Equitable assignment of rent requires express earmarking for debt repayment; an irrevocable power alone does not suffice.

An irrevocable power of attorney and allied loan documents did not, by themselves, create an equitable assignment of rents receivable from a tenant. The equitable mortgage gave the bank only the rights of a simple mortgagee and no independent right to the property's rents or income. Because the loan documents did not earmark the rents for repayment of the debt, the power of attorney operated only as an agency authorising receipt of rent on the company's behalf. The label "irrevocable" was insufficient to create a power coupled with interest, and an instrument creating rights in rents from immovable property would in any event require registration. The bank was therefore not entitled to receive the rents to the exclusion of the company.

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Issues: Whether the irrevocable power of attorney and allied loan documents executed by the company in favour of the bank created an equitable assignment of the rents receivable from the tenant, so as to entitle the bank to receive those rents to the exclusion of the company.

Analysis: The equitable mortgage over the property gave the bank only the rights of a simple mortgagee and did not confer any right to the rents or income from the property. The loan documents, other than the power of attorney, did not refer to the rents or contain any arrangement authorising appropriation of the rents towards the debt. The power of attorney merely authorised the bank to demand and receive rent as agent of the company and did not disclose any agreement that the rents were earmarked for discharge of the bank's dues. The mere description of the power as irrevocable was insufficient, because irrevocability arises only where the authority is given to secure an interest or effectuate a security. The document therefore was not comparable to the instruments construed as equitable assignments in the cited authorities. Since an instrument creating rights in rents from immovable property requires registration, the contention that an unregistered power of attorney created such an assignment was untenable.

Conclusion: The power of attorney did not create an equitable assignment of rents, and the bank was not entitled to receive the rents to the exclusion of the company.

Ratio Decidendi: A power of attorney that merely authorises receipt of rent, without an express arrangement earmarking the rent for discharge of the debt, does not operate as an equitable assignment; an irrevocable label alone does not create a power coupled with interest.

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