RIGHTS OF MORTGAGORS.

Poverty Bay Herald, Volume LII, Issue 16993, 26 March 1926, Page 8

RIGHTS OF MORTGAGORS.

RECOVERY OF BALANCES. AN IMPORTANT POINT. A point of very great'interest to mortgagees and mortgagors was set for liis Honor Mr. Justice Ostler to decide at the Supreme Court at Hamilton. The calse> was sin appeal from the judgment of Mr. Wyvern Wilson, S.M., at Hamilton, the appellant being Thomas Roden Bowen, farmer, of Kihikihi, and defendant Caroline Redmond, formerly of Te Kawa and now of Whangarci. Mr. D. Seymour represented appellant and Mr. P. IT. Watts, respondent. Bowen, it seems, was the mortgagee of a property from Redmond. While t he, mortgage was in existence Redmond transferred the property subject to the mortgage, and default was made? by the purchaser of tin* property. Bowen then proceeded to exercise his power of sale through the Registrar, and, as required by the statute;, he placed an estimate of-value on the property. This 'estimate was £9OO and the sum was- paid him by Redmond. In the ordinary ease of mortgagee and mortgagor, the mortgagee. Bowen, should thereupon have executed the release of the mortgagee as required by. the statute, the statute protecting bis rigid of. action against the mortgagor for any balance. Iho statute does not. however, provide for the east? where the property has been transferred by the mortgagor subject to the mortgage', so that the release of the mortgage would operate to the benefit of the wrong person. Under these circumstances Redmond had tendered her £9OO, and Bowen, after consideration, gave this transfer. Tho amount claimed to tie owing being in excess of £9OO, at which Bowen valued the property. the latter commenced an action in tho Magistrate’s Court to recover the balance claimed. Redmond defended tlie action, setting up that no money was owing by her to Bowen. .Included in Bowen’s claim were various legal expenses, which Redmond said were not her debt, and also certain interest at penal rate, which she claimed was not chargeable. She also set up that. the. effect of the transfer of tho mortgage to her was to divest Bowen of the right, of action under the mortgage. The magistrate gave judgment on this hist, ground, without: dealing with the other grounds. Bowen is now appealing to the Supremo Court against the decision. After hearing lengthy argument by counsel, his Honor, in reserving his do, vision, remarked that the point was a most interesting and important one.