TIMBER-RIGHTS SALE

Sun (Auckland), Volume IV, Issue 948, 15 April 1930, Page 11

TIMBER-RIGHTS SALE

EGMONT BOX COMPANY CLAIMS INTEREST DEBENTURE PAYMENTS The sale of timber rights cn Whangaipek© block, near Kakahi, on May 14, 1926, was the subject of a claim heard in the Supreme Court today, for £7ll interest on debentures under an indemnity. The action was brought by the Egmont Box Company, sawmillers, of Eltham, against Bertram Philipps, of Salisbury, England. Mr. Johnstone and Mr. Fleming appeared for plaintiff and M: . Finlay for the defendant. According to the claim, Philipps entered into an agreement with the plaintiff firm to purchase the timber rights on this tract, and Philipps undertook to pay all interest on £20,000 worth of debentures, previously issued by the Tongariro Timber Company against the timber-rights, and to indemnify the Egmont Box Company until the debentures were paid off. Philipps made a default ija payment of the halfyearly interest, “with the result that the Egmont Box Company had been compelled to pay £7OO 17s 6d interest to the debenture holders under its guarantee.

The defence was that Philipps was obliged to pay interest only on the balance of the debentures still unpaid, and further that defendant was not liable to pay interest now that the debentures had matured. Mr. Johnstone explained that the debentures totalling £26,000 had been issued by the Tongariro Timber Company, which, in 1908, obtained timber rights over a large area between the upper Wanganui and Lake Taupo including the block involved in this case. The Egmont Box Company purchased the property from the Tongariro Company in 1919 subject to the debentures. . By the sale of the rights by. the Egmont Box Company to Philipps it was intended the company should get out and that defendant should take over its liability. Mr. Finlay contended that both the Tongariro Timber Company and the Egmont Box Company were under an unqualified legal obligation to pay off the debentures by July, 1928. He submitted the indemnity given by defendant was limited in duration, and was restricted to persons of a particular class. Philipps had never undertaken to discharge the principal sum of the debentures which was the liability of the Tongariro Company, collaterally vith the Egmont Company.