A STRONG DISPUTE—THE SOUTHLAND EAILWAY CONTRACTS.

Southland Times, Issue 893, 3 February 1868, Page 2

A STRONG DISPUTE— THE SOUTHLAND EAILWAY CONTRACTS.

DAVIES V. MJLBCHANT. Mr James Smith, with whom was Mr Macdonald, of Invercargill, appeared for the plaintiff, James Eichard Davies, sen. ; and Mr Jas. Macassey was for the defendant, Bobert Mudge Marchant. The plaintiff claimed to recover £3883, for money lent and advanced, work done, and goods supplied to the defendant, and on an account stated. The defendant I pleaded payment as to items amounting [to £198 ; and as to the remainder, he ! gave a general denial to the allegations i in the declaration. Mr James Smith stated the case ; and the following evidence was given : — James Eichard Davies, the plaintiff; I received a letter from the defendant, requesting me to purchase for him, in Melbourne, some woman's wearing apparel, a stove, and some goats. I purchased them and delivered them. The total cost amounted, I think, to about £20, £9, and £14. I have not the letter with me. It was in May, 1863, that I received it. I gave the goods to the defendant, at Invercargill. He was then the engineer for the Southland Eailways. When I first came over, I took a contract for breaking road metal- for the Southland Government ; but the railways were about to be tendered for, and I came down with the intention of tendering for them also. There were other transactions between the defendant and myself. He bought a buggy from me in January, 1864 ; the price was £80. During the same Lionth, he borrowed £500 from me. That transaction took place at my office in Invercargill. There was no other person present when he asked me for the money. He came into my private office and asked me for the money; and I called Mr Smyth from the outer office, and he went and fetched the money, and put it on the table. Mr Smyth was then my partner; he acted as my principal agent. I did not take from the defendant any receipt for the money; but I made a private memorandum of the matter. I produce the book containing that memorandum. I cannot give details as to the carting referred to in the account ; it was done under Mr Smyth's superintendence. In April, 1864, the defendant, at my office, borrowed £250. Mr Smyth again brought the monoy from the* outer office, and he was present when the defendant had it. I made a memorandum of that transaction ; and I produce the book. The house referred to was built and erected according to the defendants instructions. It was intended, for a portable station, and it was erected" on some land which the defendant had leased. When I included the cost of the house in my returns as against the Government, the defendant told me to strike it out, saying that he would settle with me privately for it, as it was on his property. It is there now, in fact. The defendant not only instructed me to build the house, but he furnished me with the plans ; and his land, oh which the house stands, is within a mile ofthe railway. The £400 charged for the house, is its cost, with 10

per cent, added for nay profit. In June, 1864, in my private house, I lent the defendant £250 : there was no other person present. In July, I lent him -£500, and in September, -£300. Both were lent in my private house, and no other person was present. As to the £75, I cannot speak. It was lent by Mr Smyth ; and so was £500 in March, 1866. The £1000, I gave to. Mr Marchant at Popotunoa, in September, 1866. In April, 1864, I received £100 from the plaintiff on account of the moneys. I had advanced — not on any particular account. By Mr Macassey : I have had a great deal of litigation recently; with Mr Connor, amongst others. Mr Macassey : Are you the person of whom Mr Justice Eichmond said, in Davies, jun., v. Connor — Mr Smith objected to any question being put. After argument, The Judge declined to allow the question. The jury were to judge of the credibility of the evidence of the plaintiff, by his demeanor in the box, and by the light of any other evidence that might be given ; but he (the Judge) did not think that counsel could import the opinion of any other person as to the witness, howsoever high that other person might be. Mr Macassey submitted that his question, which he had not been allowed to complete, came within the category of questions which a witness was bound to answer. The Judge: If you want Mr Justice Eichmond's opinion, put him in the box. You are now attempting to get . in evidence upon which the plaintiff would have no power of cross-examining. That is the real test of whether it should be allowed. Mr Macassey : Will your Honor take a note of the question? Mr Smith : All the effect you. want might be gained, if your question were merely stated. The Judge: No, I shall not take a note of it. Ido not think it necessary to do so. Cross-examination continued : Ido not produce a single receipt, acknowledgment, or voucher, for any