A. Legal Cognizance
• Freeman Sold property to Barrs, containing residences and barns, within one of these barns was a cattle scale/printer that freeman is suing to recover (annexation) the scale removed from the property. Barrs claims the scale is a “fixture” witch now belongs to the new buyer.
a. Briefly describe the facts.
• The contract between the two sides indicated that “all property includes any and all rights privileges, and easements appurtenant thereto, together with all existing buildings, improvements, and affixed equipment and fixtures” among many other items”, additionally it states that all non affixed items belong to the seller.
• Freeeman purchased the scale with the intent for it to be portable (which it was designed to do), though it was locked into cement, with a fence surrounding it. Freeman did have a plan for removal though.
b. Which facts were key to the outcome?
• Plaintiff didn’t purchase accompanying equipment that would have been used to remove the scale. The installation also seemed so permanent that the personal property (chattel) became real property and a permanent fixture. The scale was also used for the operation of the ranch.
2. Legal issue: Real Property Vs. Personal Property, Fixtures.
a. What legal issue(s) does this case illustrate (i.e. why is this case in the chapter)?
• TANGIBLE PROPERTY: Real property (belonging to the land) or Personal property (belonging to the initial owner)
• Fixtures: personal property (can travel with previous owner)
b. What are all of the elements of the main legal rule that this case illustrates? For instance, if the case is about undue influence, list ALL of the elements that the court in this case said had to be proven by the plaintiff.
• PERSONAL PROPERTY: The plaintiff made it clear that the scale was purchased with the original intent of removing it at some point, that although it was cemented and fenced in, it was capable of being removed. The court ruled that they must determine if the scale had become a fixture by: 1) Annexation to the realty 2) adaptation to use 3)intent for object to become a permanent fixture in the land.
• Ultimately the last two items were deemed most important.
B. Expand Perspective, Gain Interpersonal Understanding, and Critically Assess Implications
3. Prevailing party’s point of view:
• The scale was an essential element in the property and the property’s purpose (cattle ranch business), without the scale business could neither proceed or maintain stability as the animals may become sick or unsellable. Due to the permanent placement of concrete and fencing, it was a fixture (Real Property).
a. What legal arguments were made by the prevailing party?
• The prevailing groups only point was that the scale and accompanying printer was an essential part of the property, and the way it was installed and never changed, it had become a permanent fixture to the barn and property.
b. What facts, legal reasoning, social policy, and ethical principles would support a ruling for the prevailing party? x
• The selling party of the property had no interest in the scale other than its monetary value, he never dealt with the ranch, and assigned others to take care of it for him. This indicates to me he had no use for the scale other than to sell it or use it on another property.
• While he may have intended to permanently use the scale he acted in a way that indicated the fixture should be permanent (tools to remove, trailer, cement ramp, cement surrounding, fencing around the scale). Additionally, the terms within the contract are as the court says “unambiguous” and lack clarity when it came to the scale, because the courts will not enforce or create documentation to enforce the contract it needed to remain with the property due to the plaintiffs actions.
c. What were the probable motivations behind the prevailing party’s actions leading up to the dispute? After the dispute?
• The scale was so vastly important to the ranch and its day to day operations (keeping the cattle healthy, at proper weight, proper weight to be sold) that without the business and land would suffer without it. Additionally, the wining side likely viewed the scale as a permanent fixture even though it was not expressed in the contract. When they were evaluating the land for purchase, and they saw the scale entrenched in cement they likely would have assumed it would remain with the property upon purchase.
• Once the dispute ended they were likely fully satisfied and able to continue with business and life as if the entire dispute had never happened.
Repeat 3. for each and every issue in the case.
4. Losing party’s point of view: The scale/printer was put in with the intention of removing it at some point in time, and that they had the right to annex the item at will.
a. What legal arguments were made by the losing party?
• Annexation was there legal right (due to the fact they thought it was personal property), as was the original intention upon purchase and installation.
b. What facts, legal reasoning, social policy, and ethical principles would support a ruling for the losing party?
• The scale was designed to be removed, he had the intent of removing it since day 1, the contract states all personal property is reserved by the seller. Ultimately I believe he was penalized for an honest mistake of not putting in express writing the scale was to be his, as well as not purchasing the equipment to remove, and the fact he surrounded the scale with permanent items designed to keep it there. While I feel bad for him in some ways, the scale is a necessity for the farm to operate, and the way it was installed indicated it was a fixture to the land.
c. What were the probable motivations behind the losing party’s actions leading up to the dispute? After the dispute?
