Supreme Court

Taranaki Daily News, Volume LVII, Issue 3, 22 May 1914, Page 6

Supreme Court

Sparrow for the purpose of erecting the factory which was then in course of construction, and for the purpose of securing further advances which might he made to or on behalf of the Company. By an instrument of the same date a number of the settlers executed and signed an agreement by which tliey also undertook to repay these monies and further advances. The terms of the agreement so far as Mills and Sparrow were concerned, were that the settlers, who were intending shareholders on the Company would guarantee payment of £2,500 with interest and further advances and indemnify .Mills and SparI row against the default of the Company. In the agreement of April, 1907, the settlers were the principal contractors —they could not be guarantors because no company was then in existence. By the agreement of January, 190,8, they became guarantors, the principal debtor being the dairy factory company which' they had formed. The two defendants were parties to both these agreements. They wore also shareholders in the dUiry company. The first defendant, Mr. Siindison, was chairman of directors, and the other defendant, Mr. Bruce, was also a director of the company. After the, execution of "this mortgage and agreement further advances were made from time to time by Mills and Sparrow for and on account of the dairy company, with the result that there was due on Dec 12 last in interest £3102 ,'is (id. The defendants, in the statement ol defence which they first filed, admitted the mortgage and agreement of January, 1908, but they denied that there was any money due ,and owing under the mortgage. In .their amended statement of defence filed a few days ago, after the case had been set down for trial, they put in various new defences, it was a very remarkable thing that it had taken them some six years Jo discover that they had these defences. It was very remarkable that they did not even discover it wheit they put in their first •i defence on February last, and he suggested that it would he the duty, of the jury to criticise very carefully any evidence which the defendants might bring forward in support of these defences. The first was • that there was no eon- • sideratJon for the execution of the [agreement of 1908. He did not know what defence they really intended to set up, and so could not say anything at this stage upon that point. The second defence was that it was made a condition between Mills- and Sparrow 1 and defendants and .some of the settlers J that all the settlers should consnet and sign the agreement of H)OS, but Mr. Griffiths would say that no such agreement was entered' into with iiim at all. j So far as'he was concerned there was no J such condition.

NEW PLYMOUTH SESSIONS. THE OOIER CASE. ACCUSED ADMITTED TO PRONATION. When the Court opened yesterday, Mr. Johnstone intimated that as suggested on the previous day, he intended to call the evidence of Mr. Ahier, in support of his application to have Ogier admitted to probation. Charles Ahier, a member of the firm of H. Brown & Co., deposed that he hail >nown accused for eighteen years, and his firm had employed him in a subordinate and later in a very responsible position at Elt'liam and Inglewood, where he laid the foundation of his reputation. He handled all the cash for the firm and was strictlv honest. He held these positions until shortly before he was 1 appointed to the Town Clerkship of Tnglewood. Since January last accused had been employed by the firm again because they believed that once removed from t..e temptations of | a township like Inglewooil he was all i that a man should be. There was less temptation in New Plymouth than in : Inglewood. He had 'had forty years' experience in dealing with dipsomaniacs, , and tad employed numbers of them in I' all case 3 with profit to himself/nd to them. He had never had any reason to regret it. If Ogier had been under his own personal control he. would never have occupied his present position. His Honor: If I let Ogier oil', "will he be under your personal control? Witness: Yes, your Honor; I am thankful to say that what I have done with him since he has recently been in my employment has been beneficial. His Honor: Don't you think he ought to take a prohibition order out against himself?

Witness: 1 have, no faith in prohibition orders, your Honor. I have bad a great deal "of experience and never ask a man to-day to sign tlie pledge unless I can convince that man that the drink will he the cause of his ruin. The signing of the pledge or the issuing- of prohibition orders are worthless until a man has been convinced, and this is the point I always attempt to reach. ■His Honor: Yes, 1 think there is a grea*- deal of sense in what you say, but prohibition orders are in some eases beneficial.

