Reynolds v Ashby & Son Ltd
| Jurisdiction | England & Wales |
| Year | 1904 |
| Date | 1904 |
| Court | House of Lords |
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.
Machines were supplied by the owner of them to the lessee of a factory upon the hire-purchase system, the machines to remain the property of the owner till they had been wholly paid for; upon default in payment the owner to have power to determine the hiring and remove the machines. They were affixed, as the owner knew, to concrete beds in the floor of the factory by bolts and nuts, and could have been removed without injury to the building or the beds. The lessee made default in payment, and the owner brought an action to recover the machines or their value from a mortgagee of the premises who had taken possession:—
Held, that the machines had been so affixed as to pass by the mortgage to the mortgagee.
HOLDWAY, the lessee of land in Reading for ninety-nine years from 1892, was in April, 1900, building a factory thereon for a joinery business. On April 7 Holdway mortgaged the premises to Burrows, “together with the buildings, fixtures, machinery and fittings erected thereon.” Holdway afterwards executed a second mortgage to Hatt, and on August 27 a third mortgage to the respondents.
On August 30 Holdway and the appellant (a manufacturer of machines) made a hire-purchase agreement, whereby the appellant agreed to let machinery to be used in the factory, and Holdway agreed to hire and to pay for it by instalments at specified times, the machinery to become the property of Holdway as soon as the payments were all duly made, but if default was made in punctual payment of any of the instalments Holdway might determine the hiring and enter and resume possession of the machinery, which was to continue to be the sole and absolute property of the appellant until the last payment was made.
In September the machines — heavy carpenter's tools — were put up on the ground floor of the factory (in the words of Lord Lindley's judgment) “on beds of concrete prepared for them. The machines were worked by steam power transmitted from a steam engine by shafts, wheels, and gearing in the usual way. Each machine was complete in itself. Each was fastened down to its concrete bed by bolts and nuts. The bolts were firmly fixed in the concrete and passed through and projected beyond holes in the machine. The nuts were screwed on the ends of the bolts where they projected, and the machines were thus held fast. By unscrewing the nuts each machine, although heavy, could no doubt be raised up and removed without injury to the building containing it, and without injury to its concrete bed and to the bolts embedded in it.”
In November Hatt took possession of the premises under his mortgage, and Holdway having made default in payment the appellant gave him notice determining the hiring and demanding the return of the machinery. In December the respondents took transfers of the prior mortgages, having bought up the mortgagees' interests. The respondents having refused to deliver up the machinery the appellant brought this action against them, claiming the machinery or damages. Lawrance J. who tried the action did not leave any question to the jury and entered judgment for the defendants. This decision was affirmed by the Court of Appeal (Collins M.R., Romer and Mathew L.JJ.)F1 Hence this appeal.
July 8, 11, 12. Haldane, K.C., and Herbert Reed, K.C. (Rowlatt with them), for the appellant. The question which should have been left to the jury was whether the machinery and apparatus had been affixed to the premises with the intention of improving the inheritance, or merely for their more convenient use as chattels, and there can be no doubt which way that question would have been answered, namely, for their more convenient use. The stipulation that they were not to be the property of the lessee till they were fully paid for and that the owner was to have power to remove them is conclusive on that point. At the least therefore a new trial should be granted. But there is enough in common sense and authority to justify a judgment for the appellant. The importance of intention was clearly recognised by this House in Leigh v. Taylor.F2 That was between tenant for life and remainderman. The argument is a fortiori in a case of trade fixtures between the lessee and the lessor or mortgagee. If tapestries structurally attached to the freehold are movable chattels, why are not carpenter's tools which the owner had the right to remove upon default in payment? There was only so much fixing as was necessary for steadiness. “The object and purpose of annexation” have to be considered, said Parke B. in Hellawell v. EastwoodF3, where spinning mules were sunk into a stone flooring; and see Lord Blackburn's judgment in Wake v. Hall.F4 The custom of hire and purchase agreements strengthens the argument from intention and has been recognised by the Courts: Gough v. WoodF5 where the owner's title prevailed over the mortgagees'. It was otherwise in Walmsley v. MilneF6: but the practice of such agreements had not then arisen, and Willes J. subsequently expressed doubts of the accuracy of the decision. The question is one of fact, of degree of attachment as well as of intention, and ought therefore to have been left to the jury as it was in Climie v. Wood.F7 In Holland v. HodgsonF8, too, the question was treated as one of evidence. The Court of Appeal followed Hobson v. GorringeF9; but in the Chancery Division the judge discharges the functions of a jury. The present case is like Lyon v. London City and Midland Bank.F10 The doctrine which was the basis of many of the older cases, that whatever is affixed, however slightly, to the soil becomes part of the freehold, has been dissipated once for all by Leigh v. Taylor.F11 Whatever authority there may be for the favour shewn by the Court of Appeal to the position of a mortgagee there is no reason or justice. It is a...
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Chattel houses and mobile homes; fixtures in Caribbean and Canadian Law
...mortgagee unsuccessfully claiming widow's mobile home). 25 Supra, note 23 at 99 (per Hutcheon J.A.). See also Reynolds v. Ashby & Son [1904] AC. 466 at 474 (per Lord Lindley): "I do not profess to be able to reconcile all the cases on fixtures, still less all that has been said about them."......