RESIDENT MAGISTRATE’S COURT.

Evening Star, Issue 2810, 19 February 1872, Page 2

RESIDENT MAGISTRATE’S COURT.

This Day. (■Before A. C. Strode, Esq., R.M.) EXTENDED JURISDICTION. Otago and Southland Investment Company v. A°J. Burns. —L7S interest. Mr James Smith for the plaintiff; Mr Barton for the defendant. The short facts as stated by Mr Smith, were as follows On the 28ch December, 1870, Mr A. J. Burns made arrangement at Home with the Otago aud Southland Investment Company, to borrow L.3,000 to be advanced for five years from the Ist July, 1871, for the purpose of constructing machinery for a woollen manufacture at Mosgiel, at the rate of 10 per cent, interest, aud I per cent, commission. Wanting the money immediately, Mr Gilbert Burns gave a Bill at nine months for a similar amount. Mr Cook, as solicitor for Mr Bums, having occasion to call on Mr Lamach on other business, mentioned the arrangement made by Mr A. J. Burns with the company, when Mr Larnach, now the manager, said if was possible the company might require additional security, and asked if the Grant’s Braes property could not be added. Mr Cook declined giving an answer, and Mr Burns accepting the conversation as a refusal to make the advance on the terms agreed, obtained a loan elsewhere at a less rate of interest. At maturity of the bill at nine months date, the amount was tendered and refused, and the interest was paid. No further interest had been paid, and the object of the present action was to recover payment of one quarter’s interest due on the 31st December. Mr Larnach had been acting manager of the Otago aud Southland Investment Company since April last. Mr Co A, on behalf of the defendant, paid the interest due at maturity of the bill. Since then hj had paid no interest Interest was due from September 30 to December 31. By the agreement Mr Burns was to give a freehold security for the amount of the bill, and he as acting manager had never declined to take the security referred tb in the agreement. The company, to his knowledge, never declined ’it, He had a casual conversation some time in March or April la-t with Mr Cook, Mr Morris then being in Dunedin, and still manager of the company. Mr Cook called on him at the Bank of Otago on Mr Haukey’s business, he being that gentleman’s representative. Having finished Mr Hankey’s business, Mr Cook casually mentioned the loan to MiBurns, merely saying he supposed witness was aware he hid arranged for a loan with the company at Home. He merely said, from what lie had heard the manager say, he would require further security than that offered, witness believed he did ask if Mr Burns was not entitled to further property under his father’s will, which could be included in the security if required. The whole conversation with Mr Cook, including Mr Haukey’s business, did not occupy more than five minutes. He never had any further conversation ; but the next thing ha heard was that the loan had been raised pi? where at I pep cent, lower rate of interest, The business of the company wag carried on in an office in Temple Chambers, distinct altogether from the Bank of Otago. The office was between that Bank and the Bank of New South Wales. In cross-ex-amination by Mr Barton : Business came before the Committee of Management every Wednesday at the Company’s offices. The Company was a London Company. _ Mr Morris and himself were the committee. He did not take the active management of the company until the 7th Aprjl. Mr Morris did not give up He active management until the afternoon of the 6th. In consultation with Mr Morris it was probable he suggested further security than that offered. He said to Mr Cook he thought it very probable MiMorris would ask further security. Mr Cook declined to give any information respecting- the will. Re-examined by Mr Smith ; y Witness had been informed Mr Burns had procured ’mqjiey elsewjiere, and he called, in company with Kip Cpqk, at the Investment Company’s offices, It was tffo first time he had seen him in reference to the loan, and Mr Burns said that he thought a more absolute refusul had beeu given than appeared. He seemed rather annoyed at the difficulty in which he had been placed. Witness told him ho could not release him from the agreement, as compares could not be treated in that way. For the defence, Mr Barton asked a nonsuit on three grounds. First that the advance on an approved bill was a separate transaction from the proposed advance on mortgage. 2nd. That the agreement for of L3OOO was never completed, and therefore ' nowaiijg was due under it. 3rd. The money not haying bpen advanced nothing was due under it. 4th. That 'Slip- 1 posing it to be true the contract had been broken by Mr Burns, he was only liable to the difference of interest. But while raising the non-suit point, he thought it better the whole of the facts should he brought out. Mr A. if. Burns sail the company took his acceptance, endorsed by libert p|urns, for LSrtiiO. and advanced the money ’ upon it. ■ At the end of nine months the money was to be repaid. He thought the other agreement was signed at the time he received the money. He arrived in Dunedin from England on the last day of March, and saw Mr Moms, the company’s manager, on the 3rd of April; On stating he called respecting the loan, he ‘ was referred by Mr Morris to Mr Larnach, who ' had full control in the matter. He did not see Mr Larnach in person until a month or two afterwards. He was accompanied by Mr Cook, and on stating their business they were taken by Mr Larnach to the company’s office. JJg paid the six months’ interest due, and an account wus tendered of 1 per cmt. premium, which oh being told it was paid, Mr Larnach said he would take his word. After giving a cheque for the interest, witness tendered a cheque for the amount of the L.3,000 bill, which Mr Larnach nfused to take until' the maturity of the Bill, and perhaps not then, as he had not looked into the securities. Ho said surely he must have d ne so, or he would not have gheu the answep he did to Mr Cook. No reply was given to this. Witness said surely you will not make a Court case of this, but if you do

I shall not hesitate to recommend Mr Burns to defend. On being further pressed to take the money he declined. In cross-examina-tion, the witness said the bill for L 3,000 was in fulfilment of an agreement for the proposed loan. The bill was to be cancelled by repayment of the money or security to be given. He made three quarterly payments upon the bill. The bill said notliing about interest. —A. J. Burns, re-examined by Mr Smith. He made the thr-e quarterly payments in the bill under trn agreement with the company.—George Cook, examined by Mr Barton. He was secretary for Mr Burns, and on Thursday, 6th April, saw Mr Larnach in the bank parlor of the Bank of Otago and asked him if he had received notice from him in regard to transactions between Mr Burns and the Directors of the company iu connection with a mortgage of L3WOO on Mr Burns’s property. He said he had, and that he had formed a very different estimate of its value from Mr Burns. He inqubed if Mr Burns was entitled to Grmt’s Braes under his father’s will. He replied, he did not if he was at liberty, and that the loan was wanted on the Town property. Mr Larnach said unless the Gi ant’s Braes property were thrown into the security the application would not be entertained. He (witness) sail Mr Burns was not prepared to put it into the security, aud Mr Larnach said he supposed he would get the advance. VVitness said he would be sorry for it, as he had to return the bill, and send it home to Gilbert Burns; but, of course, on rerefusal, he would have to apply e’sewhere. He did not wait on Mr Larnach respecting Mr Hankey’s business, it not being pressing ; aud iu his diary he made an entry of Mr Burns’s business, but not of Mr Hankey’s. Mr Burns was anxious to return the bill and send it to his uncle. In cross-examination, he treated what fell from Mr Larnach as a refusal to advance the money. He did not think it necessary to address a letter to him requiring an explicit refusal. Judgment deferred. (Left sitting.)