.Witness: That may be, your Honor, and I have no objection to a prohibition order, but 1 am satisfied that if I am allowed to take charge of Ogier—l will pledge my word in fact—that I will make a man of him. He is not the first by a great number that 'have been through my hands. The man is honest, your Honor. It is only under the influence, of drink that he committed the crime for which he stands here to-day. The man is an honest man. He had every opportunity when he was with our 'firm, and as I- had charge of, the financial affairs of the firm it was my duty to investigate those affairs, and I i am'satisfied on my oath to say that there was nothing wrong. As your Honor knows, these small townships have been the ruin of scores and scores of young men. His Honor: Yes, I dare say that is so, and then there is the fatal habit of paying for other people's drink. If a real reform is to be effected in the liquor traffic then it should V> made penal to pay for another man's drink. Witness remarked that Ogier had held a responsible public position, and in the performance of his various duties met many people and titer! this 'shouting" came in. He had no idea that Ogier was going wrong. Whenever he had been to Inglcwood he had always called and .seen Ogier and it had never entered his mind that he was drinking. I His Honor: J will put the prisoner in your charge, and if he misbdiaves himself he will be brought up for sentence. To the prisoner his Honoi said that with the utmost doubt he was about to give him a chance to retrieve himself, "For the rather extraordinary course ! which I am about to take with you," he continued, "you are indebted almost cnI tirely to the very earnest and obviously i truthful evidence of Mr. Ahier. I am putting you in his charge, and you must

KusUiius Griffiths, the Now X«.ilami agent of the plaintiffs, deposed that lu had :bi;cn their for thirteen 01 fourteen year*. He entered into n'-'SiXiiit-1011s wil'h flie hitlers of the Ohura district in April. 11107. H« did this on hehalf of 'Mills & -Sparrow and an agreement between liim and settlers of Ohura,, including the defendants, was made on April 18, 1907, a copy of which was produccd. . He proceeded to act on that agreement, and to erect a duirv factory at Waihonino, about :i miles from Ohura township. lie personally :.'iip,?rinteiuleo the work, paying the contractors from time to time and receiving refunds from Mill* and Sparrow. A co-operative dairy company was then formeu. On December 21. 1007, a sum of £2&)0 had been advanced by Mills ibid Sparrow in three payments. There was work in ham. for which they were responsible, and the | sum of £2.">01) in (he mortgage would b< approximately the amount due in JimI nary. The documents wer.e sent for signature to the solicitors for the settlers. They comprised an agreement and « mortgage.- There was a mortgage and a guarantee by the settlers. He \vss not sure whether they were returned to- hi in or fjo th,e solicitors. From telegrams produced it was quite cle.i-r that- on February 4 only one document, had been received hack. Mills and -Sparrow made further advances to the Ohura Dairy C'ompanv. 'His Honor licre commented on tlie fact that the defendants had never bc,"n supplied with a detailed account of the ad vances, nor was tlwre one produced' in Court.

Continuing, witness said that £3370 had been advanced l>v him to the company, hnl this had boon reduced bv refund's. Tie had not an account of the refunds with him. .]?.-> could ffive them from, his own knowledge, but tliev would ho very lengthy. £2820 was the total i* -t of the factory. Con-hlerahle '.argument ensued li.tweeii counsel and His Honor concerning the lack of details and in the statement of claim. Witness said, that on December 21. Milh and Sparrow sent out £2250 and there were other payments to bo nvadr f so the mortgage was made for E2500 and further advances. ITij Honor pointed out that this die not prey the; details. Of course the -o count- c'ltld ho .made no afterwards bv the Kegisl.rar.but in that case Mr Northcote witi'i.hl not be', able to cross-examine on th,e figure*. The account should have been put in.

look to liim as a cliild looks to its father. In ordering you to come up for sentence when .called upon," he remarked, 'I leave, you entirely under the control of the Court. If ,\ou do not pay attention to the kindly instruction of

Mr. Aliier, and take to drink again, you will be brought up for sentence and receive a, fairly severe penalty. You are ordered to come up for sentence when called upon. Prisoner was then discharged.

A DISPUTED GUARANTEE. FORMING A DAIRY COMPANY. Mills and Sparrow, of London, proceeded against William Sandison and David J. Bruce for £3102 .'is (id, alleged to be due on a guarantee in connection with the Ohura Dairy Co., Ltd.

Mr. 1). HuttJien, with Mr. Ronald ,Qui]]iar,i, appeared for the plaintiffs, ami Mr. E. 11. Northcote and Mr. G. P. Finlay for the defendants.

