property, real and personal, in March, 1913, contracted to sell the same to Brackett. Later Brackett assigned and transferred this contract to the bankrupt, the bankrupt accepting said assignment and binding itself to carry out and perform the terms of said contract. In December, 1914, the bankrupt contracted with Frick Company to install an ice-making plant with the necessary machinery to replace the plant on the premises at the time of the contract of sale to Brackett. Frick Company performed its contract, and the bankrupt paid all the purchase price except $1,395.08, for which on February 15, 1915, a note was given, payable in one year. By the contract Frick Company retained title to the machinery until the same was fully paid for, and further contracted that the machinery should be and remain personal property. Parts of the machinery were attached in a substantial manner to the realty. The contract between the East Coast Hotel Company and Brackett contained a provision that Brackett would maintain at his own expense the premises and buildings and every part thereof in the same good repair and condition as the same were at the execution of the contract (ordinary and reasonable wear that cannot be repaired or replaced, and loss and damage by fire only, excepted). This contract of purchase and the Frick Company contract were each recorded in the public records of Duval county, shortly after each was executed. Pursuant to the contract of purchase and the assignment to the bankrupt, the Florida East Coast Hotel Company, on March 15, 1915, conveyed all the property, real and personal, to the bankrupt, and received from said bankrupt a purchase-money mortgage covering all of said property. Afterwards the Atlantic Beach Corporation was adjudicated a bankrupt, and a trustee duly appointed. Said trustee after an examination disclaimed as to this hotel property and quitclaimed and released all of said property to the mortgagee. Under this state of facts the referee ordered that the Florida East Coast Hotel Company forthwith elect to pay Frick & Co. the balance of the purchase money or to deliver to Frick & Co. the machinery, etc. The Hotel Company seeks a review of this order on three grounds, the first two taking exceptions to part of the opinion filed by the referee with his order. The third takes exception to the order. It is this third ground to which I shall direct my attention. [1] There are no proofs submitted that the mortgagee in this case had any actual notice of the Frick Company contract. The fact that it recognized the assignment to the bankrupt and made a deed to it pursuant to said contract is not, to my mind, proof of actual notice; nor would such knowledge put the mortgagee upon inquiry to ascertain the existence of it. On the other hand, the sworn answer denies such actual notice. [2, 3] Was the record of the contract in the public records of Duval county constructive notice to the owner of the land? It is well settled that constructive notice by the record is the creature of the statute. The recording of an instrument not entitled to record is not constructive notice of its contents. Statutes of Florida, § 1832, authorize the record of chattel mortgages, but the instrument on which Frick Company bases its claim is clearly a retention title contract and not a chattel mortgage. Section 2516 of the General Statutes of Florida provides that reservations of title in personal property, whereby possession of same is delivered to the vendee evidenced by one in writing, proved and recorded within two years, to be valid against purchasers or creditors. In Onyx Soda Fountain Co. v. L'Engle, 53 Fla. 314, 43 South. 771, it was decided that to comply with this statute the deed must have been executed by the vendor, execution by the vendee was not a compliance. The case of Marvin Malsby, etc., v. Gamble, 61 Fla. 310, 54 South. 766, has no application to the instant case. In Dillon et al. v. Mizell Live Stock Co., 66 Fla. 425, 63 South. 824, the court held that a conditional vendee of personal property, before the expiration of two years, could convey no right to a mortgagee, not possessed by the mortgagor. In other words, that a mortgagor without notice of the conditional sale, before the expiration of two years, acquired no other or greater right than his mortgagor had. In the instant case the contract is under seal and executed by the vendor and acknowledged by said vendor before a notary public and recorded. But it seems to me that the question of notice or record is of no particular moment, in view of the decision in Dillon et al. v. Mizell, etc., supra, if this property remains personal property. The property was delivered presumably on February 15, 1915, and the mortgage executed and delivered on March 15, 1915, one month later. If by its attachment to the realty it becomes real property the above considerations do not apply. [4] In the instant case it seems to me that there can be no doubt that the engine and machinery for making ice and cooling the different rooms were so attached to the realty as to become a part and parcel thereof, unless the provision