SUPREME COURT.

Evening Star, Volume IX, Issue 2693, 4 October 1871, Page 2

SUPREME COURT.

NISI PEI US. This Day. (Before Mr Justice Cnapimw apd a Special Jury.) AN IMPORTANT EQUITY SUIT. Cured y. Dai/jety and Others —Mr Macasscy, with him Mr Smith, appeared for the plaintiff, the Rev. Charles Creed, of Sydney; and Mr Barton, with him Mr George Cook, for the defendants, Mess s Dalgety, Nichols, and Co., of this city. Thomas Ferens was made a defendant b;it was not represented by counsel. The declaration, after reciting the facts relied on by the plaintiff, prayed for an inquiry to be made as to the number, ages, and sexes of the flock of sheep, the subject of the suit, for a further enquiry as to the present number of the flock; that the mortgagees executed by one Thomas Ferens, in favor of the defendants, might be declared null and

void, aa against the plaintiff; that Dalgety, Nichols, and Co should bs restrained by injunction from selling any of the flock of sheep, and that Ferens be directed to return to the plaintiff the sheep claimed. The defendants pleaded —first, a general denial of all the material allegations contained in the declaration, and second, that after the occurrence of the cause of action an arrangement was entered into between themselves, the plaintiff and Ferens, by which the defendant undertook to sell all the stock, &c., on Ferens’ station, anil, after deducting out of the proceeds a sura sufficient to repay themselves the amount of their advances to Ferens, pay to the plaintiff a sum not exceeding L 832 13s, the plaintiff waiving all claim upon the sheep and waiving all objections to the mortgages held by the defendants, and that they (defendants) were willing to carry out the said promises. The defendant Ferens admitted all the material allegations contained in the plaintiffs’ declaration, so far as he was concerned, and averred that the two mortgages obtained by the defendants were only executed by him on the express advice of the defendants and on the understanding that they would advance him monies sufficient to enable him to pay the monies due to persons whose sheep he (Ferens) held on terms, and to enable him to purchase those sheep, so that, as a matter of fact, the action was undefended so far as Ferenfe is concerned.

The facts of the case, as stated by Mr Macassey, are as follow :—lt was fortunate, he thought, that cases similar to the present were of exceedingly rare occurrence in this Province. Mr Ferens was charged by the pla ntiff with having misappropriated property confided to him, as the executor of the estate of a former friend of his, and Dalgety, Nichols, and Go. were not only charged with obtaining from Ferens security over the property which was so confided to him, but with doing so in order to secure a previously existing debt to them—in other words, the case made out by the declaration was one of equitable fraud. When the facts which he was about to state were proved, there would be no doubt that Dalgety, Nichols, and Go. must stand condemned in the judgment of the jury .as being devoid of anything like honorable principles. A Mr Stephen Smith, whose name would appear frequently in connection with the case, made his will on October 19, 1859, and by it made Messrs C. T. Kettle aud Ferens his executors. Being possessed of sheep and other property, he bequeathed it to trustees in (rust, aud in order to secure a life interest in favor of his wife, who was an aboriginal native of the Colony, anil any residue after her death, was to become the property of the present plaintiff, who for many years was a missionary in the Province, hut for the last seven years had resided in Sydney, N.S.W., and Mr Ferens was at one time an assistant missionary under him. Smith died on September 10, 1862. His will was proved on the 9th September in the following year, and probate was granted to Messrs Kettle and Ferens on June 5, 1862. From that time until very recently the management of the trust estate was confided entirely to Ferens, aud Smith’s widow lived under his protection until her death, which occurred on July 16, 1809, and was only known to the plaintiff twelve months afterwards. During the lifetime of Mr Kettle, an agreement was entered into between Ferens and Mrs Smith for the depasturing of the sheep on his (Ferens’s) station. There were then about 1000 sheep, and whatever doubt might exist as to the number at the time of Mr Smith’s decease, there was no doubt that iu February, 1869, the number was 1225, although the .declaration only claimed 900 odd. On the 10 th of that month the agreement was made with Ferens to depasture the sheep on terms for five years, the widow to receive 50 per cent, of the increase, and 2s per head for wool money. The agreement expired iu 1866, and when a settlement to.ok place between Ferens and plaintiff, some time after Mrs Smith’s death, the former rendered an account, in \yhich he showed that 8,000 sheep remained at that time, and that was the number of sheep existing in 1869, which plaintiff had agreed to adopt, and it was pot an unreasonable ope. The increase might have been larger, but Ferens sold some of the sheep from tipie to time ; and ip respect of these sales and wool money, hp further admitted a further indebtedness to the etate of between L6OO and LBOO. This would be an element in the case in considering one of the defences set up. It was ip May, 1870twelve months after Mrs Smith’s decease—when Mr Thomas Cullen, plaintiff’s attorney, in the course of aa interview with Ferens, learned for the first time that the latter had mortgaged the whole of the sheep on his station, in order to secure a debt due by him to Dalgety, Nichols, and Co. In narrating the circumstances under which the first mortgage pbtained by the firm was abandoned, it wop Id appear tjiat they had had ample iiotise gf the existing right of the plaintiff before taking their security. In March, 1870, Ferens was possessed of between 16,000 and 17,000 sheep; hut fully half the number did not belong to himself. As executor under Smith’s will, he was depasturing 3000 sheep on terms, and he was also depasturing sheep for the plaintiff and his son and other persons in the district But the claim of the plaintiff, his son, and the other persons, formed no part of this action, which was limited to the sheep belonging to the trust estate. On March 5, 1870, Dalgetty, Nichols, and Co, wrote to Fdreps* ■ptt.Uipg attention to the fact that their account against Ifiip amounted to L 6974 6s 7d, exclusive ,gf interest, ami dei manding an early settlement, At that time they held no security over Feren's property. Ferens came to town and bad an interview with the defendants, aud in answer to questions told Nichols he could not carry on unless he received further assistance. He told Nichols that half of the sheep were on terms, when the latter replied lie believed pothipg of the sort ; it was a lie, or words to that effect. Ferens directed his attention to the firm’s books, showing how the wool money had been paid for years, as being corroborative of his statement, Nichols then stated that their demand must be satisfied or a writ would be issued, and Ferens sold up Much about the same time, Ferens had an interview with ]\Jr Rattray at Oamaru, when reference was again made to the sheep he held on terms. On Mr Rattray’s return to Dpnedin, a letter was written on April 20 to Fere'ps, informing him jihat Dalgety, Nichols, and Co. felt themselves driven to protect themselves; that until that moment they were jjnder the ijn- : pression that the whole of the sheep pu the station were his; aud that such not being flip case, they insisted on no delivery being made of any of them until arrangements were made for the transference of their account. So that the defence set up that the

