SUPREME COURT.

Otago Daily Times, Issue 65, 30 January 1862, Page 2

SUPREME COURT.

Civil Side. WEDNESDAY, JANUARY '29. (Before His Honor Judge Gresson and a special Jury. Teschemaker and Strode v. M'l.ean.

This was an action to obtain damages for tin non delivery of 2450 ewes alleged to have been purchased by"James Macandrew of the defendant John M'Lean, and purchased of Mucaiulrcw by the plaintiffs. Mr. Cook and Mr. Gillies-appeared ■for the plaintiffs, and Mr. Richmond and Mr. llowarth for the defendant.

Mr. Cook opened tlio ease, and state 1 that in September, 1859, the plaintiffs purchased of James Macandrew, then carrying on business ji.-s .T. M:waudrew & Co., a certain run known us the Upper Chitlm with 2000 ewes, at the rate of 375. 6d. per head, to be paid for in four amounts, the first payment of £1000 in cash, and three acceptances, one for £1000 to come due on Hist, January, 1860, another for £1000 due 31st March, 1860, and the third for £7. r>O to fall due on 31st May, 1800 ; all the bills were met at maturity. The delivering of tlv. :.'OOO ewes was postponed to the mouth of Muv'.i, 1860. On the 12th March, Mr. Maeiii.drotv jjavc plaintiffs an order (produce!) on the defendant JohnM'Lcan, and on Allan M'Lcan, for "the 2000 ewes, to be driven across to their run ;" any expense incurred by M'Lcan's people to be clc'friij (:d by Jas. Macandrew & Co. The plaintiff, 'IWciieniakcr, presented the order at M'Lean's station on 30th March, lint the defendant was absent from home. Plaintiff, however, saw Uoht. M'Lcan, a brother of defendant, and applied to him for delivery. Eobt. M'Lean made some dimeulty in consequence of his brother being absent from home. In conversation, the affairs of Mr,. M'Andrew were referred to, and Kobt. M'Lean said, "Thank God, we are on the right side of the ledger, wo owe him money." Mr. Strode- was also present. The plaintiffs returned to Dunedin and called upon Mr. Macundrcw for an explanation. Maeandrew told them that he was unable to ticcount for the difficulty, and it must have arisen entirely from the absence of the defendant from home. Macandrew added that the Messrs. M'Lcan were in his debt, some £1500, and he had no doubt that the matter would be rectified on the return of the defendant, John M'Lean. At this time the plaintiffs had paid £3000 on Recount of the purchase, and felt anxious about their money, Macandrew therefore proposed to give them some security. While the security was being negotiated, the defendant came to Dunedin (on 30th April). On Ist May Mr. Mucaudrew handed to Mr. Teschcniuker an undertakincr, signed by John M'Lean, to deliver .24.50 ewes to the order of James Macandrew, in Nov., 1860. This was endorsed from Macandrew, to the plaintiff; The difference of 2450 instead, of 2000 ewes, was to allow for a lambing' season and the increase by lambs was estimated at 45 per cent., and one ewe counted for two lambs". After this the plaintiff, Tesehmaker, with Macandrew, met the defendant, and in reply to a question the defendent said it was not to be supposed that he should like to have sheep "delivered when he was away from home. Macandrew then went away, and M'Lean told Teschemaker that it would probably be more convenient for him, ( M'Lean) to deliver in January, 1861, after shearing in which case he would be ready to allow 2s. 6d. per hend for wool money. Teschemakcr assented and a note or memorandum to that effect was drawn up and signed by M'Lean. Nothing was said between the plaintiff and M'Lcan aboutpayment by Macandrew for the sheep. Shortly after signing this 'memorandum, the defendant, M'Lean, met Mr. Strode, and informed him that he had seen Teschemaker and that the document was signed. Nothing further took place, until January, 1861, when the plaintiff sent to defendant's run, to take delivery of the ewes, and delivery was refused. The plaintiffs were, therefore, obliged at considerable expense to make other arrangements for stocking their run to prevent it being" forfeited. Having thus stated the facts of the case, Mr. Cook proceeded to point out to the

jury, that the points upon which the case principally turned were how tar M'Lean was liable to bo bound by any sub-sale by Macandrew, and whether any fraud had been practised by the plaintiff, Teschemaker, in concealing the endorsement of Maeandrew when the memorandum about the wool was added.

