§ Order of the Day for the Second Reading, read.
§ Moved, "That the Bill be now read 2a"—(The Lord Chancellor.)
§ LORD O'HAGAN
cordially supported the second reading. He thought that the powers given to limited owners by the measure were very desirable, but that means should be given for having them exercised in the cheapest manner. He hoped that his noble and learned Friend on the Woolsack would see his way to placing existing settlements in regard to the provisions of the Bill on the same footing as future settlements, as far as existing interests would permit of that being done. There was an objection to going to the Court of Chancery when that process could be avoided. The system of settlements required to be carefully considered.
THE MARQUESS OF BATH
reminded the House that the object of settlements was to preserve estates intact and to direct the course of the inheritance. The restrictions imposed upon the life-owners for that purpose were usually those which a prudent owner would impose 279 upon himself. It was true that in the old settlements there were clauses which would prevent the management of estates in accordance with the present system of farming; but those restrictions were nullified by means of modern Acts of Parliament. Persons who had property in the neighbourhood of towns where there was an increased demand for building ground, and also persons who had to do with certain descriptions of waste lands, might find themselves hampered by the restrictions contained in settlements; but these were exceptional cases. Extravagant life owners and limited owners who desired to divert the property from the succession in which it was entailed also objected to those restrictions. The real reason why more money was not laid out on land was that the investment was not in itself remunerative in regard to landed estates. During the 20 years previous to 1875 there had been a competition for land, and under that competition rents had increased to an amount higher than had been attained before. To meet that increase of rents buildings had been erected, and work carried through, which had proved unremunerative. The error that was at the base of the arguments of those who advocated the abolition of settlement was that they did not take account of the fact that any system but that which made outlay remunerative must result in the deterioration of the estate. With reference to the Bill, there really was no power and no privilege conferred by it of any importance that was of value to a prudent owner which a prudent owner did not already possess with one or two exceptions. There was a slight advantage in the leasing powers. But the Bill conferred a most dangerous power on a life-owner, who had not the interest of the estate at heart, by enabling him to sell property for the so-called improvement of the estate. It allowed, in that respect, an expenditure out of capital for what ought to be defrayed out of income. Such a power would cause the deterioration of the settled property and its eventual destruction. Repairs ought to be paid for out of income; but if this Bill passed a life tenant would be tempted to neglect the ordinary repairs, and make use of the powers conferred by the Bill to rebuild and do afresh the work which would not be required to be done at all had they been properly attended to. 280 At the present time, the life-owner had very considerable powers for the maintenance and improvement of his estate. He might obtain money from the In-closure Commissioners, and lay it out for the benefit of the property. His proceedings in that respect were checked in two ways—in the first place, by the check that he had to re-pay both principal and interest by an annuity; and, secondly, by the sanction of the Inclosure Commissioners being required, who, although they did not exercise such a close supervision as would be desirable, yet did, to a certain extent, check unnecessary expenditure. An advantage of the present system was that the successor to the estate, however burdened it might be for the present, would find it eventually free and clear; whereas, under this Bill, the changes would be permanent. Instead of capital not being laid out in land now, the real evil was that it was laid out in an unremunerative manner. But the power in the Bill which was the most dangerous was the power of sale for the purpose of effecting improvements which would not be permanent, though the charge for making them would be so. Buildings, after a certain number of years, either perished altogether or required a considerable amount of outlay to prevent them from depreciating. In the case of drainage, a large outlay was necessary for renewals. He thought there would be a very improper use of the powers referring to improvements, and this improper use was very inefficiently guarded against. Fourteen days' notice only was to be given to the trustees. The trustees would know nothing of the property, and would have to consult their solicitor and the next heir. They had no personal interest in the matter themselves; and the next heir, when he heard of the proceedings, might not be in a position to resist their fulfilment. A little further on in the Bill, by Clause 19, a mortgagee was not obliged to inquire whether the money advanced on the mortgage was required or used for the purpose. It was sufficient for him to advance the money to the tenant for life, who simply brought this Bill as a justification of borrowing. The mortgage was good, whatever was done with the capital afterwards. By Clauses 45 and 51 safeguards were provided; but by the last paragraph in both these clauses it was distinctly stated that 281 the purchaser was not prejudiced if the required measures had not been taken. The purchaser had neither to inquire whether the trustees or the Court had given their sanction, or whether any of the conditions required had been complied with. The only value of the safeguards provided was against fraud, and if they were not valid against fraud they were of no value whatever. If settled estates were bad let them be got rid of; but he objected to alterations that, under the name of improvements, would so increase the evils complained of as to render their complete abolition before long necessary. There were other points, such as the provisions as to the sale of a reversionary interest, and the powers intrusted to persons having a limited interest, to which he should have liked to call attention; but these would naturally come forward in Committee. The main objection he had to the Bill was that it admitted a grievance to which it applied no remedy. It spread further a grievance for which it professed to apply a remedy; and its effect would be to impoverish settled estates.