defendants were unaware at the time of the execution of the mortgages that any of the sheep were not Ferens’ property was positively untrue. Apart from the letter, ) Ferens had sold some sheep depastured with ' him through the agency of Mr Rattray ; and irrespective of these sales defendants had ample notice of a quantity of the sheep being held on terms. At an interview at Gillies and Street’s office, Ferens furnished Mr Rattray with particulars of the number of sheep so held. The defendants continued to endeavor - to obtain security over the whole of the sheep on the station, and how such a reprehensible and improper course could have been entertained, it was difficult to understand. -• coording to Mr Street’s account of what tool: place at his office Mr Rattray expressed his willingness to aid Ferens in purchasing the sheep he held upon terms, and gave an assurance if the mortgage of the whole of the sheep was effected in favor of his firm, they would advance the money to enable him to do so, aud to pay what he owed in respect of those sheep. On the faith of those assurances Ferens agreed to execute the mortgage. Before this arrangement was made Ferens thought it necessary, from what had transpired, to telegraph to Oamai u, that between 7UOO and 8000 sheep shouhl be set apart as representing those he held on terms and branded differently from those belonging to the station, which was done. Mibscquently a Mr Jopp, representing the defendants, visited the station, and saw the sheep differently branded, and in consequence of his report defendants thought it necessary to protect themselves further, by including those shetp, and a second mortgage was made. As soon as this security had been obtained, defendants utterly repudiated their engagements, aud refused to make any advances, beyond those required for the actual working expenses of the station, so that Ferens found himself unable to carry on or to purchase the sheep he held on terms, after having made overtures to their owners for their sale. Proceeding to notice the defence set up that an arrangement had been entered by which plaintiff' agreed to waive all his claims, the learned counsel characterised it as unfair and preposterous. It was very onesided. It was mpst unlikely that plaintiff would agree to such terms. According to the agreement he was only to receive LS3O after the defendants had satisfied their own claim. As to the law of the case, Fe c ’.s was under no obligation to distinguish the sheep he held on terms, and his omission to distinguish them gave defendants no better title than Ferens himself could have asserted. It would be a monstrous wrong to say that the plaintiff should, suffer for neglect on Fcreus’s part. In an extreme view of the case plaintiff was entitled to claim the whole she p on the station, or at all events to so many of them as would enable any person giving delivery to answer a demand upon the defendants for all sheep of the same age as the sheep claimed. It was to be regretted that the case was ever brought into Court, or that a linn occupying the position the defendants did should have allowed their names to be dragged into it, since the claim was one which in common honesty should never have been resisted. Mr Barton urged at considerable length that the opening statement of counsel for the plaintiff was such as to entitle the defendants to a decree ; but His Honor, while admitting that there was a good deal of force in many of the points raised, and that some of them were arguable, considered the present was not the time to urge them. They should have been urged on demurrer, or in opposition to a decree. At present they were premature. The evidence was then gone into, and when the Court rose, the plaintiff’s case had not concluded.