A TIMBER TANGLE.

Taranaki Daily News, Volume LII, Issue 191, 16 September 1909, Page 4

A TIMBER TANGLE.

SUPREME COURT JUDGE BAFFLED. " ABSOLUTELY ■ UNINTELLIGIBLE." The Supreme Court resumed its sessions yesterday morning, before His Honor Mr. Justice Edwards. Edward Pawson, of Ohakune, sawmiller, and Graham Patterson, of Daunevirke, accountant, formerly trading as E. Pawson anil Co., sawmillers, Ohakune, v. Wallatu Bros., builders etc., New Plymouth. This case, had been adjourned from the previous day for counsel to submit proper statements of account.-,'. Plaintiffs sued for £l3B Ss iid for timber sold and delivered.

Mr. C. 11. Weston appeared.for plaintiffs and Mr. A. It. Standisu for defendants.

ill'. Standish stated that since the I adjournment, the question of the value and delivery of the timber had been settled, and amended statements of claim and defence had been, filed. The only matter in dispute now was a qucstio of promissory notes. Jn April last Wallath Bros, sued the plaintilf Patterson with regard to a cheque for .D>U, and Patterson- counter-claimed for limber he alleged he had sold to Wallath tiros, from a mill at Koru. Jjater, -at Danncvirkc, Puwson laid an information against Patterson for misappropriation of promissory notes. The information was dismissed on the technical ground that the partnership was- not leg-ally dissolved.

In the former case, of Wallath. liros. v. Patterson, the evidence of K A. Ede, a former manager of the Koru mill, was taken at Hamilton on commission. Ede was cross-examined by Patterson, who afterwards -abandoned bis defence. The defence therefore was' not prepared for a reiteration by Patterson oa Tuesday that a promissory note for CKIO was given by Wallath liros. for Koru timber ami not for timber received from Ohakimc. Jn these circumstances, continued Mi- Mandish.he must ask for an adjournment of the case, to enable Kile's evidence to he taken, unless counsel fm Hie other side agreed to the evidence .aiven by Ede in the Magistrate's Court being put in. Mr. ('. 11. Weston at first opposed an adjournment, but upon His Honor sayig he must grant tile adjournment if Mr. Staudish desired it. he agreed to the case going on, and Edc's Magistrate's Court evidence going in. .Mr. Standish proceeded with the evidence for the defence. The ease soon became very complicated again. In opening his evidence. Mr. Standish staled that, before the transactions with Pawson and Co., Wallath liros. had dealings ivilii lii,. Koru Timber Company, which was really J. .1. Patterson, of Damicvirke. Tt was the practice for Walbitli 1ir.0.-. to give an, order for timber and al 1 the same time give a promissory note for its value. To ensure the limber being delivered the |\oru .Timber Company gave Wallath Bros, another promissory note. These pnimisAiry notes were given by either Ede or I>. <!. Patterson, who succeeded Ede as manager of the mill. All of Wallath Bros.' promissory notes were met, but none of Patterson's or Ede's. ft would be necessary lo go into the question of accounts between the Koru Timber Company and Wnllalli Bros, to show that renllv the Koru Timber Company was in Wallath Bros.' debt. J

■Robert Herman Walla th. one oF llio defendants, stated Unit about October, 1008, one of liis employees, named Lander, asked him to see if any papers were missing from the oll'ice. Witness asked "Why!" He replied ".MY. J'atlerson has just been in the office. ) came in unexpectedly and he was opening one of your letters. When J came in Jlr. Patterson just pushed it under a blotting pad.'" Lander gave witness the letter, which had been torn open. It was an account from Wellington. Wit-

