AN EXTRAORDINARY CASE.

Taranaki Daily News, Volume XLVII, Issue 81852, 27 September 1906, Page 2

AN EXTRAORDINARY CASE.

BANK MANAGER AND NEW CHUM. PECULIAR TRANSACTIONS. A case in which considerable interest is manifested was commenced in the Supreme Cuurt, New Plymouth, before Mr Justice Cooper 11 Wednesday afternoon, when a claim was made by James W. Harding, of Norfolk-road, against Alexander Jas. Mcintosh, late manager of tlie Bank of Australasia, New Plymouth, for specific performance in respect of a land transaction.

Dr. Findlay, of Wellington, with Mr Quillhm, appeared for the plaintiff, and Mr Oliver Samuel, with Mr J. G. Wilson, appeared for defendant. Dr. Findlay outlined the case from his dient's point of view.. He did not want to reflect on the'defendant more than was necessary to his client's internes, but the case was of such a peculiar nature that to some extent it could not be obviated. Plaintiff came to New Plymouth at the age of 21 from England, raw and unsophisticated and unused to financial

matters. His idea was to lay out his money ,£2000) in land and found a home for himself. After seeing Mr Mcintosh, lie accepted that gontleman as his guide, philosopher and friend. It was almost impossible to compare the terms upon which these two men met, the degree to which this youth was at the mercy of Mcintosh in the way of worldly endowments. The latter had proved himself an adept at finance, a finished artist in the way of high finance, keen and astute, without conscience, except to oil the wheels 0 f his schemes —certainly to put no brakes upon them. He took a kind and unselfish interest in Harding—a characteristic scarcely to be expected of

a busy bank manager—and at his instance he got the young fellow to send for his money and place it at his bank. Counsel referred to the manner in which the marriage of Harding and Mcintosh's sister was brought about. Harding was then about 22 years of age, and the young lady 30. Mcintosh interested himI self greatly in the matter, and also at the same time interested himself 'n procuring for Harding a farm. The

arrangements in connection with both appeared to have been consum-

mated about the same date, viz., in February, hjoo. Depending on defendant'.? advice, Harding' agreed to purchase the Brouligton's farm of 503 acres at £3400, and a deposit was paid. The vendors were agreeable to allow ,£2OOO to remain upon mortgage, providing the balance was paid in cash. Harding was prepared to do this, utilising tho balance for stock, etc. A deposit of £SO was paid, and the thing could have been fixed up without tho "hocus pocus" that afterwards xvas indulged in. From this point the evidence diverged. Mcintosh told Harding he need not put his money into the farm, as lie could find other investments, yielding 10 per cent. Ho urged Harding to leave the matter of the farm to him, and plaintiff, who was about to be married to his .sister, left him to arrange the financing. Mcintosh, between whom and Mr Sam llill, the Government Valuator, there were certain relations, told him ho could get £2OOO from the Public Trustee. Some lime elapsed, and then he told Harding lie could not get the scheme carried out without sonic further steps being' taken. These were as follows; —Harding was to pie lend to sell the farm to Mcintosh, so

that tho latter, in his scheming, could say there was a sale for ,£4900 .£ISOO more than had been paid for it a few weeks before. This "resale" was to be effected by a transfer direct from the Broughtons to Mcintosh, while the land was not to be taken in Harding's name at all. The bogus j&yoo was to be substituted as the selling price, in order to bo produced to the Public Trustee for

the purpose of perpetuating a fraud. The weh was further entangled by two other documents. One was to be a mortgage of £1250 from Mcintosh to Harding, as proof by a second mortgage of the value of the hind, and the other a lease from Mcintosh to Harding for five years at

i,.2i0 per annum; in other wordp, about ,|i per cent, on .£4900. With pioof of this nature, Mcintosh felt sure he could get from the Public Trustee, and, as a matter of fact, succeeded. "At this moment," continued counsel, "I wish to pause

to express my admiration of the skilled hand which devised this scheme. Whether it will succeed we will find out at the conclusion of the case." Tho purchase money paid by Harding was, as ho said, carefully omitted from the transfer. Harding had paid altogether and deposit. AH the documents were prepared by Mr F. W. Richmond, who unfortunately, was not now in the colony, and Harding was taken along to sign them. Harding' signed them, knowing littlo of thoir true effect until some years afterwards, lyhen he consulted Mr QuiUiam. Since March, igoo y Ilajrding spent ovjor £2500 in improvements. It was not until 1504 that Harding consulted a solicitor, and he then found he had practically no> documentary evidence to show his title. Application was made to transfer tho property to Harding. No claim had been set up by Mcintosh that he was entitled as a beneficiary to any part of the property, but he stated to the plaintiff that half should go to him (Harding) and half should go to plaintiff's wife and children. Harding agreed to this. Mr Richmond, on behalf of defendant, called 011 Harding's solicitor and proposed that a deed of trust bo drawn up, vesting half in Mcintosh in trust for Mrs Harding and the children. Harding refused to do this and proceeded to England soon afterwards. On his return he found that Mcintosh had not carried out his propiise, for it was still in Mcintosh's name. Mcintosh then declined to effect the transfer unless Harding agreed that at the death of Harding's wife half should revert to Mcintosh's son. Plaintiff declined. Future applications to defendant were also fruitless. Mcintosh later claimed a beneficiary interest on his own behalf, and now declined to convey to anyone, and proposed to sell his alleged interest by placing the property in the hands of an auctioneer.

