PAYMENTS UNDER MORTGAGE

Taranaki Daily News, 11 December 1922, Page 7

PAYMENTS UNDER MORTGAGE

LEGAL POINTS. The question of the right of a mortgagee, who has transferred his lease of a property to a third person, to obtain judgment against that party before he has paid his mortgagor, was put before His Honor Mh Justice Chapman at the Supreme Court at New Plymouth on Saturday. TW were William Kirby Wallace Jand others (for whom Mr. *T. Houston appeared,) who sued Thomas A. Rowe (Mr. A. A. Bennett-, and the latter sued Freeman George Wilcocka (Mr. W. L. Matthews) in a second action as lessee under the mortgage and. indemnity. The amounts claimed were £2938 10s 7d in the first action and £2958 16« 7cl in the second, but, both were reduced, by agreement, by £ll 7s. Mr. Houston said the claim rose out of a covenant to pay certain moneys in a. mortgage. He stated that the plaintiffs had a clear covenant with Rowe, and he said that Mr. Bennett proposed on behalf of Rowe to consent to judgment as against him, and counsel was not concerned in the third party action. Mr. Bennett formally consented and judgment was entered accordingly. In regard to the second action, in which Rowe sued Wileocks, who was the lessee under the mortgage, Mr. Bennett admitted his client had not paid any of the moneys, but submitted that the defendant in this action, as the transferee of the lease, had made default in payment of the moneys and therefore had breached the covenant. In consequence of the default and breach the judgment just given had been entered against the present plaintiff, who sought redress against the transferee, under the covenant implied by virtue of the Land Transfer Act of 14)15. His Honoui*: You are entitled to that redress unless something can be shown to the contrary. Continuing. Mr. Bennett said the case was not one of principal and surety, but one of covenant, and he cited authorities in support of his submissions.

Mr. Matthews submitted that the Court had no jurisdiction to give judgment until the moneys Riled for by plaintiff had actually been paid to the original creditor. He pointer! out that the defendant was interested in the application of the moneys and submitted that plaintiff could not give a discharge as against the principal creditor, and should the moneys be applied to any other purpose the defendant might be called upon to pay twice over. He cited some English decisions which he submitted supported his argument. His Honour intimated he would consider the authorities mentioned and make known his decision in a few days.