latter Act, although enacting that the word "land" shall, in CHAPTER XIII. its meaning, extend to tithes, has reference to an estate in tithes, and not to tithes as a chattel; and sect. 2, therefore, does not embrace the case of a render of tithes as a chattel by the person bound to pay to the tithe owner (). Actions for tithes must be brought within six years from the time when such tithes became due (a), and the defendant may avail himself of the Act without pleading it (b). iv.-Mortgage of Rentcharges.-A mortgage may be made Form of of a subsisting rentcharge, or of a rentcharge created at the mortgage. time and for the purposes of the security. In the former case the form of the mortgage will not materially differ from that of a mortgage of land, and the same form may be adopted in the case of a newly-created rentcharge, but in such cases the form of the security is more commonly that of an absolute grant of the rentcharge with power of repurchase (c). The statute 3 & 4 Will. IV. c. 27, sect. 42, provides that no Arrears of arrears of rent are to be recovered after more than six years rentcharge. from the time at which they become due, or an acknowledgment in writing is given by the debtor. This provision was apparently intended to apply exclusively to rentcharges, and not to other rents (d). remedies. By the Conveyancing and Law of Property Act, 1881 (e), Statutory s. 44, the insertion in grants of rentcharges of powers of distress and entry, and of limitations of terms to trustees to secure rentcharges, are rendered unnecessary. When the mortgage is of a subsisting rentcharge, it will be well for the mortgagee to take a power of attorney from the mortgagor, so as to enable him to enforce these rights and remedies against the land out of which the rentcharge issues. (z) Dean of Ely v. Bliss, 2 De G. M. & G. 459. (a) 53 Geo. III. c. 127, s. 5. (b) Goode v. Waters, 20 L. J. Ch. 72. (e) See as to annuity deeds, ante, pp. 32 et seq. (d) Paget v. Foley, 3 Sc. 120. Meaning of "'chattels." Securities on chattels. CHAPTER XIV. OF MORTGAGES OF CHATTELS. SECTION I. OF THE NATURE AND INCIDENTS OF MORTGAGES OF CHATTELS GENERALLY. i. Introductory Remarks.-In its widest sense, the expression "chattels" means all personal property, including leasehold and like interests in land which are known as chattels real, and debts and other choses in action, as well as goods capable of being transferred by actual delivery, which are often distinguished by the title "chattels personal." In a more usual and restricted sense the expression "chattels" is used to denote. only the latter kind of personal property, and it is in this sense that the word is used in this present Chapter. Chattels may be made the subject of a security for a loan or debt, either by mortgage or by pledge. A mortgage of chattels, like a mortgage of land, passes the property therein to the mortgagee, subject to redemption. The goods may, like any other mortgaged property, be retained, as is usually the case, by the mortgagor, in which case, as will be seen hereafter, the validity of the mortgage will depend on its conformity with the requirements of the Bills of Sale Acts, 1878 and 1882 (a). Independently of those Acts, or of the inferences to be drawn therefrom (6), a mortgage of chattels might have been made by assignment contemporaneous with or subsequent to delivery of the goods to the mortgagee (c). But it is somewhat doubtful how far, having regard to the provisions of those Acts, such transactions can be validly effected at the present day (d). (a) 41 & 42 Vict. c. 31; 45 & 46 Vict. c. 43; the provisions of these Acts are considered post, pp. 189 et seq. (b) See Great Northern Rail. Co. v. Coal Co-operative Soc., (1896) 1 Ch. 187. p. 192. chattels where possession is the mort The question as to the validity of a mortgage of chattels, CHAPTER XIV. where possession of the goods is retained by the mortgagor, has Mortgages of generally arisen between the mortgagee and some other creditor of the mortgagor who has obtained possession of the goods by retained by execution or otherwise subsequently to the mortgage, or between gagor. the mortgagee and the general creditors of the mortgagor, he having become bankrupt. These cases, though frequently confounded, require a distinct consideration; for it frequently happens, as will presently be seen, that mortgages which might be supported against execution creditors, notwithstanding the non-delivery of possession, are void under the enactments of the bankruptcy law (e). mortgages The question, as it regards the mortgagee and any other Fraudulent individual creditor or creditors, turns partly upon the principles of chattels. of the common law, and partly on the well-known statute 13 Eliz. c. 5. The question, as between the mortgagee and the trustee in bankruptcy of the mortgagor, acting on behalf of the creditors generally, is regulated by the provisions of the Bankruptcy Act, 1883 (f), which will be hereafter considered. secret trust. ii.—Mortgages fraudulent at Common Law.-At common law, Fraud or independently of any statute, a security to a creditor will be void if fraudulent, or made upon a secret trust for the debtor. The retention of possession by the mortgagor after assignment Retention of is material as raising a primâ facie presumption that the trans- mortgagor. possession by action is tainted with fraud. Immediate transmutation of possession is, however, at the present day, seldom contemplated by the parties to a mortgage transaction, but the mortgagor is usually allowed to retain possession of the goods until default in payment of the mortgage moneys, or until breach of some stipulation contained in the deed. It is unnecessary that the assignment of the chattels should Effect as between parties be followed by possession, in order to make it valid against the to deed, &c. assignor himself, or against his creditors, who are cognisant of and take part in the arrangement under which it is made, or which proceeded upon the assumption of its validity, or against strangers (g). The presumption arising from retention of the goods may Effect as (e) Byth. & Jarm. (4th ed.), Vol. III. p. 765. (f) 46 & 47 Vict. c. 52. See post, pp. 177 et seq. (g) Steel v. Brown, 1 Taunt. 