POWER OF SALE.

Hawera & Normanby Star, Volume XLII, Issue XLII, 19 April 1922, Page 4

POWER OF SALE.

♦ MORTGAGE OVER. A WAIKATtt FARM. QUESTION OF COMMISSION.. The Appeal Court announced its decision last week in the case of Edward Chas. Stanley and Jeremiah Murphy a dispute in regard to a mortgage over a. Hamilton farm. Murphy sought in the lower Court torecover part of £811 surplus over mortgage realised when the property was sold up by Stanley, also £450 for hay stacked there at time of sale. - Stanley put m a counter-claim for £205 for depreciation, expenses, etc. Mr. JusticeCooper awarded plaintiff £190 damagesm respect of the hay, and on theer;Slm,foHll(l for defendant for <ty l/s 10d (the costs of the mortgage). Stanley's ground of appeal was that thejudge s ruling was incorrect in law* Mr. Justice Cooper had held that in accounts between the parties as mortgagee arid- mortgagor proceeds of the. sale of the mortgaged property must beapplied m the first place in satisfSion or the principal and interest moneys; secured by the mortgage, and that only the surplus was applicable in payment ot the mortgagee's costs and expenses. i-fi, £ P- 9? Urt was unable to agree* with this ruling of the law The covenant which, was implied in every mortgage, under section 103 o f thi wk* ? + an? fe- r $&> 1915 ' *nless other. n£»t? ? • m,i he mort&&> was not negatived m the present mortgage. svlff]? f SaH m case of default was--given the mortgagee, and he covenanted to apply moneys from such sale in the* hrst place to costs of sale or expensesincidental to the sale or otherwise incurred in respect of the mortgage, and m the second place to satisfaction of nmL PT^'r interest, and othermoneys for the time being owing underthe mortgage.' The mortgagee was, therefore, entitled to apply proceeds of" sale to payment not only.of costs and expenses of sale, but in payment oF costs and expenses in respect of the-, mortgage. ■..■-■. As regarded, items to which respond- - ent took exception, the payment toMandeno Jackson of lani amount ascommission on the sale of the property was one. . "When a second mortgagee sells themortgaged property subject to the firstmortgage, and employs a land agent orauctwneer to make the sale,'» said theOourt; "he ought to stipulate, we think, that commission shall be paid only on the price obtained for the equity of redemption. There has been a practice, however, for a long time to pay commission to agents on the gross price, including the mortgage debt. Having regard to this practice, and to the agreement made by the respondent himseff for thepayment of commission, the appellant cannot be treated, we think, as having- ■ acted unreasonably in the circumstances, and the decision of Mr.-Justice Cooper on this question is affirmed. It is desirable to add that mortgagees will not be • entitled to rely on this decision as; justifying m the future a payment such as was made in the present case.'' Concluding its judgment, the Court said: "The judgment for £190 on the claim is to stand, and judgment is "tobe given in the Supreme Court on the counter-claim for £174 6s in all subjectto the deduction (if any) to be made, from the solicitors' costs. The case is - remitted to the Supreme Court so that it may be dealt with on this basis. Each party should pay his own costs of theappeal.'* . ■ ,