Supreme Court, March Sittings, 1845 ; BEFORE MR. JUSTICE CHAMPMAN: Smith v. Betts and another.

New Zealand Spectator and Cook's Strait Guardian, Volume I, Issue 43, 2 August 1845, Page 2

Supreme Court, March Sittings, 1845 ; BEFORE MR. JUSTICE CHAMPMAN : Smith v. Betts and another.

This was a feigned issue, directed by the Supreme Court, for the purpose of trying the title of the plaintiff to cattle, sheep, and other property, taken by the sheriff under a writ of execution at the suit of the defendants against the goods of Samuel Revans. It was admitted that the whole of the property seized had originally belonged to Mr. Revans, but it was alleged by the plaintiff that he became, possessed of a moiety of the cattle, sheep, &c, as a paflner with Mr. Revans in May, 1843, and of the other mafettr, as well of the remainder of the property seized, unoer a deed of assignment from Mr. Revans, dated the 31st. August, 1844. To protect himself against the claims of the plaintiff, the sheriff applied to the Court under the interpleader rule, and this issue was directed. Mr. Holkoyd stated the case for the plaintiff — that in June, 1841, the plaintiff and Mr. Revans entered into a joint speculation in cattle — that previously to this the plaintiff had become liable, on account of Mr. Revans, in two bills for £500 each to the Union Bank ; — that afterwards the plaintiff advanced Mr. Revans £1, 500, and accepted a bill for his accomodation in favor of Waitt & Tyser for £1,540 ; that in consideration of the payment of .£1,500 the plaintiff became a partner with Mr. Revans in the cattle, sheep stations, and other property, which had formerly been the joint property of Mr. Revans and Messrs. Waitt & Tyser, but that he had no guarantee or security for the sums which he had made himself liable to pay, amounting to £2540. That in the month of August, 1844, the plaintiff applied to Mr. Revans for security, and Mr. Revans being at the time in embarrassed circumstances, proposed to assign to the plaintiff the greater part of his property upon condition that the plaintiff should indemnify him against any liabilities in respect of those bills, and should pay certain debts owing from Mr. Revans. Indeed, the plaintiff was to pay all the liabilities of Mr. Revans, excepting those to the present defendant, and those were provided for by a claim which Mr. Revans had upon Waitt & Tyser's estate, and by two pieces of land which had not been included in the assignment to the plaintiff. lie should prove the payment of the £1,500 and the subsequent partnership, and should put in the deed of assignment and give evidence in support of the allegation of that deed. William King Hulke. — Was employed by plaintiff and Mr. Revans in May, 1842 ; went to Sydney to purchase cattle for them, which were purchased of the defendants ; they were paid for by bills drawn upon Mr. Revans ; Mr. Revans went to Sydney in the Middlesex; shortly afterwards some cattle were sent down in the Brilliant and Skerne ; witness took charge of them for Mr. Revans and Mr. Waitt ; those cattle and the sheep were kept entirely distinct from those belonging to the plaintiff and Mr. Revans ; the plaintifflmd told him that as soon as he could sell his commission he should invest the proceeds in stock. Robert Waitt, of Wellington, Auctioneer. — Was jointly concerned with Mr. Revans in purchase of cattle and sheep in the early part of 1842 ; the plaintiff had no share or interest in the transaction ; remembers the establishment of the meat company ; it was on joint account of Waitt ix. Tyser and Mr. Revans ; the plaintiff had nothing to do with it ; in January or February, 1843, witness received a bill for £1500 drawn by plaintiff on Cox & Co. ; received it from Mr. Revans ; does not know if plaintiff received any consideration for it ; believes he did not : in May, 1843, Waitt & Tyser relinquished to Revans all their share in the various joint adventures in consideration of a bill to the amount of £1,540t 0: 7: accepted by piaintiff, and indorsed by Revans ; at this time witness imagined that Mr. Revans owed him this amount, but before the bills arrived at maturity he was satisfied this was not the case ; the accounts between witness and Mr. Revans as finally adjusted shew a balance of £1,800 in favor of the latter- , Waitt & Tyser have subseqnently assigned their property for the benefit of their creditors ; until within 14 days of the assignment witness believed his firm was solvent ; thinks his estate will pay 7s. 6d. in the pound. Cross-examined by Mr. Hanson — When the sum of £1,540 was claimed by witness from Mr. Revans an estimate was taken of the value of the stock ; the loss upon it was estimated at £922 ; the value of the stock at the time witness gave up his share to Mr. Revans was estimated at £6,000 ; this was Mr. Revans's estimate ; the adjusted balance of .£l,BOO in Revans's favor arose from his having received credit for having paid Betts & Panton, the defendants, the whole sum due ; if the £1,900 which was owing from Mr. Revans to the defendants had been deducted, he would not have any claim ; witness did not consider Waitt & Tyser liable to defendants ? Waitt & Tyser would have shared in any profits that might have been made, and did bear their proportion of the loss; considered that Mr. Revans was paying for the witness's share of the cattle in giving the bill for £l ,540:0:7 ; when witness found himself in difficulties, he advised ■

