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PUBLIC RECORD OFFICE

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PUBLIC RECORD OFFICE, LONDON

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be sufficient to pay all creditors, both secured and unsecured, in full, if mortgaged estates are all sold at prices twenty per cent. below Liquidating Committee's valua- tions? If so, mortgaged estates might be sold subject to reserve prices at last mentioned rate, and mortgagees allowed to claim in liquidation as unsecured creditors for balance of debts. If it is thought undesirable to sell below amounts secured,

"Sin Vorguenza,"

"San best to restore the mortgagees' rights over Coryal," Antonio," and perhaps "Indian Trail," and to compel them to realize securities and account to Liquidating Committee, claiming as unsecured creditors for balance of debts. This would involve fresh legislation, and it might be desirable to take action at once, excluding estates named from the sale. Telegraph your views before taking action.-LONG.

42004

No. 204. TRINIDAD.

THE GOVERNOR to THE SECRETARY OF STATE. (Received 7.45 a.m., 23rd Angust, 1917.)

TELEGRAM.

Your telegram of 16th August, cipher.* If mortgaged estates sold at twenty per cent. below valuation Liquidation Committee Neubauer's assets would be more than sufficient to pay in full all creditors secured and unsecured. Liquidation Committee strongly of opinion that reserve price should be not less than their valuation. I have firm offers from resident 218,000 dollars cash for Neuhauer group cocoa estates to hold good till 27th September. Do not recom- mend fresh legislation for restoring rights of mortgagees over estates named.— CHANCELLOR.

46891

No. 205. TRINIDAD.

THE GOVERNOR to THE SECRETARY OF STATE.

(Confidential)

(Received 17th September, 1817.)

[Answered by No. 207 and 208.]

Government House, 14th August, 1917. Sæ

I HAVE the honour to transmit a letter which I have received from Mr. A. Warmer, K. C. and Mr. Carl de Verteuil on the subject of the realization of the mortgage debts of Messrs. Neubauer & Company. The mortgagors are apprehen- sive that if the mortgages are put up for sale by public auction, in accordance with the arrangement approved by your telegrams of the 7th April and 14th May,† they will be bought not as a genuine investment, but by a purchaser whose object will be to use the mortgage debt as a means of forcing a sale and acquiring the properties at a price much below their real value.

2. When I recommended that the Neubauer mortgages should be sold individually in Trinidad that possibility had occurred to me, and, in view of the fact that with one exception all the mortgagors in question are members of the Trinidad Cocoa Planters' Association, an institution which is not viewed with favour by the local merchants and brokers, it is, probable that the danger is a real one. It would be contrary to the public interest that the Trinidad Cocoa Planters' Association should cease to exist; and it does not seem equitable that the mortgagors of property to Messrs. Neubauer & Company should receive from the Government harsher treatment than that which the petitioners claim they would have received from Neubauer had not war broken out.

* 40098.

t. Nos, 191 and 192.

3.

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Before submitting proposals to you for dealing with the points raised by Messrs. Warner and de Verteuil I desire to call your attention to a question which has arisen as to the liability for interest of mortgagors to enemy mortgagees. The mortgagors do not dispute their liability for interest due up to the outbreak of war and after a direction to wind up the business or property of the enemy mortgagee had been given under section 6 of Ordinance No. 37 of 1914; but they do dispute their liability to pay interest accruing during the interval that elapsed between the outbreak of war and the order to wind up the business, on the ground that mortgage interest does not run in favour of an enemy.

4. The Liquidating Committee took the opinion of the Attorney-General and Mr. O'Reilly, a member of the local bar, on this point, and were advised that, though the legal position was by no means free from doubt, there was a question for con- sideration which should be judicially decided; and in consequence the Committee brought an action against the Honourable H. A. Alcazar, K.C., who was a mortgagor of Neubauer's.

I may mention that this mortgage provided amongst other things :-

For securing Mr. Alcazar's account current with Neubauer; (b) For payment of interest at seven per cent. with half-yearly rests;

For delivery of all cocoa grown on Mr. Alcazar's estate to the Trinidad Cocoa Planters' Association for purposes of sale, the Association paying the proceeds to Neubauer, who, after deducting a commission of two-and-a-half per cent. on the amount of the sales, were to devote the balance to the credit of the account current.

For the purposes of the action against Mr. Alcazar the account was made up strictly on the basis of the mortgage deed, and as if no state of war existed, but in the course of negotiations with a view to a settlement he pointed out that :-

(a) A commission on sales should not be charged to him;

(b) Under his arrangement with Neubauer he was entitled to draw on them for money to carry on his estate, that the rate of interest had been fixed on this basis, and that some allowance should be made to him in view of the fact that these financial facilities had ceased with the outbreak of war, and that he had had to seek for others; and

(c) He was entitled to an allowance to cover the protest expenses in respect, of bills drawn on Neubauer & Company under his arrangement with them which had not been met owing to the outbreak of war.

The balance in dispute between Mr. Alcazar and the Committee was £724, which was arrived at by charging former interest and commission in full under the mortgage deed and refusing to allow any expenses in respect of the protested bills; but counsel advised the Committee that the contentions raised by Mr. Alcazar and referred to above were at least equitable, and, in view of the uncertainty of the legal position, advised that the claim of £724 should be compromised for £450, and this advice was eventually followed:

5. The accounts of the other mortgagors have been made up on the same basis as the compromise come to with Mr. Alcazar (see column 9 of enclosure No. 2); and I have the honour to recommend that an offer of the amounts so found due by them should be accepted. I cannot recommend that their proposal that only half the interest due and a discount for prompt payment of an amount which is actually due and payable should be assented to.

I enclose a statement of the amount due by each mortgagor on the basis of their being charged with the full amount that would be payable by him if there had been no war, and another account showing the amount due if recommenda- tions are approved by you.

my

6. I recommend also that the request of the mortgagors that they should be allowed time to pay their debts should be granted; and I suggest that they might be allowed to pay by equal monthly instalments, payment to be completed by 30th June, 1918.

I have, &c.,

J. R. CHANCELLOR,

Governor.