Counsel then wep.t on to deal tivith the statements filed by the defence.

Inter alia, he remarked that defendant's explanation of the second mortgage was a collection of plain and palpable contradictions. How was the £1250 made up? If it wore given on the basis of a partnership, the

amounc would have been £9OO odd instead of .£1250. There was therefore a discrepancy of right away. The lame and impotent explanation r° tile rent showed the extremity defendant was pushed to in order to put an honest face on what was something in the nature of a fraud. It was a fair inference that defendant was keeping the interest

I in .trust oil account nf t<;° Aster's ! (Mrs Harding) i'l health. Cruelty was denied, find, if relevant to the issue, it could be shown that her end was inevitable long before young Harding- came on the scene. In conclusion, counsel said the Court had wide jurisdiction to prevent any litigant taking- advantage of a questionable transaction.

Plaintiff, James W. Harding', said that he arrived in New Zealand on 17th November, iSgg. Had followed the life of a farmer, working for his father. Had £l4O with him when he came out, and about £iSoo, plus some interest, lying at his bank in tho Old Country. Never had anything- co do with business or finance before be came to New Zealand. Left school when if) years of age. On arriving' at New Plymouth, he wenl to the Bank of Australasia, to cash ,£So wottli of Conk's coupons. Saw defendant there. This was the first time he had seen defendant. told Avlntosh he had come out to look for a home and farm. Mcintosh asked him how much money he had, and he replied, "about £2000." Ho (plain-( tiff- said ho wanted to get some 'experience before buying a place. Mcintosh said lie knew of a man who wr.ukl give him tho opportunity of learning' farming, and told him" not to trust to the land agents of New Plymouth, as they would "take him down." Being- a banker, he sai'd he knew all about the value of land, and would put him on to a good property.

' Mcintosh asked him how much in 'he way of interest he got for his money in England, and stated that he would draft a letter for him to get it sent out. Mcintosh accordingly drafted the letter, and plaintiff signed it. The money came out in duo course, and was put to an account in the Bank of Australasia, New Plymouth. The first day he was in New Plymouth, defendant invited him inside his private quarters, where he mot defendant's sister and mother. On the advice of defendant, he went out to Mr Lepper's farm to get a little experience, but was only there for a week or two, returning to New Plymouth. He had intended going back to Mr Lepper's, but defendant said thar it would serve no purpose to do so, as lie could not learn anything further there. During the first week i of their acquaintance Mcintosh had ' si|)ken to him about marrying Miss , Mcintosh. "110 told me if I married Pattic I would make a fortune out of . land. He said he had himself made | over ,£IO,OOO. Pactie, he said, had :aken a fancy to me because of my ikeness to her late brother. I after-

wards walked out frequently with Miss Pattie, who was then about 30 years of age, though Mr Mcintosh told me she was only 24. I was 22. Lator on, Mcintosh asked me if I would marry Pattic, saying if I did

