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Operation and effect of floating chattel mortgages.
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28.—(1) A floating chattel mortgage shall, so long as it is duly registered under this Part and any moneys remain owing for principal or interest or costs on the security thereof, and it has not become fixed as hereinafter provided, operate and have effect—
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(a) to create an ambulatory and shifting charge of the principal moneys 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
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(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
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(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
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(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 moneys 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 moneys and interest and costs.
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(2) A floating chattel mortgage shall so long as it is duly registered under this Part operate and have effect to imply a covenant on the part of the mortgagor, his heirs, executors, and administrators with the mortgagee to pay to the mortgagee the principal moneys and interest secured by the chattel mortgage at the times and in the manner appointed by the chattel mortgage.
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