MORTGAGE MONEY

Otago Daily Times, Issue 21997, 5 July 1933, Page 4

MORTGAGE MONEY

REPAYMENT QUESTION LIABILITY UNDER AGREEMENT. Questions, of law, removed from the Supreme Court, New Plymouth, for argument before trial, as to the liability or otherwise of a company which had gone guarantor for a farmer who subsequently went bankrupt to repay £4500 lent on third mortgage were argued last week in the Court of Appeal. It was claimed on liehalf of the company that the act of bankruptcy discharged the liability to repav. The plaintiffs were Albert James Perrott and Ada Mary Perrott, and tlw defendant Newton King, Ltd. On the Bench were the Chief Justice (Sir Michael Myers), Mr Justice Herdman, Mr Justice Blair, and Mr Justice Kennedy. Mr G. P. Finlay (Auckland) and Mr P. H. Watts (Hamilton) appeared for the plaintiffs, and Mr P. B. Cooke (Wellington) with Mr R. H. Quilliam (New Plymouth) for the defendant. On May 31, 1927, Albert James Perrott and "Ada Mary Perrott, at the request of Newton King, Ltd., and in consideration of an agreement of guarantee contemporaneously entered into by the company with them, lent and advanced to Jan.a Wood, fanner, of Huiron. the sum of £4500. The £4500 was secured by a memorandum of mortgage, registered at New Plymouth, which'was subject to prior mortgages to the Public Trustee and the State Advances Superintendent. The money still remains wholly unpaid. Wood was adjudicated bankrupt after the execution of the memorandum of mortgage and the agreement of guarantee, and the plaintiffs no longer have any power or right to recover any moneys from him under the memorandum of mortgage or otherwise. The whole of the property affected by the memorandum of mortgage has been sold by the prior mortgagees acting under the power of sale conferred by the prior mortgages, and on the sales no surplus arose for payment of any moneys to the plaintiffs. On November 17, 1931, Wood obtained an order of discharge from his bankruptcy. The questions for the court were whether the liability of the defendant under the agreement of guarantee has ceased, and, if so, upon the happening of .vhat event. At the conclusion of loyal argument, the Chief Justice said that the court would take time to consider its decision.