SUPREME COURT—CIVIL SITTINGS

New Zealand Times, Volume XXIX, Issue 4235, 16 October 1874, Page 3

SUPREME COURT—CIVIL SITTINGS

Thursday, October 15. (Before His Honor Mr. Justice Johnston and a Jury of Twelve.) GRACE V. DIVER. Mr. Travers for the plaintiff, and the At-torney-General and Mr. Izard for the defendant. This was an action for ejectment from certain premises on the reclaimed land, which had been built by the plaintiff and leased to the defendant under certain conditions incorporated in a deed of partnership between the parties to the suit, on the grounds that a subsequent dissolution of that partnership terminated the tenancy under its original terms. M. S. Grace, M.D., sworn, stated : Last year about July I entered into partnership with defendant for five years. I erected a house on part of tho reclaimed land for the purpose of carrying on the business, and for Hr. Diver to occupy. I agreed to date occupation from 15th October. Before he went into occupation ho agreed to pay me rent at the rate of 8 per cent, on the cost of tho purchase, and T2J per cent, on the value of the perishable material. It was ultimately agreed that he should pay me £llO per annum. The occupation was to continue, if convenient for the business, during the whole term of partnership ; but in any case it was to continue for two and a-half years under the partnership. The partnership was determined by mutual consent on the 31st March. There was an adjustment of accounts, which was submitted to Mr, O'Shea. Prior to the adjustment, Mr. O’Shea came to me with a document in Dr. Diver’s writing. Mr. O’Shea said “ I come to you with a power to settle with you tho ao-

counts, and Dr. ■ Diver requests me to make arrangement by which he may continue in occupancy of the house after the dissolution of partnership.” I said, “You do not know the man you are dealing with. He will repudiate anything you do under that power Fetch me a power of attorney and X will deal with you.” I then said, “ I will go down with you and settle these matters to your satisfaction and his.” I went down with O’Shea to Dr. Diver’s house. I said, “Mr. O'Shea informs me that you wish I should purchase your share of the accounts. You’re a difficult man to deal with ; I would have offered to do this before, but there is a bill of yours coming due in the Union Bank, and if you dishonor it I’m liable. If you’ll agree to have the bill redeemed at once out of the money coming to you, I’ll purchase and settle the thing at once.” He agreed, and I asked him to wind up the accounts as rapidly as he could; to send them up to me that I might go through them; and then I would make an offer to buy them. Ho agreed to that, and seemed pleased about it. I said, “That settles that. Mr. O’Shea tells me you wish to continue in occupancy of this house after the dissolution. You know that I built it solely for partnership purposes and to please you. The house is no longer of any value to me; the best thing you can do is to purchase the house, and I’ll give you to the loth April to complete your arrangements.” He agreed to try and do so. I then left. He and Mr. O’Shea came to me in the evening, and I agreed to purchase the accounts, and we adjusted the matter as set forth in the document produced. He was debited then with a half-year’s rent, £55. I handed over Dr. Diver his bill of £75, which was receipted, and other matters were settled. I paid the balance for the accounts, and received a power of attorney to collect. This ended the matter for the time. Dr. Diver told me at the time of dissolution that he thought he had made complete arrangements for the purchase of the house. He came to my house early in April with the receipt for rent in his hand, and asked if I'd make it “ half-year's rent” (an interlineation of the words); the original receipt being only “Received rent, £55." I hesitated, but afterwards made the interlineation. I afterwards instructed Mr. Ben. Smith, early in April, to make an application to defendant. I did not obtain possession on the 15th April, and saw defendant next day. I told him I was astonished he had made no arrangement with Smith, and more astonished that he should claim to continue in occupancy of the house on the strength of the interlineation in the receipt. I warned him that if he persisted in his course I should have to try and eject him. He declared to me that he had no intention of doing anything of the kind ; that his only desire was to continue in occupancy of the house. He claimed no right whatever ; he merely desired to occupy the house. I said, “You can occupy the house for as long or short a time as you like, but make me a reasonable offer in writing.” He said he would write to me and make an offer. He did not do so. I afterwards ■wrote to him (letter produced dated May 9), to which I received a reply (produced), merely acknowledging receipt of letter. Cross-examined by the Attorney-General ; The arrangement relative to the house was made whilst the partnership was being arranged. There was no original agreement that I was to purchase the house for Dr. Diver, and that he was to pay me interest and the principal of outlay in a certain time. lam quite sure that the terms, as stated, were to be £llO per annum for rent. I agreed that Dr. Diver should be allowed a bonus of £SO a year, to be deducted from his rent on certain conditions, which were that he would make up for the allowance by attention and assiduity to business, and furthermore that he should go on zealously in the partnership to the end of the term of five years. This was said to Mr. Gilligan. The proposal by Mr. O'Shea was in reference to occupancy, and I introduced the subject of purchase. The actual settlement took place at Mr. Izard’s office. The interlineation in the receipt did not take place at Mr. Izard’s office. It was early in April, before the 16th, when I gave instructions to Mr. Ben. Smith. The conversation with Dr. Diver was, I think, before writing my letter dated 16th April ; lam not sure. I wrote the letter produced some time in May ; it was before that of the 9th. I did not have a personal interview with Dr. Diver after the 16th April. At that interview he. did not assert any right to continue in occupancy. I began to be doubtful after the interview about his intentions. It was his uncomfortable manner which made me doubtful. He admitted that it would be grossly dishonorable to try to continue occupancy on the strength of the interlineation in the receipt. I may have said at the time of the dissolution that the rent should be at its original figure, instead of at the deduction of £SO. We agreed that the bonus was not to continue, because he had not kept up to the terms of the partnership agreement.

