George v. Commercial Credit Corp.
440 F.2d 551 (1971)
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Rule of Law:
A mobile home is treated as a fixture to real property when the owner's objective intent, as demonstrated by their actions, is to make it a permanent accession to the land. Consequently, a security interest in such a home is properly perfected through a real estate mortgage rather than under the motor vehicle code.
Facts:
- Dale Wallace Foskett owned five acres of land in Jefferson County, Wisconsin.
- On December 6, 1968, Foskett purchased a 68-foot by 14-foot, 15,000-pound Marshfield Mobile Home, which could not move under its own power.
- The mobile home was delivered to Foskett's property, where he and his wife used it as their sole and continuous residence.
- The home was set on cement cinder blocks and connected to a well, a septic tank, and electric power lines.
- Foskett never applied for a motor vehicle certificate of title for the home.
- Foskett purchased a homeowner's insurance policy for the structure and requested that the seller remove its wheels.
- Foskett applied for a building permit, which was granted on the condition that he construct a permanent foundation for the home within one year.
Procedural Posture:
- Dale Wallace Foskett filed a petition for bankruptcy.
- The bankruptcy trustee claimed an interest in the mobile home as personal property.
- Commercial Credit Corporation, the creditor, asserted a secured interest via a real estate mortgage, arguing the home was a fixture.
- The Referee in Bankruptcy held that the mobile home was a fixture and sustained the creditor's secured interest.
- The trustee appealed the Referee's decision to the United States District Court.
- The District Court affirmed the decision of the Referee in Bankruptcy.
- The trustee (appellant) appealed the District Court's order to the United States Court of Appeals for the Seventh Circuit, with Commercial Credit Corporation as the appellee.
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Issue:
Does a real estate mortgage on a mobile home prevail against a bankruptcy trustee's claimed interest when the owner's actions indicate an intent to permanently affix the home to the land, thereby making it a fixture?
Opinions:
Majority - Duffy, Senior Circuit Judge
Yes, a real estate mortgage on a mobile home prevails against a bankruptcy trustee when the home has become a fixture. Applying Wisconsin law, a mobile home becomes a fixture when the evidence demonstrates the owner's intent to make it a permanent part of the real estate. The court utilized Wisconsin's three-part test for determining if an item is a fixture: 1) actual physical annexation to the realty; 2) application or adaptation to the use or purpose to which the realty is devoted; and 3) the intention of the person making the annexation to make a permanent accession. The court emphasized that intent is the most important factor. Foskett's actions—connecting utilities, placing it on blocks, obtaining a homeowner's policy, requesting wheel removal, and seeking a permit for a permanent foundation—all objectively demonstrated his intent to make the mobile home his permanent residence. Therefore, the home became a fixture, the real estate mortgage was the proper method to secure the creditor's interest, and the Wisconsin Motor Vehicle Code's provisions for perfecting security interests do not apply.
Analysis:
This decision clarifies that the legal status of a mobile home is determined by its use and the owner's intent, rather than its inherent mobility or its classification under motor vehicle statutes. It establishes that when a mobile home is treated as a permanent dwelling, it legally transforms from personal property (personalty) to real property (a fixture). This precedent is significant for lenders, as it validates the use of real estate mortgages to secure loans on mobile homes intended as permanent residences, providing greater security than a lien on a vehicle title, especially in bankruptcy proceedings. It directs future courts to look beyond an object's name and origins to its objective integration with the land.
