SUPREME COURT.

Evening Star, Issue 3334, 27 October 1873, Page 2

SUPREME COURT.

Patukda y, October 25. (Before His Honor Mr Justice Chapman and a Special Jary.) OTAGO ANT) SOI'THtjAND LOAN COMPANY V. BURNS. After counsel for the parties had been heard, his Honor summed up as follows ' This action is brought by the Coni])iiny, styling itself the Otago and Southland Investment Company, against Air Arthur Burns, to recover threequarters of a year’s interest due upon L 3,000, amounting to a sum of 1/225. Consequently, if you hud for the plaintiffs, that will be the measure of damages you will have to give as put to you by the fourth issue. On the other hand, if y<m find for the defendant, there will be no damages at all. As to the issues, they are nine in number. No question really arises as to some of these ; therefore you will find an answer to them in the alihmative. The second issue is after all the issue upon which the whole meiits of the ease turn. 1 will pass over the question involved in that issue at present, as I will have to detain you at some length by again referring to it. Respecting the third, fifth, and sixth issues there can he no dispute, and you will therefore find for them in the affirmative. I will leave you to form your own opinion regarding the seventh issue. It turns upon the question as to the evidence given before the Magistrate, Mr Strode. Under it you will have to consider whether the defence set up in the Resident Magistrate’s Court is the same as the defence set np here, and whether the Magistrate decided the case upon its merits. After i(noting the eighth and ninth issues, his Honor proceeded to say —There can be no doubt hut that that judgment is still in force. _ You will, therefore, find for these questions in the affirmative. As to the first point dwelt upon by the defence, that these proceedings were adopted without any authority, or at all events any proper authority io sue, I think there is sufficient before us to show that proper authority has been given to sue. However, that question is not properly raised on this record as a question for the jury. In urging that point, o nmscl for the defence relied upon a despatch from tin! Directors of the Company in London, in which they instructed the local agent to settle the case without litigation. It appears, however, that before this despatch could have been received in Dunedin, litigation had actually taken place. Considering the elapse of time that had taken place, and that the manager had full authority .to defend the interests of ('ompauy, his authority to institute proceedings must he presumed, notwithstanding the terms of the despatch relied on by the defence. If the circumstances which were present to the minds of the Directors, on December 2h, when that despatch was written, changed, then the agent or manager was justified in bringing the action, if he conceived the lights of the Company had failed. I think, however, that the question has not been properly raised, and 1 will therefore instruct you to pass it over. Whatever advantage may bo taken of that point hereafter, you have nothing to do with it here. As I stated at the outset, the question set forth in the second issue is the one upon which the whole case turns. Some slight doubt would seem to exist in the mind of Mr Larnach as to the date upon which the iutrrview took place between him and Mr Cook. There can be no doubt but that the interview did take place on the (ith April, the day upon which Mr Morris wont away. Mr Ltiniach’s impression is that it was before that date-before the date of Mr Burns's retain to New Zealand, I think