ho would furnish a house for us. replied that I would marry her. proposed to her late r on, was accept od, and eight weeks afterwards \vi were married." In regard to buying- a placo, ho had inspected Broughton's farm of 503 acres, and two others. Mcintosh advised him to buy Broughton's. He offered £6 per acre, and afterwards agreed to buy at £6 12/6. The sale note was written out by Mcintosh, who paid the £SO, which plaintiff subsequently refunded to him. Mcintosh to'd him he would do the financing, and that he believed he could procure a mortgage of £3OOO at 4j per cent. 011 the place, remarking, "The bigger the blister the better the chance for selling." Defendant also said that by getting the money so cheaply, plaintiff could use his money in a different direction and have no trouble in getting 10 per cent, for it. A week after being committed to the sale, the Broughtons were asked how much they would leave on mortgage, and they intimated that they would leave £2OOO. Plaintiff told Mcintosh he would rather pay £isix and lec the other stand. Mcintosh was against this course, as several hundred pounds would be required for stocking and making improvcme nts. Afterwards Mcintosh said could not get the mortgage, "j said, 'Never mind, I will pay the £ISOO and stock the place with "the balance.' I could have done this easily, as later on it only cost me , £390 in stock. "Mcintosh replied, 'I am a friend of Mr Fisher's, I will . get Mr Sam Hill to make a valuat tion.' Defendant added that the Government valuation was over £4 then. He also said : 'I will take the . farm in my name; you pretend to j iand mo ,£1250. No money need . pass. I will get some dummy leases ready, show them to the Public Trus j tee, and get the money.' He told , mo to leave tho whole thing to him. P£ever at any time was there any arrangement made about his becoming [ a partner with me. I agreed to Mc r lntosh taking the land, but knew nothing about the amount shown being | £4900 until the other day. I was . given a dummy lease." I Dr. Findlay : "In which you were I badly tied up 1" (The document was t put in.) , Witness identified the signature to the leaso as liin. Didn't remember ) signing it. Had none of the docu monts in his possession. They had J been kept by Mcintosh and Riclv , raond (solicitor). The mortgage . (copy produced), purporting to show . that plaintiff advanced £1250 on the , land, was only for Mcintosh to show , the Public Trustee. No rent was mentioned for the dummy lease. . "The documents were not read over > or explained to me. I trusted all - that to Mcintosh. Regarding tho first payment of interest, Mcintosh , said he would have to work it in tho , iiuiuin:! he did. I gave Mcintosh a . cheque for £lO5, and he paid me back - ,£3l 5/ Ihe same day. I got no in- , torcst. on the £I2OO lent to Mclntosh, and paid no further rent. Mr Mcintosh paid one or two lots of in- ' terest after this to the Public Trus- ! tee, and I paid the others. This was ; in 1900." . Continuing, plaintiff said. "Except ■ during the honeymoon, I lived at Mr 1 Mcintosh's till I went out to my . farm. Took possession and lived at . tho farm from 6th March, 1900, and have lived there over since. Have [ spent 011 the place, roughly speaking, 1 about from March to the pre- . sent day. This includes £434 depo- . sit as purchase money. The great- [ or part of the amount was spent be- . fore I went to England on the 31st . of August, 1904. Up to that time . I had no documents in my posses- , sion to show what my title was. I consulted Mr Quilliam shortly before I went to England, and ascertained my position. When I told Mcintosh i desired to have the farm in my name he said : 'Who has been talking to you?' I replied, 'Mr Quilliam, and 1 insist on it.' He replied, 'You know I don't want a penny of it; it is your placo. I will toll you what I will do: 1 will put half in tho name of Pattie and the children.' So long as it was in the family I did not care, and I agreed to this. We went to Mr Richmonl's. Mcintosh said that if I would make a deed vesting half in the wife and children ho would pay tho cost. No deed of trust has ever been executed by Mcintosh in favoui

of my wife and children. I fulfilled my part. Mr Richmond took mo to Mr Quilliam, and instructed the latter to draw out the deed of trust, as Mc

! Incosh had told him (Richmond) to do. I know it was prepared and sent 1 by Mr Quilliam." 1 (Dr. Findlay put in engrossed deed . of trust sent by Messrs Govett and 1 Quilliam to Mcintosh at Invercargill, ( together with a letter asking him to i ; Proceeding, witness said he was f away in England at this time. He i was away altogether nine months, returning in May, iqo6. When he > came back he found the document . still unsigned. Ho saw Mcintosh i at the Commonwealth Hotel, a nd told him thai he was surprised that he had not fixed things up. Defendant told him that plaintiff's wife was dying. (Plaintiff here explained that his wife did not go to England with him. She would not do so.) Mcintosh said, "I will put it in the children's jiame if it conies to my son die." Plaintiff replied' that, he would not agree to that. Defendant said, "Pay me back the little accounts I have paid for you and I will agree." "Wo decided to get Mr Quilliam to prepare the deed. I saw Mcintosh two or three times afterwards to find out whether lie had rlona it as I wanted (t done, 1' asked him to come up to the office, but he said he" did not speak to Mr Govett (Govett and Quilliam), and would not go near the office. On the last occasion { mc t him going mi t!<« Commonwealth HoiCi steps, and lie said. 'lt is a!', right, I will fix it up.' Next day I saw him again and asked, 'Are you going to transfer that half to Pattie and the children'?' He answered 'No.' I replied, 'Then I am going up to instruct my solicitors to sue you.' He said, 'You can do so. 1 will instruct Mr Newton King to sell the place.' All these interviews were in May and June. I saw Mr Quilliam the same day. A caveat against tlio sale was lodged on July 17. My wife died a fortnight ago of consumption. 1 his is the first time I have heard it alleged that I ill-treated my wife. Of course, ,wb ihad rows; occasionally. She was quick-tempered, but wo got 011 all right. There were two child? ren one two years of age and the other four years. I have had to send them out to nurse. lam still living , <: 'i r the farm, and making headway." ; This concluded plaintiff's state- j m?nt. The Court was adjourned till this morning, when Mr Samuel will cross-examine plaintiff. It is 1 expected that the cross examination a will take a considerable time. :