Supreme Court
of Canada
Haggert v. Brampton
(Town), (1897) 28 S.C.R. 174
Date: 1897-12-09
Robert Haggert (Plaintiff)
Appellant;
and
The Town of Brampton,
Richard Blain and John McMurchy (Defendants) Respondents.
1897: October 19, 20, 21; 1897:
December 9.
Present: Taschereau, Gwynne,
Sedgewick, King and Girouard JJ.
APPEAL FROM THE COURT OF APPEAL FOR
ONTARIO.
Mortgage, construction of—Trade fixtures—Chattels—Tools
and machinery of a “going concern”—Constructive
annexation—Mortgagor and Mortgagee.
The purposes to
which premises have been applied should be regarded in deciding what may have
been the object of the annexation of moveable articles in permanent structures
with a view to ascertaining whether or not they thereby became fixtures
incorporated with the freehold, and where articles have been only slightly affixed
but in a manner appropriate to their use and shewing an intention of
permanently affixing them with the object of enhancing the value of mortgaged
premises or of improving their usefulness for the purposes to which they have
been applied, there would be sufficient ground, in a dispute between a
mortgagor and his mortgagee, for concluding that both as to the degree and
object of the annexation, they became parts of the realty.
APPEAL from the
judgment of the Court of Appeal for Ontario affirming with some variations the
decision of the Chancery Division of the High Court of Justice which had, with
variations, affirmed the judgment of the trial court dismissing the plaintiff’s action with costs.
The liquidator of
an insolvent manufacturing company claimed certain articles as chattels from
mortgagees of the company’s lands who had gone into possession
and claimed the same articles as fixtures attached to the freehold. In the
trial court the learned judge,
[Page 175]
(MacMahon J.), who
dismissed the plaintiff’s action, held that upon the
construction of the mortgage the property had been mortgaged as a “going concern.” and that all the articles in the
factory premises incident to and necessary for the manufacturing business of
the company were covered by the mortgage, and that the plaintiff’s claim did not extend to certain other articles to which
he would otherwise have been entitled to recover by the judgment. The judges in
the Divisional Court, although divided in their opinions, agreed with the
principle of construction laid down by the trial judge but granted to the
plaintiff the other articles which had been refused him in the trial court. The
plaintiff appealed from the Divisional Court judgment in so far as it had
allowed the defendants the articles claimed by them as fixtures, but as he only
partially succeeded in the Court of Appeal he took the present appeal to the
Supreme Court of Canada as to all machinery and other chattels for which
judgment had not already been delivered in his favour and which were not
permanently affixed in May, 1891, when the company went into liquidation, or,
at the latest, which were not so affixed on the 15th of January, 1894, when the
respondents, the Town of Brampton, took possession of the mortgaged premises.
Aylesworth Q.C.
and Justin for the appellants.
The security is expressly restricted to the freehold “including all machinery annexed to and known in law as
part of the freehold.” Some of the machinery although
slightly attached to the floor for the purpose of steadiness in working could
not be operated if permanently fastened down, it being necessary to shift them
when reversed. The appellant has made out at least a Prima facie case
that the machinery was not attached at the time possession was taken by the
town, and the burden of proof was thus shifted upon the respondents to
[Page 176]
show that the
machinery had been attached by some person with the authority of the insolvent
company. No such proof was given, and the conclusion is inevitable that it was
attached by some person without such authority and as a mere wrongdoer, and
therefore that such annexation in no way affected the character of the property
as chattels.
In considering the
intention of the parties in giving the mortgage, the learned trial judge seems
to start with the view, that, because the mortgagors were then carrying on, and
intended to continue carrying on the manufacture of engines, threshing machines
and agricultural implements in the mortgaged premises, they were mortgaging
their factory premises, machinery, tools and business, treated as one “going concern.” This is an entirely erroneous idea.
The company was mortgaging nothing but its lands and buildings, including
therewith, of course, all machinery which in law would be deemed part of the
freehold. The grant in the mortgage is of the land only. What this grant
carries with it, defendants are entitled to, but the interpretation of the
grant cannot be widened. The learned trial judge treats this mortgage as
including all the machinery in question because all of it was “necessary to the carrying on of the business and
operations of the company;” but that circumstance, even if the
evidence established it, cannot afford any indication whether or not the
company, when the various pieces of machinery were put into the buildings,
intended them to become parts of the buildings, or to still remain chattels.
As to the specific
articles claimed upon this appeal, the safe is clearly shown not to have been
fastened. The fact that “pigeon holes” were built around it is not material. This was not done
with the intention of fastening the safe, but as a matter of convenience. It
[Page 177]
is merely in the
position of a chattel placed in a room, and subsequently the room or doorways,
so changed that the articles will not come out without being taken apart, or
the doorway enlarged. The character of the property is not changed. See Longbottom
v. Berry,
at pages 129 and 139, and Park v. Baker.
The lathes, bending machine, Bradley forges, iron wheel clamp, Daniels planer,
band sawing machine, platform scales, anvils and other similar machines rested
in position by their own weight only; they were not permanently affixed in any
way. See Ex parte Astbury; In re Richards; Mather
v. Fraser.
