OUR LEGAL LIGHTS.

New Zealand Herald, Volume XXV, Issue 9000, 13 March 1888, Page 6

OUR LEGAL LIGHTS.

AN INTERESTING CASE. DR. LAISHLEY'S CLAIM FOF INTEREST. MR. COTTER SPEAKS HIS MIND. An unusual case was heard at the District Court, yesterday, before His Honor Mr. H. G. Seth Smith, District Judge, when a monetary transaction between two wellknown Auckland solicitors was ventilated. The plaintiff was Dr. Laishley, and he sued Mr. C. W. Cave for the sum of £53, moneys claimed to be due to the plaintiff for certain sums paid by him on behalf of defendant, and at his request, to one William Bond, for the interest for one quarter at the rate of 12 per cent, per annum, due on January 14, 1888, in respect to a mortgage to William Bond for £1400 over the Belmont Estate, Devonport; and also for the deed of conveyance. For the defence, the liability was denied, and several sots-off were entered, on the ground that the amounts actually given by the defendant during several quarters had not been paid in full, it naving been agreed between Bond and the plaintiff, without tho knowledge of the defendant, that plaintiff should obtain from Cave interost at the rate of 12 per cent., but should only pay to Bond interest at the rate of 9 per cent., the plaintiff retaining to himself the balance of the moneys which he might receive from the defendant over and aoovo the 9 per cent, which Bond had agreed to receive. Mr. Theo. Cooper appeared for the plaintiff, and Mr. Cotter for the defendant. Dr. R. Laishley was the first witness called. He deposed that he was interested in certain property at the North Shore, mortgaged by the defendant, Mr. Cave, to Mr. Greenwood and Mr. William Bond. Witness was cross-examined by Mr. Cotter with reference to his transactions with Mr. Bond. His diary (produced) contained several entries showing that he had paid to Mr. Bond sums of money received from Mr. Cave, and had, at the same time received from Mr. Bond bonuses in consideration for his trouble in getting the money from Mr. Cave. He had never told defendant that these bonuses had been given to him by Mr. Bond; the arrangement having been come to between himself and Mr. Bond, who had entered into an agreement with witness (produced) that in consideration of witness's retiring two cheques for £'26 each, given by Cave to Bond, and in consideration of the prompt payment of the interest on the Belmont mortgage, plaintiff was to be entitled to a rebate at the rate of 3 per cent, per annum of every quarter's interest. Witness sued Mr. Cave, and not as his (defendant's) solicitor, and he had never regarded Cave as a client, but merely as a gentleman who should remunerate him for trouble he (witness) had taken on his behalf. Mr. Cotter asked witness whether he had acted as Mr. Cave's solicitor in tho matter ; and after some hesitation Dr. Laishley, when urged by the Bench, said he had not. Mr. Cotter entered in evidence a letter signed by Mr. Cave, and instructing Dr. Laishley not to pay any money on his (defendant's) behalf at the expiration of a certain date named. Dr. Laishley said he had paid the money, as he was in honour bound to do under the terms of the agreement. The agreement with Bond was a private one, of which Mr. Cave was not aware. Defendant agreed to pay 12 per cent., and that was all he was charged ; and plaintiff received from Mr. Bond £10 10s out of every quarter's interest, £52, which he collected from Mr. Cave. When he sued Mr. Cave he had got solicitor's fees —not from the Court, but from defendant. The charge of ten guineas was very unusual, because the case involved a large amount of work. Mr. Cotter : I am glad, for the sake of the profession, that it is unusual. Dr. Laishley: This has nothing to do ■with the profession. Witness was further cross-examined at some length, and said he did not think there was anything morally wrong in his receiving the ten guineas from Bond at the end of each quarter. William Bond, farmer, residing at Mangawai, deposed that he was the mortgagee of the Belmont property at the North Shore. A portion of that