Reynolds v Ashby & Son
[1904] A.C. 466(Judgment by: Lord Lindley)
Between: Reynolds - Appellant : Ashby & Son - Respondent
Court:
Judges:
Earl of Halsbury LC
Lord MacNaghten
Lord James
Lord Lindley
Subject References:
FIXTURES
Machinery attached to Freehold
Presumption of Law
Trade Fixtures
Mortgage
Hire-purchase Agreement
Rights of Mortgagee against Owner of Machinery
Licence to remove Trade Fixtures
Entry of Mortgagee into Possession
Judgment date: 5 August 1904
Judgment by:
Lord Lindley
My Lords, Holdway did not pay the instalments of his purchase-money as they became due, and the machines therefore never became his property. The appellant knew that the machines were wanted in order to fit up a factory which Holdway was building. The purpose for which the machines were obtained and fixed seems to me unmistakable; it was to complete and use the buildings as a factory. It is true that the machines could be removed if necessary, but the concrete beds and bolts prepared for them negative any idea of treating the machines when fixed as movable chattels.
The question is whether they passed by the mortgage. But for the fact that Holdway had not paid for them the question would not in my opinion be open to the slightest doubt. There is a long series of decisions of the highest authority shewing conclusively that as between a mortgagor and a mortgagee machines, fixed as these were to land mortgaged, pass to the mortgagee as part of the land. The decisions in question begin with Walmsley v. Milne, and include Ex parte Barclay; Mather v. Frazer; Climie v. Wood; Longbottom v. Berry; Holland v. Hodgson; Gough v. Wood; Hobson v. Gorringe.
Others were referred to in the argument, but I need only mention Southport and West Lancashire Banking Co. v. Thompson, where it was held that whether the mortgagor is an owner in fee or is only a leaseholder (as in this case) is immaterial with reference to the question now under consideration. My Lords, it is quite impossible to overrule these decisions.
It must be conceded that there are dicta in other cases and even decisions which shew that for some purposes even machines more or less like these have been treated as chattels. There is Hellawell v. Eastwood, a case of distress which has been much commented on in later cases, and is of questionable authority; there are rating cases, such as Chidley v. West Ham and Tyne Boiler Works Co. v. Overseers of Longbenton; there is the case of the miners' huts, Wake v. Hall, which arose between miners in the Peak District and landowners, and turned entirely on a local custom; there is the tapestry case, Leigh v. Taylor, which arose between a tenant for life and a remainderman; there is Fisher v. Dixon, which arose between the heir and the executors of the deceased owner of the land and the machinery fixed to it.
My Lords, I do not profess to be able to reconcile all the cases on fixtures, still less all that has been said about them. In dealing with them attention must be paid not only to the nature of the thing and to the mode of attachment, but to the circumstances under which it was attached, the purpose to be served, and last but not least to the position of the rival claimants to the things in dispute. In this case, and still regarding the question for the present as concerning the mortgagor on the one side and the mortgagee on the other, it is in my opinion impossible to hold that the machines did not pass with the mortgage. The only authorities on mortgages which present any difficulty are Trappes v. Harter, and the very recent case of Lyon & Co. v. London City and Midland Bank.
Trappes v. Harter was a reputed ownership case, and turned on the facts stated in a special case. The Court there held that some trade fixtures did not pass by a mortgage of the property to which they were attached. The special case, however, stated facts shewing that the machines as fixed were locally regarded as chattels, that the partners who put them up so regarded them, and that the mortgagee knew this and so treated them. This accounts for the decision.
In Lyon & Co. v. London City and Midland Bank some chairs were hired from the plaintiffs by the owner of a place of public entertainment in Brighton. The Brighton Town Council required the chairs to be fastened so as not to be easily displaced, and this was done. The chairs were screwed to bars fastened to the floor. The building and fixtures were then mortgaged to the defendants. The mortgagees took possession and claimed the chairs, but the Court held they did not form part of the property mortgaged, but remained so many chattels. Having regard to the nature of the things fixed, the mode of fixing, and the order of the town council, the decision was, in my opinion, quite right, and in accordance with the authorities above referred to.
I pass now to consider whether in this case the fact that the mortgagor Holdway had not acquired the ownership of the machines by paying for them entitles the appellant to recover their value from the defendants. The title to chattels may clearly be lost by being affixed to real property by a person who is not the owner of the chattels. This was pointed out in Gough v. Wood, and is very old law. Holdway agreed to buy the machines; but the appellant knew what he wanted them for, and that before paying for them he intended to put them up in his factory and to use them. The appellant knew that the factory was mortgaged, and ran the risk of the machines being claimed as fixtures.
In effect, Holdway was authorized by the appellant to convert the chattels into fixtures, subject to the right of the appellant to enter and retake them if Holdway did not pay for them. But, apart from this knowledge and authority, the result would be the same, although not so obvious. After the machines were fixed, and before the appellant claimed them, the second mortgagee took possession; the appellant's right to enter and remove the machines, resting as it did on his contract with Holdway, ceased to be exercisable. The appellant has no greater rights against the defendants than he had against the second mortgagee, whose rights the defendants have acquired. The machines had ceased to be chattels belonging to the appellant; they were not chattels wrongfully detained by the defendants. The machines had become fixtures which the appellant was not entitled to remove from the possession of the mortgagees. This was the view taken both by Lawrance J. and by the Court of Appeal, and was in accordance with Hobson v. Gorringe, which, in my opinion, was correctly decided.
There were really no facts in dispute, and nothing would have been gained by leaving any question to the jury. The legal questions arising on the undisputed facts were, in my opinion, rightly decided, and the appeal ought to be dismissed with costs.
Order of the Court of Appeal affirmed and appeal dismissed with costs.
Lords' Journals, August 5, 1904.
- Solicitors: Scott, Spalding & Bell; T. H. E. Foord.