FARM PROPERTY DEAL.

New Zealand Herald, Volume LXVII, Issue 20622, 22 July 1930, Page 12

FARM PROPERTY DEAL.

ACTION BY VENDOR. PERFORMANCE OF CONTRACT. OBJECTIONS BY PURCHASERS. [BY TBLEGRArn. —OWN CORRESPONDENT.] HAMILTON, Monday. Tlio unwillingness of the purchasers of a property to sign a personal convenant with respect to a mortgages held by the Public Trustee led to a civil action being :hcaril in tiio Supreme Court at Hamilton to-day beforo Mr. Justice Hcrdinun, in which the vendor of the property sought specific performance concerning the sale of'a farm valued at £22,347.

Tll o plaintiff was Frederick Edwin Bishop Lovelock, fanner, Eureka, and llio defendants weio Henry Martin Boylo and James Glenny Boyle, contractors, Christchurch. Plaintiff was represented L»y Mr. 11. T. Gillies arid Mr. E. L. G. West, while Mr. A. 11. Donnelly and Mr. A. W. Brown appeared for defendants. Plaintiff, in his statement of claim, set out that on December 20, 1929, the defendants agreed to purchase from plaintiff 2483 aoies- of land, known as Wavcrloy Islaml, at Eureka, at £9 an acre. It was agreed . that tho- money should be paid on February 1, 1930. In a letter dated February 17 defendants renounced tho contract. Matter of Consent. Tho defence was that the snlo was subject to tho consent of tho Public Trustee, there being a clause in tho mortgage stating that the Public Trustee must givo his consent in writing before the sale. Defendants alleged that this had not been done. It, was further contended that the purchasers were required to sign certain deed; of covenant to pay the mortgages. They refused* 1 to do that on the grounds that 'they did rot contract with reference to thoso deeds of covenant.

Mr. West said the. property was subject to two mortgages,' one of £7500 to the Public Trustee and' one of i.3500 to F. W. Burley. Defendants agreed to pay cash above tho mortgages and to take over tho mortgages. The Public Trustee had consented to tho transfer of his mortgage to tho purchasers. There was no need for the consent of the second mortgagee to be obtained. Correspondence Quoted.

No objection was made to taking over the mortgages, said counsel, and the correspondence clearly showed that defendants wero proceeding with the deal, lliey searched the title and forwarded moiwy to pay the stamp duty. They asked that the transfer be prepared. Ou February 17 plaintiff's solicitor rccoived a letter stating that defendants were not willing to execute the documents. Mr. West said defendants expressed their unwillingness to comply with the terms of the mortgages, namely-, to give a personal covenant. The vendor was ready to settle on February 1, and at that date there was no breach ojf either mortgage. Counsel contended illat there wero no merits in defendants' ejection, and that the action taken by plaintiff's solicitors in requiring defendants, \o enter into a personal covenant witli \respect to the mortgages was in'keeping with ordinary conveyancing practico fallowed in the North Island. Contentions ol Defence. .*,■

Mr. Donnelly said the contract was subject to conditions, namely, the unconditional consent of tho Public Trustee. He submitted that tho contract had V een discharged by tho non-fulfilment of condition. The consent obtained did.not fulfil the condition and was, in any event, too lato. Defendants, being entitled under the contract to the unconditional consent of tho mortgagee, were not bound to accept what was, in fact, a qualified consent, conditional on their entering into a deed of personal covenant unless tho Public Trusteo waived his rights. Counsel contended that the buyers of an equity of redemption, when they agreed to tako over existing mortgages, did not contract to execute a deed of covenant with tho mortgagee, lid further submitted that the liability of tho transference was limited to indemnity implied by law under Section 88 of tho Land Transfer Act. Defendants wero entitled to receive tho written consent of the Public Trustee prior to tho date of sale. Tho consent was not received until after the date fixed for settlement, and, therefore, there was .1 breach of tho mortgage. Public Trustee's Attitude. Mr. West replied that the Public Trusteo had been at all times prepared to consent, and that the written consent was not necessary until the actual transfer took place, This had not yet occurred. Evidenco was given by Douglas Reginald Woods, solicitor to the Public Trustee, Hamilton, that tho Public Trusteo was prepared to consent to the transfer of his mortgage on Lovelock's property to tho Boyle Brothers, subject to tho requirement that the purchasers should execute a deed of covenant. Implied consent was given by tho Public Trusteo on January 16. When an express consent was asked for, on July 21, that was given. After lengthy legal argument His nonoi reserved judgment.