SUPREME COURT, WELLINGTON.

New Zealand Gazette and Wellington Spectator, Volume V, Issue 340, 17 April 1844, Page 3

SUPREME COURT, WELLINGTON.

Tuesday, 2nd of April, 1844.

Before His Honor Mr. Justice Chapman.

Jones v. Smitk.

This was an action brought by Mrs Jane Jones, against Mr John Smith, the Manager of the Branch of the Union Bank of Australia, at Wellington, to recover the sum of £500 damages, for the conversion of a cash order for £300. This was one of three actions arising out ot' the same transaction ; the others being Stobo v. Smith, to recover the sum of £150 damages, for the conversion of a cash order for £100; and Pharazyn v. Smith, to recover £1,000, for the conversion of three land orders and sundry packages of merchandize. Mr. Hanson and Mr. Ross were for the plaintiffs in all three cases, and Messrs. Holroyd and Hart for the defendant.

From the importance of these cases in a merchantile point of view, and from the peculiar circumstances out of which they arose, they excited intense interest, and from the sitting of the court until the verdict was given the court was crowded.

It will be recollected that in the month of May, 1841, the barque Jane, of which William Stobo was master, arrived here, bringing out as passengers Mr. Swainson the naturalise and his family, Lieutenant M 'Donald, together with Mrs Jane Jones, the plaintiff in this suit, Mr. Pharazyn, the plaintiff in another suit, and several other passengers. Soon after she left the Downs in December, 1840, complaints were made by some of the* passengers about either the quantity or quality of the provisi jns, and the vessel was taken into Port Praya, St. Jago, to obtain supplies. Either from a similar reason, or because her decks were leaky, or because Lieutenant M'Donald had the privilege of touching at a South American port, she put into Rio also. At Rio the complaints were renewed before the Consul, a survey of ship and stores was ordered, and expenses incurred to the amount of £543. To pay these charges money was raised on bottomry at the enormous premium of 100 per cent. But even at the eleventh hour this did not satisfy the lenders, and they demanded collateral security. In order to avoid detention, as it seems, three of the passengers deposited as collateral security such property and documents as they could muster, and the vessel was enabled to proceed on her voyage. On depositing the securities the passengers who furnished them took a receipt to the effect they were to be returned on the happening of 1 of three events: — 1. On payment of the bond. 2. On the loss of the ship. 3. On Mr. Smith's being satisfied of the sufficiency of the value of the ship and freight to discharge the bond. Soon after the arrival of the ship the Captain and Mr. Pharazyn waited on Mr. Smith in order to satisfy him of the sufficiency of the ship and freight as security for the bond, they made him au offer of the ship and freight (between £300 and £400 subject to a charge of £120 for seamens wages,) on condition that he would give up the securities, but he declined having anything to do with the ship (probably as there was no Admiralty Court then here to put the bond in suit,) and expressed his determination to hold the collateral securities.

Subsequently a second bond was given for a loan here, and the ship sailed for Sydney, where she was sold for a sum that did not realize the last (and in law preferable) bond; Mr. Smiih then deemed himself entitled to hold the securities, the owners on the other hand thought he should have delivered them up on being satisfied of the sufficiency of the ship and freight, hence arose the three important actions of which we are now about to present our readers with a report. Mr. Ross opened the case giving a history of the transactions already as we have stated it : he then called —

Charles Johnson Pharazyn. The witness who was plain tift'in another action described himself as a farmer, and formerly a member of Lloyd's As his examination in chief merely gave the history of the transactions nearly as we have described it. we need not repeat it. In the course of his evidence the bond and also therecept given by Naylor and Co., to the depositors were put in and read. The important point established by the latter, was that the securities were to be given up in one of three events as mentioned in the history of the transaction above given at the close of the examination in chief.

