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Decisions of the Superior Courts of New South Wales, 1788-1899

Payne v Terry [1836] NSWSupC 64

mortgage, foreclosure - warrant of attorney - Terry, Samuel - mortgage, equity of redemption

Supreme Court of New South Wales

Dowling A.C.J., and Burton and Kinchela JJ, 14 October 1836

Source: Sydney Gazette, 20 October 1836

Payne v. Terry. - The prayer of the bill in this cause was to the effect, that plaintiff might be let in to redeem a mortgage upon certain property by paying what principal and interest might appear to be due to the defendant, the latter deducing such rents and profits as might have been received which exceeded the merest of the mortgage.  The facts were these: - About the year 1823, Plaintiff was in partnership with Matthew Baron, when they purchased certain property known as the Wellington Brewery; the concern becoming embarrassed, they applied for and obtained 4000 Spanish dollars from the defendant (Mr. Samuel Terry), which he advanced upon a mortgage deed of the premises, which 10 years subject to redemption, by paying principal and interest.  On the following year a further sum of 4000 Spanish dollars were advanced, which, as they were to be calculated at 5s. each, made the sum of £2000 English money.  At that time as a further security they gave defendant a Warrant of Attorney for £2000, stipulating to pay it in Spanish dollars.  The interest not having been paid when it came due, defendant caused a writ of fieri facia to be issued on the 1st July, 1825.  The Sheriff levied on the premises, and put them up for sale; Terry attended the sale at plaintiff's request, and bought the premises for the benefit of plaintiff for £2350 current money.  Plaintiff further averred that the then object to be attained by Terry was that plaintiff should not be harassed by his other creditors through the embarrassment in which they then were, that embarrassment being then at its height.  Paton died intestate in August, 1835, considerably indebted to plaintiff.  It was then agreed between Payne and terry, that the former should continue to live on the premises, but to appear as tenant of the latter.  An agreement was then drawn up to sell the premises to Terry, and to pay a rent of £235 per annum, plaintiff to repurchase them in two years, and to have until 1828 to pay the purchase money; this bill of sale was only nominal, no actual bill sale having been made out.  Plaintiff further avered [sic] that defendant had since received more than would way [sic] all the interest, and that now plaintiff was willing to pay such balance of principle as might appear to be due.  Defendant in his answer contended, that having bought the premises at the Sheriff's sale, plaintiff had no equity of redemption in them.  He admitted that he lent the money as alleged, but denied that he was bidding, or buying the premises for plaintiff's benefit, or that any one through him was prevented from bidding at the sale; he bought solely on his own account; he admitted having allowed the plaintiff to rent the premises for two years, and that if plaintiff at the expiration of that time, paid the purchase money, with interest, he was to have the premises but having failed to do so, that agreement was void.

The Attorney General at considerable length contended - 1st  That the fieri facias could only have been issued under the warrant of attorney.  But it was never held for a moment, that a judgement obtained under such a warrant could attach mortgaged property.  The warrant of attorney in this case was given as a collateral security.  If the primary security, viz. the property mortgaged, did not fetch the amount claimed, then the collateral security was available for the balance - 2nd.  A mortgaged property could not be sold without the mortgagee first obtaining a foreclosure in a Court of Equity, and even that, the Court would not grant without first allowing the party at least six months to pay off the money, sometimes (it had been known) two years were allowed - 3rd  The sale being a sham sale, the property was in consequence disposed of considerably below its value, but Terry could not sell without having first filed a bill of fore-closure; and 4th. - Plaintiff still had an equity of redemption in the property, for an equity of redemption could not be taken in execution, and therefore under any circumstances it could not be  sold by the Sheriff.  If it could not be sold then the Sheriff could not give a conveyance.  He concluded by observing that plaintiff had for some years been at Van Diemen's Land and New Zealand, where, through industry, he had accumulated sufficient property to pay all his creditors, leaving him still enough to satisfy Terry's claim; and he would submit that plaintiff was still entitled to be considered as mortgagee, and as such the prayer of his bill ought to be granted.

Mr. S. Stephen following on the same side.

Mr. Foster then addressed the Court on the part of defendant.  He contended that with nice points of law they had nothing to do with, whether the equity of redemption could or could not be sold; plaintiff had averred that the premises had been put up for sale by the contrivance of himself, and defendant, for the purpose of withdrawing the property from the general creditors of Payne and Bacon - that act of itself was sufficient to shut him out from all equity.  The sale was put in motion by plaintiff himself, and the property fetched within a trifle of what was considered its full value.  All the allegations contained in plaintiffs affidavit were denied by defendant.  All that the latter admitted was, that when he bought the property he offered to let it to him for two years; it had been shewn that plaintiff had assigned in 1829, all property in which he then had any right, title, or interest to his creditors, therefore he must also have assigned the equity of redemption now sought; a person making a deed for the purpose of defrauding another, a Court of equity would not grant him relief should he by so doing get into a scrape, the Court would not help him out of it.  After some further remarks he submitted that plaintiff had no equity whatever, and that defendant was entitled to retain the purchase.

Mr. Windeyer, Jun. followed on the same side.

The Attorney-General in reply, contended that they had nothing whatever to do with the release from the other creditors; the case quoted on the other side might have been applicable in an argument for a nonsuit, but gentlemen seemed to forget that because the Court was usually occupied in hearing common law cases it was then sitting in equity; he would submit that it was impossible to get over the case reported first, Vesey jun., 541, which was decided entirely upon the invalidity of the sale, and that they were entitled to the equity of redemption; it was not for the defendant to suggest that other parties, viz. the trustees should be made parties to the bill, and thus create merely delay and additional expense.

Mr. Stephen said he would suggest that the bill be referred to the master, and it would then be seen whether the trustees were necessary to be included.

The Court consulted for a short time, said they would consider upon the case.[ 1]

 

Notes

[ 1] The judges announced on 29 October 1836 that they had reached a decision and were ready to deliver it when the parties were in court: Sydney Gazette, 1 November 1836; Australian, 4 November 1836.

See also Australian, 3 October 1837: ``Mr Sydney Stephen moved that the answer to the bill of one of the defendants, Mr Daniel Cooper, non-resident in the Colony, be received without oath or signature. - Granted.

Published by the Division of Law, Macquarie University