AN IMPORTANT CASE.

New Zealand Herald, Volume XL, Issue 12400, 13 October 1903, Page 5

AN IMPORTANT CASE.

NEW ZEALAND LOAN AND MERCANTILE V. REID. [by telegraph.— association.] Wellington, Monday. Argument of the case of the New Zealand Loan and Mercantile Agency Company, .Limited, v. Reid, was begun in the Court of Appeal this morning before the Chief Justice and Judges Williams, Dennistoii, Cooper, and Chapman, this is a case in reference to. dealings between the appellant and respondent iii connection with the Arambho Freezing Works, near Wanganui, which have been the subject Of protracted litigation. In the present action the respondent, William Reid, of Wanganui, was plaintiff. lii the year 1901, Mr. Thomas Mitchell was proprietor of the Aramoho Freezing Works. Mi-. Reid had made advances to Mitchell to the extent of about £16,000- upon a mortgage of the works, and a number of other securities, and had also guaranteed Mitchell's account with the appellant company to the extent of £8000.' Mitchell's total indebtedness to the appellant company was about £22,000, guaranteed to the extent of £8000 just mentioned by Reid. At the suggestion of the appellant company E. D. Johnson kid been put in as manager of the freezing works in ! the interests of Reid. Reid alleges that Johnson, although nominally his agent, acted in reality in the" interests of the company. Reid in 1901 entered into agreements by which he sold and transferred all his securities to the appellant company for £16,000, receiving £8000 in cash, and being released from his guarantee for £8000. This meant accepting a loss of £8000 on his total transactions with and on account of Mitchell. Reid alleges that his security was in fact sufficient, ana that he was induced to.sell, transfer, and to submit to a loss of £8000 by fraudulent misrepresentation on the part of Johnson, acting in conjunction with Stevenson, local manager of the appellant company ; Johnson, working upon his (Reid's) fears, misrepresenting to him the condition of Mitchell's business and concealing from him circumstances which greatly improved Mitchell's position, and the value of his (Reid's) security. Reid, therefore, claimed chat the sale and transfer of his securities should be set aside. The case was heard at great

length before Mr. Justee Edwards, sitting without a jury, in December last, and further in March 'and April of this year. Judge Edwards in .May last delivered an elaborate judgment, reviewing the facts at great length, and finding the charges of fraud and misrepresentation to have been established, His Honor made a decree setting aside the sa!e and transfer of the securities to the appellant company, with costs £300, and disbursements. The company now appeals from this decision, Messrs. H. D. Bell and W. H. Barnicoat and Dr. Findlay appearing lor the appellant company, and Messrs. Chapman and Skcrrett for the respondent. Argument is expected to occupy the whole of the present week.