HC Deb 02 February 1838 vol 40 cc726-33

Mr. Young moved the second reading of the Ships' Mortgages Bill. He was surprised at the opposition which he understood the Bill was to meet with at the eleventh hour from the hon. Member for Sunderland and others. If he had not supposed that the Bill would have met with general satisfaction, he would not have pressed it. The intention was to remedy in a degree great and acknowledged evils. The enactments of the Bill met with two classes of objectors of a different character: one thought it went too far, and fettered the owners of ships in the hypothecation of their property; the other class thought it did not go far enough, and that it ought to prevent the owner of a ship from mortgaging the ship at all. This was a proof that he had steered between two extremes. When Mr. Huskisson introduced his measure it was considered a been to the shipowner that he was permitted to mortgage his ship. It was said that the Bill was intended to operate for the benefit of the shipping traders; but he had brought it forward as a shipowner, and the shipowners admitted that it was for their benefit. Several instances had occurred of ships which had been fitted out under advances on mortgage, and the mortgages had disposed of the property, sometimes in collusion with the mortgagor, to the prejudice of the creditor. In 1836 a committee of shipowners disapproved of the Registry Act as leading to fraud, and in 1837 the same Committee stated in their report that he (Mr. G. F. Young) had obtained leave to introduce a bill for the purpose of modifying the Registry Act, and thus checking the system of fraud which existed. It was not, therefore, a shipowner's question; for those parties felt that the mortgagees in too many cases acted improperly, and were anxious to check the evil which prevailed. The present system was in fact injurious to the interests of the shipowners; for in foreign countries an opinion prevailed, that the shipowners of this country were not to be trusted, and when captains of vessels offered bills for provisions and ships stores they were refused; and the foreign merchants providing the stores, instead of accepting those bills, would take nothing but a bottomry bond. That was the effect of the present system of mortgages, and it must be obvious that such results must create the greatest inconvenience. He thought, therefore, that the opposition he was now to encounter was unfair. He had no personal motives in bringing forward the Bill, and he would not have introduced it if he had not been led to believe by the shipowners that such a measure would prove beneficial to them. He still thought that the Bill would prove advantageous to shipowners, and that those who now opposed him took an erroneous view of the measure. One objection which had been raised to the Bill was the unpleasant publicity to which the shipowner would be subjected in effecting a mortgage. Under the present system, however, it was well known that the mortgage was not valid unless it was recorded at the custom-house, and that too with the greatest publicity, and all tradesmen, and every person interested, might go to the custom-house and examine the record. There was, therefore, complete publicity under the present system. What, then, was the provision of the present Bill? It was proposed that previous to effecting a mortgage, thirty days' notice should be given, and all persons having claims upon the vessel were to lodge those claims with the registrar, and when so lodged, the parties were to have a preferable lien. The effect of this would be to prevent all those fraudulent proceedings which had been so much complained of, and which had proved so injurious to tradesmen. He could not imagine how any objection should be offered to such a plan. Acts of mortgage did not require to be executed rapidly, and it was quite clear that under the old system justice was defeated. Nor was there any thing novel in the course of proceeding he proposed; for under the old maritime law those who supplied the ship had a preferable lien. He might mention that he had received from all parts of the country attestations favourable to the Bill, and he had not received one opinion condemnatory of the measure. Some persons had expressed a wish that its provisions should be extended to Ireland; but he had thought in making use of the expression "united kingdom," he had thereby included Ireland. The same wish had been expressed in regard to Scotland, which he also thought he had included by the expression he had used. If, however, he found himself in error in this particular, he should take an opportunity afterwards to extend the provisions of the Bill both to Ireland and Scotland. He thought he had now said enough to convince the House he had not introduced the Bill from an obstinate adherence to his own opinion; and he could assure them that he had brought forward the measure under the belief that it would be for the advantage of those on whose support he calculated, but who were now, some of them, hostile to the plan he had proposed for terminating the system of fraud which, it had been allowed, existed. He hoped he had been able sufficiently to explain his views and to make the measure understood. He had avoided all technical details, and he would now leave the Bill to be disposed of as the House might see fit, and bow to the better judgment of those whom he knew were prepared to state their opinion on the subject.