381; Robinson v. M'Donnell, 2 B. & Ald. 134; Beasey v. Windham, 6 Q. B. 166; White v. Morris, 11 C. B. 1015. See also Olliver v. King, 8 De G. M. & G. 110. against creditors generally. CHAPTER XIV. be rebutted, and the security may be supported as against creditors who have not assented to the transaction, by showing that the retention of possession by the mortgagor is consistent with the nature of the transaction. Such evidence may be supplied either by the express terms of the mortgage deed, or by parol evidence proving that the assignment, though in terms absolute, was really a mortgage (h). Clause for default. So where a mortgage of chattels contained a clause that the possession till mortgagor should keep possession until default in payment, or until sequestration, his possession did not show fraud, and unless fraud be proved, the mortgagee's title prevailed against an execution creditor (i). Nor is the mortgagee bound to take possession on the first or a subsequent default made in payment of the debt or an instalment of the debt (k). Possession consistent with deed, where no such clause. The effect of such a clause is to operate as a redemise by the mortgagee, who cannot sue for the chattels until default has been made, or the expiration of the time for payment; and the mortgagor may maintain an action if his possession is interfered with in the interval. But the mortgagor is only entitled to the use of the chattels; if he or his trustee in bankruptcy sell them during the term, it will be a disclaimer of the tenancy, and the mortgagee or his assignees can sue for the conversion (1). The proviso for the mortgagor to retain possession until default is not inconsistent with a proviso for taking possession on the happening of a certain event (m). Even when the mortgage does not contain the clause for possession by the mortgagor until default, the mortgage will be supported, if the possession is consistent with the requirements and probabilities of the case (n); as where it was necessary for the mortgagor, who was an hotel-keeper, that he should remain in possession (o). So also a security may be supported where, from the very nature of the transaction, a delivery could not be contemplated. (h) Cole v. Davies, 1 Ld. Raym. 724. See Meggott v. Mills, 1 Ld. Raym. 286. It must, of course, be borne in mind that all mortgages of chattels must now conform to the requirements of the Bills of Sale Acts; see post, pp. 189 et seq. (i) Martindale v. Booth, 3 B. & Ad. 498; Reed v. Wilmot, 5 Moo. & P. 553; Minshall v. Lloyd, 2 M. & W. 450; Bradley v. Copley, 1 C. B. 685; Gale v. Burnell, 7 Q. B. 850; Tapfield v. Hillman, 6 Man. & Gr. 245; Alton v. Harrison, L. R. 4 Ch. A. 622. (k) Martindale v. Booth, sup.; Tapfield v. Hillman, sup. (1) Fenn v. Bittlestone, 7 Exch. 152; Brierley v. Kendall, 17 Q. B. 937. (m) Re Francis, 10 Ch. D. 408, C. A. (n) Steward v. Lombe, 1 Br. & B. 506; 4 Moo. 281; Cook v. Walker, 3 W. R. 357. (0) Cook v. Walker, sup. Thus (p) where a supercargo of a ship bound to the East Indies CHAPTER XIV. shipped goods, and made a bill of sale of them and of their profits to one Royston, by way of mortgage; the voyage was made, and the supercargo sold the goods, and bought others, and made several barters and exchanges, and afterwards died at sea; in a question between the mortgagee and a judgment creditor, the assignment was held valid, for though sold to Royston, they were intrusted to the supercargo to negotiate and sell them for Royston's advantage, and the possession was not for the purpose of giving him a false credit. So in the case of land being mortgaged with a mill standing on it, not affixed to the freehold, in which instance the possession of the mill by the mortgagor, although a mere chattel, was held to be consistent with the deed (g). The result of all the cases seems to be, that possession of goods and chattels after an assignment of them does not of itself at common law constitute fraud as against creditors, but is only primâ facie evidence of it, capable, like any other evidence of a similar kind, of being rebutted or explained. iii.-Mortgages fraudulent under Stat. 13 Eliz. c. 5.-A mortgage of chattels, though complying in all respects with the requirements of the Bills of Sale Acts, may be liable to be set aside as fraudulent against creditors under the statute 13 Eliz. c. 5. creditor void. By that statute (which will be more fully considered hereafter Conveyances with reference to its bearing upon the avoidance of securities in fraud of generally as against creditors on the ground of fraud (»)) it is, amongst other things, provided that every conveyance of goods and chattels made to the end, purport, and intent to delay, hinder, or defraud creditors, shall be void as against persons who may be defrauded and their representatives. But the Act is not to extend to any such conveyance made upon good consideration and bonâ fide to a person not having at the time of such conveyance notice of any fraud. Soon after the passing of this statute, the question how far How far rethe retention of possession by a grantor of chattels was to be tention of pos (p) Bucknel v. Royston, Prec. Ch. 285. And see Lemprière v. Pasley, 2 T. R. 485; Belcher v. Oldfield, 6 Bing. N. C. 102. (a) Steward v. Lombe, 1 Br. & B. 506; Rufford v. Bishop, 5 Russ. 346, 354. (r) See post, pp. 567 et seq. session raises |