IN THE SUPREME COURT OF NEW ZEALAND, WELLINGTON DISTRICT.

New Zealand Mail, Issue 606, 15 September 1883, Page 21

IN THE SUPREME COURT OF NEW ZEALAND, WELLINGTON DISTRICT.

MCEWEN V. WATT. (Judgment of Prendergast, C. J.) Delivered September 7th, 1883. At the trial I stated my opinion on the • evidence that the defendant had not agreed to waive his claim to the dividends on that portion of J. P. Watt’s debt to the plaintiffin respect of which the defendant, W. H. Watt, had given the mortgage for £SOOO. The only matter that seemed to me open to • question was whether the mortgage was a security for the son’s debt, or the father’s. ~From the nature of the transaction, the position of the parties, and the form of the mortgage, lam satisfied that the mortgage is a security, not for the purchase of the sons debt, as substantially contended for by the plaintiff, but as contended by the defendant, W. H. Watt, a security for £SOOO. the father’s debt to the plaintiff arising out of his liability on the guarantee. It is clear from the evidence that, the agreement for the mortgage was concluded in Wellington, and was not contingent upon or connected with the plaintiff’s assent to the deed of assignment and liquidation. It is clear also that the parties believed it certain that the Son’s estate would not pay a dividend of anyth ng like ten shilling in the pound, and, consequently, that the defend ant would in any event have to lose the full . amount of the guarantee. There was no reason, therefore, for keeping open the payment or settlement of the defendant’s liability on his guarantee, and for the same reason I am satisfied that the plaintiff was will to settle the matter by taking this . security, and thereby giving up any claim on the son’s estate in respect of the portion of the debt which had been guaranteed. He was, no doubt, satisfied that by so doing he was not giving up anything, for if he obtained a dividend in respect of the part of debt guaranteed, his claim on the guarantee ■would have been so much the less. I conclude, therefore, that the transaction is just the same as if the defendant had paid his liability on the guarantee, and reborrowed the amount on mortgage. I am satisfied that the parties would not have agreed for a mortgage for five years at four per cent, if the transaction was intended to be a mere collateral security. I 'conclude, therefore, that the defendant, W. H. Watt, having paid on his guarantee ©f £SOOO, part of the • debt, is entitled to the dividends in respect of that part. The suit is, therefore, dismissed with costs. The plaintiff must pay the costs of both parties; the trustee did no more than was proper in his defence, but the costs must be only as between party and party. SMART V. HALCOMBE. (Judgment of Prendergast, C. J.) Delivered in Banco August 10th, 1883. It was concluded by the appellant, that the vendor of goods sold according to sample has no other remedy, when the goods are not equal to the sample, than to reject the goods, and that only in case of rejection he can sue for the breach set up or the defect in answer to an action for the fine. During the argument I estima’ed that notwithstanding the goods had not been rejected on delivery, the vendee might afterwards sue ,/for the breach. I, however, reserved my decision on the authortie3 establishing this were sighted at the argument. The law is ■clearly defined in Carter v. Palmer, 48. & Aid. 393. The distinction is that not having rejected, he cannot treat the contract as wholly void, but he may recover such damages as sustained by the breach. The Magistrate lhaving assessed the damages on an erroneous basis, there must be a new trial. The costs -of the appeal will not be given, as the point was not taken at the trial.