ALLEGED FRAUD.

Taranaki Daily News, 20 May 1918, Page 7

ALLEGED FRAUD.

EXCHANGE OF BUSINESSES. VALUATIONS OF STOCK. The hearing of ,a claim was. commenced in the .Supreme Court on Saturday morning, hclore his Honor the thief Justice (Sir Kobcrt Stout), in which Gilbert T. I'crrott and Ellen I'errotL claimed £232 damages from William Griffin, for alleged fraudulent misrepresentation reCarding the value of the stock-'n-trade of a store, which was the subject of an exchange between the parties. Defendant counter-claimed for the specific per-' formancc of an agreement, and compensation amounting to £267 10s Cd. Mr. W. J. Treadwell (Wanganni) appeared for the plaintiffs, and Mr. P. O'Dea (Hawera) represented defendant.

ilr. Treadwell, in his outline of the case. id it was a. claim for specific perfor" —"e of an agreement under which --'Riant had agreed fo sell to plaints certain stock and plant of. a general store business that had been part of an exchange between them.

.. UNBUSINESSLIKE (PEOPLE. Referring to the plaintiffs, counsel said they were evidently simple-minded, confidential, and thoroughly unbusinesslike. They had been .dairy farming in the Dannevirke district until about 11 month 3 ago, when Pcrrott had a serious illness and had to give up outdoor work. Fie placed his farms for sale in the hands of Orbell and Whitehead, a Feilding firm of land agents, who brought him into touch with defendant, who, they said, had a general store business to dispose of, and tliev thought an exchange could be arranged. An exchange was actually arranged through Mr.' Orbell, the equities being equal and no cash being required. Before the matter was finally settled, however, defendant refused to go on unless Perrott reduced the valuation.of his properties by £GOO. Continuing, Mr. Treadwell said that by such .an arrangement an equity of £GOO at once became payable in favor of Griffin. How a land agent could allow such simple-minded and unbusinesslike people as plantiffs undoubtedly were to be led into such an agreement was past Ills comprehension. However, the exchange had been effected, and he supposed they would have to put up witli it. The £GOO was secured to Griffin by a second mortgage on some of the land. The agreement was dated December 21, and between that time anil January 1, when possession was to be given, piaintiff and his wife went to Griffin and asked for a postponement till February 1, as they were unable to get a valuer to go over the stock with them. Griffin said there need be no trouble about that. The cost prices were the merchants' prices, and they were all marked on the goods and could be seen.

PRKJES AT STOCKTAKING. He was, continued counsel, in a position to say that at the stocktaking defendant had charged plaintiffs from 15 per cent, to 80 per cent, too much for the goods, and in some,.eases aa much rs COO per cent, above actual value. In same cases the goods were absolutely unsaleable—to offer them would be a breach of the Sale of Foods Act. After plaintiffs took possession, customers began to conjplain of the prices being charged for some of the goods gold. An investigation was asked for, but defendant refused to make a valuation. Thore was a billiard table in the transaction, which plaintiff had taken over for £llO. When first asked what the table was worth plaintiff, who knew nothing about billiards, hazarded £SO as a guess. "Just at the opportune time," said counsel, "in came a man who had a prospective buyer." Griffin asked the newcomer if "his man" was still wanting the table, and the reply was that he was prepared to give £125 Counsel said lie hoped the buyer was a bona fide one, biit it required a big stretch of imagination to believe it. Griffin told Perrott that lie could get £125 for the table, but that he would let

plaintiff have it for £llO, and in his ignorance he thought that as someone had offered £125 it must be worth £llO at least, and so lie agreed to take it. Perrott found later that lie wished to dispose of the table, and communicated with the man who had the prospective buyer, and asked if his client was still anxious to buy, and the reply was that he thought so. "Apparently," said counsel, "lie is still thinking. - ' The table was an Alcock, and had since been rabied .by an expert at £3O if it had to be removed. ,

