SUPREME COURT.

Taranaki Daily News, 23 November 1916, Page 7

SUPREME COURT.

CLAIM UNDER INDEMNITY' JUDGE'S DECISION RESERVE H. Interesting features were pryst'iitctl in a civil claim heard at the New I'lyointuh sessions of the Bnp]i>im- Court" before His Honor, Mr. Justice Chapman on Tuesday, when Charles Daniel ('hunt, of New Plymouth (JJr. A. 11. Johnstone) claimed from Frank Rhodes, of Napier (Mr. Hallett) the sum of JC3OO l'7s (Id on an indemnity with respect to a mortgage. Tha circumstances leading to the claim were explained by Mr. Johnstone, who said in September. 1012. the plaintiff, Chant, entered into an agreement to sell the goodwill of a lease of Belle Vue bourdinghouse at Inglowood to the defendant, upon terms that defendant should take over the boardingliouse subject to a mortgage held by the late Mr C. W. Covctt for £;">7'>, and deliver to plaintiff a motor-cur and pay to him £;i() in cash. Before the settlement was reached, defendant requesiHl plaintiff to execute a transfer of the boardingliouse, subject, of course, to the mortgage, to his wife instead of to himself, fn pursuance of this request, Chant signed the transfer direct to Mrs. Rhodes. Default under the mortgage was made by Mrs. Rhodes and her successors in titfe, and the executors of the late Mr. Govett e.'.erciicd their power to sell. The property realised £450, and after giving credit for this amount, there sti'll remained owing to the late Mr. Covett's executors the sum of £2BO. Judgment was recovered for this amount against Chant in the Supreme Court, Chant still being liable under a personal covenant in the mortgage.

The present action was brought by Chant upon on indemnity which he alleged was raised in equity' in his favor by reason of the original agreement for sale and purchase. The- points raised by Mr. Hallett for the defence wore as follows: (!) That Rhodes entered into the agreement as agent for this wife; (2) that there was no covenant expressed or implied on the part of Rhodes to indemnify Chant; (3) that if there were such n covenant it was merged in the covenant implied against Mr. Rhodes under section «il of the'hand Transfer Act, 1MB; (•)) that if there were any covenant fur an indemnity ever existing, Chant had lest the hem-fit of it by suing Mrs. Rhodes for rent ;\-A rates in arrears, thus treating %o.r as the indemnifying party and not lior husband; (.">) that Chant, by acquiescing in the transfer to Mrs. Rhodes, had lost, any remedy he might have had against her husband. The plaintiff relied an the equitable doctrine that upon the sale of an equity of redemption, there arose an implied indemnity that the purchaser would pay all monies scoured by the mortgage which should fall due, and that this indemnity was in no way affected, whether—as in the present case—a transfer was made to a third party at the request ol the purchaser or not. * ; Decision was reserved. 1