RIGHTS OF MORTGAGORS

Manawatu Times, Volume XLIX, Issue 3305, 26 March 1926, Page 5

RIGHTS OF MORTGAGORS

RECOVERY OR BALANCES

AN IMPORTANT POINT,

A point of very great interest to mortgagees and mortgagors was set for His Honour Mr Justice Ostler to decide at the Supreme Court, Hamilton, recently. The case was an appeal from the judgment of Mr Wyvern Wilson, S.m;, at Hamilton, appellant being Thomas Boden Bowen, farmer, of Kihikiki, and defendant Caroline Redmond, formerly of Te Kawaand now of Whangarei. Mr D. Seymour represented appellant and Mr P. H. Watts, respondent.

Bowen, It seems, was the mortgagee of a property from Redmond. While the mortgage was in existence, Redmond transferred the property subject to the mortgage, and default was made by the purchaser of thie property. Bowen then proceeded to exercise his power of sale through the Registrar and, as required by the statute, he placed an estimate of value on the property. This estimate was £9OO and the sum was paid . him by Redmond. In the ordinary case of mortgagfcc and mortgagor, the mortgagee, Bowen, should thereupon have executed the release of the mortgage as required by the statute, the statute protecting his right of action against the mortgagor for any balance. The statute does not, however, provide for the case where the property has been transferred by the mortgagor subject to the ‘mortgage, so that the release of tho mortgage would operate to the benefit of the wrong person. Under these circumstances Redmond had tendered her £9OO, and Bowen, after consideration, gave this transfer. The amount claimed to be owing, being in excess of £9OO, at which Bowen valued the property, the latter commenced an action in the Magistrate’s Court to recover the balance claimed. Redmond defended die action, setting up that no money was owing by her to Bowen. Included in Bowen’s claim were various legal expenses, which Redmond said wore not her debt, and also certain interest at penal rate, which she claimed was not chargeable. She set up that the effect of the transfer of the mortgage to her was to divest Bowen of the right of action under the mortgage. The Magistrate gave’ judgment on this last ground, without dealing with the other grounds. Bowen is now appealing to , the Supreme Court against the decision.

After hearing lengthy argument by counsel, His Honour, in reserving liis decision, remarked that the point was a most interesting- and important one.