THE COURTS.

New Zealand Mail, Issue 867, 12 October 1888, Page 22

THE COURTS.

SUPREME COURT.

Judgment of Prendergast, C.J. Delivered

23th September, 18SS. Crawford and Others v. Stevenson. This action was tried before mo at Gisborne without a jury. In June, ISS4, defendant sold the goodwill of the Roseland Hotel—goodwill and stock —to one Beresford, and granted land lease of the hotel for a balance of £387 of the purchase money ; tho defendant was secured by a bill of sale over furniture and stock-in-trade, by way of mortgage ; by that instrument Beresford covenanted to insure the chattels against tire, in the name of the mortgagee, to an amount to cover the amount secured by the bill of sale— that is, £387 and interest.

Beresford insured in' the name of the defendant in the full insurable value—£740 — and that insurance had .been kept up, first by Beresford, and subsequently by his assignees. The policy is dattd 1885. In June, 1884, Beresford gave, subject to the defendant’s security, a bill of sale over the same chattels, as a mortgage to the plaintiff, Matthewson, to secure present and future advances m_ade- by him. Matthewson’s bill of sale contained a covenant by Beresfoid to insure, but it was not provided that the insurance should be in Matthewson’s name. Beresford did not obtain any other policy than the one above-mentioned —that in the defendant’s name. There is no evidence of any express arrangement between the defendant and Beresford.

In ISS6, Beresford, by arrangement with the plaintiffs, on being under heavy pecuniary liabilities to them, partly for moneys ad. vanced to pay the defendant rent and interest, sold out (subject, it is to be presumed, to tbe security given to the defendant) to one Macintosh. In effecting that transaction, Beresford’s security toi Matthewson was discharged, and Mackintosh, the buyer, gave a security by bill of sale (subject to the defendant’s) to both the plaintiffs. In this security is a covenant by Mackintosh to inBure in plaintiffs’names. This was not done. Not long after Macintosh sold out to one Waugh, and thou Macintosh’s security to the plaintiffs was discharged, and a new security given, subject to the defendant’s, by Waugh to the plaintiffs ; in this is a covenant by Waugh to insure in the names of the plaintiffs ; this was not done. Afiroocourred in January, 188 S, and most of the chattels destroyed. The policy was, as already mentioned, in tho defendant’s name, and was for the full insurable value. At the time of the fire the amount due to the defendant under the bill of sale, from Beresford, was £3S7 Us 9d for principal ; interest had been paid up to the 31st December, 18S7.

The defendant and his assignee, Chrisp, after much correspondence and objection on the part of the plaintiffs, settled with the insurers for a sum of £SOO instead of £740, the amount insured, on the alleged grounds of over insurance, aud that some articles insured were not damaged by the fire ; amongst others, a piano specifically insured. The plaintiffs clairii against the defendant that they are entitled to the difference between the amount insured, £740, and tho amount of the defendant’s secured debt and interest ; or, if the settlement with the Company cannot be impeached, then the difference between the amount actually received from the insurers and tho amouut of the defendant’s secured debt and interest. The defendant contends that he is not accountable to the plaintiffs for tho insurance money; that if ho is j the settlement with the insurers was not improper, and that as to the difference between tho amountreceived from the insurance and tho defendant’s secured debt, a larger amount was due to the defendant for rent of the hotel in which the chattels were, and that he has a right to retain the moneys to cover that indebtedness. It appears that on the sale by the debt to Beresford, the defendant made him a lease of the hotel for seven years, from June, 18S4, at £395 per annum, payable 2nd of September, December,. March, and June. There is a covenant against assigning or underletting without previous consent of the assessor, in writing. In July, 18S6, Beresford, the lessee, with oonsent of the defendant, assigned the lease to Macintosh, the, purchaser of the chattels, and Macintosh covenanted with Beresford to pay the rent. In July, 1886, Macintosh made a mortgage to the plaintiffs of the hotel, by way of underlease, for the whole term leas one day. It does not appear that any consent in 1 writing was given by the defendant to this

under-lease, though no doubt lie was well aware of it.

