ALLEGED FRAUD.

Evening Post, Volume LXIV, Issue 131, 29 November 1902, Page 5

ALLEGED FRAUD.

A LAND PURCHASE TRANSACTION Yesterday afternoon and to-day the Chief Justice sat in further hearing of the action in which Willian Henry Reid, farmer, and Margaret Henry Reid, his wife, of Manaia, in the Taranaki district, are plaintiffs, and the Bank of New South Wales ; Herbert Graves, Eltham, land agent ; James Randall Corrigan, Hawera, farmer ; and Samuel Sinclair Coirigan, &ame place and occupation, defendants. The action relates to a land transaction under circumstances already set out. Messrs. Ch.ipman and Skerrett appear for plaintiffs, Me&srs Hislop and Monson for the defendant Bank, Mr. Jellicoe for defendants Graves and James R. Conigan, and Mr. Tanner for defendant Samuel S. Corrigan. Called on behalf of the defendant Bank, Joseph Frederick Pease deposed that the land in question was valued by him at £3 12s 6d an acre, or about £13,342. Alfred W. Webster, defendant Graves's successor in the local managership at Hawera under the defendant Bank, which position -witness now holds, gave evidence as to correspondence that passed, and stated that plaintiff Reid had never complained to him that defendant Graves had misrepresented matters in connection with M'lntosh's offer. Edward John Finch, inspector in New Zealand for the defendant Bank of New South Wales, deposed that he had never considered the likelihood of the Bank's exercising its power of sale over the land of the defendants Corrigan. He considered defendant Jas. Corrigan's account safe, but had made objection to its going beyond its limit. A manager of the Bank had no authority to act as an agent for people outside the Bank. Cross-examined by Mr. Chapman— lf a local manager of the Bank was asked by an intending vendor to introduce to him a purchaser, witness would not object to the manager's doing so, and to his giving reasonable information about the property. In any * other circumstances, witness would object to the manager's introducing purchaser and vendor. He would object to -"managers assisting customers in selling or in getting money en mortgage. This was not the practice. He dared say scores of instances oould be found of this being don*, but he could not remember one. Mr. Jellicoe, in opening' on behalf of defendant Graves, said plaintiff Reid had gone in for a speculation that had been unsuccessful. He called Herbert P. -H. Graves, land agent at Eltham and brickmajcer at Patea, who deposed that from December, 1884, to August, 1900, he was in the employ of the defendant Bank. Witness resigned his managership under the Bank and received a bonus for long service. Witness left on 7th February, 1900, for Otago, and returned to Hawera on sth March, 1900. In April, 1900, witness reported a surplus of £5000 on defendant Jas. Corrigan's account, which he did not regard as a hazardous account. A country banker was called on by his customers to do many things' a city banker would not be called on to do. Defendant Jas. Conrigan frequently consulted witness as to his private affairs. Defendant Corrigan used to raise crop and stock, and to deal in and fatten stock. In February, beioce wiiness went South, defendant Corrigan and MTutosb mentioned to witness in Palmers! on North in a brief conversation M'lntosh's desire to lease the land. Defendant Corrigan told M'lntosh that wilne.-'s was his man of business, ond th.it M'lntosh could communicate with witness. When . witness returned from the South, defendant Corrigan asked witnes to drop M'lniosb a line about the matter, which witness did. Subsequently, plaintiff Reid asked witness the value of the land. Witness told him that £3 10s an acie all round mas witness's valuation of the land to the Bank. Plaintiff asked if defendant Jas. Corrigan i\ould sell, and witness said he believed Corrigan had offer?* 1 the land Plaintiff asked witness to get the land under offer, and witness got an otfer in witness's writing from defendant Corrigan to sell at H6 15s, the offer being open for ten days fiom 27th April. The same day witness showed the offer to plaintiff, also M'lntosh's proposal' to lease at 6s an acre, with £4 10s purchasing clause. Ultimately, witness wrote, at plaintiff's request, asking M'lntosh to offer 7s (M'lntosh had raised his first offer to 6s 6d) and £5. M'lntorh -wired on Bth May declining these terms, saying he was after another place, and offering finally 6s and £4 15s, or 6s 6d and £4 10s. On the same day plaintiff instructed witness to wire to M'lntosh : " Cau get lease 7s, purchase clause £4 15s. Beet and finaJ offer." Witness sent this not later than 4 or 5 p.ni , and reeaived no reply. At 6 p.m.,_ plaintiff and, defendant Corrigan called' at witness's house, and plaintiff sai3 he and Corrigan had done a deal at ' £3 14s. Plaintiff seemed pleased, and in a . hurry to complete, and they went to a solicitor's office and signed the agreement. Plaintiff said Le would give witness something if the deal with M'lnlofh came off. Reid me£ defendant Corrij gan on Bth May on Reid's own initiai tive, and not on witness's advice. Wit- I ness did not keep copies of correspon- I dence he wrote for customers outside of I bank dnties. M'lntosh wrote about 15th April, stating that he had closed for I another place, and Raid was perturbed on seeing the letter, asking what he shoui- do "with fhe grass. Witness detailed Reid's steps to finauce himself after signing the ptirchase contract, and stated that in September, 1900, Reid placed the land in witness's hands for sate at the purchasing prico. In Novem bar, 1900, Reid complained to witness at being charged 5£ instead of 5 per cent, on the money advanced by the Bank. Witness then gave Reid (for u<be with the Bank) a letter acknowledging that witness as manager had promised Reid the money at 5 per cent. Reid withdrew the property from witness's hands, 'saying he would put it, into other hands Reid did not comjihin about witness's action, and did not tiy he had been induced into purchasing. On 24th March, 1902, witness next saw Reid, who appeaied ill and excited, referred to the drop in sheep, and the depreciation of the land, and said the Bank had called him up. The Court adjourned at 6 p.m. till 10 a.m. to-day. When the Court resumed this' morning, defendant Givivps continued his evidence as to his interview with Reid when the latter stated that the defendant Bank had -called him up. Witness advised Reid to transfer his account to another bank. Reid referred to wilne.ss having severed his connection with the defendant Bank, and said : "The Bank is nothing to you now. I'll give you a handsome commission if you assist to make a case I propose to bring against the Bank." Witness replied : "Would you ask me to turn dog on the Bank that employed me for sixteen years?" Witness also told Reid that everything had been done for the best, but it had not succeeded, and that witness had nothing to conceal. Continuing his evidence, witness denied that he had told Reid that the proposed lessee (M'lntosh) of the land purchased by Reid was a person possessed of £3000, with £5000 to come to him in seven years. Witness told Reid that the New Zealand Loan and Mercantile Agency Company's manager had informed 'defendant James Corrigan that M'lntosh's credft was undoubtedly good. / Cross-examined by Mr. Skerrett: Wifh regard to advances (£Booo' odd) to defendant James Corrigan exceeding the limit,

