The Nelson Evening Mail. FRIDAY, MARCH 13, 1868. SUPREME COURT, CIVIL SITTINGS,

Nelson Evening Mail, Volume III, Issue 61, 13 March 1868, Page 2

The Nelson Evening Mail. FRIDAY, MARCH 13, 1868. SUPREME COURT, CIVIL SITTINGS,

(Before his Honor Mr Justice Kichmond and a Special Jury.) Thursday, March 12. Charles Henry Moffitt v. James Sinclair. Mr Conolly and Mr Kingdou appeared for the plaintiff; Mr. Pitt for the defendant. Mr Kingdon opened the pleadings. The declaration was on two bills for £200 and £350, accepted by the defendant. Having given credit for £200, the balance claimed was £381, for principal and interest. The pleas were 1. The general traverse ; 2. A special plea, in substance as follows : — That before the bills sued on were accepted, it was agreed between the plaintiff and the defendant that the plaintiff should advance money on the bills, to be applied in paying for the share of one Duncan Campbell Macdonald, (Manager of the Bank of New Zealand at Picton and Blenheim) in the firm of J. 0. Deuham & Co. at Havelock, and for no other purpose, and that upon that understanding defendaut accepted the bills, that a large part of the moneys advanced on the bills was paid, by a private and preconcerted arrangement between the plaintiff and Macdonald, in another way, and also that by reason of the misapplication of the moneys, the position of Macdonala and of defendant was injuriously affected, whereby the defendant was discharged in equity from his liability on the bills. The defence was, as appears above, that the defendant being liable on the bills merely as a surety on the understanding that the whole of the proceeds were to be applied in payment of Macdonald's share in J. O. Denham and Co's mill, and that a great part being applied in payment of Macdonald's private debts, in fraud of the agreement, it was therefore void. Another branch of the defence was that, owing to the misapplication of the money, Macdonald's position was reudered worse and the defendant was therefore discharged from his liability. There was one sum of £150 in particular, which the defendant alleged had become due to the plaintiff from Macdouald some time before the accepting of the bills by the defendant, and had been paid out of the moneys advanced by the plaintiff on the bills without the defendant's concert or knowledge, but which, as the plaintiff asserted, was so applied with the express sanction of the defendant. Mr Conolly opened the case, and stated that it was one which involved personal character, and that it was Mr Moffitt who was in fact upon his defence, insisting on the fact that if the plaintiff could have anticipated the defence which had been set up, he could have paid away the bills, which were worth £650. The plaintiff, C. H. Moffitt, being sworn, said: I am a solicitor and barrister at Blenheim. In January, 1867, there was an arrangement between Macdonald and the defendant, for the purpose of obtaining £300, afterwards increased to £650. I waa to advance the money, and the defendant would become security for Macdonald to that amount. Macdonald in January, or before, had stated to me that he had a bill to meet, and wanted £150. He asked

me for a cheque, and I gave him one, relyiDg on his statement that he had previously consulted the defendant, and he gave me a counter-cheque to hold till defendant's security was completed. Defendant culled on me after Macdonald came to Blenheim, early in March,' and before the bills were drawn. He then stated that Macdonald wanted £650 instead of £300. I said it was too much, and that I should have nothing to do with it. Defendant said 'I don't think I will,' and theu left. Defendant and Macdonald came to my office on the 14th March, when defendant said he had agreed with Macdonald to become security to the full amount. The bills produced were then drawn and accepted in my presence. It was understood that Macdonald was to find the mouey for the bills when due. Defendant then went out, and I handed Macdonald his counter-cheque for £140, and paid him £200 then, and afterwards another £200, he debiting my account with the second £200. Before the bills became due it was suggested to me by the defendant that the money had been misapplied. He said, ' Macdonald has been making strange statements to me; he is in debt at Canterbury.' He asked me what I had paid on account of the bills ? I said * £250,' and we arranged not to pay him any more on them. Macdonald never applied for money after this. lam positive this was the first I knew of any misapplication of the money. The first bill was due on the 17th June, 1867, the second on the 17th July. The Court then adjourned. Examination of C. H. Moffitt resumed : — At a subsequent interview with the defendant, I complained of the position in which I was placed by his not paying the bills, and he said I need not fear, for he would pay me, if he had to sell the last shirt off his back. He said he was morally responsible to me. I said 'And legally too.' We left his office, and went towards the Omaka bridge. I said, ' Now Mr Sinclair, how soon will you be able to pay these bills'?' 'Not very long,' he said, and two months was named as the time when I should be released, or he would give security for the amount. 1 believe he was aware then of what had become of the money arising from the bilk. I waited for two months, and on the 27th September, I saw defendant and applied to him to fulfil his agreement. He refused, saying that I had been aware of Macdonald's position, and should have informed him of that. Pie desired me to wait and see what could be done with Macdonald. I refused, and said he must either give me security, orpay, or I should sue him. He said ' very well, I am not to be frightened by the crack of a whip.' He offered to give me what security he held from Macdouald, such as I was aware of. I remember a conversation at the Bank of New Zealand, Blenheim, about June 10th, before the bills were due, and about the time when Macdonald was suspended. Defendant spoke about the bills, and made this charge against me — 'All I have to complain of against you is, that you did not make me aware of Macdouald's position.' He said that Macdonald had stated in my presence that I was aware of his having applied mouey to his private concerns, and that I did not contradict it. That statement, if made, was untrue. I dou't recollect if it was ever made. After this statement by the defendant, I said, * Mr Sinclair, you are always adverting to the same matter. You know how it was I could not contradict that statement. 3 He said, ' I have not heard you yet contradict it.' I replied, 'I do contradict it.' He then said, *If you deny that statement, I believe you in preference to Macdonald.' . Cross-examined by Mr. Pitt : — When Macdonald applied for £150 on the 12th January, he did not say he was pressed