contained in the contract with the bankrupt that same should remain personal property is in effect to bind the Hotel Company. It seems well settled by authority that such a provision is binding upon the parties thereto, and any one dealing with the realty with knowledge of such agreement. The Hotel Company in this case was the owner of the property, real and personal, at the time of the making of the contract and installing the machinery. The contract was recorded, and as above noted section 2516 of the general statutes of Florida provided for the recordation of such contracts. Subsequent to such installation the Hotel Company conveyed the property, real and personal, to the bankrupt, and received from it a purchase-money mortgage. Can it, under these circumstances, be said to be a subsequent mortgagee without notice? I think not. I am of opinion that the record of the contract prior to the conveyance to the Hotel Company, and acceptance by it of the mortgage to secure the purchase money, was constructive notice to it of the terms of said contract, and after such constructive notice accepted the mortgage, and cannot now be heard to contend that the provisions of the contract are not binding upon it. The Hotel Company accepted from the trustee in bankruptcy a quitclaim deed, and thus acquired title of the bankrupt vested in the trustee by the adjudication. It therefore occupies in this position the dual position of owner and mortgagee in so far as Frick Company is concerned, with constructive notice of the retention of title by the vendor, and the provision that the machinery, though attached to the realty, should remain personal property until fully paid for. I bear in mind the provisions of the contract, in pursuance of which the deed was made, but do not think they have a material bearing upon this phase of the question. Had the title remained in the Hotel Company with the contract of sale on record (constructive notice of its terms to Frick Company), the question presented in this case would not arise. I am of opinion that the order of the referee is not erroneous. MacGLASHAN et al. v. LANGSTON. (District Court, N. D. New York. August 9, 1917.) 1. PLEADING 248(4) - AMENDMENT-ALLOWANCE. Plaintiffs' original complaint was on a note for $2,000, and they moved to file an amended complaint. The amended complaint alleged that plaintiffs were a copartnership; that they entered into a contract whereby defendant agreed to build a machine for the manufacture of beaver board; that defendant agreed to be responsible for the quality and quantity of the output of the machine; that plaintiffs agreed to lend him $2,000, for which he was to execute a note; that, if the machine should be successful, plaintiffs would return the note and apply the amount as part payment on the price, but otherwise defendant should pay the note, together with advances made by another for labor, material, etc.; that, after plaintiffs had loaned defendant the amount agreed, the machine proved unsatisfactory, and plaintiffs were obliged to pay the amount of the third person's advances to defendant, and that he failed and refused to discharge the obligation. Held, that the proposed amendment should be allowed, a new cause of action arising out of the same transaction being stated, and it being unnecessary for plaintiffs to set out all the evidentiary facts bearing thereon. A proposed amendment must stand or fall on its own allegations and statement, and cannot be supplemented by affidavits as to the facts. At Law. Action by William F. MacGlashan and Harry S. Lewis, doing business under the firm name of Northern Paper Company, against Samuel M. Langston. On motion to amend plaintiffs' complaint, by asserting additional cause of action of the same nature, kind, and quality as that alleged in the original complaint, and growing out of the same transaction. Motion granted. Moot, Sprague, Brownell & Marcy, of Buffalo, N. Y., for the motion. Southworth & Scanlan, of Utica, N. Y., opposed. RAY, District Judge. The first cause of action of the proposed amended complaint is on a promissory note for the sum of $2,000 dated April 20, 1910, given by the defendant Samuel M. Langston to the Northern Paper Company, a copartnership composed of one MacGlas For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes han and one Lewis, but doing business under the name mentioned, Northern Paper Company. The proposed amended complaint contains not only this cause of action, but one alleging the following facts in substance, viz.: That the said MacGlashan and the said Harry S. Lewis were, and now are, a copartnership doing business under the name of Northern Paper Company; that on or about April 16, 1909, the plaintiffs and the defendant entered into a contract whereby the defendant agreed to build for the plaintiffs a certain machine for the manufacture of beaver board for the sum of $3,600, and that in and by said contract the defendant duly promised and agreed that he should be held accountable for the quality and quantity of the output of said machine, and further guarantied that the machine would be free from defects