of the items in the total claim of £3833. There is a crossaction pending in which the plaintiff seeks to recover a large sum from me. His action was the first commenced ; and until he commenced, I never made auy demand upon him for payment. He had promised to pay me. I cannot tell what has become of the letter I say I received from the, plaintiff. I drew cheques for the amount. MrsDavies purchased the wearing apparel, and the account was rendered to the defendant. I cannot swear that there were were any other articles of apparel concerned that are represented by the account for £9 16s showed to me. The goats were purchased expressely for the defendant, at his own request; fchey were not given to his, little girl. The defendant came to me in my office, Dee-street, Invercargill, and asked me to lend him the first £500. He told me that he had been a long time in Victoria doing nothing, and was, in fact, " hard up." He asked me for a loan of £500. I offered him a cheque, but he refused it, and he begged that the affair might be kept as secret as possible. I called to Mr Smyth, who. afterwards went into the other office, and got £500 in notes, from the safe. I cannot tell you whether they were £10, £50, or £100 notes ; they were made up in a small parcel, and they were not counted in defendant's presence. I did not ask him for a receipt, or when he would pay back. It was not a trifling matter to me: but consider the position he held — I dared not refuse him, almost, anything he might ask. I produce the book in which I made the private • memorandum of the loan. I will not undertake to swear that it was made in the defendant's presence. It was made on the day of the loan, and for my own eye. No addition was made, after the memorandum was made. The entry is in a sort of patois of Welsh, I suppose. I will not swear that the figures, " 500," or the "E.M.M." were written at the same time as the rest. The entry was made so that nobody could understand it but myself; that was because of the defendant's request. I kept books at this time. The £500 is debited as " plant." I produce the book with that entry. A Mj Guthridge kept the book : it was made up at the time, I suppose. This is the general account-book. There was a daily account-book kept. I cannot say that the £500 was entered in any other book. I gave Mr Smyth a cheque for £500, to replace the amount in the safe. I produce my private entry as to the £250; that also was fetched by Mr Smyth. I did not, seeing that the defendant had borrowed £500 within three months, ask him when he was going to repay it ; nor did I take an acknowledgement for the £250. My signature is to the document handed to me.-rr[The agreement declared on in the crosss-ac-tion.] There was an argument as to whether the agreement could be examined upon. Jhe Judge : That document purports to be an agreement by which you purchased of the defendant an interest in something, for £4000. The Witness : Yes. The Judge : That is enough as a foundation. Cross-examination continued : The sums of £500 and £1000, the last in the bill of particulars, were not paid under this agreement. Mr Smyth can explain the £500. I positively deny that the £1000 was a payment under this agreement. The date of the transaction is October, 1866. I was not then in the defendant's power. My railway contract was made in September, 1863. I had j received a letter from him requesting to see me. This is the letter (September | 29th, 1866), and which I read. He had previously written to me about a concession he had had of a railway in Wellington ; he said he had been put to great j expense, in having to keep up an appearance ; and that if I would let him 1 haye a further loan of £1000- ho would

be sure to repay me &U he had had. This was on the 2nd October, 1866. I did not take any receipt from him, because I had the most implicit confidence in his sincerity. I saw him shortly afterwards in Dunedin. He wanted me to go to Wellington. I went to see him,. because he was much bruised, from the accident mentioned in his letter" o&JSeptember. No, t think it was at his request I went. He did not want more money then. I swear that nothing was said as to money. He wanted me to go up and see about the line, for which he said he had the concession. The capacity in which I was to go was not specified. I was to look about the railway. He said that he would repay me everything. I intended at first to go to Wellington, but I did not ;go. I saw Mr Hutchinson at my place, at the Mataura, on the 13th October, 1866. He brought me a letter from the defendant. It was as follows : — " I have made business arrangements with Mr Hutchison, which oblige me to refer him to our agreement, dated 11th February, 1866, a copy of which I have given him. I explained to him that circumstances prevented your immediately handing over the greenback for £5000, in security for payment of the balance due on the £4000, as