§ LORD WAVENEY
said, this was not the stage on which to discuss details. It was the principle of the Bill they had now to consider. He believed that principle to be a good one. It proposed a short and ready way to the point at which they were aiming—the improvement and better cultivation of land—and provided a means of meeting the state of things which the change in agricultural affairs had brought about.
THE EARL OF ONSLOW
failed to discover in the Bill the dangers to which his noble Friend (the Marquess of Bath) had referred. He found no clause in the Bill enabling the tenant for life to fritter away the property that had descended to him from his ancestors. On the contrary, the tendency of the whole measure was in quite an opposite direction, contemplating and putting forward safeguards for lasting and permanent improvement. Perhaps the only details in the matter of improvements to which he felt inclined to take exception was the planting of trees which the tenant for life might cut down. On the whole, he gave his support to the Bill, though some of the clauses did not go so far as he should like to see them.
§ LORD CARINGTON
thought that they were to be congratulated on the fact that 282 this Bill had been introduced in their Lordships' House, which was so largely composed of landowners, and also that it was not regarded with dismay by that Assembly. He considered that the existing state of settlements was an obstacle to the improvement of agricultural land by the landowner, and to beneficial expenditure and cultivation by the tenant. It made the sale of land difficult and expensive, and made registration impracticable. The system, in his opinion, must be done away with before the land could be transferred to the purchaser with a clear Parliamentary title, and before any system of registration could become operative. A further objection to the existing system was the fact that a tenant for life could not sell the land without the consent of his trustee, and that even if such consent was obtained no portion of the proceeds could be applied to the improvement of the remaining portion of the estate. The Bill now before the House embodied many important reforms; but he thought it did not go quite far enough in the powers it gave to the tenant for life. If it had been suggested before the Session commenced that the Government would have introduced a Bill of this kind the matter would have been ridiculed; and, as it was, he did not doubt that the Bill would be looked upon with distrust and dismay. In the present agricultural depression, the relief that had been suggested in the way of temporary reductions and return of rent, of reducing the pay of the farm labourer, of the abolition of the Game Laws, and the proposals that landowners should cut down their own personal expenses, appeared to be of no practical value; and he thought that a great opportunity had been allowed to pass in which a system of registration might have been introduced to advantage. Many of the settled estates of this country were larger than the conditions of the country justified. The owners were unable to help the tenants to get as much out of the land as ought to be got out of it. During the Recess the noble Duke the Lord President, in a speech at Chichester, said that those who condemned the Law of Entail and the Law of Settlement were bound to show that on entailed and settled estates agriculture was worse, the tenants more discontented, and the labourers were paid a lower rate of 283 wages than on other estates. From his own experience, as having come into possession of a settled estate 12 years ago, he knew that he was unable to do what was necessary for that estate out of income, and could only have done it by loan, for which a heavy annual amount in interest must have been paid. A friend of his had a somewhat similar personal experience; while in a third case, that of a brother officer of his, on coming of age he had found himself in possession of an estate in fee which had narrowly escaped being entailed, the income of which was £18,000, but which was mortgaged for £250,000 at 4 per cent. There was attached to it a large mansion, utterly out of repair, and a number of buildings, school-houses and so on, to keep up, which would probably cost £7,600 a-year, so that after he had paid the interest on the mortgage £10,000 and the charges, it left him just £400 a-year to live on. Fortunately he was able to sell it, and the result was that he was able to increase his income by just 30 times its former amount. If such an estate had happened to have been entailed it must have ended in the ruin of that which it was intended to conserve. The noble Lord, in conclusion, expressed his satisfaction that the Government had introduced a measure which was of such great interest and importance to owners of land in this country.
