THE COURTS.-TO-DAY.

Evening Star, Issue 11701, 6 October 1902, Page 4

THE COURTS.-TO-DAY.

SUPREME COURT.—CIVIL SITTINGS. (Before His Honor Mr Justice Williams.) FOLEY'S EXtBNBBD MEDCING COKFAHY V. •cuttKnt nads. and FArrHFirL. Action to. recover £I,OOO damages.. Mr Solomon and Mr Woodhouse appeared for the plaintiff company; Mr Hosking and Mr E. T. Cutten for Cutten Bros.; Mr Chapman for William Faithful. The special jury empannelled to try the issues consisted of Mr W. Crow (foreman)and Messrs. P. Y. Wales, F. E. Brittain' C. R. Smith, H. Islip, T. C. Cdull, J. Braithwaite, W. Scott, T'. R. Christie, W. Murray, J. Mann, and T. Stark. Mr Wopdhous'c read the pleadings. In'the statement of claim the following allegations, were made: —During the year 1900 Win.. Faithful was employed, by Cutten Bros, on the West Coast. In August of 1900 George Neill and other persons who were promoters of the company employed Cutten Bros, to inspect and report upon a mining claim at Fbley's Creek- 1 which. the company was being formed to acquire. Cutten Bros, employed Faithful as their servant to make such inspection and report. On the 15th October, 1900, Faithful, as servant of Cutten Bros., wrote and issued the following report: " Greymouth, 15th. October, 1900. Dear sirs,—. lie Foley's Extended. We have visited and examined this claim for. the purposes of ascertaining the type of dredge required. The ground consists of river flat, about seventy-eight chains long by thirty to fifty chains wide. The creek bed proper varies from one to three chains in width. The flats adjacent to the creek are from 2ft to ?.ft 6in high for a width of two or three chains back, and from there to the foot of the high terrace are as high as sft. Four shafts have been sunk, and particulars are as follow, starting at lower end of claim: No. 1 shaft, dunk 7ft, bored 12ft, total 19ft; No. 2 shaft, sunk 10ft 6in to bottom ; No. 3 shaft, sunk 7ft 6in, bored 4ft, struck bbulder;. No. 4 shaft, sunk 6ft,- bored lift Bin, total 17ft Bin. One yard from No. 1 yielded Idwt 9gr; No. 2, 2dwt from two barrow loads; No. 3, good prospect; No. 4, one yard yielded ldwt 4gr; seven dishes from bank of creek gave lOgr. No difficulty in dredging ground. Wash all fine. Timber consists of a few forest trees, but mostly small scrub. The creek contains twenty-five to thirty heads (at time of visit), and creek bed can be converted into road at a moderate expense. A sluice box dredge will suit this claim, especially as the gold seems to be rough. Firewood can be obtained as fuel." On the 20th October Cutten Bros, sent the Teport to Neill, who was then secretary of the company, and on the faith of the report the claim was purchased and the Company floated. The report contained misrepresentations—namely : (1) FaithfuL had not visited and examined the claim; (2) Faithful had not sunk the shafts or obtained the results mentioned ; (3) the shafts had not beeti sunk nor had the results been obtained by any person; (4) the claim does not consist of a river flat about seventyeight chains by thirty to fifty chains wide, but a very much lessareiv. All the defendants knew the real facte. The claim is worthless, and the money spent by the conipany has been lost. The company pray judgment for £I,OOO damages. The defendants Cutten Bros, in their statement of defence, said that on the 3rd September George Neill requested Faithful to report on the question of whether the type of dredge best adapted for the claim was a sluice box dredge. This request was made without the knowledge of Cutten Bros. Faithful refused to report, and never reported to Neill, but he wrote to Cutten Bros, the report referred to, which was only in relation to the type of dredge. Save as hereinbefore admitted, neither George Neill nor any other person employed Cutten Bros, to inspect or report upon the claim. They deny that they employed Faithful to make the inspection and report. They admit that on the 20th October, at Neill's express .request, they sent him a copy of the report in a letter addressed to him in his hidividjal capacity. Further than that, they deny that they or Faithful issued the report. They deny that the company employed brokers or others to procure applications for shares, or that the company spent money in the purchase of machinery, and say that if brokers were employed or money so spent it was not on the faith of the report, nor was the report made with intent to induce the company to act. They deny that the report contained misrepresentations. No member of the firm had any further knowledge of the matters set forth in the report than the knowledge they gained from the report itself. In sending a copy of the report to Neill they acted in good faith and in the honest belief that the matters therein set forth were true. If they are responsible for the acts of Faithful (which they deny) they Say that the statements made by Faithful were in good faith and in the honest belief that they were true.

