SUPREME COURT.

Dominion, Volume 2, Issue 519, 28 May 1909, Page 11

SUPREME COURT.

>■ BACKWASH OF THE ELLIOTT CASE. TREADGOLD VERSUS THE ASSIGNEE. PLAINTIFF WINS. Before Mr. Justico Coopor yesterday, tho 7 ;;■ 'hearing of the,notion bfitwoen Georgo Tread- :> • gold and the' Official Assignee r,-as concluded. This' was an action as to tho validity of a ■ •'?'•'■ mortgage. Plaintiff (for whom Mr. .Skerrett, V. K,C., with' him j(r. Holdsworth,' appeared). alleged that' Albert' Chrenco Elliott, prior; to his'bankfuptey, had given him sccunty over ■•'■'•■' a property in Murphy Street: for a debt of £400/ Ho prayed that defendant .might be ordered to specifically, perform the agfeomoiit V- by oxecuting the transfer.- Defendant (who .\ . . was rcprfcsehtcd by Mr. P. Young) ■ alleged cftfe. that .the .transaction-constituted. a fmdutent - preference over the other creditors in Elliott s ' estate. Mr. J. J. M'Grath, who became tho ■• ■ '.purchaser of the property at auction, was represented by Mr. h'tavo. " . Decision ot the Court. His Honour, in delivering judgment,, said , that, atthe'elosfc of a nu'mbar ofti'ansttot'iong, Elliott was' found to bo indebted to Tread- ; cold in the sum.of £670;, Elliott gave lEead-

cold a-cheque, wjhioh was, liowowr, dis- • honoured. ' Wlien: Treadgold saw Llliott on ' the matter, Elliott told him th4t.tbo chequo 'would bo honoured as soon M no got a" : - a irregularity in a > cheque for .£2OOO irom a . New Plymouth firm remedied. Upon ® e ' J ohequo for £670 again being dishonoured, j ■ Treadgold went to Elliott, whoi gave him.a < 'ohoGtte'in part' of ' tite debt* ,LUlotu j ' then;>had an• ottabk •of 'illness. : Vp to. that ( there: was: no conflict/of evidence. It i was agreed that the amount due by Elliott to t . Treadgold wa3 £400. On behalf of Treadgold, .. ,■ '■.Mr;' LeTToy-.bbtamedi.an ..fitder.•from. Elliott, ( • to Mr. N'Grath, to enable him to obtain in- ( formation with" regard to the property .in j question. What ho .hid vto .decide : was, .< ■ •••'. whither'' the pressure brought .t0... .bear; /on • .connection sirith: .Treadgold s :debt, . v had /in .operating s _mind . ' causing him to givo . a Security to Treadgolu. Tho transaction would not be taken .out .of , ' the scopo: of. Section 79 of the Bankruptcy , ' : Act if the-dominant/cause of the/agreement j ' v:,was to give'. Treadgold a preference. Tlio ] -/■. : inducing cause-was-the demand mado by Mil. i Levvoy, on behalf of Trofidgold, fort.ho pay-- i . mentof tho debt, and a statement made by i bim that, if tho demand was not immediately complied with," a writ would be issued. . Had the threat of tho isiue of a writ an Operating : . ' effect^'upon l Elliott's mind? . Tho Official ' Assigneo had contended that tho transaction . was; a fraudulent preference.-,; After carefully :considering the ovidence, tho Court had come to/,theconclusion that/' ' were mixed - motives in ,Elliott's mind. Elliott had corn-. mitted gross frauds,'and was in danger of his ; crimesbeing discovered. If it became known x \ that; a- writ ■ hfjd'been, issued against Elliott . /'/- ' . it .would havo brought an avalancho of disaster uponbis head. ; Elliott was desirous .'of •; postponing as'long as possible whit he called ':■ ,v" the. inevitable end." The Court, held that . . tho threatened issue of tho writ' was ..bona ; , fide. It found that Elliott wasnofc a verso to helping -Treadgold, if he could, but that he would not. have offered tho security without the pressmre of tho threat with regard to the i~.\: . writ. Thbre'wa's'authority to show .that .there ' . was sufficient pressure to take tho transaction f. V. ont 'bf .tbeVrogibn' of :. fraudulent preference. ■It was,,ho thought) unnecessary to express . ■ an opinion on the collateral questions raised • V in the case. • - • ■■■■;• > ;'An Unwlso Proceeding. 1 ' : His Hollow then referred-to the fact that tho • conditions; of..'sale: had- been prepared : at tho instance of the Official Assignee by 1 Mr. M'Grath, who was a mortgagee, aud ultimately becamo the purchaser of the property. " Seeing.; that, Mr. .: M'Grath "was 1 - in- . ./ terested in ' tho ' property, he ■' ought not to havo acted -in. thematter.;. Then,, again, '; : owing to the lack-of funds' in "the' estate,' the Official-Assignee was-in nn unfortunate . -position, .but' he Ought; riotY'to have 'allowed his: name to bo used'to attack; the trans- - • action .by Btating that he had been advised that it was a fraudulent preference. Such a statement ought not, properly, to have been made,' as it /put .him to . the;.necessity of : : ; being. indemnified;:by the, , .'piirohasei l :.. '-. any.proceedings..:wllich ;might ;be': ; :iri ! : respect of the agreement. It Would tend to C affect. thC-ialo,; :as intending , purchasers would' know-that .the bidder , was : . ' liable.to;b'fi dra^n','ifit6;a*law : -hiit in 'respect' of which,tho ■ Official AssignCo'would be immune/ His Honour stated,>furthir> -that . the Official .Assignee found himself in a very difficult positioh, but lie did tint impute any blame :to him. If he, had instituted pfoceedings.hd' wAuld h'Avo a. personal liability :-fdr; .'costs..'.The j best course for him - would..have : been , to' place the. whole iniit-' SerJ beforeHhe creditors.s ;;TJnder. the; ; spCcial sircunistanccs, ho : could not' see any .real ' .. Impropriety of conduct' otv his part, Nof did. ;■ be i impute .'.any .suggestion, .'of - professional misconduct to Mf. M'Qfftth, but it was,; ho , • thought, ,an unwise proceeding to agreo .to 'draw up tho conditions of sale. Judgment 1 for Plaintiff. .• Ill; Conclusion, his Honour said: that the only ordor -that, lie . could; make'was r tbat Treadgold was entitled -to'a chafge ~h» -the ; land to tho extent of £400, but that charge .. would bfi :sub]GCt the ; thre:e. prior -nibrtEages. ; It was, .ho added, extremely pro- . bable that*,ITreadgold1Treadgold fould not get anything j. : but his costs out of tho matter. Judgment 1 Would-be. 'given for.-, plaintiff, ;with costs"0111 k;.'.- the middle scale,-but ,-for one day only, and y an allowance for second cCunsol. : SALE OF A PROPEBTY. .WERE THE,,PURCHASERS? .. f ' An. action relating .to the -sale of a ' pro. perty at Paekukariki was theu commenced, . the:plaintiffs'being R'-. B.;, Jackson, .settler,; Nelson; C. 1. i'ell,' solicitor, Nelson; . Bout, 'jun.' auctioneer, WelSon; and A. T. 7 Bate,; sharebrokerj: AYeilingtoii, and tho de- .: ieiidants being 'W. ;B; Hudson, civil sorvant; . ,W. H. Fiold, solicitor,' o; ; .'Antico, settler; , nnd G. Angeliui, settler, all of Wellington. • • . . Mr. Von Haast/'appeated 611 behalf of plaintiffs; Mr. Skerrett, Ji.O, (With him Mr. 'i'oo- . good), for defendants Hudson and Field; Mr. ; -Levi. for defendant Antico, and Mr. Wilford for defendant Angeliui. ~ .. . The. statement of claim 'set out that, 011 :,i .. .'April 29, 1908, defendants agreed to purcliase from plainti&B a property at PacKakariki about 30 acres at tho rate of

