was, therefore, no identity of interest between lessor and lessee. The conditions of the tenancy, so far as concerns the period after January 1, 1936, are set forth in a lease dated December 27, 1935, which contains the usual clause that any improvements or alterations made by the lessee shall become the property of the lessor. There was, however, no evidence as to the conditions of the tenancy during the period prior to January 1, 1936, when the machinery and equipment was being installed.
Considering these circumstances and the other evidence, I find that it was not the intention of the parties to incorporate into the real estate and so subject to the lien of the mortgage the machinery installed in the building by the Ellis Silk Hosiery Company. I, therefore, conclude that the machinery and equipment here in question is not subject to that lien and that the petitioner in this case has no claim thereto.
In reaching this conclusion I have considered the principles laid down by the Circuit Court of Appeals for the Third Circuit in Ideal Building & Loan Association v. Bateman, supra, but I do not believe that they are applicable to the situation here disclosed. In that case the American Pile Fabric Company was the tenant whose machinery and equipment were claimed by the mortgagee. It appeared that the Fabric Company, which had occupied certain land and buildings as tenant, decided to purchase them and in order to do so its stockholders organized the Tremont Realty Company, which purchased the premises and leased them to the Fabric Company. The officers and directors of both companies were the same, and the stock ownership was largely the same. The machinery and equipment had all been installed long before the mortgage in question was executed by the Tremont Company, and that mortgage in express terms covered the machinery and fixtures. The tenant had full knowledge of this fact. The lease from the Tremont Company to the Fabric Company contained the provision that all alterations, partitions, additions, or improvements, made by either party, except movable office furniture other than partitions, put in at the expense of the tenant should be the property of the landlord. It also contained an express provision that certain equipment was the property of the tenant and should be removable by the tenant. The lease also provided that it was subject to any mortgage which might at any time be placed upon the premises. It further appeared in that case that at least a part of the machinery in question had been installed in a building specially constructed for it. From these facts the Circuit Court of Appeals concluded that the machinery and equipment in question, although installed by the Febric Company, were nevertheless subject to the lien of the mortgage executed by the Tremont Company.
Where a landlord and tenant are substantially identical in interest, and the mortgage executed by the landlord with the knowledge of the tenant expressly subjects to its lien the machinery ane equipment installed by the tenant, part of which was installed in buildings specially constructed therefor, the intention of the parties to incorporate the machinery into the real estate and subject it to the lien of the mortgage is clearly discernible, and this is especially so where the lease itself provides that all alterations, additions, and improvements made by the tenant except certain furniture and machinery shall be the property of the landlord. In the present case, however, none of the foregoing circumstances existed.The landlord and tenant were not substantially identical in interest. The mortgage did not contain any express provision subjecting the machinery and equipment to its lien and it does not appear that any of the machinery or equipment was installed in specially constructed buildings. On the contrary, it was all installed long after the mortgage had been created. Nor does it appear that the lease in force when the machinery was installed contained any provisions making additions and improvements the property of the landlord. The present case is, therefore, distinguishable on its facts from Ideal Building and Loan Ass'n v. Bateman, Supra. It is also distinguishable from Union Bldg. Co. of Pennsylvania v. Pennell, supra, since in that case it appeared that the buildings leased by the tenant were specially constructed for a grocery warehouse and bakery to be operated by the tenant. The plans and specifications were designed with that end in view, and all the machinery, equipment, and apparatus were particularly adapted and installed to carry out the work and business of a warehouse and bakery, and when installed, these fixtures became as "essential part of the construction necessary in conducting the business for which the structure was erected." Under the circumstances, the Circuit Court of Appeals held that the presumption arose and became practically irrebuttable that it was the intention of the lessee in putting the chattels into the buildings that they should become a part of the realty.
In the present case it appears that the building was designed and erected for general manufacturing purposes, that it has been occupied from time to time by various manufacturing tenants, some of whom at least have been permitted to remove their machinery without objection by the mortgagee, that the tenant whose equipment is now in question did not come in until long after the mortgage was executed, and then only occupied a portion of the building. I do not think under such circumstances that a clause in a lease providing that alterations and improvements to the premises made by the lessee should become the property of the lessor would be of itself sufficient to indicate an intention to subject the lessee's machinery and equipment to the lien of a mortgage created by the lessor long before. To so hold would be to extend the law beyond the decision of any case which I have found. In the present case, however, there is no evidence as to the provisions of the lease in force during the period the machinery was installed. Consequently, this question is not in the case. The lease which was offered in evidence covering the period from January 1, 1936, did have such a clause in it, but it has no bearing on the case, since it appeared that all of the machinery had been installed prior to that time.
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