provided in the agreement, but that you had experessed yourself most anxious to avoid any appearance of breach of faith, and to do this at the earliest possible moment, and that I knew you would in every other way, endeavor to meet his views. I also told him that by the Ist December you would be in a position to complete the terms of the agreement either by payment of the baknee, or by deposit of the greenback referred to in the agreement, unless different arrangements, satisfactory to him, were made. .Although he wants the money, he has promised me to do the utmost to meet your views, and I am sure you will do your best to meet him in the matter. Any arrangement you come to with him will be satisfactory to me." Mr Hutchison brought me a copy of the agreement of Eeburary, 1866 ; and he said that Marchant saicl I owed him £2500. I replied that I did not owe him anything ; that Marchant was greatly indebted to me ; that the agreement was made as a matter of honor, and for a particular purpose at Marchant's urgent request ; and that I would sooner chop off my right arm than break faith with anybody. Mr Hutchison spoke of a proposed business arrangement between him and Marchant as to gas works. I did not tell Hutchison that he could safely enter into such an arrangement — quite the contrary. I did not tell Hutchison that I owed Marchant £2500, and that I would pay it as soon as an injunction in another proceeding had been removed. It had been removed long before. I said expressly that Marchant was heavily indebted to me I had at this time settled with the Southland Government, I did not tell Hutchison that my debentures were all tied up in the Union Bank at Invercargill, or in any other bank. I never told Connor, in connection with our disputes, that I could not settle with him because I was heavily indebted to Marchant. 1 never spoke to him about Marchant, in . any way. The Mr Smyth I have spoken of is a son-in-law of mine- I had not and have not any interest in his recent contracts. At the time at which the advances were made to Marchant, Smyth was my confidential agent and general manager. Ec-examined: I think the £40 cheque included the price of the goats. An engineer has power over a contractor to mar or make him — he could -annoy him very much — in fact ruin him. The defendant had to certify for my fortnightly payments as contractor for the Southland Eailways. The defendant's name did not appear on the cheque I gave to Mr Smyth to replace the £500 ; that was because the defendant wanted his name not to appear. This letter of the 10th June, 1866 :s the one I received from the defendant, from Wellington : — " I have reason to anticipate getting a concession here, on a proposal I have submitted, which really amounts to getting paid for the railway before it is begun, and possessing it when it is finished. A week or two will probably decide matters respecting it, and as I shall want to communicate with you, I wish you to keep me, about that time, well informed of your movements, that, no time may be lost in communicating. Keep this information entirely to yourself for the present. I like Wellington very much. * * * I also send down a certificate for £1700 to the New Zealand Bank, for sale at 95 per cent. I hope money will be sent me, one way or the other very shortly." Mr Marchant came to me in Dunedin and told me that an Investigation Committee had been appointed ; that it would not do for it to appear that there had been' money transactions between us, if either of us was called ; and that he had drawn up an agreement which would serve to cover the matters between us. Evidence as to the contents of the agreement was objected to ; and Mr Smith pressed for its admission. The Judge declined. The plaintiff had sworn that the £1000 was not paid under any agreement, real or otherwise. Mr Smith was now wanting to get out that the agreement was a fraud between these two men, to blind the eyes of a third pary. Could that do the plaintiff any good. Mr Smith would not press the matter. Alexander Jerusalem Smyth : lama sheep-farmer in Southland. lam the plaintiff's son-in-law. In 1863 I was his partner and agent in railway contracts with the Southland Government. I remember that in 1863 the defendant bought a buggy from the plaintiff, and that I delivered it. The price was LBO. I remember, in 1864, the defendant going into the plaintiff's private office, and asking for the loan of LSOO. I was in. a passage near the office. The defendant said that he wanted some money ; the plaintiff asked, about how much, and