property was sold to Mr. Cave, and a mortgage was executed, an arrangement being made fifteen or sixteen monthe ago that 12 per cent, interest should be paid. He was present in Dr. Laishley's office when that arrangement was made, and as he wanted his money, which was due to a gentleman from whom he had bought some property, he decided, at the request of the plaintiff and defendant, to go outside and borrow a sum of £900. In consideration of hia doing this he was to receive 12 per cent, interest from the plaintiff and defendant till the money could be paid. He had borrowed this money at the Bank of New South Wales, paying 10 per cent, interest. Dr. Laishley had always paid the interest, regularly—£42 at the expiration of each quarter. By Mr. Cotter: Throughout the transaction he had been careful to make his arrangemente with Dr. Laishley, and plaintiff was responsible for the payment of the money. There had been a little difficulty in getting the first quarter's interesc. He had cheques, and they would not meet, and he returned the cheques to Dr. Laishley, making him responsible. Witness, however, was willing to deal liberally in the matter, and he would have been willing to take 9 per cent, from Mr. Cave, but he had not mentioned to him that he was getting only 9 per cent, from Dr. Laishley because he did not think that Mr. Cave had anything to do with witness' transactions with the plaintiff. Witness deposed to entering into an agreement with plaintiff to allow him a rebate of 3 per cent., and the was entered in evidence. Mr. Cotter opened the case in a brief address, and called Chas. White Cave, who deposed to having purchased an equity of redemption from Dr. Laishley. The interest was 8 per per cent., and witness paid at that rate up to the 14th of October. Mr. Cave deposed to the interview held in Dr. Laishley's office between plaintiff, Mr. Bond, and the witness. Bond then said that he did not wish to put witness or Dr. Laishley to any inconvenience, and if he could borrow the money, he would allow the mortgage to remain for a time. Witness understood that the sum of money required by Bond was £800 or £1000. Consent was given to Mr. Bond's borrowing the money. There was then some discussion as to the rate of interest, and Bond said he would have to pay 8 or 10 per cent, to the bank, when Dr. Laishley suggested that, seeing that Bond was doing them a kindness, snould have something for himself. Mr. Cotter: Certainly, seeing that you had to pay for it. Witness continued, and said he had expressed his concurrence jn this arrangement, and 12 per cent, was mentioned. Bond, in reply to the plaintiff, said he would be satisfied with 12 per cent., and would like some part of the principal paid off as speedily as possible. Witness was satisfied that it was never intended that the 12 per cent, interest should be paid for a longer term than twelve months ; and he had paid the interest for that term. He had then written to Dr. Laishley, ordering him not to pay any further interest on his (witness's) behalf. Dr. Laishley had never informed him that he was paying to Mr. Bond a less sum than 10 per cent; on the contrary, he (plaintiff) had frequently summoned him when the interest was due, and had charged solicitor's fees against witness. Witness had frequently asked Dr. Laishley to endeavour to nave the rate of interest reduced, but plaintiff had told him that he must himself see Mr. Bond, and that he (witness) must write to him. On one occasion Dr. Laishley said he had seen Bond about the matter, and Bond had refused the application. Mr. Cotter : Did he make any proposals to you about fees ? Mr. Cooper objected that this question was not relevant to the issue ; and after some argument, Hie Honor upheld Mr. Cooper's contention. Mr. Cotter: Very well, your Honor ; you can put It that Mr. Cooper objected to the question. The Law Society will have something to do with it. Mr. Cooper : That's not relevant either. Mr. Cotter: It's relevant to the Law Society. . , Mr. Cave was further cress-examined, and he suid that bo considered that the re.