Fred. Greer.deposed, that in September, 1859 he was managing for James Macandrew & Co. Mr. Macandrew was then the sole partner. He remembered a transaction between Teschemaker, and Strode, and Macandrew, about that time, .witli regard to a run and some sheep. The document produced [No 1] was in his handwriting. It was a " sold note" to Teschemaker and Strode, of the depasturing license of run, 340, with 2000 ewes, deliverable in January. 18G0, at 375. 6d. per head ; and was signed by himself on behalf of Mr. Macandrew, by Mr. Macandrcw's instructions. Believed that the £1000 cash was paid, and that the bills were met. Cross-examined by Mr. Richmond. —The book produced was Mr. Macandrew's book of bills receivable. The bill No. 261 was discounted on 31st Oct. ; No. 262, on 7th Nov. ; No. 263, o:i 23rd Jan., 1860. Henry Thompson Steel: AVas a clerk in the Union Bank, and produced memoranda from the books of the bank. The bills had been discounted by the bank on behalf of James Macandrew and Co.

William Henry Teschemaker deposed, that in September, 185!)', lie entered into an agreement to purchase a run and stock from Mr. Macandrew ; the agreement produced (No. 1) was that which he received. It was not tlipn explained to him where the sheep were to come from. When the. time came to take delivery, he learnt that he would have to go to Messrs. M'Lean's run, Morven Hill, to take deliveiy. Did not receive the delivery order produced until after he went to Morven Hill. Went to Morven Hill witli Mr Strode, and followed by two men to drive the sheep. Saw Mr. Robert M'Lean, who said that he had received instructions not to deliver the sheep. He said it was not in consequence of their not having a delivery order that he refused delivery, but from instructions receive* from his brother, Mr. John M'Lean. He said nothing about the sheep not being paid for. Returned then with Mr. Strode to Dunedin, arriving about 12th April. 1860. Went immediately with Mr. Strode to Mr. Maeandrew, who said that there must be some misunderstanding, and advised them to wait until the arrival of Mr. M'Lean, who would set the matter right. Meanwhile, he ottered to give security, but no arrangement about security was made previous to the arrival of Mr. M'Lean on 30th April. Saw Mr. Maeandrew on Ist May, and on 2nd May went with Mr. Maeandrew to the defendant, Mr. M'Lean. Mr. Maeandrew that day gave him the document , (No. 3). produced, which ran as follows : — | Dunedin, Ist May, 1860. I hereby undertake to deliver to the order of James Maeandrew, in November next, on my run, Morven Hiil Station, in the Province of Otago, two thousand four hundred and fifty ewes, from two to fullmouthed, free of disease. John M'Lean. It was endorsed as follows —" Please deliver the within, to Messrs. Tescheinakcr & Strode, James M acandrew." Mr Maeandrew said "Mr M'Lean prefers giving old sheep instead of lambs, at the rate of one ewe for two lambs." On meeting M'Lean, witness had the undertaking in his hand, and Mr. M'Lean remarked " you don't suppose, Mr. Teschemakcr, that I should like to have sheep delivered, when I was absent from the station." Soon afterwards Mr. Maeandrew went away saying " I leave you gentlemen to talk the matter over." Mr. M'Lean then said " I should prefer delivering you those sheep in January instead of November," and witness replied " It might suit us better though I should not like to say positively. If you give us the opjion, at what rate will you allow us in lieu of wool money?" Mr. M'Lean replied, "I suppose 2s. 6d. is the usual thing." They met again the same day, and went to Slbbald's hotel, and witness, in M'Lean's presence, wrote at the foot of the agreement, (No. 3.) the following note or memorandum :—"Gentlemen—Should you prefer taking delivery of the above sheep in January, 18GI, instead of November, 1860, I will allow "you'at the rate of 2s. 6d. per head in lieu of wool." He then handed it to Mr. M'Ltan, who aflixed his signature. Mr. M'Lean did not at any time, up to the period of signing, or until a year after, state to him, or give him to understand, that he, (Mr. M'Lean,) had any claim on the sheep ; nor did he give witness any notice that there was any other understanding 'with regard to the sheep, or any previous agreement as to wool money with regard to those 2,450 slice]). Mr M'Lean