SUPREME COURT.

Otago Daily Times, Issue 8919, 25 September 1890, Page 4

SUPREME COURT.

: CIVIL SITTINGS. WEDBBBDAY, Skptbmdbb 24. (Before hia Honor Mr Justice Williams,

ROBKRTSON AHD ANOTHER V. lIOWDEH AND OTHUKS. Action to recover £5000 alleged to have been invested negligently and unauthorised!-*. Mr Jelliooe (of Wolllngtoh) appeared on behalf of the plaintiffs, Mary Jane Frances Robertson and Frauk Carlyle Robertson; Mr Hosking on behalf of the defendant, Charles Bttohlo Howden; Sir Bobert Stout, with him Mr Solomon, on behalf of the defendants, Bryan Ceoil Haggitt and William Robertson Ketohen; Mr Chapman on behalf of the defendant, William James Mudie Larnach; and Mr Vraßer on behalf of the defendants, tho Perpetual Trustees, Estate, and Agency Oompany. This ease was resumed at 10.15 a.m.

John Smith, clerk of the Waikouaiti County Counoil, produced valuations of the land in the county oompUed for the Property Tax Commissioner and the Blueskin Road Board.

Mr Haggitt'a oross-exarainatlon was theu continued. In answer to Mr Jellicoe, ho eaid that Baliner's mortgage was prepared In his offlce. When witness spoke to Mr Larnach about tbe application made by Mr Stanford for a loan, he (Mr Lnrnnoh) was oross when he found he oould not get all his own way, and he went away, witness thought, to got Mr John Reid's valuation of the Orakanui property from the National Insurance Oompany, The letter produced, written in 1807, was drawn up by witness's father. After reading it, witnesa could not say that the settlement waß in the colony nt that time. It certainly appeared, however, as It the settlement was here at that time.

To Sir B. Stout i Before witness agreed to give the loan to Stanford he was perfeotly satisfied the security was good and sufficient; he waa almost forced against his will to believe that. Mr Roberteon was informed of the Investment, and made no objection to It.

To Mr Chapman i Mr Larnach was In England at the time Balmer's security waß taken. Witness did not communicate with Mr Larnach's attorney; he did not know he had one here r.t that time.

Robert Loftus Stanford (reoalled), in answer to Mr Jellicoe, said he did not state the previous day that he made no profit out of the land. He never mnde £300 a year out of lt for grazing purposes, Sec, and It was impossible that he could have represented to Mr Haggitt that he did so. He never made profit from butchers or drovers, and never represented to the trmtees that he did. Witneas never had any conversation with Mr Hnggitt about paddooking. Spencer Brent, of the firm of Hnggitt Brothers and Brent, eaid he had been In business since 1871. Witness noted as attorney for Mr Robertson from 1871 to the time of Mr Hobertaon'a death, and had frequent communications from him. On 26th Ootober 1877 Mr Robertson wrote to him, one eliuiße of the letter beiDg to the effeot that both Mr Ketchen and himself would prefer if the fundß were Invested in one sum In landed seourity, Witness received letters from Mr Robertson on the 14th March 1879, on the 10th September 1879, and on the 9th April 1880. At the time the loan was made to Stanford witness was acting as attorney for Ketchen. Stanford spoke to witneas about hia application to borrow money from Mrs Rob?rtaon'a trustees. Witnesa received Borne partioulars from Stanford about his property, and on the 13th September 1881 he was at a i meeting with Mr Hsggltt aud Howden when StanI ford's application waß considered. Nothing was I done further than that It was agreed to get a [ valuation of the property from Mr John Roberta, and witness was Instructed to write to him, but it was fouud he was out of town. Subsequently witness saw Mr Beid, and asked him what he thought of the property. Mr Reid spoke of the natural grass on the land, and left the impression ori witness' mind thnt what oould be got from the grass would pay the mortgage interest. Witness was at a second meeting, late in the evening, with Mr Howden and Mr Haggitt. The valuation waß then again discussed, and lt was agreed to advance the money. The cattle were mentioned at thnt meeting, Mr Howden being apparently muoh Influenced by the fact that the land was capable of carrying them. Witness asked Mr Reid for a seoond valuation addressed to the trusteea, and it was forwarded, being similar to the first. Mr Black also mnde a valuation, but witness had searched for it without success. It was not in the possession of hia firm. Witness wrote to Mr Robertson, on the 4th November 1881, informing him that at last his money had been invested— £1000 having hem loaned to Mr Stanford on the seourity of his property at Blueskin for a term of i five years nt 7 per cent.

To Mr Jellicoe: Witness always paid the fire premiums yearly, generally a sum of __I 6or so. The premium was af terwardß raised. Witness never paid any rates.

