A £9700 CLAIM.

Press, Volume LIX, Issue 17940, 7 December 1923, Page 6

A £9700 CLAIM.

TRANSACTIONS IN SHEEP

DEALER SUES STOCK AGENTS. Robert McKlhumey. stock Asiiburtor.. claimed the .-:um ol £J'~l<is from Pyne. Gould. Guinness, Ltd., stock agents. in a civil action, heard by Mr .Ju.-tice Adamt, and a special nirvof twelve, at the Supreme Court vestei(iav The action arose out ot sheep crsirsaccior.i which w«?re entered into iV i)«vml.er. U'l9. The hearing will take ,-everal days. Messrs -f. H. T'plutni and < Thonia- anpc.-ired for the plaintiff, and Messrs M. J. Gresson and IX EWanklvii for the defendant company. Statement of Claim. fhe -tate'iiont of claim set om that on or about December 19th. 1919, th« defendant company had upon its books for sak- on behalf ot the p.a.ntifr 3--t> ewes, and upon that date the' coin panv's Ashbiirtdn stock agent, Bei Anderson, brought out to the defendant's farm Daniel Byrne, of Ashburton, for the purpose of sellingTiim the ewes. Oji or about December lUtli the defendant company, bv its agent, Anderson, sold the ewes at 32s per head and tie iivered them to Byrne. At the of the sale find delivery, the comp O arranged .with the planuift tat thft ewes should remain on the P ljl £ tiff's land until after Christmas y" or about J miliary 20th. 1020, the defendant company removed from uie plaintiff's land 150 of the ewes, but let the remainder. 259 U. on the propel iShort!-- after the company informed the plaintiff that Byrne was ill nv hospital and could not take the balance and requested plaintiff to feed them, which he did. J-'rom time to time the plaintiff enquired aa to when the ev.es would be taken auav and "was tola t wait, as Byrne was still ill. Later was told ' that Byrne had died. plaintiff had notified the company that he was holding the ewes at the company's cost and risk and requested- the companv to pay lor and remove them, which the company had refused to 00. Plaintiff had been informed that the .statement that Byrne had " <lS false, but plaintiff had been unable to trace Byrne, and lie had been informed that Byrne was insolvent. Hie c( >ni pany had paid plaintiff for 150 of the sheep, but had refused to pay for'the balance, 3100 sheep, or for their ec * - ft was the custom or usage ot slock agents, dealers and farmers in Canterbury in accepting contracts through agents for sale and purchase, where an agent procured a vendor, and delivery took place, for the stock agent to accept responsibility to the vendor for the price to the same extent as the purchaser. Plaintiff had no knowledge of Byrne's financial position at the time ot. the transaction. He relied upon the custom and usage, and would not have entered into the transaction except on that basis. Plaintiff had found feed for the sheep from the ' date of the transaction to the present time at the company's request, and on that credit, and not on the credit of Byrne. Plaintiff also had had the sheep dipped and shorn. Plaintiff and the company had acquiesced in a course of dealing in which interest had been,, charged to the party in debit. He claimed for the sheep, feed, and other items, a total of £9722 16s.

The defence denied that the custom tit usage stated in the statement Qf claim was recognised, or that it applied to the cimimstances and facts of the present case. In a series of alternative defences the company set out that plaintiff acquiesced in the company's refusal to pay for the sheep, and consistently treated the sheep as his own property. If there was a contract between plaintiff and Uyrne, Byrne had unconditionally repudiated it, and plaintiff had accepted the repudiation. Plaintiff had not suffered any loss or damage on account of the company's refusal to take delivery. If the custom existed, it was inconsistent with the contract, and could not be implicitly read into the contract. Plaintiff was

