The Agricultural Credit Acts were introduced in the early years of the State to facilitate the granting of security principally by farmers over stock, produce and agricultural machinery. In the absence of the legislation, the Bill of Sale (Ireland) Act would have made the creation of a charge over agricultural chattels impractical.
- animal and birds of every kind and their progeny,
- insects and fish of every kind and their progeny
- agricultural crops, whether growing or severed
- trees, whether growing or severed
- products derived from the forgoing
- machinery implements vehicles, fixtures and materials used in the production, manufacture process and preparation for the sale or marketing of any agricultural or fishery produce.
A chattel instrument is a security granted under seal between certain classes of borrower and certain classes of lender. It may be a specific mortgage over identified stock or it may be floating charge over stock generally .
Although the legislation also deals with the establishment of the former Agricultural Credit Corporation that is so it applies to any licensed credit institution.
A borrower to whom the Act applies is any person who might be lent or advanced money or provided with credit facilities. It is not limited to farmers as such.
A fixed charge permits charging of specific stock wherever situated for the repayment of monies advanced by the recognised lender. The charge can comes into being on the date the stock is acquired by the chargor. The charge is to continue for as long as the debt is outstanding.
The chargor may not sell or transfer ownership or possession of the stock without giving seven days’ notice in writing to the chargee. He may not sell or transfer ownership for the stock for less than a fair and unreasonable price.
The chargor must notify the mortgagee within seven days of stock being stolen and destroyed or killed. It must give notice of any transfer of ownership or possession in writing, giving particulars as it is required.
The chargor must pay the sums owed or such lesser sums as are agreed within seven days of transfer of ownership or possession of stock. The mortgagee may apply the monies as their mortgage allows.
It is implied that the mortgager has to pay sums due on demand together with the interest. The mortgagor is to
- preserve the stock,
- keep it safe
- must not remove it from his land save as permitted or it may be necessary for permitted sale
If there is a breach of any of the implied conditions, the whole monies become due and payable notwithstanding anything in the mortgage.
A floating charge may be granted. It creates a shifting charge on all stock which is property of the mortgager from time to time on the land which it relates. The chargor may not sell any of the stock other than the ordinary course of business.
It must be maintained at a level of value equivalent to the value at the date of commencement grant of the charge. If stock are sold and are not replaced within one month with stock necessary to bring the value back, part of proceeds of sale must be paid to the chargee.
There is an implied covenant to pay the principal sum and interest.
A chattel mortgage must be registered within one month with the Circuit Court office for the area or each area in which the land is situated. It is generally registered by the chargee. It may be removed and released with the consent of the charge. It must be removed when the loan monies and other sums due have been repaid in full.
Agricultural chattel mortgages have priority in accordance with the time of registration. The register is not generally available for inspection. Recognised lenders may search it through their solicitor allow agent.
A person must disclose the mortgage if requested by a potential creditor. Failure to do so is an offence.
Where monies remain due under s specific chattel mortgage 14 days after the due date or there is a breach, the mortgagee may serve an order on the sheriff in prescribed form or the county registrar who must seize the mortgaged stock and remove to the custody of any person. The stock is to be sold and the proceeds applied for towards expenses and then the discharge of the debt.
The chargee may while the monies are outstanding between the hours of sunrise and sunset in daylight hours on days when a civil process may be served, take an inventory of secured stock. The mortgagee may enter land where the stock is for such purpose. This does not apply against a bona fide purchaser for value of the stock. It is an offence to obstruct an officer of the landlord.
Similar provisions apply to a floating charge A floating charge may be converted into a fixed charge. This may be done whenever
principal monies remain unpaid for 28 days after the due date or if interest is unpaid 56 days after the due date or there has been a breach of any mortgage condition.
The mortgagor serves a notice in writing to declaring the floating charge to be crystallised. The chargee takes an inventory of the stock and sends it to the Circuit Court office and the mortgage accordingly becomes fixed.
Revenue debts in respect of income tax rates and rents rank behind a chattel mortgage. Creditors may exercise rights of distress or levy. Assets which are charged maybe seized and sold by way of enforcement of a judgment or by way of landlord’s distress, if they are subject to a floating charge. This does not apply to a fixed charge.