R.M. COURT.

Patea Mail, Volume XII, Issue 132, 2 March 1887, Page 2

R.M. COURT.

TUESDAY. Ist March, 1886. (Before C. A. Wray, Esq,, R.M.) Patea Permanent Land, and Investment Society v. Bank of New South Wales. Mr G. D. Hainerton for plaintiffs, Mr Barton for defendants. This was an action brought to recover from the defendants certain moneys alleged to have been paid to them by a tenant of plaintiffs’ for a special purpose, and which had not been applied to such purpose. Mr Hamerlon opened his case briefly, and called Mrs Holtham, who, aworn, said, She was the widow of Edwin Holtham, who had occupied the cottage she now lived in prior to his death. She knew nothing about mortgages, but was told that the cottage was mortgaged to the Building Society and Mr Dale. After her husband’s death, Mr Tennent the then Manager of the Bank of New South Wales, let the cottage to her son. Her husband had paid all rent due to December Ist, 1883. Produced receipts for rent since paid (the receipts produced covered rent payments up to October 4th, 1884, She had generally paid the rent in the banking house. She had not paid any rent to the Bank since October 6th, 1884, because she bad received a notice from the Building Society not to do so, The Manager of the Bank offered to sell her the property for £SO, subject to the Building Society’s mortgage. She said she was not inclined to purchase at that sam. Cross-examined by Mr Barton . I got the last receipt for rent paid to the Bank on October 6th. Mr Powell called once subsequently to that date, but I declined to pay him, as I had received notice from the Building Society not to do so. The notice from the Building Society was received after I made the last payment. I afterwards paid rent to the Society. My son made arrangements to pay 8s per week to the Bank, and subsequently 7s per week. My tenancy began under the Bank. I cannot say how the property became the Bank’s.

Thomas Eyton, sworn, said: He was secretary and manager of the P.P.L,B. and 1. Society, and had been so since 1882. He recollected a mortgage from Hcltham to the Society. It was in existence when he took over the Society. All payments which have been made have been credited to B. Holtham. The payments made by the Bank were also credited to E. Holtham. The Trustee in Bankruptcy gave no notice of taking over the property. The Society never authorised the Bank to collect the rent. He rendered a statement of account to Bank at Bank’s request. The Bank made no further payments after that. He sent , notice to the Bank when the calls were three months in arrear, that Society would enter into possession of the premises. The Bank paid no calls after, but continued to collect rents to October 4th. At the time Holtham died, he would think the property was worth very little more than the first mortgage. I heard that the Bank were, at that time offering their interest in the property for £SO. Cross-examined by Mr Barton ; The notices mentioned are all the written notices that were sent. I never legally entered into possession of the premises. The 16th of October was the first time the Society tried to collect the rents. There was no resolution passed by the directors relative to the notice to the Bank, other than the one the notice refers to.

George Washington Taylor, sworn, said : He was a settler residing in Patoa. Resided hero in 1882 and part of 1883Ho was appointed Trustee in Bankruptcy of Edwin doltham’s estate. He was aware the debtor had property in Cambridge Street under mortgage to Building Society, and under second mortgage to Win. Dale ; he was clerk to Win. Dale just prior to that time,and was therefore cognisant of the fact, lie made an arrangement with Mr Tennant, then manager of the Bank of Now South Wales, to collect rem from Holtham for him (Mr Tennent), and Mr Tennent was to pay the Buildup Society calls. To the best of his recoioction he collected some rent, and handed it over to Mr Tennent. Holtham filed, ho thought at the end of 1882 or beginning ol 1883 (declaration of insolvency was obtained from the District Court and showed date to be 21st December, 1882). Ho saw Mr Tennent in Wellington on his (witnesses) way no from Tiinarn to Nelson, but nothing was done in the matter. The Bank Inspector offered to sell him the second mortgage for £SO. He looked upon it as a joke, as he did not want thu property. He never gave any notice as Trustee, that he took over the property, either to the Bank or the bociety. Cross-examined by Mr Barton : I know very little about the mortgagee. X know Mr Tennent came to me and asked me to collect the rents. I don’t know that he bad to do so, I only know that he did. I am fully under the impression that 1 collected some rent and paid it over to Mr Tennent before I left. I left in March, 1883. I cannot remember small matters of detail that happened four or five years ago. Re-examined by Mr Harnerton : Holtham was alive and working when I left. I don’t know absolutely whether anyone was paying the Building Society calls, but I understood the Bank was to do so. It was no portion of my duty to see to the application of the rents collected. What I received I paid to Mr Tennent. I think I left early in March, I think about the sth or 6th. I have never been asked anything about this matter till now. I have not been prepared to give evidence in anyway or warned for what purpose I was wanted.

