DOUGLAS GEORGE WRIGHT Vs. NEW ZEALAND FARMERS CO-OPERATIVE ASSOCIATION OF CANTERBURY LTD

JUDGEMENT

(1.) This appeal was brought by the plaintiffs in an action against the New Zealand Farmers Co-operative Association of Canterbury, Limited (hereinafter referred to as the Association) from a judgment of the Court of Appeal of New Zealand which affirmed the judgment of the trial Judge, by which judgment was entered for the defendants in the action, and judgment was entered for the defendants on a counter-claim by them for, (amongst other relief) a sum of ?13,384 13s 9d. Two questions only were argued before their Lordships' Board; they are unconnected, and may be dealt with separately. The relevant facts upon which the first question is founded may first be stated. In July 1928, the plaintiff Wright owned a farm called "Cattle Peaks," which was subject to a first mortgage for ?9425. By memorandum of mortgage dated 27 July 1928, the plaintiff Wright mortgaged "Cattle Peaks" to the Association, subject to the beforementioned mortgage. By virtue of the Land Transfer Act, 1915, the mortgage of 27 July 1928 conferred upon the Association a power of sale in the following terms :

(2.) The mortgagee may sell the mortgaged property, or any part thereof, either altogether or in lots, by public auction or by private contract, or partly by the one and partly by the other of such modes of sale, and subject to such conditions as to title or evidence of title, time or mode of payment of purchase-money or otherwise as the mortgagee thinks fit, with power to the mortgagee to buy in the mortgaged property or any part thereof at any sale by auction or to rescind any contract for the sale thereof, and to resell the same without being answerable for any loss or diminution in price, and with power to execute assurances, give effectual receipts for the purchase-money, and do all such other acts and things for completing the sale as he may think proper: And also that the mortgagee may exercise such other incidental powers in that behalf as are conferred upon mortgagees by the Land Transfer Act, 1915 : And, lastly, that the mortgagee will apply the moneys arising from any such sale as aforesaid, in the first place in payment of the costs and expenses incidental to the sale or otherwise incurred in respect of the mortgage, and in the second place in satisfaction of the principal interest and other moneys for the time being owing under the mortgage, and in the third place in payment of the moneys owing under subsequent registered mortgages (if any) in the order of their priority ; and will pay the surplus (if any) to the mortgagor.

(3.) By an agreement dated 8 May 1929, the power of sale being then exercisable, the Association as mortgagee agreed to sell "Cattle Peaks" to one Little for the sum of ?15,317 5s Od. The purchase money was to be paid as to ?2000 on the signing of the agreement; this was duly paid. The sum of ?9425 was to be paid by Little assuming liability for the first mortgage of that amount, and the balance of ?3892 5s Od was to be paid on 23 March 1934. Interest on the unpaid purchase money was payable by Little at the rate of 9 per cent. per annum. Little was given possession of the land, but no transfer of the property to him was ever effected. The agreement however provided that if Little made default, the Association might re-enter on the land, and (whether it had re-entered or not) resell the land. Little failed to carry out the contract, and the Association rescinded the agreement with Little and sold "Cattle Peaks" to another purchaser, but for a price considerably lower than that payable under the first agreement. The second agreement has been carried to completion and the land has been vested in the second purchaser. The second purchaser was in fact Little's wife, but nothing turns on this. Neither the propriety nor the validity of that sale is questioned. The Association has credited the plaintiff Wright with all moneys received from Little under the agreement of 8 May 1929, and with the full price for which the property was sold under the second agreement. The plaintiff Wright however is not satisfied; he claims that he is not concerned with the second sale, but that he is entitled to be credited with the whole of the price for which the property was contracted to be sold under the first agreement. The first question arising on this appeal is whether that claim is well-founded or not.