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nrrtfif in*- * v n ■ V i .. i .i_m the defendant said, about LSOO. Th* plaintiff told me to get it, which I did, from the Bafe. ' I put the £500, in notes,, Onthe table; the plaintiff gave it to the defendant; and the defendant thanked the plaintiff, saying that he would return it as soon as 'possible. I did some carting for the defendant — 13 or 14 loads of a four-horse dray ; £5 a load was a fair charge. I acted as agent for the plaintiff. I was witness to the loan of £250, in the office, two or three months after the £500. I again fetched the money, and gave it to the plaintiff, who gave it to the defendant. At the defendant's request, I lent to his son £75 : it was the plaintiff's money. In March, 1866, the defendant, got direct from me the sum of £500 : that was the plaintiff's money. He distinctly told me he wanted it to enable him to take up the award, in an arbitration between him 'and tha i Southland Government. By Mr Macasssey : I was partner in the railway contracts, privately ; my name did not appear. I most distinctly heard the defendant ask the plaintiff for tha £500 in March. I counted the notes— the defendant did not count them in my presence. In the case of the £250, as in that ofthe £500, I distinctly heard the defendant say he would repay as soon as he could. T made a subsequent advance of £500, although there had been no repayment, because of the defendant'! peculiar position to me — I had a contract, and he was the engineer. Ec-examined : I was in his power. This was the case for the plaintiff. Mr Macassey, in stating the case for the defendant,"Baid that the jury's duty was a very painful one — for the issue really was, perjury or no perjury. Eobert Mudge Marchant ; lama civil engineer, and reside at Wellington. In 1803, 1864, 1865, and two or three months of 1866, 1 was living in Southland, and was railway engineer to the Provincial Government. I became acquainted with the plaintiff through a letter he brought to me from Mr Higinbotham, whom I knew in Victoria. I gave him what information it was within my department to give, he seeking a railway contract. He obtained the first railway contract about October, 1863. The plaintiff, previously to that, was freighting a vessel from Victoria, and I asked him to get and bring over warm clothing for my family, who had recently come down. He bought me goods ; and he delivered me this account for £9 16s. He had brought down from Melbourne some stoves, which were lying about at his store. I asked him to spare me one, and he did so. There was no agreement as to the price of ;the stove t The goats were a present to my little girl — the plaintiff, had imported a number of goats, and was giving them away. As to the buggy, I heard the plaintiff offer to sell to a publican, named Hughes, two broken-down buggies, for LIO a-piece. I spoke to him about one I knew of, and , said I would buy it. I bought it for LIO, and I afterwards paid L 27 to have it repaired. It was subsequently sold by Smyth for L4O. The carting of logs wai done of Mr Smith's offer — return drays from the works were used. The charge now made is altogether exorbitant. I have frequently asked the plaintiff what I owed him for the stove and things, but he never would tell me. He says how that I paid him Ll9O, but I think that he states far too high an amount. All that I recollect paying him was L7O or L 7 5; but whatever the amount, it was what I calculated settled the whole matter be** tween us. It is utterly false that I requested a loan for my son ; but I knew of it, because I accidentally heard of it. My son is of full age— he was twenty-six or twenty-seven years old, and he was at this very time in business with a partner in Invercargill. I have heard the plaintiff's evidence as to the first LSOO, on the 20th January. I say that no money was lent to me on that occasion, and that no such sum was ever lent to me. The statements of the plaintiff and of Smyth as to it are utterly false. As to L 250 on April 18th, I say that I never received such a sum. I utterly deny all the other items except the two last — LSOO and LIOOO ; and they were distinctly paid on account of the agreement between myself and the plaintiff. I never heard of any of these items until about three months after I commenced my action to enforce that agreement. The £500 was specifically paid me by Mr Smyth on account of the agreement. I had seen Smyth at Osgood's Hotel here, soon after the agreement, and had spoken to him. He promised to facilitate a payment through his having a sum of money that belonged to Davies. When I was going to the Mataura to see Davies, and met with the accident, I wrote to him from Popotunoa. He came to me„ bringing LIOOO. He told me he had been obliged to get it by a stratagem, as his means were tied up in the banks. In the early part of September, all chance of a concession for a railway in Wellington was at an end.. When I wrote the letter that has been read, the proposal was for a land bonus; afterwards, a guarantee of seven per cent, on the money expended was proposed ; and by the end of September, all negotiation had ceased. It was with a view to a final settlement under the agreement between us that I got Davies to come to me in