The scales in connection with the dynamometer are simply a pair of ordinary
weigh scales, and they do not become a fixture from the circumstance that it
may have been customary to use them with a fixed machine, when in fact they
have never been in any way attached to, or made part of that machine, any more
than a chisel becomes a fixture by the circumstance of a workman using it in
turning a piece of wood upon a turning machine which is fixed; it may be taken
away and used for any other purpose, and is not a part of the machine, though
it may be impossible to use the machine itself for any purpose without using
the other article as well.
Appellant is
entitled to damages for illegal detention of the machinery; Dreyfus v.
Peruvian Guano Co.; Cockburn
v. Muskoka Mill and Lumber Co.;
and the difference between the value of the property at the time of the demand
made therefor, or, the time of the commencement of the action, and the value at
the time of delivery thereof. Henderson v. Williams;
[Page 178]
Blakely v. Dooley; Auger v. Cook.
We also refer to La Banque d’Hochelaga v. The Waterous Engine Works
Co.; Hobson v. Gorringe;
Joseph Hall Manufacturing Co. v. Haslitt;
Stevens v. Barfoot.
The case of Keefer
v. Merrill
explains Crawford v. Finlay,
and shows it to have no application in this case.
Blain and
Cameron for the respondents.
The articles, though loose, belonging to the fastened or fixed machinery,
belong to the freehold, and the annexation may be actual or constructive.
Constructive annexation arises when the thing is fitted for use in connection
with the premises and is more or less necessary to their enjoyment. On this
principle not only the machines but even the patterns and tools belonging to
the fixed machinery pass with the realty, as they were essential to the
profitable user of an agricultural implement factory. Such effect must be given
to the language used in the mortgage as to include all things which were
annexed to the freehold with their essential parts whether fixed or loose. Hobson
v. Gorringe11; 8 Am. & Eng. Encyclopœdia of Law, 8, p. 43.
The evidence shows
that there is a countershaft to each of the machines consisting of a short
piece of shafting on which are fitted two or more pulleys. Each counter-shaft
runs in cast iron hangers, which are firmly bolted to the joists and beams of
the ceilings. Each counter-shaft is connected by belting, both with the line
shafting and with the machine below to which the counter-shaft belongs. Power
is
[Page 179]
conveyed to the
line shafting then through the counter-shaft to the machine on the floor.
Another function of the counter-shaft is to enable the machine below to run at
varying speeds. This is effected by what are called cone pulleys, which are
really groups of pulleys of different sizes; the counter-shaft is firmly
annexed and is as much a part of the machine as the rudder is of a ship. See
judgment of Brett L.J. in Sheffield, &c., Building Society v. Harrison.
The machine, its belting and its counter-shaft form one fixed piece of
machinery.
The respondents
rely on the following authorities: Longbottom v. Berry;
Holland v. Hodgson;
The Sheffield &c. Building Society v. Harrison16; Ewell
on fixtures p. 21; Keefer v. Merrill;
Rogers v. Ontario Bank;
Sun Life Insurance Co. v. Taylor;
Dickson v. Hunter;
Crawford v. Finlay.
The judgment of
the court was delivered by:
KING J.—The question is whether certain things were rightly
adjudged to be fixtures in a case between mortgagor and mortgagee. The mortgage
recited that the Haggert Bros. Manufacturing Co. had applied to the town of
Brampton for a loan of $75,000 upon certain undertakings to carry on all their
manufacturing business in the town, during a period of twenty years, and it was
agreed that the company should give in security their bond in double the amount
and a mortgage for the amount of the loan, and interest “upon all the real estate of them the mortgagors,
including all the machinery there was or might thereafter be annexed to the
freehold, and which should be
[Page 180]
known in law as
part of the freehold.” The mortgaged premises were conveyed
by description of the several parcels or tracts of land.
The articles in
question are pieces of machinery and other articles used on the premises in
connection with the manufacturing.
A mortgagor in fee
has not the same right as against the mortgagee, nor a grantor as against his
grantee, that a person having a limited interest only, as a tenant, has to
remove things annexed for the purposes of trade or domestic convenience.
In Holland v.
Hodgson in 1872,
it is said:
There is no
doubt that the general maxim of the law is that what is annexed to the land
becomes part of the land, but it is very difficult, if not impossible, to say
with precision what constitutes an annexation sufficient for this purpose. It
is a question which must depend on the circumstances of each case, and mainly
on two circumstances, as indicating the intention, viz. the degree of
annexation, and the object of annexation.
The circumstances
indicating the intention are such as are patent for all to see, and not such as
rest in mere agreement with the third party. In Hobson v. Gorringe,
an assignee of a mortgage was held to be entitled to treat an engine affixed to
the building by bolts and screws as part of the land, notwithstanding that it
was brought upon the land under a contract with the maker of the engine, by the
terms of which contract the engine was, under the circumstances that existed,
to continue the property of the seller (as between vendor and vendee).
