SUPREME COURT.—CIVIL SITTINGS

Daily Telegraph (Napier), Issue 3718, 15 June 1883, Page 2

SUPREME COURT.—CIVIL SITTINGS

Tins Day.

(Before His Honor Chief JusticoPrendorgast) NEWTON V. UURKE. Mr Lascclles and Mr Brown for the plaintiff, and Mr Travel's and Mr McLean for tho defendant. The following wero sworn in as a special jury:—Messrs AY. Nolson (foreman), F. J. Knight, J. S. Large, J. AY. Craig, C. C. Murray, A. G. Tuxford, Philip Dolbel, J. J. Torre, T. H. Hanna, R. H. MoKonzie, J. 11. Williams, and R. Holt, Mr Brown opened tho case, and said he would proceed to read tho pleadings. His Honor interrupted by saying that such a course was neither usual nor convenient. A summary of the caso would be much moro preferable. Mr Brown said he would in that case givo a brief epitoino of the proceedings. The plaintiff in the case, Mr T. K. Newton, was a merchant carrying on business in Napier, and in March, 1880, being in pecuniary difficulties, he executed a deed of assignment of all his property to trustees. These trustees were the present defendant, Mr AY. Ulick Burko and Mr John S. M. Thomson, the latter being also a largo creditor in the estate, and the former representing several English creditors. The deod was duly assented to and filed, and the trustees took possession of tho property of the plaintiff and commenced to administer the estate for the benefit of tho creditors. A largo portion was sold, and a dividend of 10s in the £ paid. Tho defendant then entered into negotiations for the re-purchase of tho residue of the property not then sold, and it was agreed by tho creditors to sell to him if ho paid them a further dividend a of 5s in the £. In answer to the Court, Mr Brown said the deed gave tho trustees power to administer the estate and to sell back to the debtor on tho terms mentioned. Tho trustees had tho power to realise. Mr Brown resumed: This conveyance or re-assignment was then made by the trustees with tho consent of tho creditors. At the time of such re-assignment there was an unrealised asset belonging to tho estate of £2873 7s, which was secured by socoud mortgage, on some property belonging to Mr Sutherland,' and securod by first mortgage to the New Zoaland Loan and Mercantile Agency Company (limited). The present defendant, however, acting as trustee in tho estate and as agent for a large number of English creditors, refusod to assent to this arrangement, by which tho debtor should havo back his proprcly, unless the plaintiff agreed to sell to the defendant this mortgago of Sutherland's

for £1500. The plaintiff was unwilling to do this, but, being pressed, he was forced to let the defendant havo the mortgage for tho sum named, and the dobt was then assigned to tho defendant. This agreement for sale, as alleged in tho declaration, was unknown to Mr Thompson or tho other creditors of tho plaintiff. Tho defendant then, with Mr AVilliam Balfour, became purchasers of this property of Sutherland's at a prico exceeding tho whole of tho moneys. Mr Lascellos also addressod the Court. Ho said that the defendant, acting as trustee in plaintiff's estate, refused lo agree as such trustco to an arrangement which all the other creditors accepted unless he was secured at an advantage to himself, i.e., unless this mortgage was made over to him. That was briefly why the plaintiff came into Court to seek redress. A sum of money vastly in excess of the £1500 paid was received for tho mortgago by tho trustee to his own private advantages and benefit. It was allcgod that the defendant did, as trustee with a trust estate, force the debtor to sell it to him at considerably bolow its value. The jury would be asked to decide whether unfair pressure had been employed, and, further, what was the actual amount tho defendant received. The evidence would show that the asset in question was .pf the full value stated by the plaintiff. T. K. Newton, being sworn, said ho was plaintiff in tho case, and was a merchant carrying on business in Napior. In March, ISBO, he mado an assignment of his estate for the benefit of his creditors to tho defendant and John S. M. Thompson as trustees under the deed. The trustees ontered into possession of his property, and in December, ISSO, he commenced negotiations with his creditors. At that time the bulk of tho property had boen realised, and the trustees were anxious to finish tho winding up. AVitnoss made a proposal to tho principal creditors with the kuowledge of the trustees— Mr Travers said the defendant would admit that the plaintiff had made a proposal to rc-purchaso the balance of the estate, ho paying a further dividend of 5s in tho £. It would be admitted also that tho proposal had been agreed to on terms of deed marked A. Tho amount of Mr Southerland's mortgage was £2086 10s 7d. _ Mr Brown said there was interest duo ou the mortgago that brought it up to tho amount previously stated by him. Of course that would be a matter for proof later on. Mr Travors admitted that tho debt was secured. Examination continued : After making tho proposal to the creditors for rc-purchasc of tho estate witness saw defendant, and a stipulation was made that the mortgago over Sutherland should bo left in tho hands of tiie trustees for their benefit, and that he should purchase tho remaining assets for a sum equivalent to 2s Gd in the £1. That proposal was rejected, and witness mado a second one. The second proposal was au offer of 5s in the £ made in writing for ro-purohaso of tho whole of tho balance of assets. That proposal was absolutely accepted. On the 28th January, 1881, defendant camo to his office and enquired how he was getting on