Mr. Holroyd here requested the opinion of his Honor on a point of some importance. He wished to know if he cross-examined the witness now in the usual way, whether he could call him as a witness and then put leading questions ; as he was a witness for the other side. Mr. Justice Chapman said, the learned Counsel had an undoubted right to call the witness again for the defence: the rule as to hostile witnesses, is that leading questions may be put to' them as in a cross-examination, but this witness though called Jor the other side, had given his evidence with fairness and candour, and he (the learned Judge) should therefore reserve his decision on the point till the necessity occurred. The witness was then cross-examined at great length by Mrl Holroyd. A considerable portion of this cross-examination merely elicited a repejtitfpn.of the history of the transaction. His Honor intimated that he thought this course of examination could- be much shortened, as the facts were .neither, in issue nor in dispute. Mr. Holroyd considered it essential to his cliant's interest,, that there were strong reasons for depositing the securities. His Honor said all that might be assumed in favour of his client. Mr. Hanson intimated that he admitted all that his learned friend seemed to take so much trouble and time to prove, in fact it was not denied. With the exception of the history of the case ; the complaints, the survey, the difficulty of raising money, the bond, the largeness of the interest, the mischievous interference of Lent. M'Donnell, and the depositing of the. securities,' but little was elicited. '.The witness denied that he had acted as adviser to both parties, andadmitted that the ofter of .ship and freight to the defendant was on .condition that the securities

should be given up or ''released* as it was expressed. He also admitted the difficulty of communicating with Rio, and explained why the cash orders had been included in his plaint, namely, by mistake of his Solicitor. Heiwore he had no claim' to the order which was the subject of this suit.

Captain Stobo was the next witness. Its effect was generally to corroborate that of the last witness. He said, there aiose no complaints but merely a " request " to put into Rio, (a subsequent witness swore to complaints.) He said f the ship had cost £2,000, and that £600 had been laid out on her. His freight was nearly £400, there were £120 or £130 wages owing. He admitted that he could not collect this freight as there were disputes, but explained that when the ship was offered] to Mr. Smith, no goodssubject to freight were landed. He also said, the goods were not damaged by bad stowage. John Jones, of Sydney, merchant, was the next witness. His evidence was characterised by remarkable clearness, shrewdness, and can** dour, and it was interesting and important a 4 explaining the course of proceeding in Sydney. He dsscribed the fate of the second bottomry bond, the first in point of claim. He received the bond as agent to Messrs. Wade the lenders. The Captain could not pay it, and he (the witness) agreed to give him two freights of 100 head of cattle at £4 to " work it out." He had sent for the cattle when he heard that Mr. Sea, the defendant's agent, had put the first bond in suit, he was consequently compelled to proceed. The ship was seized and put up for sale under a decree, having been first valued by appraisers at £2,800. He (witness) attended the first sale and bid £1,550, but the ship was withdrawn under a rule of the Court, not to take less than the- valuation. At the second sale the reserve is reduced to the sum bid at the first sale. Witness did not know this at the time, and he made a. private bid of £1,800 as he wanted a ship. His offer was refused, and then he learned the rule. At the second sale he bid £1,050 or £1,090, he had forgotten which. He did not bid more because lie had learned that the third sale was without reserve. At the third sale the ship was knocked down to him at £695. The witness waa cross-examined by Mr. Holryod, and stated that the reason why he offered £1,800, was because he wanted a ship, and waa obliged to give £5 10s a head for cattle, that the reason why he did not bid more afterwards, was because he had 5 or 6 ships m, and he would not buy without a bargain. Merchants sometimes arranged not to bid against each other, but nothing of the kind had taken place in this case. [At the close of Mr. Jones' evidenceit wns agreed by the Counsel on either side, with the leave of the Judge, that the Judge's notes should be read in evidence, in Stobo v. Smith, and Pharazyn v. Smith, in order to enable the witnes to proceed to sea ] Mr. Kenneth Bethune was examined as to the value of the ship. On the strength of considerable experience as a seller qf ships, he valued her at £1,500 or £2,000. He had refused £1,501) cash for the schooner Bailey of 140 tons. In cross-examination, the witness admitted that he had not carefully examined the Jane, and that schooners are more saleable than barques. ■ Mr. William Guyton considered her worth £2,500 to £2,800. He admitted (in crossexamination) that he had not been on board, but he judged by her general reputation and» her tonnage. He also thought she would have realize £1,600 even with some risk as to the title.