did mention that in a former case that sum 2s. Gd. per head, had been reckoned between Maeandrew and himself as the value of the wool. Did not, when presenting the memorandum to Mr. M'Lean for his signature, tell him that the memorandum would not be alleged as tending to prove any privity of contract on the part of M'Lean, or as any recognition of any right of property in the ewes on the part of the piaintitf. Witness did not conceal, or attempt to conceal, from Mr. M'Lean the endorsement on the document. M'Lean did not make any remark upon the word "gentlemen" in the memorandum. M'Lean knew that it referred to witness and Mr. Ss rode. AVas quite certain he had no notice that this sum of 2s. Gd. per head for wool was to bo in reduction of the price of the ewes upon payment for them. M'Lean made no allusion to payment for the ewes. In consequence of the non-delivery of these ewes witness was put to an extra expense of about £300 in getting the run stocked, and had his license postponed. Had not recovered one farthing of the money that he paid for the sheep. IJn Janunrv. 1861, ewes were worth about-30s. a head, jnd'iir May, 1801, about 325. | Cross-examined by Mr. Richmond.—Was quite sure that he was introduced to Mr. M'Lean, by Mr. Maeandrew as the holder of the delivery order. In the interval between parting with M'Lean and meeting him again at Sibbald's Hotel, he had seen Mr. Strode and Mr. Gillies, ami had agreed to accept the offer of 2s. Gd. per heitd—wool money. [At this stage of the case Mr. Richmond put in a letter, from tho witness to Mr. M'Lean, dated January 18(51, in which reference was made to the undertaking to deliver the sheep as a document oft he purpor! of w iiii-h M'Lean appeared to be wholly un.tware and in which also it was proposed that a plan should be adopted to save the loss of tho license for the run No. 340, without compromising M'Lean's position. The letter proceeded to state that the writer and Mr. Strode were acting under legal advice, and that they should, if they did not get the slwcp, institute legal proceedings.] The witness acknowledged the letter as his handwriting. He had met Mr. M'Lean near Oamaru, in January, 1861, and Mr. M'Lean had told him that he would not deliver the sheep without payment, and said that such were the terms of an agreement with Macamlrew, and witness then recited the words ot tho undertaking in which there were no mention of payment. In May, 1860, witness did not explain that ho expected the sheep without payment, because M'Lean had then in his hand an undertaking which spoke for itself. Witness did not at the time of signing tho wool memorandum tell M'Lean that he suspected that the sheep had not been paid for by Maeandrew. Had heard in May, 1860 that Macnndrew's circumstances were embarrassed, hut was not aware that lie could not fulfil his engagements to witness. The defendant did not distinctly refuse in May, 1860, to acknowledge anybody but Mr. Maeandrew in the transaction. Wit-nc.-.sdid hot ask M'Lean to sign a liieinoivinduin in order to know what he might get back from Maeivndrcw. After receiving tho undertaking and showing to the defendant, - witness recognised him (M'Lean) only in the.'.affair. Did not say to M'Lean with reference to the wool memorandum, " whatever you allow to Maeandrew he allows us." Did not furnish Mr. Gillies with a copy of the wool memorandum with the words "Messrs. Strode & Teschemaker " aflixed above the word " Gentlemen."

He-examined by Mr. Gillies : Had said to the defendant " If there is any difficulty, as I know there often is about drafting sheep with .young lambs, as we are both practical men, no difficulty need occur, if you will let me know."

To a Juror : Received the undertaking dated Ist May, from the hands of Mr. Macandrew, on the 2nd May, in the street in front of Young and MGlashan's store. Mr. Macandrew said "I told you it. t .would be all right when Mr. Jl'Lean arrived, and I suppose that will satisfy you. You can talk it over with M'l/ean." Witness kept it in his hand and heJd it, and referred to it while talking with the defendant.

A. C. Strode, one of the plaintiffs, was then examined, and generally eoniirmed the evidence of the previous witness. He also denied having ever received back from Macandrew any portion of the money paid on account of this transaction.

