POWERS OF SALE.

Star (Christchurch), Volume LXIV, Issue 809, 8 July 1933, Page 17

POWERS OF SALE.

Order Made by Judge “With Regret.” COMMENT ON. BANK’S ACTION. Per Press. A»Swht»a. ; . WELLINGTON, July 7. “ I regret very much having to make this order, for legislation was passed for the protection of just such a man as the mortgagor, whose skill as a breeder of high-grade stock .has been an asset, to the Dominion in the past, but Parliament has not thought fit to give the Court power to do complete justice between mortgagees of land and mortgagees of stock, and therefore I feel bound to make the order.” This observation was made by Mr Justice Ostler in a .reserved judgment in the Supreme Court in a case in which the Public Trustee, as first mortgagee on a rural property near Masterton, moved for leave to exercise his powers of sale. 11 is Honor said that the defendant was a first-class farmer and a noted breeder of stud sheep. His farm was subject to a first mortgage of. £9240 to the Public .Trustee, and the Bank ot New Zealand had a mortgage over the stock secured by a collateral guarantee by the mortgagor’s father. Application was made for relief to the Adjustment Commission, and relief was granted, one of the terms being that £241 should be paid to the Public Trustee before December 31, 1932. The £244 which was ordered ta be paid to the Public Trustee was not paid. Willing to Pay. His Honor said: ‘‘The mortgagor was quite willing to pay it, but the bank, by virtue of powers under its stock mortgage, controlled the payment of all moneys, and refused to allow this sum to be paid out of the proceeds of the farm. The bank took every over and above the bare living expenses of the mortgagor, and on February 25. 1933, it had reduced the amount of its mortgage to £3453, but £9OO of this reduction was obtained from the guarantor. The bank also has been getting interest on its debt, whereas the Public Trustee has had no interest. The mortgagor is anxious to comply with the terms of the order, but is absolutely in the hands of the bank, and is unable to do so. ; The Public Trustee is willing to enter into a pooling arrangement, so that all the profits of the farm can be divided between him and the bank, in proporton to the amount of their mortgages. The bank has refused this offer, except on condition that the Public Trustee agrees to share any loss that may be made in the working of the farm. The Public Trustee regards this condition as unreasonable, and I agree that it is. “ The result of the bank’s attitude is that it is using the farm, at the expense of tlie first mortgagee, to pay all its debt and to pay its interest. That being the position, I can see no other course to pursue than to give the Public Trustee the powers that he asks fbr.”