UNKNOWN

Hawera & Normanby Star, Volume LXXIV, Issue LXXIV, 7 November 1919, Page 5

UNKNOWN

FAMA v. JAMES & GILLMAN

The hearing of the case Fama v. James and Gillman and Hawera Building Company advanced a further stage at the Magistrate's Court yesterday %M m°iS' £**? ¥ r W^'ern Wilson^ S.M. Mr F. C. Spratt appeared for aft Jf'JS' Dei> (instructeJl Pby AYe sh and McCarthy) for James and Gillman and Mr Foy for the company Mr Spratt, for Mr Fama' said he wished to put in evidence by consent that no demand had been made on the Building Company before or since the action, that the approximate dat P of completion of sale was about June 17, tfiat th© transaction was completed by the transfer prior to the action the production of minute dealing 'with ratification of agreement, and appointing of trustees for the company, and of the letter of demand of July 18 on James and Gillman and of July 23 from Halliwell, Spratt and Thomson to the same firm.

In reply to Mr Spr a tt'& request for leave to bring rebutting evidence His YVorship said that if the request 'were admissable he could apply at th c proper

Addressing the Court on behalf of James and Gillman. Mr ODea said that this was a case in which there was a charge of fraud and a claim based on a technicality that the firm are the servants of the company and that as the company had no license at the time commission was not payable. His clients look on the former as most serious to their Teputation and business, and that they can .dispose of the technicality effectually. The former is two- + rUoSf. 1 ' J hat bein £ authorised to sell at £1825 the firm sold at £1800 concealing the fact from their principals, «^Sv th€y ™also °.uote<l the property at £1850. Though the claim uses the word misconduct instead of fraud, the letter received by James and Gillmam trom Halliwell, Spratt and Thomson says that they have committed fraud on Mrs Fama. The allegations of fraud are denied in toto. and. moreover, when alleged must, it is clear be proved to the hilt. He submitted that j from plaintiff's own showing the charge had dismally failed. The plaintiff Fama | had said that the price £1800 was-not : authorised for the .property and his I whole case hinged oh this. Yet he said j m evidence: "Mr James said I was to i receive £1080 cash. I knew the mortgages were £720, but it did not occur to me that this made £1800." His clients, he said, were acquitted of the charge out of plaintiff's own mouth. Mr James' actions had all been straight and above board. He told Mr *McDonald, when making a n offer of £1800. that he would have to see Fama before acceptance, but added: "He will accept like a shot," and there was, said counsel, no doubt he did. Fama had a few clays before quoted £1750, and the firm might no doubt have settled at this i figure but that Fama meantime raised I the price. Then again, after Mc- j Donald's offer had been made in writ- j ing and James had seen Fama, h e said j to McDonald that Fama accepted the j offer. If the price had been £1825 j James would.have said to Fama. "Mc- j Donald accepts your offer." " Fama must have known a counter offer had been made.' It was absurd to say that { Fama did not know he was dealing • with James and Gillman and would not j have done so, because Fama signed th e j authority on a form on which the firm's j name was printed in bold black type, [ and because Fama dealt wholly with Mr James. He submitted that the evidence of Famavand his wife was the veriest subterfuge. There was, further, i the fact that a sole agency was given, j addressed to James and Gillman. Ir i Mr James had wished to commit' a , fraud he would not have had a docu- | ment typed out. with £1800 in figures ! and words, lt was a fact that £1750 | was the first price given, but later it j was raised to £1825, and offered to McDonald at that figure, never at £1850. | McDonald's counter offer of £1800 was ( taken down by Mr James, and after be- [■ ing typed was signed by McDonald, the ■ addendum re further building being j made afterwards, and also signed by \ McDonald. He submitted that the lat- j ter got mixed through this and said j he signed the written copy first, and ■ that hie evidence could not be taken against the denial thai, would be given j by Mr James. In reference to McDonald's offer and Fama's acceptance the Building Company was not men- | tioned at all. Later Fama said to I Heathcote James that he regretted sell- i ing for £1800, and this Fama practic- I ally admitted. Evidence will be sub- ] mitted that the agreement was seen by j one of the staff, and that Fama knew j before he reached the firm's office that | the offer had been made, and this Fama ) admitted. He must have known it was a counter offer. The charge made must j have been due to Fama's deficient mem- < ory, as Mr James said to Fama, or to j Fama being afraid to tell his wife that he had sold below the price fixed by her; but it was strange that he did not tell her of his dealings with James and Gillman when the agreement was signed. The further technical claim that commission was not due because James and Gillman were the servants of a company who had no license, that is, that after accusing the defendant firm of fraud and misrepresentation and of j conduct which, if proved, should have j resulted in the cancellation of their licei^e, they said : "W 7e have discovered a collateral contract by which commission should go to the company and that the firm cannot charge us with it. arid > therefore we shall try to recover. He : asked on which side was the m"moamduct. Even her e the plaintiffs are inconsistent, because Fama said he would he quite satisfied if he got £25, but did not wish to take it from James and Gillman, and that he told his solicitors to claim £25, not £75. Later, however h e said he ratified their action in claiming the extra £50, which is refund of commission, which showed there was something more which did not appear on the face of it. In conclusion, counsel stated that he would be prepared later to support the following propositions with authorities : (1) Even if the firm were the servants of the company, which he denied, the Land Agents Act is complied with because it is not necessary for more than one person m a concern ,to hold a license. (2) The Act is complied with because Fama knew only James and Gillman, not the Buildin o- Company, in the matter. (3) Tne Act applies te sale of land but not to distribution of profits, and the firm could do ac they liked with them. (4) The plaintiffs, by completing the deal after notice of. what they allege was a contract not authorised by them nave ratified their agents' action, and cannot now recover. (5) They have further waived their rights by not **<**?; incr the extra £25, which McDonald denies offering, but which they say he did offer. The purposes of the l*and Agents Act, he said in conclusion show that it was never intended to bolster up, a claim of this kind, based en a technicality, but in reality camouflaging a charge of fraud.

