DISPOSAL OF CHATTELS.

New Zealand Herald, Volume LXVIII, Issue 20889, 3 June 1931, Page 12

DISPOSAL OF CHATTELS.

MORTGAGEE'S PROCEDURE..

BUYING IN AT AUCTION.

A COMPANY NON-SUITED. [fltOM OUR OWN CORRESPONDENT. ] HAMILTON, Tuesday. A reserved decision of interest to motor dealers and to others who sell goods under [he hire-purchase system was given in tho Hamilton Magistrate's Court to-day by Mr. Wyvern Wilson, S.M. A claim for £3OO was brought by Fred Baker, Limited, motor importers, Hamilton, against H. Zimmerman, farmer, Matiu. The action was one for money alleged to be due by the defendant to the plaintiff under an instrument by way of security over three motor vehicles, the property of defendant. It was admitted that the plaintiff seized and sold the three motor-vehicles which were subject to the security. The sale was by auction and the plaintiff bought in two of tho vehicles for sums aggregating £55 and the third vehicle was sold to another man for £ll. Contentions by Defence. The principal ground of defence was ono on which there did not appear to be any direct authority, said the magistrate. It was contended that plaintiff could not sell to himself except through the intervention of the Registrar of the Supreme Court and that consequently there had been no sale of the chattels aud that, until there had been a completed sale, the balance, if any, due by defendant to plaintiff could not be ascertained or recovered. It was further submitted that plaintiff's only rights on default being made were, cither to sue for this instalment under the covenant in I lie instrument otto receive the chattels and realise them toward liquidation of the whole debt and then claim the balance as a nonsccurcd debt. Tho plaintiff had elected to take the latter alternative. The magistrate said the question for the Court to decide was "can a mortgagee of chattels, when exercising his power of sale by auction, be a bidder and become the purchaser of the chattels, or if lie was to become the purchaser, must lie adopt, the procedure laid down by the Property Act, 1908, and incorporated in the Chattels Transfer Act, 1924, and sell the chattels through the intervention of the Registrar of the Supreme Court. Proper Course to Adopt. The magistrate expressed the opinion that the only way in which the grantee of an instrument by way of security could himself obtain the ownership of the, chattels subject to his security was by a sale conducted by the Registrar of the Supreme Court under the powers conferred upon him by hection 48 of the Chattels Transfer Act, 1924. Until the grantee did resell he had not completed the exercise of his power of sale and he still held the chattels as a trustee. Concluding, the magistrate said on the form in which the action went to trial he thought the plaintiff must be non-suited, the plaintiff having failed to prove the allegation that, the chattels had bt-en sold at auction for £66 and that a balance of £3OO was owing. It might be that the companv still had a remedy by appropriate action in another form, in which different issues of fact and law could be tried. Security for appeal was fixed at £ls.