that impression hue been negatived, and Mr Larnach states that if Mr Cook swears distinctly that it took place on the 6th April, he would not feel at liberty to contradict him. Mr Burin returned to New Zealand in the end of March —about the 29th or 60th of that month — and be never saw Mr Cook until the 3rd April, therefore it is quite certain that the interview in question could not have taken place, as Mr Larnach suggests, before Mr Burns returned, as, in point of fact, Mr Cook had no authority to act in the matter. You may therefore assume the interview took place, as sworn to by TVlr Poolt on tVic morning of tUo fttli Wc now came to consider the nature of the agreement entered into between the parties in London, In negotiating the loan, Mr Burns gave a description of the property, which he valued at Ld.ooo or Lb,ooo. Assuming that to he a satisfactory valuation, you can hardly doubt but that the meaning of the agreement is that the loan was intended to be one for live years, and that on his arrival in the ('oloiiy, Mr Burns was to grant security over the property. But there was this condition attached to the agreement. It the Company here were dissatisfied with the security—if they thought the property was over-valued, or that there was something in its nature which they did not like -then, in order to reduce the transaction to a simple form, a promissory note was given, payable in September. If the subsequent negotiation had been conducted in a more busi-ness-like manner between the parties, and Mr Larnach had written to Mr Cook—“ I will not have this security, and the transaction will not be carried out unless other property be thrown in,” that would undoubtedly have amounted to a repudiation of that part of the contract which stipulates for a loan for five years. _ It would, of course, have released the security, and it would then have been competent for the defendant to have raised the money in another quarter to pay the bill. I think that this agreement is an agreement binding upon the parties, unless upon refusal of the secuiities or dissatisfaction being expressed therewith, the same being communicated within a reasonable time. That question, however, does not arise here. Something did take place within a reasonable time, and that raises the question whether or not that something amounted to an expression of dissatisfaction, or as expressed by the contract, release of the security. What Mr Larnach says about the matter is this; “Mr (look’s visit to me was about Mr Haukey’s business, ami took place, I believe, in my office in the bank.” Mr Cook denies that, and I think he shows good grounds for his denial. Haukey’s business was usually transacted before ithe mail went out, and that visit took place after the mail Inul gone. Suppose, however, the visit was made about Hankey’s business, that has very little to do with the matter. The question is not materially affected by the fact that other business besides that of the defendant’s may have been discussed or even transacted. Another question raised by the evidence is ns to whether the meeting took place at one place or at another. If Mr Larnach was manager for the Company, and there can he no doubt hut that he was, as we find that Mr Morris, who was going away that afternoon, referred to Mr Larnach, it makes little matter whether the meeting took place at the bank or at the office of the Company. People are not hound to speak of any particular business at the place where that particular business may happen to be carried on. The version given by Mr Larnach of what took place at this interview is to the following effect:—“Mr (look inquired if I had had information regarding the loan proposed to be granted to Mr Burns by the Company. I replied that I was aware the Company had received information about the matter, or words to that effect. I believe I did ask if Mr Burns had not further security to give in property left by his father’s will. I leferred to the Grant’s Braes property. Mr Cook replied that he was not at liberty to say what property Mr Burns inherited under his father’s will. He then left abruptly.” According to Mr Larnach, that was the whole of the conversation which took place on that occasion. Supposing that to have been the whole of the conversation, that would not have justified any one in considering that the securities had been rejected. In cross-examination he says, “ I did not say, as I had no authority to say, that unless Grant’s Braes property was added to the security it would not be accepted Mr Cook did not say that Mr Burns would not give further security, and that if further security were insisted upon he would go elsewhere for the loan. At that time I had never seen the propert v. I saw Cook afterwards in July, IS7I, and he wanted me to take payment of the L 3,000. I declined to take the money.” The only other point about the security is this. Mr Morris, in his evidence, confirms part of Mr Larnacli’s testimony, stating that at the first blush he considered the secuiity insufficient. Mr .Smith : He considered the valuation excessive.

