SALE OF A HOTEL.

New Zealand Herald, Volume LXIX, Issue 21164, 22 April 1932, Page 12

SALE OF A HOTEL.

CLAIM FOR £2OOO DAMAGES. ALLEGED MISREPRESENTATION. QUESTION OF WEEKLY TAKINGS. The hearing of the action in which John O'Sullivan, hotolkceper, of Mangawai, alleges misrepresentation by Haywarrl Charles Subritzky, hotelkeeper, of Auckland, in regard (o the sale of the Mangawai Hotel in April, 1930, was continned in tho Supreme Court yesteiday before Mr. Justico llerdman. The plaintiff claims tho cancellation of a mortgage for £1650 and £750 damages, or in the alternative, £2OOO damages. The sale price of tho hotel was £BOOO, of which plaintiff paid £6350 in cash. Continuing his evidence yesterday the plaintiff said Subritzky and his solicitor repeatedly stated to hiin that tho takings of the hotel were £IOO a week for tho wholo year. In his first week the takings were £76; for the first six months they averaged £46, and for the second six months £54. The total for the third six months was £779 find for the fourth £B3O. Ho spent altogether £IOOO in repairs and improvements. Ho was prepared to lose this if he could find a purchaser at £BOOO, but ho had failed to sell oven at £6OOO. Cross-examined, tho plaintiff said the hotel business had fallen off greatly in tho past year or so, perhaps by 50 per cent, in some cases. Ilis Honor: Is that due to hard times, or to people brewing their own beer? Plaintiff: I don't know, sir. A Census ol Glasses. Cyril Albert Brown, land salesman, gave evidence regarding the form of authority to sell which he had made out at Subritzky's dictation in favour of the agents. This stated that the takings were £lO5 a week from December to March. The witness said he heard Subritzky say in O'Sullivan's presence that the takings were £IOO a week. Tho takings were represented throughout as £IOO a week. Thomas Davics, hotel valuer, stated that lie had valued the stock, etc., in the hotel and his assessment for the liquor was £144, for groceries in the storo £42, making, with fuel and other sundries, £203. Furniture, chattels and livestock brought tho grand total to £489. The witness gavo an inventory of the glasses (45) on tho bar shelves. Tlaintiff's Counsel: Do you consider that £IOO worth of liquor a week could bo consumed in .those glasses ? His Honor: It depends on the speed. They may bo very thirsty up there. The witness said that if all the liquor ordered were consumed, tho takings would average a little over £47 a week. Thomas Carter, formerly barman and porter at the hotel, said no books wcic kept by Subritzky, who paid a good many accounts out of the till. Misrepresentation Denied.

On tho conclusion of evidence for tho plaintiff, counsel for the defence moved for a non-suit on the ground that there wi>s 110 proof of fraud, and in particular no proof that, if the takings were represented as £IOO a week, Subntzky knew that the representation was untrue. Such a representation, counsel submitted, was consistent with an honest mistake. Tho non-suit point was reserved. Counsel said the defence was a complete denial of tlio alleged statements. When the defendant went to Mangawai the roads were ill very poor condition, but as a result of his efforts and those of others metalled road connections with Auckland and with tho railway wcro obtained. This led to an increase in traffic, and in the last few years of his occupation tho hotel began to pay. Early in 1930 his mortgage fell duo. Tho mortgagee not only called it up, hut began proceedings to recover the capital sum. Subritzky went to Auckland and consulted his solicitor, and they both went to tho bank. It was agreed that in the event of further difficulty the bank would take over the mortgage, at least temporarily. In filling in tho agents form of authority to sell, defendant inserted tho words, "£4500, just arranged, quite innocently, because to him that represontod the position at the time. The statement on the form that the weekly takings were £lO5 from December to March was also strictly true. They had amounted to that in the whole period of his dealings with the bank. Hearing Adjourned.

Thoro were many conversations, and O'Sullivan was told repeatedly that there wero no books and that the exact takings were unknown. Subritzky would say that ho gave a rough but approximately correct estimate, that they were £3O a week throughout tho year, and that £IOO a week was never discussed. So f;ir from "buying a pig in a poke, O'Sullivan was given every assistance in making the fullest independent inquiries of banks, the Northern Steamship Company and the firms which had supplied liquor to (lie. hotel. There was evidence that lie did inquire. O'Sullivan was in occupation of tho hotel for many weeks before the monetary transactions wero complete, but ho mado no complaint of inadequate takings. When lie, appeared in the Magistrate's Court to claim the protection of tho Mortgagors' llelief Act his attitude wa s that, if ho were, given relief lie would be able to settle with Snbrif/.kv. It was only after failing to sell that lie suddenly issued a writ and filed a statement of claim containing seven allegations of fraud. The hearing was adjourned until next Thursday.