CT. OF APP.]

outstanding, but shall not operate as precluding the company from continuing to prosecute its undertaking and using, employing, and selling, or otherwise dealing with or disposing of bona fide in or for the purposes of the ordinary prosecution of its undertaking and business any portion of its capital and property which may be required to be used, dealt with, or disposed of until any or either of the following events shall happen;" and then there is default in payment of interest. It is said that there is something in that condition which precluded the company from annexing these machines to the freehold, and that I, therefore, ought not without cogent evidence to assume that the company had done in this case that which they bargained not to do. But I do not agree. I do not think that in fixing these machines, if they did fix them, the company was acting in breach of that clause at all, and for this reason: in my judgment those machines never had as the property of the company a chattel existence at all if they were fixed. I am of opinion that, on the evidence before me, I ought to assume whatever was done that it was done from the first. The bargain was, that these manufacturers should bring the machines, deliver them, and do whatever was necessary, and whatever was necessary, in my opinion, was done in the first instance. Under those circumstances, if it be that the purchasers did affix these machines when they bought them, I think that there is nothing in this clause that in any way precludes the company from ordering machinery of a character which, when delivered or supplied, shall be a portion of the freehold. Therefore I see nothing in that clause which should deter me from coming to the conclusion that these machines were affixed, if the other evidence shows that they were affixed by the nailing of the planks to the floor. [His Lordship further .considered the evidence and continued:] On the whole I have come to the conclusion that these planks were nailed to the freehold. Some recent cases were cited to me. One was The Cumberland Union Banking Company v. The Maryport Hematite Iron and Steel Company (66 L. T. Rep. 108; (1892) 1 Ch. 415); and another was Gough v. Wood and Co. (70 L. T. Rep. 297; (1894) 1 Q. B. Div. 713). Those cases raised very nice questions as to how far chattels which are wrongfully and against the will of a third person incorporated with a freehold become part of the freehold and cease to be the chattels of the person who has purchased them. I have not got to decide that kind of case. If I had to decide that kind of case, I might find it rather difficult to reconcile the judgment of North, J. with the judgment of the Court of Appeal. But I have not to do so. It seems to me that there is no pretence for saying that, if these machines were fixed by the manufacturers who delivered them, they ever were owned as chattels by the company. Of course, if they were owned at any time as chattels by the company, then they would have been covered by the debentures. Supposing that they were So owned after the debentures came into force, then those questions might have arisen. But I think that the questions do not arise for the reasons I have given.

From that decision the defendants row appealed.

[CT. OF APP.

Farwell, Q.C. and Sheldon for the appellants.We submit that Williams, J. has made a wrong order here, inasmuch as the court has no jurisdic. tion to set aside a consent order except on the ground of fraud or surprise, and nothing of the kind is asserted in the present case. In order to support such an action as this, fraud in the sense of misrepresentation or concealment of material facts must be alleged and proved :

Flower v. Lloyd, 39 L. T. Rep. 613; 10 Ch. Div. 327:

Vadala v. Lawes, 63 L. T. Rep. 128; 25 Q. B. Div. 310, 316:

Abouloff v. Oppenheimer and Co., 47 L. T. Rep. 325;

10 Q. B. Div. 295, 307.

[KAY, L.J.-In the case of Attorney-General v. Tomline (38 L. T. Rep. 57; 7 Ch. Div. 388), Fry, J. said that a consent order could be set aside for reasons which would enable the court to set aside an agreement.] But the learned judge meant an agreement still to be enforced, not a completed agreement. What is necessary for the purpose of setting aside a completed agreement appears from the observations of Lord Romilly, M.R. in Re The Liverpool Borough Bank; Ex parte Duranty, 28 L. J. 37, 39, Ch.

A judgment, although by consent, and upon which the court has not exercised a judicial mind, creates an estoppel between the parties to the action, in just the same way as if it were a judgment arrived at after the action had been fought

out:

Re The South American and Mexican Company
Limited; Ex parte The Bank of England, 71
L. T. Rep. 334; (1895) 1 Ch. 37.

As to the practice of the old Court of Chancery in regard to the review of an action, see

Bradish v. Gee, 1 Amb. 229;

Webb v. Webb, 3 Swans. 658.

[KAY, L.J.-So far as unaltered, the practice remains the same as before the Judicature Acts.] Where compensation was claimed in respect of a defect of title which might have been discovered by a lessee before he took his lease, there being no contract as to compensation, it was held that he was not entitled to compensation after taking it:

Clayton v. Leech, 61 L. T. Rep. 69; 41 Ch. Div.

