SUPREME COURT.

New Zealand Herald, Volume III, Issue 719, 5 March 1866, Page 5

SUPREME COURT.

EQUITY JURISDICTION. Saturday. [Before His Honor the Chief Justice.! VERNON AND ANOTHER V. I'REDK. DOTTE.S". This was a proceeding under tho Equity Jurisdiction cf tho Supreme Court, involving questions of great public interest. The caso w:is exceedingly intricate, and will he more easily comprehended by giving' an outline of its peculiar features and a statement of tho leading facts. Mr. Wynn appeared for the plaintiffs, and Mr. Gillifß for tho defendant. One of the plaintiffs, Daniel Tjorrigan, executed a deed of mortgage to Frederick Doueli oil t-lio 19th of June, 1865, making over cortain land and hereditaments situated in tho Karnngaliape lioad for a sum of eight hundred pounds, the mortgage not being necessarily rodecmablo until IS6B, and covenanting to pay interest at the rato of 15 per cent., quarterly, tho first payment becoming duo on the 19th of September, and tho second on tho 19th of December following. Tho plaintiff Lorrigan had made a previous settlement of his estato to tho plaintiff Vernon, in trust for a number of creditors to which deed of trust hi* wife Mary Lorrigan, and her trustee Mr. Ivcolley, solicitor, had ulso beon made consenting parties. The language of (ho covenant pj*o" viding for tho quarterly payments was very explicit and positive, being to the effect tint if there should bo default in the payment of the interest on auy ono of tho quarter days or within twenty - olio dayn noxt nftcr, it should bo lawful for tho mortgagee tho said Fredk. Douen, to eiercise forthwith the powers vested in him under the deed, and under the tonus of tho mortgagft, by the Conveyancing Ordinance 10, session 2, from three months to three months. It appeared however that although tho plaintiff, Lorrigan, had made a disposition by deed for tho benefit of his creditors on tho 15ill of .Tonttary, four days previously to tho execution of tho mortgage, that deed hud not been registered, and the mortgage therefore obtained priority. It further appeared that neither of tho plaintiffs had paid tho interest duo on the 19th of September, or on tho 19th of December, r.or within twenty-one day next thereafter. Tho mortgagee accordingly applied to tho Kegi?trar to enablo liim to sell, and gave instructions to his solic'tors to propare conditions of Elite to be approved by tho Registrar. 'I ho sale of tho property was advertised to tttlce plnco on I tho Bth of January, but was postponed until the 15th. Meanwliilo tho plaintiff, Mr. Vernon, on 13th of January, in order to prevent tho sale, tendered £60 for intorest due, and " expenses and chargesincurred," but this wbb refused as being insufficient. On tho 15th, the morning of the sale, the samo amount was tendered by Mr. O'Brien, the Eegistrar of the Supreme Court, and £5 again . tendered ns expenses, which was not accepted. Subsequently oil the same day, Mr. Vernon applied to Mr. Nhaylo George to know what wero the expenses charged, and roceived an answer that they wero £30. Mr. Vernon asked for particulars, but these were refused. £10 were demanded as auctioneer's fees and commission, but the plaintiffs conceiving tho sale to be " wrongful," did not tender this amonnt. Tho sale accordingly proceeded, and tho mortgagee pnrchasod tho estato for £766. The estate was sold in three lots, for tho first of which £700 wero given, and £33 for each of tho othor two. Tho legal aspect of the case was the following:— Mr. Wj nn asked for a provisional injunction to restrain tho defendant and the Kesristrnr of the Court from completing the pale by the issue to tho former of the neccssnry conveyance under tho authority of the Court, tho result of which would be that the estato would go out of tho hands of the assignee to deprivation of creditors and loss of the beneficial interest held in it by Lorrigan. Ho contended that A ernon having offered a reasonable sum to cover tho interest duo and the expenses incurred, had made a lawful tender. That in the case before tho Court tho covenanting parties wero precisely in the posi ion that two persons woro of whom one incurred forfeiture under a deed by the non-payment of a fitiptiial sum at a particular dato. In that caso the tender of the amount due was sufficient to induce the Court to place them both in tho position they had previously occupied, As to the refusal of the £10 for auctioner's fees, the Bale was wrongful if it were completed, but it had not been completed ; the plaintiffs could not be asked for that sum, and therefore it could not bo computed with tho required tender. Tlio amount ol lender claimed was £77 10?., but the plaintiff Vernon was perfectly justified in asking for particulars, at all events his having dono so should not bo takon as showingany disinclination to pay all cliatgea and expenses that were just. Although there might have been default of the interest, there had been no default of tho principal, upon which alone the power to sell could arise. His Honor : And if lie sold, the question would bo whether an action might not be brought for the recovery