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2 1978

AGRICULTURAL CREDIT ACT, 1978

PART III

Chattel Mortgages

Definitions for Part III.

[1947, s. 21; 1961, s. 12.]

the Act of 1926” means the Enforcement of Court Orders Act, 1926 , as amended by the Enforcement of Court Orders Act, 1940 ;

chattel mortgage”, when used without qualification, means an instrument under seal made between a recognised borrower of the one part and a recognised lender of the other part which is—

(a) a floating chattel mortgage, or

(b) a specific chattel mortgage, or

(c) both a floating chattel mortgage and a specific chattel mortgage;

execution order” means an execution order within the meaning of the Act of 1926;

floating chattel mortgage” means an instrument under seal made between a recognised borrower of the one part and a recognised lender of the other part whereby the recognised borrower charges the stock from time to time on the recognised borrower's land with the payment to the recognised lender of any money advanced or to be advanced to the recognised borrower;

land”, in relation to a recognised borrower, means the buildings or land or buildings and land in or on which the recognised borrower carries on business or which he uses in connection with his business;

the mortgagee”, in relation to a chattel mortgage, means the recognised lender to whom the chattel mortgage is given;

the mortgagor”, in relation to a chattel mortgage, means—

(a) if the recognised borrower (party thereto) is an individual—

(i) in case he is alive and has not become a bankrupt or of unsound mind, the recognised borrower, or

(ii) in case he has died, his heirs, executors, administrators and successors, or the executor de son tort of his estate or the person into whose possession or control, legal or actual, the chattels charged under such chattel mortgage have passed by reason of the death, or

(iii) in case he becomes a bankrupt, his assignee, or

(iv) in case he becomes of unsound mind, his committee or guardian,

(b) if the recognised borrower (party thereto) is a body corporate, that body corporate;

recognised bank” has the meaning assigned by section 25;

recognised borrower” means any person to whom money may be lent or advanced or who may be provided with other credit facilities by a recognised lender or who gives or agrees to give security to a recognised lender for the payment of money by himself or any other person;

recognised lender” means any body, being—

(a) the Corporation, or

(b) a recognised bank;

specific chattel mortgage” means an instrument under seal made between a recognised borrower of the one part and a recognised lender of the other part whereby the recognised borrower charges

specific stock (wheresoever situate) with the payment to the recognised lender of any money advanced or to be advanced to the recognised borrower;

stock” includes—

(a) animals and birds of every kind and the progeny and produce of such animals and birds,

(b) insects and fish of every kind and the progeny and produce of such insects and fish,

(c) agricultural crops (whether growing on or severed from the land),

(d) trees (whether growing on or severed from the land),

(e) any product derived from any of the foregoing,

(f) machinery, implements, vehicles, fixtures, fittings and materials used in or for the production, manufacture, processing, preparation for sale or marketing of any agricultural or fishery produce.

(2) Where a chattel mortgage creates both a charge on specific stock and a floating charge on the stock from time to time on particular land, the chattel mortgage shall, for the purposes of this Part, be—

(a) in so far as it creates a charge on specific stock, a specific chattel mortgage, and

(b) in so far as it creates a floating charge on the stock from time to time on particular land, a floating chattel mortgage.

(3) An instrument shall not be excluded from being a chattel mortgage by reason only of one or more persons (in addition to the mortgagor and mortgagee) being a party or parties thereto as surety or sureties only.

(4) References in this Part to stock in relation to a chattel mortgage shall, subject to section 24, be construed as references only to stock which is the absolute property of the mortgagor.

Chattel mortgage of specific stock.

[1947, s. 22.]

24. —Where—

(a) a recognised lender has agreed to make a loan to a recognised borrower wholly or partly for the purchase of specific stock, and

(b) that recognised borrower, for the purpose of giving security for the loan, has, prior to the purchase, executed a specific chattel mortgage of the specific stock, and

(c) the chattel mortgage is duly registered under this Part,

that chattel mortgage shall, notwithstanding anything contained in this Part, create a charge on the specific stock on and from the date on which the stock comes into the ownership and possession of the recognised borrower.

Recognised banks.

