SUPREME COURT.

Star (Christchurch), Issue 4128, 14 July 1881, Page 3

SUPREME COURT.

♦ NISI fPEIUS SITTINGS. Wbdnbsday, July 13. (Before His Honor 2_r Justice Johnston, and a special jury.) OBBDITOBB' TBUSTBB OF JOHN PHASER AND OTHBBS V. BBOWN AND BEAUMONT. The cross-examination of John Beaumont was continued by Mr Garrick : I have no personal knowledge of the sale of the horses to Eraser. The amounts coming to me from the Government were by virtue of the assignment of the contract. The Government agreed to the deed. We paid the deposit of £400 for Eraser when he tendered. . There is a balance of £596 Os 2d, including the £400, due from Government. There is now due to us from Eraser £740 4s lOd, without interest, from June, 1880. To His Honor: Eraser would owe us a balance of £144 4s Bd. Re-examined: That account is made up partly of the £1000 for the plant, and interest on it. The interest was 10 per cent, _nd there waß 15 per cent commission on the highest amount of the overdraft. The goods would be sent sometimes to John Eraser, and sometimes to Eraser and Co. I don't suppose the storeman would know. Alexander Dunlop : lama member of the firm of Eraser and Dunlop ; also with Eraser, Grigg and Guild, called Eraser and Co. ; also partner with Eraser and Henderson, at Mount Somers. Eraser and Dunlop carried on the contract for water-works at Malvern. Eraser and 00. were contractors for the railway, having an assignment of John Eraser's contract with the Government. A draft deed of assignment was sent up to us by the solicitors of Wood, Shand and 00, Ifc was nofc signed. Fraßer had ifc. Ho has left tho Colony. Mr Garrick objected that unless fche contents of the document were known to Wood, Shand and Co., the copy could not be referred to ; also that secondary evidence of the document could not be taken. His Honor overruled the objection. Witness : Eraser haß been Been in New South Wales. A letter has been recently received stating that he has been soen in the bush with a survey party. I read the deed. Ib waß a general assignment of moneys, plant, and everything connected with fche firm of Fraser and Co. It referred to the railway contract. Eraser and Co. had considerable liabilities on June 9. (The four days' statement was here produced.) Cross-examined by Mr Holmes *. I received a writ from Wood, Shand and Co., jusfc before the assignment. I never read the four days' statement of John Eraser aud Co. I suw Fraser and Henderson Bign it, and I was satisfied. John Eraser is the business man of the railway contract, and of Fraser and Dunlop. Henderson had charge of the Mount Somers store. I was to put £200 into thiß business, but did nofc. I believe Eraser put money into it ; I don't know if Henderson did. Eraser and Dunlop had one separate character besides Wood, Shand and Co. Mutch and M'Kenzie were creditors for about £7. George Guild, a member of tho firm of Eraser and Co., gave confirmatory evidence. David Thomas, auctioneer : We sold a lot of horses and contractor's plant on the ordor of Mr Brown. They were on James Stark's premises, Lincoln road. The Bale realized gross £651 19s Gd, and neb £403. His Honor : Whafc, £250 expenßCß ! Witness : There were a lot of expenses to pay for the horses to start with. I don't know what the neb proceeds were. The account sales give £559 14s 6d gross and £521 2s Id net. It was sold as Eraser's estate. I can explain any mistake. There is over £100 worth of othor goods added in tho rough auction book. Thero was an entire horse sold. Mr Dunlop, re-called : There was a gelding in my private account, which was sold at the same sale. Mr Brown took possession of him. Nicholas Grigg gave Bimilar evidence. Daniel Henderson corroborated his partner's. Tho fucb that several firms had separate creditors on July 9 was admitted. William Anderson, saddler at Ashburton, valued Henderson's house at £300. This was the caso for tho plaintiff. His Honor hinted to Mr Garrick to move for a nonsuit. Mr Garrick would prefer a verdict. His Honor considered the question was altogether one of law, as the facts upon which the plaintiff relied wore admitted. Mr Garrick was inclined to lead evidence to justify his asking for a verdict from the jury upon sevoral important issues. After considerable discussion, iv the courso of which Mr Garrick quoted Jones v. Hurver, 40 L.J. Queen's Bench 59. Tho following evidence was taken for tho defence :— William Brown, examined by Mr Holmes : lam manager in Christchurch for Messrs Sargood, Son and Ewen. I know Fraser aud Henderson, tho defendants. They came to see me in May 1880 with reference to a writ served on them for a * ill of Wood, Shand and Co , dishonoured by thorn. Their firm was John Fraser and Co., storekeepers, Mount Somers. Wo also had an orerduo bill of theirs. I told them their only courso was to file or make an assignment. _ hey agreed to call a privato lMeeiii.g of their cruditors at our I office. 