THE EARL OF MORLEY
said, the objections to the present Law of Settlement were that it restricted the free sale and transmission of land from one person to another, and prevented owners from making the best use of what land they possessed. The noble and learned Earl on the Woolsack had said that, to justify the maintenance of the present system of settlements, the limited owner should have all the powers which a prudent and reasonable person would exercise for good purposes connected with the land. If land belonging to a prudent and reasonable owner were sold the purchase money would be paid to him, and he could expend it as he liked. He would possibly be able to pay off encumbrances, and the residue he could place on some good security. But under this Bill a limited owner would only have the power to invest such money for the purposes which were enumerated in the Bill. For his own part, he heartily approved of the Bill as far as it went. 284 In his belief, it would effect a very considerable improvement in the existing state of things; but it did not appear to go far enough in regard to those powers to which reference had just been made. One point of objection which still remained was as to the powers of the trustees, especially in so far as they would be able to resist the action of the owners. He had nothing to say against the powers generally which were enumerated in the Bill, and which he thought were all most useful and desirable; but they stopped short of what he thought they ought to have aimed at. The landowner would still be deprived of the power which a prudent and reasonable owner should have of turning his real into personal property, and thus, to an enormous extent, were diminished the inducements which would be held out to encumbered owners to part with their land. The powers enumerated in the Bill did not place the limited owner in anything like the position which the noble and learned Earl had said, in bringing forward the measure, ought to be that of every landowner. They had, in short, this state of things—that before the powers given by the Bill could be exercised the unfortuate owner would have to weather the opposition of the trustees; he would be exposed to the expense and delay of a suit in the Court of Chancery; he would not have the free disposal of his money, the application of which was limited to certain purposes; and he would have to execute improvements under the tutelage of the Land Commissioners. He should not oppose the Bill, for, on the whole, it was a very valuable one. They all ought to thank the noble and learned Earl for bringing it forward, although it was not a complete or entirely satisfactory measure. They were, however, accustomed in this country to move step by step rather to meet the practical wants of the times than on any theoretical principles. Though he could not give such unqualified approval to the system of settlements and entails as the noble and learned Lords who had spoken on this Bill, he would frankly admit that he was not prepared rashly to advocate any great change in the law which he thought would be a very serious one, and might lead to results which it was difficult to foresee, and therefore ought not to be accepted with- 285 out great deliberation. They needed legislation on practical, not theoretical principles, legislation based on some definite scheme, and not on vague generalities; and he thought it was desirable in the interest of the country that in the case of building land, as much as, if not more than, agricultural land, the owner should be free to deal with the land as he thought right. Especially should he have the power of sale; but the present Bill, if it became law, would not give him much more of this than he possessed at the present moment.
was understood to express regret that as regarded future settlements the Bill did not more largely modify the powers which were usually contained in settlements, and which tied up land for such long periods of time.
said, that the remarks of the noble Lord (Lord Went-worth) who had just spoken would be useful in Committee, and that the facts as to the Whitmore family given by the noble Baron (Lord Carington) would make everyone who heard him regret that the tenants for life had not had the same power as their successor, the owner in fee, had had, and which would have been conferred upon him by this Bill if it had passed earlier.
§ THE EARL OF POWIS
said, he thought advantage might be taken of this Bill to prohibit stipulations by testators of compulsory residence. It was clearly against public policy that a young man should be prevented from going into the Army or Navy, or the Diplomatic Service, by an obligation to reside in a particular place.
§ VISCOUNT MIDLETON
contended that the powers given by the Bill might be found only to warrant temporary investments in Consols, and that limited owners ought to be allowed to sell portions of their estates and to invest the proceeds in Government securities, instead of being obliged to re-invest it in land.