[cf. 1947, ss. 21 (1), 23]

25. —(1) Every bank which, immediately before the commencement of this Act, was a recognised bank for the purposes of Part III of the Agricultural Credit Act, 1947 , shall continue to be a recognised bank for the purposes of this Part.

(2) The Minister may, on the application of any bank, appoint the bank to be a recognised bank for the purposes of this Part and he shall thereupon give to the Minister for Justice notice of the appointment.

(3) The Minister may by notice in writing withdraw, giving the reason or reasons therefor, the recognition of a bank as a recognised bank and shall thereupon give to the Minister for Justice notice of the withdrawal.

(4) A bank which is for the time being recognised under this section is in this Part referred to as a recognised bank.

Registers of chattel mortgages.

[1947, ss. 24, 36.]

26. —(1) A register of chattel mortgages shall be kept and maintained in every Circuit Court Office in accordance with this section.

(2) Subject to compliance with the conditions prescribed by or under this section for the registration of a chattel mortgage, every chattel mortgage shall be capable of being registered within one month and no longer after its date in the register of chattel mortgages maintained under this section in the Circuit Court Office serving the area in which the land of the mortgagor is situate or, where the land is situate in two or more areas served by separate Circuit Court Offices, in each of the several registers of chattel mortgages maintained under this section in the said Circuit Court Offices respectively.

(3) Any person (including a surety) party to a chattel mortgage or the legal representative of any such person may register the chattel mortgage within one month and no longer after its date in any register of chattel mortgages in which the chattel mortgage is capable of being registered under this section and the mortgagee or, with the consent in writing of the mortgagee, the mortgagor or any surety party thereto or his legal representative may at any time cause the chattel mortgage to be removed from any such register.

(4) Whenever the principal money, interest and costs secured by a chattel mortgage are fully repaid the mortgagee shall forthwith cause the chattel mortgage to be removed from every register of chattel mortgages in which it is registered under this section.

(5) No chattel mortgage shall have effect until it is registered in pursuance of this section in the register or every register (as the case may be) of chattel mortgages in which it is capable of being registered under this section and a chattel mortgage so registered shall cease to have effect on ceasing to be duly registered in such register or every such register (as the case may be).

(6) The contents of any register of chattel mortgages shall not be published or disclosed nor shall any copies thereof or any part thereof be issued to any person except that—

(a) a recognised lender may at any time by requisition under the hand of the solicitor or law agent of such recognised lender require the county registrar to inspect the register and to provide the recognised lender with certified copies of any entries therein relating to the stock of any person named in the requisition;

(b) a sheriff or county registrar may at any time inspect the register of chattel mortgages maintained in a Circuit Court Office serving the area or any part of the area for which he is the sheriff or county registrar;

(c) any person in the service of the State and duly authorised in writing in that behalf by the Minister or the Minister for Agriculture may at any time inspect and take copies of any such register or any part thereof;

(d) an officer employed in a Circuit Court Office and performing duties formerly performed by the undersheriff may at any time inspect the register of chattel mortgages maintained in that Circuit Court Office; and

(e) whenever the Supreme Court or any Judge of the High Court or the Circuit Court directs that a copy of the portion of any such register relating to any particular chattel mortgage or alleged chattel mortgage be furnished to them or him, the copy shall be so furnished accordingly and the Court or Judge may disclose or publish such copy or the contents thereof to such extent and in such manner and subject to such conditions as in their or his opinion justice may require.

(7) The Circuit Court or the High Court or the Supreme Court on appeal from the High Court may at any time cause any register of chattel mortages to be rectified (whether by variation, addition or omission) in such manner as justice may require.

(8) The Minister for Justice may make regulations in relation to all or any of the following matters:

(a) the form and contents of the several registers of chattel mortgages;

(b) the keeping and maintenance generally of the registers;

(c) the mode of registering a chattel mortgage in a register and the evidence to be produced, for the purpose of registration, of the due execution and stamping of the chattel mortgage;

(d) the mode of removing a chattel mortgage from a register and the evidence to be produced for the purpose of removal;

(e) the requisitioning, making and certification of searches by officials of the Circuit Court Offices on a register at the request of those persons or bodies who under this section are authorised to inspect the register;

(f) the providing of certified copies of a register or of any parts thereof or of any entries therein at the request and on behalf of any recognised lender;

(g) with the consent of the Minister for Finance, the fees to be charged and taken in respect of the registration of chattel mortgages in a register, the removal of chattel mortgages from a register, the inspection of registers and any other matter relating to the register;

(h) the general preservation of the secrecy of the registers and in particular the evidence of authority to be produced by persons claiming to inspect or take copies of a register.