The following jury was empannelled: Messrs. E. Johnston, G. 11. Hanson, T, C. Wilson. ,1. McLeod, L. C. Earp, 11. F, Cain, E. W. Edgecumbe, F. Jones, A. V. Stohr, J. U Bullot, 11. Stocker, and G. Sole. Mr. Stocker was appointed foreman.

I Mr. ITutchen, in opening the ease for Hie plaintiff, stated that in 1!)07 some of the settlers of the Oh lira district, including the defendants, were anxious to have a dairy factory in their district, and entered into negotiations with Messrs. E." Griffiths & Co., of Xew Plymouth, tha Xew Zealand representatives of Messrs. Mills and Sparrow, produce merchants in London, for the purpose of c-htaining financial assistance, and linailv an agreement was entered into, dated April IS. 1007. My "he agreement made between E. Griffiths and Co. and various settlers | on the other part it was agreed that K. I Grifliths & Co.. who were really acting I as agents for Mills and Sparrow, should erect and equip a factory at Xihoniho and creameries at Mangapapa anil Mangaroa, at the cost of the settlers, the co-operative dairy factory company should be formed, and that when the factories were erected a mortgage should he given by the settlers to secure payment of the amount advanced, On Sept. 1, 11)07, with interest added at 7 pelcent, in the meantime. The plaintiffs proceeded to act upon the agreement. A site was procured for the settlers at 'Xilioniho. and a. factory was erected, but they did not proceed with the creameries at the time because they were told by the settlers that thev d'id not wish to have the creameries erected just at this time. As he had already .said, the factory was erected and a co-opera-'tive company was formed on January 15, 100 S. In pursuance of the original agreement, a mortgage was executed by the Company to secure payment. On December 1, 1912, of the Hum" of ,C2,001i, which was the amount which had up to the time upon advances by Mills and

Witness sa.id that tlio agreement was ham could not have made -such a roprefur his linn, as agents, of the plaintiu.->| sontation. He was aware, that the dcto erect a v'aeli»ry, and 1 the contract pric | fence tc his claim was that certain people was £2:(17 -U 10.1. This was recorded ill" who signed the first agreement did not Ids ledger. I sign the s.econd. Wliat appeared in the 11;.- Honor asked who made the first agreement would be a guide, to the in the ledger? | drawing .up of the sccondl agreement. ITO Mr Hutchen: He hail never hee \ Tie believed, however, that he was at ti asked; by the defendants for details. .mooting at Nihoniho (which he had up till Mr liivUhen finally said that if .M I then forgotten) with Mr Hine, the solieNoi'thoote wanted details he would trfl itor of tlio company, and it was at this to supply than. i meeting, that the mortgage and guaran'Mr Xorthcoto said that if the casgi tee were signed. Mr Hine was present were proved l against him lie would cor.- to explain the deeds to the settlers, mid sent for the "Registrar to .make up th tad had witnessed a number of signflaceount:\ but a prima facie case mus lures to the deeds. He himself might be proved. I have brought the guarantee back with .Mr Hutchen said the agreement ad ' him, but did wot think so. He thought m'rtted receipt of the 'amount claimed jit was left with the directors of the That wan prima, facie proof. j company who were to 'obtain the signa'llis Hoiioir. on inspecting the agree j tures <of other settlers. Tie thought that iivnt. said it did not acknowledge any | before the meeting at Nilictiiho in Dething lint the application to-Mills an i comber, .T. B. McEwan and Coy. had Sparrow fo v the money. ] started a factory at Matiero and that Mr N'orthcote said tlial there had un there was some doubt as to whether doubtedly been s'rime money paid bv stil! ' some of tho settlors wdio had signed Mcend Soai'n.-w. TTe would agree to go oil Ttaii's agreement as well as his would with ihe oa=o, leaving, the question of 1, 0 released by McEwan or not, and lie accounts to the Rogi-trar. | had been told tint some of the signature.-, Ton!inning, the -witness said that Is' to his own agreement wove supplying had no conversation with defendant ! the McEwan factory and breaking faith o V any; of the settlers as to) with him, TTe did not consider the ii.we■vii.'i should sign the guarantee of nient which he drew up legal and bind--1!)0S. Tt was understood that it shoiul ing, but acted on if. and on the e>:...~d lie signed by Mills and Sparrow and. b | faith in the settlers, until the second the settlors'of the Ohura who could "9' agreement was signed. <jot. to do so. ' Tie knew that thev struck he! rimes