London-street, when I was disabled ; and he then repeated his promise to pay me in December. When that agreement was entered into, Davies had for more than three months ceased to be in any way a contractor with the Southland Government. I had nothing like power over him ; everything had been settled with the Government, or I would not have entered into the agreement with him. At the interview in London-street, I pressed Davies to state about what time in December he would pay me the money ; and I asked "if anything happens, so that you cannot pay me in December, will you give me your acceptances, so as to settle the matter at once ?" He Baid he hoped thero would be no necessity to give acceptances, as he hoped to get the money. Personally, I never gave the plaintiff any

Instructions to build me a house of any kind. The plaintiff's statement is an entire misrepresentation. The place was put up for offices for an assistaut engineer under ths Government, and it was uieaut ior a Station. Had matters gone on aa they were then expected to go on, the place would have become a station. "When the plaintiff asked me to certify for thd place, I replied.that I could not do it until it came to be used for a railway station. I never got a penny for the use of that building from anybody; and it was by mere accident that the building was put on my land. I had bought the best site in the neighborhood : it was fenced ; and Mr Babington, the assistant engineer, asked me to allow the building to be put there. I consented ; but I also insisted that it should be constructed on panel, for easy removal. By Mr Smith : "We were on intimate terms— -visiting terms. I did not get a receipt for the £75 I say I paid to the plaintiff. I did not get a receipt for the £500 from Mr Smyth ; I did not give the plaintiff a receipt for the £1000 at Popotunoa. I did not receive £1000 cash at all, but two documents of the Southland G-overnment, £500 each— I took it as negotiable paper. The plaintiff did not ask me for a receipt. The sole purpose of my going up-country, when I met with the accident, was to press for a settlement with the plaintiff under the agreement that has been referred to. I see that in my letter to the plaintiff, which I wrote when laid up at Popotunoa, on the 29th September, I say — " My only object in coming down from "Wellington was to see you on matters I have written you of ; and I cannot doubt you will- enable me to do so by meeting me here." I had written continually to him from "Wellington, to know when the injunction was. to be lifted, so that I might hope for a settlement under the agreement. That was the only matter between us. I say that I did frequently write to him on the matter of what The owed me. I see a letter here, which I wrote in .French, from Wellington, on the 15th June. It contains this — "Essaye de m'envoyer 250. II nefaut pas que je demonstrois le manque de moyens ici." Yes, saying to him, try to send me £250, and adding that it would not do for me to appear *to be short of money in "Wellington, was asking him for some of what he owed me. The £1700 certificate to which I refer in one of the letters, was the compensation I got under the award in the arbitration between the Southland Government and myself. In a letter of the 26th June, there is an allusion to the compound-rail which is the subject of the agreement between the plaintiff and myself. I wrote, " I see the Americans are going in for steel rails. If so, the compound rail ought to come out very well." In a letter of the 9th July I wrote — " The wonderful Southland petition has been shelved. lam sorry they were disappointed of their commission before I left, but certainly should not like one in my absence. I suppose the injunction is lifted, but have heard nothing." The injunction was in Connor's matter, and was over the Southland greenbacks, out of which I was expecting to get the £5000 greenback. — [The witness was examined upon, and read the whole or parts of several other letters written by him to the plaintiff.] — I cannot produce any reply from the plaintiff to a specific request from me for a settlement under the agreement. I see that the tenor of most of my letters is, as you put, " I " expect a valuable concession : come up to "Wellington." But I say that I did not come down to see him about the concession, because that matter was at an end early in September, and I did not come down until the end of that month. 