of tho surplus. Mr. Wynn: But beforo the Bale is completed tho plaintiffs haTe tho right to come and ask the Court for specific relief. His Honor: Tho object of tho suit appears to be to restrain the conveyance. Wo have to inquire whether anything has happened during tho various proceedings to cliangc tho position of these parties in their relation towards each other. It is not proved that the estate has changed hands. _ . Mr. Wynn : 1 ho question for the plaintiffs is whether they tendored sufficient to covor all oxpensos and charges incident to their own leche in not having paid tho intorest at tho proper time. Their contention is that they did. Tho plaintiffs have very fair ground of complaint—that thoy were not Told tho amount of tho costs. His Honor: Then you ask mo to delay the salo. But then you may lose your purchaser. The Court is also bound to look at the subject from that point of view. Mr. Wynn • We contend that there should bo no purchaser, tho power to sell not being in tho mortgagee, until 1868. His Honor! Is the estato safo? that is another mattor. If the estate be Bafe, pendente lite, thon ono of the arguments for an injunction is removed. It is unnecessary. Mr. Wvnn: The covenant provided that tho mortgagee" " might," in particular circumstances ; hut the absolute power to sell only oxistcd when tho principal became due. Although he "might" sell, that would possibly be subject to express authority given. . His Honor: "What is tho precise time of tendering P Mr. Wynn: Thero was an actual tender on the morning of thi sale. The declaration shows that plaintiff did everything ho could to know what the actual expenses wero. In the affidavit of Vernon it appeared ono of the defendant's told him ho had nothing to do with it and declined to tell him. His Honor: You argue, Mr. Wynn, that if tho plaintiffs liavo a right to an injunction at all, they are not debarred of that right by having in ignorance tendered an insufficient, amount. Mr. Wynn : By the affidavit of Mr. George there were two deeds, dated the the 19tli and 20th June. The affidavit of the defendants complained that Lorrigan had coaccaled from them the deed of the 15th of June, but their rights wero not affected by that. Their mortgage had priority owing to the non-regis-tering of the deed of the 15th June. His Honor: But made to secure the same property. ! Mr. Wynn went through tho several nffida- i vits made by tho various parties examined, which wore very voluminous, and recited tho facts which are above stated. Mr. Gillies, on behalf of the defendants, contended that the application being for a special injunction, it lay on the plaintiff to show suffieient grounds for a provisional relief. The only reason given by tho plaintiffs for comiDg in. at that stago was that tho Begistrar had threatened to convey. His Honor: Thatißa serious one, for conveyance once made, it might be difficult to know what would become of tho estate unless sufficient notice ware given to tho purchaser, the lis pendens being sufficient in this case. Mr. Gillies i The mortgagor can always protect, bUae#lf by giving nstlet to ths jnueh*»« Hut n* ku

I filed a bill impeaching Iho galo! Thoro was no necessity for asking tho interposition of the Court in 1 this crise. Tho proper course tfotild have been to have taken the ordinafy proeeedings of moving Tab Court ' in tho cause, to refer tho claimed to the " master," to report whctti'v thcv wore fair and ' reasonable and then to nek for a decree in tile cau'so. .The whole matter would be argued upon tlio motion for a dccrec. At present it was arguing the merits of the ease upon a preliminary prneecdin£?. There w?s no ground for the Court to interfere. No damage could arise to the plain iff from tho cause taking its usual course. The plttintilT Lorrigan did not come into Court with clean handg, frf he had executed a deed four days prononsly to the mortgage, by which his estato hud passed frooi him. In fact lie Lad no estate to mortgage. In the second place tho Court would not use its power of injunction unless the plaintiffs had tried every other means at law of obtaining thoir remedy. Tho Court should not be called upon in its equity jurisdiction to settle a miserable amount of some £12 odd. Had any overcharge _ been mado tho plaintiffs could have taken an action for money li;id and received. Xn th« next placo sufficient, fonder had not been made. It was not alleged th'it tho principle hud bcc-n tendered It was nowhere stated in the pleadings. There was nothing in the declaration to guide tho Court or enablo it to give judgment. Tho evident intention of the covenant, however construed, was that a pOWGr of Balo was given ill default of payment of interest crery thrco month*, or within twenty-one days after each quarter. This implied that if the interest wore not paid tho principal became due. The said sum of £SOO, or the interest thereof, not being paid within twenty-one dtys next after each I quart, r day, enabled tho mortgagee to pell. Default of payment of interest mado thu principal from that I moment due. So court of equity would hold that tho power to