To Mr Kinky: He had powers in this at lbs factory, but did not remember milter to a limited extent. He was em whether for the first year they only now<red to make all negotiations fo paid (id for butter fat and 7d for t'V Mills and .Soarrow to the extent of ad, second year. .He did not know that the viuimr l::s the settlors £:1000 on ccrtai proprietary factory paid fid in that year, condition*. One of the conditions of th i This factory would have more difficulty. ■Kal was that the. dairy produce from owing to Toads than any other in New t.l". factory should he- shinned theo'ii' j Zealand. The company wanted the i\rsi MM!* and Snarrow. He had communi ' agreement to enable thnn to sue ccrc'Med with Siindison at a time whni tain of the signatories for not supplying there was competition as to who w""> t | the fa'ctory. In the. opinion 'of the diivc •ret the. custom from the factory. This tors the agreement was good' and bitidwas the only occasion on which die had ing. When ho himself had said < artier done that class of business.. The an we | in the day lh.it he did not li--;k on tiV he received from Sandison was that when ajrrcement as .legal and binding he. •T. ?>. McEwan and Cov's opt'nn lapsed ; ov-rely meant to convey th" idea that hj," his.firm could handle the business if tluy did n'ofc know whether in itself it \vv could come to term?. TTe thought theK sufficiently binding. lie roii'rmb'.'.re.l »r ho first met the settlers at ..Miticre interviv.w with S-.indison at a time when was not sure, but could not think if wa f.-h-p latter came from Ohura for the at Ohura. Nevertheless ho would re guarantors to -diwnss their po-ifion uu•.nember what took p'ace. He discuss.-X dor the agreement, in view of the fact with the settlers the possibility of t-he'r that certain of them who signed'tie' Ills', buildinir a factory and how many cov.3 agreement had-lint signed the •oeoie'. would be required. -Seven hundred oovs Sindison -aid it was th<> desire of hi J i was recognised as a reasonable uunib"-,I director! to brniig to book those who had but that number could not be lessened signo the first agreement, but not i-he |

unless there wore immediate prespcet I second. The guarantee was ""nt to the of an increase. o'bis was the only meet l company for liven to get further signa-

in« ill, which the eonditions of the ne | turr-ft.' ITb considered Hint h<> ln<l tvo.it>*otUUioiis with Mills and Sparrow could oil Ih'Mii well in Hip matter, mid r.havo lioi'ii aiTansed. The condition thafc| cognised" tlic imp"rUii<p to the r-<vnni!:y the defendants "should not m ct unless of every .si>>il'.ituro tiV'.v conhl »•!. the olliprs did, could not lnvc ben iiv.idc| LCHT DOCTMKXT. T'm" 'Si"'"* "iPi" nr* Mr Mnlav: Did you wrilo M,i< letter April 1H ID.)/, that the prehmma, . t() flf ~„, iiur.ncinpiit w;i« hibupil. Tie a<_'roen,cn „, . • . f . , ~ i.,„ ,r ~ i \ i t> i-i • «>•!! i n pom.iianv., atxwoinsinjr tor a delay ol 1 t?* I v.™ *I 1; : S ,r V tl4,.?ontaiim»n,wori.,Kalott..r;«n.l '■' ?„,"'"'„" , W " S 'Y I,;,,C 'V\ «.vin. that von had applied to (tnvett him at, Olinra on the d«y ofthc meet, - Q -, lilHam / fm . u , p and thev or nit tli," previous niffht. lie had anti ' ' . , . „,-,,,, ; t ~. ~, ln • ~,,,, • " . „ ~ had refused to part with >it except to pmitoit that business would result an ~,. ' ~.„ „„4 1 ;,i. n,,„ m , . , , , , ~ • , i tt some responsible poison out Mile I'ie pooiwislied to have evervthiiis rendv. Tl v _' r , ' took the. a S rPcn,cnt in hisname m»roly Aml on N ., )vrall „v ,; (lii i y r„ tor brevity ami he took in ]*nmn, writc that rou would arrange to send it rprese„ta.t,ve, of Mason and Mr,,.he s| • dnjV-YM. vor whom tho witness was himsplf an "' ~ , ... „ . ~~* ,- „ -, lUnt) to ndvfeoaa to fa*U>n-machinery | A «"* dul ~ot *** "" '' He emild not understand why thin mo, " S j™" Finkv; n , lt tta , ]iaill ~,,,, a?j;]v . slum ,1 represent that Mason an | ojff f 01 , M .-,„,,... 7 ,, Stni hers wero h«*>njf him ini W be<ai,, M lie had showed Donhnm th : ' rcflec;tion (m lne . • «aM M from Mill. a«d finarrow nnd the | iWW ;lvU infnseirl, to advance the money. Ben- '" •