1 In October, ISS6, Macintosh, with oonsent ' of the defendant, assigned to Waugh the lease, subject to the plaintiff’s mortgage. At the time of the fire, a sum of about £7O wa3 due to the defendant for rent, aud subsequently other rent became due. The defendant claims not only to set off all rent iu arrear against the moneys received under the policy, but also by counter-claim to recover from tho plaintiffs a balance beyond that, as rent due up to July, 1888. This claim against the plaintiffs for rent is made umhr some supposed transaction in the nature of an agreement for an assignment between Beresford and tbe plaintiffs. In my opinion, the plaintiffs cannot be deemed to have held, and they never, iu fact, held any relation to the demised proparty, other than as appears from the instruments put in, that i 3 that they never occupied any other position than sub-lessees, and consequently did not become liable to the defendant for any rent, and consequently tho plaintiffs are entitled to judgment on the counter-claim. For the same reasons I conclude that the plaintiffs were never liable to the defendant for any rent prior to the tire. It is true that when Beresford went out aud Macintosh came iu, there was a settlement of accounts as to the amouut due from Beresford to Stevenson. The memoraudum of account (Exhibit A) treats the plaintiffs as debtor to the defendant, and that subsequently, after tho assignment of the demised premises, first to Macintosh and then to Waugh, tho defendant applied to tho plaintiffs for the rent, and they paid it. But this amounts to nothing in the face of the instruments of assignment and sub-lease, and is accounted for by the fact that the plaintiffs were acting really as agents for the assignee of the lease, they being the persons who supplied him with spirits and beer, and of course interested in that respect and as mortgagees in seeing that toe rent and interest were duly paid, aud thus the lease preserved from forfeiture, and the security over the chattels preserved.

If the plaintiffs’ right to receive any portion of the insurauce money depended upon their having assumed a liability for Beresford’s debt, I should think that the evidence failed to show that they took upon themselves that liability. They never made themselves personally liable to the defendant for the payment of the debt due from Beresford, and secured by the bill of sale ; the chattels remained liable ; and as second mortgages, that is under the bill of sale from Waugh, their security was subject to the first, but the evidence does not establish, that they had any personal liability. The letter of the defendant of 28th July, (886, is merely a promise that he will not exeroiso the power of sale without reasonable notice to the plaintiffs. There was never any suggestion of a personal liability on the plaintiffs’ part until tho statement of claim. The conduct of the parties up to that time is quite consistent with tho plaintifis having no other iuterest in th© chattels than as mortgagees from Waugh, and as such subject to the prior mortgage to- the defendant. It is true that the defendant, as well as the plaintifis, says in his evidence that the plaintiffs took over the debt from Beresford, but he also says that they took over the lease, which would mean that they agreed to make themselves liable for the rent. They, however, deny that they ever made themselves liable for the rent. I conclude that this evidence amounts only to a statement of what they inferred, rather than a statement of what actually was said. However, except verbally, it is not pretended that the plain, tiffs ‘ took over ’ the debt. If is be true that the plaintiffs were accepted as debtors for the sum owing by Beresford, and lie was discharged, then the defendant’s security was gone. I am satisfied that it was never intended that the plaintiffs should bo personally liable. They certainly never gave a written guarantee, aud, in my opinion, the evidence altogether fails to show that they were accepted in lieu of Beresford. The position, then, of the parties is this—the first mortgagee holds the policy iu his own name, effected by tbe mortgagor or ha assignees, in pursuance of an agreement to that effect. The premiums are paid by the mortgagor or bis assignees, and the amount insured was laigely in excess of the sum covenanted for between the defendant and Beresford. The plaintiffs, as second mortgagees, do not insist upon the covenant with thorn for insurance being effected, because the policy already existing being for the full insurable value was supposed by them and their assignors and the defendant to be a sufficient insurance for all parties. I accept the evidence of Mr Matthewson on this matter. He says it was expressly agreed with Stevenson that he was to hold the policy for the benefit of all parties ; that no doubt means for Stevenson himßelf as to his security, for the plaintiffs as to their security, and for the mortgagor or his assignees afterwards. Such being the case, the defendant is, I think, accountable to the plaintiffs for the balance, after satisfying the defendant’s secured debt and interest. I think it would be so where the premiums are paid by the assignee of the mortgagor without any express agreement, see May on Insurance, par, 449 ; it niust be bo where the mortgagee has agreed that it shall be so, sec per Bowen, L.J., in Castellan v. Preston and others, 52 L.J. 2 B. 366, at p. 375, cited in Somerville v. Australian Mercantile Union Insurance Co., L.R., N.Z., vol. vi., 109. The amount due to the defendant under the security at the time of the receipt of the insurance money for interest was £9 16s I Id ; this sum, together with the debt, £387 Us 9d, iu all £397 8s Bd,the defendant is clearly entitled to retain. As to the difference between that amount and the £SOO, he must account to the plaintiffs. The secured chattels insured were not a security to the defendant forthe rent. It istrne that ifthev had not been destroyed by fire, they might by means of a destraint have become security. As tc tbe claim of the plaintiffs to make tho defendant responsible for the difference between the insured amount and the £SOO actually received, I think the evidence shows that.a considerable reduction, whether to the extent of £240 is not clear, was the right of the insurance company. I think that the defendant and his assignee, Mr Chrisp, were perhaps somewhat too peremptory with the plaintiffs as to calling upon them for the indemnity if the offer of the company was nol