lations between himself and Dr. Laishley in this transaction were those of principal and client. Mr. Cotter then addressed the Court for the defence. He referred to the previous judgments which had been obtained by Dr. Laishley against the defendant, and said that though the pockets of the plaintiff might havftbeen bulging with the proceeds of hie manipulations, yet he could come into Court and say to the defendant, " I was such a smart individual that I managed to get judgment against you before you found it out; now you have found it out, you can whistle, when you have seen what a smart man I am." Mr. Cotter quoted several cases to prove that the profits acquired by a servant or agent in the course of his service or agency belonged to his master; and he read the remarks of a learned judge in referring to such a case, when he said that a person who is dealing with another's money ought to pive the truest account of what he nas done with it, and ought not to receive the smallest allowance or present without full knowledge of his principal. Mr. Cotter quoted from Story on "Agency," that authority laying it down as a general principle that, in a case where a person is either actually or constructively the agent for other persons, all profits made by him in the business beyond his ordinary compensation are to be for the benefit of his employers; and although he should be answerable for any loss, the profits belonged to his employors. Other authorities were quoted by the counsel for the defendant, who proceeded to refer to the facts of the case before the Court. He would first of all contend that, upon the evidence, and upon the admissions by the plaintiff, coupled with the accounts which ho had sent in, it was clear that the plaintiff stood in a fiduciary position to the defendant. Although the plaintiff had fenced the question—he usod the term advisedly—His Honor would come to but one conclusion upon that point. Dr. Laishley had placed himself in the position of a solicitor by hio having made the charges for solicitor's fees ; and he (Mr. Cotter) submitted that no member of the profession deserving the name would do what had been done by Dr. Laishley, who had made these charges believing him defendant's solicitor, and now used to Mr. Cave's detriment all the advantages which he had thus gained. He (Mr. Cotter) thought it would be abundantly clear that all that Dr. Laishley had done had been done in his capacity as agent. What he did was this : he himself was the mentor, the suggestor of this 12 per cent., and having made a nice little margin to operate upon, then it was that he approached Mr. Bond behind the back of the man whom he was professedly acting for, and makes this little arrangement. Supposing His Honor was to nold that the plaintiff had acted as agent, it was clear that Dr. Laishley and Mr. Cave were jointly and severally responsible to Mr. Bond, and thereby securities for each other —if Dr. Laishley did not pay, then Mr. Cave could be compelled to pay ; if Mr. Cave did not pay, then Dr. Laishley could be compelled to pay. But they were both responsible for the one debt, and while so responsible, any advantage gained by one or the other was the common property of both. He wondered what his friend would say if the shoe were on the other foot? He wondered what he would say if Mr. Cave were to make some secret arrangement with Mr. Bond, thereby deriving some ad vantage, and allow Mr. Bond to sue Dr. Laishley for the full amount of the principal and interest? He wondered whether he would say that it was quite open, and fair, and above board, and what was quite right in the profession? Not only had the plaintiff sued Mr. Cave as an individual, but Mr. Cave as a solicitor, as if the hawks, not satisfied with picking out other people's eyes, turn to pick out the eyes of each other. They heard of school children being taught morale in the public schools, but if this was the morale that was to be taught in the profession, then he was sorry for the teachers, and ho hoped the pupils would not believe what was taught them. No adroitness in wiapping the transaction up in nice terras, in wrapping it, so to speak, in gilt paper, would make it look better than it appeared -n all its own hideousnesa —an attempt to obtain from a man one-fourth more than he should pay. The learned counsel referred to the points of the case, and contended that the cases which he had quoted were ample to justify His Honor in finding for the defendant. He asked His Honour to dismiss without any hesitation the little attempted juggling in bringing in the two cheques, and the supposition that Dr. Laishley, for bringing in these two cheques, was to get this rebate. When a person mixed another person's goods with his own, the person whose goods had been wrongfully mixed could take the whole of the goods ; so in like manner, a person who mixed up his private matters with those of his master, should forfeit all the benefits to his master. He submitted that HLb Honor could not believe that Mr. Bond agreed to give Dr. Laishley ten guineas a quarter