DUNEDIN.

Southland Times, Issue 674, 24 May 1867, Page 3

DUNEDIN.

SUPREME COURT.— IN BANCO. (Before His Honor Mr Justice Chapman.) DEMTTBBERS. Marchant v. Davies. — This was a demurrer to a plea; Mr Macassey appearing for the plaintiff, Eobert Mudge Marchant, and Mr James Smith for the defendant, James Eichard Davies, senior. The short case, as made by the declaration, iS this: — On the 16th February, 1866, an agreement was signed by the parties, according to the terms of which Marchant was to sell to Davies, for .£4OOO, " one-third share in a rail invented by the said R. M. Marchant, for railway purposes, to be called "* The Compound Eail.'" The rail was to be patented jointly, in such countries as might be agreed upon. Davies -was to make such payment on account of the <£4000 " as may be practicable during the existence of an injunction preventing the said J. E. Davies from disposing of certain provincial securities now in his possession;" and the whole was to be paid within a month of the dissolution of the injunction, or the completion of any arragement which enabled Davies to deal with the securities, those securities being Southland debentures. If there was failure so to pay within a month Davies was to give to Marchant a debenture for £5000, and Marchant was to be at liberty to realise on it, as for himself, if at the end of a second month Davies had not paid any balance of the .£4OOO, or made some other arrangement satisfactory to Marchant. Any surplus on the sale by Marchant was to be repaid to Davies. In March Davies paid .£SOO, and in October £1 000, bn account. " That all conditions were performed," &c., by Marchant, but Davies had not paid the balance or given a debenture : wherefore, Marchant seeks to recover .£3OOO. By the pleas, Davies admits having signed the instrument as set forth in the declaration ; otherwise, he denies all the material allegations. There is also pleaded, upon equitable grounds, a plea of seven paragraphs. The points of that plea are these: — From 1863 to 1866, Davies was contractor with the Southland Government, for the construction of the Bluff Harbor and Invercargill Eailway, and the Oreti Eailway j and Marchant was, during the greater part of that time; EailWftT^jgjfteerto'the Goyerninent, bo that heWtQßup-3?Yi§Q && coataQl Qm&s

work, and to give certificates for progress payments. Great intimacy between the two families, resulted from this business intercourse; and upon several occasions Davies lent money to Marchant, " being aware that, in consequence of monetary difficulties under which the Provincial Government of Southland was then laboring," the plaintiff and others were very irregularly paid. Sums of -£40, -£500, £250, £250, and £500, were so advanced to, or on behalf of, Marchant, during 1863 and 1864; in 1866, further sums of £500 and .£IOOO were lent ; "no part of which moneys has ever been repaid by £he plaintiff." The two last-mentioned sums (continues the plea) were those alleged to have been paid on account ofthe £4000 ; but they were not so paid; the circumstances under which they were lent being these :— Marchant had a dispute with the Southland Government as to the remuneration to which he was entitled, and there was arbitration. The £500" was lent by Davies, through A. J. Smith, to enable Marchant to pay the arbitrators' fees, and to take up the award; the £500 so lent being in certain negotiable acknowledgments of the Southland Government, Davies being the payee. The £1000 was advanced by two Southland acknowledgments for £500 each ; and that advance, or loan, was made on Marchant's request, on the 2nd October, when Davies (on his way to Dunedin from Southland) met him at Pollock's accommodation house, Popotunoa. The circumstances under which Davies signed the agreement set out in the declaration, are stated in the plea as follows : — On or -about the 16th February, 1866, when Davieß was residing in Dunedin, at Smith's house, Marchant called upon Davies and told him "that the Provincial Government of Southland had appointed an Investigation Committee to enquire into all matters connected with the railway contracts in Southland, and that he, the plaintiff, feared that if he or the defendant were examined upon oath as to any monetary transactions between them, the sums which the defendant had advanced to the plaintiff as loans, would be considered by the Committee as bribes given by the defendant to the plaintiff, to induce him improperly and fraudulently to grant his certificates for payment ; I and in order to account for the sums so advanced, the plaintiff had drawn up a document which plaintiff and defendant could sign (or words to that effect) ; and the plaintiff then produced the agreement set forth in the declaration, which the defendant signed, on the repeated assurance of the plaintiff that it was a mere matter of form, and was to be used only i to enable "the plaintiff to pass the Investigation Committee without suspicion." The agreement (the plea adds) was never intended to be binding ; for signing it, Davies received no money or other consideration from Marchant ; and the sole object was to avert any suspicion, which might otherwise arise, of collusion as to the certificates for progress payments. The plaintiff demurred to this second plea; the matters of law relied upon being — That the circumstances stated fail to disclose any illegality in the contract sued upon; that the plea fails to show absence of consideration in the contract. Mr Macassey, in support of the demurrer, contended that the circumstances set forth in the plea were mainly irielevant; for there was in the plea no charge of fraud nor any allegation of a misrepresentation of existing facts. He quoted, as indirectly in favor of the plaintiff, the cases — Pym v. Campbell E. and B. 370), Eodgers v. Hadley (32, L. J. N.S. Ex. 245), and Wallis v. Littell (31, L. J. N.S. 100). Under the English plea of non assumpsit, the defendant would have to give in evidence the circumstances which he said went to show that there had not been a perfect contract ; here the defendant had iriyokedthe decision of the court by pleading a set of facts which, at the highest, only went to show that at the time the contract was made it was not then complete and binding. If the defendant wanted to get rid of the contract he should have alleged that he had renounced it ; for in this colony a contract or chose in action might be assigned, and it was of the last importance in such a case as the present to show that nothing had been done to forfeit any right there might be from the contract being a nullity. There were many cases showing that where there was a clearly fraudulent contract the party to it who might otherwise have had a right to complain could not claim a recision unless he showed that he could place the other party in statu quo. The defendant ought to show, but did not, that he had no other consideration for signing the contract than the consideration mentioned. — -Boden v. Wright (12, C.8,_445), Bailey v. Goldsmith (Peake's N.P. Beports, 56), Bianci v. Nash (1, M. and W. 545), Northwestern Railway Co. v. MichoU (5, Ex. 114.) _Mr Smith, in support of the plea, relied upon Pym v, Campbell, Wallis v. Littell, Davis y. Jones (17, C, B. 625), Gudgeon y, Basset (6, B, and B, §86), AH thqae cases were. tocUy ia, $QJ&t» H U 90U14

