BANK MANAGER SUED.

New Zealand Herald, Volume LXV, Issue 19986, 30 June 1928, Page 13

BANK MANAGER SUED.

CLAIM MADE FOR £2500.

REPRESENTATIONS QUESTIONED AN ALLEGATION OF FRAUD. [BY TELEGRAPH. —OWN CORRESPONDENT ] CHRISTCHURCH. Friday. A claim for £2500 damages for alleged misrepresentation in the matter of certain guarantees- came before Mr. Justice Adams in the Supreme Court to-day. when legal argument was heard. The plaintiff was Harry Digby James, printer, Greymouth (Mr. J. A. Murdoch and Mr. J. W. Hannan), and the defendant, Edward Ernest Bayly Mabin, bank manager, Nelson (Mr. M. Myers, K.C., and Mr. W. F. Ward).

The statement of claim set out that, when Mabin was manager of the Bank of New South Wales at Greymouth he advised James to guarantee the account of E J. Rundlc and Company, timber merchants.

In September last the bank demanded from James and two other guarantors the payment of £32,000. To secure a release of his liability James paid the bank £2500. The company was unable to pay that sum to James.

James alleged that to induce him to enter Into the guarantee Mabin fraudulently and falsely represented that the company's financial position was quite sound. He had discovered since that the representations made to him by Mabin were untrue, and that Mabin's advice was given negligently, carelessly and recklessly. He therefore claimed £2500. Submissions by Counsel. Mr. Myers said that if the case went to trial it would involve great expense, and it appeared to defendant's advisers that there was no case to answer. He submitted that tho matter could be disposed of by the application of well-known elementary principles of law, without the citation of a single authority. The case was based on fraud alone, and could not be based on anything else. Mabin, he said, was not advising James in regard to an investment, but was inducing him to enter into a contract with the bank. James' case was that Mabin induced him to sign the guarantee by fraudulent misrepresentation. James therefore was not liable to the bank, and need not have paid tho £2500, which he had chosen to pay voluntarily. The whole cause of action had gone. Judge Reserves Decision. Mr. Murdoch, in reply, contended that a quasi-contractual relationship existed between the plaintiff and the defendant, through the latter approaching the former and inducing him to sign the guarantees. Counsel contended that Mabin acted beyond the scope of his authority as manager of the Greymouth branch. When he found that he was in a difficult position he obtained the guarantee for his personal protection. His Honor: Do you say that tho guarantee was obtained by fraud ? Mr. Murdoch: Yes, Your Honor. His Honor: The main answer to that is that if it is fraud, the bank could not recover a penny from the guarantor. If that is so, James' payment of £2500 to the bank was voluntary. Do you say it was fraud, dissociated from the bank ?

"Yes, Your Honor." Mr. Hannan said there was no allegation in the statement of claim that Mabin made his statements for the bank, or acted as the bank's agent. Mabin went far beyond a bank manager's doty." The statements complained of were made by Mabin before the signing of the guarantee. His Honor reserved his decision.