The Court then adjourned till 2 o’clock. On resuming, R. A. Adams, sworn, said, He was Chairman of Directors of the Patea Permanent Land, Building, and Investment Society, and remembered Holthara’s mortgage. Recollected Mr Holtham becoming bankrupt. Up to the time of his bankruptcy he had paid his calls himself. It is no matter to the Society who pays the calls, they are credited to the mortgage security on account of which they are paid in. The payments to this account ceased some time in 1884. Under the Society’s rules, after payment has ceased for three months, notice is sent to the mortgagor. Notice with a statement was sene to the Bank. It was understood the Bank was paying the calls to prevent the Society realising their security. The Bank made an application to come under what is called the “ pauper clause,” which allows the Society to grant temporary relief to any persons who it may think unable to keep up their payments by charging only interest without any redemption payment —but the Directors did not consider the Bank of Ifew South Wales came under that category, so declined to allow it. The Bank ceased making the payments about April, but continued to collect the rents until October, when the Society warned Mrs Holtham not to pay any more rent to the Bank. He believed Mr Kempiborne had given him verbal information i hat he did not intend to pay any more c alls to the Society. The Society could not interfere until the payments were

three months in arrea". Notiee was sent to the Bank. The Bank never replied, disclaiming its liability to pay the calls. Cross examined by Mr Barton ; I was not aware officially, but was aware that the Bank was keeping its security alive. I don’t know when Holtham stepped paying, nor do I know of my own absolute knowledge who did pay the calls. Dale may have paid them. Re-examined by Mr Hainerton : I'am not aware what person actually paid m w of the money. I only know the calls were paid to the credit of the security. Mr Barton then addressed the Court at some length, and subsequently called E Kempthorne, who sworn, said : He was Manager of the Bank of New South Wales. The first payment made by the Bank was £6 9s Bd, in August, 1883. Mr IVnnent was manager at that time. The first rent received from Holtham was as fiom August, 1883, The last was in Oct. 1184, making a little more than a year altogether. He had heard MrTayler’s evidence- Heard him state rent had been paid by him to Bank Manager. Never heard anything about it before, and don’t think such a thing occurred, as there is no record whatever of such a transaction. He did not think the property was worth much more than the Society’s mortgage, so there was nothing to give Taylor, as Trustee, any interest in it. If such an arrangement as he mentioned had been made there would be some record of it, and there would not have been such a long t delay in carrying itoo f . Cross examined by Mr Hamerton: There is no record of Holtham being a tenant, or of having paid rent, the only dealings with the Bank, so far as I know, were with Mrs Holtham, There is no record of Holtham agreeing to atom to the Bank. Banks are particular to have these things placed on record. —Mr Hamerton : Yet you say all these things happened ; but nothing Mr Taylor said happened could have done so, because they were not en record in the Bank. That’s rather strange isn’t it ?—Examination continued : 1 knew Tayler was Trustee of Holtham’s Estate, but I never wrote or spoke to him. I believe Taylor had been out of the place for some time. I never saw him until within the last few weeks. I have not spoken to him on the subject. I cannot say whether the Bank of New South Wales was ever the Building Society’s Bank. 1 was aware the Bank’s mortgage was subjectto the Society’s first mortgage, but never troubled to ascertain that the mortgage was subject to rules. The payments made to the Society were debited to W. Dale’s accounts, and the ients received were credited to his account, All the payments made to the Society were j '.barged to Dale’s account. The Bank holds security against the account. Some of the securities are not realised. Judgment reserved till next Friday. The Court then adjourned.