A LOAN TRANSACTION.

New Zealand Herald, Volume XXXVI, Issue 11202, 24 October 1899, Page 5

A LOAN TRANSACTION.

AN INTERESTING POINT. [BY TELEGRAPH,—PRESS ASSOCIATION.]

Wellington, Monday. The case of Studholme v. the Superintendent of the Government Advances to Settlers Office, was argued in the Court of Appeal today. This was a case arising out of the embezzlement recently committed by W. N. Cathro, solicitor. Cathro acted as clerk for Mr. John Prior, of Feilding, who was the local solicitor for the Government Advances to Settlers Office. Plaintiff had applied for a loan of £3000 from the Advances to Settlers Office, on the security of a mortgage of land under the Land Transfer Act. The application was granted, and the plaintiff, at the request' of the Department, signed an order for the Department to pay the amount secured by mortgage to Mr. Prior. The money was remitted by the Department to Mr. Prior, and placed in the Government account at Fielding, on which Mr. Prior operated. After the mortgage had been executed by the plaintiff, but whilst it was in the hands of the plaintiff's solicitors in Wellington, Mr. Prior drew a cheque for £1084 on this account, and handed it to Cathro for settlement with the plaintiff. Cathro embezzled the amount, and the present case is brought to determine, whether the loss is to be borne by the plaintiff or by the Department. The Department contends that the plaintiff must bear the loss, he having signed an order for payment to Ml. Prior. Plaintiff contends that the order authorised payment to Mr. Prior on his behalf only when the mortgage was handed over and the money secured, and that the mortgage being still in the possession of the plaintiffs solicitors, the money was in tho hands of Mr. Prior as agent for the Department when it was stolen by Cathro. The case, which was argued on a motion by the plaintiff for judgment, was removed into the Court of Appeal by consent. Mr. Hadfield appeared for the plaintiff, and Mr. Treadwell for the Department. In delivering judgment the Chief Justice said the Court were unanimously of opinion that the moneys were in the hands of Mr. Prior, as solicitor' for the Department, at the time when they were embezzled by Cathro, raid that the defendant must therefore bear the loss. Judgment was therefore given for the plaintiff with costs. The defendant applied formally for leave to appeal to the Privy Council, which wp s granted on the usual terms.