The question that the Bill be now read a second time having been put from the chair,

Alderman Thompson

said, he did not think there was any good ground for the hon. Member complaining of the Bill being opposed at the eleventh hour. When the hon. Member brought forward the Bill last year, he had expressed to the hon. Member that he entertained strong doubts as to its operation, and when it was introduced this year he had stated distinctly that he would not pledge himself to support it. It was hardly necessary for him to point out the importance of the Registry Act which this Bill proposed to modify. It would be recollected that the Shipping Registration Bill had been under the consideration of a Committee of that House for many years, and it came before them so strongly recommended by that Committee that it passed through the House without any opposition. The particular clause enabling shipowners to raise money by mortgage had been strongly recommended by the Committee, and Lord Tenterden had also expressed a strong opinion in its favour. That clause proposed that mortgages should be registered at the port from which the vessel sailed, and at the Custom-house in London, and the books in which those registries were entered were to be open to the inspection of all parties concerned. What was the alteration now proposed? Instead of a shipowner remaining in a position to raise a little money when wanted he was to be obliged to give thirty days' notice of any intended mortgage, and if that mortgage were effected at a distance from the metropolis the officer receiving the notice was to transmit a copy to London, and if any tradesman gave notice of any claim for supplies to the vessel, that tradesman was to have a preferable lien. Now, he would ask, was there any thing in shipping property that rendered such a process necessary? There was no other property subject to the same process, and if the hon. Member would go through the mortgages effected on other kinds of property he would no doubt find cases of fraud equally gross as those he had cited. There was, perhaps, as little of shipping as of any other kind of property mortgaged, and why should shipowners be placed in a worse position than persons raising money on any other description of property? If he understood the Bill, its effect was to make an exception of this kind of property, which he conceived was neither fair nor just to the shipowners. He contended that this Bill was wholly absurd, for while it prevented a shipowner from mortgaging his vessel, it contained no provision to hinder him from selling it, and thus defrauding those whom it was sought by the measure to protect. For these reasons he felt it to be his duty to move as an amendment that this Bill be read a second time this day six months.

Mr. A. Chapman

supported the Bill, which went to establish a system of registration of liabilities similar to that which existed with reference to other descriptions of property in the county of York. From that system of registration no inconvenience had either arisen or been complained of. The Bill would work no hardship, and was only a just protection to the fair, honest tradesman furnishing the tackle and furniture of a ship against the preference which a mortgagee now had. On the whole he supported the Bill, which he thought would work beneficially even for the shipping interests themselves.

The Solicitor-General

gave the fullest credit for sincerity to the hon. Member who had introduced the Bill, and the hon. Member who had supported it; but he was opposed to the measure upon general principles. The hon. Member for Whitby had assimilated the provisions of this Bill to the registration in the county of York, but that very system already prevailed in respect to shipping, which, as regarded other property, only had existence in the county of which the hon. Member had spoken. In fact, there existed now a registry of shipping, and if a mortgage was about to be effected, information of previous liabilities could be ascertained. But what did this Bill propose? Why, that any individual who chose to call himself the creditor of a shipowner, might impose on that shipowner the difficulty of being unable to raise money upon that description of property. In fact, the bill gave to a man on his own ipse dixit, all the benefit and advantage of a mortgage, without affording any of those precautionary protections which a mortgage gave to the mortgager. No questions presented more difficulty to the courts of equity and law than did those arising from and affecting the shipping interests; and though it had been said, that this Bill would remove those difficulties, and was therefore satisfactory to the shipping interests, he could say it would be equally satisfactory to his profession, inasmuch as, instead of preventing it would lead to endless litigation. He agreed with the hon. Member for Sunder-land in thinking that this Bill, if good at all, did not go half far enough, for though it prevented a shipowner from mortgaging, it did not preclude him from selling his ship. Looking at the measure in a general point of view, he could not see that any case had been made out for passing it into a law.

Sir J. R. Reid

said, that as a shipowner, he never was more pleased in his life than he was with the speech of the hon. and learned Gentleman who had just sat down, and who, in his opinion, had upon this question hit the right nail on the head. He had looked at the petition presented by his hon. Friend, the Member for Tynemouth, in favour of the measure, but he could not find that one single shipowner had signed it; and after consulting a large number of the body, he could state with truth, that with one or two exceptions, there was hardly a shipowner that was not positively opposed to the bill. He should give every opposition in his power to the measure, satisfied as he was, that it would work material injury to the commercial interests of the country.

