The debtor gave a mortgage not only over his existing machinery but also over all the machinery which, during the continuance of the security, should be placed in his mill. The question arose whether the equitable title of the chargee in respect of new machinery that had been placed in the mill prevailed over the rights of a judgment creditor of the chargor/debtor. Could the chargee assert an equitable interest in the new machinery? Lord Campbell LC had held not.
Held: The House reversed the decision, holding that ‘ . . immediately on the new machinery and effects being fixed or placed in the mill, they became subject to the operation of the contract, and passed in equity to the mortgagees’ (Lord Westbury) and: ‘in equity it is not disputed that the moment the property comes into existence, the agreement operates on it’ (Lord Chelmsford).
Judges:
Lord Westbury, Lord Chelmsford
Citations:
(1862) 10 HLC 191
Banking
Updated: 30 April 2022; Ref: scu.228299