not, in a position ultimately to delivei the goods alleged to be sold to Byrne. Plaintiff's Case. Mr I'pham said plaintiff had put through dealings to the value of many thousands of pounds with Pyne, Gould, Guinness. Ltd. In September, 1919, he was in debt to the extent of £SOOO to the company. At that time he had about 3300 ev.es. the majority of which were hoggets, and a culled mob of 711 all unshorn, which he put in the hands of the defendant company for sale. Plaintiff was more of a dealer than a farmer, and only held the sheep for resale. His shearing shed was used by others on a contract system. He effected the .sale of 711 ewes to Byrne, and tliev were taken about three miles down the road and sold at a fair profit to Bvrne. A iter the sale. Anderson, of the firm of Pyne, Gould, Guinness. Ltd., and Byrne came to McElhinney's shed and asked if he would hold the balance of the sheep for them until morning. They turned up the next morning, anil Byrne purchased 3000 odd ewes, which had been all shorn. Bvrne and Anderson agreed to take delivery of them, but they asked the plaintiff to allow the sheep to remain on his place until after the holidays. Thereupon the ewes were counted over and delivered to Byrne. The Christmas holidays supervened,' and some time in January. 1920, Anderson came out to plaintiff's farm with a buyer for Bvrne named Boyd. He drafted out 150 ewes and sold them to Boyd at 345. Next day the sheep were taken away and the transaction passed through the defendant firm's books. A rough diarv had been examined and an entry on December 20th set down the sale from McElhinney to I). Byrne of about 2300 ewes at 325. An account sale was put through in connexion with the purchase of 150 ewes by Boyd from Bvrne. Byrne had left Ashburton before Christmas, unknown to the plaintiff, and he never returned. Shortly after McElhinnev was opening his mail in a barber's shop when Anderson and a man named Lloyd, also an employee of the defendant company, were present. He found that a credit for 150 ewes and not for 3250 ewes had been given him. Lloyd stated that the note was all- right, but Anderson si),id "Now you've put the fat in the fire!" and later took the note back, saying he would alter it. "When the 3250 sheep were sold the parties evidently got a one-armed man, Slade, to writ* out. the sale in Anderson's pocket-hook. The book had been in the possession of the company from the beginning, and tboufih Anderson knew very shortly afterwards that something was wrong, the- book was destroyed. McElhinney saw the manager of the Ashburton branch, O'Malley, and was told that Byrne was in hospital. O'Mallev asked him to hold the matter over and paid £2OOO to his credit at the bank. Plaintiff did not" want to hold the sheep indefinitely and from time to time he asked O'Malley . to , have the matter cleared tip. He took care of the ewes, had them dipped aind shorn, and, as a prudent bailee, sold the lambs and the wool. Though McElhinhey was in debt to the extent of £SOOO to the company and ' the amount was increased by £2OOO in 1920, no .pressure was put on him until July, 1922. In July, 1922, O'Malley told plaintiff that Byrne had died, which statement was a deliberate lie, and that he would have to take over the sheep again. It seemed that O'Malley's hand had been forced by the head office. The account for £7OC<J was forced, and McElhinney confessed judgment. Counsel stated that whenever a stock dealer became insolvent, stock companies were always creditors to varying amounts. / Mr Gresson objected, to that opening, and his Honour upheld the objection.

Mr Upliam contended that when a stock agent introduced, a purcliasetr, if by any means the purchaser repudiated before delivery, an agreement made by the company's representative, or if the transaction fell through in any other way the stock agent was not responsible, but if the stock agent concurred in the delivery, immediately delivery was given, the stock agent was responsible and the vendor might look to the stock agent and not necessarily to the purchaser for payment. .

McElMnney's Evidence. Robert McElhinney said he had liad many transactions with the defendant Company. In December, 1919, he was in debt to the amount of £4400 to the Company. He corroborated counsel's statement regarding the alleged sale of the sheep. When lie opened the credit note for 150 sheep in the barber's shop, Anderson and Lloyd, of the firm of Pyne, Gould, Guinness, Ltd., were there. Witness expected to get credit lor 3251) sheep, and he told Anderson so. Anderson was putting the note in his pocket, but Lloyd - looked at it, and then said to witness, "No, it's all right, Mac." Anderson said, "Now you've put the l'at in the fire 1" and JLiloyd went away. Anderson then asked for the credit note, and stated that lie would put it right. Witness then saw O'Malley, and was told that Byrne was ill in hospital. He had never disposed of one of the ewes or given security over them. Excepting the ones that had died, they were still on his place. To Mr Greason, witness said that the ewes in brought him £4960. ; He admitted that if his claim had been made that month it would have been £4960. Since then it had grown to £14,048, the sum in the first claim made. He had not told his solicitors before the first claim had been made that the Company should be given credit for lambs and wool which he had sold. He started business with the firm in July, 1919, with a cash advance of £2OOO for sheep, and ~on August 4th he received ■ another £IOOO cash from the Company. By the.end of December his account" was about £4OOO. Pyneand Co. had never asked him for any security on those amounts. It was hot usual to remove the sheep immediately after delivery was taken. He kept the sheep after delivery had been taken, by arrangement with Byrne and his firm. The arrangement was that he should keep the sheep for nothing from December 19th to January 3rd. Witness denied an allegation that when he was arranging the sale to Byrne. Anderson said that his firm would not stand to Byrne for that amount, but lie would put it in th<s bank and see if it would go through, O Malley gave witness to understand that he would pay for the feeding of the sheep during January. Both in January and February, witness told O'Malley that his firm should pay him for the'sheep, because it had taken delivery of the ewes and sold some of them. The £2OOO was paid to him, as O'Malley said it would be something to go on with until Byrne got better. That sum was a part of the price of the ewes. He considered that it was a payment on account of the sheep. He was trying to force O'Malley to take away the sheep when the manager told him that the £2OOO had only been advanced to him. Although he had a pass-book, he did not know for eighteen months that the sum had been debited against him. Although £6OOO had been advanced to him without security by Pyne and Co., and his farm and stocli ,were free, he was seriously afraid of the calling in of his account with the firm in 1920. He admitted that probably he could have paid off the account. During the whole of 1921 he continued dealing with defendants, and on an average he interviewed O'Malley once a month about the . tiheep. He was always put off with the story that Byrne was ill; Mr' Gresson: What difference did that' make in regard to your claim against Pyne, Gould, Guinness, Ltd.?— It did not make any. Witness said he told O'Malley so, and the latter said it did not matter as witness owed the firm money over

