FORECLOSURE

Rotorua Morning Post, Volume 2, Issue 578, 8 July 1933, Page 5

FORECLOSURE

(Press Assn. —

bank ano trusteb JUDGE EXPRESSES REGRET ORDER A FIRST-CLASS FARMER

By Telegraph — Copyright).

Wellington, Friday. "I regret very mucli haying . to mahe this order as the legislation was passed f pr tfie pro.teetipn of just such a man a§ th'g. mprtgagpr who, as a hreeder pf higfi class stock, has been an asset tp the Ppminion in the past. Unfortunatply Parliament has not thqpght fit to. giye the couft power to do complete justice between mortgagees of land and. mprtgagees of sto.ck and t.fierefpre I must make an order" said Mr. Justice Ostler in the co.urse of a reseryed judgment in a Supreme Court action in which the Public Trustee, as first mortgagee on a rural property, sued for leave to exefcise powers pf sale His Honour said that the defendapt was a first-class' farmer and a noted hreeder of stud stock. His farm was suhject to a first mortgage of £9,240 through the Public Trust while the Bank of New Zealand had a mprtgage over the stock secured hy a cpllateral guaraniee on the part of the mortgagor's fath'er. A sum of £244 was due to the Public Trustee hy Decemher 31, 1932, hut had not been paid. The mortgagor was not unwilling to pay it hut the Bank of New Zealand, hy virtue of its powers under the stock ag'reement, controlled the payment of all moneys and would not allow the sum to he paid out of the proceeds of the farm. The bank had taken over every penny over and above hare living expenses allowed the mortgagor. On Fehruary 25, 1933, it had reduced the amount of the mortgage hy £3,453 hut £900 of this reduced amount was obtained hy a guarantee. The mortgagor had tried to comply with the terms of the order, but he was very much in the hands of the bank and had heen unable to. do so. The Public Trustee had heen willing to enter into a pooling arrangement so that all the profits from the farm could be divided between himself and the hank in proportion to the amount of their mortgages. The hank was only willing to agree to this on condition that the Trustee agrepd to share any loss which might be made in the working of the farm. The Trustee regarded this conduct as unreasonahle. The bank was employing its right at the expense of the first mortgagee. "That heing the position," added His Honour, "I can see nothing for it hut to give the Trustee the powers asked for."