This closed the case for the plaintiff. Mr. Holroyd then opened the case for the defendant, telling the Jury that he should show an extraordinary necesiity for putting into Rio, and that the demand of aditional security waa justifiable. (Mr. Justice Chapman hers intimated that this was not in issue. It must be taken to be admitted on the record, fnd in reality did not affect the case.) Mr. Holroyd then briefly stated that he had evidence to disprove the case of the plaintiff, and to establish that of the defendant to the satisfa«tion of the Jury. He then called-*-Charles Harvey, an intermediate passenger, who testified to the insufficiency of the provisions, and to the complaints that were made. Mr. Hanson here interrupted the -learned counsel, and submitted to his Honor whether this evidence was not wholly irrevalant as it went to prove facts that were not in dispute. The learned Judge ruled that if the testimony were intended to contradict Captain Stobo, so as to shake his credit with the Jury, the learned counsel was justified in the course he was taking, if topfove what was not disputed the course was irregular. The examination of the witness was then continued, but nothing was elicite beyond the fact that the passengers had made early complaints.

Charles Johnson Pharazyn was then called on the part of the defendant, but nothing was elicited beyond what "was already before the J.ury. Mr. Thomas Waters, formerly of the firm of Waters and Smith, who were the agents to the ship in 1841, described the mode in which the second loan was obtained. £1,500 was at first advertised for to pay off the first bond, and send the ship to sea, but £400 only could be obtained, namely of Messrs John and George Wade. He also gave evidence of the difficulty of collecting freight, showing that only £70 or £80 was in fact received.

John Wade described the mode in, which he became a lender of £400, at 20 per cent. ; his evidence was important as shewing that his bottomry bond for £480, and the charges at Sydney exhausted the proceeds of the sale, for only £373 was ever placed to Messrs. Wade's credit. M,, ' ' Mr. Hanson then addressed the Jury for the plaintiff, contending th"at the yeal question was not whether the putting into Rio w.as justifiable, not whether, the preinium^on -the-; bond was excessive,, but whether the defendant has done what he ought to nave done, and. therefore wher ther he is entitled to retain this order. The condition on which tlte cash order was deposited was. not that it should be retained at Mr. Smith's discreation, but that he should satisfy himself<ai) to the value of the ship, that he should L then give up the securities of which, this w,a^;,on'ej The defendant was Bound to exercise a reason-

-able discretion, and not 'to constitute- himself an arbitary judge. The Jury would observe that the cash order was deposited as a collatural security. Tbe defendant without the least reason had given up the primary security, and had chosen to retain the collateral securities. He also complained of the supineness and even selfishness with which Mr. Smith hid acted, he had recklessly destroyed the property of others, when by taking the ship he might have saved all parties, as well as himself from injury and loss. He had refused to act when acting would have been wise and proper, and his agent in Sydney had acted when he ought to nave remained quiet. Mr Holroyd addressed the Jury at considerable length for the defendant. He contended that under the whole facts of the case, Mr. Smith was entitled to hold the securities either until the bottomry bill was paid or until there were proper means on the spot to which tbe defendant could resort to ascertain the value of the ship in tbe only legal way in which it could be ascertained, namely, a .resort to a Court of Vice. Admiralty." But even were it not so, if the Jury thought the defendant bound to take the ship, he contended that the obligation to take it must be proved by the plaintiffs shewing that tbe ship was of sufficient value. It was obviously for the plaintiff and not for the defendant to ascertain the value, and that having been neglected, he was entitled to hold the securities. The learned Counsel then commented on the evidence given by the several witnesses, and contended that the Jury could draw no inference as to the value of the ship, as the point that no good title could be given, was not taken into consideration by tbe witnesses. He then insisted the witnesses Pharazyn, and Stobo, had an obvious interest against the defendant; a point which ought to weigh with the Jury. The defendant's case was one of peculiar hardship he had no interest in the transaction, he was merely an agent, and yet he was to be mulcted i» the damages and costs, because he had acted throughout with extraordinary leniency. • He might have returned all these securities to Rio, he was even advised to do so. If he had done so, he would have saved himself at the cost of the plaintiffs in these cases. But he had acted otherwise ; he had held th«se securities until he could ascertain how he could dispose of them and for tbis he was called hard and selfish, There was another point to which he must call the attention of the Jury. The tender which bad been made was bad, a tender when good must be unconditional, this was clogged with a condition, namely, that the securities should be returned. The Jury on this point would be instructed by the learned Judge, and he was quite his Honor would support the view he contended for. His Honor would also take judicial notice of tbe non-existence of any tribunal, to which Mr Smith could have resorted at the time, either to ascertain the value of the ship or to sell her with a good title. He left the case to the Jury in full confidence of a verdict for his client.