and above the amount .the sheep brought. Witness was pressing for credit for the sum. In September, 1922, O'Malley' came to liiin when he was in hospital, and asked him to give the firm security. He refused. In 1922, although he owed about £BOOO to defendants, he sold' part of his wool through the -Bank of New Zealand.* On December 15th, a writ for £7OOO was issued against him, and in Januai'y, 1923, he confessed judgment. Mr Gressoji: If you did not have a trumped up claim, why did you not counter-claim for £14,000 at that time? Witness said he acted on the advice of his solicitor.

Mr Gresson: I give my friend credit for giving better advice than that. McElhinney stated further that the counter-claim was not put in until May. He agreed to pay £3OOO down and £4OOO on May 31st to defendants. He refused to carry out his part in May, as he had a claim against the Company. He had never intended to give a. mortgage.'.

Mr Gresson: .Do you think it's a straight thing to bay you will give a mortgage, and never intend to give it? —I can't say. Is it not a fact- that it was only after you refused to give the mortgage that you put in the claim against Pyne, Gould, Guinness, Ltd?— No. ■."Alter cross-examining witness on the wool clips, Mi 1 . Gresson said there was obviously a big discrepancy in the number of bales that should have beeu obtained, and the amount of - wool credited to the Company in the claim. Mr Gresson: This wool wasn't yours andiyou sold it. Why did you do it? —They were pressing me. What right had you to sell Byrne's larr.bs ? —1 sold them because I could not keep them.

Witness stated that when a firm brought a purchaser on to anyone's farm to sell and- deliver stock, the farmer looked to the firm and not to the purchaser for the money. The custom was that the seller looked to the agent, who would pay him, but charge it up to the purchaser in its books. The agent undertook to finance the purchaser. Personally, he never had been paid by the purchaser. He could not say that he knew of a .case where; the agent was held liable to pay the seller when the seller was in possession of the goods, or of a case, in which the agent had paid for stock without having received money from the buyer, and while the seller retained possession of the stock. Mr Gresson: Do you know a man named Munns?—Yes.

Did you know he was a divorce detective ?—-No. Did he do any work for you in this case ?'■—Yes.

And you didn't know who he was ?■ — Not until 14 days, ago, when I. had to go to North Auckland looking for the famous Daniel Byrne who died. I took Munns with me. Witness said he did not know that Munns had interviewed witnesses in the case, at Ashburton., If he had done so, it had been without witness's authority. Munns had no authority to send a statement to the solicitors, until after he had been to Auckland. Mr Gresson: If, six weeks ago, he interviewed one witness and he didn't do so by your authority, he must have done sf? for love? —I suppose so. , Witness said he first saw Munns some four or five weeks ago.

Fohner WoolclasseT's Evidence. Gordon Knudsen, formerly a wooiclasser, but now of the detective branch of the Police Force, Christehureh, said he classed all the wool that went through McElhjnney's shed in 1919. He had heard Byrne ask the plaintiff to hold sheep until the next year after the deal had been made. Later witness heTped to count the sheep which had been sold. The case was then adjourned until to-day, at 10 o'clock*