Western MacHinery Co. v. Graetz

JONES (G. L.), J., pro tem.

Plaintiff, in July, 1937, leased to The Mack Mining Company a certain piece of mining machinery known as a “classifier”, the lease or “Rental Agreement”, as it was headed, being in writing, but not recorded.

It was specified in the document that the classifier was “to be used at the Mack Mining Company property” situate in Placer County, the property belonging to the defendants herein and then in possession of the Mining Company under a bond and lease. The rental rate of the classifier was fixed as $275 for the first month and $150 for each subsequent month.

After the execution of the lease, a conversation was held between the representatives of the plaintiff and of the Mining Company, in which the representative of the plaintiff informed the Mining Company’s agent that it was the policy of the plaintiff, after rentals had been paid on a machine and “the rentals were paid right up to date” to allow, as credit, 100 per cent of the initial payment, then 75 per cent of the other rentals paid, if it was desired to purchase the machinery. The selling price of the machine was given as $700. No testimony was given as to any reply by the Mining Company’s agent, or of any notice given by that company, showing an intent to purchase the machinery on the terms and conditions stated.

The initial payment of $275 was paid, followed later by a payment of $150, and then, on November 16, 1937, and after

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a lapse of two months, the sum of $300 was remitted, making a total of $725, which would have created a credit of $612.50 in favor of the Mining Company if it desired to purchase the property, leaving a balance of $87.50 still to be credited on the next monthly rental to be paid. Neither the next rental payment nor the sum of $87.50 was paid.

The machinery was placed and used on the real property. By the terms of the lease, the machinery would retain its character of personal property, notwithstanding the manner in which it might be annexed to realty.

On October 29, 1937, the owners of the real property, being the defendants in this action, brought an action against the lessees of the premises to quiet their title to the land and to the mining machinery situate on it. The Machinery Company was not made a party to this action, but, in the following month, knowledge that such an action had been commenced was acquired by the Company. In April, 1938, the owners of the premises were given judgment quieting their title to the land and to the mining machinery located on it.