in material, workmanship, and design; that thereafter, and on or about July 20, 1910, the plaintiffs and the defendant entered into a written contract whereby the plaintiffs agreed to loan to the defendant the sum of $2,000, for which defendant was to execute and deliver his promissory note payable three months from date, and it was further agreed that, if at the maturity of the note the machine should be running successfully and doing its work in accordance with the guaranty, plaintiffs would return the note to the defendant, and apply the $2,000 as part payment for the machine, but if said machine did not prove successful and operate according to the guaranty, that the defendant would pay the note at maturity, with interest, "together with advances made by J. P. Lewis for labor, material, transportation charges, advances to salesmen," etc.; that the defendant did build the pasting machine and deliver same to the mill of the J. P. Lewis Company, but that said machine was defective in workmanship, material, and design, and failed to operate in that it would not paste paper boards together and cut the same, and that because of defects the machine has never been operated; that, pursuant to the said agreement of July 20, plaintiffs did loan to defendant the sum of $2,000, and a promissory note therefor was made and delivered by the defendant, and that between the 5th day of February, 1910, and the 1st day of June, 1917, said J. P. Lewis Company advanced and paid the sum of $3,798.36 for labor, material, transportation charges, advances to defendant's workmen and storage of said machine, "which sum plaintiffs were obliged to pay and did pay to said J. P. Lewis Company, and which said sum defendant duly promised and agreed to pay to plaintiffs in and by said contract dated July 20, 1910, but that notwithstanding his said promise defendant has failed, neglected, and refused to pay the said sum of $3,798.36, or any part thereof, and that the whole thereof is now justly due and owing from defendant to plaintiffs." The plaintiffs demand judgment for $5,799.90, with interest on said $2,000 from the 20th day of July, 1910, and with interest on the balance from June 1, 1917. [1] The defendant challenges this second proposed cause of action as failing to state a cause of action against the plaintiffs, and that therefore the amendment should not be permitted. But the proposed complaint alleges that in case the machine did not operate as guaranteed, the defendant agreed to pay plaintiffs, not the Lewis Company, the advances made by J. P. Lewis Company, and alleges that the advances were made and that plaintiffs were compelled to pay said advances and did pay same; and if this be true, it is difficult to understand why, under the contract, the defendant is not liable to the plaintiffs for the advances so made. If the defendant made a contract with the plaintiffs to pay these sums of money advanced by J. P. Lewis Company, and plaintiffs have been compelled to pay same and defendant has not paid same, there is, it seems to me, a clear breach of the contract and the defendant is liable. It is not incumbent on the plaintiffs to set out all the evidence bearing on this subject. [2] Affidavits have been filed as to the facts, but it seems to me that a proposed amendment to the complaint by way of a new or additional cause of action must stand on its own allegations and statements. If the proposed amendment does not state a cause of action, then, of course, it should not be allowed; but if it does, justice demands that the plaintiffs be allowed to plead same as long as it is a matter on contract, as is the first cause of action, and a cause of action arising out of the same transaction. Such an amendment is in the interests of justice, and would obviate the necessity for another suit between the same parties. I think the amendment should be allowed, and it is so ordered on condition that the plaintiffs pay to defendant, within 10 days after being served with a copy of the order allowing the amendment, $10 costs or to cover the expenses of opposing this motion. The plaintiffs should also serve within the same time their amended complaint. So ordered. THE RHINE. THE WINDRUSH, (District Court, E. D. New York. May 25, 1917.) SEAMEN23-WAGES-PAYMENT IN ADVANCE-AMERICAN SHIP IN FOREIGN PORT STATUTE. Seamen's Act March 4, 1915, с. 153, § 11, 38 Stat. 1168 (Comp. St. 1916, §8323), declaring payment of a seaman's wages in advance of being earned to be unlawful and of no effect, applies to payment by an American vessel in a foreign port. In Admiralty. Two suits-one by Paul Neilsen and others against the Rhine, the other by John Hardy and others against the Windrush. Decrees for libelants. Silas B. Axtell, of New York City, for libelants. Burlingham, Montgomery & Beecher and Roscoe H. Hupper, all of New York City, for claimants. VEEDER, District Judge. In the first case Paul Neilsen and nine other seamen sue for the recovery of wages claimed to be due them from the bark Rhine. It appears that they shipped on the American For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes 244 F.-53 |