CLAIM AGAINST LIQUIDATORS OF THE COLONIAL BANK.

New Zealand Herald, Volume XXXIV, Issue 10627, 16 December 1897, Page 5

CLAIM AGAINST LIQUIDATORS OF THE COLONIAL BANK.

[BY TELEGRAPH, association.] Ddnedin, Wednesday. At the Supreme Court to day a case was commenced in which R. Brooks and Co., London, sued the liquidators of the Colonial Bank, claiming £6500, and an ordor of the Court for an account of sales of oats held by the J. G, Ward Farmers' Association, and covered by certain warrants. Messrs. F. R. Chapman and J. A. Cook appeared for the plaintiffs, and Sir R. Stout and .Messrs, Haggett and Hosking for the defendants. In 1894 R. Brooks and Co. agreed to allow the J. G. Ward Farmers' Association to draw upon them and to accept drafts in terms stated in a letter dated the 6th of April as follows "We aro also willing to accept your drafts at 90 days' sight against bond warrants (which we understand to be certificates that goods are in store) to the extent of £20,006, on your undertaking that shipping documents to the amount of such drafts shall be sent forward within two months of so drawing, you also undertaking that the goods are fully covered by insurance until shipped. This letter was exhibited to the Bank. The Association drew upon the plaintiffs' drafts for £4250 and £2*250. With the first was the memorandum, " Invercargill branch holds warrants for 16,000 sacks of oats for shipment to London and insurance cover for £4750." To the second bill was attached a memorandum that the Bank held warrants for 8000 sacks of oats and £2500 insurance cover. Relying on these representations Brooks and Company paid the amounts. The statement of claim alleged that the Association had since become insolvent and gone into liquidation, and was found to have no oats in its possession which the Bank or plaintiffs were entitled to claim as forming specific security for bills of exchange, By reason of failure to take from the Association the warrant for the oats the plaintiffs had lost the value of the oats or the amount of the bill of exchange. Mr. Chapman opened the case. Referring to the warrants held by the Bank, he said the only thing that could be said of those documents was that they were a kind of undertaking to hold bo much oats of such a quality as were shipped from New Zealand, but beyond that there was no description whatever of the quality or of the marks.. His Honor: It is more than an undertaking. It is a certificate that the grain is there, but not what the grain is. It amounts to a representation that the amount of grain is there, and there is an undertaking to hold grain to •that amount. Mr. G. A. Birch, late manager of the Colonial Bank at Invercargill, and Mr. John Fisher, late manager of tho Ward . Association, were examined,