Re-examined : On the settlement I paid over money to Dr. Diver. James O’Shea, sworn, stated : I am a merchant, residing in Wellington. In March last I assisted in adjusting some accounts between Drs. Diver and Grace. It was the former who first spoke to me on the matter. Dr. Diver spoke to me about the house he was occupying. I said that if I was to arbitrate he ought not to make any claim on the house ; that the existing lease ceased with the dissolution. He told me that Grace was going to turn him out and was disagreeable. I said I thought it could be adjusted. He authorised mo next day to settle the matter in any way I could with Dr. Grace. He told mo the terms of the lease—that there was a house built by Grace for the firm, which was to be occupied by him (Diver) during the partnership. He said the rent was £llO.

Cross-examined by the Attorney-General : I was not acting as a paid agent between the parties. I was acting as a sort of amicable arbitrator between them. In speaking on the dissolution, I said I thought Dr. Grace ought either to let or sell the house to Dr. Diver, being under the impression that the former wanted to turn the latter out without offering terms.

J. A. N. Salmon ; I am a clerk, in the employ of Benjamin Smith and Co. In May last I made an application to Dr. Diver, for Dr. Grace, for payment of an account for rent. He said, “ Tell Urn I won’t pay it ; to go to my solicitor, Mr. Izard.” I also demanded possession of the premises. He said, “Tell him not to bother me.”

James Gilligan, a sheep farmer, sworn, stated : I had a conversation with Dr. Diver during the partnership, with reference to the premises he was occupying. He said he thought it very hard that he was occupying the house for the benefit of the partnership—that Dr. Grace was deriving as much benefit as he was, and that therefore he ought to bear a part of the expense of the rental. I think I suggested that I could get Dr. Grace to make some reduction in the rent. He thanked mo, saying I should do him a great favor. I spoke to Dr. Grace on the subject, and proposed to him a reduction, which he agreed to, but saying that he would expect Dr. Diver to give mere time to the business. I afterwards told Dr. Diver that Dr. Grace would make a reduction of £SO a-ycar on condition that more attention should be given to the business. Benjamin Smith, sworn, stated ; I am an estate agent. I consider £l5O per annum a fair rental for the house occupied by Dr. Diver.

Cross-examined; I saw Dr. Diver on the subject of the house prior to the 15th of May, about the rent and giving up possession of the house. I told Dr. Diver that Dr. Grace insisted on a higher rental—that rental being £l5O a year. He told me he had an agreement for a much lower rental, and the term had not expired. I did not tell Dr. Diver that Dr. Grace said he was willing to give six mouths’ notice.

