[IN THE COURT OF APPEAL.] REYNOLDS v. ASHBY & SON, LIMITED. Fixtures Machinery affixed 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 plaintiff on the hire-purchase system to the lessee for a long term of years of a factory, which he had mortgaged. The machines were affixed to the premises by the plaintiff's workmen by means of upright bolts let into the floor, which passed through holes in the bases of the machines, and upon which nuts were screwed. By the terms of the hire-purchase agreement the machines were not to become the property of the mortgagor until the last of a series of payments for their hire had been made by him, and, if default were made in those payments, the plaintiff was to have power to determine the hiring and remove the machines. The mortgagor failed to make the specified payments. The mortgagees having entered into possession of the factory, the plaintiff gave notice to determine the hiring, and claimed to remove the machines, but the mortgagees refused to give them up, claiming them as fixtures. In an action brought by the plaintiff against the mortgagees to recover the machines or their value, the judge held, on the authority of Hobson v. Gorringe, [1897] 1 Ch. 182, that the machines were fixtures, and gave judgment for the defendants without leaving any question to the jury. Held, that the decision of the judge was right. Leigh v. Taylor, [1902] A. C. 157, discussed. Gough v. Wood & Co., [1894] 1 Q. B. 713, distinguished. Chidley v. West Ham Churchwardens, (1874) 32 L. T. 486, commented upon. APPLICATION by the plaintiff for judgment or a new trial in an action tried before Lawrance J. with a jury. The action was for the recovery of certain machinery or its value. It appeared that land in Reading was, by indenture of underlease dated February 2, 1900, demised to one Holdway for the residue, less twelve days, of a term of ninety-nine years from September 29, 1892, granted by the head lease. In April, 1900, Holdway was engaged in erecting a factory upon the land so demised to him for the purpose of carrying on therein a joinery business. C. A. 1902 Nov. 21. C. A. 1902 v. ASHBY & SON, LIMITED. By an indenture of mortgage, dated April 7, 1900, and made between Holdway, thereinafter called the mortgagor, and one REYNOLDS Burrows, thereinafter called the mortgagee, after reciting that the mortgagor had arranged to build a factory and buildings on the demised premises in accordance with plans and specifications approved by the mortgagee, and the mortgagee had agreed to make certain advances to the mortgagor to enable him to do so, in order to secure repayment of the same, the mortgagor assigned the demised premises to the mortgagee for the before-mentioned term by way of mortgage, "together with the buildings, fixtures, machinery, and fittings erected thereon." Holdway assigned the term subsequently by way of second mortgage to one Hatt, and on August 27, 1900, by way of third mortgage to the defendants. The defendants bought up the interests of the prior mortgagees, and on December 17, 1900, took transfers of their mortgages. On August 30, 1900, Holdway entered into a hire-purchase agreement with the plaintiff, who was a manufacturer of machinery, under which the machinery in question was supplied by the plaintiff for use in the factory, and affixed to the premises as after mentioned. By that agreement the plaintiff agreed to let the machinery, and Holdway agreed to hire it, and to pay for the hire of it by the payments, and at the times, specified in a schedule to the agreement. It was further agreed that, so soon as those payments should have been duly made, the machinery should become the property of Holdway, but, if Holdway should make default in punctual payment of any of the hire payments, then the plaintiff might determine the hiring of the machinery and enter upon Holdway's premises and resume possession of the machinery; and that the agreement should not be construed to operate in any way as a contract for the sale of the machinery, but simply as an arrangement for the hire of it, subject to the provision thereinbefore contained, and, until the last of the payments was made, the machinery should continue to be the sole and absolute property of the plaintiff. The machinery consisted of heavy carpenter's apparatus, such as lathes, planes, saws, and other tools driven by steam C. A. 1902 V. ASHBY & SON, LIMITED. power, which were affixed to the premises by the plaintiff's workmen in the following manner. Concrete blocks were let into the floor of the building, in which were embedded upright REYNOLDS iron bolts projecting above the concrete. When the machines were placed in position, these bolts passed through holes in the bases of the machines, which were fixed by means of nuts <зcrewed down upon the bolts. The machines could be removed by unscrewing the nuts and lifting the machines off the bolts. The steam-power was conveyed to the machines by means of shafting and bands connected with a steam-engine. There was evidence that such machines could be, and often were, used without being fixed to the premises, but it was better to have them steadied by being so fixed-in order to avoid vibration, and to prevent the machine from shifting its position. In November, 1900, Hatt, the second mortgagee, entered into possession of the factory under his mortgage, and let it to one Paterson as a weekly tenant, and Paterson