BANK AND CLIENT.

Dominion, Volume 4, Issue 960, 29 October 1910, Page 7

BANK AND CLIENT.

' THE MANGATOKO ESTATE. , Sir,—l .do not for a moment attach tho slightest blame to' tho manager of tho Bank of Now Zealand for endeavouring to Vindicate the action of the bank in its dealings with Captain Hamilton. As he tells us in his last letter he has presented tho facts "from tho hank's standpoint." _ 1, on the other hand, m company with tho members of the Parliamentary Committeo to • whom Captain Hamilton's petition -was referred, have presented them from tho standpoint of an impartial investigator. Mr. Mills's reply consists of a diary of events , relating' to the transactions oi Captain Hamilton with tho bank,' extracted from the .summary of tho Chief Justice, Sir Robert. Stout, and'quotations from the .deliverances of Justices Edwards and Denniston ini-the Court of-Appeal. I'have avoided any criticism whatever of the finding of their Honours. What I have endeavoured to prove is that Mr. Mills's reference to "fair and proper consideration" does hot apply to the treatment of the former owner of Mangatoro. Mr. Mills refers to the imperative demand made on Captain Hamilton on the afternoon of June 17, 1884,' to pay up by 3 p.m. next day as "a legal document."" I have not disputed its legality. Shylock depended on/his, legal rights when lie demanded, his pound of flesh. What I contend is that it cannot be construed an illustration of "fair and proper consideration." . I'or. a period of nearly fivo years', up to the-time when : Mangatoro was ottered at auction and, bought in by the bank, Captain Hamilton was under pressure—th 6 bank demanding, its money whilo ho was making vain efforts to releaso himself from his. liabilities. What a shriking up ho had! . Eirst, the.formal demand, for. .£45,000, then fourmonths' grace,; then the threat to sell because his oreditora : are pressing, then sis months' grace, next appointed manager on sufferance, desperate efforts of Hamilton's solicitor, attempt to finance by floating a company, - finally, a registrar s sale;.' Where • was the "consideration"? When Captain Hamilton's creditors became threatening how was this consideration extended? By informing him that the bank-might have to'sell him of!'. Is a live bait wriggling ,on a hook, or Van insect pinned through the. back against a wall tD, be pitied or envied? Can such exquisite torture be called "fair and proper consideration"?

The valuo of .the contention that the bank had power under its Deed of Settlement, to buy in the property as mortgagee is discounted by the fact that the bank found it necessary, to pass a private Act'giving it power'to purchase and hold freehold and leasehold land if sold undSr ■ any . power of. sale contained in any. mortgage. .'lf .it possessed this power why-was it included in the Act of 1S89? "Mr..Mills says:—,"To.contend that-the passage of tho Statute by the Legislature Captain Hamilton a claim against the .State, for redress, seems absurd." In view' of the doubtful-..legality of 1 the bank s_aotion and the statement of the Chiet Justice on the subject, the absurdis not very,apparent.. That Captain .Hamilton has' suffered ti wrong is more than'probable, but it'would., be unfair, to impute deliberate wrongdoing / to .'the whole; of . the members: of the; Legislature 'ml .the -measure in question. : /The.. Bill was a .-privatp.-.one, • and -litfUestion how many-.members./', tho Legislature had. the/ remotest /knowledge ?<ri it_ was intended. to validate. Captain Hamilton suffered no. injusand a good portion of, Hawke's Bay; ,h<)ld ; a 1 very' pronounced opinion; about the treatment' of Captain Hamilton, and it .differs from'that of tho, mniiager of tho Bank of New Zealand. "It was. open," says Sfr. Mills, "to. Captain, Hamilton and his friends 'i to have.'entered into competition with the. ; bank at;the auction,"'and lie adds that their failure to do so showed "they . regarded .the .-debt, to the;bank as being in ,'of. the -value .of . the property." This is. a singular argument. • Had Cantain Hamilton and his friends been able to find the money there would -have been, nosale, for the. bank' would' have been' paid off.; Tho.Pale took place when money was scarce and'dear, and when to raise v668,00p was virtually an impossibility. Captain . Hamilton and his solicitor - had b°en'doing :their best to find the money. It was., because ; thev ' could not do so that tho bank held Captain Hamilton at its mercy.. . . '■

■Having bought in ?. property worth about: <£100,000 for .AiOOO did the bank' roleaso. CaDtain Hamilton from the balance :of .'his' allegedliability? .'Was, he not-'compelled eventually to take refuge in bankruptcy? . That the estate was always worth an amount very largely in excess ( Of._ thtf money borrowed from the bank is clearly' shown by the different valuations - made by comnetent • valuers, Tanging from 1883—when the property was valued at 'J75,000, and. the debt to the bank was 338,000. leaving a margin of \to 1888. when . the bank's insne'ctors valued Maiigato'rd : 'nt' ' .£91.(100 nnd -the margin wis vC2fi.2so, the debt,, having ; incrnf to ; ifG7,750. •• It may be asked:-Why did the debt inp.reafe and,the margin show a fallinr-olt? But it" must be romembered that a larue expenditure, was going on, imnroving the property, and the bank carefully .exacted 8 per cent, for interest—ranging from .23000 to over <85000 per yetir.—l am, etc., ; . A. W. HOGG. .