MONEY LENT TO SOLICITOR

Dominion, Volume 21, Issue 149, 23 March 1928, Page 7

MONEY LENT TO SOLICITOR

AN APPEAL DISMISSED, In the Appeal Court, consisting of the Chief Justice (Sir Charles Skerrett), Mr. Justice Reed, Mr. Justice Adams, and Mr, Justice MacGregor, John I’lederick O'Connor, a farmer, of Raetihi, yesterday appealed against a judgment of Mr. Justice Ostler in respect to a claim made by appellant for the recovery of X5lB 3s, and interest, against William Henry Tustin, a solicitor, of Wellington, and Wil; liain Ernest Waldegrave, a solicitor, of Raetihi. Mr. F. C. Spratt appeared for O’Connor, while Waldegrave was represented by Mr. A. Young, and Mr. D. Virtue. Although Tustin was cited as one of the defendants in the Lower Court, he was not named as a respondent in the appeal. In giving his decision in the Lower Court, Mr. Justice Ostler said that, while Tustin and Waldegrave were practising as solicitors in partnership at Raetihi, they acted for O'Connor in some transaction whereby X2OOO canje into his possession. Tustin, who was acting for O’Connor, suggested that the latter should lend his money to the firm. Finally, it was agreed that XlOOO should be lent to the firm for six months at seven per cent, interest. The money was paid to Tustin, and Tustin gave a receipt. The money was paid into the firm’s trust account, and used by Tustin, partly in making small loans to clients, but mostly for his private purposes. He drew for his own purposes some X7OO. . . . Waldegrave stated

that he did not know of the loan until a considerable time after it had been made, and when he first knew about it, he thought it was money which had been paid to the firm as trust money for investment on behalf of the plaintiff. In July, 1923, he discovered the tree facts about the loan, and made certain other discoveries, with the result that he dissolved partnership with Tustin, who left Raetihi, and the business was taken over by Waldegrave. who took into partnership a Mr. Windle, formerly managing clerk of rhe firm. After Tustin left, plaintiff made a claim on Waldegrave for the amount. He had taken the advice of two solicitors upon the. legal effect of the receipt, and he intimated to Waldegrave that he looked upon him for payment. .Waldegrave denied liability, and there were a, number of discussions between the two, mostljf as to the realisation of tho properties included in the mortgage. If was agreed between them that if these properties were realised, there would be a shortage of some .£2(Xl.Waldegrave then offered, if time were given to Tustin. Io guarantee the payment to the extent of ,£250. Plaintiff agreed to this, and a document was prepared by Waldegrave. and signed by both parties. The Judge said that the original document had been lost, and that plaintiff denied that he agreed to nr signed .it.' On that point. Waldegrave’s evidence would be accepted, ns His Honour believed that O'Connor had signed it. Moneys had been paid from mortgages and by Waldegrave. and another agreement made, until Waldegrave said that the only amount due to O’Connor, ns far ns he was concerned, was .£75. He informed a firm of solicitors that only .£75 was owing, when he was written to on the matter, but before they had received his letter, tho writ for action had been issued. His Honour said that the statement of claim did not refer to either of the agreements made between Waldegrave and tho plaintiff, but merely set out the loan to the firm, nnd demanded repayment. It gave credit for certain amounts paid, nnd asked iud"ment for the balance. ”... I hold as a fact,” said Mr. Justice Ostler, in riving his judgment. "flint Waldegrave did have nn honest doubt, as to his liability, nnd that there is consideration to support the second agreement. That being so. plaintiff’s case against Walderrnve must fail, and Wnldogrnvo must have costs noc-rding to scab', witnesses’ expanses. and disbursement s ."

After legal argument find been heard on both sides, the Appeal Court dismissed the appeal.