Cross-examined by Mr. Howarth : When, at Morven Hill, ltobert M.Lean spoke about being

being "on the right sidu of the ledger," they were talking about Macandrew's affairs. Witness supposed that M-Lcnn was referring to the sheep transaction ; that Maeandrew had bought tbe sheep of M-Lean. AA ritness and Teschemaker had some conversation with -.Robert M'Lean about buying sheep, and M-Lean was willing to sell. •Witness and Teschmaker then went to their own station, and afterwards returned to the Morven Hill Station, and declined 'to buy sheep of M'Lean until they liad seen Macaudrew. With regard to the refusal of Robert M'Lean to deliver the sheep, witness only knew what Robert M'Lean said," that- he had instructions from his brother not to deliver them.

AVilliam Logic, principal Sheep Inspector for the Province of Otago, deposed that in January, 1801, ewes from, two-tooth to full-mouthed were worth about 30s. In May they were worth about the same price. AVilliam Fenwick, a stockowner in the North, deposed that in January, 1861, the value of ewes from two-tooth to full-mouthed was about 305., and in May, if in lamb, they ought to have been worth about 355. a head. This concluded the case for the plaintiffs.

Mr. Howarth then addressed tlie jury for the defence, and drew -their attention to the respectable position of the parties, to the largeness of the sum involved, to the plea of fraud set up by the defendants, to the conflicting nature of the evidence that they would have to consider, and to the painful fact that it would be for them to decide that one or other of the parties had not spoken the truth. He then adverted to the question of the statute; of frauds, and argued that but for the statute of frauds the plaintiffs would have no standing in the court. As the case really stood, however, lie argued that the original contract of sale was for cash, and that the second purchaser could not stand in a better position with regard to the seller than the first priv-iascr. The "undertaking" he held, although saying nothing. of payment beforehand, could not supersede the previous contract of sale and delivery on payment, and it was only under the statute of frauds that the memorandum upon that document could be held to bind the defendant. He also stated that at the time that memorandum was signed, Mr. McLean said, with regard to the word " Gentlemen" that he only knew James Macandrew, and enquired did that rufer to Macandrew and Co, to which Tesehemaker replied, that all he wanted was to get the same allowance as was to be made to Macandrew. Mr. Howarth further stated that the fact was that Macandrew sold to the plaintiff a. run and 2000 sheep, and thnt the plaintiffs had paid their money, but that as Macandrew was not able when the time came to deliver the sheep to them, he was glad to take any means to put them off, and so applied to Me lVJim to give him aid by undertaking to deliver the slieep, with a distinct understanding that McLean should not be required to give them up, but that Macundrcw should import them as he had done before. He concluded by saying that it was not to be supposed that his client was such » simpleton as knowingly to sign a document that would bind him to give the sheep for nothing. He then called

John M'Lean, -who said that about the beginning of Oct., 1559, Air. Maeandrew came to him and said that lie hail sold a run and 2000 sheep to Tesohemaker, and that he was importing the sheep. But, in case iie should be disappointed, he asked witness to promise to let him have the sheep, to carry out his contract with Tesohemaker. To this, after some hesitation, lie (M'Lean) agreed.'

Mr. Gillies objected that this was referring to a contract with which his clients had nothing1 to do. .

After some discussion, his Honor said that lie saw the objection, but was reluctant to shut out the evidence.

Mr. M'Lean then proceeded. Shortly after this he went to Auckland, but, before starting, he called on Mr. Macandrew, and told him that if ho required the sheep, he must now pay for them.