through you for Mill* and Sparrow, and •Mills and Sparrow were responsible for v.'hat they did'. - For k long tims application was made to you for the first agi'ument, in •' order that signatures iwyht I K . obtained' to On- second. Do you remember what you wrote?— No. Do you remember anything they did to particularly impress yen with the importan-.-;- of the matter to'them?—No. Would it be of any moment to you (hat tlv.'.y complained of the delay' to your London principals?— No. It was no reflection on me. Yen don't remember that thev did?— No. Did Mills, and Sparrow write you in conniciirn with, the complaint ?—I hare no recollection of it. i

V/"!tld it surprise you to leirn that On «.■!, 1011, the conipanv wrote to Milb and. 'Sparrow that (Iriffiths and Co. h id hampered them in every possible way, am] thcyi conaiiHered 'Oriffiths and Co. diiecth- responsibly f ( , r the small output which the enmpanv had had? That I hey haxl failed to produce the oriS'mal agreement signed by peiople who had never sigm'il l the aefeond uareement, am* th.it Mr Griffith.* 'had said it was lost. Do you remember it?—lt is difficult in recollect it.

Did yivj write to the company saying that vo:i had sent the first agreement to 'Mr Northcroft when you had not .wit it?—T don't know what vou menu. ■Yn-i admit that you were (hen lying conlinna.lly worried for the agreement? Tn a Idler on April 1, KlOi). vou said it \\-i\> l'ost.—Yes.

And it continued (o h:> lost until !><vm.!>«r 1(1, 1011.? You have my letter mid (elcjram of December Ifi. .advising of the receipt, of the deed. Th'. history of the loss was this. When the agreement came frtom the .suppliers it was

Th!? ,? T}° G,ovett and ( J ua!ißm - Their method of carrying out the terms of the agreement was by mortgage and guarantee, fcatcr on, 1 m , ',£& fo " ho orainal agreement by the company. 1 could not find it, and Ifo reason proved to be tlrat I had never-(had it ■wneo giving if to my solicitors. 1 wrote to the company and explained the mutter that it had been t3re .oHeUfflA who had! it, ami. could not find it. Tn# was on November 10, 1911 «r Hb Honor: Mr Finlay is tpt implying that anyone fa* been

I Mr Finlay: By «o means. i Witness: Mr Govett, who prepared the deeds and had the agreeme, t W ent ! away to England. A systematic sS ' T, 9 " WM n °t »ntil iTL , tarn tint ,t could be found. It m. .^roweverreferre.ltothe^pany', LjJSfcTl ,na^lwt »tte«ftir--- , pany Mills «„d Sparrow said they could come to no conclusion from wlmt the tor to you. Yon said thnt vou, Jwd no ecolWtio„ that the first men rfmed «e agreement on condition that aUTgn <vl the second agreement ?-Ycs I IICII Ivl1 vl, y did you write to the sec ' wo?™I tk c T pa,ly 0f **««"»<* 80, I the joint and several guarantee, it is ffir 8 ingl . I suggest to you: that that «. nwaon showed that; in your own mind I tiu sLotr. * asrcc,nent 9,101 " d 8i «» j WUnc**. referring to the letter from the vompany mM t ],at wlmt I S,'r^i2 t T ,ist l t 'r wl ' osi^^ ffimrnnte,. („ supply the milk- fron „ flir Honor; The original agreement " contained a guaranty "of milk %S" N itncss: ll,ey were receiving the milk from people who had nit sign, d 0* "'t .v ? CV ° r> " ■™ pp,,pr ahM,lif M ]■ ,„„,.: On 0 f forty expected sup £,Tvin"''l I, ''°" t tW<,n<V ™* W^'V t r f ; r ause • vmi fnii,!i " to i»-"i"« o-i JT "f eem ™t. «»d iiothing hi 0,1. of it would enablie them to «et the 0...er enpplier, to sign. o an you S ay 1 tho face of yon, i rtter thflt ft^ tin- nngmnl gu irantors? T put it to ll\ \i *!"',! ™T ny ox ' >wted th « »« •il s,J? " ,d U,t ' nr *t ajrreemrat to sim the gnarantee. The guarantor* und™ ?7 Wm t l '" <l''ffliilHng suppliers werfl in honor l,onnd to sign tho , won l deed? r "7„.V?" /■'"• «" iu, « n tec-was sent to the '.(ctmy for them to pet miore signatures J hen was there no legal obligation?1 can t say.

