A chattel is an item of tangible, movable character
that is capable of possession. It is any movable item that is capable of
delivery. When affixed to land, the chattel becomes a fixture. As was held in
the case of Botham versus TSB Bank plc
(1996) EG 149 whether a chattel has become a fixture will depend on;
·
The degree of annexation
·
The purpose of annexation, and
·
the permanence
A chattel instrument is an
instrument creating security over a chattel. Section 2 of the Chattel Transfer
Act defines a chattel instrument as any instrument given to secure the payment
of money or the performance of some obligation and includes any bill of sale,
mortgage, lien or any other document that transfers or purports to transfer the
property in or right to the possession of chattels, whether permanently or
temporarily, whether absolutely or conditionally, and whether by way of sale,
security, pledge, gift, settlement or lease.
A chattel instrument should be in the
prescribed form as provided in Form 4 of the First Schedule of the Chattel
Transfer Act. It should state in clear terms;
1.
A description of the parties to the
instrument.
2. The
date
3. A
statement showing it is an instrument meant to operate as a chattel instrument
4. The
chattel subject of the chattel security. An instrument should contain, or have
endorsed thereon or attached thereto an inventory of all chattels comprised
therein. The instrument does not affect any chattel contained in the schedule.
5. Consideration
6. Mode
of payment
7. Recognition
of ownership of the chattel by the grantor
8. Assignment
of the chattel to the grantee by the grantor
9. Covenants
10.
Execution, attestation and verification
Execution of the instrument
should be attested to by at least one witness who should add his name, signature,
residence and occupation. Sealing is not important for the validity of the
instrument. Verification should be done by a qualified advocate. As per section
9 of the Advocates Act a qualified advocate is one who;
·
Has
been admitted as an advocate
·
His
name is for the time being on the roll
·
He
has in force a practicing certificate. An advocate is deemed not to have a practicing
certificate at any time when he is suspended from practice under section 27 of
the Advocates Act.
The instrument does not take
effect until it is registered. An instrument should be registered within 21days
of execution by filing it and all schedules endorsed thereon, annexed thereto
or referred to therein, or a true copy of the instrument and the schedules, and
an affidavit in Form 1 in the First Schedule or to the same effect, in the office
of the Registrar. Registration should be renewed once every five years. Failure
to renew registration, the initial registration ceases to have effect upon
expiration of five years since registration.
An unregistered instrument is
deemed void and fraudulent as against any person seizing the chattels or any
part thereof comprised in the instrument, in execution of the process of any
court authorizing the seizure of the chattels of the person by whom or
concerning whose chattels the instrument was made, and against every person on
whose behalf the process was issued. The instrument is also void in respect of
any chattels that the grantor acquires or becomes entitled to after execution
of the chattel instrument.
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