103.

[LINDLEY, L.J.-There is a case the other way of Bloomer v. Spittle (26 L. T. Rep. 272; L. Rep. 13 Eq. 427).] But that was not a decision of the Court of Appeal. One of the older cases on the point is Okill v. Whittaker (2 Phil. 338). [LINDLEY, L.J.-If a party has by mistake consented to an order, the court has power to relieve him, and will do so on being satisfied that the mistake existed, that the conduct of the party himself has not deprived him of his title to relief, and that the relief can be given with due regard to the just interests of others: (see Davenport v. Stafford, 8 Beav. 503, at p. 522.) There is also a passage in the judgment of Lord Kingsdown in Trigge v. Lavallée (15 Moo. P. C. 270, at p. 298) as to the effect of a common mistake. LOPES, L.J.-See also Furnival v. Bogle (4 Russ. 142).] In Brooke v. Lord Mostyn (2 De G. J. & Sm. 373) Turner, L.J. (at p. 416), said: "The circumstances which will furnish sufficient ground for impeaching a compromise made under the order of the court must be such as to amount to fraud in the party

CT. OF APP.]

It is not sufficient, therefore, merely to allege common mistake, where the matter has been completed as in the present case. [KAY, L.J.-Equity relieves against bargains made under a misconception of rights: (Bingham v. Bingham, 1 Ves. sen. 126.) That case is cited in Dart on Vendors and Purchasers (6th edit., vol. 2, p. 907); and so also are Cochrane v. Willis (L. Rep. 1 Ch. App. 58) and Jones v. Clifford (35 L. T. Rep. 937; 3 Ch. Div. 779).] The doctrine established in Bingham v. Bingham (ubi sup.) has not been tested by the Court of Appeal, and is inconsistent with that laid down in Legge v. Croker (1 Ball & B. 506); Wilde v. Gibson (1 H. L. Cas. 620); Brownlie v. Campbell (5 App. Cas. 925). The following cases are also on the same footing:

Garrard v. Frankel, 30 Beav. 445;

Harris v. Pepperell, 17 L. T. Rep. 191; L. Rep. 5 Eq. 1;

Paget v. Marshall, 51 L. T. Rep. 351; 28 Ch. Div. 255.

As regards the looms, we will assume that they were actually fixed to the planks by the washers. We do not ask the court to interfere with the finding of the learned judge in the court below on that question of fact. But we ask the court to say that the looms were never fixed by the authority of the appellants, and that they were never known by them to be fixed. [KAY, L.J.-It does not depend upon whose authority the looms were fixed if in fact they were fixtures. matter how they became so.] But if things are made fixtures against the orders of the proprietors, they may be altered subsequently. If it is found that owing to a workman's error there is a fixture the proprietors can order it to be unfixed.

It does not

Other

wise it would be making the workman dispose of the property of his employer. A general statement of the law on this subject is contained in Wake v. Hall (48 L. T. Rep. 834; 8 App. Cas. 195, 202). One person cannot turn another person's property into fixtures without his consent:

D'Eyncourt v. Gregory, L. Rep. 3 Eq. 382.

Of course, if the court found that there was authority for these looms being affixed to the floor of the mills, it would be a different matter. But we submit that there is absolutely no evidence as to that. Mortgagors in possession can remove fixtures brought on to their premises for the purposes of their trade:

Gough v. Wood and Co., 70 L. T. Rep. 297; (1894) 1 Q. B. 713;

The Cumberland Union Banking Company v. The Maryport Hematite Iron and Steel Company, 66 L. T. Rep. 108; (1892) 1 Ch. 415. Cooper Willis, Q.C. and Kershaw, Q.C., for the respondents, were not called upon to argue.

LINDLEY, L.J.-We have had an opportunity of carefully considering this case, which is of considerable importance, and none of us requires to postpone delivering judgment. The case arises in this way: [His Lordship stated the facts of the case and continued:] An order was drawn up by consent, dated the 17th Oct. 1892, and it was an order made on the summons of the plaintiffs in the debenture-holders' action, which

[CT. OF APP.