Articles no
further attached to the land than by their own weight may become fixtures if
the circumstances are such as to show that they were intended to be part of the
land, though of course the onus of shewing that they were so intended lies on
those who
[Page 181]
assert that they
have ceased to be chattels. Holland v. Hodgson.
In a number of
cases were articles were held to be affixed to the land, the affixing was by
means of bolts and screws. In Holland v. Hodgson26,
already referred to, looms were so held which were attached to stone
floors of a mill by means of nails driven through holes in two of the four legs
of each loom, in some cases into beams built into the stone, and in other cases
into plugs of wood driven into holes drilled in the stone for the purpose.
In Hellawell v.
Eastwood in 1851,
spinning machinery fixed by screws to the floor in much the same way were held
not to be fixtures, the court considering that they were attached slightly so
as to be capable of removal without the least injury to the fabric of the
building or to themselves, and the object of the annexation being in their
opinion not to improve the inheritance, but merely to render the machines
steadier and more capable of convenient use as chattels. In recent cases it is
questioned whether the principles of law laid down in this case were correctly
applied to the facts.
The circumstance
that the fastening is merely to steady the machines when in use is now held not
to be inconsistent with the inference that the object was to permanently
improve the freehold. Longbottom v. Berry.
The court in that
case says:
This fixing
was clearly necessary, for they (the machines), could not otherwise be
effectually used; as for the same reason the fixing was obviously not
occasional but permanent. It is no doubt said in this case (referring to Mather
v. Fraser,)
that the object of fixing was to ensure steadiness and keep the machines in
their places when worked; but the same thing could probably be said of most
trade
[Page 182]
fixtures from
a steam engine downwards; and if the effect of this fixing is to cause the
whole set of machines to be effectually used in the manufacture of wool and
cloth, it seems very difficult to avoid coming to the conclusion that a
necessary conveyance is to cause the mill to be put to a more profitable use as
a wool mill than it otherwise would be. It is also equally difficult to
conceive that a machine which at all times requires to be firmly fixed to the
freehold, for the purpose of being worked, could truly be said never to lose
its character as a movable chattel.
So also in Holland
v. Hodgson,
where the looms were attached by nails for the purpose of steadying them and
keeping them in a true direction.
In passing upon
the object of the annexation, the purposes to which the premises are applied
may be regarded; and if the object of setting up the articles is to enhance the
value of the premises or improve its usefulness for the purposes for which it
is used, and if they are affixed to the freehold even in a slight way, but such
as is appropriate to the use of the articles, and showing an intention not of
occasional but of permanent affixing, then, both as to the degree of annexation
and as to the object of it, it may very well be concluded that the articles are
become part of the realty, at least in questions as between mortgagor and
mortgagee. See the cases already referred to, and also Walmsley v. Milne,
and Wiltshear v. Cotterell.
It was contended
that, as to a number of articles, an inference upon the evidence ought to be
drawn that the affixing did not take place until after the mortgagee went into
possession, but the inference is by no means a necessary one, and the
conclusions of fact should not be disturbed upon this account.
Certain articles
(as the watchman’s clock), are instances of
constructive annexation. Certain other articles (as the dynamometer scales) are
necessary parts
[Page 183]
of fixed machines,
neither being practically available for the purpose for which it was used
without the other.
As to machines not
themselves affixed at all, but connected with fixed countershafting, we do not
think the machines became thereby affixed where they were not parts of the one
article.
As to the safe,
the learned judges of the Court of Appeal were evenly divided, and it is
impossible to feel confident on such a question. But considering that the safe
was put in a place structurally adapted for it, and was so enclosed in it by a
wooden structure subsequently built that it could not be taken out without
destroying what was a portion of the realty, and that it was put there not for
a temporary purpose but to be permanently there, it would seem reasonable to
conclude that it was so affixed as an adjunct to the building, to improve its
usefulness as such, considering the purpose to which the building was applied.
Applying the
principles enunciated to the several classes of articles in question, those
which are considered to remain chattels are as enumerated hereafter, and the
rest were affixed to and formed part of the realty. The chattels which were not
annexed to the realty, nor became part of the realty, are as follows: In the
office, one copying press and table; in the blacksmith’s shop, No. 7, anvil; No. 9, four anvils; in the boiler
shop, No. 11, two anvils; in the long wood shop, iron clamp for making engine
wheels; in the wood finishing shop, the band sawing machine, and saws in
connection therewith, also belting; in the outside yard, the platform scale on
wheels. Amongst the miscellaneous articles, the fire hose, fire hose reel with
all its hose, tools and couplings, including brass nozzles and branches.
[Page 184]
The variations
here indicated should be made in the judgment entered in the court below. The
appeal is dismissed without costs.
Appeal
dismissed without costs.
Solicitor for the appellant: B.F.
Justin.
Solicitor for the respondents, the
Town of Brampton: J.W. Beynon.
Solicitor for the respondents, Blain
and McMurchy: T.J.Blain.
42 Ch. D. 66; 43 Ch.
D. 316.