THE POWERS OF MORTGAGEES.

Ashburton Guardian, Volume V, Issue 1355, 30 September 1886, Page 3

THE POWERS OF MORTGAGEES.

By some means or other there appears to have slipped into the Land Transfer Act of 1885 an amplification of the powers of mortgagees which cannot but be regarded as dangerous, and which we are persuaded was not contemplated, or at least the effect of which was not duly appreciated by the representative branch of the Legislature. We refer to sections 96 and 97, which give power to the holder of a mortgage upon any premises to distrain for arrears of interest upon the goods and chattels of the mortgagor, or, where the premises are in the occupation of a tenant, of a mortgagor, to c&train upon the goods and chattels of such tenant to an amount not exceeding the sum of any rent which at the time of the distraint may be due by the tenant to the mortgagor. Prior to the passing of the Act referred to the mortgagee’s remedy was limited, in the first instance, to the realising upon the mortgaged premises, and the goods and chattels of the mortgagor could not be distrained upon, much less those of a tenant of the mortgagor. And this was obviously how the law should stand, the alteration made by the Act of 1885 being calculated to work much hardship and injustice. A person advancing money by way of mortgage on freehold property does so only to at most two-thirds ot the estimated value, and in default of payment of interest or principal can realise upon that that property, and it is altogether wrong he should have the choice of levying upon goods and chattels which were never intended to form part of the security, and which in point of fact may never even have been paid for. For example, A sells to B, upon terms of 3,6, or 12 months, sheep or cattle to the value of B’s freehold is mortgaged to C for that sura, and B falling in arrears of interest C distrains upon the sheep or cattle, as the case may be, before B’s

acceptances to A have matured. That is just what is possible under the clauses cited, and that, we submit, is a state of the law which but few persons are aware of, and which needs to be remedied as speedily as possible.