subsequently, upon the defendants' buying up Hatt's interest, took a lease of the factory from them. Shortly after Hatt's entering into possession, as before mentioned, the plaintiff gave notice to determine the hiring and claimed to remove the machinery, Holdway having made default in paying the instalments under the hire-purchase agreement. The defendants refused to give the machines up, claiming them as fixtures which had passed to them as mortgagees. The learned judge at the trial held, on the authority of Hobson v. Gorringe (1), that the machines had become fixtures, and the property in them had therefore passed to the defendants; and he accordingly gave judgment for the defendants without leaving any question to the jury. H. Reed, K.C., and Rowlatt, for the plaintiff. Attachment to the freehold does not necessarily, and in every case, constitute a thing a fixture in any sense of the term. A thing may be affixed in such a manner and under such circumstances as to remain a mere movable chattel, as for instance in the (1) [1897] 1 Ch. 182. C. A. 1902 REYNOLDS v. ASHBY & SON, LIMITED. case of a carpet nailed down with tacks, or a picture secured to a wall by nails: Hellawell v. Eastwood. (1) [COLLINS M.R. Has the conclusion of fact in that case, as distinguished from the principle there laid down, been approved of in any subsequent case?] In Chidley v. West Ham Churchwardens (2) articles more completely annexed to the freehold than the machines in this case appear to have been held to be chattels, and therefore not rateable. The question whether an article has ceased to be a movable chattel, and become a fixture, must depend on the circumstances under which and the purpose for which it was annexed. That being so, upon the facts of this case the question ought to have been left to the jury. The question whether a thing is a fixture or not is a question of fact: see Ex parte Cotton (3); Hellawell v. Eastwood. (4) In Climie v. Wood (5) and in the previous cases of Wood v. Hewett (6) and Lancaster v. Eve (7) it was left to the jury. In subsequent cases it has arisen on special cases where the Court had power to draw inferences of fact. Hobson v. Gorringe (8) was a case in the Chancery Division, where the judge is judge both of fact and law, and it is submitted that the Court of Appeal in that case must be taken to have decided the question whether the machine there in question was a fixture or not merely as one of fact. Here, though the machines were to a slight extent affixed to the freehold, they were easily removable, and the fact that they did not belong to the mortgagor, but were under the hire-purchase agreement to remain the property of the plaintiff, is strong to shew that the purpose for which they were attached was not the improvement of the freehold. That fact was at any rate evidence which ought to have been left to the jury as rebutting any presumption which might otherwise arise from the attachment of the machines to the premises. Upon the facts of the case, particularly the (1) (1851) 6 Ex. 295. (2) 32 L. T. 486. (3) (1842) 2 M. D. & D. 725. (4) 6 Ex. 295, at p. 312. (5) (1868) L. R. 3 Ex. 257; (1869) 4 Ex. 328. (6) (1846) 8 Q. B. 913. (7) (1859) 5 C. B. (N.S.) 717. (8) [1897] 1 Ch. 182. is fact that when these machines were affixed they did not belong to the mortgagor, it is submitted that the true inference, or at any rate an inference which a jury might reasonably draw, that these machines were fixed as they were merely to steady them and for their more convenient use as tools, and not with any intention of making them part of the premises. In the case of In re De Falbe (1), the judgment in which was affirmed in Leigh v. Taylor (2), it was held that tapestries structurally attached to the freehold remained mere movable chattels, That case is a very strong authority in point of principle for the plaintiff, and shews that at any rate there was a question for the jury. [MATHEW L.J. Was not that case decided on the ground that the tapestries, though fixtures, were merely affixed as temporary ornaments, and were therefore removable as between tenant for life and remainderman ?] It is submitted that the tapestries were really treated as chattels. No suggestion could be made in this case that the advances by the mortgagees were made on the faith of this machinery being part of the mortgage security, for it was affixed after the premises were mortgaged. [They also cited on this point Longbottom v. Berry. (3)] In Gough v. Wood & Co. (4) it was held that, if a mortgagee leaves a mortgagor in possession, and allows him to carry on business in the mortgaged premises, he must be taken to license him to carry on business in the usual way, and therefore to disannex and dispose of fixtures which it may be in the ordinary course of business to disannex and dispose of. These hire-purchase agreements with regard to machinery such as this are now common in business and their terms are well known; and it would be a great hardship on those who under such agreements let out machinery, which is slightly annexed to the premises for its better use, that it should become the property of a mortgagee of the premises. According to Gough v. Wood & Co. (4) it is to be presumed that a mortgagee who leaves a mortgagor in possession licenses him to enter into (1) [1901] 1 Ch. 523. (3) (1869) L. R. 5 Q. B. 123. C. A. 1902 REYNOLDS v. ASHBY & SON, LIMITED. |