A FARM EXCHANGE.

Waipa Post, Volume XX, Issue 1180, 10 December 1921, Page 5

A FARM EXCHANGE.

PROMISSORY NOTE FOR BALANCE.

MORTGAGES EXTENSION ACT IN-

APPLICABLE,

A reserved written judgment was given by Mr H. A. Young, S.M., and read at the court on Thursday, as follows, in the case of A. H. Knight, of Kawhia (Mr H. Crimp) v. L. H. Peat, of Pirongia, farmer (Mr E. W. ter):—The plaintiff claims to recover from the defendant the sum of £2OO on a promissory note, which reads: "Due 13 th July, 1921.-40th July, 1917. — £2OO. —Pour years after date I promise to pay A. H. Knight or order the sum of two hundred pounds sterling value received. Payable at Bank of New Zealand, Te Awamutu.—L. H. Peat." It is admitted that the promissory note was signed by the defendant, that the plaintiff is the holder, that it was dishonoured by non-payment, and that notice thereof was given to defendant. It was contended on behalf of the defendant that the plaintiff cannot recover because (1) the promissory note was conditional and (2) the provisions of the Mortgages Act, 1912, apply. By an agreement dated the 29th of July.. 1916, the plaintiff and the defendant agreed to exchange certain properties, the difference in values being £2OO, which sum the defendant agreed to pay to plaintiff on 13th July, 1921, and in the meantime to pay interest thereon at the rate of 5 per cent per annum, payable on 13th January and 13 th July in each year. Clause 12 of the agreement provides: " The said Leonard Harcourt Peat shall also sign and deliver to the said Arthur Horace Knight a promissory note for the said sum of £2OO to become due on the 13th day of July, 1921; but if the interest mentioned in clause 6 hereof shall be in arrear or unpaid for the period of three calendar months the said sum of £2OO shall be deemed to be immediately due, and the said Arthur Horace Knight may thereupon sue for the same and recover payment thereof upon the security of the said promissory note or upon the agreement, whichever he shall consider fit." It seems to me whether I read the promissory note by itself or in conjunction with this clause that the defendant made an unconditional promise to pay the •money at a certain time. There was no condition by which he reserved to himself the power cf control the obligation or his performance of it. The fact that the plaintiff was by clause 12 given discretion to sue for the sum in the event of a certain default could not in my opinion affect his rights as the holder of the promissory note. In my opinion the provisions of the Mortgages Extension Act do not apply. The agreement for sale and purchase was given effect to by the plaintiff and defendant transferring their properties as agreed upon. A mortgage was not executed by the defendant, and the only matter left subsisting between the parties was a promise by the defendant to pay the plaintiff £2OO on a certain date, and to pay interest thereon in the meantime. Even if a mortgage had been executed it seems likely that the plaintiff could have recovered on the promissory note (Connell v. Phoenix Aerated Water, 34, N.Z.L.R., 679). I therefore give judgment for plaintiff for £2OO and costs. Leave to appeal was granted Mr McCarter at £lO 10s and amount of judgment.