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  • Wm. Dewitt Alsup, Kim Cox, Alsup Alsup, Corpus Christi, for appellant. Christian Jenkins, Walter Groce, Corpus Christi, for appellees.
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  • Wm. Dewitt Alsup, Kim Cox, Alsup Alsup, Corpus Christi, for appellant. Christian Jenkins, Walter Groce, Corpus Christi, for appellees.
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Smart Summary

Case Summary: T. G. Connelly v. Art Gary, Inc., et al. (No. 1920)

Factual and Procedural Background

This is a conversion suit brought by T. G. Connelly against Art Gary, Inc., Elmer Haag, and Nancy Bowen. In his Third Amended Original Petition Connelly asserted a right to remove a sign from property associated with Art Gary, Inc., and sought either damages or, alternatively, possession of the sign. The case was tried to the court without a jury and resulted in a take-nothing judgment against Connelly. Findings of Fact and Conclusions of Law were requested and filed.

In 1968 Connelly leased a building from Nancy Bowen and erected a large sign to advertise his auto parts business. The sign is forty-six feet high, sixteen feet wide, and extends approximately twelve feet into the ground, with the portion in the ground encased in cement. The sign could only be removed by cutting off the top and leaving the bottom twelve feet embedded in the ground (and the concrete foundation) in place.

The lease between Connelly and Bowen contained clauses stating that alterations and improvements (except trade fixtures) become the lessor's property and must remain with the premises at lease termination; that no improvements be made without the lessor's written consent; and that the lessee shall not place signs except as approved by the lessor, with the lessor having the right to remove signs to paint or repair the premises.

Connelly testified he had obtained permission from Delbert Bowen (agent for Nancy Bowen) to erect the second sign; Delbert Bowen testified to the contrary. The trial court found no permission had been given. Connelly moved his business in December 1975 and did not attempt to remove the sign then. In February 1976 Nancy Bowen sold the building to Art Gary, Inc. In March 1976 Connelly attempted to remove the sign but was refused permission by Art Gary, Inc. The trial court found the sign was not a trade fixture but a permanent fixture erected without permission, and also found Connelly waited an unreasonable period (six weeks) before claiming the sign.

Legal Issues Presented

  1. Whether the sign in question is a trade fixture such that Connelly, as tenant, is entitled to remove it under the terms of the lease.
  2. Whether Connelly waited an unreasonable period of time before attempting to remove the sign (i.e., whether he abandoned any right to remove it).

Arguments of the Parties

Appellant's Arguments

  • Connelly contended that the sign was his trade fixture and thus he was entitled, under the lease, to remove it or to obtain damages if removal was prevented.
  • Connelly also argued that he had obtained permission (through Delbert Bowen, the lessor’s agent) to erect the sign and sought reversal of the trial court's findings that no permission was given and that he had waited too long to remove the sign.

Appellees' Arguments

The opinion does not contain a detailed account of the appellees' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
White v. Cadwallader Co., 299 S.W.2d 189, 191 (Tex.Civ.App.-San Antonio 1957, writ ref'd n.r.e.) Cited for the definition and characteristics of a "trade fixture." The court relied on this precedent in stating the general rule that a trade fixture is an article annexed by the tenant to enable carrying on the trade and removable without material or permanent injury to the leasehold.
Moskowitz v. Calloway, 178 S.W.2d 878, 880 (Tex.Civ.App.-Texarkana 1944, writ ref'd w.o.m.) Also cited as authority for the meaning of trade fixtures. Used with other authorities to identify the two essential elements of a trade fixture (enables tenant's business and removable without material/permanent injury).
Granberry v. Texas Public Service Co., 171 S.W.2d 184, 186 (Tex.Civ.App.-Amarillo 1943, no writ) Cited for the legal principle defining trade fixtures. Incorporated into the court's statement of the legal standard to be applied to the sign.
35 Am.Jur.2d Fixtures § 39 (1967) Secondary authority cited for the fixture/trade fixture rules. Used to support the court's articulation of the elements of a trade fixture.
36A C.J.S. Fixtures § 38 (1961) Secondary authority cited for the fixture/trade fixture rules. Also used to support the court's articulation of the elements of a trade fixture.
Van Valkenburgh v. Ford, 207 S.W. 405, 420 (Tex.Civ.App.-Galveston 1919), aff'd 228 S.W. 194 (Tex.Com.App. 1921, judgment adopted) Applied for the principle that an article bolted to a concrete foundation (where the foundation cannot be removed without injury) is not removable without materially injuring the realty. The court analogized the sign's iron and concrete foundation to the engine-and-concrete foundation in Van Valkenburgh, concluding the sign could not be removed without material injury to the leasehold and therefore was not a trade fixture.

