QUESTION OF DEPOSIT

Evening Star, Issue 22988, 20 June 1938, Page 12

QUESTION OF DEPOSIT

NEGLIGENCE BY LANG AGENT ALLEGED UNUSUAL CASE IN COURT An unusual case, which involved the question of neglect on the part of a land agent in not obtaining a deposit on the sale of a property when the sale was drawn up, was partly heard in the Magistrate’s Court this morning before Mr J. R. Bartholomew, S.M. William Frederick Rigby, billiard saloon proprietor, proceeded against Ivan S. J. Pringle, land agent, of Mosgiel, claiming the sum of £250, amount of deposit which was arranged should be paid over when Pringle sold Rigby s business to one W. R. Scott. The sale had fallen through, and it was alleged that it had fallen through because Pringle neglected to collect the deposit. Mr I. B. Stevenson appeared for the plaintiff and Mr W. P. Uartstonge for the defendant. Mr Stevenson stated that the ease was one of negligence against a land agent in his profession cir business capacity. It was not the intention of the proceedings to make Pringle a _ scapegoat, nor to impose upon him a liability that did not morally rest upon him. It was contended that the defendant’s lack of knowledge as an agent, or his failure to take proper steps to guard against that lack of knowledge, were culpable actions. Defendant’s failure to obtain (1) an lOU for the deposit, or failure to obtain (2) a deposit m cash were acts of negligence. The second was far more important. The plaintiff was the proprietor of a billiard saloon situated in the Stock Exchange Buildings. He placed the saloon in defendant’s hands for sale, and agreed to accept a deposit of £250 from some clients defendant had in mind. The transaction reached the point where an agreement was drawn up and the deposit paid over by Scott to Mr Brugh, solicitor. Defendant, who was present at the interview, did not ask for the deposit money, although it had previously been arranged that the money would be handed to plaintiff that morning, which was a Saturday. Over the week-end the purchaser cooled off and refused to carry on the contract. Had the deposit been obtained by plaintiff or by defendant on plaintiff’s behalf, or had there been a stockholder appointed, the deposit would have been forfeited by the vendor. The negligence aljeged on the part of the defendant did not necessarily lie in the failure to obtain the deposit, but negligence was alleged in his failure to ask for a deposit, and his failure to take reasonable steps to obtain jt. He could at least have held out his_ hand for the deposit, but even this he did not do. There was little doubt he would have obtained the deposit had he asked for it, for the Scotts were anxious to proceed with the deal. Defendant’s failure to obtain that deposit had resulted in a loss of £250 to the plaintiff. If negligence on the part of defendant could be proved it would have a twofold effect: defendant would have no right to claim commission, and plaintiff would have the right to claim damages. In evidence, plaintiff stated that when approached by defendant to sell his business he said he would sell if he could get £SOO deposit. Defendant said that clients he had in mind would not be able to put down more than £250, and plaintiff finally agreed to accept this. Defendant then brought Mr Scott and members of bis family to see plaintiff, and after inspecting the books the Scotts aggreed to purchase. When the matter of finance was brought up Mr Soott stated he could not pay over the deposit then as the savings bank was closed, hut he would pay it over the following morning (Saturday). The contract was signed, and Scott was to take possession on the Monday. Plaintiff told defendant he should'have got an 1.0. U. from Scott for the amount of the deposit. Defendant said that he knew the Scotts and that they were all right. On Saturday night plaintiff saw defendant and asked what had happened to the Scotts and the deposit money. Defendant said it 1 was all right, as Mrs Scott had insisted on putting the business through the hands of her solicitor, Mr Brugh. The money had been paid over in the solicitor’s office, and been placed in his safe. Plaintiff expressed annoyance with defendant over the matter, but again defendant said everything was all On Monday morning defendant and Scott came to plaintiff and told him the deal had fallen through. Plaintiff told defendant if he had obtained the deposit money the deal would have had to go through. He then instigated the present proceedings. _ To Mr Hartstonge plaintiff said that he naturally left the arrangements_ in defendant’s hands, as he was paying defendant £45 in commission. He had taken action against Pringle and not Soott because he considered the former was to blame for the sale not going through. He did not know, or care, whether Scott was financial or not. George Tyrrell Baylee, solicitor, said that he was first approached by plaintiff to act in the case on February 26. On February 28 Mr Brugh telephoned stating that his client (Scott) had decided to withdraw from the transaction. Witness read correspondence which gave an account of what had transpired in Mr Brugh’s office when the £250 was paid over. Defendant remarked to witness that he considered Mr Brugh in the light of a stakeholder. When the transaction fell through witness told defendant that plaintiff wanted the sale to go through, and unless defendant could find another purchaser and have the same sum of money involved he would look to defendant to find the sum of £205, which was the deposit, less the amount of commission agreed upon. Defendant was warned that plaintiff was going to take the matter to court. Gladys Louisa Rigby also gave evidence.

At this stage Mr Hartstonge asked that defendant be non-suited. There was no evidence of neglect on defendant’s part, Mr Hartstonge contended. Possibly the only part of the entire transaction where a suggestion of neglect might be found was when defendant took the Scotts direct from the the Savings Bank to Mr Brugh’s office instead of to Mr Rigby’s saloon ns arranged. Defendant could not logically have refused to go to the solicitor when asked to go. ft would in fact, have been improper for defendant to have refused to go to the solicitor. The case was unusual in that defendant had not been as thrusting as most land agents, and had actually taken his clients to the solicitor before asking for the deposit. Scott had withdrawn from the transaction because he was dubious about the business. Mr Stevenson stated there was a prima facie case. Kvcn allowing for the change in plan. that, of going to the solicitor instead of direct to plaintiff, there was still no excuse for defendant not asking for the deposit. The 'Magistrate ordered the case to proceed.

William Robert Brugh, solicitor, recalled his discussion with defendant and the Scotts on the Saturday morning. The transaction was an involved one, and was also a 11 rush ” case, as it had to be put through by Monday morning. Witness detailed taking delivery of the £250 from the purchaser, who seemed rather nervous at passing over such a large sum. He had locked the money in his safe because he did not believe in passing over such a sum in one amount.

Asked by Mr Stevenson why he had not handed over the deposit to defendant, witness stated he had acted on general principles, and he would similarly have acted in the interests of any of his clients. Had he been asked by defendant to act as a stakeholder be might so have acted, but he was not asked. “ What would you have said if Mr Pringle had said: ‘ I must be given that money as a deposit, or the deal is off’?” asked Mr Stevenson. “ I would still have looked up the money and would have given an lOU for the sum,” replied witness. He added that he would not have allowed more than £SO to have been paid over except under the imperative instructions of the purchaser. Witness did not remember defendant asking for the deposit. George Sinclair Scott, miner, of Fairfield. gave evidence as to the intending purchase of the billiard saloon on behalf of his son, who was a minor, and his reasons for withdrawing from the transaction. The hearing was adjourned until this afternoon.