1 took tho minutes. Thu dt-blora ; made a sl-leuieul of liabilitus ;i d u-i.-t-t--, i showing that they had stock of num«.-ihi'.g , Ike £1000, book debi*> of ii ■*■•_:, CSOO, , and liabilities of about £1200 In adi j dition they furnished a statement tliat. > Fraser' 8 share of a contract to come in would : be ab the lowebt £150. Dunlop was not i present, but Eraser made a similar stateroom > on his behalf. Henderson made a statement 5 that ho had a houso, tho equity of redemption . of which he valued at £200. This made in all s about £2000 assets. They therofore showod s tho creditors a Biirplus of closo on £800. Thej t were informed that thoy would have to file, oi i make au assignment of their Mount Somen a storo. Tho ussignmont was agreed upon r Tho resolution was — " That in conßidoratioi !- of Messrs Wood, Shand and Co. withdrawn"!' n legal proceedings, tho estate bo assigned ti is j Messrs Brown and Beaumont, to bo curriei w on for tho benefit of tho creditors." Fraso ' and Hendoreon told me that Frasor am Lt ' Dunlop wero to havo contributed £400 cacli

and Hendorson was to have given £200, but that all they could givo now would be £150 each, tho amount they were lo receivo iiom the contract. No proofs of debt were given, but Mr Friodlander said that hiß firm waß a creditor for about £50. After that meeting tho deed was prepared. Mr Beaumont went with mo to Messrs Garrick and Cowlishaw's. I believo Fraser went, but I'm nofc I had never receivod notico of any act of bankruptcy on tho part of Fraser and the others. There was no understanding that the debtors should receivo favour on account of their signing the deed. I wus present at a meeting when the deed was confirmed. Ifc had beon executed. Cross-examined : Tho store business was to be carried on. That was the estate to be assigned. The debts were in connection with the Mount Somers business. They said that the £150 coming to them from the railway contract would bo net, after paying tlie liabilities on that contract. I don't think that they said it would be after paying their liabilities. No reference was made to debts in connection with that contract. They were to carry on the busineaa as our servants. Nothing was said in my presence as to paying Henderson's private debts. There were running monthly accounts, for which wo put down £100. That sum had reference to those accounts only. Re-examined : They Btated that they were perfectly solvent — words to that effect. Alexander MD. Cooper, Manager of the Bank of Australasia, Christchurch, examined by Mr Garriok : Tho Bank was a creditor of John Fraser and Co. I was present at a meeting in your office. I consented to the deed of assignment. I had heard of their having dishonoured a bill. My assent was bond jide. There was no arrangement, as far as I know, that they were to gefc any benefit nofc mentioned in the f3eed. To His Honor : I believed thafc the deed was for the benefit of all the creditors. Cross-examined : I was not aware that the deed was assigning the joint property of the firm, and the separate property of each member, for the benefit of the joint creditors only. The Court adjourned afc 5.15 p.m. till II a.m. on Thursday (to-day). Thubbday, July 14. (Before His Honor Mr Justice Johnßton and a special jury.) obbditobs' tbusteb in ban_buptcy of john fbaßbb and co. v. bbown and beaumont. This case was continued at 11 a.m. Mr Joynt appeared for the plaintiff ; Mr Garrick, with him Mr Holmes, appeared for the defendants. W. P. Oowlishaw, solicitor, examined by Mr Garriok : I recollect on May 28, 1880, receiving instructions to prepare a deed of assignment from Fraser, Dunlop and Henderson. I believe Messrs Brown and Beaumont called first. The instructions were to assign tho real and personal estate of the debtors to the defendants, for the benefit of the creditors, the deed to contain a release, and