INTERPRETING A DEED.

New Zealand Herald, Volume LXVII, Issue 20607, 4 July 1930, Page 18

INTERPRETING A DEED.

MORTGAGE OVER PROPERTY. A COVENANTOR'S LIABILITY. CLAIM FOR £9OO PRINCIPAL. A sum of £9OO and interest thereon was involved in a claim heard by Mr. Justice Smith in tho Supremo Court yesterday. The claim was rnado under tho covenants expressed or implied in a deed of mortgage over a building and sectiou on the corner uf Great North l-toad and King Street. Tho plaintiff was the Guardian Trust and Executors Company of New Zealand. Limited (Mr.-Iluband), and tho defendants, Charles Robert Bolor, taxi proprietor, who offered no defence, and Frank Roderick .Rogers (Mr. R. N. Moody). It was claimed that tho defendants had covenanted with the plaintiff to pay £9OO and interest on December 18, 1929, and that tliev had made default. Mr. Iluband said it was admitted by the defence that the defendant Rogers was a covenanting party. The only question iu issue was whether Rogers was bound by any covenant in respect of the principal and interest money secured by the mortgage. That was entirely a matter of interpretation of the deed. An alternative claim was made that if it were found that Rogers was not bound by the mortgage then tho deed did not represent tho true intention of the parties and should bo rectified by the Court. Property Transactions. The Guardian-Trust sold the property in question to Rogers in December, 1924, for £I2OO. The balance of purchaso money, £9OO, was to remain on mortgage. In December, 1925, Rogers assigned all his lights and benefits under the agreement of salo to Charles Robert Boler and his wife, Alice Mabel -Boler. Plaintiff conveyed tho land direct to the Bolers and Rogers was joined in the mortgage so that ho should remain personally liable. Evidence as to the preparation of an agreement for salo and purchase between the plaintiff' and tho defendant Rogers in December, 1924, was given by George 11. J. Campbell, solicitor. In subsequent transactions there had never been any intention to let Rogers out of his liability under the mortgage. Tho question of a limited liability was never discussed. Mr. Moody said the intention of Mr. Wood, Rogers' solicitor, was to see that Rogers was exempt from liability under the mortgage, and that was Rogers' own intention.'

Tho defendant Rogers stated in evidence that he believed he had handed over tho wliolo responsibility to his daughter, Mrs. Boler, and her husband. He believed that when he signed the document he was completely finished with .the property altogether His Honor's Interpretation. Arthur M. Wood, law clerk, who completed the transaction between the Bolers, Rogers and the Guardian Trust, said lie had objected to Rogers being joined as a principal party under tho mortgage and liad eliminated him from it. lie insisted that Rogers should not be a, party at all. In cross-examination, witness said that Rogers had signed tho mortgage as covenantor for rates and one or two minor items. Leslie G. Simpson, solicitor, in crossexamination, admitted having written to the plaintiff's solicitors making an offer of £7OO on behalf of Rogers. Witness at that time had assumed that Rogers was liable.

A question by Mr. Iluband us to Rogers' attitude of mind was disallowed on the ground that the conversation was privileged between solicitor and client.

Both counsel submitted numerous authorities bearing on the interpretation of tho terms 'of the mortgage.

His Honor said he had no doubt whatever as to tho construction of this mortgage. In his opinion the covenantor had undertaken that the mortgagors would pay the principal and interest and that if they did not he would. That was the only reasonable construction of the whole document. The plaintiff was entitled to judgment against both the defendants jointly and severally for the sum of £9OO and interest at the rate of 6 per cent, from June 18, 1929, to the. date of judgment.