JUDGMENT OF INTEREST

Taranaki Daily News, 20 December 1932, Page 9

JUDGMENT OF INTEREST

DEBTOR AND SUB-DEBTOR. CASE IN STRATFORD COURT. A case of some interest was decided at Stratford yesterday, . when M?., R, ■W. Tate, S.M., gave reserved judgrnent refusing to . make an attachment;;inferloi cutory- order absolute. The ‘ case involved the relations between a judgment creditor (James Morrison, butcher, Stratford), the judgment debtor (George Sleeman, -sharemilker, Kaporfga) 1 and ■ a sub-debtor (Edward Beech, farmer, Eltham). Mr. P. Thomson appeared for Morrison and Mr. A.K. North for ■ Beech and others. ■ ‘ '■' > ■ ' " The circumstances were-that on' November 3, 1932, an attachment order (interlocutory) was made whereby the debt owing from the sub-debtor to the judgment debtor was attached and the' subdebtor was ordered to . appear tq show cause why he should not", pay to the judgment creditor the debt due by him to ,the judgment debtor. Mr. A. K. North, appeared for the sub-debtor and for himself, the Southern Union Insurance Company, and the Farmers’ Co-operative Organisation Society, Ltd. It appeared, said ’the magistrate, that the Judgment debtor, Sleeman, had sued the. sub-debt-or, Beech, i for damages arising out of a motor collision and had recovered damages for costs of repairs, £l7 10s. 6d., and for depreciation, £25, and costs on the action. .• The judgment debtor’s car, which was injured in the collision, was acquired by. him from the Farmers’ ./Co-operative Organisation Society, Ltd., under a customary hire-purchase agreement, dated February .1, 1930, whereby as a conditional purchaser he agreed, to purchase the car and wherein it was provided that the property in the car did not pass to' him until the completion of the payments he had agreed to make. It was agreed that the relation between the society and the judgment debtor was that pf bailor and bailee. Mr. North acted for the judgment debtor in his successful action against the sub-debtor, Beech, and it was agreed that his taxed costs, as between solicitor and client should be allocated and paid out of the fund.

The insurance company had paid the £l7 10s. 6d. for repairs and it was agreed that it should be repaid out of the fund. There remained the £25, or what was left of it after paying the proportion of Mr. North’s costs, and the question to be decided was whether this was an attachable debt in respect. of which the Court should make an order absolute under Section 145. This was not a proceeding under Section 142, where, money having been paid into Court, an order was sought as to payment, out of Court

The money was in the hands of the subdebtor. The service of. the .attachment order (interlocutory) bound .in the hands of the sub-debtor debts with which the judgment: debtor could deal.. honestly and properly. and without injury, to the rights of third persons at the time the order was served., >

An execution creditor could only tqke the property of the execution debtor subject.'to all equities attaching to it. An execution, could take effect only against property that a. debtor had a right to dispose of'for his own purposes. The money the sub-debtor held represented the damage done to the car. It was agreed that the judgment debtor who obtained the judgment was a bailee of the car' and that the Farmers’ Co-operative Organisation Society, Ltd., was the bailor. As between bailor and bailee the bailee must account to the bailor and must' pay. over to him any sum he had recovered as representing'the value of the car, or its permanent deterioration. The £25 was awarded for “depreciation.” Mr. Tate said he could not conceive that that would be other than permanent deterioration; the reparable deterioration was covered by the £l7. 10s. 6d. In his opinion-the'bailee (the judgment debtor) was bound to pay over to the bailor the amount he might receive for deterioration. This money, then, lying in the sub-debtor’s hands, was not money the judgment debtor could deal with honestly and-without injury to the rights- of the Farmers’ Cooperative Organisation Society, Ltd., and the magistrate did not think it was attachable by the judgment creditor. The question arose whether the parties other than the sub-debtor had a right to be . heard. It seemed to Mr. Tate that the Court should hear any person who asserted a claim to the moneys sought to be attached, so that, the true position might be ascertained. Mr. Tate said that in the case of Joannis Vatis, reported in the Law Times Reports of 1922, a sum of money was available to a bailee; it was not in Court; when- the bailee received it he was under obligation to account to the bailors. Before he had received it, aqd before the Court even had taken the necessary steps to enable the money to be paid, or given authority to him to collect it he repudiated before the Court the obligation to recognise the rights of his bailor.

Under those circumstances it seemed to the magistrate impossible that any selfrespecting Court could act in such a way as, to enable that bailee to receive the whole of the money as long as. the Court -had any control over it at all, and' it appeared perfectly proper that the Court should allow the claimants against the bailee to come to the Court to say tliqt they sought in that action to establish their, claim. .

It was unreasonable that the Court, by refusing to hear any person who

asserted a claim on the money sought io be attached, should enable the disposal of the money in a manner in which the judgment debtor could not properly deal with it.