Court's Reasoning and Analysis

The court identified the dispositive issue on appeal as whether the sign was a trade fixture. It first articulated the governing legal standard: a trade fixture is an article annexed by a tenant to enable the tenant to carry on the trade or business contemplated by the lease and which can be removed without material or permanent injury to the leasehold. The court cited multiple cases and treatises for that definition.

The court then examined the physical nature of the sign and the practicalities of removal. The sign extended approximately twelve feet into the ground and that portion was encased in cement. Connelly's testimony established that removal would require cutting the sign off at or slightly below ground level and that the concrete and embedded piping would remain in the ground.

The court applied the reasoning from Van Valkenburgh v. Ford—where an engine bolted to a concrete foundation was held not removable without materially injuring the realty—to conclude that when the foundation or embedded portion must remain and cannot be removed without injury, the entire structure cannot be treated as a removable trade fixture. Based on that analogy and the testimony about the sign's embedded concrete foundation, the court concluded the sign could not be removed without materially injuring the leasehold.

The court additionally observed that the sign was erected to advertise Connelly's business rather than to enable the operation of the auto parts business itself, and therefore did not satisfy the "enables business" element of the trade-fixture definition. Because the sign failed the removability criterion and arguably also failed the "enables business" criterion, the court held it was not a trade fixture.

Having resolved the appeal on that basis, the court declined to reach Connelly's alternative contention (that he did not wait too long to attempt removal), stating that the dispositive trade-fixture determination rendered consideration of the second point unnecessary.

Holding and Implications

Holding: The appellate court affirmed the trial court's judgment. The court held that the sign was not a trade fixture and therefore Connelly was not entitled to remove it; the judgment of the trial court was AFFIRMED.

Implications: The direct effect of the decision is that Connelly cannot remove the sign and the take-nothing judgment against him is upheld. The opinion rests on application of established fixture/trade-fixture principles and the specific facts concerning the sign's permanent foundation; it does not announce or discuss any broader, new legal rule beyond applying existing authority to these facts.

Show full summary ...

T. G. CONNELLY, Appellant, v. ART GARY, INC., d/b/a International ABM Elmer Haag,Indi

OPINION

BISSETT, Justice.

This is a conversion suit filed by T. G. Connelly against Art Gary, Inc., Elmer Haag, and Nancy Bowen. In his Third Amended Original Petition, Connelly alleged that he was entitled to remove a sign from property owned by Art Gary, Inc., and prayed for damages or, in the alternative, possession of the sign. Following a non-jury trial, the trial court rendered a take-nothing judgment against Connelly. Findings of Fact and Conclusions of Law were requested and filed. A "Notice of Limitation of Appeal" was filed by Connelly which excluded Nancy Bowen as a party to the appeal.

In 1968, Connelly leased a building from Nancy Bowen and erected a sign on the premises to advertise his auto parts business. This sign is forty-six feet high, sixteen feet wide, and extends approximately twelve feet into the ground. The portion in the ground is encased in cement. The only way to remove the sign would be to cut off the top of it and leave the bottom twelve feet in the ground.

The lease agreement between Connelly and Nancy Bowen provided, in pertinent part:

"All alterations, additions and improvements, except trade fixtures, put in at the expense of Lessee shall be the property of the Lessor and shall remain upon and be surrendered with the premises as a part thereof at the termination of this lease . . . That no improvements or alterations shall be made in or to the hereby demised premises without the consent of the Lessor in writing."
* * * * *
"The Lessee shall not place any signs at, on, or about the premises except as and where first approved by the Lessor . . . and the Lessor shall have the right to remove any sign or signs in order to paint the building or premises or make any other repairs or alterations."

Connelly testified that, prior to the erection of the second sign, he obtained permission from Delbert Bowen, the agent for Nancy Bowen, to erect the sign. Delbert Bowen, however, testified that no such permission was given. The trial court, in its Findings of Fact, found that no such permission was given.