Re-examined ; Dr. Grace never told me that ho would have to give six months’ notice, nor that he was willing to do so. This closed the case for tho plaintiff. The Attorney-General submitted that the plaintiff must bo nonsuited. There was no evidence of a notice to quit, and there was eyidonco of a monthly tenancy, and the plaintiff ought to have proved a notice subsequent to the 15th of May sufficient to end a tenancy. Tho learned gentleman then went on with the case for the defendant, contending

that the tenancy was for two and a-half years, and that there was nothing to’show that the dissolution of partnership terminated the lease for that period ; that was only assumed by Dr. Grace, and his evidence as to the understanding about Dr. Diver going out on the 15th of April was not to be relied upon ; it did not show that the original terms of the lease had terminated with the partnership. Dr. Diver, M.R.C.S., sworn, stated: In July, 1873, I went into partnership with Dr. Grace. Previous to going into partnership arrangements were made about a house. Dr.. Grace was to buy a section on the reclaimed land, and on it was to build a house, subject to my approval. I was to pay him 10 per cent, on the outlay. Afterwards Dr. Grace said that the original terms would bo departed from, and that I should have a lease for two and a-half years, and I should pay rental at the rate of 10 per cent, on the outlay. I was to have the house for two and a-half years, by the second arrangement. The house was built and finished according to my plans, in October, 1873. I gave orders for furnishing. Dr. Grace came to the house and agreed that the rent should commence from the 4th October. I afterwards was dissatisfied with the rent, with my income, and with the amount of work. I expressed this dissatisfaction to Dr. Grace. He never complained about me neglecting the practice. An arrangement was come to by which the rent was reduced from £llO to £6O per annum. This reduction was not accorded on a condition that I should pay more attention to the practice. We eventually agreed to dissolve partnership. I afterwards spoke to Mr. O’Shea about matters, but he did not say that I should give up the house owing to the dissolution. Dr. Grace afterwards said that he had no further use for the house; that he had placed it in Mr. Smith’s hands for sale; and it would be to my advantage to buy it. Dr. Grace brought the receipt for rent, signed, to Mr. Izard's office, when the deed of dissolution was signed. Dr. Grace asked me, the day before the receipt was signed, to pay the rent, which would be due in fifteen days. He said, “ Of course you will not take advantage of what Mr. Gilligan had arranged about the reduction.” Isaid, “Certainlynot”—aslthought the original rent a fair one. The next day I handed him the receipt, saying, “ Doctor, you have forgotten to say for how long this rent is paid. You may say it’s a month, I may say it’s twelve.” He said, “I beg your pardon,” and immediately made the interlineation. I never afterwards went to Dr. Grace’s house, and had no further conversation about the receipt. The words “ half year ” were put in at the time that he originally handed me the receipt. I never asked him for a fresh receipt. I had a conversation with Dr. Grace after this, in April. He did not refer to the receipt. He did not say he was astonished at my claiming occupancy on the strength of the interlineation in the receipt, and did not warn me that I could not occupy on that interlineation. He said he should take steps to eject me, because Mr. Smith told him I wanted six mouths’ notice. I said, “You know the house had nothing to do with the partnership. You know I was to have the house for years. I require legal notice.” He said, “I shall not give you six months’ notice, you had better purchase the house ; if you don’t I shall take you to the Supreme Court and get you ejected.” I said I did not wish to be threatened, and anything further he had to say I should be glad to have in writing. He did not say it would be dishonorable in me to claim occupancy. He went away very excited. I did not say I would write to him, making an offer to continue occupancy. I never agreed to become a monthly tenant, from 15th April to 15 th May. Mr. Travers cross-examined at some length.

O. B. Izard : I acted as solicitor for defendant in this matter. I recollect the signing of the dissolution of partnership at my office. I recollect a receipt being then given. Some remark was made by Dr. Diver to Dr. Grace about an omission in the receipt ; but I cannot say what the words were. The receipt was handed back to Dr. Grace, and I believe a correction was made.

Cross-examined by Mr. Travers: I am sure the alteration was in the receipt and not in the cheque. Tins closed the case for the defendant. The Attorney-General then addressed the jury. Mr. Travers replied, in a lengthy address. His Honor then summed-up, going over the evidence at considerable length. He also remarked on the distinct conflict in the evidence of the plaintiff and the defendant on several points of great importance, and the disagreeable duty the jury had in deciding on this difference.

The most important issues for the consideration of the jury were Was the defendant, at the commencement of this action, tenant of the plaintiff of the said land and premises from year to year, from the 15th day of October, 1873, upon the terms of the said agreement ? Was the sum of £55 paid and received on the understanding that the tenancy was fully to conclude on the 15th April?

After a retirement of about four hours, the jury were unable to agree upon a verdict and were discharged. The Court then adjourned until ten o’clock next day.