Lyon & Co. v London City (Case Analysis)
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Title
Lyon & Co. v London City and Midland Bank [King’s Bench Division] [1903] 2 KB 135
Parties
Lyon & Co. (The Plaintiffs)
London City and Midland Bank (The Defendants)
Facts of the case
On August 7, 1901 the plaintiffs, a firm of upholsterers, part of whose business consisted in letting chairs for hire for use in places of public entertainment received a memorandum in writing from one Brammall, who was the owner and occupier of the Brighton Hippodrome, to supply on hire specific chairs for use the above Hippodrome. The plaintiffs accepted the order, and in due course supplied the chairs on the terms contained in the memorandum. When the chairs were delivered, they were, in compliance with the requirements of the local authority, Brighton Town Council, fastened to the floor of the Hippodrome by screws.
Brammall later, on October 18, 1901, mortgaged the Hippodrome to the defendants, “together with all fixtures whatsoever now or at any time hereafter affixed or attached to the said premises or to any part thereof other than and except trade machinery as defined by s. 5 of the Bills of Sale Act, 1878.” On November 18, 1901, Brammal hired the chairs for further period of twelve weeks from that date and he had never exercised his option of purchasing the chairs.
The defendant bank entered into possession of the Hippodrome under their mortgage on August 25, 1902 and the plaintiffs later formally demanded delivery up the chairs from the defendants. The present action was brought since the demand was not being complied with, in which the plaintiffs first, claimed delivery up of the chairs, or in the alternative their value; second, damages for wrongful detention of the chairs from the date of the formal demand; and third, an injunction to restrain the defendants from selling or parting with them without the consent of the plaintiffs.
Issue
Whether the dispute chairs by virtue of degree of annexation and object of annexation amount to fixtures so as to constitute part of the freehold and pass by the mortgage to the mortgagee.
Argument by both parties
Lyon & Co. (The Plaintiffs)
The chair was not fixtures and did not pass to the defendants under their mortgage.
The mere fact that they were screwed to the floor is not enough in itself to make them fixtures. The mode of annexation must be such as to constitute a permanent improvement of the freehold: Norton v. Dashwood; Hobson v. Gorringe; Reynolds v. Ashby. In re De Falbe, if the purpose of the annexation be the mere temporary improvement of the freehold or the better enjoyment of the chattels as chattels they will not pass with the freehold.
The chairs could be easily removed without doing any injury to the freehold and the annexation was intended to be temporary only (they are the subject of a mere agreement for hire) and not for the permanent improvement of the building.
By allowing the mortgagor to remain in possession the mortgagees acquiesced in the agreement between the plaintiffs and the mortgagor as to the chairs: Gough v. Wood.
London City and Midland Bank (The Defendants)
The chairs passed as fixtures to the defendants as mortgagees of the freehold.
The mode of annexation was the same as in Hobson v. Gorringe, where a gas-engine affixed to the freehold by bolts and screws in order to prevent it from rocking was held to be a fixture passing under a mortgage and the fact that the engine being the subject of a hire-purchase agreement is not an element in determining the question of the intention with which the chattel is affixed to the freehold: Reynolds v. Ashby.
The mere fact that the chairs were removable does not prevent their being fixtures: Dixon v. Fisher.
It is true that in Hellawell v. Eastwood it was held that chattels affixed to the freehold for a temporary purpose were distrainable for rent and did not become part of the freehold; but that does not apply to cases where the object of the annexation is to improve the inheritance or to render more effectual the enjoyment of the premises: Holland v. Hodgson.
In the present case the chairs were intended for the better enjoyment of the Hippodrome as a building, and the object and effect of their annexation was the permanent improvement of the building as a place of public entertainment.
Ratio
Judgment by Joyce J (who in favoured of the view of North J. in Cumberland Union Banking Co. v. Maryport *48*atite Iron and Steel Co.[1892] 1 Ch. 415.)
The present case in hand dealt with seats, and not with engines, boilers, or trade machinery. The seats were complete in themselves and might have been used as seats without any annexation, though no doubt, apart from the requirements of the town council, it was better, considering the place where and the purpose for which they were used, that they should be screwed down to the floor.
The agreement under which these chairs were provided was not an ordinary hire-purchase agreement. The agreement in the present case, though an agreement for hire only, contained an option of purchase; but that option was never exercised. At the date of the mortgage the owner of these chairs was the plaintiffs, and it never passed to Brammall, the mortgagor, who had only that special property in them; it is difficult, therefore, to understand how the legal ownership could have passed to the defendants by virtue of their mortgage.
No doubt a chattel on being attached to the soil or to a building prima facie becomes a fixture, but the presumption may be rebutted by showing that the annexation is incomplete, so that the chattel can be easily removed without injury to itself or to the premises to which it is attached, and that the annexation is merely for a temporary purpose and for the more complete enjoyment and use of the chattel as a chattel.
The mode of annexation of these chairs to the freehold is analogous (comparable) rather to the mode in which a carpet is fastened to a floor than to the mode in which engines, boilers, and heavy machinery are affixed to the freehold, and moreover the purpose of the annexation is only temporary. These chairs did not cease to be chattels on being screwed to the floor and the property in them did not pass to the defendants.
Held
The chairs did not cease to be chattels because they were screwed down to the floor, and that the property in them did not pass as against the plaintiff to the mortgagee of the freehold under a mortgage of the building and fixtures.