His Honor: That was merely a vague impression. Neither h® nor Larnach had been to the ground, nor had they submitted the property to a property valuator. Morris had not seen the property for about twelve years. Against that evidence you have the evidence of Mr Cook, which places a very different feature on the aspect of affairs. He says, 14 1 first saw Mr Burns on the 2nd or 3rd April. I took instructions about the loan, and saw Mr Larnach on the morning of the (ith. I asked him if he had had any despatches about the loan. I also mentioned that I wished to know what was next to he done. He said lie had received the papers from Home, and inquired if Mr Burns was not entitled to the Grant’s Braes property under his father’s will. I said I did not know that I was at liberty to say what property Mr Burns was entitled to under the will; the loan was wanted over the Taieri property.’' So far, then, the difference between the two persons was but very trifling. Cook, however, proceeds to say that he (Larnach) wont on to say that he formed a very different estimate of the value of the property from that put upon it by Mr Burns, and that unless the Grant’s Braes property was thrown in, the proposal would not be entertained. Ho replied Mr Burns would be sorry for that, as he wanted to retire the lull and send it Home to Ids uncle, and that he would have to seek the loan elsewhere, as Grant's Braes property would not be thrown in. He then goes on to say : “ I went to Mr Larnach’s solely on this business, and no other business was mentioned. If you accept of this account of the interview as given by Mr Cook, you cannot come to any other conclusion than that your finding under the second issue must be for the defendant. Your test, therefore, will be to weigh the probabilities as between the evidence given by Mr Larnach and that given by Mr Cook, to determine whose memory of the transaction yon must rely upon. Unfortunately tins conversation was not reduced to writing. It would have been perfectly easy after the conversation took place, for Mr Cook to have stated that Mr Burns was advised that the security had been rejected. That would have given Mr Larnach an opportunity to say “No; it is not,” or otherwise to have made answer “A r es, it is.” Therefore, it is that you are reduced at this distant day to the unpleasant necessity of weighing and estimating the strength of memory as between these two gentlemen. I do not ask you to test their veracity. What I ask you to do is to test the strength of their memories. Mr Cook further stated in his evidence that lie made a record of this conversation immediately after it took place. If left then without any crossexamination as to the nature of that record, that fact would have had givat weight with the jury. That record would have turned the scale as against Mr Larnach’s evidence. When sifted, however, it turns out to he a very brief record of the event, merely a memorandum of the result, and contains nothing about the statement of his having told Mr Larnach that lie would have to apply elsewhere fur ths loan, as the Grant s Braes property would not lie thrown in. It does not necessarily follow that, because this is omitted from the record. Mr Cook’s memory on the point is defective. In taking memoranda of this kind, it is reasonable to suppose that an attorney would deal chiefly with what^ another hum says, and not record very precisely what he says himself. Then there is the question about preparing the ease. In giving his evidence on tiiat point before the Besident Magistrate’s Court, he says that -Mr Strode omitted to take that" part down. There ia a possibility that such an omission was made, .fudges in the Supreme Court do not always take down all that a witness says. They' frequently, so to speak, “slides” over parts that arc not considered important. Mr Cook after - wards prepares a ease for the Appeal Court, and

bore again the reference to Mr Bums going elsewhere for the loan is omitted. Mr Cook’ explanation of this omission i* that finding the statement was not taken down by the Magistrate he did not think it was worth while to put it into the appeal case. The importance of this is really more as a test of Mr Cook’s recollection and the strength of his memory than anything else. There are some circumstances in favor of Mr Larnarch’s evidence. It is undoubtedly the interest of a company like that l^ a * u^^s 1° lend money, and a loan of L 3,000 to a respectable party upon fair and reasonable security is just the business they are seeking for. ihe interest they asked was the market rate of interest at the time. You have evidence that two or three months afterwards Mr Burns got the money for 9 per cent., and therefore we must presume that 10 per cent, was the highest rate of interest at the time! The property was undoubtedly good security, and it was not their interest to reject it and take repayment of the money at the expiry of the nine months. After reviewing the evidence given by Mr Strode, his Honor said— The defence set up in the Resident Magistrate's ('ourt seems to have been the same as the defence set up here, viz., that Mr Larnach refused, or, at all events, was dissatisfied with the security. Mr Strode appears to have thought that he did not, and upon that he gave his judgment. Had he come to the conclusion that the security was refused he would not have given the judgment he did. After an hour’s deliberation, the juiy returned into < court, finding for the defendant, on all the issues. IN BANKRUPTCY. Monday, October 27. (Before his Honor Mr Justice Chapman.) Final Order and Discharge.— Final orders were granted to tho following bankrupts William Fraser, Janies Congreve, Jacob Turnbull. Petition eor Adjudication.— William Kent was adjudged a bankrupt, the first meeting of creditors to be held on Tuesday, 4th prox. The applications of James Gibson and Michael Lake were postponed till Monday next.