§ Order of the Day for the House to be put into Committee read.
§ Moved, "That the House do now resolve itself into Committee, and that the Lord Kensington do take the Chair in the said Committee in the absence of the Chairman of Committees."
§ Motion agreed to: House in Committee accordingly.
§ Clauses 1, 2, and 3 agreed to.
§ Clause 4.
§ THE EARL OF BELMORE moved an Amendment in this clause which dealt with rent-charges in Ireland in connection with loans made by the Board of Public Works to tenants, and provided that in cases of sales to tenants under the Land Acts, the purchase annuity should take precedence of the rent-charge. At the first glance the clause appeared to be innocent enough, but he would point out shortly how the matter really stood. These loans were guaranteed by sureties, who in some cases were the landlords and in others third persons. When loans were made to tenants it was the custom of the Board of Works to ask whether the landlord would consent to the rent-charge taking priority of his rent. Where that was agreed to, in some cases—possibly not many—the landlords became, in that way, surety for the repayment of the loans. But when the landlord had sold his interest and gone away, it only seemed reasonable that he should be cleared from further liability with regard to the loan. Ordinary sureties for the tenant ranking after the landlord, and relying upon the tenant's solvency, were affected in this way: two interests existed—the landlord's and the tenant's; but after the sale had taken place, the landlord's interest no longer remained distinct—it became grafted upon the former interest of the tenant; they were united together, and 1054 the purchase annuity represented not merely the landlord's rent, but the entire interest on the farm. Supposing that in that case the former tenant - purchaser neglected to pay and became insolvent, the surety was called upon to make good the default in repayment of the loan, which, while the tenant had a separate interest, there was reasonable security he would not be called upon to do. He had accordingly given notice to move the insertion of a proviso that in such cases the sureties should be released from their suretyship, unless they desired in writing to continue responsible for the repayment of the rent-charges. Eminent authorities had expressed opinions (it was unnecessary to trouble the Committee with them all) that the settled principle of law was that in all ordinary cases sureties were released from their suretyship by any material alteration of conditions. That was laid down in Chitty on Contracts, 11th edition, 1881, and in Addison's Law of Contracts. Therefore, what he was asking on behalf of either landlord or third-party sureties was not unreasonable; and, at any rate, even if the noble Earl (Lord Rosebery) could not see his way to insert this clause, he must surely admit that there was something in the point, and would give assurance that in some way or other those persons should in future be held harmless.
Amendment moved, in page 2, line 12, after ("Acts") to insert—
("Provided that where any person or persons prior to the date of such advance have been sureties for the repayment of any of the rent-charges in this section mentioned, such surety or sureties shall be released from such suretyship, unless he or they shall signify their consent in writing to continue surety for the repayment of such rent-charge, not with standing the provisions of this section.')—(The Earl of Belmore.)
THE FIRST LORD OF THE TREASURY AND LORD PRESIDENT OF THE COUNCIL (The Earl of ROSEBERY)
I think the noble Earl cannot have received the communication I made to him.
THE EARL OF BELMORE
said, he had only received it a few minutes previously, but not having had the opportunity of consulting his noble Friends who were interested in the matter, he thought it better to hear what the noble Earl had to say about it across the Table.
THE EARL OF ROSEBERY
The case of the Treasury, as I am informed, is this: they do not think the sureties are in a worse position under the Bill, but that, on the contrary, their position is better than that which they formerly occupied. I will not follow the noble Earl into technicalities, which he understands better than I do; but I think these securities always rank after rent.
THE EARL OF ROSEBERY
If the landlord was the surety he might not rank after his own rent—a third party probably would do so. The understanding is that it ranks after the rent. It always did so, and under the present system the sureties are really in a better position, because the amount to be paid to the Land Commission is in all cases less than the old rent formerly payable to the landlord. I do not know of my own knowledge whether that is so or not; but that is the case of the Treasury.
THE EARL OF ROSEBERY
It was thought that the noble Earl might, perhaps, be satisfied with that explanation, and if he is content to waive his Amendment the Treasury would be willing to give him a written undertaking that the provisions of this section shall not be made to apply to any loan sureties who might otherwise be affected by them. This is to avoid the progress of the Bill being retarded, which would result in case the Amendment of the noble Earl was inserted. Would that proposition meet with the noble Earl's concurrence?
§ LORD ASHBOURNE
It may be that this clause is quite right, though it appears to require examination in the opinion of those who have read it. I have read it myself, and also the Amendment of my noble Friend, who takes a great interest in these questions. A few minutes before the matter came on for consideration he showed me the letter which the Prime Minister has referred to, but I was barely able to run my eye over it, and not to give it any consideration. These are questions of difficulty and complexity. It has happened two or three times in these Public Loans Bills that clauses have been put in at the end which, though apparently harmless, have been 1056 found to be of a most serious and injurious character, from their own point of view, to many of the landed proprietors in Ireland. I think, therefore, it would be better to let this Bill stand for a day or two, in order that the matter may be looked into and considered. I do not suggest this on the ground that upon consideration from any point of view this may not be thought a reasonable provision, but in order to see where we are. The clause may be quite as innocent as the Prime Minister suggests, and may be found not to need careful consideration or minute examination, but I should like to have the opportunity of looking into those provisions.
LORD ORANMORE AND BROWNE
said, that being familiar with these matters, he might state that the landlord's consent was always asked when money was lent to a tenant. That consent, in his own case, he had refused to give, and the reason was that he had already laid out money on the holding himself, and the proposed work had been carried out with the sanction and under the superintendence of the Board of Works. He thought, therefore, that to begin draining, and so forth, again was very unfair and undesirable, and he could have nothing to say to it. In one case of draining he pointed out to the Government Superintendent that there was no fall, and on further examination the Superintendent himself confessed that it was impossible to drain the land properly for that reason. The noble Earl had done good service in calling attention to the circumstances, and he hoped that his noble and learned Friend would be able to make a satisfactory arrangement with the Government.
THE EARL OF ROSEBERY
I will postpone the Committee until to-morrow in any case. That will, I hope, give noble Lords time to consider the proposition of the Treasury.
§ LORD ASHBOURNE
I can assure the noble Earl there is no desire to delay the matter at all.
House resumed, and to be again in Committee To-morrow; and Standing Order No. XXXIX. to be considered in order to its being dispensed with.