H D F. James, called, said, in reply to Mr ODea, he had been a land agent for 16 years. His firm had received authority from Fama to sell his nropertv, the authority being taken by Mr Lewis, who did business for the firm. He prepared an agreement for the sale of tbe property, and wrote to Mr McDonald, of Alton, putting the property before him, and left the matter then in the hands of his salesmen. On the day of the . agreement being signed he was called to 6ee Mr Mc-

Donald, the salesmen being in the room. They told him McDonald was going to make an offer of £1800, and he wrote up a draft copy of agreement or offer, which he gave to his typist to be typewritten, 'lhis was done, and brought to him in his room. He read the offer to McDonald, who signed it and gave his cheque for £50 as deposit. He asked McDonald to return at 1.30 p.m., and told his clerk to tell Fama to come to see him immediately after lunch When Fama arrived- he told him of McDonald's offer, and read it oyer. Fama said it was all right and signed it at once. When McDonald arrived he told him that the offer had been accepted, and afterwards a discussion took place as regards completion of buildings. Realising that it . would be necessary to have document- " ary evidence for this contract, he had a brief agreement to this effect also i?„ °t T t ' and this was signed by « 7' ™ was not sure who signed first. When he read this over to them he mentioned to Fama that he was to get £1080 out of the amount

To Mr Foy, witness said that he was a shareholder and director in the Building Company. Under the terms of the hrst agreement made with the company they were to take over the town agency business of James and Tillman, who would continue to do business for them. This was for one year,, but it was afterwards extended. Ihe company had nothing to do with transactions other than' to take commissions on business in the restricted area. The company had part of the same office until July, 1919, when they removed to a building of their own.

Mr Spratt asked witness if this did not look like putting their house in order after the disorder raised by this case. 3

Witness said this was not so, but* that the company had arranged to de the business themselves. Continuihg witness said that the company- was not carrying on two agency businesses He was carrying on business in town and country, and his firm accounted for proceeds of town sales to the company. He was not working for nothing, but got a w-eekly wage as a retaining fee m pursuance of agreement. Mr Lewis was working for James and GillmanJ but as regards town business he was allowed to get authorities, and there was no fixed understanding as to payment. He occasionally got a share of commissions. He did not work for the company on .country business, but )nly on town business. He was not surprised that Fama was mystified as to whether Lewis was a land agent or not. When Lewis got authority to sell Fama's property he was working for James and Gillman in connection with the town agency. He thought the agreement between his iym att_ the company was extended *for one year only. The firm were really acting as employees of the, company.. They had resigned frem acting under the original conditions, but afterwards arranged to carry on as before. The license fee was paid by James and Gillman, no rebate being made and no portion being charged to the company. Until some months ago they had the same staff and office and ' the one secretary, his salary being paid jointly by James and Gillman, the Building Company, and the Motor Company. The only* thing the company received from them was the commission on sales. They did not engage Mr Lewis, but he used to receive authorities, and was occasionally given a part commission. ■ ■ ■

Out of the. goodness of your heart? -Yes.

