CLAIM FOR DAMAGES.

Auckland Star, Volume XX, Issue 245, 15 October 1889, Page 5

CLAIM FOR DAMAGES.

KAIHU RAILWAY COMPANY V KAURI TIMBER COMPANY.

JUDGMENT FOR DEFENDANTS.

The case of bhe Kaihu Valley Railway Company v. the Kauri Timber Company, claim. £21,000, was continued before His Honor Judge Conolly yesterday.

Mr Hesketh resumed his speech on the case for the defence. He drew abbenbion to the letters between the solicitors on each side so show that the Timber Company was under the impression that the contract was good, and that no intimation of its being bad had been given by the Railway Company. The caveat also, he claimed, was perfectly in form. He also claimed that Mr Cooper's'contention that "'all the world' was supposed to know of the acts of settlement, of the Railway Company," was too broad, and did not apply to cases where there was a doubt as to the rights of the parties or oven ignorance of those rights on both sides. In criminal cases, of course, ignorance of tho law was no plea, bub he quoted authorities to show that this maxim did not apply without qualification in civil causes. If both parties are undcracommon mistake there was surely reasonable cause for the error made- He quoted specially the case of Rhode- v. the London Small Arms Co. After some further argument on the.same lines Mr Hesketh concluded, claiming that he thought he had shown reasonable ground for lodging tho caveat.. Mr Cooper replied. He stated that the defendants were bound to know the plaintiff's powers. He would admit thab if bhe agreemenb had been good there would have been faculty to lodge caveat. But the memorandum of association had been submitted to tbe Kauri Company, and neither party seemed to know that the articles of association could give the Kaihu Valley Company no;right to make the contract. Still, the Kauri Company should have been sure of their rights before lodging caveat. He submitted that on the pleadings defendants had no right to lodge caveat.

Hia Honor then gave judgment. The point to decide was whether there had been reasonable cause to lodge caveat. The case had been argued very fully, and he had had ample opportunity to study the case quoted in support of the arguments.- He had arrived at the conclusion that judgment must be for defendants. The plaintiffs must show that there had not been reasonable cause for the lodging of caveat. Mr Cooper had contended that anyone contracting wibh a corporate body must in fact and in law make himself acquainted with the powers of that body. But it was impossible to be sure of the legal bearing of every word in a company s articles of association. This Kaihu Company had Eower to acquire and dispose of land, and c must hold that the trees went with bhe land. If they could sell the land and the trees it was natural for them to think that they could cut and deliver the trees. The point ab which their rights stopped in "regard to these trees was hardly clear enough to the ordinary mind.' All the lawyers were deceived on thispbintup to the 21st February. But after caveat had been lodged some lawyer saw the point thab the Railway Company had no right to cut and deliver timber, and that on that ground the caveat might be set aside. He thought Mr Justice Richmond, with all his legal learning, had gone a little too far when he characterised the Kauri Timber Company's action on this point as absurd. Up to the time of lodging the caveat it had not entered the minds of either party that the agreement was bad on this particular ground. ' He held that plaintiff had failed to make out that there 'was no reasonable ground for lodging the caveat,' and in answer to the question pub him, Was their reasonable ground for lodging caveat ? he should reply in the affirmative. This would mean judgment for defendants, and costs would be on the highest scale.