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194:. The case reports that "n 1858 he became embarrassed, a sale of his effects by auction took place". The Holroyds purchased all of his machinery. They subsequently sold it back to him, but because he could not pay for it, the purchase price was left outstanding and a security interest was granted over the machinery. However, the indenture granting the security interest not only referred to the existing machinery, but separately to:
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There can be no doubt, therefore, that if the mortgage deed in the present case had contained nothing but the contract which is involved in the aforesaid covenant of Taylor, the mortgagor, such contract would have amounted to a valid assignment in equity of the whole of the machinery and chattels in
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Apply these familiar principles to the present case; it follows 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, to whom Taylor was bound to make a legal conveyance, and
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elementary principles long settled in the Court of Equity." He noted that a contract for sale of any property would immediately pass a beneficial interest in that property, and this applied not only to real estate but also to personal property. This drove him to the inevitable conclusion that:
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if a vendor or mortgagor agrees to sell or mortgage property, real or personal, of which he is not possessed at the time, and he receives the consideration for the contract, and afterwards becomes possessed of property answering the description in the contract, there is no doubt that a Court of
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Lord
Westbury started by noting that the respondents had conceded that if the mortgagees (the Holroyds) had an equitable interest in the added machinery then it could not be seized by them as judgment creditors. He then stated that "he question may be easily decided by the application of a few
174:. As part of that process debenture holders were seeking greater protection for themselves to protect the capital which they invested in these new ventures to ensure that, if the company failed, that they had a prior claim the company's assets over any competing creditors.
198:"... all machinery, implements, and things which, during the continuance of this security, shall be fixed or placed in or about the said mill, buildings, and appurtenances, in addition to or in substitution for the said premises, or any part thereof ..."
225:
On 30 May 1860 the
Holroyds filed a bill for relief claiming that they had superior title. The case came initially before the Vice Chancellor, who found in favour of the Holroyds. The judgment creditors then appealed, and the case came before
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over future property, i.e. property that they did not actually own at the time of granting the charge. Prior to decision, the generally accepted principle under
English law was that pursuant to the
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Equity would compel him to perform, the contract, and that the contract would, in equity, transfer the beneficial interest to the mortgagee or purchaser immediately on the property being acquired.
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Lord
Wensleydale affirmed that if an agreement was specifically enforceable, then once the property was acquired, then an incohate interest in the property vested immediately.
170:. With the expansion of industry, companies were hungry for capital, and commercial parties were exploring new ways for these companies to raise debt finance by way of
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483:
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242:.' Before any subsequent act is done, the assignment gives an equitable interest as between assignee and assignor; but a legal interest subsequently,
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The decision had a transformative effect on security interests and the ability of companies to raise finance. It led indirectly to the decision of
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Licet dispositio de interesse future sit inutilis, tam fieri potest declaratio præcedens quoe sortiatur effectum, interveniente novo actu
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question, supposing such machinery and effects to have been in existence and upon the mill at the time of the execution of the deed.
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it was impossible for a person to convey a security interest in property which they did not own at the time of granting the charge.
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330:(1870) 5 Ch App 318 which is generally accepted as the first decision under English law to recognise a
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M.A. Clarke, R.J.A. Hooley, R.J.C. Munday, A.M. Tettenborn, L.S. Sealy, P.G. Turner (27 April 2017).
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294:. However, he felt that there was a crucial distinction between the position at law and in equity:
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As time passed Taylor sold and replaced some of the machinery, and bought some new machinery.
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The case is also notable in that no less than three persons who were, or one day would be,
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He accepted that a contract for the sale of property which does not exist at the time is
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The underlying borrower was a businessman named James Taylor, who was engaged as a
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interrupting another during their speech to object to a point in their judgment.
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acquired before possession taken by the equitable assignee shall prevail.
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for whom he, in the meantime, was a trustee of the property in question.
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against Taylor and machinery was seized in appropriation of the claims.
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as being the first case where this result was identified by the courts.
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The "premises" being the property charged under the indenture.
120:(1862) 10 HLC 191, 11 ER 999 was a judicial decision of the
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In re Panama, New
Zealand, and Australia Royal Mail Company
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In re Panama, New
Zealand, and Australian Royal Mail Co
124:. In that case the House of Lords affirmed that under
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On 13 April 1860 one Emil
Preller sued Taylor, and Mr
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A number of commentators regard the 1870 decision of
150:, gave judgments. It is also a rare example of one
250:The Holroyds then appealed to the House of Lords.
594:"Holroyd v Marshall (1862) 10 HLC 191; 11 ER 999"
162:The case was decided against the backdrop of the
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216:, the high sheriff of York, executed a writ of
49:Holroyd and Others v J.G. Marshall and Others
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578:: CS1 maint: multiple names: authors list (
459:British Eagle Ltd v Cie Nationale Air France
202:The indenture was duly registered under the
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551:Commercial Law: Text, Cases and Materials
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418:Re Yorkshire Woolcombers Association Ltd
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393:British India Steam Navigation Co v IRC
230:, who reversed the decision. He held:
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472:Aluminium BV v Romalpa Aluminium Ltd
678:. The Federation Press. p. 3.
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614:(1862) 10 HLC 191, 226
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596:. Student Law Notes
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117:Holroyd v Marshall
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238:'s maxim, '
126:English law
707:Categories
685:1862871299
322:Giffard LJ
236:Lord Bacon
172:debentures
158:Background
574:cite book
475:1 WLR 676
463:1 WLR 758
244:bona fide
132:or other
68:11 ER 999
63:Citations
434:1 KB 431
422:2 Ch 284
254:Decision
152:Law Lord
139:nemo dat
130:mortgage
106:Priority
93:Keywords
190:, near
188:Ovenden
55:Decided
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487:AC 214
184:damask
600:7 May
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408:AC 22
338:Notes
178:Facts
35:Court
680:ISBN
602:2016
580:link
560:ISBN
524:see
273:and
141:rule
528:in
324:in
292:law
166:in
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