INTERESTING CASE

New Zealand Times, Volume XXXIII, Issue 7448, 24 May 1911, Page 1

INTERESTING CASE

TRAVELLER’S ENGAGEMENT GUARANTOR’S LIABILITY- FOR FIDELITY. His Worship Mr W. G. Riddell, S.M., delivered his reserved judgment in the Magistrate’s. Court yesterday in a civil action which presented some rather unusual features. The Southern Sales, Ltd., carrying on business in Wellington, sued John Clark, clerk, cf Christchurch, for .£53 17s 3d in connection with tho employment by the plaintiff company of Charles 1 Graham Lamb as a traveller- The claim was based on the-written', guarantee,end promise of the defendant, bearing tho date of August llttb, 1310, consenting to be responsible to \ the company -for the fidelity of Lamb during - fho period covered by an) agreementbetween the plaintiffs -and. Lamb,, and for the repayment of any moneyS 'Jor which he (Lamb) might become indebted to the‘plaintiffs. ■ Lamb,' it appeared,’-.had answered an advertisement which ajmeared ,in 1 the Christchurch papers, find, on' ’coming -to Wellington was employed, by the boiitaern Sales, Ltd., to travel in the Canterbury district for tbo safe of veterinary outfits to farmers, and ■ fori, these, sales he lyna to I'oceivo commission, but to pay his own travelling -expenses.. A condition of his employmoJitcW^s-that he should obtain a guarantee Tot* the sum of o£!C0 ns security for his 'fidelity, and the defendant went bond forVhim* On receipt by the company of orders, the outfits were forwarded, to' Lamb, their cost, less commission, debited to | aim. His instructions were to", obtain payment on delivery, ami 'to forward same to tho company, the money: so '-received to bo credited l to his account. On December . sth Lamb : resigned his position, and, as several farmers received outfits had >not paid for them, tho plaintiffs now sued the defendant - for the full amount to the debit of Lamb's account—«fis2.l7s 3d.. >, X EMPLOYEES LIABILITY. - . Prom the evidence, said his Worship, it would seem that Lamb -paid,, no particular attention to the pauses 'of the agreement at tbe time be triads his arrangements with tbe plaintiffs’ manager. The only clause they appeared to have 1 discussed was. clause 11, which, dealt with 1 the employee’s remuneration .\ 1 Lamb said he understood ■ from the plaintiffs manager that he had to'receive XI <per week, as well as commission on. all butfito-sold. Plaintiffs’.. manager -denied this, 1 but Lamb might, easily bate come-tb-such a conclusion unless he read the.Y.'clause carefully. A perusal of'it showed-that the employee should not, while he. was in— the" company’s.- service, - receive- \m' amount less than XI. per.week- If -Lamb had exercised more care over the agree! meat he must have noticed that the wording of clause 11 was peculiar and. ■called for some consideration and inquiry before acceptance. ■ '*■ Clause 3 of the agreement, his Worshin continued, stated that the employee should bo responsible for any . damage or claim which might arise against 1 tho company through the cause .or act of the employee, and should indemnify tho company for any loss or expenses caused thereby, and be financially, responsible for all goods or other property under his control whether remitted for or not; but the company should allow full -credit for all grodi returned in good condition to the office, and should have the right to recall any goods in hand, whether remitted for or not. Lamb did not seem to have been informed of his liability under this clause, but on the other hand he did not ex) hibit much concern with regard to- his own interests by signing a document’of the. contents of which he was ignorant. Lamb gave no particulars of his interview with the defendant when he handed him the guarantee for signature ex, cept that he did not produce the agreement. and there / was no 1 evidence tha t the defendant made anv inquiry as to its conditions before signing the guarantee. ■ , THE DEFENCE. 1 For the defence it was argued:—(l) That before plaintiffs could succeed it imust be shown that Clark knew nil tbe .'particulars-of their scheme >of employment for Lamh, as the contract u’as one of guarantee, and therefore it-was the duty of tho person guaranteed to reveal to the guarantor every material fact which would affect his mind when deciding whether he would or would not become a party to the contract. (2) That ns plaintiffs admitted there was no complaint against Lamb’s integrity, there had been no breach of fidelity- on his part. (3) That as the agreement was never shown to defendant he was entitled to assume that it was an ordinary business agreement to employ and not an extraordinary one. '(4), That the contract of employment .was entered into' before -the guarantee, and as .Lamb was already in the plaintiffs’ employ there was no occasion for the, guarantee. 1 THE MAGISTRATE’S VIEWWith regard to the fourth 'objection his "Worship thought it Could jio disposed of by the fact that although the agrecm eh t cf employment was signed on August 13th Lamb did not commence work with the plaintiff company till September Ist—after the guarantee was signed. The contract of employment depended upon the guarantee, and until Lamb obtained it from Clark) he"., could not commence'work. " He did ‘hot think tho fact that the guarantee was-* signed at a. date later.'than the contractSof employment (although shown as of even date) affected defendant’s liability!under, it. To the third objection it mUiht be said that there was no arrangement between plaintiffs’. manager and La tub to suppress tho terms of the agreement from the defendant- The guarantor ! referred to the agreement of employment, and that fact, haying been brought under the_ notice of defendant, a ‘duty;. lay upon him for. his own protection'toxinquire into its-terms. The guarantee Was for Lamb’s benefit as well -as - the plaintiffs’. and as the agreement was in his possession a ..similar duty was cast upon him to show it to tho ‘ defendant. In') view of defendant’s carelessness with regard to its" contents, bis Worship doubted if he could 1 now say that plaintiffs should have actively placed its -terms before him prior to his signing the guarantee. With regard ,to the first and second objections it conld hardly be said -that the contract was . one which guaranteed only the fidelity of Lamb. Its language was plain enough to show its "connection with Lamb’s agreement of employments JUDGMENT FOB PLAINTIFF. tV After reviewing tho law" at'"length, his Worship -said: “I do not thinkthis failure of Lamb to acquaint defendant with all tho terms of bis agreementof) employment is. a suppression of fact-

amounting to a misrepresentation of.,.fact on the part of plaintiff sufficient to avoid the guarantee.' , = Judgment; was for plaintiff for tho amount claimed‘and costs .£5 I2s. i Mr W. H. D. Bell appeared for plaintiffs, and Mr Morisoh for defendant. ■■ >