John Beid, at one time of the firm of Reid and Duncans, said he had a moderate amount of valuing lauds about Otago. He had been engaged in lt for considerably over 25 years. Previoua to 1881 he wont into business, and it was part of hia duty to value securities. Tho National Insurance Company had employed him before tbat to value on their behalf, : and be had contiuueil to act for them since. In 1881 ;he was asked to mnko a valutlon of Mr Stanford's i property at Orakanui. He wont to the property and j found it in good order. There was no evidence at that timo of damage hy rabbits ; they had not commenced. The bulldliigswere Ingoodorder. There was some manuka scrub on the land, but the gorse waß well kept. Witnesß had no recollection of telling Mr Brent that the land would carry from 100 to 150 sheep. Witness Bent his valuation to Hr Jack, being particularly careful about it. To Mr Jelliooe i Witness 6tarted the business of valuer In 1877. He had b?en a farmer and was a farmer vow. It took him abuut three hours to value the Orakanui property. He did not ride over It. but walked over as much of it as ho could In the time. He could not say who told him how much of the land had been under plough. It was probable Mr Stanford give him an eatimate—about 200 acres altogether. He did not think much of the natural grass, as it did not Bhow well. He caw no sheep on. the land, but there were some oattle on It. He did not go round all the boundaries; perhaps he went round a fourth of it, but ho satisfied hlnuelf that the whole fence was in good order. If the laud with manuka bush on it had been sold It would have brought £10 nn acre al the time. Wituess did not know th-.t Mr Slanford bad beeu his own architect in connection with tho building. Witness had nerer bought or Bold a school. ' He did not consider about the rateable value or the insurance premium. Witness never heard thab Mr Larnach was interested iv tho ] property bofore it was sold to Mr Stanford. ', To Mr Solomon: Witness did uot think ther* would bave been any difficulty in selllcg the land at the price he put upon It. Thomas Oulciitt, manager of the New Zealand Mortgage and Investment Association (Limited), said ho had been 33 years In the colony. He was valuer for the Governmeut of land bought for railway purposes, and had also valued otlier lands. He kuew the Orakanui land in 1881, having often to pasture cattle on it before Mr Stanford's time. The value of the land at that time, without buildings and improvements, ho estimated at £2810 or £2850. i Perhaps it would not have gone In one block, but if 1 lt had beeu cut up Into sections of 50 or 100 acres it | might hava brought that figure. I Jl'o Mr Jellicoe : Witnesii' company had no country j lands on their hands In Otago ; they hud a few town

| landa. He was not interested in l.oeping up the > value of lands. If he had out up the Und he would j have divided it according to the lay and contour of ! the country.

| Edmund Peel Kenyon, of the firm of Konyon and • Hosking, said he acted at one time as attorney for [Mr Howden. The attorneys wero produced. j After the luncheon adjournment,