Mr. Revansto secure the plaintiff; did not know that the plaintiff had been secured in any way until it was publicly known, although he was on terms of Intimacy with both of the parties ; believed that Capt. Smith had advanced the £1 ,500 and the acceptance for £\ ,540 : 0 : 7 without any security. Samuel llevans was then put in the box, but was objected to on the ground of interest. The Judge ruled that he had a disqualifying interest. Mr. Holroyd then produced a release from the plaintiff to Mr. Revans, but it was then withdrawn, and Mr. Revans withdrew from the box. Donald Drummond, stock keeper. — Was engaged by Mr. Revans and Mr. Waitt to take charge of stock at Nelson ; came from Nelson to Wellington in June, 1843 ; was then told by Mr. Revans that the plaintiff was to be a partner on his arrival ; after witness arrived here he went with plaintiff to look after the stock ; Captain Smith told the parties there that witness was to be manager ; received his instructions from Captain Smith ; only once saw Mr. Revans ; when he took charge of the sheep they were in a very bad condition, and witness saw many dead ; there were 970 in all ; the cattle and stock were delivered by Mr. Revans to Captain Smith on the 31st. August, last.

Arthur Todd Holrotd produced the deed of assignment, dated 3 1st August, 1844; received instructions to prepare it about a fortnight previous to its execution ; received instructions from both plaintiff and Mr. Revans; it was executed late in the evening of the 31st. August. William Flyger, Joseph Constable, Peter Touchings, Macnamaa, servants qf the plaintiff, proved that they understood the plaintiff to be a partner with Mr. Revans. A deed of mortgage of 100 head of cattle from the plaintiff and S. Revans to Messrs. Ridgways, Guyton, & Earp, to secure payment of a bill for £1,100, was then put in and proved, and a notice of claim to the sheriff founded upon it. James Inglis, accountant to the Union Bank. — There were two promisary notes for £500 each discounted with the bank, one by the plaintiff and one by Mr. Revans ; a dayor two after that by the plaintiff was discounted, a check for £397 was given by him to Mr. Revans, and that since transferred to Mr. Revans's account. Evidence was then offered to shew the sales of the property comprised in the deed of assignment, and the date of the proceedings in the original suit Betts and another v. Revans. This closed the case for the plaintiff. Mr. Hanson then stated the case for the defendants. — There were two questions for the jury to try, the existence of a partnership, and the validity of the assignment which had been put in* He should not have many proofs to offer, since the oljgftion to the deed lay upon the face of it, inasmuch as it was an assignment by a debtor of all his available property to the plaintiff, obviously for the purpose^gfdefrauding the defendants of their claim. It had bee'JKflready proved by Mr. Waitt that the claim upon his estate, which the learned counsel for the plaintiff had stated was set apart by Mr. Revans to meet the debt due to the defendants, was a claim which could have no existence until Mr. Revans had paid the defendants, so that the deed really assigned every thing of value of which Mr. Revans was possessed. He should prove, by Mr. Bannatyne, declarations by Mr. Revans, that the plaintiff was not a partner, which were quite inconsistent with the inference sought to be raised from the evidence of the servants of the plaintiff ; that Mr. Revans, as late as July, 1843, estimated a portion only of the property assigned by this deed at £10,100, the cattle, sheep, and station, at £6,600, being a little more than the sum at which it appeared from Mr. Waitt's testimony they had been valued at in May, in the same year; and the Gazette office stock and debts at £3,500. He should then prove by Mr. Waitt, that from the period of the transfer of the sum of £390 in the books of the bank, from the account of the plaintiff to that of Mr. Revans, that Mr. Revans had been in the habit of paying all Captain Smiths's accounts, so that nothing could be inferred as to the state of the accounts between them, from the fact of this sum having been so transfened. The consideration for the deed was a covenant on the part of the