The Daily News. MONDAY, FEBRUARY 21. MORTGAGEES-SALES THROUGH THE REGISTRAR.

Taranaki Daily News, Volume LII, Issue 320, 21 February 1910, Page 4

The Daily News. MONDAY, FEBRUARY 21. MORTGAGEES-SALES THROUGH THE REGISTRAR.

The sale by mortgagees of property j under the supervision of the Registrar of the Supreme Court which for many years past lias been adopted in the dominion, in lieu of the costly and dilatory course of proceeding called foreclosure still obtaining in England, has proved of much advantage. Its object is' to enable a mortgagee to acquire absolutely the estate of a defaulting mortgagor in the property after it has been submitted to competition by means of a public auction. When the system of sales through the Registrar was first I initiated by the Legislature it often resulted in disastrous cons'equences to the i mortgagor. The mortgagee might attend the auction sale and for a bid of an amount, trifling in regard to the real value, beuome the purchaser of the property. The mortgagee was only bound to give credit for the amount however small he might acquire the property for at the auction, leaving the balance a debt still due by the mortgagor for which the mortgagor was still liable, and for which the mortgagor remained still liable in any action the mortgagee might choose to take against the mortgagor for its' recovery, and if the mortgagor became bankrupt the right of the mortgagee to prove for the balance in competition with the other creditors was unimpaired. The theory in its inception was a good one as regards the mortgagee, but in practice it often worked disastrously to the mortgagor, as bidders never, or scarcely ever, went to a mortgagee's sale because they were bidding, as one learned judge put it, " against an unseen foe." To alleviate the hardships of a mortgagor under the circumstances alluded to, the Legislature in 1905 enacted that in sales by a mortgagee through the Registrar tne mortgagee must state in his application the value at which he estimates the land to be sold, and the Statute gives the mortgagor liberty before the sale to redeem at the mortgagee's valuation or the amount due and owing under the mortgage together with the expenses incurred by the mortgagee. Should the mortgagor buy at the auction then the consideration in the transfer of the property to liim is to be not less than the value of the land as estimated by the mortgagee whatever may be the figure at which it is knocked down to the mortgagee at the sale. The law as enacted in the statute seems clear enough i says the Mercantile Gazette, but the question came up recently before the Supreme Court as to whether the statute compelled the mortgagee to give credit to the mortgagor for the amount at which the mortgagee had estimated the value of his security, and it was contended that the provision must be read as designed only for revenue purposes. The full bench of the Supreme [Court unanimously held that where mortgaged property sold through the Registrar was bought by the mortgagee the statement of the amount of the mortgagee's estimate of the value of the land in the- conveyance from the Registrar to the mortgagee releases and discharges the mortgagor from payment of the same, so that the mortgagee was bound to allow the mortgagor in account the amount of such estimate, and that an intending purchaser was entitled to see tiie mortgagee's application and his estimate of the value of the land, and that the advertisement of the sale ought expressly to state that the mortgagee's application and his estimate of the value of the laud could be seen at the Registrar's office prior to and at the time of the sale. The amendment of the law and the construction placed on it by the Court goes far to alleviate the hardships of a mortgagor under the previous system, as it will have the effect of making a mortgagee cautious' in regard to the value ho estimates the value of the property at. We may add that where the estimate of value is less than the amount owing and the mortgagee becomes the purchaser at the auction, which he can only do at a price not less than that estimated, the mortgagor will of coarse be still liable for the balance (if any) owing on the mortgage. !