NO REDRESS

Evening Post, Volume LXXXVII, Issue 103, 2 May 1914, Page 6

NO REDRESS

A FARMER'S LOSS "A LAMENTABLE CASE" SUPREME COURT JUDGMENT. "A very lamentable c&ae," remarked Mr. Justice Edwards to-day as he concluded reading his judgment in the action Wright v. London, in which he gave judgment for the defendant. The plaintiff, Scarborough Wright, had endeavoured ib recover from the defendant, John London, moneys which had been lost through the fraud of a third party, a solicitor, since become bankrupt. The evidence was heard at Palmerson, a-nd the motion for judgment was adjourned to Wellington, where the case wjw argued. The plaintiff held a lease from the defendant of a parcel of land in the Apiti survey district. The lease showed that the land wafc under a mortgage from the defendant. to the Trust and Agency Company of Australasia for £1500. There was a purchasing clause, the plaintiff contracting to -buy the land for over £2100 on or befbre Ist September, 1912, the date of expiry of the lease. In May, 1912, the plaintiff instructed Oliver Noel Gillespie, a solicitor practising in Feilding, to act for him -in the purchase from the defendant, and 'a notice in writing, prepared by Gillespie, was signed by the plaintiff, and forwarded to the defendant, intimating , that the plaintiff would purchase the property at the expiration of three months.' The defendant instructed Mesors. M'lntyre and Murphy, solicitors, of Feilding.itoact for him, and a transfer .was executed. The mortgage to the Trust and Agency Company was sent to tho Bank of Australasia in Feilding, to be^handed over on payment of the sum of £1400 14s 2d, then due to the company, and M'lntyre and Murphy then intimated to Gillespie. that they were prepared, on behalf of the defendant, to settle, but Gillespie informed them that the plaintiff was not then ready to complete. , The plaintiff had instructed Gillespie to raise £1800 upon mortgage of the property to enable him to complete the purchase, and Gillespie, arranged with certain gentlemen^ referred to as Gunn's trustees, to , advance £1500 upon', first mortgage, and with Mrs. Prior to advance £v<)o upon second mortgage. Gillespie then prepared and obtained the signature of the plaintiff to a mortgage of the property to Gunn's - trustees «nd groduced it, with two mortgages to win's trustees from other persons over other^ properties, to the manager at Feilding of the Bank of New Zealand, and represented that these three mortgages Were complete securities, entitling .the plaintiff, and the other persons whose names appeared as mortgagors, to - payment of the moneys expressed to be secured by these instruments. By means of this fraud Gillespie was able to procui'e the payment by Gunn's trustees to him on or about 14th September, 1912, of. the sum of £5500, which included £1500 represented by the mortgage signed by the plaintiff. Gillespie also prepared and obtained the plaintiff's signature to a second mortgage to Mrs. Prior over the same land to secure tho sum of £300, and obtained from her on the sth November, ' 1912, a cheque for that sum. He also obtained 'from the plaintiff, on the 15th October, .1912, a further sum of £311. Gillespie continued to make to M'lntyre and Murphy fraudulent excuses for' not completing the transaction, but on Ist October, under great pressure, he paid them £200 in part payment of the sum by which the purchase money exceeded the mortgage to the Trust and Agency Company, and on 6th November, 1912, under still greater pressure, he paid them a further £495 17s 6d, these two sums being the balance of the purchase moneys payable to the defendant, after deducting therefrom the amount payable to the Trust and Agency Company. Simultaneously with the payment of the last sum, Gillespie gave M'lntyre and Murphy an undertaking " forthwith to discharge memorandum of mortgage to Trust and Agency Co."; and Mr. Murphy ' handed lo Gillespie the transfer • signed by the defendant. Mr. Murphy was induced to settle the matter in this highly irregular manner -by Gillespie's representation that he 'had not yet received the moneys raised upon mortgage for tho plaintiff, but thai he expected to do so daily. On the night of , the 6th November, 1913, the day after this settlement was made. Gillespie had to his credit in his trust account £2141 5s Bd. There were, therefore, funds available to discharge the mortgage to the Trust and Agency Company. Gillespie admitted that if Mr. Murphy had on the sth of November insisted upon his paying the amount due to that company, he must have paid it, or have stopped business. He said that though his circumstances were then desperate, he was not at that time aware of this, and' as he continued until the following month _of September to discharge liabilities in connection with trust funds at the fate of £30,000 per month, there was no reason .to doubt his statements On 25th November, 1912, Gillespie rendered to the plaintiff a bill of coste and a statement of account in which he credited the plaintiff with the two sums of £1500 and £300 received from Gunn's trustees and Mrs. -Prior respectively, and with £311 received from the plaintiff ; and he debited the plaintiff with various sums of. money alleged to have been paid by him on account of the plaintiff, including the sum owing to the Trust and Agency Company under its mortgage. These sums, with £32 for Gillespies charges, showed a balance of £53 10s 4d owing to him by the plaintiff. Shortly after 18th November, 1912, M'lntyre and Murphy received a letter from the' Trust and Agency Company informing them that the mortgage moneys due to the company had not been repaid. Thereupon Mr. Murphy at once called upon Gillespie, w!k> assured him that he had settled the matter with the manager of the Bank of Australasia, in whose hands the deeds were, and who was authorised to receive the money. Thereupon, Mr. Murphy said, he went away quite satisfied, and took no step to verify Gillespie's statement, although he frequently saw the manager of the bank at the ekib. Mr. Murphy further says that he heard no more about the matter until September, 1913, ten months later^ In the meantime, the plaintiff, having no reason to suspect Gillespie's frauds, paid to Gillespie, ' as agent for Gunn's trustees and Mrs. Prior, the interest which would have become due to them if the mortgages had been duly completed. The Trust and Agency Company continued to press Gilespie to pay the principal moneys due under the mortgage, and early in May put the matter into the hands of their solicitors, who threatened a to resort to legal proceedings, and ultimately to cause the property to be put up for sale under the conduct of the Registrar of the Supreme Court. Gillespie nipt these applications | and warnings with various fraudulent excuses, and he paid some interest, upon tha moneys due to tile Trust and Agency CoimpV.ny, but nothing was paid on account 'of the principal. On sth September, the company's solicitors wrote to M'lntyre and Murphy informing them of the position of the matter, and enquiring the name of the purchaser from the defendant. Upon receipt of this letter'