Havo you anv ronson to doubt tli«t Hip plnw? ,„ Mm wUnn*) wrroemonf provulme for M„ dvn W f n . ~p fl f . To«• think nnouf if. Nt nil, T Mt it t„ mr RolN.,lol*. i ),„,, nnlv ~„, t n mid Sparrow. Tf> tlmm wore enonrii siciwtiirrs to in-oltvt tlionv it was not mr ..i»mioj». >..t tl.f oompunVn. to w ( mOT< ;. Mr TTiiW.ni: TV poopV who sijjnwi ■ w first pi n ran toe mid not dho w eon{ \ ii"np.nrfd lial.N iinilor the first TKr TTonor: ,U lli-r who st,.„.l* now, it

looks as if you should have sued undei the first agreement, if any. r Mr FinWy: You told us that it re ; quired 700 cows to start <x factory, so ' tliat one which started with only about 500 was foredloomed to failure? —I told ' you before that a company could start 1 less than 700 if there was reason- ' cause to expect an increase. j But you knew that it was in the 1741 cows which the company did not get that: 1 its pi»fit lay!—lt was hoped that there | 1 would be a substantial nnerease. j If you had known that the supply , 1 would be as small aa it was. would you ' have financed! the company? It was a poor proposition. WeiV. that's an Ihonest answer, Mr Grif- ' (iths, and it was an equally poor proposition for these people t« guarantee it. ■ —Tt was a poor proposition merely because there was not sufficient trade for "Mills and Sparrow to handle to make it •worth while to get the company started. These men would not have signed if they had known tfhat the Whole of the men who signed the fir>t agreement and not tlfe second, represented the supply -from 230 cows? Witness: It is impossible to say that they were all expected to sign the second agreement, because it was not drawn up until eight months after the j first, and they might not all have been r there to sign. | To Mr. Hutched: The signatures to j the guarantee of January, 1908, were ob- 1 tamed at the November meeting at ! Nilio Niho, at which Mr. Hine was pre- j sent, and explained and read it over to . the meeting. He received the letter 1 produced, dated April 29, 1907, from Mr. iSandison, which said that Mr. Iline had j visited the district and arranged for a t meeting. Mr. Hine obtained the signa- ; ' tures. Witness was not in a position to apply to them for their signatures, j He did not tear Mr. Hine say that he j ~ was acting for the settlers. He received the letter produced, dated Augu.it «•'. ' 1909, from the secretary of the Ohura ; Dairy Co., asking that the mortgage died be sent for the signature of one , ■or two new suppliers. The answer wan that Govett and Quilliam had refused ; to part with it except to a responsible nartv. ■ I THE DEFENCE. Mr. Noi'lheroft, in a .brief address to ■ the jury, stated that he and Mr. Finlav stood between Mills and Sparrow (a wealthy London corporation, represented by Mr. Griffiths) and the defendants, who were two farmers. The Ohura in 1907 was a new district, and the optimistic settlers were anxious to establish dairying there <m a iirin footing. ,T. I>. MaeEwan and Co. had, as a matter of fact, got ahead of Griffiths and Co. in this respect, and he'd some sort of option over the dairy trade of the district. but as tliey did not proceed under this, Mr. Griffiths got in touch with Sandison and went into the district to establish a dairy factory there. He was nil the time representing Mills and Sparrow. although the agreement was drawn up as between ''K Griffiths and Co. and various settlers in the Oliurn district." Mr. Griffiths was acting for an undisclosed principal—Mills and iKpanw. Tlie agreement provided that Grifliths was to be repaid the money advanced tc build a factory in a certain way. A mortgage was to be given by the cornpan v, and was to be guaranteed by those who had signed the first agreement.

