PARTNER OR MORTGAGEE?

New Zealand Mail, Issue 1367, 12 May 1898, Page 29

PARTNER OR MORTGAGEE?

The case on appeal between James Allardice, appellant (defendant below), and Thomas Tanner, respondent (plaintiff below), which cam© before Mr Justice Denniston, Mr Justice Conolly and Mr Justice Pennefather in the Court of Appeal on Monday, arises ou*-. •-■? litigation which commenced in 1894.

The parties belong to Hike's Bay, where the transactions in question also took place. On the 3rd February, 1894, Tanner advanced .£6OO to Julia Mortensen, wife of Karl Frithj off Mortensen, upon the security of leasehold bush land known as Piripiri, and of two sawmills. Default having been made by Julia Mortensen, Tanner on the 20th September, 1894, foreclosed and entered into possession. On the 23rd November, 1894, in plaint No., 1305, Palmerston North, wherein AUardice was plaintiff and " J. Mortensen and Co." were defendants, judgment was entered for the plaintiff on the confession of Julia Mortensen for the sum of 17s 2d and £S 9s costs. Thereupon execution was issued and certain timber assumed to be part of the assets of " J. Mortensen and Co. " was seized in execution. Tanner interpleaded, claiming to be mortgagee in possession of the assets of "J. Mortensen And C<J. W j and tin im iifck January, 16DS,

I Mr Stanford, S.M., sitting at Dannevirke, decided that the contention of the plaintiff Allardice that Tanner was a partner at law with Julia Mortensen as well as being mortgagee of her assets was established. The interpleader summons was accordingly dismissed. On the Ist February, 1895, an application for rehearing, made on behalf of Tanner, wa3 granted by the Magistrate, partly on the authority of rule 63 of the Magistrate's Court Act, 1893. The rehearing was prevented by a prohibition from the Supreme Court granted by the late Mr Justice Richmond on the ground that rule 63 was ultra vires. An application to the Magistrate at Palmerston North for rehearing of the interpleader summons was refused. An action was then brought in the Supreme Court to restrain Allardice from proceeding to enforce the interpleader judgment, on the ground that it and the judgment in the plaint in which the execution wa3 issued were obtained by collusion with a judgment debtor, or rather one of them sued in a firm name, and with intent 'to defraud Tanner. Sir James Prendergast, C.J., at the end of his judgment in the action, said, " I conclude, therefore, that the plaintiff is entitled to a decree declaring the interpleader judgment to have been obtained by fraud, aud that the defendant, Mr Allardice, be restrained from proceeding upon it, and that the bond be ordered to be given up to be cancelled; and that the defendant be restrained from enforcing the judgment obtained on the third plaint, the plaint against J. Mortensen and Co., No. 1305, against Mr Tanner, or otherwise than as a judgment against Mrs Mortensen only." Notice of appeal was given on the 27th September, and on the 9th October the Chief Justice made an order for stay of execution. &c. The defendant Allardice now appeals from the whole of the Chief Justice's judgment of the 16th September, upon the grounds (1) that the judgment is erroneous in point of law, and (2). v that the decision is against the weight of evidence and that all the findings of fact are erroneous and not justified by the evidence. rMr H. D. Bell, with him Mr Souttiey Baker, is appearing for the appellant, and Mr Martin Chapman, with him Mr Humphries, for the respondent.