Agricultural Credit Act, 1978

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.