MORTGAGES AND ADVANCES

Taranaki Daily News, 18 April 1918, Page 8

MORTGAGES AND ADVANCES

IMPORTANT NEW LAWS,

A new clause added to the Finance Bill in Parliament on Saturday widens the scope of the Mortgages Extension Act, 1914, by providing that the moratorium shall apply to mortgages regardless of contracts to the contrary. The Minister of Finance explained that many borrowers had contracted themselves out of the moratorium during the last three years, because lenders insisted upon adding provisions to this effect to the mortgages. The clause would render such contracts invalid.

"Trade mortgages," however, are exempt. A trade mortgage is defined as follows: "A mortgage securing to any bank, trading company, or merchant the balance of the account current of a customer of such hank, trading company, pr merhant,' whether such mortgage be granted by .the customer or by any surety for the customer."

Another new clause provides: "Notwithstanding anything to the contrary in .Section 130 of the Companies Act, 1908, registration of a mortgage as therein defined given by any company shall not be necessary to the validity of such mortgage ns against the liquidator and any creditor of the company if the Minsiter of Finance notifies tile mortgagee that owing to the war conditions tho registration of such mortgage would be unfair or unreasonable in the circumstances, and that such registration h dispensed with, provided that the Minister may impose such conditions as he thinks fit for Die protection of any other creditors, whether by way of providing for priority over Ihc'mortgagee or otherwise." . . '

Sir Francis Bell said thtt owing to tho shortage of shipping enormous advances had required to be in_<ide to owners of. produce in store. The registration of the mortgages would tend to destroy credit and so prevent companies making the advances.