CLAIM UNDER GUARANTEE

Taranaki Daily News, 3 December 1926, Page 9

CLAIM UNDER GUARANTEE

MONEY ADVANCED ON STOCK RECOVERY OF MONEY SOUGHT. COURT RESERVES ITS DECISION , Recovery of £lOO9 and interest 1 amounting to £B2 8s 4d was sought in the Supreme Court at New Plymouth yesterday by William A. Hewitt, of Hawera, who proceeded against Christopher Mumby, farmer, of Stratford. The money was said to be duo under a guarantee given on behalf of George Major. Judgment was reserved. Plaintiff was represented by Mr. P. O’Dea, and Mr. F. C. Spratt appeared for Mumby. Plaintiff, now general manager of the Farmers’ Co-operative Organisation Society at Hawera, was formerly with the New Zealand Loan and Mercantile Agency at Stratford. He occasionally loaned money on his own account. He granted a lease of a property at Rawhitiroa to George Major from July 1, 1917, to July 1, 1922, the latter taking over the stock and giving Hewitt a bill of sale over them. Major farmed the place, but later on it was considered he was not making a success, and Hewitt wrote to him suggesting that something should be done. A sum of £2469 15s lid was owing by Major to Hewitt on July 1, 1922, and by September 30 the amount was £2458 19s 10d. Hewitt then intimated that he could not continue to back Major unless guarantors could be found, but though two persons were suggested, Mumby whs the only one who agreed to take the resnonsiblity. A guarantee was therefore drawn up on September 30 for £lOOO for two years front the previous July. Hewitt advanced the money. On July 1, 1924, Major owed £2735 8s 6d, but still carried on until July 6, 1926, when the matter was wound up. The parties met and arrived at the value of the stock as £BB7 14s, the arrangement being that they should not be sold but transferred to Hewitt at valuation. The balance then owing wa s £1943. QUESTIONS AT ISSUE. The questions at issue were whether the deed of guarantee was in order, whether the carrying on after 1924 affected the surety’s liability under the guarantee and whether the crediting of the rents paid by Major were “advances” within the meaning of tlie guarantee. Plaintiff gave evidence that on the expiry of the guarantee he continued to make advances to Major, but then insisted on having a 75 per cent, order against his milk cheques. This was known to Mumby. Plaintiff advised Major that he thought the farm was too large for him, and offered him a smaller place at Cardiff, intimating that he would not carry on the Rawhitiroa farm any further. Major wanted .to remain there for another year, but witness would not agree. Mumby wae made aware of these things, and he finally agreed to take over Major’s interests at Rawhitiroa, the stock to be taken over at valuation. The valuation took place on July 5, all parties being represented. On August 9 notice was given to Mumby calling up the guarantee. At that time Mumby knew of Maior’s indebtedness to witness. Under cross-examination by Mr. Spratt, Hewitt said he told Mumby that he had security over the stock, but did not say his guarantee was protected by the stock. Mumby wits also told that he would have to stand the loss of the £lOOO if Major had to be sold up. EVIDENCE FOR THE DEFENCE. For the defence, George Major said it was his indebtedness that Mumby had guaranteed. So far as he knew, nothing was said about security for the guarantee. If the guarantee were witnessed by McMillan, then witness was not present when it was executed. Mumby had signed something which witness thought was the guarantee when they were together in plaintiff’s office. Witness could not remember at any time discussing his accounts with Mumby after the guarantee was signed. Mumby visited witness’ farm in a friendly way, but not for the purposes of inspection. Ellen Mumby, wife of defendant, said her husband could neither read nor . write, though he could sign his name. Witness did all the reading and writing necessary. The Hewitts lived not far away, and cattle belonging either to Mr. or Mrs. Hewitt were often grazed on defendant’s farm. She remembered receiving a pencilled note from Hewitt in July, 1926, concerning the valuation of the stock. She told her husband of the contents. She knew then that there was a claim, but had been led to believe the stock would be the security. Actually the first notice of wae received in August. Christopher Mumby, the defendant, said Major had asked him to sign a guarantee when in Stratford. He could not remember the date, and could not recall ever signing a guarantee before. Major did not say anything, or for how much the guarantee wae. Witness went to Hewitt accompanied by Major. A paper was on the table ready to sign, and he was asked to sign it. It was not read oyer to him, and no explanation was given. Hie wife knew he was going to sign the guarantee at Hewitt’s place, as far as he knew. He had had no previous conversations about the matter with either Hewitt or Major. When Hewitt had written asking him to send a valuer out to see the stock he knew nothing in particular about the claim. fo Mr. O’Dea: Major might have asked him for a guarantee of £lOOO. He hud forgotten. McMillan, whose name appeared as a witness on tho guarantee, sas not present when witness signed it. . After Mr. Spratt had addressed the vourt on the legal aspect of the cose, Ins Honour asked Mr. O’Dea if he desired to be heard. Mr. ODea: No, Your Honour. I do *iot think it necessary. His Honour said he felt no doubt on the matter, but would put his judgment in writing.