Witness' retaining fee was paid by the company alone. He had \not ■known nor was he advised that in

carrying out this arrangement he was transgressing the Companies Act, an<t also not complying with thfc usrovisions of the Land Agents Act. He 'was concerned in several companies and interested in promoting them, and had considerable experience in mercantile practice. The companies included furniture, motor importing, boot and shoe, gold mining,* land and timber, in addition to building company and amusements, in which he was a promoter and a shareholder. He also had shares in a patent medicine company. He denied that he had had trouble with McDonald previously over a sale. He said the Building Company had bought land on its own account, and he had acted as agent for the vendor as a member of the firm of James and Gillman, and received commission for the sale of such properties.. The company had also bought sections on which to build houses and to sell to people. He considered that these transactions in which he had acted were perfectly honest, and had been carried out with the approval of the vendor.

Counsel suggested ttat there wasmore than one case where it was not disclosed that he was acting for the company. Witness replied that there was not a case where he bought *ror the company and charged commission. He considered that it was not honest business to take a property on the understanding that the vendor would sell for so much and the agent was allowed to get as much more as he could. He believed that this was often done, but he had never done so. Counsel instanced several sales effected by the company but witness sadd that in each.* case all commissions ,on sales had been, accounted for to the company. ,

In further-cross-examination witness stated that after McDonald had come into town his cheque given as deposit was attached to the agreement and waa left in Lewis' room, where anyone mighthave seen the offer. Witness adhered to his former statement about the time of McDonald's visit on Tuesday, May 20, but said that McDonald might have given a cheque to another firm before handing the deposit to witness. There was only one interview with Fama, and both he and McDonald left about two o'clock. When McDonald came the second time, he beckoned him tocome into the room, and said to him, "Mr Fama has accepted your offer." The original agrement was signed before lunch by McDonald, and afterwards by Fama. He would deny that the blotter was across the paper. He was not sure when the receipt was. sent. When the cheque was given he did not know if Fa%aa would accept. The procedure in the matter of a saile was for the company to receive the commission. The secretary had .apparently put the deposit in one case to the company's credit in error, whereas l the deposit should have gone through i James and Gillman's trust account. The error may have been due to tho fact of the agreement being made out jon the wrong £orm. When Fama called !on him later to complain, he got the i shock of his life, and was very muehv surprised that there should be trouble between vendor and purchaser. He j had never in all his experience had any I such occurrence, and when he received j a letter from HalliweQ, Spratt and i Thomson he did not consider he was being charged with fraud, and that trouble lay between vendor and agent. After he bad read the letter carefully

he realised the gravity of the case and

consulted his firm's solicitors. He at first did not know there was likely to> be trouble, and just waited developments, not considering it a reflection on them as men of business integrity. Reverting again te the first interview. He said that if McDonnld said he was told that the price was £1850, he would say it was not correct. The agreement was first drafted, but not being fit to be

signed, although there were no alterations or erasures, tie had a copy typed out and the rough drafts after a week or two were burnt, with other used papers, a copy pc-ing kept in the office for reference. The first agreement was typed by a clerk, the second by a lady typiste. He did not know why McDonald's name was typed on the first document, but. assumed it was because the clerk knew otf the business on hand and so typed it in. He could not explain why both names were typed on the adendum agreement. He averred that if''McDonald and Fama said they both signed in one another's presence it was not correct. He read over the paper signed by McDonald making an offer to Fama, but did not ask Fama if the price was £1875 or £1825, and denied that he made any pencil mark on the agreement when he read it. when Fama had heard it he said, "That's all right—accepted," and then signed it. He said that his letter to Halliwell, Spratt and Thomson did not reveal his true feelings in the matter, and that he did not state that McDonald would not give more than £1800. The only discussion was after the signing of the agreement, and only about the building, not as to price. If any such discussion re prioe took place it must have been with his salesmen.

The Court then adjourned until this morning for continuance of the hearing.