In December of 1975, Connelly moved his auto parts business to another location and ceased occupying the premises leased from Nancy Bowen. Connelly did not attempt to remove the sign at that time. In February of 1976, Nancy Bowen sold the building formerly leased by Connelly to Art Gary, Inc. In March of that year, Connelly attempted to remove the sign but Art Gary, Inc., through Elmer Haag, refused to permit its removal. This suit followed.

In his Findings of Fact and Conclusions of Law, the trial judge determined that the sign was not a trade fixture, but a permanent fixture erected without permission, and that Connelly waited an unreasonable period of time, i.e., six weeks, before claiming the sign.

In his first point of error, Connelly contends that the trial court erred in finding that the sign was not a trade fixture. In his second point of error, Connelly contends that the trial court erred in holding that he waited too long before trying to remove the sign. We think the dispositive issue on appeal is whether the sign in question is a trade fixture. If it is a trade fixture, under the terms of the lease Connelly is entitled to remove it unless there was an abandonment; if it is not a trade fixture, Connelly is not entitled to remove it.

The term "trade fixture" refers to an article annexed to the leasehold by the tenant to enable him to carry on the trade, profession, or business contemplated by the lease agreement or in which he is engaged while occupying the premises, and which can be removed without material or permanent injury to the leasehold. White v. Cadwallader Company, 299 S.W.2d 189, 191 (Tex.Civ.App.-San Antonio 1957, writ ref'd n. r. e.); Moskowitz v. Calloway, 178 S.W.2d 878, 880 (Tex.Civ.App.-Texarkana 1944, writ ref'd w. o. m.); Granberry v. Texas Public Service Co., 171 S.W.2d 184, 186 (Tex.Civ.App.-Amarillo 1943, no writ); 35 Am.Jur.2d Fixtures § 39 (1967); 36A C.J.S. Fixtures § 38 (1961). Thus, to constitute a trade fixture, the sign in question must be an article annexed to the leasehold by Connelly which:

(1) enabled him to carry on his auto parts business, and
(2) can be removed without material or permanent injury to the leasehold.

As stated above, the sign in question can only be partially removed. In Van Valkenburgh v. Ford, 207 S.W. 405, 420 (Tex.Civ.App.-Galveston 1919), aff'd 228 S.W. 194 (Tex.Com.App. 1921, judgment adopted), the court held that a 30,000 pound engine bolted to a concrete foundation could not be removed without materially injuring the realty. This was true even though the engine itself could be removed from the concrete foundation. The court reasoned that the concrete foundation must be considered a part of the engine and since the foundation could not be removed without injury to the realty, the engine could not be removed.

Regarding the removal of the sign, Connelly testified as follows:

"Q. How far did these poles go into the ground?
A. Twelve feet.
Q. And you're going to cut them off level to the ground?
A. About six inches below the ground.
Q. What equipment had you gotten to go remove that six inches below the ground?
A. A pick and a shovel and a cutting torch.
Q. Were you going to be able to remove the cement?
A. There isn't no cement even with the ground.
Q. I'm talking about below the ground.
A. No, it was to be left there.
Q. So basically you're leaving twenty-four feet of the sign there when you leave, is that right?
A. No, sir, I'm leaving twelve feet of the sign there.
Q. Well, it's two sides, right?
A. Yeah, okay.
Q. Twenty-four feet of sign?
A. Of pipe, right, and concrete."
* * * * *
"Q. Now then, you've got twelve feet, you say, and that is set in concrete?
A. Yes, sir.
Q. And twelve feet over there is set in concrete?
A. Yes, sir.
Q. And that's permanently affixed to the ground, that part of it, at least?
A. Yes, sir.
Q. Then you say you had that welded to the pipe down there.
A. Yes, sir."

Since the sign in question can only be partially removed, and since its removal will leave the iron and concrete foundation in the ground, we hold that the sign cannot be removed without materially injuring the leasehold. We, therefore, hold that the sign in question is not a trade fixture. Further, the sign was not erected on the leasehold to enable Connelly to carry on his business, but to advertise his business. Connelly's first point of error is overruled. In view of our holding, we need not consider Connelly's second point of error.

Judgment of the trial court is AFFIRMED.

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CONNELLY v. ART GARY INC
(Apr 8, 1982)