ILLUMINATING FIGURES. Mr. Treadwell then proceeded to quote from stock sheets some of tlie prices put upon goods by Griffin at the time of Stock-taking, compared with the prices allowed in February, when a valuation was made, in the course of which the following examples were given:—Groceries: Golden syrup, cost price 5s 9d per dozen tins, Griffin's price 8s per dozen, valuation Gs fld per dozen; Rickett's bag blue, 8s 7d per doz., ]Bs, !)g; spice, 10W lb, 4s, Is; rice, 21s lid per cwt., 39s Sd, 245; T twine, 3b lb, (is, 3s. Drapery goods: Huckaback, 8d per yard, Gs Bd, Is 3d; hooks and eyes (carded), 10y,d per doz., fld per card, 2d pet card; flannel (which was miserable stuff and "no more like flannel than I am," said counsel), 7id per yard, 2s Gd. These were but a few of the examples, and the same applied to everything that the unfortunate man had bought. The agreement set out that the stock was to be taken at the cost price a? marked by the defendant, allowing for loss and breakages. Mr. Treadwell continued that if the evidence proved (and he believed it would) that what he said was correct, lie could characterise the deal as nothing else than a disgraceful swindle. If tliey had been awaro of what came to their knowledge only on Friday night, the claim would have been for very much more than £230. Regarding defendant's claim that some of the stock and plant on the farm was missing. Mr. Perrott would swear that Griffin had gone over the place and expressed liithself as satisfied with everything. After taking possession he had alleged that there were some deficiencies, and One or two of the deficiencies had been alleged since the writ had been issued. Mr. Treadwell concluded by saying that such peopla as his clients, who had no business ability, must be protected against sueli treatment. PLAINTIFF'S EVIDENCE.

Gilbert T. Perrott, storekeeper, said ha was previously a dairy farmer' at Dannevirke. About 11 months ago he had a severe illness, and as a result he was compelled to give up outside work. £e saw land Agents flamed Orbell and

Whitehead, at- Palmr.rston "North, who; said they knew of a storekeeper at linktiimi, whom they thought would exchange for witness' farms. The prices fixed were £t 10s per acre for the bush farm and £-15 per acre for Hie dairyfarm. Or'oell gave him an -introduction to Griffin, and witness went to see him. He told Griffin about his farms, and Griffin and he inspected the properties he was willing-to exchange. TJiey also inspected witness' farms, and a subsequent meeting of the parties was. held at Orbetl's office. Griffin said he could not do business unless witness knocked oil' £COO. He thought that, in order to Set something to do that, he could manage, he had better drop the £OOO. The values lie placed on his property were fair values. The interview took place between the 11.30 a.Tn. and the 1 p.m. trains. Griffin seemed pleased when the {•eduction was agreed upon. The agree ment produced was the one he signed. The stock of the store was to be taken at valuation. Witness' equity was valued at £3171, and Griffin's valuation of the place was £3475. Witness could not say why the difference was fixed at .t'GOO. Griffin's stock was supposed to be worth £ISOO. Witness had never done such business before. He signed the agreement without nonsuiting a solicitor. The deal was done in a hurry, as Griffin wanted to catch-the 1 o'clock train.

Mr. Treadwell: Have you ever exchanged farms before?— Witness: Yes. Well don't do it any more; that is my advice.

Continuing, witness said he and his wife went to see Griffin between Christmas and New Year, and asked that the valuation of the stock be set back from January 1 to February 1, as they could get no valuer just at that time. Griffin said the valuation was fixed for January 1 and would have to be made then He could supply the cost prices, and that was all that was required. He said he had a code by which his goods were marked. The code was "Know thyself." Nothing was done at that time. Witness went to see Griffin' Again the next day, alone, and commenced to take stock. Griffin was there with his son. Witness was alone. Griffin called out the prices from the code marks and witness wrote down the items, believing them to be the cost prices of the articles. The total valuation came to £1514 lis. His and Griffin's totals were identical.

CUSTOMERS AND 'PRICES. Witness, continued in the sliop, selling goods to customers. Some of them complained of the prices charged, and he said he was charging only the prices marked according to Griffin. They said they had not paid such prices to Griffin. Up to that time he thought everything was all right. When he was shown the billiard table he made a rough guess at the value, and said he thought it probably worth £SO. Griffin said it waß worth over £IOO, and as witness had agreed to take over everything at valuation he would pay what it was worth. He had no true idea of the value. DEFENDANT'S "BEST FRIENDS."

In the kitchen witness and his wife were introduced to Mr. and Mrs. Hall, who were said to be the "best friends we have." Hall asked about the billiard table, but Griffin said he could not let Hall have it then, as Perrott was taking over everything. Hall was evidently acting for someone else, as Griffin asked him if "his man" was still willing to buy, and he replied that he was prepared to buy at £125 clear of commission. Hall askad witness if lie took over the table would he be likely to sell it again, aad he said he. could not say at that time until he got settled. They went back into the billiard room, and Griffin said he could get £125 for the table, but would let witness have it for £llO, and he agreed to that, believing that it must be worth that. About a fortnight later he offered the table to Hall, but he had not bought it, and it had never been sold since.