80-examined: I did make a demand upon the plaintiff for a settlement. There are handed to me letters of 13th October, Ist November, and Bth December, in which such a demand is made. By Mr Smith : They were written after the Popotunoa inteview. Thomas Connor, contractor: I was a partner some time since with the plaintiff, and disputes arose from the partnership. After the dissolution of the partnership, in settling with me on the 31st May, 1865 or 1866, 1 am not sure which, he said he was giving me all he could through his having paid, or having to pay, Mr Marchant LSOOO. That conversation was at the Criterion Hotel ; and the subject of it was not referred to in any other conversation between us. By Mr Smith : "We had but one settlement, and I think it was in 1866. I cannot be positive whether he said he " had paid," or " had to pay," the LSOOO. There were unpleasant differences between us, but we were friends. By the Foreman : It was not alleged that the LSOOO was a partnership debt between us ; but I took that amount less, in order to obtain a settlement. By Mr Smith: Yes, it was proved afterwards that I was entitled to twice LSOOO more than I got ; but I was glad to have an end to the matter. Stephen Hutchison : lam a gas engineer; and know the defendant and the plaintiff. In October, 1866, I went to the plaintiff on his station on the Southland side of the Mataura. I think it was about the middle of the month. I stayed at the station a day and night. I took to the plaintiff this letter of the 13th October from the defendant. That letter to some extent explained my object. I related to the plaintiff that I had proposed a matter of business to the defendant, which would take some few thousands of pounds ; that the defendant had not sufficient capital undisposed of to enter upon the matter without the aid of some of the money which he alleged to be due to him from the plaintiff. I also went on to say that when I had come to know that it was the plaintiff j who was indebted to the defendant to the extent of L 2500 ,1 said that there would be no difficulty whatever in the way of

my arranging the matter with the plaintiff, by taking his acceptances for the amount ; and I accounted for my visit by saying to the plaintiff that it was my desire to conclude the transaction, by taking his acceptances for £2500. The plaintiff objected to give me the acceptances, stating that although he had certain moneys due and payable to him in December", out of which he intended to pay the defendant, yet he would not give the acceptances, because he could not possibly tell the exact day on which such amounts would be payable to him. He further informed me that he was interested in Smyth and Hoyt's contract for railways, and that he had a considerable portion of capital locked up there, which would be liberated when the contractors got (I think it was) certain land orders. Another conversation ensued just before I left the station on the following morning. I addressed the > plaintiff almost in these words—" Now, j you have refused to give me these acceptances, but you say that the money is due I to Marchant in December. Shall Ibe really safe in undertaking this arrangement with him, on the faith of his receiving this money?" He pulled up his sleeve, and he said, "Mr Hutchison, I would sooner cut off this right hand than that Mr Marchant should be injured or delayed by not having this money at the earliest possible moment I can give it him, or that he should lose irom my not being able to pay him." He said that in a very emphatic manner, when we were beside a new building he was putting up. I thanked him for his hospitality, and rode away. I wrote a letter on the 12th November, 1866. I said in it— "On my return from my mission to your station, I informed Mr Marchant of the result. I consequently wished to recede from the matter of business entered upon between Mr M. and myself, through your having refused to allow him to draw upon you for the amount due by you to him ; but this he refused to concede, on the ground that as I had satisfied myself of the legally-binding character of the bond signed by you, and under which the money is payable, he did not feel called i upon to do so, as, without his assistance, ! I could get a settlement, to effect which he thought there would be no difficulty, but if such difficulty did arise, I must have recourse to my legal remedy. I trust no such necessity will exist, and I am the more sanguine, from certain views and statements made by you to me relative to this matter during our last interview. I wish you would meet my views. You know I have every disposition to meet your convenience, so far as my own business necessities will admit. I shall therefore hope to hear from you by an early post, or what, perhaps, would prove more to the purpose would be a speedy interview. . On the 22nd November, the plaintiff wrote to me — " I have to acknowledge the receipt of your letter, together with one enclosed "from Mr Marchant and in reply, cannot but express astonishment and surprise at the conduct of Mr Marchant. He appears to have forgotten the circumstances under which the memo, he alludes ■ to was signed. He seems also to have forgotten the various sums of money, &c, advanced to him and paid to his account by me. I take this opportunity of stating most distinctly that I- am not indebted to Mr Marchant, but the