MORTGAGE DEAL.

Waikato Times, Volume 102, Issue 17168, 2 August 1927, Page 6

MORTGAGE DEAL.

SkN INVOLVED TRANSACTION.

CLAIM FOR £l4O INTEREST.

RESERVED JUDGMENT DELIVERED.

Reserved judgment was delivered by Mr Wyvern Wilson, S.M., at Hamilton to-day in the case in which Alexander Hopkirk, farmer, of Cambridge, Harry Dunstan Matthews, and ■ Clive Matthews, farmers, of Hamilton, and the Bank of New Zealand sought to recover from Lucy Burbush, wife of Walter Harold Burbush, stock agent, Hamilton, £l4O interest allegedly due under a deed of mortgage. Mr H. Hammond appeared for plaintiffs and Mr 11. J. McMullin represented defendant.

The evidence showed, stated his Worship that one C. R. Smalfield covenanted by deed of mortgage to pay Matthews Bros. £6900, with interest at 8 per cent. The mortgagees submortgaged to the Bank of New Zealand for £3500 and interest, subsequently assigning the mortgage, subject to the sub-moragage, to Alexander Hopkirk for £3400. On the death of the mortgagor, C. R. Smallfield, probate of his will was granted to the- present defendant, who was then Mrs Smallfield, and the sole beneficiary. The present defendant and Alexander Hopkirk executed a reduction of mortgage whereby the principal owing was reduced from £6900 to £3500, being effected by Mrs Burbush paying off £2OOO and Mr Hopkirk foregoing £800; when'that reduction was signed the principal moneys under the mortgage had not fallen due, and the mortgagor was not entitled to pay off instalments. The'interest moneys now claimed were due and unpaid under the mortgage. It was further admitted that Mrs Burbush had signed an agreement with Mr Hopkirk whereby she undertook, in consideration of his consent as mortgagee to the closing of a road through the property when called upon to execute in his favour a mortgage over such portions and the closed road as should become vested in her,- such mortgage to be collateral to the mortgage originally given to Matthews Bros. It was submitted by Mr Hammond that defendant was in the position of a purchaser or assignee of the equity of redemption, and was not liable unless she became so by the execution of the reduction of mortgage and the agreement. He contended that there had been a new contract between the parties compounded of the original mortgage and the reduction executed by the defendant. In this case, said the magistrate, the effect of the reduction could only be to decrease the liability on the property and of the parties then personally liable. He could not think that the reduction of the mortgage imposed any further liability upon defendant than formerly. The fact that in consideration of Mrs Burbush paying £2600 before its due date, she was conceded £BOO, did not justify the Court in inferring any acceptance by her of liability for the balance of £3500. With. respect to the agreement relating to the closing of a road, the plaintiffs could not found their action upon that agreement as an equitable mortgage. Apparently nothing further had been done concerning the closing of the road nor had the agreement ever been carried into effect. It did not seem to his Worship to create a new contract to accept liability for the principal secured by the mortgage, but was merely an agreement to give a collateral mortgage on the happening of a future event. ' j Judgment was given for defendant, with £7 costs. Security for appeal was fixed at £l3 17s.