(9) Every register of chattel mortgages maintained in a Circuit Court Office under the enactments repealed by this Act shall be a register for the purposes of this Part and every chattel mortgage registered therein shall be deemed to have been duly registered under this Part and this Part shall apply to it accordingly.

(10) Regulations made or deemed to have been made under section 24 of the Agricultural Credit Act, 1947 , and in force immediately before the commencement of this Act shall continue in force and be deemed to have been made under this section.

(11) The expenses of carrying this section into effect shall to such extent as may be sanctioned by the Minister be paid out of money provided by the Oireachtas and any fees received pursuant to this section shall be paid into or disposed of for the benefit of the Exchequer in such manner as the Minister may direct.

Effect of specific chattel mortgage.

[1947, s. 25.]

27. —(1) A specific chattel mortgage shall, so long as it is duly registered under this Part and any money remains owing for principal or interest or costs on the security thereof, operate and have effect—

(a) to prohibit the mortgagor from selling or otherwise transferring the ownership or possession of any stock comprised therein without giving to the mortgagee at least 7 days' previous notice in writing of his intention to effect the sale or transfer,

(b) to prohibit the mortgagor from selling or otherwise transferring ownership or possession for less than a fair and reasonable price,

(c) to impose on the mortgagor, in the event of any of the stock dying or being stolen or being destroyed by fire or other agency, the obligation to notify the mortgagee of such event within 7 days after it occurs,

(d) to impose on the mortgagor, in the event of his selling or otherwise transferring the ownership or possession of any of the stock, the obligation to give forthwith to the mortgagee notice in writing of the sale or transfer, with such particulars thereof as the mortgagee may require,

(e) to impose on the mortgagor, in the event of his selling or otherwise transferring the ownership or possession of any of the stock, the obligation to pay to the mortgagee, within 7 days after the sale or transfer, all sums secured by the chattel mortgage or such lesser sum as the mortgagee may in writing agree to accept or to apply the proceeds of the sale or transfer in such other manner as may have been previously authorised by the mortgagee,

(f) to imply a covenant on the part of the mortgagor to pay to the mortgagee on demand the principal money and interest secured by the chattel mortgage at the time and in the manner thereby appointed, and

(g) to impose on the mortgagor the obligation to preserve and keep safe the stock therein comprised and (save as may be otherwise authorised by the chattel mortgage or the mortgagee or as may be necessary for any intended lawful sale) not to remove such stock from his land.

(2) If the mortgagor under a specific chattel mortgage commits a breach (whether by commission or omission) of any provision implied in the chattel mortgage by virtue of subsection (1) (other than paragraph (f)), or contained therein, the whole of the principal money secured by the chattel mortgage shall, on demand by the mortgagee for payment thereof, become and be due and be forthwith payable notwithstanding anything contained in the chattel mortgage.

(3) If the mortgagor under a specific chattel mortgage—

(a) sells or otherwise transfers the ownership or possession of stock which is the subject of the mortgage without having given to the mortgagee at least 7 days' previous notice in writing of his intention to effect the sale or transfer, or

(b) having sold or transferred the stock or any part thereof, does not within 7 days after the sale or transfer pay to the mortgagee all sums secured by the chattel mortgage or such lesser sum as the mortgagee may in writing agree to accept,

the mortgagor shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £500 or, at the discretion of the Court, to imprisonment for a term not exceeding 2 years or to both.

(4) A copy of this section shall be endorsed on every specific chattel mortgage, but non-compliance with this provision shall not invalidate the specific chattel mortgage.

Seizure of stock under specific chattel mortgage.

[1947, s. 26.]

