The Law of Mortgage.

Hokitika Guardian, 16 November 1921, Page 4

The Law of Mortgage.

OBT/ICATIONS. OH ASSI'ONKKS. A TICK LAND, Nov. 11. The quest ion whether the purchaser of a property, which is subject to a mortgage, can he sued for the recovery of principal and interest overdue on the mortgage, or .whether the liability is solely on the original mortgagor, was the subject of a judgment delivered at the Supreme Court by his Honour. Mr Justice 1 leidmaii, in the case Mary Kaiiisav (Kemuera) v. Herbert Brown ( Pukekinhe) and Klleii Jane Webb (Mutierei. The circumstances- were that Mrs Webb purchased a property ot 202 acres at MaungataWhiri from Herbert Blown, over which there were two mortgages, the second one being in favour of Mrs Mam say, the plaintiff. Hniw n sold to Mrs Welib. subject to the 'mortgages. Default was made in the obligations under the second mortgage. and a wi it was issued against both defendants claiming moneys due under the second mortgage, 1*121)0, together with costs, C! 12 lls (id, and interest. The question was whether there was any privily of contract between the original mortgagee, Mis Kaiiisav, and Mrs Webb, the purchaser of t-lie equity of redemption. In the course of a lengthy judgment his Honour pointed out that it had heeu held in Hnglaml ijn re 'Kiringtun expai tejtliat there was no privity of contract between the assignee ol the equity of redemption and the transferer- of a mortgage, and no (leisnmil liability Oil the part of the assignee of the equity of redemption to pay interest. The original mortgagor rontiniiod to In' liable under his personal covennut. lie could not r-scaiK- trom his obligations to pay the mortgage debt or the inteiest by assigning the equity of ledemptioii to another. Alter reviewing cases quoted by counsel to indicate the New Zealand law on the point. Ins llunorir concluded: "I have been unable to lind suvli a substantial difference between the legislation in New Zealand and section 2li nl the Conveyance and Law of lVopeity Act. | SSI, which would justify me depaitiug I nun the conclusion arrived at in Krringbiii. 1 -shall therefore hold in the present case that the burden ot the personal covenant entered into n\ the mortgagor to pay principal and interest dues not run with the equity of redemption.”