CLAIM FOR £600

Evening Post, Volume CVIII, Issue 131, 29 November 1929, Page 13

CLAIM FOR £600

LOAN COMPANY SUED

LATE SECRETARY'S PART

A claim by Annia Elizabeth Cooper, spinster, of Wellington, against tho To Aro Loan and Discount Company occupied the attention of the Chief Justice- (tho Hon. M. Myers) in the Supreme Court to-day.

Mr. W. Perry appeared for tho plaintiff, and Mi-. C. W. Nielson for tho defendant.

The plaintiff^claimed ' that in 1922, she deposited £600 with Walter Whitehouse, secretary of tho company) on terms requiring repayment on demand, and that the company had refused to accede to her request for repayment. Sh© claimed £600 and interest. - The defence was a denial that the money was received by Whitehouse as agent for the company, and it was pleaded that Whitehouse had been dismissed from the company's employment owing to certain irregularities for which ho was convicted for theft. Further, if any money were received by him in his capacity as the company's agent, by a series of acts concurred in by the plaintiff and outside the scope of his employment, the money was lost, and the directors were entirely ignorant of the circumstances. It was further claimed that by having accepted Whitehouse's personal .liability tho plaintiff was' estopped from' proceeding against the company. DEALINGS WITH WHITEHOUSE. Tho plaintiff gave evidence- to the effect that in 1922, Whitehouse asked her to lend her money to the company for investment when she sold her milliner's business. He said she would be paid substantial interest, and the money would be quite, safe. Witnoss subsequently handed £600 to Whitehouse and was given receipts for the various sums. She made a practice of calling at the company's office each month to collect the interest, £5 at first, and later £10 when tho full £600 had been deposited. These payments were kept up until February last, when Whitehouse called at her house and paid her with two &5 notes. In March she went to the office and received £5 in cash from Whitehouse, who said he was in difficulties. He -asked for her receipts, and she reminded him that they were in tho company's safe. He replied that he could not find them. Witness then asked for a receipt as she had nothing, to show, and Whitehouse gave her a promissory note for £600, signing it himself. She thought 'it was a receipt for the, £600. Subsequently she instructed her solicitors to write- a letter to the directors of the cbmpany.-Cross-exainined, witness said that before paying the money to Whitehouse, she did not see either of the directors, nor did she make any inquiry into the company's finances. The receipts were on the company's printed form signed only by Whitehouse. No arrangement was made for repayment. The monthly interest cheques wero signed by the directors and Whitehouse, and were payable to' a number. This was the procedure until December last, after which cash payments were made. For the first twelve months, witness signed receipts in a book kept by Whitehouse, but after that sho gave,no receipts whatever.

In reply to Mr. Perry, witness said she thought tho money was perfectly safe with Whitehouse. "I thought he was lovely," she saia, "and I would have trusted him with more if I had had it." •■■'■'■.

Ethel. Florence Cooper, sister of the plaintiff, testified to having seen a number of cheques from the company in her sister's possession. She thought they were signed by the two directors and Whitehouse.

DIRECTORS' EVIDENCE,

Giving evidence for the defence, James Kod, chairman of directors of the company for the past eleven years, said that Whitehouse was appointed secretary about twenty years ago. He was the sole employee of tho company, and tho only person with whom investors could deal. Whitehouse was not authorised to accept deposits without reference to the directors. Interest at tho rate of 6 per cent, was paid by the company, payment being made by cheque every six months. The first witness heard of the plaintiff was when he met her at the'house of a friend. She asked how "Walter" was, and if he "had anything." Witness replied, "Yes, he is a wealthy man." „ It would be quite a simple thing, said witness, in reply to his Honour, for a "number" cheque, the butt of which bore a name, to be paid to-a per--son other than that named on the butt. As far as he knew he had never signed a cheque in favour of the plaintiff. Tho irregularities had been going on for some years. Witness knew now that there had been falsification of tho books by Whitehouse, but he was unaware that any had been destroyed by him. After questioning witness at some length regarding the books, his Honour said that he could not have been paying as much attention to the company's business as he thought ho had been. Witness: "We thought we were looking after it."

James M'lntosh, public accountant, saia that an investigation of the company's books had revealed no trace of n deposit by the plaintinff. The only indication of tho payment of interest was a cheque for £10, oh the back of which the city firm which cashed it had written the plaintiff's name. There was no trace of that cheque in tho cashbook nor any receipts given to the plaintiff for her deposit. The investigation revealed falsification of the books by Whitehouse ' over many years. Witness was unable to find a balance-sheet signed by the company's late auditor of a more recent date than 1923.

Whitehouse, in the box, said that the plaintiff came to him and asked him if he wanted any money. He agreed to take it, and she gave him £250, receiving a receipt signed by him and written on plain paper. Ho denied that she had given him the receipt for safe custody. In all, he received £600 from the plaintiff, all the receipts being signed by him. He agreed to pay 20 per cent. AH the interest payments were made- out of his own money by cash or cheque, the latter being, with only one exception,' his own. The ono company cheque used was against hia wages. He did not tell the directors he was dealing.with the plaintiff. Witness did not answer when asked by his Honour why he had not given the plaintiff a receipt for £600 instead of the promissory note. To Mr. Perry, witness admitted having destroyed a letter from tho plaintiff's solicitors to the company's directors. That was after his defalcations had been discovered. ■ (Proceeding.) \

It was inadvertently announced in last night's "Post," owing to a typographical error, that Mr. J. Bell had won the championship at tho Wellington Eose Show. The name should have read Mr. J. Ball.

Mr. K. W. Henry, factory representative in New Zealand for Franklin cars and Brockway trucks, leaves New Zealand next Tuesday on a business trip to New York. He is accompanied by Mrs. Henry, and expects to be absent for about three or four months.

Messrs. C. W. Price and Co., auctioneers, will sell furniture and carpets on the premises, 92, Daniell street, to-morrow, commencing at 1.30 p.m.