plaintiff to indemnify Mr. Revans from certain debts, and he should prove that Mr. Revanuhad since executed to the plaintiff a general release of all claims, including this covenant ; this would be the main evidence which he should offer, and upon that they would have to form their decision. William Macleod Bannatyne. — Is agent to Betts & Panton ; applied to Mr. Revans for payment of £1,769, the balance due to them ; he said that his property was so valuable that he had ample means of paying all that he owed, if a little time was given him ; the statement now produced is in the handwriting of Mr. Revans ; it purported to be an estimate of the value of his property, of the amount owing to him, and of his probable income in the next year ; I received it fiom him in July, 1843 ; I there find that the value of the cattle and stations is estimated at £6,600, and the Gazette office and debts at £3,500 ; the claim on Messrs. Waitt & Tyser is estimated at £700 ; Mr. Revans told me that this was the whole of his liabilities ; I asked him as to the plaintiff ; he said that he was not a partner, but had made some advances, and had an interest in the property to that amount ; I never heard, either from the plaintiff or from Mr. Revans, that the plaintiff claimed to be a partner until after the cognovit ; I was present at a conversation between the plaintiff and Mr. Revans as to a person of the name of Constable ; Mr. Revans asked the plaintiff to dismiss him, as being a relative, he did not like to do so himself ; lam a trustee of the estate of Waitt & Tyser ; £137 : 10 has been paid from that estate in discharge of the bill for £1,100; I showed Mr. Revans the forbearance I did, on the faith that the statementhe had given me was a fair estimate of the value of his property, and the amount of his liabilities. Cross-examined by Mr. Holroyd. — After Waitt & Tyser had assigned their property for the benefit of their creditors, Mr. Revans told me he intended to set apart the sum due from them for payment of the defendants. Robert Waitt remembers Mr. Revans going to Sydney in the beginning of 1842 ; from that time till the 15th May, 1843, was in the habit of letting the plaintiff have all the goods and money he wanted, and charging them to Mr. Revans ; it was always understood that Mr. Revans paid the whole of the debts of the plaintiff. Cross-examined by Mr. Hojuaorp. — There was a check for £100 in favor of the plaintiff paid over to witness, and also a bill of £270 upon Cox & Co., wmc-'i was applied in ( part discharge of the bills for £1,540, which, with another payment, reduced those bills to £1,100 ; the sum of £6,000 was the estimated value of the property at the time of Waitt & Tyser relinquishing the property to Mr. Revans ; not the cost price, but the value after deducting the loss wbieh had been sustained. Some other evidence was then given, and then Mr. Holroyd, the counsel for the plaintiff, was called upon to produce a deed of release from Mr. Revans to the plaintiff, which he refused to produce, on the ground that it was no longer in his custody. The serving of notice to produce was proved. Arthur Todd Holroyd. — Remembers attesting a deed of release on the part of Mr. Revans ; refuses to disclose the contents of that deed, as he became acquainted with

them in his professional capacity ; sent the deed to the plaintiff, from whom he received it, hefore he received the notice to produce ; it was executed a few weeks previously to the trial. Richard Davies Hanson.— Had seen the release referred to by the last witness ; it was executed by the plaintiff and Mr. Revans, and duly attested by two witnesses to each signature ; it was a mutual release of allclaims whatever. . Some other evidence on formal points was given, and Mr. Holuovd addressed the Jury for the plaintiff upon the whole case. The evidence before them was such, that he felt satisfied they would only come to one conclusion, that the plaintiff was entitled to their verdist upon both issues. With regard to the first issue, there was distinct proof of the fact of the partnership, and of the consideration which Captain Smith had paid for it. Mr. Waitt had proved that he had received £1, 500, the proceeds of a bill drawn by the plaintiff, and that money vas p.iid in contemplation of the partnership. The fact of the partnership was not merely proved by the testimony of those who were most likely to know, the servants of the plaintiff and Mr. Revans, but it was a matter of general notoriety. With regard to the deed : in the first place, there was no such thing as a fraudulent preference, excepting under the bankrupt laws, which did not prevail here ; any debtor might pay the whole of the claims of certain debtors in preference to others, and such payments could not be impeached. Then was there any thing fraudulent in this deed ? He contended that there