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

Cummings v. MacKenzie (No. 2) [1847] NSWSupC 17

equity, promissory notes

Supreme Court of New South Wales

Therry J., September 1847

Source: Sydney Morning Herald, 7 September 1847, in Supreme Court Collection, Vol. 2, p. 10 [1]



His Honor Mr. Justice THERRY pronounced the following judgment on the exceptions filed in this suit on Thursday, the 2nd instant:-

The exceptions of the plaintiff in this suit, though three in number, are founded on one and the same objection. That objection is that by the decree, the Master was directed to take an account of all moneys received by the defendant William H. Mackenzie since the 14th day of April, 1843, and that the several sums of £100, £150, and £187 18s. 4d, ought to have not been certified by them to have been so received. Literally, and in strictness, these sums may be said not to have been received until some time subsequent to the 14th of April, 1843, because the promissory notes given for their amounts previous to the 14th of April, did not fall due until after the latter date. In fact, and in truth, however, these notes were given previous to the 14th of April, 1843, they were considered a payment at the time they were so given, and were credited in reduction of Mackenzie's claim at the time they were delivered. It may be said no doubt, and it was contended, that at the time the promissory notes were given they were to be regarded as a money payment when the note became due, and not until then , and inasmuch as these notes did not fall due until after the 14th of April, 1843, therefore they should be available for the purpose of reducing the sum of £2930 --- the sum, on the presumption of which being due --- the account was directed to be taken. Apart from the presumption, that if a man gave securities for a certain portion of a sum on one day, and on a day subsequent admitted a balance to be due against him --- the amount of the securities given on the previous day, would naturally be deducted from the admitted balance against him on the day subsequent; there are ample materials in the present suit to show that when the balance of £2930 was struck, it was struck with the understanding that by reason of credit being given for the payment of the sums represented by the several promissory notes, - the amount on which the account was directed to be taken was reduced to £2930. This does not rest on a mere conjecture, for the sums paid on account of Holland's note show that it is only by regarding the amount of these notes to be credited in reduction of Mackenzie's claim, that the sum of £500 recited to be due on the bill of exchange in the mortgage deed, can be accounted for or satisfactorily arrived at. Were not these promissory notes regarded as payment at the time they were handed over to Mackenzie, the debt on the bill, would have (originally £1338) been £918 16s. 2d., which the recital on the deed clearly indicates was not due upon it. As these payments were, therefore, bona fide payments made previous to the 14th of April, 1843, they were properly excluded from an account directed to be taken of moneys received by Mackenzie after that date, and the Master's report is right in not charging Mackenzie with them; and, therefore, the plaintiff's exceptions must be disallowed.

I now come to the defendant's exceptions, the first of which complains of the Master having charged the defendant with £537 17s. 8d., which he might have received but for his wilful default. With this sum I think the defendant is properly chargeable. Holland, the drawer of the note, though in embarrassed circumstances, has not been insolvent, and he has been since in a condition to pay the amount, and it was Mackenzie's duty to put the note in suit, and recover it from him. But instead of doing so, he exchanges it for securities of Brown, Gosling, and Co., which were partially paid, and this he does on his own risk and responsibility, and without Cummings's privity or consent; and to this moment he is the real or supposed holder of it. Nor can I consider that the indenture of the 15th of April, 1843, contradicts or disproves such a sum being chargeable on the defendant, for although £500 is the sum mentioned in the deed as being due by Cummings, who endorsed the bill over to Mackenzie, yet a different sum may be due upon it by the acceptor or Holland the drawer.

This exception must, therefore, be disallowed.

With respect to the three other exceptions, however, complaining that under the head of "Just Allowances" the defendant was not admitted to give evidence of the expenses incurred by them as mortgagee. Now as both by the Bill and answer, it appears throughout that the relation of the parties was that of mortgagor and mortgagee, under the direction of just allowances, it was competent to the Master not to hold the mortgagee down to the taxation in law, but in the account to allow him all he laid out or expended. To this allowance, indeed, the mortgagee has a right; for if "a mortgagor, by is own act, should occasion an additional expense to the mortgagee in the progress of a suit, such costs ought to be sustained by the estate."

As I am not prepared, however, to say that the evidence though admitted would establish the defendant's right to an allowance of the precise sums he claims, and alleges the evidence, if taken, would establish in his favour, I cannot allow these exceptions in the form in which they now stand, and I must send the Report back to the Master with a declaration that the decree is a decree to take an account of what is due on the mortgage, and that the cost of the ejectment and proceedings mentioned in the 2nd and 3rd exceptions ought to be allowed to the mortgagee in taking such account, and any sums which have been paid by him in that character, and I refer back the Report to the Master to revise it, having reference to this declaration. As to costs, the plaintiff, having failed in his exceptions, must pay the costs of his exceptions; and as to the defendant's costs, as each party has partially succeeded and partially failed --- each party must defray his own.


[1] See Cummings v. MacKenzie, 1848; and see Cummings v. MacKenzie (No. 1), 1847; MacKenzie v. Cummings, 1847.

Published by the Division of Law, Macquarie University