summons had been served on the banking company. Now let us consider what it was that the banking company were consenting to. They had nothing whatever to do with the patent rights. The sale of the patent rights was included in this order for convenience. They had no more to do with it than I have. But they did consent to the sale of these looms which everybody at that time thought were Lister's chattels, and not included in the mortgage to the banking company. The banking company consented to that. Under those circumstances the looms were sold, and the receiver has got the money. Since then it has been found out that these thirty-three looms had been originally screwed down in the way I have mentioned, and had thereby become the property of the mortgagees. That fact was not previously known, and never supposed by anybody. That fact having been discovered the banking company now say, and say by their present action: Set aside that consent order on the ground that it was made under a common mistake, and instead of the receiver handing over the money to the debenture-holders order it to be handed over to us." Williams, J. has made an order to that effect, and he has done it upon this ground: He has done it on the fact that that consent order was made by mistake not of one side, but a common mistake of both sides; that there is jurisdiction to set it aside; and that it would be a failure of justice if he did not rectify that mistake. Now Messrs. Lister and Co. Limited appeal, and they contend that that order is wrong. They say, first of all, that there is no jurisdiction to set aside this consent order upon such materials as we have to deal with; and, as far as I understand it, they go so far as to say that a consent order can only be set aside on the ground of fraud. I dissent from that proposition entirely. A consent order I agree is an order, and so long as it stands it must be treated as such, and so long as it stands I think it is as good an estoppel as any other order. I have not the slightest doubt on that point. But that a consent order can be impeached not only on the ground of fraud but upon any grounds which invalidate the agreement it expresses in a more formal way than usual, I also have not the slightest doubt. Now, if authority for that be wanted, it will be found in two cases which were referred to in the course of the argument, and which I do not propose to examine at any length. I mean the cases of Davenport v. Stafford (8 Beav. 503) and AttorneyGeneral v. Tomline (38 L. T. Rep. 57; 7 Ch. Div. 388). The only thing to my mind to be done on this point of setting aside a consent order is to see whether the agreement upon which it was based can be invalidated or not. Of course, if the agreement cannot be invalidated the consent order is good. If it can be, the consent order is bad. Now, on the point of jurisdiction, let us see what there is against setting aside the agreement. How does that stand? It is an agreement carried out by payment to the receiver; that is to say, the receiver sold the things under that agreement and has got the money. But I take it that an agreement which is founded upon a common mistake, and which mistake is impliedly treated as a condition which must exist in order to bring the agreement into operation, can be set aside formally if necessary, or treated as set aside and as invalid without any process

CT. OF APP.]

or proceeding to do so. The moment you have got rid of the consent order, I take it that it is quite plain that an action would lie at law for money had and received at the instance of the bank against the receiver upon the ground of the mutual mistake or rather, as it would be put at law, a total failure of consideration. If authority for that be wanted, the cases will be found collected in the ordinary books on contract; but I would cite in particular Strickland v. Turner (7 Ex. 208). That case related to the sale of an annuity, the annuitant having died shortly before the sale was executed. It was a sale by trustees who were vendors, and the purchaser knew nothing about the death of the annuitant. The money was paid over, and the purchaser brought an action to recover it back, and succeeded as a matter of course. On the same principle there are cases in equity, among which Bingham v. Bingham (1 Ves. sen. 126) may be referred to as a leading example. There an agreement to purchase a property was set aside, and the money restored upon the ground that the property really belonged to the man who had professed to buy it. It was a common mistake, but the transaction was set aside. I am aware that Bingham v. Bingham (ubi sup.) has been occasionally criticised, and in some of the earlier editions of Lord St. Leonards' book on Vendors and Purchasers he seemed to think that there was something wrong about it. In his later editions he changed his opinion. Bingham v. Bingham (ubi sup.) was carefully examined in the House of Lords in Cooper v. Phibbs (16 L. T. Rep. 678; L. Rep. 2 E. & I. App. 149), and was distinctly affirmed. The principle of it was assented to and laid down to be correct; and in a still later case of Jones v. Clifford (35 L. T. Rep. 937; 3 Ch. Div. 779) Hall, V.C. again went through the whole of the cases relied on, and came to the conclusion that Bingham v. Bingham (ubi sup.) was sound law. As I understand the case, I cannot couceive on what ground there should be any question of its soundness. It appears to me to be in perfect accordance with well-settled principles of law, both of this country and of all civilised countries so far as I know. Therefore there is no difficulty, so far as I can see, either in getting rid of the consent order or in getting rid of the agreement as based upon a mistake common to both parties. It was a mistake of this nature, that both parties believed that these thirtythree looms never had been fixed at all, whereas in fact they had. It was a common mistake of fact, on which mistake the agreement under which the receiver received the money was based. Now I pass to another point. It was said that this was a compromise; that there were thirty-five of these looms, and the real arrangement was, not that the thirty-three should be sold upon the common mistake I have alluded to, but that something of this kind should be done: Lister and Co. claimed all the thirty-five looms, and the bank said, "Give us two; there are two screwed down," and they said, "You, the bank, may have two; but give us the balance." If that had been the true arrangement the aspect of the case would have been totally different. This part of the case was carefully considered by Williams, J., and he finds upon the facts, I think, after seeing the evidence of Mr. Taylor, who said distinctly that there never was any such give-and-take arrange