28. —(1) Where—

(a) a specific chattel mortgage is for the time being duly registered under this Part, and

(b) any money remains owing for principal or interest or costs on the security thereof, and

(c) either—

the principal money secured by the chattel mortgage or any part of such money or any interest thereon is unpaid for 14 days after the day appointed by the chattel mortgage for payment thereof, or

a breach of any covenant or condition contained in the chattel mortgage has been committed by the mortgagor,

the mortgagee may serve on the sheriff (or, if there is not a sheriff, the county registrar) of the county or county borough in which any of the stock comprised in the chattel mortgage is situate an order in the prescribed form requiring him to proceed in accordance with this subsection, and thereupon—

(i) the sheriff or county registrar shall, as soon as may be, seize and remove from the custody of any person (other than a bona fide purchaser for value without notice of the chattel mortgage) and from any place (other than land or premises belonging to such purchaser) within the county or county borough of the sheriff or county registrar all or any of the stock comprised in the chattel mortgage;

(ii) upon such seizure the sheriff or county registrar shall, with all convenient speed, cause the stock so seized to be sold, and shall apply the proceeds of such sale in or towards the discharge of expenses, fees and costs of the seizure and sale and of the sum certified in the order to be due on foot of the chattel mortgage, together with interest on the said sum at the rate applicable to the chattel mortgage from the date of the said order to the date of such seizure, and shall pay the surplus (if any) of such proceeds to the mortgagor.

(2) An order under subsection (1) directed to a sheriff or county registrar shall have the same effect as an execution order and shall be a sufficient authority to him to act in accordance therewith, and he shall, when acting in accordance with the order, have all such rights, powers and duties as are for the time being vested in or imposed on him by law in relation to the execution of an execution order.

(3) A sheriff or county registrar executing an order under subsection (1) shall be entitled to charge and (where appropriate) to add to the money certified in the order to be due and (in any case) to levy under the order such fees and expenses, calculated according to the scales appointed under section 14 (1) (a) of the Act of 1926, as he would be entitled to charge or add and to levy if the order were an execution order of a court of competent jurisdiction.

(4) The Minister for Justice may make regulations in relation to any matter referred to in this section as prescribed and “prescribed” in this section means prescribed by such regulations.

(5) The remedies for the recovery of money due under a specific chattel mortgage given by this section to the mortgagee shall be in addition to and not in substitution for any other remedies which the mortgagee may have by law for the recovery of such money.

Inventory of stock under chattel mortgage.

[1947, s. 27.]

29. —(1) So long as any money remains owing for principal or interest or costs on the security of a chattel mortgage, the mortgagee may between the hours of sunrise and sunset on any day on which a civil process may be served—

(a) in the case of a specific chattel mortgage, enter any land or premises (other than land or premises belonging to a bona fide purchaser for value, without notice of the specific chattel mortgage, of the stock comprised in the specific chattel mortgage) on or in which the said stock is and take an inventory of the said stock, or

(b) in the case of a floating chattel mortgage, enter on the land to which the floating chattel mortgage relates and take an inventory of the stock on the land.

(2) If any person obstructs or interferes with the mortgagee in the exercise of the powers conferred on him by subsection (1), that person shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding £50.

(3) References in this section to the mortgagee under a chattel mortgage shall be construed as including references to the agents and servants of the mortgagee.

Effect of floating chattel mortgage.

[1947, s. 28.]

30. —(1) A floating chattel mortgage shall, so long as it is duly registered under this Part and any money remains owing for principal or interest or costs on the security thereof, and it has not become fixed as hereinafter provided, have effect—

(a) to create an ambulatory and shifting charge of the principal money and interest secured thereby on all stock the property of the mortgagor from time to time on the land to which the chattel mortgage relates (in this section referred to as the land), and

(b) to prohibit the mortgagor from selling any of the stock at any time on the land otherwise than in the ordinary course of business, and

(c) to impose on the mortgagor the obligation of maintaining the stock from time to time on the land at a level of value equivalent (as near as may be having regard to the ordinary course of business) to the value of the stock on the land at the date of the chattel mortgage, and

(d) whenever the mortgagor sells any of the stock for the time being on the land and does not within one month replace such stock by new stock sufficient to bring the value of the stock on the land as near as may be to the value of the stock on the land at the date of the chattel mortgage, to impose on him the obligation of paying such (if any) part of the proceeds of such sale as the mortgagee shall require to the mortgagee in reduction or discharge of the principal money secured by the chattel mortgage and any interest and costs due thereon and to confer on the mortgagor the right to pay the whole or any part of such proceeds of sale to the mortgagee in reduction or discharge of such principal money and interest and costs.