accepted ; on the other hand, I think the plaintiffs wei;e dilatory and to blame in regard to furnishing the . office with reliable grounds for the claim for the full amount of the insurance, and, on the.whole, with such evidence as is before me, I think the plaintiffs have not made out such a case of neglect or misconduct as would justify me in charging them with the difference (if any) between the actual value of the goods destroyed and tho amount accepted by them ; indeed, I am not satisfied that the actual value was greater than the amount accepted. I certainly believe it to be possible that the insurers might possibly have paid something more rather than go to trial, but that does not conclude the matter. -Treating the defendant as a trustee, I think HeT wasLnot guilty of such default as to render him liable to aecount beyond the £SOO actually received. Judgment is therefore for the plaintiff for the sum of £lO2 Ils 4d, and costa on.tho lowest scale, and judgment for the plaintiffs in the action on the defendant’s counterclaim without costs;

CRIMINAL SITTINGS.' Thursday, October 4. (Before his Honour the Chief Justice.) FORGERY AND UTTERING. George McOoinbe pleaded not guilty to forging and uttering a cheque for L 6 10s, purporting to be drawn by John McMenenian. Mr Gully prosecuted on behalf of the Crown,-’and'Mr Bunny was for the defence. The evidence was similar to that taken in the lower Court, and the jury, after a short -retirement, found the prisoner guilty. He also pleaded guilty to two other-..charges of forging similar cheques, and was sentenced to two years’ imprisonment on . each charge, the sentences to run concurrently. INDECENT EXPOSURE. Frank Masters, alias Charles Smith,’ alias Charles ' Johnston, alias George Masters, pleaded nob guilty to a charge of having exposed liis person on the 31st August last, in the presence of a number of young childrep, J. on the Wellington terrace. Mr Tanner was for the defence. Evidence having been taken, the prisoner was found guilty. v ; His Honour said .there was a provision in the 24th section of ' the Police Offences Act, which provided that for such an offence as this a person could be sentenced to a whipping, but not. unless whipping had been recommended by the jury. This, his Honour remarked, was, he believed, tho first time in the Colony that the question had-come up; and he intended to ask the jury whether they would recommend that the prisoner be whipped. - . The prisoner, through his counsel, having admitted three previous convictions fora similar offence, the' jury retired again, and, after being absent a few minutes, returned. The foreman said the jury were unanimously opposed to. the prisoner being whipped? - - The prisoner, in answer to the usual question, made a ,statement to. the effect that he was not master of himself when he committed these offences, and knew nothing of them till he was arrested. He urged his Honour to have steps taken to prevent him doing these things again, for he was certain he was not in his right mind when he did them. Mr Tanner suggested that the prisoner should be examined by a doctor before being sentenced:-- ' , His Honour assented to this, remarking that the man was evidently a simpleton. At the same time the public must be protected against such a man, and the pri-* soner himself was v apparently conscious, of that. The Gaol Medical Officer, Dr Johnston, had, however, examined the man and found him sane.' Mr Gully (Crown Prosecutor) said Dr J ohnston’s report was that the man was sane, but of filthy habits. His Honour agreed to defer passing sentence till Saturday morning. He remarked to the prisoner, however, that it would probably not be worse for him to go to gaol than to a lunatic asylum. At the Supreme Court last Friday, before his Honour the Chief Justice, Allan John Gibson and Henry Luther pleaded not guilty to a charge of having, on the 11th August, stolen a cashbox containing £2O in money and some papers, the property of Mary Moynihan. Mr Gully conducted the prosecution. Mr Jellicoe was for the prisoner .Gibson, and Mr Gray for Luther. The charges were taken separately, that against Gibson being heard first. The evidence for ■ the prosecution was similar to that given in the lower Court. "For the defence Mr W. Cable was called to . prove the prisoner’s good character, having known him up till three years ago. Messrs Alexander McDonald, H. Hurrell, and Scanlon, Father Kerrigan and others also testified to the p isoner’s good character-. Caroline Luther, wife of Henry Luther, the other prisoner, gave evidonee to the effect that the prisoner was in her company till 830 on the night the (cashbox was stolen, and then went to bed. Mary Ann Gibson, mother of the prisoner, also deposed that he did.not go out after half-past eight on that night. Henry Luther was examined at some length, his evidence being to the effect that he and Gibson found the Cashbox on a road near the cemetery. He denied that ha was in the Queen’s Hotel on the night in question or at any other time. Charles Johnston, a sailor employed on the wharf, acauainted with Luther, deposed that he was in company with him for some time on the Saturday night in question, and at the time when he and Gibson were alleged to have committed the robbery. As the evidence was not concluded till past eight o’clock, counsel waived their addresses,“and'liis. Honour having summed up, the jury retired at a quarter to nine. At eleven o’clock they were called in, and as the foreman stated that there was no prospect of a verdict ..being decided upon, his Honour ordeied'them to be looked up till tea Ojdock-next morniDg.