• He either wanted to reuse the scale for himself on another property, or sell it for profit. They had after all put in great work and money into installing the asset, they would have wanted to continue its benefits as was the plan.
5. Judge’s point of view: The item was a fixture & real property, due to the actions of the seller the scale and printer was to remain on the land with the buyer. Additionally the contract language was not clear on the categorization of the scale, and would not force a change to the contract.
a. How did the court rule on each argument?
• The item was a fixture on the land
• The sellers actions (INTENT) illustrated he had no intention of removing the scale, despite his testimony to annex the item.
• The scale had been adapted into the land for the purpose of ranching cattle, without it the business could not function.
b. What facts, legal reasoning, social policy, and ethical principles did the court use to support its ruling?
• The item was a fixture on the land (based on the contract, actions, and intent of the seller)
o The sellers actions (INTENT) illustrated he had no intention of removing the scale, despite his testimony to annex the item. Had he put more effort into clarifying or illustrating beforehand that the item was removable, the court may have sided with him.
o The scale had been adapted into the land for the purpose of ranching cattle, without it the business could not function. ( to take away the scale, which appeared to be a permanent tool for the ranch upon selling would essentially undercut the cattle ranchers and their respective business.
c. What were the probable motivations behind the judge’s decision?
• The contract lacked specificity in terms of ownership, the actions didn’t correlate to the intent to remove the scale, and the scale was pivotal the ranches operations. To allow the annexation and removal of the scale would literally undercut the buyer and its business. the ultimate nail in the coffin was the lack of appearance of intent of the seller (despite the testimony given).
C. Find Recent Developments and Diverse Theories, Synthesize, and Compare
• One of the newer disputes that has come up in fixture disputes is the length of time between transaction, some parties tend to allow an unreasonable amount of time to pass before coming back to attempt the annexation of the personal object. from what it appears in my research the courts are leaning towards the current owner due to the large time gap in failing to claim the item in a reasonable amount of time.
6. Different Rules: Pose the question “What if the court adopted a different legal rule?”
• Had the court evaluated the products specifications closer to see that the product was made with the capability of being moved, and taken his testimony into account, they may have sided with Freeman that it was indeed personal property and subject to annexation.
a. Search the web for other articles to refer to in your article or call an attorney or business professional who may have experience with this type of issue. Write a brief one-paragraph summary of this case or article:
• In June of 2016, a dispute concerning an aged loaned out sculpture came about disputing the ownership of the item. Though the court took place in London, the arguments were very similar (was it a chattel or permanent fixture?). Ultimately the judge decided that although the item was a chattel, it had now belonged to the park through the process of conversion and because of the time elapsed from previous ownership (along with lack of documentation).
7. Your point of view of the case in the book:
• This was a avoidable case based off of simple mistakes and assumptions by both parties, had clear definitions been issued beforehand the situation would have never escalated.
a. Do you agree or disagree with the actual outcome? Why or why not?
• While I feel for Freeman and his honest mistake, i fully agree that the annexation could not take place. Ultimately it would have ruined the cattle business and the whole reason the land was purchased by the Barrs in the first place. All indications showed that the scale would remain with the ranch, thus ethically it should.
b. Change it up: Pose the question “What if the facts were different?” Create changes to the facts that would probably result in a different outcome of the case and, using critical thinking and legal reasoning, tell why your change in facts would make a difference.
• Had the Barrs discussed the status of the scale during before purchasing the land, they would have gone into it knowing the risk.
c. Relate the case to your own experience, if applicable, or to the experience someone else has shared with you.
• We all jump into purchases or deals at some point in time, failing to read the full disclosure on the terms or conditions of the item or rental. Often times the details of the agreement dont trun out to be what we thought they were. (Rental car terms come to my mind).
d. How will you apply the lessons from this case to your future career?
• Clearly classify ownership and personal property, avoid assumptions, and if an outcome is desired we should show the intent/desire for it to happen.
e. Write recommendations to avoid future legal problems and that best suit the objectives of a firm or company in your chosen career field.
• As a future accountant its essential to disclose all material assets and ownership to avoid assumptions and confusion. The safety/damage is often in the details!!!
A. Legal Cognizance