§ THE MARQUESS OF RIPON
said, that the portion of the Bill which was intended to enable a tenant for life to sell a portion of his settled property and invest the proceeds in improving and doing justice to the remainder of the estate would be but little used in practice. A landowner who had no other means but his land would often find it far from easy to avail himself of some of 286 these provisions; and he therefore trusted that this point would receive the full consideration of the noble and learned Earl who had charge of the Bill. No doubt, improvements were possible even under the existing law; but he recollected that the noble Marquess (the Marquess of Salisbury) had, in 1873, drawn up a Report, when dealing with this question, pointing out the great difficulties which the law placed in the way of laying out money for the improvement of settled estates. A tenant for life who proposed to sell a portion of his estate for the purpose of improving the remainder could not move, even under the present Bill, until the Inclosure Commissioners had examined the proposed improvements and certified them to be of a really useful character, or until the Court had pronounced that they were of such a nature as to warrant such application of the money. But it was not until a considerable portion of the proposed improvement had been completed that he would be able to obtain the certificate of the Inclosure Commissioners, and to ask for the repayment of the money from the trustees, and if he had had originally no other means but his land he might be placed in a position of great difficulty. The Report of their Lordships' Committee in 1873 had distinctly shown how much landlords disliked going to a public office or having their property inspected by a surveyor or other public official. He acknowledged that the present Bill effected a considerable improvement, inasmuch as formerly the supervision of the Commissioners had come in at every stage from beginning to end. But he drew attention to these things mainly in order to remind the House that neither this Bill nor any other Bill could convert a limited owner into an unlimited owner, or give the owners of settled land the power inherent in those whose land was under no settlement; but in these times of agricultural depression it was becoming more and more necessary that the management and cultivation of land should be conducted on commercial principles—that persons who had to deal with land should enjoy the freedom possessed by all manufacturers and persons engaged in industrial operations. He believed the time had come when it was very desirable to take reasonable and just measures for the 287 increase of the amount of land in the country which was not under settlement, and for throwing the influence of the law, if he might so say, in favour of securing to the actual present owner the free and unfettered use of his land. He believed it was admitted that two-thirds of the land of England was under settlement. Settlements were not created by the law, but by the lawyers; and the question was how far the protection of the law should be given to them. This and the other Bills introduced by the noble and learned Earl on the Woolsack were undoubted improvements in the law, and he tendered his best thanks to the Lord Chancellor for the steps he proposed to take, because they were in the right direction; but, still, they ought not to be looked upon as affording a full and satisfactory settlement of the various questions which arose in the present day in connection with the Land Laws, and which seemed to him urgently to demand an adequate and complete solution.
§ LORD SELBORNE
said, with reference to sale, what he understood the Bill to do was to put every estate in the same position, for that purpose, as if it were an estate in fee simple. The tenant for life under the Bill would always have a power of sale. The Bill would make registration a simple operation if the Legislature only fulfilled two conditons, which were probably indispensable conditions—namely, to make registration compulsory, and to provide sufficient machinery—no doubt, at considerable cost—for carrying it into effect by district registries throughout the Kingdom. As to settlements, he did not desire to see them entirely abolished; but he did think that the existing law on the subject, both as to real and as to personal estate, might with advantage be revised.
THE LORD CHANCELLOR
said, he could not but congratulate their Lordships upon the conversation they had heard on the subject of this Bill; all the more so, as it had been conducted mainly by those Members of the House who were not lawyers, but who brought to bear on the subject the fruits of their own personal experience with regard to the possession and management of land, and the effect of the present law on the position of landed estates. He was glad to say, in the first place, with regard to 288 what had fallen from his noble and learned Friend (Lord Selborne), that he looked upon the difference made in this Bill between existing and future settlements as not a difference of very great magnitude in itself; and the reason of the difference would, on the whole, commend itself to their Lordships. In the first place, he must rather demur to the idea that because there were cases under this Bill in which the opinion of the Court, or the assent of the Court, as it was called, had to be obtained, that that was anything like the institution of a lawsuit. It was a proceeding in which the Court of Chancery would act, not in a forensic sense so much as in an administrative spirit. The Court would act generally in Chambers, and by way of performing one of its administrative functions, a great many of which were at present consigned to it. The difficulty with regard to existing settlements was this. In the case of future settlements the Bill proposed that the opportunity should be given to the trustees of opposition, which was to be referred to the Court. If the trustees made no objection or demur, it would be a considerable security that the proceeding of the limited owner was correct. But, with reference to future settlements, it would be in the power of those who executed them to appoint trustees who were qualified to perform the duties of that office; but it might well be, in the case of existing settlements, that no trustees could be found qualified to perform such duties. With regard to the provision of the Bill that the money should be invested upon proper securities, that would justify the trustees in making the investment; of course, that would be considered a permanent investment, under future