Ontario Real Estate Source
By Brian Madigan LL.B.
The laws related to personal property started out with a basic division:
1) chattels real, and
2) chattels personal.
Personal property was to be distinguished from real property. Personal property in the Middle Ages had nominal value. The real value in terms of wealth was in the ownership of land. Real property had value, and the wealthy class were landowners and landlords.
Chattels real were “leases”. This was a right that was held as against another. It was a personal right. So, when land possession was divided into time intervals and temporal occupation, it was thought of as a chattel. The term chattel is derived from the term “cattle”. The intention in the sale of a farm was to distinguish ownership of the herd from ownership of the land.
As time went by, it was clear that many of the important characteristics of real property applied to leases. The common law developed the “right of ejectment”. This was a right bestowed upon the tenant to oust the landlord and restore possession to the tenant. The case still had to be heard in the courts which dealt with chattel property rather than real property, but nevertheless it was a meaning recognition of rights in respect to chattels that were “real” in nature.
I’m sure they had a different definition of “the real thing” at that time.
Chattels personal represented the rest of the class of chattels. And, not surprisingly, they had two categories here:
1) choses in action, and
2) choses in possession.
The distinction here was tangible and intangible property. A chose in action was personal property which could not be reduced to possession. Listen, that’s the way they talked. I didn’t just make this stuff up. They had a sophisticated legal system and the first preliminary debate at the outset of the case was whether or not this property could be “reduced to possession”. That’s the exact legal expression they used, and naturally it has significance in later cases dealing with the difference between chattels and fixtures. Without understanding where this expression came from, the legal reasoning in the later cases might seem nonsensical.
A chose in action is an abstract concept. It is a right. It can be enforced by the courts by legal “action”. It is intangible.
If it could be reduced to possession, then it would be an “object” or something tangible. If that were the case, then the chattel would be classified as a chose in possession.
Promissory notes, debts, negotiable instruments were all abstract concepts, rights that could be enforced, but not sensed as objects by one’s senses in any way.
This category of choses in possession gradually grew throughout the centuries to include shares, bonds, guarantees, intellectual property, copyrights, trademarks, and patents.
The mere fact that a share might be represented by a share certificate did not make it a chattel in possession. It was still a right, or and entitlement to a certain percentage of a company. The share certificate was just evidence of the right. It was not considered to be the right itself.
When examining the difference between chattels and fixtures, it’s very important to keep in mind the different classes of chattels.
Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through Royal LePage Innovators Realty, Brokerage 905-796-8888
www.OntarioRealEstateSource.com