satisfy the Court that the plea amounted to a plea that there was no agreement. The latter portions of the second plea were ample to show that there was no agreement ; and the cases quoted established that, although a defendant could not adduce parole evidence to vary or to control an agreement meant to be operative, such evidence was admissible to show that what appeared to be an agreement was never intended t6 have any effect as an agreement. It surely could; not be necessary for the defendant to show or to allege that he had renounced that which was never intended to have any potential existence. To ask that he should do such a thing, was to ask that he should prove a negative. Mr Macassey replied, and he contended that the plea was not specific enough to allow evidence to be given disputing the points involved in what was rightly stated in a general form in the declaration, "That all conditions were performed," &c. After an adjournment, The Judge said that he had very carefully considered the wording of the second plea ; and he was of opinion that the demurrer must be over-ruled. He was unable to distinguish the material allegations of that plea, from the principles of Pym v. Campbell. There was no doulst whatever, that, although parole evidence could not be given to vary, to add to or take from, a written agreement, yet such evidence might be given to show, among other things, that at the time •such an agreement was made, there was an undertaking or understanding not to act upon it. In England, that parole evidence could be given under the general issue, because that plea meant, in the view of the Courts, and in relation to the whole ofthe recognished principles of pleading, that there was no agreement at all. The rules of practice here, however, required that all material averments should be specially 'pleaded, and, therefore, the matter relied upon, and which could be given in evidence, to destroy the effect of a written agreement, must be set forth iri the plea. Therefore, although the plea here was objectionable, and especially in the introduction of the first five paragraphs, which were unnecessary, yet he thought the last two paragraphs sufficiently showed the defence to be set vp — a defence which, if it conld be established, would be good in law. He was not sure that the demurrer must not have been over-ruled, if the plea had stopped at the fifth paragraph — that the agreement was signed only to enable the plaintiff to pass a certain Investigation Committee without suspicion. But the plea went further, and set up that the agreement was signed at the request of the plaintiff, and solely for the purpose of averting from the parties any suspicion of collusion in relation to certain certificates. The demurrer would be over-ruled, with costs. The plaintiff could then reply without requiring leave. Demurrer over-ruled, with costs. *