reverse. Eegarding the threat to have recourse to legal remedy, I am fully prepared to meet any such demand, and am only sorry that "a man for whom I entertained the greatest respect should so tar forget himself as to endeavor to take advantage of my good nature." I subsequently told Mr Marchant that I would not be dragged into a law-suit; and I would not hold good my offer to him. I saw from the letter that there were going to be some extraordinary proceedings in connection with this matter. By Mr Smith : I see no inconsistency between my statement as to what passed between the plaintiff and myself, and my letter ta the piaintiff. [The cross-exami-nation on this point was continued for some time.] I may be obtuse, but I repeat, I fail to see any inconsistency. I could not make the plaintiff's mere promise available in business — I wanted some document for that purpose. I dare say that circumstances did happen after I came to town which altered my view as to the plaintiffs promise. The house in which Davies was living was a very nice one — wood I suppose, but I did not give it an architectural supervision. Mrs Davies, I believe, was in the house, but she was not present at either of the interviews. Mr Smith proposed to call evidence to contradict Mr Hutchison as to what took place at the plaintiff's house. . The Judge held that such a course was not allowable. Mr Macassey and Mr Smith addressed the jury. The Judge, in summing up, said that the question, in the main, for the jury, was, " Which of the two parties is to be believed?" The two stories were so diametrically opposed, that it was impossible by any ingenuity to put the matter to the jury other than that thsy must believe one and disbelieve the other. His Honor grouped the items under four heads : — l. The small sums for apparel, &c. ; 2. The £400 for the house : 3. The money lent in presence of Smyth; 4. The money lent when only the plaintiff and defendant were present. He explained the evidence under the first head and its bearings ; and as to the house, he said that the only ground upon which its cost could be charged to the defendant was the authority which the plaintiff! alleged was given by the defendant to charge it to his private account. As to the L 74 loan to Marchant, jun., there was no ground for charging the defendant with it, unless Smyth's evidence on the point was accepted as "the truth, the whole truth, and nothing but the truth." As to the money said to have been borrowed. The plaintiff was corroborated with regard to L 750 j there was only the

plaintiffs evidence, as to L 950 which was said to have been lent at his private house ; and as to LISOO, the payment was admitted. The defendant utterly denied receiving the other LI7OO, or any part of it ; and there was the most direct contradiction as to why the LISOO passed from the plaintiff to the defendant. It could not but appear a most facile mode of passing money, which was described by the plaintiff; and his onl^ explanation, was, " I was in the power of Marchant," As the engineer, Marchant had to sign the certificates on which Davies, as a contractor, was to be paid. How, between honest men, was that to be called being "in the power of Marchant ?" It appeared as though, by Davies, an engineer was regarded, prima facie, as a man who would not sign a certificate for a contractors work until he had got from the contt-actor some advantage in the shape of a.bnbe^ Therefore, not offering a bribe by way of j gift, Davies put himself forward as yield- | ing to the first demand, and at once ad- | vancing LSOO to Marchant. But, even if ! Davies had reason to suppose that the class of engineers were so dishonest as wrongfully to withhold a certificate until they got " tip" from a contractor, • what ought he to have done when the; first demand was made upon him ? -He should have scorned to advance the money ; and he sho aid have gone at once to the other contracting party— the Superintendent of Southland— and have said, "I am now at the mercy of your engineer. He: came to me to borrow money. I felt- it my> duty to retuse him ; I am now at his mercy ; and unless you protect me, I shall never get a certificate from him." Mr Smith had said that as to the first £500 and the -£250, respecting which Smyth corroborated Davies, the discrepancies in the two accounts were proof of their truthfulness in the main — proof that there was no concocted story. He agreed with Council, that if a short statement was made by two witnesses almost exactly in the same words, it was more suspicious than if there were slight discrepancies ; but the jury must in each case estimate the importance of the discrepancies, as well as of the extent to which the corroborating evidence gave value to the other testimony. There was a remark to be , made as to the money said to have been lent at the office, and that said to have been lent at the private house. Probably many a man