His Honor said that it seemed to him that this evidence would go to impart parole, evidence into written evidence, "to alter, to vary, or to add to it," against which there was a plain rule of law. Mr. M'Lean proceeded to state that when lie signed the " wool memorandum," he did not understand that he was dealing directly with Messrs. Teschemaker and Strode, and that he distinctly said so to Teschemaker. Teschemaker asked him.if he had told JVlacandrew that if he kept the sheep until January he would allow him 2s. 6d. per head upon them. Witness replied that he had, and Teschemaker then said, " Would you mind giving us a memorandum to that effect; we have paid Mr. Macandrew, and want to know what we are to get back from him." Witness replied that he had no objection, and then went with Teschemaker into Mncandrew's office. Teschemaker went up to the table and wrote the memorandum, and witness signed it. Teschemaker did not show him the hack of it, nor did he see the endorsement until January 18til. On seeing the word "Gentlemen,"immediately after signing, witness said, '• Mr. Teschemaker, now, yon recollect, I don't make this allowance to you at all. I make it to Macandrew & Co., when they pay me for the sheep. I know nothing of you at all in the transaction. I made this promise: from the first to Macandrew and Co., and I look upon myself as doing so still." Teschemaker replied, "we clearly understand that. The object is to know what -vra are to get from Macandrew ; whatever you allow him he pays us." He (witness)had never been paid for the sheep. Bi-fore leaving the office Mr. Teschemaker made a remarkabout Macandrew being a slippery customer, and having already disappointed him, witness rei)lied, "I have nothing to do with that Mr. Teschemaker; you know the reason why the sheep were not delivered to you." Teschemaker replied, " Oh, yes, we suspected it." In May, ISfiO, Macandrew owed him money, indeed, the balance was always against Macandrew, and sometimes for large sums. By Mr. Gillies : Could not say how much Mr. Maeandrew was in his debt. Could never get an account. As near as he could guess there must be about £100 to X2OO due to him still. Could not say how much Macandrew owed him in Jan., 1860, but the day before leaving for Auckland he gave Macandrew his promissory note for £000, which was discounted at the bank. Had been dealing with Macandrew but got nothing from him between January and March. He gave the £500 acceptance to meet any orders that might be presented, for he was in the habit at that time of paying all accounts by orders on Macandrew.

Had a faint recollection of having asked Mr. Strode to become treasurer for the Linclis Pastoral District. That must have been after the wool memorandum was signed. Never said to Strode "I have seen Teschemaker. rind that affair is all right." Was staying at Sibbald's Hotel, but would positively swear that it was not there that the wool memorandum was signed by him. Could not remember whether Mr. Macandrew was Superintendent at the time or not. The delivery undertaking of Ist of May was written and signed at Miieaiulre w's office, and not at his private house. It was a day or two after signing that document, that he met Tesehemaker aiftl Macandrew. Never said to Teschemaker, " You don't supppse, Mr Tesehmaker, that I should allow sheep to be delivered when I was away from home," nor did Teschemaker say anything about them "both being- practical men,&c," nor did witness say about the woo!, " I suppose 2s Oil is tlw usual tiling." Did not consider 2s 6d the usual tiling. Tesohemaker told him that he had paid Macandrew for the run arid sheep. Hfi did not then tell Tcscheuisiker directly that he had not been paid by Macandrew for the sheep, and that he would not deliver them until he was paid. His agreement was with Macandrow and Co., which, he believed, meant Mf.candrcw alone. Knew that Teschemaker and Strode were interested in the sheep, because, as far back as 1859, Macandrew, when first speaking about the sheep, wanted the sheep to carry out his contract wtih them, and he (witness) understood it was the same transaction running on. Was not prepared to say that Teschemaker made any false statement to him lit the time of signing the endorsement.

Mr Howarth here, by leave of the court, put into the witness.'s hnnds an agreement, which was rend in court, and acknowledged by the witness. It ran as follows:—

" Dunedin, 1 May, 18G0. " I hereby undertake to deliver to the order of James Macandrew, in November next, on my run, Morven Hill Station, in the Province of Otngo, 2450 ewes, from two to full mouthed, free of disease. Terms, 27s Cd per head cash on delivery, " John M'Luax. ".lambs Macandkew."

To a Juror : Gave the undertaking for 2450 ewes, to oblige Mr. Macundren' in the same way as he had previously given the undertaking for 2000. This concluded the evidence for. the defence. Mr. Richmond then addressed the jury lor the defence, arguing that this was not a case of two parties both in equal danger- of ruin, and both struggling in such a way that the safety of the one must be the ruin of the other, but it was an attempt to drag another person into the mire

