Sales Under Mortgage.

Timaru Herald, Volume XIIIC, Issue 14141, 26 February 1910, Page 2 (Supplement)

Sales Under Mortgage.

RECENT LAW. The sale by mortgagees of properly under the supervision, of the Registrar of the Supreme Court which for many years past has been adopted in. the I GDonunion, ia lieu of the costly and ; dilatory course of proceeding called foreclosure still obtaining in England, lias proved of much advantage. Its object is to enable a mortgagee to acquire absolutely the estate of a defaulting mortgagor in the property after it bas been- submitted to eompeti- *}™ b y means of a public auctiou. When; the system of sales through the Registrar was first initiated by the Legislature it often resulted in disastrous conseguehces to the mortgagor. The mortgagee might attend the auction sale and for a bid of an amount trifling m- regard to the real value, ,becorne the purchaser of the property. The mortgagee was only bound to give credit for the amount however ;smaU he might acquire the property for at the auction, leaving the balance a debt still due by the mortgagor for •which the mortgagor was still liable. r a ?t .?-,_!■ - 1 ch the mortgagor remained still (liable m.any action the mortgagee ; might choose to take against the mortgagor .for-its recovery, and if the mortj gagor became bankrupt the right of !-the mortgagee to prove for the balance ; m competition with the other creditors J was unimpaired. The theory in its inception was a good one as regards the mortgagee, but in practice it often worked disastrously to the mortgagor, : as bidders never, or scarcely ever, went 1b0..a. Unortagaee's sale because thev J were bidding, as one learned judge put it, "against an unseen foe." To alleviate the hardships of a mortgagor under the circumstances alluded to, the. Legislature in 1905 enacted that in sales by .a through the Registrar the mortgagee must state m his application the value at which he estimates the land to be sold, and the Statute.gives the mortgagor liberty/before the sale to redeem at the mortgagee's valuation or the amount due and owing under the mortgage to- ! gether with the expenses incurred by the mortgagee. Should the mortgagor buy at the auction then -the consideration in the .-transfer of the property to 1 him_is to.be not less than -the value of the land-;asestimated by the mortgagee whatever -may be the figure at which it is knocked down 1 to *he mortgagee j at; the .-sale./ She law as enacted in./ 'the statute sseems clear eaough, sr.vs \ the ''•Mercantile Gazet*ei" but -the Iquestion panie ijp recently before the ' Supr ; enie*Gourt asix>.whether tne statute compsllsd the mortgagee to five credit to the mortgagor for the r mount at whieh -thn mortgagee ;had estimated the value of his security, and it was contended .that the provision mist. ; be read as designed only -for revenue pur- ■ Twsvs. The full bench of the' Supreme Court unanimously held that .""/here, morta gaped pror>ertv sold through the Registrar .wis bought by the -raortgap°e -the nf the atnouut , the of the value «f -the lo.nd convevanco from thp Registrar to the mortgagee releases ■and dip?hr>rTes the mortgagor, from, payment of the sime, so that 'the -mortgagee .was hound to allow "the mort-eH-imate, and -+lnt. nn intending pur-chaser,-was, entitled to see -the uorfc-

gagee's application a;.id his estimate oi the value of the land, and that'the adyertisoir.eat of the sale ought to oppressly state that the 'mortgagee's application and his estimate of the value of the land could be seen at the Registrar's office prior to and at tho time of tho sale. The amendment of the law and the construction placed upon it by they Court goes far to'alleviate the hardships of a mortgagor • under the previous system, as it will have the effect of making.'a, mortgagee cautious > in regard to the value he estimates the value of the property at. We may add that where the estimate of value is less than tho amount owing- and the mortgagee- becomes the purchaser at the auction, which he can only di at a price uot- less than that estimated, the mortgagor will of course, he still liable tor the balance (if any) owing on the mortgage.—(Exchange).