■ £100:' per. aero. ,';Of /tho.purchMo ; inoiiey : , i : ■ : (£3042),, defendants, : it was alleged,'paid to .1 ! . : / ; 'plaintiffs £4(!0, ind.agreed to pay .the balance ; > . together With interest within three/years. • la,the altornatiyoV.plaintiffs claimed that the. '• agreement was executed by them, and assented to verbally by till tlio defendants; In ' July defendants sold portions of tho pro- : perty, which they had had 'subdivided. Of tho interest: duo to January, 1909, -viz., £165 2s. 6d., defendant Hudson had paid £24 15a. 6d. Defendants other than £tudson ' and ■Field had denied their'liability under tlio . agreement.: . Plaintiffs prayed that the Collrt would; declare that defendants were jointly . and litbl» under'the agreement, and . - that pltifltofj entitled to .have the : ncrtwiint ipecifv.«lly ptrforhs<«d by defendRirts jointly'odd ieVirally; , that .th«'Court •••' would order :th«. fofendanta to -«m'Ut« tlio agreement. in.imtini/,: and that judninant .be . given for, plaintiffg, lor £140 7s. Id.' interest now duo. •. ■ '; • • Defendant Hndson replied that .he nuver a3- ; Dented, verbally or otherwise, to tlio alleged agreemont. . As sTdsfene® to th« action,' ho Bet up the'Stttute'of Fraudil. The ajjreemeJit which he entered into With: plaintiffs ffas to purchase one-fourtii undivided share in tho property. Ho was willing to .carry ont, that contract, but Tr*s .not ■liable .with tho other defendants to. perform the,agreement.mentioned in the sUteiherit of claim. If he wero liable, then Carlo Antlco was tho purchaser of one-half share of the property, and was liable a& between tho defendants, to one-half. • of tho, purchase money; ahd 'liabilities- under any agreement which might bo established by . plaintiffs. A similar defence Was filed by defondant Field, who, however, set forth that the agreement which. lie fentered .into was verbally made.' Dofendarti'Antieo set forth ; >■ '. any agreement wote made between

the parties, there was insufficient memoranda to satisfy,the Statute of Frauds.- Ho domed that ho ever entered; into any such agree■mont in writing, or verbally assented to it. If any of tho'defebdants, tither than himself, had entered into possession of the property they had not done eo on; his behalf, or by bis authority. , Ho was, :ho.said, an .Italian with only an iniporfeet acquaintance with tho Jinglish language; What transpired, lio said, W that in Juno, 1907, Mr. R. T. Robertson aSked him, to.become ono of the purchasers of fl, picco of land. 'Robertson told him that £200 was required in a hurry, and that no further payment would bo required, as bo'wftnld' rc-sell to a syndicate, which would .' realise a handsome profit. . It was ■.ailefo'l that Robertson had falsely repi csented to him that • the owner of the property was- leaving the .colony, ana was anxious to' realise quickly., .Owing to t.lio' fact that ■ Robertson was the Oonsul for. Italy, ho (Antico). was induced to place special confidence in frain from taking ■independent advice. Of the £200. which lie handed to Robertson, onehalf was 'his' own, and tho balance the property of. defendant .Angchni. It was also alleged by Antico that, / when ho asked ' Robertson if. there was any , agreement to ■ sfen he'Wtts.told that one.was on account of the intended imm.edi.ito re-aale ■ of the-property. A defence on similar, lines was filed bv'defendant Angelim. ■■ Evldenco'had not concluded when the Court adjourned ■ until jthis DiorninS*