who was not in it. Tescbemaker and Strode had lost their money, and they now sought to throw their Joss upon M'Lean. With regard to the id legation of fraud, he did not mean directly to accuse the other side of fraud, but to charge them with kyal fraud—that'was to say, tlwtif the document was to bear the construction they wißhed to put upon it, it was a fraudulent transaction. With Vpga-d to the rights supposed to be conveyed, ho argued that the legal possession of all property in the sheep could not have been transferred by a delivery order, because there was no perfect sale, nor was a delivery order of any use or value to transfer the possession of goods where there was no special description, and no warehouseman on '• mere baillee." He also quoted a case, " Dixon v. Bovill," in which —where one party (Dixon) had undertaken, by a written agreement, to deliver free on board at Glasgow, after a certain date, 1000 tons of pigiron—Lord Cranworth held that the agreement was not a negociable instrument ; but yet. gave judgment for the respondents, because Dixon, aft' i wards, in correspondence with the siu,-^>ur-chiv.er, acknowledged the agreement. Mr. Richmond further urged that if the agreement was taken as a contract, it was void in English, law, because it contained no consideration, —it was, in fact, a nudum puctum. The case of Dixon v. Bovill, they would observe, came under the Scotch law, which varied in that point from that of Kngland. He then went seriatim through the different issues before the jury, and concluded by expressing his conviction that they must find a verdict for the defendants.

Mr. Gillies rose to reply, and observed that the other side had sought to throw upon his clients the imputation of fraudulent dealing, but he should like to know what the jury thought of the conduct of the defendant in the matter, who signed two separate documents—one which did all the mischief, 7iot bearing the important words "terms 275. 6d. cash on delivery", but the other bearing those words evidently written afterwards with a different colored ink. (The document was here handed to His Honor, and by his orders handed to the jury, who agreed with His Honor that the words " terms cash on delivery," appeared to have been put in since the document was first written.)

Mr. Gillies then proceeded to cite cases in point, to rebut those cited by Mr. Richmond with regard to the value of delivery orders, and the rights of sub-purchasers. He argued that the rale caveat emplor did not apply to tin's case, because his clients had acted on the faith of what they believed to be an honest document. ■ It would have been an impertinence for them to have gone to the original vendor and asked him whether he had been paid, or whether there was any reservation or private agreement. He argued also that the word " Gentlemen " was a sufficient link to connect M'Lean wiih the plaintiffs, because there was at'tLnt time no such firm as J. Maeandrew and Co. M'Lean's own memorandum, indeed, only referred only to J. Maeandrew, who was at that period Superintendent of the Province. He argued that everything went to show that the desire of M'Lean was to shield Maeandrew throughout the whole, transaction, and that he hud been conniving at what Maeandrew did, by giving fresh delivery orders, and by such ambiguous phrases as that about not allowing sheep to be delivered in his absence. It was absurd to hold M'Lean up as an innocent party. The allowance of wool money, he also contended was conclusive for his clients, because the wool could only belong to the owner of the sheep. In conclusion, he said that he claimed a verdict for the value of the 2,450 ewes at the time the action was raised, in May, and for the expenses incurred by reason of the non-delivery of the shoep, and for the wool money.

His Honor then summed up the case, in the most careful and elaborate manner, and having gone through the facts proceeded to lay down the law ; explaining that an ordinary vendor retains a right of lien over his goods until they are paid for, but if he has any dealing with a third person in the shape of a sub-purchaser, he give a currency to the sale, and loses his right of lien. His Honor instanced a case in point. He also pointed out some discrepancies between the evidence of the defendant and the idea of his being imposed upon by the plaintiffs. He then went through the issues, and directed the jury how to find in each, if they believed the evidence ; and should they find for the plaintiffs, he left the amount of damages to be decided by them. Mr. IJichmond said he believed now was the proper time to give notice of a bill of exceptions. A discussion ensued, in the course of which Mr. Richmond said he was aware that the only appeal lay to the Queen in Council, and that hisclient would not be satisfied with an adverse verdict, except of tiiu highest tribunal. It was ultimately agreed to allow Mr. Richmond to tiike exceptions, as a ground for a motion for a v.^at trial..' :

At a quarter to ten o'clock the jury retired to consider their verdict, and after an absence of halt-an-hour, returned into court, having found for the plaintiffs on every issue, and gave a verdict for damages for non-delivery of the sheep, £;i775 ; and wool money, £306 os. ; total, £4081 ss.