M'lntyre and Murphy wrote to the plaintiff threatening proceedings against him, and he then for the first tune learned the cruel position in which he had been placed by his solicitor's frauds, which I had been rendered possible by the concurrence of the defendant's solicitors in the irregular manner in which the, matter had been settled. . The plaintiff's claim was for judgment for £1375, the amount of the mortgage money due to the Trust and Agency Company, or, in the alternative, £1375" damages, or such other relief as the Court might award. After reviewing at length the arguments of counsel as to the responsibility for the trouble, the judgment concluded that it was plain, at all events, both by the positive evidence of Gillespie, and' the absence of all evidence to the contrary by the plaintiff, that Gillespie made no use whatever of th« transfer . executed by the defendant to further his fraud upon .the plaintiff. There was, therefore, no ground of action against the defendant. Mr. Skerrett had laid great stress upon the fact that but if or the irregular way in which M'lntyre. and Murphy completed the transaction with Gillespie the loss to the plaintiff could not have occurred. This was; no doubt, true, and it was most unfortunate that the highly irregular, though quite lionest way, in which those gentlemen conducted this transaction should have rendered possible the commission of a gross fraud upon the plaintiff. But, whatever claim this might give the defendant against M'lntyre and Murphy, it could' give none to the plaintiff, to whom they owed no legal duty. Least of all could it give ground for any claim against the defendant, who was free from all blame in the matter, both legally and morally. There must, therefore, bj judgment for the defendant, with cost* according to the scale. Mr. C. P.. Skerrett, .K.C., with him Mr. G. -Samuel, represented the plaintiff, and the Hon. F. H. D. Bell, K.C., with him Mr. M. Myers and Mr! H. M'lntyre, appeared for the defendant.