Fixtures -- Recording of Conditional Sale Contract As Notice to Purchasers of Realty

A furnace was sold on a conditional sale contract which provided that it remain personal property.The contract was recorded under G.C. 8568.A prior mortgagee of the realty who received no actual notice of the conditional sale contract, foreclosed and purchased the realty.The controversy is between such purchaser without actual notice of the conditional sale contract and the furnace company, the vendor named in it.The lower court held for the furnace company.The Court of Appeals for Trumbull County reversed that judgment.The Supreme Court held that a furnace is a fixture and that the recording of the conditional sale contract did not give constructive notice to the subsequent purchaser of the realty.'Using the threefold test of attachment, appropriation, and intention as laid down in Teaff v. Hewitt, 2 the court found that a hot air furnace is a fixture.Previous Ohio lower court decisions on this question are conflicting' as are the holdings of the courts in other states.The problem involved in considerably broader than the sale of hot air furnaces.Refrigerators and refrigerating systems, oil burning water supply systems, greasing pits, sprinkler systems, lighting fixtures, gas ranges, built-in beds, elevators, bowling alleys, concrete silos, and industrial equipment of every description have been sold on contracts which have provided that they remain the property of the vendor.The courts have held that they are fixtures in so far as it may affect third parties without notice of the agreement.Conceding that a furnace is a fixture, the controversy between the vendor and a prior mortagee of the realty to which it has been attached was determined in favor of the prior mortgagee in Twentieth Cent.Heating and Ventilating Co. v. Home Owners Loan Corp. 4 The authorities are reviewed in a note in a previous number of the journal.'The provision that the article is to remain personalty after installation and until paid for would be binding between the parties' and anyone who 'Holland Furnace Co. v.The Trumbull Savings and Loan Co., 135 Ohio St. 48, i9 N.E.(zd) 237, 13 Ohio Op. 32S (939).x Ohio St. 5x, S9 Am.Dec. 634 (1853).