Mr. Jervis

dissented from the grounds of opposition to this Bill taken both by the hon. Member for Dover, and by his hon. and learned Friend, the Solicitor-General. He was one who thought that all descriptions of property should be debarred from mortgage unless notice was given to enable all persons to come in and say—"I object to this security, having myself an equitable claim upon the property." This bill had first introduced that principle, and he hailed it as a good measure. He hoped, however, the hon. Member for Tynemouth would allow it to go to a Committee up stairs; or, even approving of the principle of the Bill, he should be compelled to give a reluctant vote against the second reading. His hon. and learned Friend, the Solicitor General had said, that this was a bad bill, because his hon. Friend, the Member for Teignmouth, had taken a wrong tribunal to adjudicate on the rights which it affected. Let that be settled in a Committee up stairs. Matters of detail might be considered there. He was in favour of the principle of the measure, as he considered that it would give the honest creditor a protection against the fraudulent shipowner, which at present he did not possess.

Mr. Clay

could not agree with the statement which had been made, that the grievances which his hon. Friend, the Member for Teignmouth, sought to remedy were of a trifling kind, but he might be permitted to doubt whether the remedy for those grievances was within the reach of legislation, or at least within the reach of that particular remedy which his hon. Friend proposed to apply to them. His hon. Friend called on the House to affirm a great principle, affecting great interests, and a large-amount of property, for the protection of a class, which, although respectable, his hon. Friend must allow, was not very considerable in point of numbers. His hon. Friend proposed to put simple contract creditors on a footing with mortgage creditors. He thought this unfair, as a mortgage proceeded on an agreement between the parties, and it did not seem equitable to him to place a simple contract debt on the same ground. It was quite clear that the measure which had been introduced by his hon. Friend was not viewed with approbation by those who represented the interests of the shipowners in that House, and under these circumstances he recommended him to withdraw his Bill, His hon. Friend would then have an opportunity of re-con-considering its provisions, and he might possibly be able to frame a measure which might be less objectionable to the respectable class whose interests were affected by it.

Mr. Ingham

said, that the shipowners of the north entirely coincided with him in the objections which he entertained to this bill, and he felt a strong objection, both to the principle which it established, and also to the selection of the shipowners for the first exemplification of that principle. The hon. and learned Member for Chester seemed to think that when a man had incurred a simple contract debt, he ought never to make a title to any property which he wished to alienate without first satisfying that debt. Let the hon. and learned Member bring forward that general proposition and discuss it, and he (Mr. Ingham) should be ready to meet it. But in what a position did his hon. Friend wish to place the ship chandler? He wished to give them the benefit of a mortgage without the expense. What, however, was the dock owner's situation now? He might if he pleased, if not paid for the repairs, detain the ship itself. The effect of his hon. Friend's bill would be, to give the ship repairer greater facilities for recovering his debt than any other person possessed. It might be made the means of an unjust creditor levying an exorbitant demand on the shipowner. Suppose a merchant had put an East India-man into dock, and had contracted with the dock owner for her repair for a sum of 500l., and having repaired her, wished to effect a mortgage on the ship for 5,000l. to pay for the cargo with which he intended to load her. Well, suppose the dock owner sent in a bill for repairs amounting to 700l. on the ground of some inconsiderable alterations having been made. The dock owner, under the provisions of his hon. Friend's bill, might interpose his claim, and prevent the raising of the 5,000l. to pay for the cargo, until his demand was satisfied, and the shipowner, rather than submit to the delay, would consent to pay an unjust claim of 200l. On these grounds and on others connected with matters of detail, into which he would not then enter, he should support the opposition which had been offered to the bill.

Sir J. Duke

, as an extensive shipowner, must say that he was opposed to this measure, and he could show that the shipowners of Scotland and of Newcastle and Sunderland participated in his feelings with respect to it; but he was quite sure from the temper of the House, that it would not be necessary to enter into the evidence. He had been engaged in the shipping trade for twenty years, and he never knew but one instance of a fraudulent mortgage by a shipowner.

Mr. P. Thomson

would recommend his hon. Friend, after what had passed, to withdraw his bill. In his opinion his hon. Friend did perfectly right in bringing in the measure; but it was incumbent on him to show, either that it would benefit the shipowners themselves, or that society generally was so much injured by the existing law that an alteration was absolutely necessary. From what had passed it was quite clear that no such case had been made out. He therefore recommended his hon. Friend to withdraw his measure till some degree of unanimity prevailed on the subject.

Mr. G. F. Young

, in reply, said that he had been urged by the shipowners themselves to introduce his bill, but when he found their representatives, instructed by their constituents, opposing it, he felt that it would be useless to press the measure. He repudiated the idea of his being actuated by any other desire than that of benefitting that commercial interest with which he was intimately connected, and which he had exerted himself in promoting for many years.

Bill withdrawn.