ENTRY OP SOLICITORS. A firm of Dannevirke solicitors (Blaekiston and Blackiston) were consulted, and later Ilalliwell and Spratt (Hawera) were consulted. A conference was held between the parties concerned, in order to come to terms over Griffin's stock values, but defendant would not meet them reasonable. Griffin asked additional security for his £6OO mortgage by including the shop fittings and stock-in-trade. Nothing was done at that, interview, and an-, other was held, when Griffin was represented by his son John, who was about 17 years of age. Griffin a little later came to see witness and his wife and asked that tho deal bo cancelled, but witness refused, as he had made Ilia financial arrangements. Griffin came later with his brother-in-law and wanted to value the stock, but on legal advice witness refused to allow him to do so. He never heard any mention that the valuation was to include the cost of loss and breakages.

PREVIOUS EXCHANGES. To Mr. O'Dea: He had on two previous occasions made exchanges of farms. He had bad farms at several places in New Zealand. He had worked in with a land agent in some deals and.had received acommission from the agent. He had been in business as a. butcher, and also on a milk run. Ho still had an interest by a third mortgage in a Wlmngamomona property. That was offered to Mr. Griffin at £lO per acre. The property was offered to Orbell and' Whitehead for rale as witness' property. It had not been sold, and was now offered by the second mortgagee at £0 per acre. The arrangement of a £(100 equity was due to a reduction of the value of the Urenui farm from £4 10s to £3 10s per acre. When the exchange was effected, witness was to arrango a first mortgage of £I2OO and Griffin was to take a second mortgage of £OOO in the property taken over by witness.

LAND AGENT AND LAW WORK. His Honor drew attention to the agreement, which, he said, had been left indeterminate, Each, however, had taken possession. Tlie agreement apparently was an effort on the part of a land agent to undertake law work of which he knew nothing. There was no mention of tlie value of the stock or the amount to be paid, and it was an altogether unsatisfactory document.

Mr. O'Dea said lie would be quite satisfied for his Honor to hold that the agreement was indeterminate. His clientwas quite ready to go ' back to his business and give-lip the farms to plaintiff. His Honor said that as each had entered into possession he supposed they would have to abide by it. Continuing, witness said the further mouth asked for was for the purpose of getting a valuer. In reply to further questions witness said he was ready to complete on January I. Jtaling with

valuations of slock, Mr. WBeii "asked witness if aoinc of Ihe ilejns had not been undercharged. An item, ]2 spades lis, referred lo toy ;iml (liny were still in the liiiou. Another item was a line of 'chocolate at li.Jd per lb. Witness did not know what lie could buy chocolates at. .. . ' , EVIDENCE OF SIMPLE-MINDEDNESS To the Judge;: He did not have the goods Weighed. -lie just/look dowtith'e figures as Mr. Grlfiin called them out: Continuing, witness "Said that' when the figures were taken down both he and Griffin's a<ih referred to each other if they were in doubt. . If one had made a mistake he .supposed they both had the same mistake. They extended the figures independent of each oilier. He commenced in the business on January 2. It was not till March that he complained to Griffin about the He had two of 'Griffin's sons working for liini alternately for about, a month. He thought lie had mentioned to the son John that the prices' seeihed a bit high. Witness said Griffin had agreed to' a valuation after his cb'ifiplaint, Wit lie refused, on the advice of his solicitor. Griffin wanted to cancel the .lyhble deal, but wanted witness to pay his own'and part of Griffin's expenses; "witness' refused. He "had sold some of the stock in the shop.. .

FARM STOCK MORTGAGED. The stock on his farm, which Griffin took, was under a bill of sale, and ho did not think Griffin had received any of the milk cheques, which had gone to the mortgagee. The bill of sale was for £7OO. . His Honor: That appears to be about the total value of the stock,. so far as. I can make out. Continuing," witness said it was impossible for them to go back to the same arrangement as the agreement, because of financial obligations undertaken. Whether he should now have a valuation he left lo his solicitors. r Mr. Treadwell: The first sensible thing you've done. The judge referred again to the man-' ner in which the agreement was drawn' up. Blanks were left,' and nothing was 9'aid about the value of stock/and land. He thought an endeavor should be made to effect a settlement.

An adjournment till 10 o'clock this morning was agreed to.