for so small a security as £10. Mr. Cotter proceeded to refer to what he termed the " lovely book-keeping" of Dr. Laishley, and was about to speak of the plaintiff's manner in the witness-box when the case was previously before the Court, when Mr. Cooper objected, and remarked that Mr. Cotter had already indulged in enough personality. His Honor said he thought it would not be competent for the counsel to refer to what had taken place on a previous day. Mr. Cotter referred to the sot-off, and said that it had been brought before the Court at the very first opportunity after the transaction had been found out. They would have come before Hia Honor, and said," This man charges us with £42—it is a fabrication : in fact, the £42 never was paid. Although Mr. Cave had constantly asked plaintiff to endeavour to get a reduction of the rate of interest, yet the 10 guineas was taken each time for paying Cave's money. Mr. Cave had told the Court that he had frequently asked Dr. Laishley to intercede with Bond for a reduction of the rate ; and His Honor would understand the chuckle with which the plaintiff would exclaim when Cave left his office, "I do that! I ask Bond to reduce his rate of interest when it is I who am getting the 3 per cent. Poor Bond ! He is only getting his 9 per cent., and he cannot reduce his rate of interest." Although Cave would have to sell his shirt to pay his interest, yet Dr. Laishley would have his money. His Honor would see that the percentage was not the ordinary fee which solicitor's get when collecting money, since 25 per cent was one-fourth of the whole amount. Aa the judges of the Equity Court had said, the mere narration of it, the mere statement of it, was in itself a condemnation, and those who viewed such a transaction as it should be viewed, could not help exclaiming, " Well, if this is what is allowed by our Courts, I will never enter them." His friend Mr. Cave might refer to his old schooldays, when the old Latin motto " Cave canem " was taught him by the dons, but in Auckland's fair city, the old warning should be changed, and now, instead of " Beware of the dbg," it should be " Beware of the Doctor." Mr. Cotter asked that judgment be given for the defendant. Mr. Cooper, in addressing the Court for the plaintiff, said that after hearing the tirade of abuse which had been poured out by the counsel for the defendant, he (Mr. Cooper) wondered what Dr. Laishley had done to Mr. Cotter. Mr. Cotter remarked that Dr. Laishley had done nothing to him. Mr. Cooper, continuing, said that, in that case, he was surprised at an advocate prostituting his abilities in order that he might pour out such a tirade of Billingsgate abuse againsta brother professional; and he (Mr. Cooper) regretted very much that Mr. Cotter had not seen fit to discuss the case upon its merits. Before proceeding to refer to the points of the action he (the speaker) would address a few remarks to the Bench in reference to the charges which Mr. Cotter had made against Dr. Laishley. The counsel for the defence had wound up his address by misquoting a Latin motto, and applying it in a ribald manner to the plaintiff. That motto was " Cave canem ;" but the first word was the name of the defendant; and Dr. Laishley should for the future at least, beware of his transactions with Mr. Cave. He asked the question, did Dr. Laishley's action bear the suggestion that he had been guilty of fraud? Was Dr. Laishley a liar ? because that was what had been advanced by Mr. Cotter. He submitted that none of these propositions put forth by the counsel for the defendant had in any way been proved. In the first place, Dr. Laishley had been liable for a large sum of money upon a mortgage signed by himself and Mr. Greenwood. Dr. Laisbley- bad been indemnified against

the payment of the principal and interest, and then occurred the transaction which Mr. Cotter had seen fit to characterise as a robbery, a deceit, and a fraud. Mr. Cave knew what his liabilities were, and knew that it was his duty to pay his interest as soon aa it was due. Yet he had not done this —in the very first quarter; there occurred a distinct breach of the contraot, for the defendant had here at the very outset failed to pay his interest when due. Mr. Cotter produced receipts showing that Mr. Cave had paid his first quarter's instalment as soon as it fell due. Mr. Cooper contended that that payment had 'been made by cheque, which Mr. Cave had dishonoured. Mr. Cave had not performed his obligations in thie transaction; ho had not shown himself to be a man of honour ; and therefore the accusation made by Mr. Cotter against Dr. Laishley came with exceeding bad grace from him when his own client had shown himself to be a man who throughout, either through misfortune or negligence, had not evinced any desire to fulfil the obligations which he had entered into. He (Mr. Cooper) would do justice to Mr. Cave, and he would say that when in the witness-box the defendant did not utter a word which would lead to the belief that he shared in the opinion which was entertained by Mr. Cotter