sell arose because tho quarter's interest was auc, btit only tho qiiaitor's interest being overdue tho principal bacatfie duo by default. His Honor: That is exactly the Question arising out of tho construction of tho deed. The Court would bo extremely glad of liny assistaneo in construing theso documents. Two parlies liavo agreed to a covouant by which a sum of £800 was to be lent, not to be payßblo until tho interest payable every quarter and in default a power to sell given to tho mortgage. Supposing the estate had been a hopeless one, and nest suppose that the mortgagee sold for £2000, was ho to become trustee for tho whole amount loss tho interest due to him. Mr. C4il)ius : The intention of the covenant as well rs the literal construction supported the view that I power of sale was given, ov default of payment of the interest, and that in default of iutere.-t payment- of the principal becanio due. Ilia Honor: It ii much to be regretted that these small matters of account had ever been brought into the argument, liut for l-liis the Court would have had to deal with the principal. Mr. Gillies : As to tho question of tender, had the plaintiffs tendered one guinea less then tho defendant had a right to claim f..i'expenses in consequence of tho plaintiffs' default, that tender would not li«,ve been sufficient. When told tho amount, of the expenses, the plaintiffs did not nay them. It was not as-ertcd that the defendant mado any claim that could he called ejces.'-ive. If so, they could have brought their action for money received. They had no right to come to a court of equity until their legal remedy had been exhausted. ITis Honor: Is there anything to prevent tho mortgagee selling again to a stranger? If it wore to be assumed that ho wished to sell by means of tho Kegistrar, then ho had bought it himself. The question is important. Sir. Oillies : Tho plaintiffs said you cannot sell until wo mnlce another default. The mortgagee might be greatly injured by this course. Tho plaintiffs might every three months put him to gTeat inconvenience in recovering his interest. The defendant had a right to tho protection of tho Court in this respect. What oppression could there ho in selling tho property at tho best possible prieo ? There was lio allegation that the property had been sold under its value. His Honor: Tho plaintiffs may say lam willing to pay 15a. per cent, for the use of £800 for three years, tho principal n«t to be paid until the three years had expired. It is a case in which the Court would be disposed t-o place both parties in the position they had occupied, providing that pendente li the estate were safe. If the eetaio wore 6afo it would relieve tho Court from the embarrassment of granting a provisional injunction that might have to be set aside at the subsequent stage of tho proceedings. Mr. Gillies : It was not alleged that notieo had not been given to tho purchaser. By giving notice impeaching tho sale to tho purchaser, tho whole object of the plaint:ffs would have been gained. His Honor: The grounds upon which a provisional injunction is asked are first that tho defendant had no right to proceed to the sale, and second that a reasonable amount in addition to tho interest duo had been tendered to cover all lawful and reasonable expense and charges. Mr. Gillies: I submit, your Honor, in tho first placo, that this is not tho prnpor mndo of proceeding; second, that thoro had not been sufficient amount tendered ; third, that tho full amount of principal and interest was due when default in paymeut of interest was made. Eis Honor: It is a question whether tho plaintiffs would have been entitled to an injunction provided be had brought tho interests and costs into Court. As to the notice of purchase would not the lis pendens bo sufficient notice that the defendant would complete the purchase at his peril. Mr. Gillies: The plaintiff could protect himsolf under the registration law. His Honor: The Court ought to bo satisfied of threo tilings—first, that sufficient tonder had been made; second, that tho purchaser lias received sufficient notice; and third, that tho estate is perfectly safe. Mr. Wynn in reply contended that 'he plaintiffs ought not to bo placed in the position of not knowing what was tho proper tender; that it would bo inequituhl'i to procr-od to salo in dofault of interest for a half-year. Ihe estate, if tho purohaso worn completed, might be convoyed to another person and to another, so that there miglit bo half-a-dozen sales if the Court did not. interfere. Hißtionor: The Courtis of opinion that tho lis pendens is sufficient l Otire in this case to provont tho purchaser completing the purehaso except at his own peril. Mr. Wynn : That is all tho plaintiffs require if tho Court is of opinion that tlio Registrar would not bo justified in executing tho conveyance. His Honor-- The Court will thoreforo refuse tho provisional injunction reserving to the plaintiff tho right to a decree in the cause until tho question of fact as to tender shall have been decided by a jury ; tho costß of tho present hearing to be defrayed by the plaintiff.