with private debts, and that his account at the bank was overdrawn. I am positive of that. I told defendant of the £250, before the bills were signed. I never made an arrangement with Macdonald to discount a bill of his with the defendant's name to it for £250. I think Macdonald said he wanted the £650 for the mill, but lam n«>t su»-e about it. It was agreed between Macdonald and myself that the £150 should be deducted from the bills defendant was to accept. I did not mention this agreement to defendant before the bills were drawn, but I told him of the advance, somewhere near the Bank. Nothing was said about its being deducted. It was not distinctly understood that the money from the bills was to go towards Macdonald's share in the mill i.e., £650. I understood so, but I had no knowledge on the subject. On one occasion I recollect defendant bringing Macdonald over to my office. I don't know what was said. Defendant was irritated, and walked' out of my office. Macdonald did not point to me and say 'He knows.' Defendant frequently complained of my conduct. He said I had concealed facts, and received money myself. I told him I held Macdonald's cheque. He was surprised, and said it was a funny thing for me to hold such a cheque. I think the first time I mentioned the cheque was the day before the writ was issued. Defendant did not absolutely refuse to pay. He said that if he lost the case, and he thought I was entitled to the money, he would pay me, that he attached no consideration to the promise when he said he would sell his last shirt to pay me. Re-examined by Mr Conolly: There is no foundation for saying that I have received money for Macdonald's creditors in Canterbury. I don't know what became of the other £350. None has been paid to or through me. Macdonald was not ia bed when I had an interview with him at the Victoria Hotel; he was in a state of drug. He was always in that state. Defendant said about a week ago that we had both been misled by Macdonald. By the Jury : With reference to the £150 advanced to Macdonald in January, 1867, he said it was to meet an acceptance of his. I never mentioned that to the defendant. Mr. Pitt had begun to open his case, when his Honor suggested that the Court should adjourn, and accordingly the Court rose at 4 p.m. Friday, March 13. The Court opened at 10 a.m., when Mr Pitt opened the case for the defendant, and stated that in December, 1866, Messrs Macdonald, Kirkwood, & Deuham agreed to go into partnership ; Macdonald residing at Blenheim, Kirkwood at Picton. In January, 1867, Macdonald met the plaintiff and told him he was • hard up,' and asked for a loan of £150, with which the plaintiff complied, giving a counter cheque, the amount of which was to be deducted from the advauce. The fact of the cheque was communicated to the defendant. The firm of J. O. Deuham and Co. started, with very little capital, and in March Macdonald applied to the defendant to accept a bill for £250, but he demurred. Macdonald said he wanted the mony to make up his share in the firm of Denham and Co. The value of each partner's share iv the mill was equivalent to the amount paid in by him. The £150 was not applied to the mill, but £200 was put into the mill by Macdonald, and that was all. The question then arose whether the plaintiff knew of the misapplication of the second £200 debited on March 30th. In June the defendant learned that only £200 had been put into the mill, and saw the plaintiff, who disclaimed all knowledge of the affair. The three parties met, when Macdonald said that plaintiff kuevvallabou.fr

it. The defendant left the room. At a second interview between the same parties Macdonald, pointing to the defendant said 'he knows,' but the plaintiff did not explain, and the defendant left the room in a passion. The learned counsel went on to argue that all the defendant's promises to pay were conditional, and that on Macdonald's leaving Blenheim at the end of the following June, defendant having heard about the cheque, repudiated the whole affair, and refused to have anything to do with the £200 paid by the bank, which was placed to the credit of the bills. He concluded by urging that the plaiutiff had by his conduct rendered the defendant's position worse, and that he was thus discharged from his liability. James Sinclair, beiug sworn, said : I have been a merchant at Blenheim for the last sixteen years, in much business. I know the plaintiff, who was my solicitor, and also Macdonald, but knew but little of Kirkwood, I met Macdonald in the first week in March, 1867, and all conversations with him 1 reported to plaintiff, almost word for word, He then stated that he had entered into partnership in a saw mill with Kirkwood and Denham, and having been disappointed in getting money from the South, wanted £250 f to make up his share in the mill. He never mentioned £300. Macdonald never spoke to me in January. He stated that as he was manager of a bank he could not put his own name on a bill, but that he had a friend who would advance £250, but wanted another name on the bill. I refused to give my name, for I never gave my name to bills, except in my own business. Macdonald pressed me, saying that he had a fair prospect that the profits from the saw mill would bring him in about £500 per annum, that if he could not pay the call, he would lose his share. He went on to say that the friend alluded to was the plaintiff, who would satisfy me that I rau no risk, and that he would give me security over his share. I declined at that time. I saw the plaintiff immediately and reported the conversation, asking the plaintiff if he was williug to perform his part, and if he knew anything of Macdonald's affairs. Plaintiff said that Macdonald had told him he expected money from the South, but he knew nothing of Macdonald's affairs, though he believed he had no spare money. I consented, and told plaintiff I would break through my usual rule. I saw Macdonald on the same day, and told him I had consented. Nothing was done for four days, on the fourth Macdonald called on me and said he had learned that Denham had been going rashly to work, making purchases of gear and stores to the extent of £1300 at Wellington aud Nelson, Jjand that he (Macdonald) in order to make good his share, would want £400. The remainder of this case, which has created considerable excitement, and which was still proceeding when we went to press, will appear in our next issue.