settlements, because it was property in the enjoyment of the tenant for life, whose enjoyment must, in the nature of the case, come to an end. But it would not be entirely for the tenant for life to say whether the money so invested should return in the shape of land during his lifetime, because the application for any other purpose was to be made on the request of the tenant for life, and if he did not make the request the money would remain as it was. But the noble Marquess (the Marquess of Ripon) entered into a much larger field; he was prepared to advocate a complete change in the law with regard for facilities for 289 settling land. He could only say that if the noble Marquess wished to bring that question before the House in the proper form he should be prepared to offer his arguments against the propositions of the noble Marquess. What he complained of was that the noble Marquess should, in his endeavours to cast as much odium as possible on settlements, endeavour to prove that it was quite impossible to make settled landed property improvable, and that the provisions of this Bill were so difficult of working that it would not carry out the object it was intended to meet. These remarks were made under misapprehension as to the provisions of the Bill. If it suited the position of the tenant for life he might make improvements with his own money, and obtain a certificate from the Inclosure Commissioners as to the amount expended and the propriety of the improvement, and he might ask to be recouped out of the funds in the hands either of the trustees or of the Court. If that was not convenient, as in all cases it would not be, he was to propose to the Court the scheme of improvement he wished to make, and the Court was allowed to provide for payment by instalments; so that, as sections of the work were executed, he would receive money, and in that way the arrangement might be made to accommodate itself to whatever was most convenient to the limited owner. With reference to the statement of a noble Earl that a prudent owner, who wanted to improve the land, could not, under the Bill, do what a prudent and reasonable owner in fee simple would do—namely, spend money, make the improvements, and so put an end to the matter—such a statement was founded on a fallacy. Everything turned on the words "prudent" and "reasonable." If limited owners could be divided into two classes—distinguishing the prudent and reasonable from all others—then he might be able to introduce into the Bill a clause providing that all the prudent and reasonable tenants for life should not be required to give notice to and satisfy the Court or trustees, but should be allowed to exercise powers absolutely. With regard, however, to the limited owners who happened not to be prudent and reasonable, care had to be taken to provide checks for them. The whole speech of the noble Earl was based on 290 the fallacy that every owner for life was a prudent and reasonable man. Another noble Lord (Lord Carington) had said that the idea of the Government introducing a Bill of this kind, if it had been suggested before the Session began, would have been ridiculed; and even as it was the noble Lord did not doubt that the Bill would be looked upon with distrust and dismay by a number of persons. Well, the Bill had been before the public for a considerable time, and no indication of either ridicule, distrust, or dismay, had reached the Government. Nor were the propositions of the Bill new; for on two occasions within the last three years—when a Scotch measure was passing through the House, and, again, when an agricultural measure was in progress—he had distinctly stated that the limited owner ought to have all the powers that a prudent and reasonable owner of the fee simple would have over the estate. Therefore, it was no new idea which was now proposed. The same noble Lord had observed that this was a time of great agricultural distress, and there was nothing in this Bill to remedy that distress. He also had remarked that the Government had not introduced any effective system of registration, as if that would provide a remedy for agricultural distress. The Government, said the noble Lord, ought to have adopted the system of registration proposed by a Select Committee in the other House, presided over by Mr. Osborne Morgan. No doubt, the noble Lord believed that; but was he aware what the system recommended by the Committee really was? It was a system for the registration of deeds. That would not remedy agricultural distress. The Select Committee of the other House had condemned registration of title, and recommended a system of registration of deeds. Ireland, for several hundred years past, had had a perfect system of registration of deeds, and Scotland had also had one, which the Scotch thought perfect. Was there anything in the condition of Ireland or Scotland which could lead their Lordships to think that a registration of deeds would be a great panacea for existing evils? Then it was said that if they swept away settlements they might remove all obstacles to the registration of deeds. But in Ireland and Scotland they had a registration 291 of deeds even with settlements. The cases which had been put of limited owners who could do nothing without selling a part of their property were just the cases that this Bill was designed to meet. There was often great indisposition to sell land, not because a man was a limited owner, but because he loved the land. In any case, however, in which a limited owner thought fit to pay off an encumbrance or to make an improvement by selling a portion of the estate, he could do it under this Bill with due protection of reversionary interests. The object of the reference to trustees or the Court was to prevent the estate being charged with perishable improvements, which ought to be made, if at all, out of income. Whether 14 days' notice was sufficient was a question of detail for Committee. Of course, the mortgagee was not bound to inquire into the quality of the exchange. If that burden were to be thrown upon him, they would never get anyone to lend money. The money was paid, not into the pocket of the tenant for life, but into Court, and the Court would see that it was properly applied. The tenant for life could have no object in raising by mortgage more money than was required. When it was said that there was a power to sell reversionary interests, he should be glad to have it pointed out where it was, for if it was in the Bill it ought to be removed.
§ Motion agreed to; Bill read 2a accordingly, and committed to a Committee of the Whole House on Tuesday next.