CLAIM FOR £600

Dominion, Volume 23, Issue 57, 30 November 1929, Page 29

CLAIM FOR £600

CASE AGAINST LOAN COMPANY FORMER SECRETARY’S ACTS IN QUESTION The Chief Justice (Hou. 11. Myers) was engaged iu the Supreme Court yesterday in hearing a claim made by Aiunc Elizabeth Cooper, spinster, of Wellington, agaiust the Te Aro Loau aud Discount Company. Plaintiff was represented by Mr. W. Perry, and defendant company by Mr. C. W. Nielsen. Plaintiff alleged that during 1922 she deposited with the defendant company £6OO upon terms that the company would pay her interest thereon and would repay the principal sum on request. She had requested repayment, but the company had - refused to accede to the request. Statement of Defence.

It was contended for the defence that for about fifteen years prior to July, 1929, the company employed Walter Whitehouse as its secretary, but in that month the directors of the company dismissed him from its employ owing to certain irregularities on his part discovered by them, and he was later prosecuted to conviction for the offence of theft. The company denied that plaintiff deposited with it the sum alleged in the statement of claim aud stated that if the plaintiff paid to Whitehouse at any time any moneys (of which the company was unaware and which it therefore denied), then such moneys were paid into the hands of Whitehouse in his personal capacity and in no way as an agent, servant or officer of the company. If it were proved that plaintiff paid into White-, house’s hands any moneys and that such moneys were paid to and received by him as agent, servant or officer of the company, then the company averred that in consequence of a series of acts on the part of Whitehouse concurred in by plaintiff or facilitated by the absence of proper care on her part, the moneys paid by her into his hands were lost by his dishonesty and such acts were outside the scope of Whitehouse’s employment and were not within the knowledge of the directors of the company and could not have been ascertained by them by the exercise of reasonable care or the adoption of reasonable care. For a further defence it was submitted that if it were proved that plaintiff had paid any moneys to Whitehouse (which the company denied), and that such moneys were paid to and received by him as an agent or servant of the company (which was also denied), and if lit were proved that it was within the scope of his employment to _ receive such moneys (also denied), then the company said that in December, 1928, plaintiff abandoned or relinquished her rights against the company, and accepted in lieu thereof the personal liability of Whitehouse —his promissory note payable on demand —in consequence whereof the plaintiff was estopped from proceeding against the company. The Plaintiff’s Version. Plaintiff, in the witness-box, said that when she sold her millinery business in 1922, Whitehouse had suggested that she should lend her money to the company, and had informed her that she would get good interest, and that the money would be quite safe. Altogether, said wtnesss, she lent various amounts totalling £6OO, and was given a receipt on each occasion. It was her custom to go to the company’s office to receive her interest each month. At first the'amount was £5, but later when the £6OO had been deposited, she collected £lO a month. To His Honour, witness said that Whitehouse had fixed the amount. . In January of this year witness received £lO, by cash, and a similar amount was paid at her house in February by Whitehouse. In March witness went to the office and received £5, by cash. Whitehouse asked her to come back the next day, saying that he did not have the balance. Witness returned the same day on account of information she had received. Whitehouse then told her that he was in difficulties. Witness asked for her receipts, and reminded Whitehouse that they were in the company’s safe. He replied that he could not find them. Witness then asked for a receipt as she had nothing to show how much she had paid, and Whitehouse gave her a - promissory note for £6OO, and signed it himself. Witness thought this was a receipt for,the £6OO. She subsequently instructed 'her solicitors to write to the directors of the company. “Signed By AVhitehou.se as Secretary.” Cross-examined, Miss Cooper said that the receipts were on a printed form of the company, signed only by Whitehouse, as secretary, the word “secretary” being printed on the form. Prior to December of last year all payments were made by cheque, these being signed by the directors and by Whitehouse. They were made out payable to a number. AfterDecember, cash payments were made. Witness said that for the first twelve months she signed receipts in ■ a. book kept by Whitehouse, but after that she gave no receipts. To Mr. Perry witness said that she thought the money was perfectly safe. She thought Whitehouse was “lovely” and .would have trusted him with more money had she bad it. Evidence for Defence. James Rod, chairman of directors of the defendant company, stated that Whitehouse was the sole employee of the company and the only person with whom people could deal. During his term of office the company had accepted only two or three deposits, and those were from shareholders. The secretary was not authorised to accept deposits without reference to the directors. Six per cent, per annum was the authorised rate of interest, payment being made by cheque every six months. The first time witness met Miss Cooper was at a friend’s house, when Miss Cooper asked if he thought . Whitehouse had anything, his reply being “Yes, be is a wealthy man.” As far as .witness knew he never signed a cheque intended for Miss Cooper. To Mr. Perry witness said that he and his co-directors always checked off the receipt books and the cheque butts. According .to witness the irregularities had been going on for some years. Witness now knew that there had been falsifications of the books by Whitehouse, but he did not know that any had been destroyed by him. His Honour, after questioning witness regarding the books, remarked that he (witness) could not have been paying as much attention to the company’s business as he thought he had been. . No Trace of the Deposit. James Mclntosh, public accountant, said that he bad investigated the company’s books, but had found no trace of a deposit by Miss Cooper. The only indication of any payment was a cheque for £lO on the back of which a city firm had written Miss Cooper’s name. There was, however, no trace of that cheque in the cash book, nor of any receipt given to Miss Cooper for her deposit.' Witness stated that he had not been able to find a balance-sheet signed by the company’s late auditor of a more recent date than 192”. The Secretary’s Evidence. Walter Whitehouse, formerly secretary of the company, stated that Miss Cooper had come to him and had asked if he wanted any money. He thought it was £230 to start with. He gave her a receipt of his own on an ordinary piece of paper. He did not say that he was taking the money on behalf of the company. His was the only signature on the receipt which was given to Miss Cooper. Witness denied that he ever received the receipts back for safe custody. Altogether the sum of £6OO was given, and each receipt was given in

witness s own name. Twenty per cent, was the rate of interest given. The interest was paid by cash and by cheque, the latter, with the exception of one, being witness’s own cheques. When he gave the company’s cheque it was against his wages. Witness did not report to the directors that he was dealing with Miss Cooper. When asked by His Honour why he had not given Miss Cooper a receipt for the £6OO instead of a promissory note, witness did not reply. To Mr.. Perry witness admitted that he had told Miss "Cooper that 'he was in financial difficulties.’’ He admitted that he had destroyed the letter from plaintiff’s solicitors. Witness had no explanation to make as to why he had antedated the promissory note. He stated that he had used the £6OO for various purposes. He considered that plaintiff’s money had been paid to him personally and that the ■ transaction' had nothing to do with the company. His Honour’s View. His Honour intimated that the view he held at the present stage was that'Whitehouse had been held out as an agent of the company, but he was prepared to hear legal argument on the matter. The case was then adjourned.