Div 10Taking Accounts of Property mortgaged, and of the Sale thereof.

Division 10.—Taking Accounts of Property mortgaged, and of the Sale thereof.

Inquiry into mortgage, &c.

Cf. No. 37 1924 s. 106.

77.—(1.) Upon application by motion by any person claiming to be a mortgagee of any part of the bankrupt’s real or leasehold estate, and whether the mortgage is by deed or otherwise, and whether the mortgage is of a legal or equitable nature, the Court shall proceed to inquire whether the person is the mortgagee, and for what consideration and under what circumstances.

(2.) If it is found that the person so applying is the mortgagee, and if no sufficient objection appears to the title of the person to the sum claimed by him under the mortgage, the Court shall direct such accounts and inquiries to be taken as are necessary for ascertaining the principal, interest, and costs due upon the mortgage and of the rents and profits, or dividends, interest, or other proceeds received by the person, or by any other person by his order or for his use in case he has been in possession of the property over which the mortgage extends, or any part thereof, or which he might have received but for his own wilful default.

(3.) The Court, if satisfied that there ought to be a sale, shall direct notice to be given in such newspapers as the Court thinks fit, when and where, and by whom and in what way the property, or the interest therein so mortgaged, is to be sold, and that the sale be made accordingly, and that the trustee (unless it be otherwise ordered) shall have the conduct of the sale.

(4.) At any such sale the mortgagee may bid and purchase.

Conveyance.

78.—(1.) All proper parties shall join in the conveyance to the purchaser, as the Court directs.

(2.) If any person, when directed by the Court in pursuance of the last preceding sub-rule, refuses or fails to join in the conveyance to the purchaser, the Court may direct the trustee or an officer to execute such instruments necessary to effect the conveyance as the person refuses or fails to execute.

Proceeds of sale.

79.—(1.) The moneys to arise from the sale shall be applied in the first place in payment of the costs, charges, and expenses of the trustee, of and occasioned by the application to the Court, and of the sale and attendance thereat, and in the next place in payment and satisfaction, so far as the moneys extend, of what shall be found due to the mortgagee, for principal, interest, and costs, and the surplus of the moneys (if any) shall then be paid to the trustee.

(2.) In case the moneys to arise from the sale are insufficient to pay and satisfy what are found due to the mortgagee, the mortgagee may prove as a creditor for the deficiency, and receive dividends thereon rateably with the other creditors, but so as not to disturb any dividend then already declared.