respecting Dr. Laishley'e action, and which was shown by defendant's counsel in his address, when ho occasion to vent his private spleen against Dr. Laishley. Mr. Cotter : I have none. Mr. Cooper : Then if you have none, the virulence of your language is very remarkable. The learned counsel then went on to review the evidence, and said the real position was this : Dr. Laishley had said to Mr. Bond, "If I am to pick up these cheques, and pay this £52, though I am only responsible for a portion of the money, and if I am to have this money ready for you ' down on the nail' whenever you come, without your having any trouble in collecting it from Mr. Cave, and so on, you must pay me something for the obligation, and for the trouble and detriment I am put to in consequence," and an arrangement to that effect was accordingly entered to in February, 1887. This was not an arrangement on the part of Dr. Laishley to obtain an advantage over Mr. Cave. Mr. Bond had said, "My interest is 12 per cent; you are liable for the 12 per cent.; if you pay it without any trouble—well, as a reward for your concession, as a payment for the detriment which you suffer, I will pay you a certain sum " —the three per cent. Was there anything in this transaction justifying the language which Mr. Cotter had used? , Hβ (Mr. Cooper) submitted that there was not. Mr. Cooper proceeded to point out that the document of mortgage stated that the balance of the money not paid on October 14, 1887, should stand over till November 16th, 1887. Was it to be supposed that during that time of forbearance Bond was to get only 6 per cent. Such a thing would be an absurdity. There was no actual undertaking on the part of Mr. Cave or Dr. Laishley to pay 12 per cent., but all parties had mutually agreed to this course. The mortgagee was in need of his money, so much so that he had to get money from the bank at a high rate of interest; both parties had failed to fulfil their obligations —Dr. Laishley as well as Mr. Cave —and Mr. Bond then eaid that he did not wish to enforce his legal rights against them, but that he could not any longer consent to receive a small rate of interest; if they wanted the money to stand over they would have to pay him a higher rate of interest— he was paying the bank 10 per cent., and they would have to give him 12 per cent. The fact of the time being limited to twelve months was right in one sense—that the money was not to bo allowed to stand longer than twelve months; but the interest was due whilst the money remained unpaid—Mr. Bond's evidence had showed that; and he (Mr. Cooper) therefore sub mitted that the agreement was one under which both Mr. Cave and Dr. Laishley had become liable to pay to Mr. Bond, 12 per cent, interest so long as the money remained unpaid. His friond the counsel for the defence had charged Dr. Laishley with juggling in connection with the agreement made with Mr. Bond in February, 1887 ; but he (Mr. Cooper) submitted that Dr. Laishley had clearly undertook a detriment —undertook to pick up cheques for which he was not responsible. With respect to Dr. Laishley's position in acting for Mr. Cave, Mr. Cooper held that Dr. Laishley had acted as his own solicitor, and though he might have taken a legally unsound position in charging fees when he was not actually engaged by Mr. Cave, yet he had not done what was unreasonable. Mr. Cooper proceeded to review the evidence at further length, and in concluding an able appeal, he asked his Honor to pay particular attention to the fact that it was Dr. Laishley whom Mr. Bond had insisted on acting with, whilst Mr. Cave had stood in the relation of surety. He could not close without again regretting that Mr. Cotter had chosen to use the abusive language which he had in referring to the case. He submitted—and he hoped the Press would take notice of this—tnat there was not the shadow of a ground for Mr. Cotter's allegations. It simply amounted to this, that Mr. Cave had placed Dr. Laishley in this position, since he (Mr. Cave) had failed to fulfil his obligations. Whatever view His Honor might take of the case, it was a matter for sincere regret that Mr. Cotter had seen fit to abuse a brother professional, and resort to the position which was generally supposed to be taken up by those who, having a bad case, abused the other side. He (Mr. Cooper) would not have said one word on the position of the parties, if Mr. Cotter had not chosen to hurl at his (the speaker's) client accusations for which there was no ground whatever Mr. Cotter said that in reply, he Would challenge his friend whether he had ever known one solicitor to charge another with one-fourth more than he had ever paid. He (Mr. Cotter) might say that during his experience of 22 years in Auckland, he had never yet heard of such a thing, and when he heard the statements of the witnesses in the case, he thought that he was entitled to make the observations he did. Mr. Cotter applied for leave to amend his defence, Dut the Bench said the defence was sufficient to judge the case on its merits. His Honor reserved judgment.