ness thought no harm had been done, and took no further notice. About a | week later witness was looking through ' the bill-book and found that a. blank form was missing. It was a form signed by Hie firm and had been in the book about two years. It had boon signed in case witness',- brother desired to settle with Ede lor timber while witness, who signed the bills aI. Unit time, was away. Witness then emjuired from the Hank of .New South Wales whether such a bill was in, ami notilied the Hank of Australasia, the linn's ba-ik. lie learnt nothing then, but some three or four months later he found thai the bill had been presented but not paid, the bank knowing tlio bill had been missing. .Since then promissory notes and cheques given by tile linn had been signed by both members. Subsequently a writ was issued against Wallath JSros. hy the Hank of _\cw Zealand on that promissory -ante. The writ \,,is defended ami then withdrawn [or some reason or othev. The promissory note produced was given to .plaintiff Patterson for Ohakune timber from Pawson and Co. It was paid on maturity. His Honor pointed out that he was not concerned with the question of the ! Koru mill at present. The whole case should have been referred to an accountant. Witness thereupon went into the question of the pruinissory notes given for Ohakune timber. To .Mr. Weston: Witness always understood that ii. li. Patterson liad no interest in the Kuril -,u, but was only agent for ,1. J. Patterson. llis Honor frequently complained that the matter was unintelligible to him. Air. Weston put in a number oi promissory notes, and proceeded to crossexamine witness on them. Again his Honor interposed: This is absolutely unintelligible to me, but if we proceed by degrees I mjg|,t understand it. Why all this could not have been put into the form of an account 1 cannot conceive. J! directed that it should be done. A little later his Honor again threatened, to refer the matter to an accountant, as he had power to do it. Under further cross-examination witness stated the Koru mill was really in plaintiff's' debt, owing to shortage in' orders. He had thought It. G. Patterson well oil'. Later, Patterson said lie had a mill at Ohakune, and asked witness for an order. Patterson said nothing of a -partner. It was not until lie got a letter signed E. Pawson and Co. in January, 1809, that he knew of it.' He went to the Hank of New South Wales about the promissory note referred to, because that was Patterson's) bank, and he. suspected Patterson. It was only with Patterson and the Koru company that witness used promissory notes. Will', lath Urns, gave cheques to other timber merchants. In the last two years' Wallatli liios. lind used only one book of pi-iiiissorv note forms, 'it was locked up as a rule, but sometimes left out of the safe. On receiving Pawson and Co.'s letter in damuary, witness asked Patterson for an explanation. Patterson said it was all right, as the mill was known as Pawson and Co.'s. Witness knew it was no uncommon thing for persons to trade under other names. Witness received an wouiit from tile Rangitikei Saw-millers' Association, "an account rendered" for timber from Ohakune. He showed it to Patterson, who said it was a mistake and he would put it right. Witness got delivery notes in the name of Pawson and Co', but still thought he was dealing only 'with Patterson. a>; the latter had told him the mill was known as Pawson aim Co.'s. About the middle of December witness had asked Patterson what the latter was going to do about his promissory note. Patterson said he did not want it to g» through. This was agreed to. and the note marked "cancelled." He was under the impression Hint Ins bills were given to 1!. (I. Patterson, who wrote out the body of the bills. His brother signed them before llicv were filled in. lie himself sig | afterwards. He didn't read them over, but saw that the figures were correct. On the sum:-

day Patterson gave him two cross bills, the idea, being that Patterson's bills should come due first. At this time about £ls was owing by th«m to Pawson and Co. for tiiebcr. Patterson'* cheque, dated December Kith, and presented on the following ,|„ v , was dishonored. Wallath's bill for £SO was discounted. Another bill was given, renewing one on the Kor.i iiiachinerv, but it had nothing to do with the Ohakiine transactions, lie received , ( letter from Pawson and Co. asking if I IP i,.„| \ m \

aiiy transactions with U. (i. Patterson, and the letter came as 1 a thunderclap. I Tie had replied giving I'awson all infor- | million concerning the bills, and expressing the opinion that if I'awson was interested in Patterson's dealing lie was being played fast and loose with. He did not mention in his letter that lie ■had had a .£SO cheque of Patterson's dishonored. He, didn't state, either, that he had two of Patterson's' promissory notes in currency, not seeing how Pawson could lie affected or interested. Witness admitted having sued Patterson'fov tile £SO on dishonored promissorv note<. His linn held two „.- Patterson's bills dishonored. Orders' given in Mnv hail not been tilled in full, lie had «ri idea, but was not sure, that Pawson and Patterson had dissolved partnership. Pawson saw .him in May and told him he had issued a warrant for Patterson's arrest, lie suggested to Pawson that he s'hoiild lay an information against Patterson for the alleged misappropriation of the proceeds of Hie two promissory notes, of .£IOO and £so,'given for Oiiakuni! timber. To ilr. Sta-.ulish: When his two bills of £OO and £SO fell due iu Septcmlier they were met by chccpie and a further bill. A bill for £lil falling due in December was met by another bill of £SO, and the balance by cheque. The bill falling dne on .March 2uih was the linal in the Koru transactions. A bill for i£o7 falling due in June, for Koru timber, was yne.t Iby cheque (produced). To Mr. Weston: Ede gave up charge of the Koru mill in June. The cheque for £-10 given by him to Edc in' December fullowing. was apart from these dealings. It was' a loan on furniture given to Mrs. Ede. His Honor requested counsel to proceed with greater speed, else the case would have to go to arbitration, where it should have gone, and where it would have gone had he known what it was like.

\. K. MacDiarnlid, manager of the Bank of New South Wales at New J'lymoiitii. gave evidence of having discounted two bills Mated Wlh .lune, and made .bv Wallath llros. in favor of 1!. (J. Patterson. They were met by a part renewal fur till odd. and .VJTti ISs bv cheque The Clil bill fell Hue ••• -. '

ccmlier. I'.IIIS, and was met bv a UO renewal and cash Cl2 4s 2d. 'The CSII renewal was met on 2lith March, Ml!). On December 11th a hill was discounted bv 11. <!. Patterson for t.'iU.