(2) A floating chattel mortgage shall so long as it is duly registered under this Part have effect to imply a covenant on the part of the mortgagor, his heirs, executors and administrators with the mortgagee to pay the mortgagee the principal money and interest secured by the chattel mortgage at the times and in the manner appointed by the chattel mortgage.

Conversion of floating chattel mortgage into specific chattel mortgage.

[1947, s. 29.]

31. —(1) Whenever—

(a) the principal money secured by a floating chattel mortgage or any part of such money remains unpaid for 28 days after the date appointed by the floating chattel mortgage for payment thereof, or some interest secured by a floating chattel mortgage is in arrear and unpaid for 56 days after becoming due, or there has been a breach (whether by commission or omission) by the mortgagor of some provision (other than a covenant for payment of the principal money or interest secured thereby) contained in a floating chattel mortgage or implied therein by virtue of section 30 (2), and

(b) the mortgagee has served on the mortgagor a notice in writing declaring that the floating chattel mortgage has become fixed, and

(c) the mortgagee has, before the service of the notice, taken an inventory of the stock then on the land to which the floating chattel mortgage relates, and

(d) the mortgagee, within 7 days after the day on which the notice has been served, sends by registered post to the Circuit Court Office or Offices where the floating chattel mortgage is registered, a true copy of the notice and of the inventory,

then—

(i) the floating chattel mortgage with effect on and from the date of the service of the notice shall, for the purposes of this Act, become and be fixed, and shall have effect as a specific chattel mortgage of all stock which is on the said land at the time of the service of the said notice, and sections 27 and 28 shall apply accordingly;

(ii) on receipt of the copies of the notice and inventory in any Circuit Court Office, there shall be entered in the register of chattel mortgages the fact that the notice has been served and the particulars of the stock set out in the inventory, and that entry shall, until the contrary is proved, be evidence in any proceedings that the notice was served and that the stock, particulars of which are so entered in the register, was on the land on the date on which the notice was served.

(2) (a) A notice in writing declaring that a floating chattel mortgage has become fixed shall, for the purposes of subsection (1), be sufficiently served on the mortgagor if—

(i) in case the mortgagor is an individual, a copy thereof is—

(I) delivered to the mortgagor, or

(II) left for the mortgagor, at the mortgagor's last or most usual place of abode or business in the State, with any person (being the wife or husband or a relative, agent, clerk or servant of the mortgagor) who is aged sixteen years or upwards, or

(ii) in case the mortgagor is a body corporate, a copy thereof is left for the mortgagor, at the mortgagor's place of business, with any agent, clerk or servant of the mortgagor who is aged sixteen years or upwards.

(b) For the purposes of this subsection, a company registered under the Companies Act, 1963 , shall be deemed to carry on business at its registered office, and every other body corporate shall be deemed to carry on business at its principal office or place of business.

(3) A copy of section 27 shall be endorsed on every notice served under subsection (1) but non-compliance with this provision shall not invalidate the notice.

Effect of chattel mortgage on distraints.

[1947, s. 30.]

32. —A chattel mortgage shall not prevent or restrict the lawful seizure of any stock comprised therein or affected thereby by a duly authorised officer distraining or levying under the Income Tax Acts or a rate collector distraining for rates or a landlord distraining for rent.

Effect of chattel mortgage on execution orders.

[1947, s. 31.]