with his arrangements with Sutton. AVitness told him matters were approaching completion, and that he had already the consent of most of tho creditors, that the matter of settlement rested mainly with him (the defendant), and .witness would liko to l.vow what he proposed to do in the interest of the people he represented. Defendant said he would consider the matter aud let witness know. Defendant then spoke about Sutherland's run. He said there would not be much to come out of tho security held over it, because Sutherland was owing to the New Zealand Loan and Mercantile Company over £0000, and that the best offer Sutherland had had for tho run was £0,500. If tho place was sold ho said Sutherland would have to go out with nothing, and he did not mean to allow that. He bad promised to protect Sutherland, and would not go back upon his word. Witness saw the defendant when he resumed the subject, aud after listening to him for some time witnc.s told him it was no use their attempting to throw dust in each other's eyes with regard to the value of the run. AVitncss had no doubt they were equally well informed on tho subject, and that the debt to the Loan and Mercantile Company was much under what was stated. There was a clip of wool to conic in, and Mr M. R, Miller had informed witness that he could have got £7500 for the run, but that Sutherland wanted £9500. AVitncss also said to defendant that he felt satisfied if the run was well advertised it would bring a sufficient price to pay both the Loan and Mercantile Company and themselves in full. Mr Burke replied to this that his information had been obtained from Sutherland, but if the case was as then stated he must enquire further into tho matter. The defendant, however, added that before he consented tho witness would have to make some arrangement for Sutnerland's protection. Defendant also said he had agreed to find Sutherland tho money for the purchase of tho run from the Maoris, and asked witness would he agree not to interfere with him for such timo as would enable him to complete his arrangements—say two years—and then take such terms as witness was seeking to claim from his own creditors. Defendant said witness must do something to protect Sutherland. AVitncss replied that he was very willing to assist Sutherland as far as he could see his way, but considering tho large amount he had to pay, and the short timo he had to pay it in, he did not feel inclined to bind himself down to conditions that might seriously interfere with the discharge of his liability to his creditors. Also, as to the value of mortgage, witness said, as they differed so widely as to the value of tho mortgage, be would prefer to hold it. Mr Burke then got angry, and said he would never consent to any settlement of his affairs until Sutherland was protected, and as witness's business was not paying the quicker it was wound up the bettor. Mr Burke went to tlie door, which he violently opened, and, with an angry scowl on his face, said, '' I will not bo long about it either ; I will send tho stock to auction." After banging the door shut Mr Burke left, and witness wrote to Messrs Turnbull and Co. complaining of Mr Burkes conduct. On January 31st he wrote aletter to the defendant [produced] stating that he was finding no difficulty in arranging with the colonial creditors, and offering to arrive at some basis of settlement with respect to Sutherland in order that the estate might be realised. Witness got no reply to that letter, but on the same day he saw Mr Burke, who said he was coining to sec witness. He did not come, however. The next d;iy witness received a telegram from Mr Thompson, and went to sco Mr Burke, and asked if he had sent any reply to witness's letter. Tho defendant said the trustees had received a cash offer for the estate of 5s in the £, and therefore it was not likely that witness's offer would be accepted. Defendant said the offer was from outside, but tho name was not to be disclosed unless tho offer was accepted. The same afternoon defendant came over to witness's office. He seemed very decided, and walked about the office, saying several times, "If Sutherland's mortgage is worth 20s in tho £ your estate is worth 20s in tho £." He also said it was not likoly ho was going to do anything against the interests of the creditors. Witness then said he would accept tho conditions imposed and give Sutherland tho two years to complete tho negotiations. Mr Burke said, "That won't do now; what will you take for it." Witness, seeing that Mr Burke intended either to have tho mortgage or to ruin witness, said, "Well, I don't think I should lose moro than £1000." In reply to tho defondant witness said the books showed a debt of about £0250, besides some interest not mado up. Mr Burke replied, " I will give you £1500 cash, and you handover to me tho. whole thing, debt and mortgage." Witness felt ho was being defrauded, but, thero being no help for it, said he would accept tho offer. Ho said to defendant that ho expected him to tnko the offer of 5s in the £ and givo a reasonablo time for paymont, as agreed to by the other creditors, bu Mr Burke refused to do so, desiring to have 3s cash and 2s by bill. AVitncss agreed to this also. [Tho caso was still proceeding when our reporter loft.]