Harry David Wallath, one of the defendants, swore that the promissory note of November Ist., BillS, tor xIW), signed by Wallath Bros., was never issued or delivered bv him. It had beci lying in the. book in' his office for some lime. He did not know what became of it. lie remembered giving Patter-on an order for Ohaknne timber ill Aiigus'l. To Mr. Weston: lie left the li m'ncial part of the business to his brother.

William Lander, about nine venrs in the employ of Wallath Bros., siiiil that in or about October, 11108, K. (i. Patterson Wiis a'bout Wallath's office a lot. One morning lio wc.it to the office. Patterson had gon<. in just before, witness thought, to use. the i|el<'|ilioue. Witness s'aw Patterson drop a letter that bail been opened. This letter was not opened before Patterson went in. He tol.l Mr. R. Wallath about this.

To 31 r. Weston: The letter might have been opened before Patterson went in. Patterson was replacing the letter in the envelope.

To Mr. Standish: Witness usual.., ,oolc the letters from the postman. Only the principals opened the letters. Neither of them had been to the office between the time the postman came and Patterson's going into the office.

Mr. Weston -asked his Honor to enter up judgment for plaintiffs. It had not been 'that these promissory nlotes were loans given, as loans to Patterson, and were not payments for timlier. these loans being -ecured by cross-bills. '

His Honor: Well, Pin not going to do it, Mr. Weston, so yon may as well call your evidence.

Edward Pawson diposed that he was' at one lime in .partnership with .11. G. Patterson, but the partnership had been dissolved. There had been no written agreement of partnership, but only an oral one. Witness had to look after the bush, and Patterson to collect accounts and procure orders. I'atterson had no

authority to sign cheques or promissory notes. They gave Dobson their clerk, authority to sign all cheques and bills for the linn. Under that authority, which was given to the bank, there was no authority to witness or to Patterson to sign cheques and bills. It was no part of their business to borrow money on promissory notes. They had an overdraft at the. bank. Never authorised Patterson lo borrow money from Wallalli. He had received ,C 75 I2s only for timber supplied to Wnllath. His linn got no advantage from the .tlOl) and

.U.iU bills received by Patterson. They had no ■banking account at New I*l vmouth, but banked with tlic Bank 'of New Zealand at Dannevirke. As for the £IOO hill due in November, lie got notice from tile bank saying the bill had been dishonored, the 'signature being irregular. The names of his two partners appeared on the firm's letterheads. To Mr. iStandisli: Timber sent to W'allaths was on orders sent through Patterson generally, but soinc ordeiv caiiiu direct, lie 'pruscVutou l'atlerson for inisappropriati if the .CliOO and ,CJO bills, acting upon information gathered at New Plymouth. He hail alread. applied' for a warrant for his arrest on

account of other alleged inisnppropria tions. Had had no settlement oi accounts with l'ntterson. Patterson had told him that these two mils «c,c ,or timber fur Koru. He did not say they 1 were loans. Did not .remember any conversation with Wallalii at Dnnncvirko in wiiicli lie promised to supply timber to make up Die delicicncies in orders. Hoou Pros' payment of £47 had not come direct to' the firm, but came through Patterson's private bank account at New Plymouth, Charles Cann, now living at Ohakune, formerly yardman for Pawson and Co., said he had received orders direct from Wallath and Jloon. They had been destroyed after the orders 'had been filled. Some of Wallnth's orders were sent in by Patterson. He had received a letter from Walat-h, addressed to the firm, before Christinas, VMS. That letter had been destroyed. Robert G. Patterson, one of the plaintills, and an accountant at. usmnevirke, said that when he c-anic to New Plymouth first it was to take charge of the Koru mill for J. J. Patterson, and also acting in hi s capacity as partner in the llrm'of Pawson and' Co. He told Robert Wallath of this, lie did not interfere materially between Waltacu and I'lde, the former manager at Koru, except to give a cheque for £4O 5s in •Tune, 11108, which he understood cleared up all matters between Wallatli and the Koru mill up to the time lie took charge. Sold Wallath a line of 30,000 feet or 40,0110 .feet of timber a.t lis (id per 100 feet, and also sold him a ■planer. He had no other transactions with Wallath from Koru. There had been no linn) settlement between witness and Wallntli regarding Koru. The first lull of GO was given to him by Wallath on account of Koru timber, and another, for £IOO, was given on the same day for the planer. About the 1 4th August Wallath gave him another bill for £IOO. Very -probably he gave, a cross-bill, because'the timber was not yet delivered. He sold Wallath Some timber to come from Pawson and Co., telling him at the same time of his partnership in the Oiiakune mill. About Xm-cmher Ist lie got a bill from Wallath Pros, for £IOO. That was the bill alleged to have been stolen. On the dav it was given young Wallath was in Unworn, and ltohert Wallatli signed the bill "Wallath llrothers." lie explained that, the signature was irregu.ilr. but if the bank made any f.rss al tit he would " pick it up," giving another bill, lie did not steal the bill. No truer bill wa-' ever given between man and man 'ban that bill. The first he heard of the bill having been stolen was from the Hank of New Zealand at Dannevirke, the coiii|i:iuy's bankers. Wallatli had never accused him of stealing the bill. Witness' bill for £IOO, given on August I4lii, and the cross-bill came due in