33. —(1) A chattel mortgage shall not prevent or restrict the lawful seizure and sale of any stock comprised therein or affected thereby under—

(a) a warrant issued under section 28 of the Land Act, 1933 , or

(b) an execution order issued for the enforcement of a judgement or order for the payment of—

(i) money due or payable to or for the benefit of the Central Fund, or

(ii) money in respect of advances made out of money provided by the Oireachtas or the interest on such advances, or

(iii) money due or payable to the Land Commission under the Land Purchase Acts, or

(iv) money due to the Commissioners of Public Works in Ireland in respect of a local loan, within the meaning of the Local Loans Fund Act, 1935 , or

(v) money due to a rate collector in respect of rates levied by the council of a county, the corporation of a county or other borough, the council of an urban district or the commissioners of a town.

(2) A floating chattel mortgage shall not prevent or restrict the lawful seizure and sale of any stock comprised therein or affected thereby under an execution order issued for the enforcement of a judgment or order for the payment of money due or payable to a landlord in respect of rent.

(3) Save as is provided in subsections (1) and (2), no stock comprised in or affected by a chattel mortgage shall be seized or sold under an execution order, unless before the seizure the creditor has previously obtained the consent in writing of the mortgagee or has paid to the sheriff or county registrar executing the execution order the full amount of the principal money and interest and costs then owing and unpaid on the security of the chattel mortgage.

(4) Whenever a creditor pays under subsection (3) to a sheriff or county registrar the full amount owing on the security of a chattel mortgage—

(a) the sheriff or county registrar shall pay the amount to the mortgagee and the mortgagee shall accept the amount in discharge of the money secured by the chattel mortgage notwithstanding anything to the contrary contained in the chattel mortgage and in particular notwithstanding that the money is not then due or payable, and

(b) the amount shall be added to the debt for which execution is leviable under the execution order, and the execution order shall have effect accordingly.

(5) For the purpose of enabling a creditor to take advantage of the provisions of subsections (3) and (4)—

(a) whenever a creditor requires an execution order to be executed against any stock, the sheriff or county registrar shall inspect the appropriate register of chattel mortgages and if, on that inspection, the stock is found to be comprised in or affected by a chattel mortgage he shall inform the creditor of the existence of the chattel mortgage, the date thereof and the name and address of the mortgagee, and

(b) the mortgagee shall on demand made by the creditor furnish to the sheriff or county registrar for transmission to the creditor a statement of the full amount of the principal money and interest and costs then owing and unpaid on the security of the chattel mortgage.

(6) In this section “creditor” means the person at whose instance in execution order is issued, but does not include the mortgagee under a chattel mortgage.

Priorities of chattel mortgages.

[cf. 1947, s. 32.]

(2) Stock comprised in a specific chattel mortgage or in a floating chattel mortgage which has become fixed shall not be deemed to be in the possession, order or disposition of the mortgagor within the meaning of the Irish Bankrupt and Insolvent Act, 1857.

Disclosure of chattel mortgage to creditor.

[1947, s. 33.]

35. —(1) It shall be an obligation on every person (in this section referred to as the debtor) who seeks from another person (in this section referred to as the creditor) the grant or continuance of credit to disclose in writing to the creditor (if required in writing by the creditor so to do) whether there is or is not a chattel mortgage subsisting in respect of any of the debtor's stock and the particulars of every (if any) such chattel mortgage.

(2) No creditor shall disclose any information furnished to him by the debtor in pursuance of this section save in so far as such disclosure may be necessary or proper for the purposes of a prosecution under this section or for the institution or conduct of legal proceedings for the recovery of money due by the debtor to the creditor.

(3) Every person who makes in writing a statement in pursuance of this section which is to his knowledge false or misleading in any material respect and every person who, in contravention of this section, discloses any information furnished to him in pursuance of this section shall be guilty of an offence and shall be liable on summary conviction thereof to a penalty not exceeding £50.

Avoidance of bills of sale of stock.

[1947, s. 35.]

36. —(1) A bill of sale of stock (whether including or not including any other chattels) made after the commencement of this Act shall, notwithstanding anything contained in the Bills of Sale (Ireland) Acts, 1879 and 1883, be void and be incapable of being registered under those Acts.

(2) For the purposes of subsection (1) and of any enactment repealed by this Act, a floating charge on stock created by a body corporate shall not be, and shall be deemed never to have been, a bill of sale.