the jiify who flrfcfe looked rip on Friday riigHt in the case Of AUan , John Gibfio'n: charged with stealing a cashbox and £2O from the Queen’s Hotel,, returned on Saturday morning, and, as they were still unable to agree, were discharged. The prisoner Silas Pogsley, convicted of stealing a dingy, was admitted to probation for, 12 months. Frank Masters, oonvioted on two oharges of indecent exposure, was presented for sentence at the Supreme Court on Saturday morning. His Honour the Chief, Justice warned the prisoner that unless he reformed he would probably spend' the remainder of his life in gaol. He expressed a hope that the authorities would endeavour to assist tho prisoner, either by keeping him at hard work or by medical treatment. His Honour then sentenced the jjprisouer~ to two years’ imprisonment with hard labour on tho first indictment, and was proceeding to sentence him on the second when Masters fell* down, aud as he was either unable or unwilling to stand, sentence on the second charge was deferred till Monday.. With respect to the prisoner’s sanity, Mr Gully, Crown Prosecutor, said the prosecution .waa satisfied. that the man was not insane m'-the-legaVs’enso of' the word, and Mr Tanner (for the defence) said that as the gaol medical officer refused to oortify to Masters’ insanity he had nothing more to say in the matter. Frank Masters, convicted on two charges of indecent exposure, was presented for sentence before his Honour the Chief Justice on Monday, His Honour (who had on the previous Saturday sentenced the man to two years’ imprisonment on the- first charge) said he was of opinion, after considering the 24th and 28th sections of the Police Offences Act, that the intention of the Legislature was that not more than twelve months’imprisonment should be given, with a flogging, if the jury recommended it. This decision, his Honour was careful to explain, was not arrived at because of any consideration for the prisoner or of any exhibitions-made on Saturday. He was still of opinion that the authorities ought, if necessary, by consults* s tion with persons skilled in such matters, to ascertain whether the prisoner should be specially treated for any derangement of the mind, and whether he was a fit subject for the Lunatic Asylum. The prisoner was then sentenced to twelve months’, imprison, ment with hard labour on each charge, the sentences to run concurrently. The oharge against Allan Gibson of stealing a caahbox and £2O from tho Queen’s Hotel was heard at the Supreme Court on Monday before a fresh jury. The case for the prosecution was.coaoluded, arid, when Mr Jelliooe had summed up (finishing soon after 6 o’clock) it was decided to adjourn the farther hearing of the case till next day. The hearing of the case in which Allan John Gibson was charged with the larceny of a cashbox and £2O from the Queen’s Hotel, was concluded at the Supreme Court on Tuesday before his Honour the Chief Justice. The jury retired at a quarter past 4, and at five minutes to 5 returned their verdict. They found the prisoner not guilty of larceny, and on a second count, charging him with receiving the property, knowing it to bo stolen, they found that the law as laid down by his Honour—namely, that.the jury must, in order to convict, be satisfied that the prisoner had dishonest intention in appropriating the money—would not allow them to find him guilty. The foreman said the jury had no proof that the prisoner had dishonest intention. At this was an acquittal, h : is Honour discharged the prisoner, pointing out to him that the jury evidently thought he had acted dishonestly, and that he had himself to blame for the trouble he had incurred. With reference to the other prisoner, Henry „ Luther, Mr Gully , said he would enter a nolle prosequi. "Mr Gray, who was for the defence, asked- that the njan might be acquitted, and the foreman said the jury were of opinion that Luther was quite innocent. Luther was accordingly discharged. At the Supreme Court Wednesday, before his Honour the Chief J ustice, David Albin Crotty was found not guilty on a, oharge of stealing a gold chain and silver watch, the property of Joshua Herd. The prisoner was defended by Mr Jelliooe., .Richard Cheeseman, charged with uttering a cheque for £1 10s, purporting to, be signed by C. G. Graham, was found the jury recommending him to mercy on account of the smallness of the amount of the oheque. Mr Sunny, who waa for the defence, applied to have the prisoner dealt with under the First Offenders Probation Act, and his Honour deferred sentence until Friday morning, in order that the Probation Officer might report on the case. Robert Crowley was charged with having on the 26th May forged and nttered a cheque for £6 10s, purporting to be signed by Mr Andrew Young. The prisoner, who was defended by Mr Skerrett, was found guilty of forging and uttering the cheque. His Honour sentenced . him to 18 months’ imprisonment.