I ne inspector of the defendant IJank wiote to witness to the effect that he fctrongly objected, and insisted .on reduction, but that w.is quite a usu.il ktttr. Witness would still advance m spite of fiuch a letter. Witness was alwvys prepared to take risks. Prior to the msfc offer by M'lntosh of Jus terms of le.ise, witness did nut- know wliat price, if any, defendant Corrigan had hugg.stcd to M'lntosh for puicnase or ku.ss' of the land. M'lntosh and Corrigan were constantly seeing each other. Asked whether it was not unusual for a man to offer ( t ia M'iuto&h had done) jirites f or i V nt<il un. der lease and purchasing clausa (r, ntal 6-s an acre, puichcise at expiry of ka&a £t 10.5),^ in le&pcct of a property he Lad not up to that time seen, and about which it was not known to witness that the vendor had named a figure, witness replied that this hr&t offer by M'lntosh was uo t really an offer ; it was more a discussion of terms luat M'lntush might be prepared to offer. To the bebt of witness's recolkceion this £4 10s purchase clause was optional, not compulsory. Defendant Corrigan was then willing to sell at £3 15s, or 15s lower, bub he objected to M'lntosh's offer because of the lowness of the rental. Mr. liislop said the £4 10s was to come in as optional after seven years. His Honour pointed out that even al« lowing for the time, the difference represented good interest on the money. Witness said his view was that £3 15a in the hand was better than £4 10s in, the bush. Optional purchases did not always come off. Plaintiff Ueid, who was negotiating for purchase of the land, came to mention to witness M'lntosh's negotiation to lease it, because Reid had heard a rumour that defendant Corrigan had sold. Then Reid asked questions about M'lntosh, and appeared to think ib would be profitable to buy tho land and lease it. Witness was cross-examined on tha point of why he negotiated, firstly, oa behalf of .intending vendor or lessor Corrigau with intending lessee M'lntosh ; secondly, on behalf of intending purchaser Reid* with intending vendor Corrigan; thirdly, on behalf of intending purchaser Reid with intending lessee M'lntosh, without in the last case letting M'lntosh know that witness was no longer negotiating on behalf of the first principal Corrigan, but on behalf of a new principal, the intending purchaser Reid. Witnes« replied that he did not inform M'lntosh. of Reid coming into the negotiations, because it did not matter two straws to M'lntosh whether he leased from Corrigau or from Reid. His Honour pointed out that, in vie-vr of this condition of the negotiations, if M'lntosh had made an offer to lease, and if Reid had then closed' as purchaser, M'lntosh's offer would not have been binding on him. Mr. Jellicoe said it was tho trouble of every man being his own lawyer. At 1 p.m. the Court adjourned till 10.30 a.m. on Monday.