacted that all 'chattels, real or personal, and all other goods liable to execution by the common law, may be taken and sold thereon, except as is otherwise provided by law;' and, as a leasehold interest of the kind in question was a chattel interest, and was by the last-named provision classed among personal property, it was not within the law applicable to the sale of lands on execution. In the present case, a chattel real is distinctly classed, by section 526, among 'real estate liable to be sold on execution,' and must therefore be sold in the manner in which section 466 directs that 'real estate taken by virtue of any execution shall be sold.'

The point decided in Meni v. Rathbone, 21 Ind. 454, 467, was that a lease for years, acquired by a wife during coverture, became the property of her husband, when reduced to possession by him, and, being a chattel, was personal property, under the definition before referred to, and subject to the husband's debts, and, being a chattel real, a judgment against the husband was, by the statute of 1852, a lien upon it. The motion made in the circuit court to modify the decree was based on the idea, that, while the term for years might be a chattel real, the machinery, buildings, fixtures, and improvements placed on the land should have been sold as personal property. As the statute requires that real estate 'shall' be sold at the door of the court-h use, the visible property could not be sold there in view of the persons attending the sale of the real estate, unless it was first severed from the land; and to have so treated it would, doubtless, have rendered not only it but the term for years worthless, as vendible articles. No such result could have been contemplated by the law-makers, and none such can be allowed, if another reasonable and consistent construction is to be found. It is not necessary or proper to consider any question involved in any right of redemption. Nor is it intended to decide anything as to the status of any of the property, aside from the lawfulness of the manner of its sale, under the statute in regard to such sale.

The decree of the circuit court is affirmed

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