No. 618 APRIL TERM, 1979, Appeal from the Order of the Court of Common Pleas, Civil Division, of Erie County, Pennsylvania, at No. 261-A-1978.
David E. Holland, Erie, for appellants.
John R. Wingerter, Erie, for appellees.
Cavanaugh, Hoffman and Van der Voort, JJ.
[ 285 Pa. Super. Page 381]
This is an action in trespass which involves the conflicting rights of the holder of an unperfected lien on a piece of farm equipment and a subsequent purchaser for value. The lien holder has trespassed on the farm of the purchaser without his knowledge or consent for the purpose of recovering possession of the equipment. The purchaser has sued in trespass to recover the value of the equipment which was taken from his farm and for exemplary damages. A jury has awarded the purchaser $3,200 for conversion of the equipment and $2,500 as exemplary damages. The lien holder has appealed from the order of the Court below, requesting either a judgment N.O.V. or a new trial. The controlling issue is whether or to what extent the purchaser had knowledge of the lien at the time he made his purchase.
The chattel in dispute was a material handling device known both as a gutter cleaner and a barn cleaner (hereinafter, a barn cleaner) and used to take manure out of a barn. It is a relatively large and heavy piece of equipment attached to a barn floor by concrete. It takes about 50 man-hours to install and so attach it. Thus in place, it would appear to be a fixture permanently affixed to the floor of the barn.
The barn cleaner here in controversy was purchased on September 7, 1976 by Ronald J. Bull from the Patz Company, one of the appellants herein, under a lease-purchase agreement dated September 7, 1976 which Mrs. Bull, now Mrs. Kathleen Kelley, also signed as a co-lessee. The contract called for a downpayment of $860.49 and two subsequent payments in the same amount on September 7, 1977 and 1978. Paragraph 10 of the contract provided that if Bull should default in either of the subsequent payments,
[ 285 Pa. Super. Page 382]
the Patz Company might "enter upon lessee's premises and, without Court order or other process of law, repossess and remove the equipment either with or without notice to lessee".
At the time the barn cleaner was purchased, Mr. and Mrs. Bull lived on a 250 acre farm in Erie County which they leased from Thomas Kelley, one of the appellees. A farmhouse and a dairy barn and two or three other small buildings were located on the property. Pursuant to the agreement, the Patz Company installed the barn cleaner in the dairy barn on the Bull farm.
The Patz Company neglected to file the financing statement necessary to perfect its security interest in a fixture attached to land with the Recorder of Deeds of Erie County or with the Prothonotary where security interests in farm equipment are perfected, 13 Pa.C.S.A. § 9401. It also failed to return a copy of the contract to the Bulls. While the contract was signed in duplicate, both copies were sent to the home office of the Patz Company for approval, and remained there.
A few months after the barn cleaner was installed, Mr. Bull abandoned the farm and his wife and left the community. Mr. Kelley resumed possession and occupancy of the farm, including the dairy barn and the barn cleaner and in due ...