[CT. OF APP.

ment at all, it would be impossible to adopt that view of the transaction. There was no compromise at all. It was simply an oversight. Then it was said that, supposing that to be so, then these looms were unfixed before the mortgagees took possession; and that, on the authority of The Cumberland Union Banking Company v. The Maryport Hematite Iron and Steel Company (66 L. T. Rep. 108; (1892) 1_Ch. 415) and Gough v. Wood and Co. (70 L. T. Rep. 297; (1894) 1 Q. B. 713) that is sufficient, and the mortgagees cannot claim. The answer to that is this: This issue turned on the view rightly or wrongly-I do not pause to consider that now-that the chattels were unfixed, and properly unfixed, on the implied authority given by the mortgagees. It is impossible to say that these looms were unfixed by the implied authority given by the mortgagees. They were not unfixed in the ordinary course of trade or anything of that kind; but they were really unfixed on purpose to prevent the mortgagees claiming them. The proposition as to inferring an authority on the part of the mortgagees, or an implied authority on the part of the mortgagees to unfix them, or to come to the conclusion that they were unfixed in the ordinary course of trade for the purpose of being replaced by others, is untenable. Gough v. Wood and Co. (ubi sup.) really does not apply to the case at all. I do not think that there is any other point of real importance. It appears to me that the appeal breaks down in every direction, and that it must be dismissed with costs.

The

LOPES, L.J.-I am of the same opinion. There are two questions that arise in this case. first is, can the court set aside a consent order which has been passed and drawn up? and, secondly, are these thirty-three looms fixtures? I will deal with the question first with regard to whether they are fixtures, because, if the looms are not fixtures, the consent order would be right, and there would have been no mutual or common mistake. Are the thirty-three looms fixtures? The learned judge found that they were so fixed to the freehold as to become part of it. I am of opinion that the learned judge was right. The conclusion I draw from the evidence is this, that the machines were fixed to planks, and that the planks were fixed to the floor in such a way as to prevent the machines when in use moving either laterally or vertically. The worms of the screws raise to my mind the idea of adhesion, or intention on the part of those placing the machines where they were placed to so fix them in position as that they would adhere to the floor. That was the view that the learned judge took, and, in my opinion, it was the right view. But it was said during the course of the argument that, even assuming all that, what was done was done by the manufacturers-I mean the annexation without the knowledge of the defendants and without their authority-and therefore must be disregarded. I cannot adopt that contention. As I suggested during the course of the argument, suppose I order a carpenter to come into my room and fix a bookcase for me, and, in the course of so fixing it, he fixes it in such a way that it becomes annexed to the freehold. It appears to me that I, telling him to make a good job of it, or to fix it properly, could not be heard to say that that was not done with my authority, and that, therefore, annexation must be entirely disregarded,

CT. OF APP.]

I

and that the chattel does not become part of the freehold. That is very much this case, because, as appears from the evidence of Mr. Illingworth, who was the maker or manufacturer, he was told by Listers to place these machines in situ, and to make a good job of it; and, acting on that instruction, he placed the machinery in the way that I have endeavoured to describe. I think, therefore, that it cannot be contended that these thirty-three looms were not fixed to the soil in such a way as to pass to the mortgagees. Then it is said that there was a consent order which was drawn up and passed, and that the court has no jurisdiction to set it aside. Now, it appears to me that the two cases which have been cited are sufficient authority to show that it can be set aside. One was the case of Davenport v. Stafford (ubi sup.), and the other Attorney-General v. Tomline (ubi sup.). The law seems to be this: that a consent order may be set aside for the same reasons as those on which you may set aside an agreement. It appears to me that, directly a common mistake is established, you can set aside an agreement. It cannot be contended here, I think, that there was not a common mistake. rather understood that it was admitted that both parties honestly believed that these thirty-three looms were loose chattels at the time the consent order was made. But then it is said that the true nature and character of this transaction is that it was a compromise. Now, the order to my mind points in the other direction. I rather conclude that the transaction was this: that the one party was satisfied that the two looms were fixed to the soil, and the other party was satisfied that the thirty-three looms were not fixed to the soil, and acting on that, not in any give-and-take way, but merely acting on this belief in that respect, they proceeded to this consent order. Another point was made, namely, that these thirty-three looms were unfixed before the mortgagee took possession; but, as has been pointed out with reference to the case of Gough v. Wood (ubi sup.), which was relied upon, that case proceeded upon the ground that they were unfixed by the implied authority of the mortgagees. There is also this observation to be made that, whereas in that case it might be said that they were removed in that way, that cannot be said in the present case.