Moreover, the settlers agreed to sup- e ply the factory, or the nearest convenient creamery, for there was a question I then tof building creameries as well. • The importance of the fact that the j agreement was between the settlers and i Griffiths lay in the fact that the first < agreement was of no value to the company, and although there was the guar- \ antee to supply milk, there was no power in it to allow the company to force other people to come into it. That rested with Griffiths alone, and it was not until the second agreement that the company had an agreement on its own part. Mr. Griffiths proceeded to spend money on the factory, and for this reason his assertion that he doubted the binding nature of an agreement drawn by him as a layman must fall to the ground, for it was some considerable time'beforc he took advice on the subject. To get further security for Mills and Sparrow, he took the mortgage and guarantee to a meeting, at which Mr. Hine was present, but said nothing, and merely witnessed signatures. Mr. Hine came without being asked by the settlers, and had never billed tiie company for his attendance, so that it would be suggested that he came at the instance of Mr. Griffiths. In further criticising the evidence of Mr. Griffiths, he said that while the latter had said that his first meeting in the Ohura was held at Maticre, it would be shown that in reality he held a meeting in the Ohura store on the previous day. To show that Mr. Griffiths had at best but a treacherous memory, Mr. Northcroft pointed out that he had not remembered the meeting at Niho Mho until he was reminded of it, and Ills' counsel had obviously never heard of it before, for they had not referred to it in opening. It was important, too, because it must have been at that meeting that any condition was imposed. Mr. Griffiths, as he had not remembered the meeting, had obviously no right to say what took place there. Owing to the delay in putting up the co-operative company, a proprietary company was established fir.st, and some \ of the settlers were foolish enough to sign an agreement with this company ;as well. Then began a fight between the two. The co-operative concern went to the wall, and was forced to liquidate. Then Mills and Sparrow in some extraordinary manner asked that two unfortunate farmers should stand the whole of the loss. The jury would find in evidence that at this meeting which Mi-. Griffiths had forgotten, the stipulation that those who signed the first agreement should sign the second ] was forcibly discussed, and Mr. Griffiths | was heckled by various people, who I were much dissatisfied at the delay in erecting the factory. In answer to various questions, Mr. Griffiths had distinctly staled that ho had the power to force and would force all those who signed the first agreement to sign the second. On that understanding all present signed the new guarantee which Mr. Griffiths produced. So angry was the meeting at the delays that w'ithout that n?««urancc no one would have, signed. Mr. Northcroft laid down as law that no guarantor could he, held to a joint and several guarantee unless all the parties who previously agreed to sign it did so. Until all .signed, the guarantee was not worth anything, and two men alone-could not be held responsible. Mills and Sparrow had a legal claim on the factory property for • their debt, but had let this go, and pick-

Ed on two farmers to proceed against. William Sandison, of Ohura, deposed that early in 1907 he had correspondence with Griffiths in regard to a dairy company, and told him there would be an opening for a factory. He met Mr. Griffiths at Ongarue, and proceeded with him to the Ohura. He had not ; arranged a gathering of settlers beforehand in anticipation of his coming. Immediately on his arrival notice was sent to the settlers, and a meeting took place at McKay's store at Mangaroa. It was a meeting of settlers. There were 'between 30 and 40 present. Mr. Griffiths read the agreement, and they discussed the question a3 to whether they had the number of cows to make a factory pay. Seven hundred cows was the generally accepted number. The agreement mentioned was then spoken of as the first agreement. It was not signed then. It was decided to hold over the signing until they had a meeting at Mangaroa the next day. That meeting was held, witness presiding. There was a good attendance—a crowded meeting. The agreement was read by Mr. Griffiths, and there was a discuslsion as to its legality, and Mr. Griffiths''told them it would be binding and legal upon them. The agreement was then signed. The agreement was left with witness in order that he could get further signatures, and he understood from Mr. Griffiths that the agreement had to be returned io him within twenty days to receive stamp and for registration. He sent the agrement to Mr. Griffiths in response to a wire after about eight days. The Ohura Dairy Co. was formed and the factory erected by Mr. Griffiths. The company had nothing to do with its erection. The factory commenced work towards the end of No-

