§ It is hereby declared that the provisions of the Courts (Emergency Powers) Act, 1914, preserving to mortgagees in possession their powers of realising their security by way of sale without the leave of the Court, shall not extend to and shall be deemed never to have extended to mortgagees other than mortgagees of land or some interest in land:
§ Provided that nothing in this provision shall affect a sale of any security completed before the nineteenth day of July, nineteen hundred and fifteen.
§ Adjourned Debate resumed on Question, "That the Clause stand part of the Bill."
1810§ Sir G. CAVE(indistinctly heard): This Bill was introduced some time ago, was read a second time, and went into Committee. When the Question, "That Clause 1 stand part of the Bill," was proposed, my right hon. Friend the Member for the City of London (Sir F. Banbury) objected to the Bill on the ground that it ought not to apply to loans made by bankers on personal securities. I think the Committee should know the effect of the Bill.
§ The DEPUTY-CHAIRMAN (Mr. Maclean)I understand the right hon. and learned Gentleman intends to move an Amendment. The Question, "That the. Clause stand part of the Bill," having been proposed, the Amendment cannot be moved at this stage. He will be able to move presently that the Bill be recommitted in respect of this Amendment, and then it can be moved.
§ Sir G. CAVEI understood that that was the course which must be followed, but before asking the Committee to allow the Clause to stand part of the Bill I thought it right to explain that I intended to move an Amendment later to meet the objection which had been taken. The bankers made representations and satisfied the Government that the objection was a reasonable one, and that the Bill ought not to extend to loans of that kind. At the same time the members of the Stock Exchange are anxious that the Bill should pass, and that the Courts (Emergency Powers) Act should apply to account-to-account loans on the Stock Exchange. What I propose to do is to move an Amendment giving effect to that arrangement and limiting the Bill entirely to loans of that character.
§ Mr. RAWLINSONMight we hear the Amendment?
§ Sir G. CAVEI will read it. I propose to leave out the words "other than mortgagees of land or some interest in land," and to insert instead thereof the words
"in relation to securities held by them as cover for account-to-account loans on any Stock Exchange, if these mortgagees can take or could have taken advantage of any scheme agreed to by His Majesty's Government for advances being made to these mortgagees in order to enable them to continue the loans."
I do not propose to take the Report stage to-day, so that the matter can be further considered if necessary.
§ Mr. RAWLINSONWhen the right hon. and learned Gentleman was stopped, owing to the exigencies of the Rules of Order, he was in the middle of an explanation of the original intention of the framers of the Bill. I understood him to say that the intention was that the Bill should extend only to real property. I shall be glad to know if that was so, and whether under the Bill as amended solicitors, for instance, in possession of such securities as policies, or anything of that kind, will be exempt from the Courts (Emergency Powers) Act.
§ Sir G. CAVEI am afraid I have not made myself clear. The Act applied to all mortgagees, and prevented mortgagees from realising their security without the leave of the Court. There was an exception in regard to mortgagees in possession, and I am told that it was intended that the exception should apply only to mortgagees of land, but the Courts have held that in fact the exemption applies to mortgagees in possession of personal property. This Bill was intended to put a fetter on mortgagees of personal property, but bankers desire to be free, as they now are. The Bill does not free anybody; it puts a new fetter upon a certain very limited class.
§ Mr. WINGDoes it mean that bankers who hold real property will have special advantages over outside persons who have mortgages on real property?
§ Sir G. CAVENo.
§ Mr. KINGThere is one little point to which I would like to call the attention of the Solicitor-General; it is a matter of drafting. Clause 1 begins with these words: "It is hereby declared that." These words are quite unnecessary. They are, I believe, sometimes used when the law is in doubt, but there is no question here of the law being in doubt. We know what the law is, and in the public interest we are going to alter the law. The words would be right if they were to remove a doubt, but they are not right when the Clause is definitely intended to alter the state of the law. Perhaps that point would be considered by the Solicitor-General?
§ Mr. BOOTHI would like to ask if I am correct in my understanding of one point. I understood that there had been a different decision in the Scottish Courts to the English Courts upon this very matter, 1812 and that, therefore, this alteration had been made necessary. I have been listening very carefully in order to hear how the matter stands. I am indebted to the hon. Member for North-West Lanark for my information in regard to this point. The hon. Member is generally pretty correct in his information. I understand that you cannot have in Scotland a floating charge or a debenture such as you can have in England, and that in Scotland it can only relate to landed property. Owing to that, the Courts (Emergency Powers) Act, which I understand this is sought to amend, works out quite differently in Scotland to England, and a mortgagee in possession of the same kind of security has been proved to be in an entirely different position across the border. So far as I can follow the decision in the Scottish Court, it seems to be more equitable—that is, it left the parties in a more just position than in England. I had my attention drawn to this matter. One of the right hon. Gentleman's predecessors was good enough to see me, and we had some correspondence upon the point. My representations were made on behalf of some solicitors, both in London and in Glasgow. I understood that this Amending Bill was to make the thing equal, so that men having the same kind of security, whether in England or in Scotland, would be in just the same position in relation to this matter. If the Amendment which has been suggested is put in, in the interests of the City bankers, it rather does away with that, because the form is more comprehensive in its operation than in this Amendment. I would like some assurance from the Solicitor-General upon this point, because, if in future there are decisions of a different character in the two countries you will have to have another Amending Bill. Directly the parties, who are following this closely, find, especially in regard to what I may call international institutions—I mean international in the sense of being either banks or insurance companies doing business on both sides of the border—their experience different with regard to the same point, they are sure to make representations, and there is no answer whatever except another Amending Bill. I should like to be assured that the law in the two countries will be exactly the same in respect to these institutions, and that they will under similar conditions receive the same treatment in England and Scotland.
§ Mr. DAVIDSON DALZIELMay I ask what is exactly meant by Stock Exchange account-to-account loans? There are several kinds of Stock Exchange loans. There are, as I understand it, loans which are made on securities from account to account, and there are loans which are made on securities for a period, the interest being payable on the account. To which class of these loans does the Amendment apply?
§ Sir G. CAVEIn reply to the hon. Member who has just put a question to me, the account-to-account loans are those on any Stock Exchange; but even so, they are restricted to the case where the mortgagees can take advantage of the Government scheme. In reply to the hon. Member for Pontefract, I am reluctant to embark upon the sea of Scottish law, but I believe it is the fact, having regard to the terms of the original Act, that these provisions in regard to mortgagees apply in Scotland only to mortgages on land, so that this Bill will have no other effect in Scotland except to give effect to what is already the law.
§ Mr. BOOTHI grant it, and that, of course, clears up that part of the matter. But the hon. Member for North-West Lanark assured me on this point, and I want to know, when we make this Amendment, which applies to England, shall we then be in the Scottish position?
§ Sir G. CAVEWe shall be nearer to it.
§ Question, "That the Clause stand part of the Bill," put, and agreed to.