with power for the assignors to carry on the business as long as the trustees pleased. The deed was to bo framed on a deed filed in the Supreme Oourt by one John Pither, for whom Mr Beaumont was trustee. They wished me to use expedition as they were keeping Fras»r and Henderson in town to sign the deed. They aßked me whether I wanted any further instructions. I said I did not know until I had seen Pither's deed, and I could not tell them if I should have the deed ready by the morning till 1 had seen that deed. I sent to the Court, and made a copy of Pither's deed, and Beaunont, Fraser and Henderson came to see me in the afternoon of the came day. We then discussed the provisions of the deed. I asked Fraser if he had any seperate creditors. He said " no," and also informed me that Dunlop had none, but that there were a few tradesmen's debts owing by Henderson. It was arranged tbat theßo should be paid, in order to avoid making Henderson's private creditors parties to the deed. I then drew the deed, so as to include the joint creditors only. The deed was executed, and filed in the ordinary course. The usual proceedings took place. On July 5 a meeting took place. I there read the Gazette notice, and produced a copy of the deed of assignment. I recollect preparing an assignment by John Fraser, of the railway contract, to Wood, Shand and Co. I also recollect the preparation of 'a bill of sale by Fraser and Dunlop to the same firm. It was engrossed on May 22, 1879. It was not executed. I produce the draft of it. I have searched carefully, and no other document was prepared. Cross-examined: I should think from whafc took place that Fraser must have understood what separate creditors meant. I advised them that if thero were separate creditors, it would be necessary to have soparato meetings of them and to get a majority of them to ratify the deed. I amagine that the man knew what separate creditors meant. I assumed so. I was aware thafc there was a railway contract. I can scarcely say that I knew there were partners in that contract. As far as the matter had been before me it was one that concerned John Fraser alone. I cannot swear at this length of time that I knew, or did not know, there were partners. 1 did not ask Fraser if there were any debts owing in connection with that contract. I did not inform him thafc such debts would bo to separate creditors, nor do I think they would be. I consider the result of my interviews to have been virtually instructions to assign the joint and separate estate for tho benefit of the joint creditors alone. I think there was no diccuasion at the meeting of July 5 as to the effect of the deed. I should think all present understood tho effeot of ifc. There was sufficient evidenco for any sensible porson to know the effect. The deed was paseed by this Court. I was nofc present when the judgment was given on the demurrer to the declaration. No suoh deed came from my offico as that alleged to have the names of Guild, Grigg, Dunlop, and Fraser. I cannot Bay that I had heard of Guild and Grigg in connection with Fraser and Dunlop, before the deed of assignment. I think I had not. I was not presont at tho first meeting, in Sargood's offico. A statement was handed to me that day ; I read it. I produce it. I suppose I knew that Fraser and Dunlop wero concerned together in tho railway contract. John Beaumont, examined by Mr Garrick : I was present at tho meeting at Sargood's office on May 28, and subsequently with Mr Brown at Mr Cowlishaw's office. I think Fraser and Henderson wero with me at tho first meeting at Mr Cowlishaw's. Mr Oowlishaw said that Pithers' deed would hardly meet tlie case if there were private creditors. Fraser and Dunlop said they had nono. Henderson said be had a fow debts which ho would settle himself. It was settled that the deed was to be for the benefit of the joint creditors of John Frasor and Co. I had no knowledgo of any provious act of barkruptcy. Cross-examined : I left for Europe on Juno 19, 1880. I waß aware in May that the railway contract wns being carried on by a firm, Fraser and Dunlop. We thought we wero finding all the money. Fr »ser and Dunlop were under the firm of John Frasor. I did not ask them if that firm ns a firm had any liabilities. I expected that Frosor's balance irom Governmen", £800, nnd tho proceeds of the horses and plant, would go to the joint croditors of John Fraser and Co., of Mount isomers. 