was not. How stood the case? Mr. Revans owed money to various parties, and his property was not sufficient to discharge the whole. He had been the victim of the defendants, who had made a large profit out of him. Under these circumstances, he felt himself bound to provide for those who had better claims upon him. The plaintiff had become liable to pay a sum of i£2,100 for Mr. Revans, in addition to payment to the amount of nearly j£ J 4OO actually made beyond the sum advanced as consideration for the partnership. Mr. Revans alio was indebted to Mr. Constable, and Mr. Neilson in England, in two sums of £500 each, and to the Bank on a bill ot Messrs. Hut in the sum of £70. The plaintiff had taken upon himself to discharge all these liabilities, amounting, with the sum paid, to nearly £5,600, and in consideration of this, Mr. Revans bad assigned to him the property comprised in the deed. The learned gentleman thus went through the evidence as to the value of this property. The average of the values given by the different witnesses was £2,400, or thereabouts, so that the plaintiff had become liable for £1,000 more than the value of the property assigned. But there was no intention on the part of Mr. Revans to injure the defendants. Mr. Waitt had stated , that after the date of the assignment to the plaintiff, he had considered himselftobe solvent, and if he had been able to meet his engagements, there could have been enough to satisfy the claim of the defendants. It was the duty of Mr. Revans to protect the plaintiff. They could not suppose that the plaintiff would have been so foolish as to make these advances, and incur these liabilities, if he had not been promised security, and the deed of assignment, therefore, was only giving effect to an original agreement. The whole transaction was fair, and bond fide, and he was assured the Jury would take the same view of the case, and give the plaintiff their verdict. Mi-. Hanson for the defendant. — With any other jury he might have thought it needful to impress upon them the importance and necessity of deciding this case simply upon its merits, without any reference to the position of the parties, or the supposed hardship of their verdict; " but he felt assured that, with the present jury, such topics were needless. The questions to be decided were two, and it was needful to separate carefully the evidence relating to each. First, as to the alleged partnership. The evidence in support of this was of a suspicious character; it consisted entirely of the statement of pei sons in the employ of the plaintiff, and was contradicted by the direct testimony of Mr. Waitt and Mr. Bannatyne, the former of these gentlemen, who had been connected in business with Mr. Revans, and on terms of intimate acquaintance with the plaintiff, had stated that he never heard of the partnership ; that he had urged Mr. Revans to secure the plaintiff from his liabilities, and that he had no knowledge that anything had been done to secure him until the deed of assignment was made public. As, however, the liabilities of the plaintiff, as understood by Mr. Waitt, had only been .£3,040, exclusive of the two bills for £500 each, to which he should presently advert ; and the property of which the plaintiff was alleged to have been admitted to an equal share, was valued at £6,000, it is clear that the plaintiff would have been fully secured by being thus admitted as a partner. Could the jury believe that, if he had been a partner, Mr. Revans would not have stated this fact to Mr. Waitt, to calm his anxiety for his friend. Then Mr. Bannatyne proved a direct statement of Mr. Revans, that Mr. Smith was not a partner. How could it be alleged that a partnership was notorious, when these two gentlemen were not aware of its existence, and when no evidence had been brought forward to prove its existence, except that of servants ? Besides, would the jury allow a party to have the advantage of representing himself as the sole proprietor of a certain pi operty, and then permit a person who could not but have been aware of these representations, and the use made of them, to come in and claim a share in this property under a secret partnership ? It might be a hardship upon the plaintiff, but he must suffer the consequences of the concealment to which he had been a party. Witd regard to the second point, the validity of tho deed, the law .upon this case was founded upon the statute of Elizabeth, which avoided all deeds made to defeat or delay creditors of their debts or judgments, except in cases where they are made bond fide, and the assigner had no notion of the intent. That this deed was made to defeat the defendants of their judgment could admit of no doubt. They, it appears, were the only creditors excluded from the benefit of it, and at the time the deed was executed, Mr. Revans had in his possession