in business would have £500 in his office safe ; but was it equally probable that, at bis private house, any man of business would be able— without warning, and without any preparation, so far aa appeared — be able to produce £250 on the 27th June, £500 on the 27th July, and £200 in September? Asto the £750 at the office, and £950 atthe private house, Marchant's reply was this — "The story is a pure invention; I never had any of the money ; Davies has committed perjury." Thejury must judge between the parties, carefully considering collateral circumstances, and by no means losing sight of probabilities. The receipt of £1500 was admitted by Marchant. There was an agreement subsisting between the parties, under which money was alleged to be due from Davies to Marchant, for some interest in an invention by Marchant. Davies wholly denied that any part of the £1500 was paid under that agreement ; Marchant said that it was wholly 30 paid. Connor's evidence seemed not to have much to do with the matter ; but Hutchison's came more closely to the point.— [His Honor commented upon the evidence of both these witnesses.] Mr Smith had commented upon an inconsistency between Mr Hutchison's statement as to what took place at the Mataura, and his letter to Davies : but he (the Judge) thought that nothing more was shown than that Hutchison had, during an interval of nearly a month, changed his opinion as to the value of a bargain— a point upon which the merest trifle would often cause a man to change his opinion. On one side, the jury had Marchant, admitting that although he had a claim, first for £4000, and afterwards for L 2500, he never directly demanded a se tlement : on the other, Davies, saying that he had lent L 3200 and never taken a receipt, and yet not making any demand for a settlement until Marchant commenced his action to enforce the agreement as to the invention. Mr Smith said that there was a letter ofthe 58th December, put in, in which Davies wrote, " I must decline any further correspondence on the matter, and have to request that you will at your earliest convenience pay me the various sums of money, &c. advanced you and paid on your behalf." Marchant's action was not commenced until January last. j The Judge said that it still remained a ! fact, that from January, 1864, until December, 1866, there was no demand by Davies. The question could only be left to thejury, " Which ofthe parties do you believe ?" The Jury retired. After being out of Court for less than half an hour. The Foreman (Mr J. S. Webb) returned, and asked whether the same jury could be allowed to try the other case, Marchant v. Davies? At present, the jurors very much disagreed ; and he believed that the two juries, as summoned, were almost identical. The Judge said he had no power to interefere. The names of the jurors for the other case, must be drawn in the usual way. .After another half-hour's absence, the Foreman again returned, and reported that there seemed not to be the last probability of an agreement. The Judge : I cannot help you. Is it a large majority on one side ? The Forman : No, your Honor, we are equally divided. The Foreman retired. Mr Smith said that he had offered to I adopt the course proposed by the Jury ; Mr Macassey said that he could not recommend his client to" agree, under the circumstances, and especially seeing what the real issue was ; and the Judge saidthat the eace must be admitted to be one ,in which it was extremely difficult for 12

tnen to take precisely the same view. No I arrangement wa* come to ; and the Judge directed that the jury should be informed that he would return to Court at eight o'clock, or earlier if the jury agreed, and sent for him. When His Honor returned, shortly before eight o'clock, the jury had agreed. They answered the issues thus : — Did the defendant, before theoommencement of the action satisfy and discharge by payment the several sums of L4O, Ll4, LBO, and L 65 part of the moneys claimed in plaintiff's declaration ? — Yes. Was the defendant, at the commencement of the action, indebted in any, and if in any what, sum of money on account of the sum of L 3883 claimed by the plaintiff in his declaration to be due and payable by the defendant to the plaintiff? —Yes, L2BO. The Judge said that it would be necessary for him to ask the jury whether j they means the payment of L 199 to go against the value of the house, or against a further Bum? After some explanations, The Judge said: Then, I will enter your special finding thus: — "We find that the payment was in respect of causes of action irrespective of the sum of L 280." The Foreman : That is so. On the application of Mr Smith, the Judge certified for a special jury. The Court was adjourned until ten o'clock to day, when Marchant v. Davies will be commenced. [The following day counsel for the plaintiff intimated that the litigants had agreed to come to terms in the crossaction.]