A QUESTION OF VALUES.

Putaruru Press, Volume II, Issue 58, 4 December 1924, Page 3

A QUESTION OF VALUES.

MORTGAGEE’S FORECLOSURE. L Farm at Overdale. Claim for £3402 Fails. A claim for £3102 by Hugh Andrew Boyd, farmer, Putaruru, against John Rigger, retired farmer, Auckland, was dealt with by Mr. Justice Herdman and a jury of 12 at the Supreme Court, Hamilton, on Friday. At the previous sessions of the Court Boyd had unsuccessfully proceeded against Rgger on a claim for £IOOO damages on account of alleged wrongful taking oT possession of his farm by defendant, as the fii st mortgagee, and the piesent c’aim was for damages on account of ib~ defendant allegedly selling the property—a farm of 582 acres at Ovcrdale—be! w its value. It was stated that pi aim iff farmed the property for IS years. It was subject to a first mortgage of £3OOO to defendant and further mortgages totalling £2840. Mr. M. H. Hampson appeared for plaintiff and Mr. Sellar for defendant. The market value of the farm was given by plaintiff at £6402. On December 11,1022,' defendant, as mortgagee, entered into possession of the •S—farm, eventually selling it to his soil, Alfred Allan Rigger, for £3OOO. It was alleged that the sale was effected without notice to the plaintiff, and that the defendant did not exercise the said power bona-fide for the purpose of realising the security, nor diet he take reasonable precautions to secure a proper price fixed with due regard to the value of the property. Plaintiff had thereby suffered damage to the extent of £3402. Plaintiff’s claim was based on the contention that the sa 1 c Pom father to son was under cicumstan ces which showed reckless disregard to value on the part of defendant, who made no attempt to realise the proper value of the farm, and that plaintiff at no time authorised such sale. The defence was a denial of disregard. It was held that defendant was given leave and license to sell the farm in order to protect himself under the .mortgage, and that plaintiff “ walked off” the farm; that at no time did the value of the farm exceed £3000; that at the time of the sale from Rigger, sen., to Rigger, jun., plaintiff was -hopelessly insolvent and unable to carry on; that the sale had since been cancelled and the farm resold by public auction. EVIDENCE BY PLAINTIFF. Plaintiff explained in evidence that he was badly hit by the slump, and lie went to see Rigger to see if he could get an extension of time to pay his interest, which was overdue. Rigger sent him to see Messrs. Bennett and Jacobsen, his solicitors, when matters were talked over. He later received a letter from the solicitors informing him that Rigger intended, in view of the plaintiff not making satisfactory arrangements to meet his obligations, to exercise his powers of sale as mortgagee. The next thing he knew was when he saw Rigger and his son driving along the road towards his farm. On his return home that day he found the gates nailed up and the house barred against him. To plaintiff’s knowledge the other mortgagees were not notified by Rigger of the sale of the iand to his son at exactly the amount of Rigger’s mortgage. The land was worth more than double this value. Cross-examined, plaintiff admitted that when he went to see Rigger on November 27 of last year his position was hopeless. He told Rigger he could not carry on, that the stock, some of the furniture and some of the implements were sold. He did not say that he intended to abandon the farm.. Rigger sent (him along to see Mr. Bennett. He did not tell Bennett that there was nobody living on the fa up at the time. Asked fiow he accounted for becoming insolvent after working for 18 years on his farm, plaintiff said he had spent more on the place than had been wise. The slump then came on. He admitted that he received two notices of intention to resume possession, and one offered him the farm back if the principal and interest were paid.

Mr. Sellar: Are you now prepared to take the farm back by paying Rigger his principal and interest? Plaintiff said he was prepared to do this if he could finance it, but the fact of defendant being in possession had affected the valuation. Mr. Hampson said there would be an end of the action if defendant would hand back the property on payment of the principal and interest, and was prepared to make an allowance to the value which the farm had depreciated since it had been" in defendant’s possession. Mr. Sellar said the farm had been improved since defendant took it over. Plaintiff said he tried to pay off the principal and interest. He wrote to the Advances to Settlers for a loan, and also approached hfs father, who

already held a mortgage on the property of £950. He saw a notice recently that Rigger was putting the farm up for sale by public auction. He did not attempt to buy the farm in, because he thought it would be useless under the circumstances.

Mr. Sellar said that all the other mortgagees were notified of the second sale.

CONSIDERED IT HOPELESS. Plaintiff admitted that he was in arrears to all the mortgagees at the time of the first sale. He considered it hopeless to try and raise the necessary money while defendant was in possession.

Herbert Henry Dorr, land agent and valuer, said he inspected the property early this year, following.on an application to the State Advances Office for a loan. He considered the farm was in fair order. About 260 acres were in good grass, 25 acres under the plough; there were 140 acres of surface sown grass; 100 acres of fern and rubbish had been burned off; there were 180 acres of unprofitable land. There was approximately a total lof 480 acres of good, fair and indifferent land. The fencing was good, and he did not consider the rabbits a serious menace, and thought they had been kept down. There was an ample supply of water. The capital value he estimated at £5135, including a house valued at £550, and a cottage at £l6O. He set clown the improved value at £2300. The previous valuation on the roll was £4900. Witness valued the property for the State Advances Department. He thought the property capable of carrying 80 cows in addition to dry stock. He regarded the valuation as a conservative cne. He saw the property again recently and thought it had gone back in he way of noxious growths, and the rabbits appeared to have increased. Cross-examined, witness said nobody was on the farm when he visited -he place in January. He learned on his last visit that an objection hart been lodged against his valuation. The district was one in which there’ was a lot of Californian thistle. There

were about three acres of ragwort on the farm when he visited it last time He would be surprised to know that 2400 rabbits had been taken off the property since Rigger’s occupancy. Herbert Robinson, farmer, Putaruru, considered the property had gone back since Rigger took it over. Cross-examined, witness said that under abandonment, with nobody on it, the farm would have been in a worse condition than with Rigger on it. He considered the farm was worth £l2 an acre when Rigger took it over. Similar evidence was given by Arthur Thomas Morris, who said that Boyd had done more than his share to keep the rabbits down. He considered the value last December to be £ll 10s per acre. There had been no

sales in the district for the past three years. He could not account for it being put up for auction and bought in for £3OOO.