80-examined .- I nover gavo instructions for the preparation of such a deed as Grigg and Guild have spoken of. I had tho management of tho wholo business with them till I left for Europe. William Derisle.v Wood, of tho firm of Wood, Bhand and Co. -. I nover gavo instructions for the preparation of any documents in connection with this matter. James Shand, of the samo firm : During Mr Beaumont's absoncu 1 conducted tho hiisincßf- in connection with t.ho railway con-tviu-i-, When lie was hero ho did it. lam not ituunt of any suoh document as that ui'iitioutd by Guild, Dunlop and Fraser. Cross-examined : I think Grigs and Guild woro mixed up in the contract. At that timo \ I had every reason to believe thoy wero only ' labourers. Fraser and Dunlop were tho only persons we knew in connection with that con- ' tract. I knew no such firm as Fraser and j Co. Goods may have been sent up to Fraser I and Co., but thoy were always charged to John Frasor. I remember a lot of horses and plant which we had seized under a bill of sale from Janus Fraser. I personally arranged tho matter with him. Wo mado '" oufc a list of horses, io. Tho arrangement was to arrivo at a prico that lie would bo •» prepared to cive ua for tho working plunt. I Tho trustee in bankruptcy, Mr T. B. Craig, myself, and John Frasor, nn-anged t.ho prioo , at £10C0, with which tho estate of James Fraser was credited. John Fruser was to '' take thorn ovor when he could pay for them.

Ho urrauged to take them at £1000 somotimi during August. Ho purchased tho plant from me, I cannot say at what date. It wa at the time we advanced him £400 as a de pout on the Ashburton Forks contract. I can't say why Jfcler;st was charged from Aug. 4, 1879. Mr Beaumont*.— The plant was first charged for as sold on May 9. Witness: — Thero was an arrangement to charge Fraser 10 per cent on the balance oi his account. To his Honor : — John Fraser had the use of the plant for the water-race and the Road Board contracts. He first disputed the tale about the time of the writ being issued. Mr Brown : — Fraser swore in evidence before me- that he had never purchased the horses and plant. In a conversation with him afterwards, not on oath, he said he had received a statement debiting him with £1000, but that he had never taken any objection toit 12 or 14 months. I mado a mistake yesterday as to our bill being overdue. It was not due till June 4, and the meeting occurred on May 28. There was an open account which waa due on May 1. I offered Henderson's house for sale but there was no purchaser. I know Mr Dander. I cannot remember putting such an absurd price as £400 on it. The reserve at auction for the equity of redemption was £200. His Honor asked if the proper courso would not be for learned counsel to move for a decree on the reading of the evidence, without a .verdict from the jury. As a fact, unless there wa9 a conflict ef evidence upon a point essential to the caße, reference to a jury impeded rather than facilitated justice. Hugo Friodlander (recalled by Mr Joynt) : During the year 1879 I saw an engrossment of a deed purporting to be a security to Wood, Shand and Co. It was in the hands of the party j Dunlop was one and Fraser and the other. The granting parties were John Fraser. Grigg, Guild and Dunlop. I swear positively those were the names. From what I remember, it was a bill of sale on all their plant and moneys to come from the railway contract. It was to secure £400, kc I swear positively that the name of either Mr Garrick or Mr Oowlishaw was on the document. Cross-examined by Mr Garrick : I distinctly recollect that there was only one name on it. There was no schedule with it. It was in 1879, near the commercement of the year. The contract had commenced ; that is, they had the contract. They told me it was accepted. I swear positively that the document put into my hand by you now is not the same. Mr Joynt : I have two other witnesses prepared to swear the same thing. His Honor : I would suggest that you might agree to state a case between you. Learned counsel agreed to the jury being discharged, and that a motion should be made by plaintiffs for a decree on the reading of Judge's notes as settled, the Judge to have leave to draw inferences of facte, and the documents to be exhibits annexed to the notes. The Courfc adjourned at 1.30 p.m. till 10 a.m. on Friday.