The defendant Wm. Faithful, in his statement of defence, said that on the 3rd September Neill telegraphed to him: " Cut ten Bros., our engineers, recommend sluice box dredge Foley's Creek Extended. Kindly report usual terms." On the 15th October Faithful wrote the letter to Cutten Bros. The statements in that letter ■were made in good faith, he honestly believing them to be true. The letter was not written in order to induce the company to act on the faith thereof, nor did the company act on the same. Having finished the reading of the pleadings, Mr Woodhouse said that he would tell the jury what the facts were upon which the company relied.

Mr Hosking asked his learned friend to state what cause of action was relied on.

His Honor suggested that this was rather premature. Mr Hosking said that there was nothing in the, statement of claim to support a charge of fraud, and what he a.«ked was that the plaintiff should either amend the pleadings or say that what was relied upon vas a breach of contract'. '

His Honor: If they are going to rely on a tort as well as a contract they can SJV so.

Mr Solomon : We rely mi both. Mr Hosking: Then you should amend your statement of claim. Mr Solomon : / - J That is not. necessary. His Honor: They need not amend at this stage. Mr Hosking said he should like it to be noted that lie had made this application, lest it should be said afterwards that he was too late, and

His Honor took a note of the applied tion.

Mr Woodhousc then proceeded to relate the facts upon which the company relied, in the course of which he said that reports about the property had been received from persons on the West Coast, but it was decided not to go on with the company until someone in Dunedin had been consulted. After the report was received the concern wns registered and a meeting called, at which one of the Messrs Cutteu said there was not the slightest chance of a mistake abent the rvport. Very soon rumors got sbout that thiDgs were not as they should be. He (Mr Woodhouse) would read the correspondence that passed between the Cuttens and Faithful about that dnte. On the 27th November Cutten Bios, telegraphed to Faithful: " Most damaging rumors re Foley's Extended. Are ypu certain of your report?" To that Faithful replied on the 29th: " Rumors re Foley's Extended unfortunately true. Report to you was private. We did not see prospecting done." Then followed a letter from Cuttens to Faithful, dated 3rd December : " We were terribly - shocked over Foley's Extended, as we recommended a lot of our friends to go in on the strength of your report—which, by the way, you did not n-ark private, neither did you tell us you had not done or seen the prospecting done. After the company was floated we sent an extract of your report to the secretary, and he published it for public information. We do not care a hang for the monetary loss, but it is the fact of our being done by the (theological expression) West Coasters, and the consequent, loss of prestige." Faithful, in his replying letter, said: "I very much regret that I.did not .mark or mention the matter of prospecting.

but. as the company was floated and I bad no idea Neill would get it in his hands, I let it, pass. We examined the claim for a dredge, and the information we got about the gold was from the most reliable sources in Kumaift--M'Illro)Y Tansey, and others who have the name of being very straights forward men in all their actions. . . .

Neill had no authority to use my letter, and if I intended it for public information I would have worded it differently. lam sorry that we did not point out to you that we had not seen the gold, and feel guilty that you have been led into it, but am clear of conscience as far a.s the outside pubhc go, and intend to deny anything bearing on reports for flotation purposes. I feel just this way: that if I thought for a moment any imputation lay on me beyond making a blunder in my' letter, I would at once leave the country. I can assure you this salting racket has made us experts round, here tread very lightly lately." In Cutten's next letter to Faithful they said: "We are sorry you are taking this to heart so much. There is no one to blame but the salters and ourselves, for we gave Neill extracts from your letter for publication." What happened was that the claim turned out to be valueless—there was no gold in it at all. With regard to Cuttcn Bros., very possibly whit they said in their defence would turn out to be correct—that they did not know what took place, and believed the report to be true. The plaintiff hoped they would be able to show that. Mr Hosking: It is for my friend to show that they did not believe in the report. . His Honor: When we have the evidence we can sec what the law is.

Mr Woodhouse contended that on either ground upon which the claim rested the Cuttens 5 ignorance of the matter would not excuFe them, for if a.n agent or servant made fraudulent representations in the course of his employment tho employer or principal was responsible; also, if "a contract was broken bv an employee the principal was liable. The plaintiff was not claiming because of a- mistake or because somebody had been honestly misled. Teat might happen to anybody. What the plaintiff claimed, for was the result of untruthful misrepresentation. It would also be contended that there was a contract between the company and ths Cuttens to report, -wherefore it was their duty to personally investigate before'reporting, and tho neg.ect to do so was a. breach of contract.