Mr. Justice Chapman then proceeded to sum up the evidence to the Jury. He commenced by cautioning them on the necessity of banishing from their minds all that they have heard out of doors respecting the merits of this case. They had attended to the remarks he had felt it is duty to offer tbejn in the morning, and he was sure their own good sense would convince them how peculiarly applicable they were to the present case. The facts had been so long before the public, and had been so much discussed, that it would be idle to suppose they (the Jurors) had not become familiar with them. Hence the difficulty was increased, and the duty strengthened of purging itheir .minds of .all impressions favourable or unfavourable to either party. To a Jmer■cantle community this .case was one of extreme importance — to .the parties concerned it was especially^ so-; there must be considerable hardship in either way, they had appeals from the counsel on both sides on this head, but he (the learned Judge) was bound to tell them, they must harden their hearts, if he might so^ express himself, to the hardship which might arise to either side from their decision. Their I sole guide must be the evidence which they had heard, aided by such direction as belonged to his (the Judge's) province to give them, and he solemnly entreated them to allow no other consideration to influence their decision. His Honor then read the pleadings, and directed their attention to the issue between the parties. He felt it necessarry to guard them against permitting themselves to be confused by such portion of the evidence, as did not relate to the issue. He did not exclude this evidence, because he thought it necessary that they should possess the whole history of the transactions which led to this suit. For this reason he should read the whole of Mr. Pharazyn's evidence, as containing a clear consecutive account of the transactions, nearly in the order in which they occurred. The learned Judge then read the whole of Mr. Pharazyn's evidence, commenting thereon, from time to time, and directing the Jury thaF they bad no concern with the validity of the bond, or the rate of interest, or the motives which induced Messrs. Naylorand Co. to demand and the ,6ther parties to deposit their securities. They must assume the regularity and propriety of everything up to the time the securities came into the hands of the defendant. The true question, hub Honor continued, was whether under the stipulations between Nay lor and Co- arid the depositors, the defendant should have discharged the sureties and looked alone to the ship. The Jury will have the receipt given by Naylor and Co., together with their letter to the defendant before them, and they will determine what meaning to attach to the words "shall be satisfied as to the sufficiency of tne ship as a security for the bond.'' The plaintiff contends that tbe defendant was bound to ascertain the value — the defendant on the other hand contends that some proof of valued should have been afforded the defendant. This is a question for them and them alone to determine. If they should think the plaintiff or her- agents ought to have given evidence of value) then they must determine whether in the several interviews had with the defendant Any evidence or rather sufficient evidence was in -fact offered. Xf on the other hand they should think it was incumbent on the defen-

