INNOCENTS AT LAW.

New Zealand Herald, Volume LXV, Issue 20116, 29 November 1928, Page 14

INNOCENTS AT LAW.

THIRD PARTY CAUSES LOSS. ECHO OF THE MANSILL CASE. REPAYMENT OF A MORTGAGE. The question whether the mortgagors or tho mortgagee should suffer through file defalcations of ;v solicitor who had acted for both parties was brought before Mr. Justice [''razor for decision in the Supremo Ccurt yesterday, lhe solicitor concerned was John lleiirv Victor Mansd, wfio \vai sentenced fast May to four years' reformative detention. 'Hie statement of claim set out that tho plaintiffs, John Kirkness and William Andrew Kirkness, retired farmers, of Auckland (Mr. Cocker), were the mortgagors, and the defendant, Joseph George Sheldon, bidder, of Manurewa (Mr. Milne), was tho mortgagee under a memorandum of mortgage given to secure tho principal sum of Ju-150 and interest. In June, 1027, a release and discharge was piepared by tho defendant s solicitor, Mansill, and signed by the defendant. Tho plaintiffs then paid to Mansill £465 as full settlement. Mansill he'd the releaso on behalf of tho pla.ntifts, and undertook to :>tainp and register it on their behalf. It was alleged that tho defendant had since wrongfully obtained possession of the lelcasc, and refused to deliver it to tho plaintiffs lhe plaintiffs, therefore, sought possession of the release and discharge of tho memorandum of mortgage, and tho sum of £25 damages for wrongful detention.

Evidence of Defendant. The defendant denied that ho had executed a release and discharge of the mortgage >n June, 1927 He had signed a release in January of that year, and left it with Mansill, who was acting for both parties. In March he instructed Mansill thai,, as the plaintiffs had not paid off the mortgage, ho would not accept rcpaynent until October, 1929. Sheldon said ho subsequently requested Mansill to hand- over the mortgago and relevant documents, and these were now in his possession. The defendant said ho had never received any money in payment of the mortgago. It was stated that interest was to be paid by the plaintifls at the rate of 9 per cent., but no payments had been made of the interest due in April and July last, totalling £ls 15s, and that amount was claimed by the defendant.

Evidence ivas given by Mansill, who said that in January, 1927, the plaintiffs told him thf.t, as they would have some money comii:g in shortly, they desired to pay off Sheldon's mortgago. Witness pointed out that the mortgage contained no right to pay off before tho duo date. However, Sheldon, who was contemplating a subdivision scheme at Manurewa, said tho money would be handy for loading purposes. Tho witness prepared a release, which Sheldon signed. On various occasions subsequently the plaintiffs were in his office, and on practically every occasion had been asked whether the expected money had come to hand to pay off tho mortgage. Sheldon decided not to go ahead with tho subdivision and became tired of waiting for the money.

The Decision Reserved. Sheldon then instructed witness not to accept payment and to cancel the release, and witness promised to do that. In June, 1927, the plaintiffs called at his office, stating their willingness to pay off the mortgage, and a cheque was paid by the plaintiff;. From that date onward, said Marisill, he did not send out any demand for interest to Ivirkness Brothers, and ho paid Sheldon interest as though the mortgage were still in force. The question of the existence of the mortgage and its release was not raised by Sheldon or by Kirkness Brothers until the closing :>f witness' office. "What became of Kirkness Brothers' cheque?" asked Mr. Cocker. "It was paid through my general account, and lot into the trust account," replied Marisill. Lengthy lpgal argument followed the hearing of evidence. Both counsel laid stress on the general principle that, where two innocent parties suffered at the hands of a third, the one whose indiscretion had led to the loss should bear it. His Honor reserved ( decision to consult authorities cited by counsel.