GUARANTORS AT LAW

Sun (Auckland), Volume III, Issue 759, 4 September 1929, Page 10

GUARANTORS AT LAW

DEFUNCT DAIRY FARMERS’ UNION DISPUTE OVER ACCOUNTS (Prom Our Own Correspondent) HAMILTON. Tuesday. The affairs of the defunct Dairy Farmers’ Union were ventilated in the Supreme Court today before Mr. Justice Ostler. A joint and several guarantee formed the subject of legal argument. The plaintiffs were Frederick William Thomas. farmer, of To Rapa; Robert Axel Forsman, farmer, of Gordonton: and Charles Parker, farmer, of llairini; and the defendants- were Henry Robert John Southee, of Walton; Beauchamp Urquhart Barlow, of Motumaoho; Albert Edward Fear, of Pirongia; and John Livingstone, of To Awamutu. All the defendants are farmers. Air. X. Johnson appeared for plaintiffs; Air. J. F. Strang for Fear and Livingstone; and Air. E. McGregor for Southee and Barlow. It was stated that during the live years the union was in operation it experienced financial difficulties. An overdraft was obtained at the Union Bank for £350, on the guarantee of six members of the union, and later the overdraft was increased to £I,OOO. The first guarantee for this £I,OOO was dated April 27 , 1922. It was signed by the plaintiffs, and, among others, by the defendants Fear and Livingstone, all of whom were liable. The first guarantee was paid oft by the plaintiffs. The defendants Fear and Living - stono admitted their liability under the guarantee of April, 1922. A fresh guarantee was required in 1923, and this was signed by Southee and Barlow, who now disputed their liability on the grounds that it was a condition that the guarantee should be signed by 20 members. The plaintiffs sought to recover from the defendants Southee and Barlow their propoition of the amount for which the guarantors were liable. They asked for a decree of the court ordering that accounts be taken, and that the defendants’ liability under the guarantee be determined. Mr. Strang said, on behalf of Fear and Livingstone, that he did not think there was anything in the prayer for relief to which he could take exception. H. R. J. Southee, in the course of his evidence, said the bank manager, Mr. Page, told him that the guarantee would not come into effect until 20 names were obtained. Beauchamp Urquhart Barlow said he signed the guarantee on the understanding that 20 names were obtained. Later he protested that there had been a breach of faith in the conditions of the guarantee. The president of the Dairy Farmers’ Union, Charles Parker, Hairini, denied that there was any suggestion of 20 names being secured. Joseph Ellett Page, manager of the Hamilton branch of the Union Bank, said that a second guarantee was signed by five members, including Barlow and Southee, and IS months later Thomas signed it. When Southee and Barlow signed it, it was understood that other names were to be added before the guarantee became effective. When Thomas signed the guarantee, Southee and Barlow we.ro notified that they were liable. Both contributed toward the reduction of the overdraft. Robert Axel Forsman said Messrs. Southee and Barlow had never repudiated liability until a considerable time had elapsed, and until after they had contributed toward the reduction "of the overdraft. Ilis Honour held that the evidence showed that the second guarantee was supplementary to the first, and was not a substitution of it. Southee and Barlow had not made it clear that the second document was not to be operative until 20 signatures were obtained, but that did not dispose of the matter. The defendants clearly proved that they signed the guarantee on condition that other signatures were obtained. An order for contribution was made against Fear and Livingstone, but not against Southee and Barlow. The apportionment of the amount to be paid by Fear and Livingstone was left to the registrar.