MARTIN LOSES.

Auckland Star, Volume LX, Issue 56, 7 March 1929, Page 8

MARTIN LOSES.

CLIENT'S CLAIM UPHELD.

JUDGMENT FOR £388.

SALE OF SECOND MORTGAGES.

Judgment was given by Mr. Justice Kennedy at the Supreme Court to-day in the-case in which Oliver Sextus Blaiv, boot machinist, of Auckland, had claimed damages against Alexander Henry Martin, formerly a law clerk in" the employ of Messrs. Bennett and Jacobsen, solicitors, of Auckland, in respect to a sale of a mortgage. The case turned upon the question whether Martin, in selling a security to Blair, was acting for himself or for his firm. Giving judgment to-day, hig Honor sa«d this was an action to set aside a sale of a mortgage on the ground that defendant, at the time of entering into the transaction, was in a fiduciary relationship to the plaintiff, and failed to disclose that the defendant himself was the owner of the mortgage sold to the plaintiff. An alternative claim was made for the return of moneys paid by the plaintiff to the defendant on the ground of a total failure of consideration. Further, claims were added, based on fraud and on negligence. Plaintiff alleged that the defendant, a law clerk employed by Messrs. Bennett and Jacobsen, offered to sell a second mortgage owned by him to the plaintiff, and received the purchase money therefor without disclosing either the fact . that defendant was selling his own mortgage or the defendant's connection with the property, the subject of the second mortgage. The plaintiff further alleged that the purchase was to be subject to the approval of Mr. Bennett, and that the defendant applied the plaintiff's money in payment to himself, althouoh he had not obtained Mr. Bennett's approval. The defendant had said in answer, that the mortgage was offered for sale to the plaintiff by his employers, and that hi s employers acted as the plaintiff's solicitors in connection with the purchase of the mortgage, and that Mr. Bennett was at the time fully aware of the fact that the mortgage sold was defendant's own mortgage. The plaintiff was a boot machinist, who had since 1920 invested money on second mortgage. He was not experienced in valuing house property, and he inspected mortgage securities offered partly with a view to getting experience. The defendant was a law clerk in the employ of Messrs. Bennett and Jacobsen, doing general conveyancing work, and on behalf of his principals taking their clients to inspect mortgage securities. In 192.") plaintiff had money with Messrs. Bennett and Jacobsen awaiting investment, and he requested the defendant, at the place of business of the defendant's employers, to find a suitable investment. The defendant was at that time the owner of a second mortgage for £400 over a property owned by a Mrs. Breen, and subject to a first mortgage for £1000. Defendant had formerly been a part owner of that property, and on the property being sold he purchased his co-owner's interest, and so became the owner of the second mortgage. The plaintiff was taken by the defendant to inspect this property, and the second mortgage was offered to him for £3(»0. "I find," said his Honor, "that the defendant spoke to the plaintiff of the vendor of the second mortgage in the third person, and represented to the plaintiff that the purchase of the second mortgage was a good and sound investment." No Record of Transfer. Xo record had been found of any transfer having been prepared, and his Honor was satisfied that none was ever prepared. The sale of the eecond mortgage by the defendant to the plaintiff was set aside, and judgment was given for plaintiff for £388 1/1.