C. A. 1896 HOBSON v. GORRINGE. annex the property in the engine to the property in the land: Wake v. Hall. (1) There being, then, no intention at the date of the mortgage to make the engine part of the freehold, it remained a chattel and did not pass under the mortgage. 2. Assuming the gas engine to be a fixture, the mortgagee is not entitled to it as against the owner. A mortgagee of business premises by leaving the mortgagor in possession impliedly authorizes him to carry on his business in the usual way, and to hire and fix on the premises fixtures necessary for the business: Gough v. Wood & Co. (2) The practice of letting out gas engines on the hire and purchase system to persons employed in trade has become so notorious as to constitute a custom of which the Court will take judicial notice: Ex parte Crossley Brothers, Limited. (3) That case afterwards went to the House of Lords, sub nom. McIntyre v. Crossley Brothers, Limited (4); but this point was not there dealt with. [LORD RUSSELL C.J. That was a reputed ownership case, and it is remarkable that the evidence adduced in that case should have satisfied the Court as to the existence of the custom.] This gas engine must be assumed to have been on the mortgagor's land on the terms of the hiring agreement, with the leave and licence of the mortgagee, and that would involve the right of removal by the owner in accordance with those terms. [LINDLEY L.J. The difficulty of applying Gough v. Wood & Co. (2) to the present case is that the engine was not put down with the licence of the mortgagee, nor was it taken up during the possession of the mortgagor.] No doubt Gough v. Wood & Co. (2) must be taken as subject to the observations of the Lords Justices in Huddersfield Banking Co. v. Henry Lister & Son (5); but there the machinery was unfixed, not in the ordinary course of trade, but for the express purpose of defrauding the mortgagees. This case falls within the principle of Sanders v. Davis (6), where a mort (1) (1883) 8 App. Cas. 195, 204. (3) [1894] 1 I. R. 235. (4) [1895] A. C. 457. (5) [1895] 2 Ch. 273, 282, 286. (6) (1885) 15 Q. B. D. 218. gagor in possession let the mortgaged premises to a tenant, who brought into them certain trade fixtures, and it was held that the tenant was entitled to them as against the mortgagee on the ground that the mortgagee must be taken to have acquiesced in the tenancy. So here the plaintiff may be regarded as a quasi-tenant of the mortgagor for the purpose of placing his gas engine on his land for the term contemplated by the agreement. Assuming that the plaintiff is in the same position as a tenant of the mortgagor for a term, which is put an end to by the entry into possession by the mortgagee, it is submitted that he ought to have a reasonable time after the expiration of the term within which to exercise his right of removal. Cumberland Union Banking Co. v. Maryport Hæmatite Iron and Steel Co. (1) is also in point. It was there laid down by North J. that a mortgagor could not confer upon his mortgagee a better title than he himself had, and the plaintiff has a perfect title against the mortgagor. [LORD RUSSELL C.J. It is a question whether, having regard to subsequent authorities, that statement of the law is correct.] Warrington, Q.C., and Willoughby Williams, for the defendant, were called upon as to the first question only. It is said that where an article is affixed to the soil in such a way that, having regard to the degree and object of the annexation, it would pass with the freehold, nevertheless, as against a subsequent mortgagee, regard is to be had to the intention of the mortgagor. The intention referred to in Holland v. Hodgson (2) is the intention to be presumed from the object of the annexation, not an intention inconsistent with the presumption arising from that object. If the plaintiff's contention were correct, Gough v. Wood & Co. (3) would have been decided on different grounds, for it could not be supposed that a nursery gardener intended trees which he had planted as part of his stock-in-trade to belong to the freehold. In that case it was expressly determined that the articles there in question were fixtures, and the decision proceeded on that footing. Here the (1) [1892] 1 Ch. 415, 425. (2) L. R. 7 C. P. 328. (3) [1894] 1 Q. B. 713. C. A. 1896 HOBSON V. GORRINGE. C. A. 1896 HOBSON v. gas engine was annexed to the soil, not with a view to its own preservation, but for the purpose of turning a vacant piece of land into a valuable property. In Wood v. Hewett (1) the GORRINGE. question at issue arose between the parties who made the agreement. In Lancaster v. Eve (2) the Court was struggling to find some form of relief against an obvious wrongdoer: that case may possibly be explained on the ground that there was a qualified possession by the plaintiff of the soil of the river, the property in which was in the Crown. There is no authority for the proposition that as against third parties you must take into account the intention of the person by whom the thing is affixed to the soil, except so far as such intention is evidenced by external facts. With regard to the construction of the agreement, this is an agreement for purchase, and not merely an agreement for hire. There is not here, as there was in Helby v. Matthews (3), any option to return the article. J. Walton, Q.C., in reply. Cur, adv. vult. Dec. 19. A. L. SMITH L.J. delivered the judgment of the Court (Lord Russell of Killowen C.J., Lindley and A. L. Smith L.JJ.). He said:-This case, though small as to the amount, raises a considerable question, which is whether a mortgagee of land in fee, when he enters upon the mortgaged premises, can take possession of an engine which is attached to the soil thereof by means of bolts and screws, although the engine did not and never had belonged to the mortgagor, but to a third party. [The Lord Justice stated the facts substantially as above set out, and continued as follows:-] The question is whether Mr. Gorringe is entitled, under the above circumstances, to the gas engine. It is not disputed that he is entitled to the land; but the plaintiff, Mr. Hobson, denies that he is entitled to the gas engine upon the ground that it had never become King's, and had always remained a chattel belonging to him, Hobson. There can be no doubt, upon a (2) 5 C. B. (N.S.) 717. (1) 8 Q. B. 913. (3) [1895] A. C. 471. mortgage in fee of the land, that, as between the mortgagor and mortgagee, the mortgagee is entitled to all fixtures which may be upon the land, whether placed there before or after the mortgage. If North J., in the passage in his judgment which has been referred to in Cumberland Union Banking Co. v. Maryport Hæmatite Iron and Steel Co. (1), meant to hold otherwise, in our opinion he was in error; but we doubt if he intended so to hold. The case of Gough v. Wood & Co. (2), decided in this court, in no way assists the plaintiff, and has no application to the present case. That case was decided solely upon the ground that the mortgagee had acquiesced in the removal by the mortgagor during his tenancy of trade fixtures. For additional confirmation of the ratio decidendi of this case what was said by Lindley L.J. and by Kay L.J. in the case of the Huddersfield Banking Co. v. Henry Lister & Son (3) may be referred to. Even if in the present case a licence had been granted by Gorringe to King to remove the gas engine during the continuance of a term, neither of which conditions in fact existed, Gorringe, by entering and taking possession of the land and engine, would have determined such licence. We now come to the real point made on behalf of the plaintiff, Hobson. It is this. It is said that this gas engine never was a fixture, but always remained a chattel, and consequently never passed to Gorringe as mortgagee of the land. It obviously did not pass to him as a chattel under the mortgage to him of "fixed machinery," for, if a chattel, it ever remained Hobson's, and never was the property of King; and unless Mr. Gorringe takes the engine as part of the land mortgaged to him he does not take it at all. Now, leaving out of consideration for the present the hire and purchase agreement of January 7, 1895, there is a sequence of authorities which establish that the gas engine, affixed as it was and for the purpose for which it was to King's freehold, ceased to be a chattel and became part of the freehold. Take first of all the case of Wiltshear v. Cottrell. (4) There the Court of Queen's Bench held that a threshing machine fixed by bolts and screws to posts which (1) [1892] 1 Ch. 425. (2) [1894] 1 Q. B. 713. VOL. I. 1897. P (3) [1895] 2 Ch. 273, 282, 286. 1 C. A. 1896 HOBSON v. GORRINGE. C. A. 1896 HOBSON v. GORRINGE. were let into the ground, and which machine could not be got out without disturbing some of the soil, would clearly pass under a conveyance of land and all fixtures. In the case of Mather v. Fraser (1), which was a case between the assignees of a mortgagor and mortgagees, Page Wood V.-C. held that the machinery fixed to the land, whether by screws, solder, or other permanent means, passed to the mortgagees. Again, in Walmsley v. Milne (2), which was a case between a mortgagor and mortgagee in fee, the Court of Common Pleas held that a steam engine and boiler and other implements secured by bolts and nuts to the walls, though they were all capable of being removed without injury either to the machinery or to the premises, were fixtures, and passed to the mortgagee as part of the freehold. In Climie v. Wood (3), which was a case between mortgagor and mortgagee in fee, the jury found that an engine and boiler which were used for sawing purposes (the engine being screwed down to planks upon the ground and the boiler being fixed in the brickwork) were trade fixtures, had been so fixed for their better use and not to improve the inheritance, and that they were removable without any appreciable damage to the freehold. The Court of Exchequer, nevertheless, held that the engine and boiler passed to the mortgagee, and this judgment was affirmed by the Court of Exchequer Chamber (4), Willes J., who delivered the judgment of the Court, stating that the reasons for a tenant with a limited interest being allowed to remove trade fixtures were not applicable to the owner of the fee. In Longbottom v. Berry (5), which was a case between assignees of a mortgagor and mortgagees, it was also held that machinery annexed to the floor of a building in a "quasi-permanent manner" by means of bolts and screws passed to the mortgagees; and in Holland v. Hodgson (6) the Exchequer Chamber affirmed Mather v. Fraser (1) and Longbottom v. Berry (5), and held that looms attached by means of nails driven through holes in the feet of the looms into the floors, which attachment was necessary to keep the looms (1) (1856) 2 K. & J. 536. (4) (1869) L. R. 4 Ex. 328. |