"PROMISE TO PAY."

Auckland Star, Volume LX, Issue 282, 28 November 1929, Page 10

"PROMISE TO PAY."

CLAIM ON P.N. FOR £775* SYDNEY ACCOUNTANT SUES. "WILL HAVE TO PROVE SWINDLE." STORY OF A FRIENDSHIP.

"Four months after this date I promise to pay John McLaughlin and Son or order the sum of £775, value received, payable at the E.S. and A. Bank, Martin Place, Sydney.—J. E. Gear."

On this statement, claimed to be a promissory note, Edward Joseph Flood, accountant, of Sydney, sued James Ernest Gear, of One Tree Hill, Auckland, for £775 before Mr. Justice Smith in the Supreme Court this morning. In the statement of claim Flood stated he was the holder of a promissory note, now overdue, dated January 20, 1923, and due on May 23, 1923.

Therefore Flood claimed £775, plus interest at 8 per cent from May, 1923, up to the date of judgment. McLaughlin and Son endorsed the note to V. A. Wawn and V. A. Wawn endorsed it to the plaintiff. The note later dishonoured and was still unpaid. Mr. Rogerson appeared for the plaintiff and the defendant was represented by Mr. E. Parry, of Wellington.

"A Holder in Due Course." "If I can establish that the plaintiff was a holder in due course within the meaning of the Bills of Exchange Act, any defect in title as affecting the position between McLaughlin and Gear does not enter into the matter," said Mr. Rogerson. "Flood claims to be the holder in due course, and gave value for the note and knew of no. defect in title. He in fact gave £105 for it. Not a tittle ol evidence has been adduced during a hearing in Sydney to disprove that plaintiff was not a perfectly innocent holder in due course. The whole tenor of plaintiff's evidence points to his being an honest man."

"The defendant will nave to prove that this was a clever swindle concocted by the plaintiff, Flood, and four other people who have committed the grossest perjury," 'said Mr. Rogerson. "Obtained Unlawfully." In a lengthy statement of defence, the defendant, Gear, denied that he the maker of a promissory note of which" plaintiff claims to be the holder. Defendant said that if he did make a promissory note, as alleged, it was obtained from him by John McLaughlin and Son unlawfully by duress or by undue influence while they were acting as defendant's solicitors. In 1923, the defence went on, Gear, was in Sydney for health reasons, and he came into touch with McLaughlin, the solicitor. Gear and McLaughlin became on intimate terms and the defendant placed complete confidence in McLaughlin as his legal adviser. It was represented to the defendant by McLaughlin that the late H. Buddie, of the firm of Buddie, Anderson and Kirkcaldie, of Wellington, who, had charge of Gear's affairs, was mishandling them and was conspiring with certain persons to deprive the defendant of the control of his own business. Finally, as the result of McLaughlin's repeated allegations, Gear came to believe that his solicitors in New Zealand were not protecting his interests.

Trip to New Zealand Arranged. McLaughlin then suggested that the defendant should come to New Zealand ■to put his affairs in order and to take them out of Mr. Buddie's hands. McLaughlin further suggested that he should accompany the defendant. By reason of the repeated suggestions and persuasions defendant came to regard it of paramount importance that he should come to NeAV Zealand and that McLaughlin should accompany him. The trip was arranged. On the day of sailing, the defendant, Gear, called at McLaughlin's office by arrangement, and was extremely disconcerted when McLaughlin stated he would not be able, to leave Australia owing to some temporary financial embarrassment unless the defendant gave him two promissory notes. These would be purely "accommodation notes" and would not be negotiated or dealt with in any way. Gear, who had never previously signed a promissory note, and not understanding their full significance, believed that it was of vital importance that McLaughlin should accompany him to New Zealand, and he signed the promissory notes on McLaughlin's express undertaking that the notes would not be negotiated or dealt with in any way. Mr. Eogerson took the best part of the morning reading evidence taken in Sydney. (Proceeding.)