Sir Hobert Stout intimated that defendants did not intend to call further evidence. Mr Larnaoh was not present, and he would not be called, but he might be examined byjthe othor side If desired. The interrogatories ssne to Mr Larnach and his letters would ba put In. Mr Jellicoe theu moved for a decree In termß of the statement ;of claim. After stating the duties of trusteea in suoh cases as the present, he submitted tbat the Orakanui Investment was not onea prudent man would have lent money upon. Mr Eeid, in his valuation, Eaid that beßidoß the college of 22 rooms there were 800 acres of laud, 600 of which represented scrub and tussock, 250 of which bad been under the plough and English grass, while there were 40 acres of manuka. A security of that nature was of course to some extent a security, because it was a security for land ; still it was not a proper security for trusc money. It was, he submitted, not a security at all for any aura beyond the value of the land aB land. The security for more th»n this was the solvency of lhe borrower and the flourishing business supposed to have beon carried on by him at that time. It was the duty of tho truatees, he submitted, to avoid all securities of] that class whichi wera attended with hazard. To lend £4000 ou land valued at £5000 was rashly to disregard* the ordinary rule ;in fact no more than £3000 (roughly speaking) should have Deen advanced. Then, a» to the advance on the Oamaru property. It was made In Messrs Kaggltt Brothers and Brent's offloe, and, prior to being made, that firm, including Mr Haggitt, had noted all that appeared in the title deed. They must be taken to havo beeu awsre In 1874 tbat the property ou wbich they were asked to advance £1000 had been sold by tho theu owner for £550. There could be no doubt as to that being the price that was paid, whatever the subsequent transactions might have beeu between the buyer and the seller iv tho course of thoir alter career. Then agaiu, looking at the deeds, lt would be seen that In 1877—one year before tbe advance was made—Julius sold the property to Balmer for £800. Now, what waa the history of tho transaction ? Balmer required money, and went for It to a person with whom he was accustomed to have dealings, and he told this gentleman he wanted te borrow money, and that he wanted him to make a valuation for that purpose. That waa Mr Sumpter's evidence; and Mr Sumpter; without reward, prepared a valuation Bhowlng that the property at Oamaru waa of the value of £1600. Thßt valuation was sent'to financial agents at Dunedin (Messrs Black, Quick, and Co.), for the purpose of getting a loan, aud they passed it on to Mr Haggitt, who for the present accepted the borrower's valuation of the property. Then Mr Howden took upou himself to telegraph to Mr Leeo, a meat preserving gentleman. It was not known what Mr Howden asked, but It was known that Mr Lees replied that the house Mr Sumpter valued at £600 waa an old building and of little value. His learned friend then told them that Loes was a gentleman who knew more of property than any other man in Otago. Thore waa nothing left, therefore, aa security for any sums advanced except tho land. Now, as to ita value, Mr Sumpter said he frequently sold land In the Oamaru district, and that he knew what land waß fetching in that particular looality Mr Sumpter said that the value of the land as land was only £900 -and that was the security upon which the tiustees had invested £1000. Mr Jellicoe then rtferred to the class of evidence brought forward by the ol her side, and pointed out tliat they had adduced nothing to controvert Mr M'Kenzie's statements a3 to the value of the Orakanui property. He then referred to the law points ou the matter and quoted a number of cases in support of his contentions. In conclusion, Mr Jellicoe said that at a Inter Btage he would require to read several letters which had been put In, but it would not be for the object of opening up new matter. Sir Hobert Stout, on behalf of defendanta Haggitt and Ketchen, shortly referred to one or two authorities cited by Mr Jellicoe, which he held had no bearing on the case. He asked, What wore the deeds that the court had to interdict ? There were two deeds. There was first the deed in Scotland, which was a Scotch deed. There was a second deed in New Zeeland, in pursuance of the Scotch deed, because the Sootch dend provided for the payment of the money. And it was said about this that Ketchen committed a breach of trust in getting the money. The fact was he never got the money. He had uo attorney here until four yearß afterwards. Wherein was the breach of trust ? and if there was 6uch, why was he not sued for it? Under the general Investment clause In the deed the trustees had a right to invest the money, and the only queation then was—where ? Under that clause tha court would understand thnt the money was to be invested in New Zealand,and it also gave power to the Scotch trusteea to invest their money in New Zsaland, or abroad, or elsewhere. Under the indemnity clause In the deed, he submitted, the trustees were not responsible for anything but gross negligence, As far as Mr Haggitt and the other defendanta were concerned, there must be some proof of wilful neglect, or there must be grosa negligence. Now. what was the evidence of gross negligence ? First, so far as the Oamaru mortgage was concerned, not a Bingle tittle of evidence was oalled concerning it by the plaintiffs, and according to Mr Haggitt's evidence tbe mortgage must be returningat present something like 9 per cent. on the sum invested. If his Honor took fiomthe£looo the sum of £170 or£lßo received, and then considered,that fche rent was £45 for one, and 10s a week for the other it would leave nearly 9 per cent, on the investment. On the Kakauui property it waa alao seen that there was no loss. If the Blueskin property had not been taken into consideration, he asked, would his Honor have called in the defendants at all to give evidence In defence? There waa nothing against tbem. and therefore hia Houor would not have takon that step What steps had been taken In connection with the Oamaru land ? Mr Howden himself inspected the property, not

I being satisfied with Sumpter's valuation of lt, and even after that lt was agreed to ask Lees to value the property for them, and this ha did. Besides that Mr Haealtt wai well acquainted with the place, bo that even if the trustees had not obtained the valuations from Sumpter and Leea they would have been iustlfled In, aoting on the knowledge whloh they themselves possessed of lt, both of them having seen it and inspected It. Another point was that no complaint seemed to have been made by either Mr or Mrs Robertson about the Investment, but on the contrary they sent out a letter from France approving of it. Now, about tho Blueakin property. Peculiar testimony had been given as to its value. Mr M'Kenzie was tho first, and he valued It from a Bmall grazing farmer's point of view; and then there was tho evidence of the rouseabout MOonnell, -wbich was of no valuo at all. Tho fact was that tbo Orakanul property cost Mr Stanford over £5400. He then spent on the property and Improved to the extent of something like £3000. The trustees therefore wera aware when Mr Stanford's application was before them that It had cost him £8000, Including the Improvements he had put on lt, so that they were not lending In excess of half the value. Then how did the trustees proceed to perform their functions ? First, JBlnok'n report was taken, and afterwards two others—one from Pym and one from , Held. Subsequently Howden called on Held and Haggitt went to Pym, and they consulted with them about the valuations, so as to find out as much as possible about the property before they took It on their hands. Then Howden and Haggitt met and discussed the matter, and what more could they do ? Where was the wilful neglect, and where did the gross negligence come In? So far, then, there was not the least thiug to show that there was gross negligence. If the other side wished to show there was any negle.it, they should have brought evidence to Bhow the value of the land at tho time the advance was made, and if negligence was alleged the court should have it stated what act tbe trustees could bave taken that they did not take. In all the cases cited there was a distinction between them and the present one. Learned counsel then went on to refer to authorities In Bupport of the defendants' case. He submitted that so far as this case was concerned no trustee could have dono more than waß done to asoertaln the value of the property on which the loan had been made. Everything was done that could possibly be done, and he would undertake to Bay that the trustees did what hardly auy trustee ever did in this colony-to go personally and question the valuero ns to how they arrived Rt their valuation, and talk and confer with them about It. He submitted that If the decrease in the value of landed property In the colony had not taken place not ft Blngle word of this dispute would have come before the court. The decree should be in favour of defendants.

At 8.20 p.m. the court adjourned till 10.16 a.m. this morning;