the cognovit, which was, signed on the 2d of September, two days after the date of the deed, the next day being Sunday. As the deed, though put in, had not been read, it would be necessary for him to refer to it in detail. It was a deed of a nature which he had never before seen. Deeds of assignment to parties for the benefit of creditors were common, and there were also deeds of absolute assignment for the payment of an existing debt : but this deed was neither the one nor the other. There was no debt existing from Mr. Revans to the plaintiff, and the deed was so far from being for the benefit of creditors, that they would have no remedy under it. They were not parties to the deed, and consequently could not sue upon it. Such a deed certainly never had been supported in a court of law. If the plaintiff did not pay the debts which he had undertaken to pay, Mr. Revans was the only person who could proceed against him, and the jury might easily judge of the value of this security to the creditors. Then as to the alleged consideration : The plaintiff was already liable to pay the two bills for £500 each, and the bills of £1,100. These, therefore, even supposing that the allegations of this deed were proved, and that the plaintiff had become liable upon these bills for the benefit of Mr.

Hevftns, could form no consideration for the deed : but what proof was there of the truth of this allegation ? With regard to the bill for .£l,lOO, it appears that it was the balance of acceptances of the plaintiff for the original sum of £1,340, which had been given in May 1843. But assuming what perhaps mi^ht be the fact, that as between the plaintiff and Mr. Revans there might have been a partnership, though the plaintiff could not, in the circumstances, come in before the jury to allege that fact in bar of the execution of the defendants, it would be remembered that both to Mr. Waitt and Mr. Bannatyne Mr. Revans had staled the value of the aileged partnership property to be upwards of ; and though it might be contended that the statement made to Mr. Bannatyne was made deceitfully to obtain forbearance, yet that to Mr. Waitt was made after a valuation of the propel ty, in order to ascertain the result as to profit or loss on the joint adventure. Was it not then clear that the two sums of ,£1,500 and £1,540 : 7d. was the consideration paid by the plaintiff, in order to be let in to a share of the cattle and stations ? With regard to the two bills for j£"soo each, it was true that it appeared tliafc-Ckptain Smith had paid over to Mr. Revans £&90ouiof the proceeds of his bill, but it also appeared thafc'frbjb the date pf this payment, the plaintiff had kept no account at the Bank, and that Mr. Revans had acted as banker for him. Without some proof, therefore, of the state of the accounts between them, no inference whatever could be drawn from this circumstance, and there was consequently no evidence whatever to support the allegations of the deed. With regard also to tb* two debts to Constable and Neilson : Of the existence of the first there was absolutely no attempt at evidence, and with regard to the latter nothing which amounted to evidence which they could take. And it was upon such grounds as these that they were called upon to supportthisdeed ! Butitwasneedlessto examine thedeedin detail. The plaintiff himself had consented to destroy it. The only consideration of the deed was a covenant on the part of the plaintiff with Mr. Revans ; there was no payment alleged, no debt stated to be due j it was merely a covenant to indemnify : and in the deed which had been produced, but afterwards withdrawn by the counsel for the plaintiff, Mr. Revans had released him from that and all covenants. And this deed, it was proved, had been sent back to the plaintiff, in whose possession it woiild remain. Supposing, however, that they could conceive the deed not to be destroyed, letthem then look at the inadequacy of the consideration ; there was an acceptance by the plaintiff in favor of Mr. ELevans for ,£5OO ; £390 paid by the plaintiff to Mr. Revans on the other bills, and a bill for ih,ooo— which last wonld be reduced by the payment of Waitt and Tyser's dividend to the extent of about .