December. On December Oth he got another bill from Wallath in connection wilh il.e CUM bill, and lie gave, Wallath a che.|iie for £3O to help him in meeting the .£1(10. Some time after December Oth he ascertained that the sec-ond-class limber from Koru had been delivered, anil lie suggested a s'ettling-up. 'Wallath said that it had already been paid for, so witness made no provision for his .CSO rhci|ue, and it was dishonored. Wallath's bill for £75 12s -til was given to I'awson and Co., and that ■was known to Wallath. Every bill between them was tilled in in witness' own handwriting, and signed by Wallath afterwards. The first word he- received from Wallalhs about the dishonored cheque was a summons. Jlis cross-bill lor £75 12s ii was given as a oumi to supply the timber, lie had not given a crossbill for tile CIOO, because he believed that Wallntii Bros, had had £IOO worth of timber at that time. Iro-vexamiiml: Wallath was swearing falsely when he said witness had not informed liiui of his partnership in I'awson and to. lode was swearing falsely when lie swore he 'Had sold to Wallath in WHS the timber which witness claimed to have sold to him personally. Wallath was also Swearing falsely when he swore he bought it from Kile, lie did not meet Ed c and Wallath in the hitter's office, and there come to a linal settlement, of ti.e Ko,-» tic-

counts, lie put the £IOO and £SO pro

missory notes to the credit of his own account. He -had no money to pay over to his principals—the boot was on the other foot. Mis Honor said lie couldn't make head or tail of it. Here was a man calling himrtdf an .accountant, and coming into court without any proper account of his

dealings. Witness said [lis papers concerning Ko-

ru had been lost at the Daunerirke railway station, His Honor: Papers: It shouldn't have been on papers but iu a big ledger, so that they could not get lost lit a rail-

way station. It is most extraordinary

I've been connected with business for over a quarter of a century, and never in my life have I come across people calling themselves business men who transacted their business as these people

Witness denied Lander's' evidence. His Honor: i'on heard Lauder's evidence about opening a letter? Witness: I never opened a letter in th" man's office in niv life. His Honor: Then Lauder was swearing falsclv. too?

Witness: Yes. This cliscd plaintiffs' case

I'pnii his Honor's direction Mr. Standish called Cyril Mice Williams, accountant at the Bank of Australasia, who stated that Wallath Bros.' cheques and proinissorv notes were signed bv both parties. ' About October last' It. 11. Wallath came to the bank and spoke to witness about a proinissorv note. Wallath told witness about tlie note, describing how it was signed, " Wallath Brothers." Witness' said it was not necessary to stop it, as it would not be paid, the signature being irregular. Wallath said it had lieen lost or taken from his oll'icc. The note was iprescnled by the Bank of Xew South Wales; they merely returned it, saying ''signature irregular."

.Cross-examined: lie had just been called over, and was'speaking from memory, lie had had no opportunity of looking up the facta. The. bill niigh' have been presented by the Bank of New Zealand. (Bill produced, and shown to have been .so presented).

To his Honor: He was satisfied that before the bill came due Wallath came to 51i 111 and told him that a bill, signed in blank, had been taken out of his office.

His Honor: That is all I want to know. ,

ISy llr. Weston: Wallath did not come in merely to tell him that an irregularly signed bill would he coming through his account. He thought another bill of Wallath's had eiuue through irregularly signed.

Mr. Williams, having refreshed his memory by-perusal of the books at the bank, gave evidence that Wallath Brothers' account was opened in 111(14, and ever since then the signatures of both parties had been necessary to chi'ipies mill hills. Hi ]!)0S throe' bills drawn by the firm in favor of the lOoru Sawmilling Company had payment stopped, and two in favor of I!.' (!. Patter-

son were returned in September. It was not true, ji.s alleged by Wallath, that in the past throe or four years* tile mode of signature had boon altered.

Mr. Weston addressed at great length, land Mr. Standisli brielly. His Honor suid he could not decide which party to believe, so he had decided to non-suit the plaintiff 1 . Ho would not allow the defendant any costs, because tile business had been so loosely conducted and the case, brought in such a complex fashion.