LAW REPORTS.

Dominion, Volume 7, Issue 1881, 15 October 1913, Page 5

LAW REPORTS.

COURT OF APPEAL. THE INEFFECTIVE CHEQUE. PAID IN DEPOSIT. STRANGE TANGLE IN LAND DEAL. Some tangle in which a dishonoured cheque and a land deal wero tho chief threads in tho skein occupied the Court of Appeal yesterday. It was an Auckland case, which had been prolonged from the previous day. The appellant was John Thomas Stembridge, of Pukekohe, clerk to the Franklin County Council, and the respondent was Donald Ewen Morrison, farmer, Paparimu. Tho former was represented by Mr. C. P. Skerrett, K. 0., with Mr. Fell, and the latter by Mr. Reed, K.C., with Mr. Perry. liio case, as outlined-by Mr. Skerrett on Monday, was that Morrison purchased land from Stembridge on the day after it had been "offered for public sale, and after giving tho auctioneer as deposit a cheque for £50 in the presence of the vendor, subsequently asked the auctioneers not to present the cheque, but to collect two debts for £49 18s. 6d., due to Morrison, and use that money as the deposit. Those two debts Were collected, but were entered against a debt of £10 lis. 6d. for goods which Morrison had bought at the sale, and tho cheque was presented and dishonoured. the vendor _ thereupon rescinding the sale. Morrison subsequently paid the balance of £350, and claimed the conveyance of tho land and damages, judgment at Auckland Supreme Court being in his favourhence this appeal. In continuing his argument yosterday Mr., Skerrett contended that tho dheque was a constructive payment until it was presented and dishonoured. The Chief Justice: The condition of contract was that tho deposit should be paid in cash. Tho vendor, however waived that and accepted the cheque. When the cheque was dishonoured, had the deposit been paid? His Honour thought that . under the circumstances the vendor could treat tho contract as being broken. - Mr. Justice Denniston disagreed, pointing out t'hat the two debts amounting to within Is. 6d. of the £50 deposit had been collected by the auctioneers. Mr. Justice Cooper: You have Taised a very interesting question, which we shall have to very carefully consider. Mr. Skerrett: This was done behind the vendor's back, and might have put him into an awkward position. Mr. Reed, K.C., on behalf of respondent, said that their Honours would have noticed from the correspondence that Morrison was quite an, illiterate man, whilst Stembridge was sufficiently well educated to be clerk to the Franklin County Council. A cheque was cash when duly honoured. The whole case was due to pure carelessness. The cheque was taken to the bank with a lot of others, and the auctioneers were not aware that it had been dishonoured. Mr. Justice Denniston: The mistake was in presenting the cheque. _ If that had not been presented and dishonoured the whole transaction would have been completed.'' 1 Mr.. Reed submitted that the two cheques must, bo treated as cash from the day of their being given. The defence .it the original hearing was that there was a recission by mutual consent, but that failed, as there was no evidence of mutual consent. He submitted that the £49 18s. 6d. must bo taken to have been paid'in casli on the same' date as the cheque, which' was dishonoured was handed in. Under the circumstances the agents had a right to appropriate the Is. 6d. to make up tho amount. . The Chief Justice suggested that jf Brooke (the auctioneers' manager) failed in not makinc the £49 18s. 6d. into the deposit of £50, that failure was on behalf of whoso remedy was against Brooko. Mr. Reed submitted that the auctioneers' were acting as bankers, and it was only a question of credit and debit. . Mr. Skerrett denied this. Mr. Reed added that Morrison did all he could, and there was not a thing which he could be reprobated for. In effect, the deposit was paid, and- it was a misunderstanding on Brooke's part .in presenting the chcquo, when told not to. The Chief Justice: The whole point is whether the £49 18s. 6d. is sufficient to justify you in saying you have fulfilled the conditions. Mr. Reed, in conclusion, expressed the hone that the Court would support the inclement of Mr. Jitsticc Edwards, who liad heard all the facts Mr. Skerrett, in roplv, reminded tho Court of the indisputable fact that at the time the £49 18s. 6d. was handed to the auctioneers Morrison was indebted" to tho latter for £7, and there was a definite aereemont between them t* at tho £49 18s. 6d., when collected, sfiould be ripplied towards the deposit of £50. Tho' auctioneers did not apply that £49 18s. Gd._ as instructed, but transferred part of it to the payment of a private debt of £10 lis. 6d., owing by Morrison to them. The vendor would not have agreed to sell but for the payment of a deposit of £50, and the cheque' was a guarantee for tho observance of the contract. Judgment was reserved. CAUSE LIST. ORDER OF COMING CASES. It was intimated by Mr. C. P. Skerrett, K.C., that the case Pukeweka Sawmills, Ltd., v. Taringamutu Totara Sawmills, Ltd., which was to follow tho Auckland appeal, had been settled out of Court. It was susgested by tho Chief Justice, therefore, that Adams v. Rutherford, a case removed from Christchtfrch, which was to have' been heard on Friday, should he heard to-morrow instead, and Mr. Skerrett promised to make arrangements with that view. Mr. J. R. Reed. K.C., informed the Court that the Ellacott v. Williams case set down in tho list last week would not be ready for hearing until Wednesday or Thursday next, as the printed proceedings had not yet reached Auckland. It would he advantageous to sottlo tho case this session, as the land concerned was lying idle. The Chief Justice remarked that the Court would be sitting nllnext week, either hearing cases or considering their judgments, and the case mentioned could be heard on Wednesday or Thursday. or any other date arranged later in the week. The other cases in the list are Wilson v. Hemes and others, a question of law affecting a Native land matter; Hannah v. Brown and M'Donald, case removed; and an application for admission to the Bar, referred to the Full Court.