dant to ascertain the value, it will be for them to determine whether he did so, or whether he was relieved from so doing by the absence of Courts. Evidence had been given as to value. It is proper that the Jury should have such evidence; but the fact was not enough to charge the defendant, they must believe either that he knew it te be and rejected it though sufficient, or that although he might not have known it he ought to have ascertained it. Hence he was bound to inform, them that at the time of the Jane no Admiralty Court existed here. The Jane arrived here in May, 1841, and it was not until March, 1842, that Mr. Halswell was Gazetted as deputy to'the Vice Admiral. His Honor could not find when Mr. Halswell held a Court, but it was probably not until several months after. [Mr. Hanson here informed his' Honor that it was in April.] If that be the case nearly a twelve month, elapsed before the bond could be put in suit, for the law of England recognizes no other way of proceeding against a ship. If there had been a competent Court, no doubt the defendant must have resorted to it, and probably would have done so, and it will be for the Jury to consider whether the absence of such a Court ought to have relieved him from the duty of further enquiry. If they should think so, there was an end of the case, but if they should think that on the terms of the agreement and in accordance with the intention of the parties, the defendant was not thereby relieved, then their enquiry must be pushed a point further to the questions already stated. His Honor then read all the evidence touching the value of the ship and freight, reminding them that there was a claim on the latter for wages. As to the difficulty of collecting the freight that might have boen met by declining to deliver cargo until it was satisfied. His Honor again reminded them that no good title could be given with the bond hanging over the ship, but at the same time the non-existence of a Court cut two ways, as it prevented any dispute about title arising out of the bond. A good title might be given had the Captain a power of sale, but there was no evidence that any such power existed, and it was to be presumed that none did exist. Under these difficulties the Jury were remitted to the terms of the agreement as contained in the receipt strengthened by Nnylor's letter, and it was for them to say whether under these terms the defendant ought to have taken the ship as offered. And here arose the point about lender, the law respecting a plea of tender, his Honor said, had been rightly laid down, namely, that " a tender clogged with a condition is bad." It was quite true that .an ordinary plea of tender clogged with a condition would be bad. His Honor then read from a work of authority (without naming the title) a quotation in support of the rule, but told the Jury that the case did not apply here, and he should not consider himself justified in withdrawing the question of tender from the Jury. The rule as to tender applied to the case where plantifF demands of the defendant more than is due. The defendant gets rid of all costs,if the Jury find that no more i 3 owning. This had but a slender anology to the present case. The offer of the ship was so interwoven with the main point, as to what the agreement really was, and whether the defendant had performed his part of it, that he should leave it as part of the whole case to the Jury. One point only remainedto be noticed ; the damages were laid at £500, whilst the cash order itself was for £300 only. He was bound to inform them, that if they found for tb.6 plaintiff at all, they might add to the value of the order such further sum as damages as they believed the plaintiff had shewn she had sustained. There did not appear any evidence of specific damage except the loss of interest for the time. The Jury then retired, and after a short absence, and returned a verdict for the plaintiff, damages £390. The trial occupied eleveu hours and a half.

We have prepared short abstracts of the other cases, which, with the Judge's charge to the Grand Jury, we must postpone.

Bjrth. — On the 22nd ultimo, Mrs. Inglis of a daughter.

Died. — On the 11th hist., Charles Wm. Cuthbert, Esq., of Ayr, N. 8., late of the H.E.I.C.S.

The brig Sir Archibald Campbell arrived on Thursday last, from Sydney, with a small lot of sheep. She came down in ten days, and furnishes us with Sydney papers to the 25 th March. The latest dates from England were to the 28th November. It will be seen by our columns that we have extracted largely from the New South Wales papers. It is satisfactory to observe, that commerce is gradually improving in Europe, America, and the Australian Colonies. It is evident that encouraging times are at hand in all the neighbouring colonies ; and we wish them joy of their promising prospects, whether New Zealand be or be not benefitted at the same time and by similar causes.

To the Editor of the "New Zealand Gazeitt and Wellington Spectator. 1 ' Wellington, April Bth, 1844. Sir,— As it may be interesting to the Scotch Colonists at Nelson to know the concern taken by the New Zealand Company in their religious welfare, I avail myself of your^aper to inform that in answer to their memorial which I had the pleasure of transmitting to the General Assembly of the Church of Scotland about two years ago, the New Zealand Company have liberally granted an annual stipend of £150 toa Scotch Clergyman in that settlement for period of 3 years. In addition to the £15,000 originally granted for religious and educational purposes to the' Nelson settlement, I perceive by the public prints that the sum of £25,000 has been granted, (I presume prospectively,) to the colony of New Edinburgh. 1 understand also, that a grant of £2,000 was made to Dr. Selwyn for the Episcopal Church, and that £200 < was given towards the erection of a Roman Catholic Chapel in Wellington. When such munificent grants are made to these various bodies,' doss it not appear itrange

that the Scotch colonistsw who were, to speak, the pioneers of Christian colonization here, and who have been the first to erect a regular place of worship, should be alone excluded from a share in the Company's liberality. On the 13th September, 1842, 1 wrote to Mr/ Ward upon this subject : but his only answer was, that the Directors had not sufficient time to consider the claims of the Scotch Church here ; and after several months had elapsed, the only answer was a duplicate of the same. Perhaps the Principal Agent of the Company, at whose suggestion I made the application, and who gave me assurance that he had no doubt of its being immediately complied with, will be able to give some information explanatory of this glaring partiality and exclusiveness.

I am, Sir, Your's respectfully, John Macfa.ki.ane.