I have come to the conclusion, therefore, that the learned judge was right in his judgment in every respect, and I think that the appeal should be dismissed.

KAY, J.-I will add a few words on my own behalf, because one of the questions raised in this case is of very considerable importance. It was denied in argument that the court had any jurisdiction whatever to set aside a consent order except in the case of fraud. Now, what is a consent order? After all it is only the order of the court carrying out an agreement between the parties. Supposing the order out of the way, and the agreement only to exist, there can be no sort of doubt that the agreement could be set aside, not merely for fraud but in case it was based upon a mistake of material fact which common to all the parties to it. Then, if you may set aside an agreement on that ground, why should you not be able to set aside such an agreement simply because an order has been founded upon it? It seems to me that, both on principle and on authority, when once you find that an agreement has been come to between parties who

was

[CT. OF APP.

were under a common mistake of a material fact, you may set aside that agreement, and this court has ample jurisdiction to set aside the order founded upon that agreement. Of course, if the order had been acted upon by them and interests of third parties had intervened, and so on, difficulties might arise, but nothing of that kind occurs here. Here we have got simply the parties to this agreement and order before us. No one else seems to have obtained any kind of interest under it. Therefore it seems to me that, if it be made out that it proceeded upon the common mistake of a material fact, there is ample jurisdiction in the court to set it aside. Then did it or did it not? The only bodies or persons who were parties to this agreement and this consent order for this purpose were the original mortgagees and the subsequent debenture-holders. The question was which of the looms that were in the mortgaged property were in the nature of fixtures. It was agreed that two were; and it was agreed that thirty-three were not; but as to the thirty-three there does not seem to have been any dispute or consent whether they were fixtures or not. Experts went down and examined what the condition of things was, and found that these thirty-three looms were completely loose. Therefore they came to the conclusion that they never had been fixed, and they were not treated as fixtures at all. That was not the fact. The fact was, that they had been fixtures just as much as the two that were treated as fixtures. I will not say any more on the question of whether they were fixtures or not. On the whole I think that the learned judge came correctly to the conclusion that they had been, owing to the manner in which they were fixed to the floor, as much fixtures as the two which it was agreed must be treated as fixtures. But then this point was raised: It was said, True they may have been at one time fixtures, but if they were, they were never fixed by the authority of the mortgagors who were in possession, but it was an accidental thing done without any authority from them at all. How stands the facts? As far as I can make out, they certainly had when this question arose, or when the question was about to arise, been fixed to the floor for some months-probably eighteen months, but certainly for some months. During all that time the mortgagors were in possession, and it certainly would be very difficult to persuade me that they must be treated as being entirely ignorant of the fact that these looms were fixed to the floor of their own mill. But when I come to look at the evidence I find, as I understand the evidence, that they were, in fact, affixed by the workmen of the mortgagors themselves, and that one of the mortgagors of this company, Mr. Lister, told the workmen to make a firm job of it. In pursuance of those general instructions what the workmen did was to lay down the planks on the floor to strengthen the floor. The planks were nailed down to the joists of the floor, and then upon those planks were fixed the looms, by screwing into the slots in the feet of the looms these screws that have been spoken of, which, as to the two looms, which were admitted to be fixtures, had heads wide enough to extend beyond the width of the slot itself, and so to hold those two looms down vertically, as well as to prevent them sliding horizontally. As to the thirty-three looms the evidence is clear that the workmen would have

CT. OF APP.]

