To the Editor of the "Norm-Cuma Dany News"
Sm—All seem to have agreed, including Mr. ¥. K. Choy. the newly, appointed Commissioner of the Land Bureau of the Municipality Greater Shanghai, that a revision of the Chinese Morigage Law becomes matter of urgent necessity; that the measure {s needed in order to restore the waning confidence in Shanghai real estate as security; and that the depression is not likely to loosen its ip over Shanghai unless such step The scheme, as it stands to-day, fg clear-cut and definite: to simplify the procedure of foreclosures. It has. been discussed at considerable length by prominent bankers and economists, and the opinion of all is unanimously {in favour of its adoption. Mr. Choy, in his official capacity, might have thrown in considerable weight to the movement if he had not chosen to Consular Title Deeds and the system 'That the system i= not perfect has never been disputed, but a better one, immune from all' maladministra-_ tion, as portrayed In Mr. Choy's letter, is yet to be devised. If this were not there would have been no room for the numerous Guarantee Title Companies which flourish in America and Europe.
It might be pertinent to ask Mr. Choy for whose protection is he: advocating the Introduction of a clearing office for mortgages through the Land Bureau—for that of the mortgagor or the mortgagee? As Mr. Choy himself admits that the courts of law have invariably given decision in favour of the former whenever a property hes been, fraudulently mortgaged by a third party, the intervention of the Land, Bureau seems: superfluous. As to the mortgagees, or financiers, they usually belong to a class perfectly able to take care of themselves and, besides, it does not appear. that they have ever asked for protection of their interests in this particular respect.
Tt is to be hoped however that Mr. Choy will continue his admirable efforts for the good of his office, which always stood in need of a man of Mr. Choy's qualifications. Mr. Choy might yet win fame for that institution, BB
Shanghai, Nov. 28.
A Serious Issue To the Ealtor of the "Nonrn-Cumma Dany News"
Smj—May 1 make use of your Jcolumns to voice my agreement with Investor's admirable letter which appeared yesterday and of your derette of to-day. fully studied Mr. Choy's "Provisional Regulations governing land mortgages with certificate of ownership in the (City of Shanghai" and as far as they [purport to relate to the procedure to, be followed to enable a mortgagee realize his security in case of default on the part of his mortgagor it strikes me that it would be dim cult to frame regulations which would more fully protect mortgagors oF make things more dificult and complicated for mortgages, Aso. measure for general mortgage reform the regulations are singularly defect tive inasmuch as they make no provi sions for such matters aso mortgagee's rights in case of default in payment of Interest, powers of taking possession and collecting rents matters which, as anyone who has! had any experience in dealing with fland and, tenants (n Shanghai, knows, Jare in a deplorable state. If it is, really desired to help the mortga position and assist mortgagees in enforcing their securities the very simple way indicated by could be adopted. No Court proceed. ings should be necessary before mortgagee can exercise his remedy Jof sale, possession and rent collection, Foreclosure is another mater and must not be confused with power to sell, they are two entirely distinct things and to secure foreclosure [Court proceedings are necessary in every country. So much for the regulations as they purport to help the mortgage situation. There is how. fever another aspect of the matter and a serious one, viz, the possible, nay, probable undermining of the Consulai title deed system—one has only to study Judge Feetham's Report Vol 1, Chapter and App: XVIII to realize the dangers looming ahead.
Scerricat, Shanghai, Nov. 30, Mr. Choy Explains Further To the Editor of the form-Cmixa Daxty News"
Sm—The suggestion for an express power of sale, as advanced by InvEsToR in ins letter appearing in your issue Jot November 29 in connection with the question of mortgages. is a Iaudlable one, but its advocate fails to re-Icognize that in our scheme for the [foreclosure of mortgages, the spirit of this idea is incorporated. For Article 2 of our Provisional Regulations ex-Jpressly stipulates that "the mortgagee, upon payment of his loan being de-Jtaulted at the date of maturity and upon notice being served to the mortgagor, shall have the right to sell (directly) the mortgaged pro perty by auction." This does not envisage the necessity for the intervention of the court, which comes in jonly when dispute arises relating to the sale or the mortgage in case new evidence concerning the legality of the title is produced. It is aifeult to see how in the case of a legal action against a Chinese mortgager as defendant, which may arise in the event of a dispute even when a mortgage deed is based upon English Law, as Investor choses to. emphasize it, the Chinese Court andthe application of Chinese Law can never be dispensed with.
Article $73 of the Chinese Civil JCode provides that even if it is agreed that upon the payment of a loon being defaulted the title to the mortgaged property may automatiesaddle it with the age-old question of ally be transferred to the mortgagee, Shanghai,
Text read from the printed page and cleaned; old type leaves the occasional error.