Samuel Edward Crawford, farmer, Walton, said he inspected the farm for a friend, who contemplated buying, and was of opinion that it was well worth £lO 5s per acre. The reason it was sold for £3OOO was probably because nobody could find the money to buy it. Witness said he saw a property sold the other day for £lO an acre which he honestly thought was worth £3O an acre. MOTION FOR A NONSUIT. Mr. Sellar moved for a nonsuit, on the grounds that there was no want of bona-fide in the sale between defendant and his son.

Leave to argue this point was granted.

Mr. Sellar pointed out defendant lent plaintiff £3OOO on his farm. Boyd in November, 1919, was behind in his interest and he saw' Rigger, who was a very old man, and told him that he could not carry on and intended to abandon his farm; that he had sold his stock, implements and furniture. Rigger sent plaintiff to see Mr. Bennett, his solicitor. Bennett told him to interview the other mortgagees and see if he could make any arrangement with them. On December 6 Bennett, havjng in mind the conversation of a few days before, wrote Boyd a letter pointing out that unless he met his obligations Rigger would have to take possession. To this Boyd replied that he would leave the matter to him (Mr. Bennett*) to act as he thought best. Rigger then told Bennett to write to his (Rigger’s) son, in Hawke’s Bay, asking him to take over the farm at the amount of the first mortgage, £3OOO. The son came down, and father and son went to Putaruru and took possession. The son remained on the place for a couple of days, and then wrote to his father that he would take the farm at £3OOO provided he paid no interest for 12 months, as the place was in a very bad state. The father replied that if the son would farm the place well and spend £SOO on improvements during the first 12 months he would allow him 12 months’ interest. Boyd sued Rigger at the last Court for £IOOO for wrongful entry, and the case went in favour of defendant. Plaintiff had now put the present action, which was brought Rigger to the additional expense of on different grounds. Following the first action Rigger decided to sell the farm through the registrar, and Boyd

! was notified of the sale. An offer was | also made to plaintiff a month ago, and before the present action was commenced, to take back the farm on payment of the amount of the mort--1 gage and interest. [ The defence contended, therefore, (1) that plaintiff authorised the sale; (2) that the sale to Allan Rigger was bona-fide; (3) that plaintiff was stopped by his conduct from objecting to the sale; (4) that the original sale to Allan Rigger had since been rescinded and the sale had now been conducted through the registrar; (5) that under the mortgage defendants were not liable for involuntary losses; (6) that this claim was res judicata; (7) that ""defendant was ready and willing now and had been all along to desist from the exercise of his powers on payment of principal and interest; (8) that plaintiff was hopelessly insolvent and was carrying on at a loss at the time of the first DEFENDANT’S EVIDENCE. M John Rigger, defendant, said ne was 80 years of age. Boyd called to see him in November last and said he intended walking off the farm, as he could not pay his interest. Defendant sent him to see Mr. Bennett. When Boyd could not make satisfactory arrangements he wrote to his son, and together they took possession of the farm. The deal between defendant and his son was a perfectly genuine one. After the last trial he offered plaintiff the farm back if the principal and interest were paid up. He (defendant) did not want the farm, nor did his son. Cross-examined, defendant said he did not consider the property was worth £3OOO when he lent the money to Boyd, but he stipulated that £7OO should be spent in building a house. In selling the land to his son, all he was concerned about was getting his money back. He did not want the farm. Allan Rigger, son of defendant, corroborated his father’s evidence with respect to the sale of the farm. He never wanted the farm, and did not want it now. Gordon James C. Bennett, solicitor, Auckland, gave evidence of the interview with Boyd, and of the subsequent transactions. Boyd said he had walked off the farm. There was absolutely no collusion between father and son over the sale of the farm. After the last trial witness wrote to Boyd offering him the farm back on payment of the principal and interest, and later notified him that the farm would be sold through the registrar, in order to give plaintiff a chance of again acquiring the farm. The other mortgagees were also notified of the sale. There were no bidders at the sale.

Andrew Wilson, surveyor, of Hamilton, said the property was not worth more than £3OOO. It was a fact that many farms were being bought in below their value at the present time, owing to the shortage of money. Harry Skeet, late Crown Lands Commissioner, did not consider that the farm in the market would bring more than £3OOO at a mortgagee’s sale. He assessed the total capital value at £3661. Edward H. Hammond, broker and valuer, 'Hamilton, agreed the evidence of Mr. Skeet in the main. The higher country on the farm was a big liability to hold. He thought the rabbits were well in check. He valued the farm at nearly £2OOO to a man able to finance and work it. He had no reason to suppose that any man would pay £3OOO cash for the property during last or this year. His Honour summed up strongly in favour of defendant. After a lengthy retirement the jury, by a majority of 10 to 2, decided that there was no wilful or reckless want of care in the sale of the land from Rigger senior to Rigger junior. Judgment was accordingly entered for defendant with costs.—Waikato Times.