done for them exactly the same if they had had screws with heads of that same size; but they had not, though they seem to have had plenty of screws with heads of a smaller size, that is, heads of such size, I understand, that they would slide up and down in the slots. In order to prevent that they put under the heads of each of these smaller screws a washer of iron which extended beyond the sides of the slot, and which made them for this purpose precisely equivalent to the larger screws that fastened down the two. That that was done by the authority of the mortgagors seems to me upon the evidence to be beyond the possibility of reasonable question. I therefore think that there was a mistake of fact, and of a material fact, which was common both to the mortgagees and to the debenture-holders between whom this agreement was made, and on whose behalf this consent order was made. The mortgagees were induced to consent by ignorance of this material fact, which also the other side were ignorant of. That seems to me to enable this court to deal with, and to have enabled the learned judge in the court below to deal with the consent order as he did deal with it, namely, to say that the agreement upon which it was founded was based upon a common mistake of a material fact, and that therefore the court had jurisdiction to set that agreement aside, and consequently to set aside the order which was founded upon it. But then it was argued, or suggested to some extent, by Mr. Farwell, and urged more strenuously by his junior, that this was a compromise. What does a compromise mean? A com

promise means, if there is a question of doubt and the parties agree, "We will not try it out, but we will settle it between ourselves by a give-and-take arrangement." I quite agree, if that was so, it would be extremely difficult to interfere with the order. But was there ever any doubt as to these thirty-three looms? Did either of the parties consider that they were fixtures? They did not. There never was any such doubt at all, and therefore there certainly was no settlement of any doubt of that kind. I cannot see that in this case there is any element of a compromise. It seems to me that that argument fails in point of fact, because there was no question of doubt as to these thirty-three looms which was compromised by the arrangement that was made. Then it was suggested that there was one large arrangement, and that this was only a part of the large arrangement. We have looked into the evidence with regard to that, and as between the mortgagees and the mortgagors I can find nothing like an arrangement except as to the thirty-five looms; and that arrangement, so far as it was made, I have dealt with already, and have come to the conclusion that it proceeded upon a mistake of material fact. Then the case of Gough v. Wood and Co. (ubi sup.), and the case before North, J. of The Cumberland Union Banking Company v. The Maryport Hematite Iron and Steel Company (ubi sup.) were referred to as supporting the argument that, even if the looms had at one time been fixtures, yet before the mortgagees took possession the mortgagors had a right to remove them. As between mortgagor and mortgagee I simply dissent from that proposition entirely, and if those cases are examined, and at any rate if the case before this court is examined-Gough v. Wood and Co. (ubi sup.)—it

[CT. OF APP.

will be found that it proceeded absolutely and entirely upon this, that from the circumstances of that particular case the mortgagees must be taken to have assented to that which the mortgagors did in removing the fixtures before they took possession. Here there is no pretence for saying that this was not a removal of the looms in the course of the trade of the mortgagors and as a legitimate act of that trade. The analogy in the case of Gough v. Wood and Co. (ubi sup.) was that of a nurseryman who, in carrying on his business of a nurseryman, removed trees which had been planted in the soil for the purpose of selling them, and converted them into chattels and sold them. That would be a proper thing to do in the course of carrying on his business. But there is nothing of that kind here. Therefore I think that those cases do not support the argument attempted to be founded upon them, and on the whole I agree with the decision of the learned judge in the court below. I think that this appeal fails, and that it must be dismissed with costs. Appeal dismissed.

Solicitors for the appellants, Ramsden, Ratcliffe, and Co., agents for Ramsden, Sykes, and Ramsden, Huddersfield.

Solicitors for the respondents, Iliffe, Henley, and Sweet, agents for Laycock, Dyson, and Laycock, Huddersfield.

Friday, May 24.

(Before LINDLEY, LOPES, and KAY, L.JJ.) TAUNTON . THE SHERIFF OF WARWICKSHIRE. (a)

APPEAL FROM THE CHANCERY DIVISION.

Company-Debenture-" Floating security"-Execution creditors -Intervention by debentureholders-Equity of.

The plaintiffs were debenture-holders in a limited company. The debentures charged "the freehold and leasehold premises, plant, stock, licences, book and other debts, property, goodwill, assets, and undertaking of the company, both present and future, including uncalled capital for the time being of the company, as a floating security."

Condition 3 of the debentures provided:

• The

charge created by this debenture shall be a floating security, and shall not hinder any dealings by the company in the course of its business with all the property hereby charged in such manner as the company shall think fit." Under subsequent conditions the money secured became immediately payable in default of payment on demand, or if execution should be issued against the property of the company and not satisfied. On the 14th Feb. 1895 the sheriff, at the instance of execution creditors, in execution of a judgment, seized certain chattels of the company covered by the debentures.

On the 16th Feb., the debentures being overdue, the debenture-holders commenced an action to enforce their security and for a receiver. On the 18th Feb. notice of the debenture-holders' action was given to the sheriff and the execution creditors. On the 21st Feb. this action was commenced against the sheriff, and an ex parte injunction obtained (a) Reported by W. C. BISS, Esq., Barrister-at-Law.