vember, 1907, so. that about three months of the season wns lost. The proprietary factory started a month b». fore, and therefore some settlers supplied the other factory and others had to throw their milk away because th» factory was so far away and the roadi were so bud. There were a number supplying the proprietary company who hail signed the first agreement. Some time after the factory was started, about December 18, 11)07, a meeting was held at the factory, convened by the secretary of the company. This had been called to get the settlers together so that they could sign the new agreement. The meeting was held in the open at the factory grounds. Apart from settlers, Mr. Hine, of Te Kuiti, who had acted as solicitor to the company, and Mr. Griffiths were present. Witness was chairman 'of directors, and they had not asked Mr. Hine to be present, and as a guarantor witness did not know he was coining. He remained chairman of the company until it went into liquidation, and Mr. Hine had not been paid by the company for his attendance at t'his meeting, and as a guarantor witnea* had never been called upon to contribute anything towards t'he cost of Mr. Hino I coming in. In point of fact, he knew that, (he guarantors had not paid Mr. Hine. Beyond witnessing the signatures to the agreement, Mr. Hine took no part in the meeting. He did not read and explain the agreement. Witness took charge of the meeting, and Mr. Griffiths explained the delay in the erection of the factory and the trouble 'he had had in connection with the machinery. He then took the new agreement out of his pocket and read it to them and then gave it to Mr. Hine, who took it across to a. log; where it was signed at the suggestion of Mr. Griffiths. Mr. Hino <lid not read the agreement. Mr. McKay asked Mr. Griffiths whether he had erected the factory with all despatch. Mr. Griffiths said he had done so. Mr. McKay then said he had not done so, and therefore he would have nothing more to do with it. Mr. McKay then went away and would not sign. A Mr. Barrett then said, '"What 1 want to know before I sign this is, whether all those who signed the first agreement are going to sign this'';" lie repeated the question to Mr. Griffiths, and he said he could compel them to sign. Mr. Owens then sang out, "is he going to make them sign?" This question was also repeated to Mr. Griffiths, and his answer was, "Yes; 1 shall, force them to sign." He thereupon gave them the lead and signed the agreement. At the time the company was formed the question was asked ,:ts to whether they would all be compelled to sign the new agreement and join the eompany, and it was decided not to sign unless Mr. Griffiths gave them the assurance that unless they all came in in full they could not run ii factory. At this time they were experiencing; some difficulty, .the opposition factory having induced some of the suppliers to supply their factory. The guarantors once 'had a meeting, and as a consequence witness came to New Plymouth and saw Mr. flriffiths. This was as a guarantor, and not as chairman of directors. The guarantors paid his expenses. lie placed the position of the company and of tlie guarantors before Mr. Griffiths, complaining about the non-production of the first guarantee. This was due to the fact that | from ithe company's standpoint they | could not get the supply at the factory, and from the guarantors 'point of view.

Mr. Griffiths promised to get the first agreement and 6cnd it along to them. They were only able to pay 8d for one month's supply during the first season and 6d for the balance of the season. The proprietary factory was paying Bd. The next year they were a'hle to pay 7d, but the proprietary company outbid them, and were paying 9d. With t'he amount of milk they were receiving they could not pay more, but if they had got the number of cows as on the first' agreement they would have been able to pay 8d to B'/ 2 d, and the proprietary factory would then have had to close down. To Mr. Hutehcn: When he saw Mr. Griffiths he knew that some of the settlers had not signed the guarantee, and as far as he understood he did not think that as a guarantor he was liable. It \ was aB much in the interests of Mr. iGriffiths as l t'heir own that 'he went to 1 see Mr. Griffiths, in case they should suddenly close the factory down. The first assurance he had that he was not liable under the agreement was when he went to the bank to get an overdraft for t'he company, but the manager of the bank said this was no good, because they had not all signed. He had not a copy of the agreement, but merely (old the manager that they had not all signFed it. The company provided a site, fbut there was no delay in this connection.

The Court then adjourned until 10 a.m. to-day.