£450 ; this would make the whole amount of the plaintiff's liability ,£1,540, and for this Mr. Revans had assigned property to the value of ,£2,500, according to the estimate of his own witnesses. Then let them look at the circumstances attending the execution of the deed 5 it was signed at night ; possession of the property had been delivered previously to the signing, and Mr. Revans had at the moment in his possession a cognovit which he was about to sign for the debt due to the defendants. If a deed of this kind could be supported by a jury in this colony, no person could believe himself to be safe in dealing with any one residing here; but he would not dwell upon these considerations. He would leave the case with the jury as it stood, believing the honor of the colony would be safe in their hands. j The learned Judge, in summing up, said — A duty, of some difficulty and much delicacy, devolvedfjipon the I jury : the case had already occupied two days, and the evidence was not very clear, or very satisfactory. The jury should dismiss from their minds all extraneous considerations, should forget whatever they might know from other sources, as to the position of the paities, or the nature of the case, and should confine themselves steadily to the evidence. The first issue was, whether the plaintiff, as partner, was entitled to the moiety. A partnership mightbeproved by an agreement; if there was no agreement, then by the acts of the parties. Here there was full proof of acts of the parties, from which a partnership might be inferred ; but against that was the statement of Mr. Waitt, that he had never heard of such a partnership ; and of Mr. Bannatyne, that Mr. Revans had denied it. The learned Judge then went through the evidence on this point, commenting as he proceeded. The second issue was, whether the plaintiff was entitled to the other moiety of the cattle, &c, and to the other property seized under the deed of assignment. The legal remarks he should make were, 1st — In point of law, a man may lcg|Hy» prefer a particular creditor even the day before judgment : whether a deed by wliich such a preference is given can be supported or not, depends upon other considerations. The learned Judge then explained the law on this point. The jury must consider if this deed were affected by any of the badges of fraud which he had described. 2cl, If there appeared any trust for Mr. Revans in the deed, the case, as to this point, would be at an end. He had looked through the deed, and could find no marks of a trust. If, upon examination, there should appear to be such a trust, then, even though flic verdict of the jury should be against the defendants, they might read the deed through carefully at their leisure and ascertain if he was right, instead of reading it through in a crowded and noisy Court. With regard to the consideration for the deed — first, as to the value of the property assigned. It was proved that Mr. Revans had lepresented the value of the property to Mr. Bannatyne at £6,600, while evidence was now given to shew it was at the time worth very far less. He did not know, however, that there was any thing inconsistent with mercantile proceedings in this. The jury would consider whether it was not a common practice with merchants to represent the value or the cost of ai tides as being greater than they really were, and he did not know that any charge had ever been made against them on that account. However, that was one piece of evidence as to the value, to go to them. The value of the property had been estimated by four witnesses ; the average of their valuation was under £2,500. Then as to the payments and liabilities of the plaintiff on account of Mr. Revans. It was not easy to arrive at a clear conception of the real nature of these transactions, and he had therefore collected nil the sums together, and he found they amounted to about .£3,800, exclusively of the debts which he has covenanted to pay to Mr. Constable and Mr. Neilson. The evidence as to these debts is very unsatisfactory : indeed, with regard to that of Mr. Constable there is no evidence. The jury would apportion this amount between the consideration for the partnership, and the consideration for the deed. If all these pre-existing debts prove such as Mr. Revans would be liable to pay, they might perhaps take them as a consideration for the^ deed. If the plaintiff paid these amounts, he at least weuld so far diminish the value of the property conveyed to him. The jury were, however, the judges of the sufficiency of the consideration, and the bond fides of the deed. As to the bona fides : If the debt due from Messrs. Waitt & Tyser were set apart by Mr. Revans for the discharge of the debts due to the defendants ; there was no bad faith. The jury would, however, consider how far this is negatived by the state 1

of Waitt & Tyser's affairs. The jury had been already informed that their was no trust in the deed, and the defendants would have an opportunity of laying his whole case before the Court, if their decision should be in a certain way. The jury then adjourned to Barrett's Hotel, to consider j their verdict, and after two hours' deliberation, returned into Court, and found for the plaintiff on both issues. Afterwards, on the motion of Mr. Hanson, a rule nisi was obtained for a new trial, on the ground of misdirection; and that the verdicl; was against evidence : and on the 18th July Mr. Justice Chapman delivered the judgmeat of the Qourt. ( To be concluded in onr next.)