Walter John Guthrie,. the first -witness, said, in the_pourse of a lengthy examination, that he,, was ono of the promoters of the company. On the 20th August Mr Walter Cutten -was instructed to get Mr Faithful to report. The report was received six weeks later. On the 19th October Mi- F. Cutten was present at another meeting, and read Faithful's report, and recommended that Steps should be taken at once to secure an engine and boiler. Mr Cutten said that the return would be exceptionally rich, and they would all be driving about in their carriages before long. Cutten Brothers, acting as the company's engineer, purchased a boiler. All the expenses had been futile; nothing had been gob out of the claim, and its working was abandoned. Witness was sure that Faithful Wad to report generally, to a dredge only. George Neil! said that in 1900 he was secretary for several mining companies. Ho put all his engineering work into Cutten's hands. It would be understating the figures to put these contracts at £40,000. In all his experience he had never known on engineer charge for examining ground to see what typo of dredge was wanted. Witness had the option of Foley's Extended for 1,300 paid-up shares-in a ■ company not to exceed £7,000 in ail and £2OO in cash. He thought it a marvellously good thing, and showed it to Mr Guthrie and others, who hud a meeting, and dn, pursuance of what then look plaoo 'ho saw Mr Fred and Mr Walter Cutten, showing thoin certain reports, and saying his friends wtro willing to go in if those reports were verified. Air F. Cutten said that a report would have to be paid for outside the commission-, and he mentioned £SO as the cost of such report. Witness made an agreement about the forming of the company whereby he w.ls to receive 2,000 paid-up shares and £3OO. At the meeting on Hie 20th August Cutten Brothers were instructed to get Mr Faithful to roporfc as to the claim. Witness had daily conversations with Cutten Bros, about Faithful, asking when Faithful would la t>.va ; lable. They had said that he was very busy and) might not be able to report for some little time. The conversations led witness to believe they had communicated with Faithful; if they had not rhcy most grossly deceived him.' On the 3rd September, having procured Faithful's address from Cuttens, witness telegraphed to Faithful, and on tho 12th received a wire to the enact that he (Faithful) was reporting fu'Jv to Cuttens. On the 13ih October Mr William Cutten and witness met, and the former said he had had news about Foley's Extended. Witness replied it wa:t better, if bad, to be found out at that stage. Mr Cutten said: "Reserve your remarks until you set: the report." He went upstairs, saw the report, and found it better than ho had ever expected. He then sow Mr Guthrie, and they went straightway and registered the company. The case was proceeding at 4 p.m.

SUPREME COURT.—IN BANKRUPTCY,

(Before His Honor Mr Justice Williams.) Re Archibald Shaw, of Dunedin, builder. —Motion for discharge, supported by Mr D. D. Macdonald. —His Honor said that there did cot seem to be any report from the Assignee.—Mr Graham replied that ho had not been able to file a report. Certain supervisors were appointed by the creditors, and they urged that they had not had time to investigate bankrupt's affairs.—Mr Macdonald said that the bankruptcy wax about a. month dd&biit, of course, he could not force the hands of the Assignee. The hardship was that thero would be"no further sitting of tha Bankruptcy Court for wis weeks or two months, and bankrupt would have to wait.—His Honor said that there would be another Hitting probably in about six weeks.

Re Margaret Peters, of Dunedin, hotelke«per.—Motion for discbarge moved by Mr ]). D. Macdonald.—There was no opposition, and His Honor granted the discharge. Re Titos. Eliott Walton, insurance manager, of elsewhere.—The Official Assign.-e a>-ked and obtained an order for the payment of the petitioning creditor's costa subject 10 taxation.

Motions for releasing orders in the ca«r* of A. E. Way. W. J. Wridit T. Chapman" R. Dyne?, E. Trytball, and M. Finker wengranted. The next sitting of the Court was fixed for the 17th November.

MAGISTRATE'S COURT.

(Before E. H. Carew, E?q., S.M.)

Judgment was given for plaintiff in the case of the Oceanic Steam Gold Dredginsi Company, Limited (Mr Findlay) v. Jame'w Plur-kett (of Ghristcburch), claim £9 7s 6u (calls due and interest), and 25s 6d costs. The Court was occupisd for the greater part of. the day hearing the case of Edward M-Kewen (Mr Hanlon) v. John Lunn (Mr Sjm). This was a claim for £3O 8s 6d for cartage of materials, for work done, for materials sold and delivrred, and for moneys paid by the plaintiff to the Government Railways for and at the request of the defendant. A considerable amount of evidence was taken, and eventually His Worship said there was deliberate perjurv on one side or the other. His mind inclined one way, but not sufficiently to enable him to give judgment. There "was no course for him, therefore, but to nonsuit plaintiff.