THE J. G. WARD'S FARMERS' ASSOCIATION.

Otago Daily Times, Issue 10731, 20 February 1897, Page 2

THE J. G. WARD'S FARMERS' ASSOCIATION.

In the Sureme Court, in- Chambers, yesterday before Mr Justice* -Williams, the settlement of claims and debts against the J. G. Ward Farmers' Association (Limited) was resumed.

In connection with the claim of Donagky's Rope ami Twine Company (Limited) for £488,

i^, 11 w,'° g' who reprinted the liquidator said that this was a case in which evidence had been taken, and as to whioh there were two or three objections.,. One further point had arisen f" 1" *he evidence was taken. Mr Passmore and iilr Wisher had said in their evidence that the twioe in question in the claim was valued and the contract entered into foi- the purpose of the taking over of the twine by a company that was goins to be formed. That suggested that the company hid not bsen formed at that time and on .searching at the Joint Stock Companies' office he (Mr Hosking) found that that was so. Apart from^ that, there wero two point? on which he rclica—first, that on the evideuceadvancM by the other side no damage had been shown, and next that there was no contract, within the meanin" of the Statute of Frauds. It might ba unnecessary to argue those points although he thought them bound. *

MrFraserfiatdhefully appreciated the bearine of tne point as to the company being a non incorporated compauy which* had been taken after the last argument. Hitherto he had acted for Donaghy's Ropa and Twine -Company (Limited), but tnat company had withdrawn its instructions from him. The managing director, Mr Lee Smith, wns, however, present Mr Hosking said lie would object to Mr Lee' Smith being heard. Mr Smith had no footine in the court. s

In reply to his Honor, who said he did not understand the position, Mr Fraser explained that he had been acting for Donaghys. present .company, but.when the case stood over for argument and pending that, it was decided by the directors to, in fact, withdraw him from the argument and to be represented if necessary by the managing director. His Honor r A company must appear by solicitor It cannot appear .personally. Ido not see how Mr Smith can be heard. If it was a matter of private affairs he might be heard but a company is a corporation, and must necessarily appear by solicitor.

_ Mr Fraser : Mr Smith is managing director of the company—chairman of directors. They can appoint him under seal.

Mr Hosking said an attorney for a corporation must appear under seal in court. The proposed course added an additional peculiarity to the case for he would submit that the case was a peculiar one and that,, the liquidator was justified in taking and was bound bylaw to take, a valid legal objection to the claim. It was not as if the \\ ard Association had had any'advantage from the other side, for it had-not benefited one uennv from the arrangement. • ■ His Honor asked Mr Fraser if there was any reason why he should notdisclose the position to the court.

Mr Fraser said the point was one on which he Iri "■?£ f°,?st olA is cHents- He thought that Mr Smith felt that the action of the liquidator was dishonourable, and that he desired to tell his Honor about it. . , Mr Hoskiug : Then I shall have to say a great deal more about it.

.^.Fra'er understood that Mr Smith regarded the liquidator s action as a breach of commercial morality. Mr Lee Smith: No.' Mr Fraser said that at the last stage a point was taten that was not covered by evidence, and.he submitted that evidence must be called to prove , > c ("j F»»ses);claimed that he would be entitled to call evidence to meet that point. The better plan for the Douaghy Company would, he thought, be-for it to continue his instructions. Mr Hosking objected to Mr Smith being twice examined and said he had given his friend notice as soon as he had discovered the point. When he submitted the* question to the liquidator, the latter told him that he should object to the claim particularly m view of the fact that Mr Smith did not include the claim as one of the liabilities of the \\ ard Farmers' Association when the matter was formerly brought before him Mr Fraser: That is the simplest thing to explain. . ta

Mr Hosking : It was explained last time by the evidence. J

His Honor said he would think it was easily explicaole.

Mr Fraser thought, if he might be allowed to make the suggestion, that if he admitted the fact as to the incorporation of the company he should he allowed to call Mi* Smith to explain, and then they could deal with the matter as it stood. Mr Hoskin- said he wished first to argue that tlieiu was no contract under the Statute of Brauds ; next, if there was a contract, no damage had been shown"; and then, if the court was still against him. that there was no contract because the company was not incorporated when the contract was* entered into. There was, however, a portion of theelaim that the liquidator adthitted- —?■}?" Ti 0J for gootiß delivered in March. Ills Hp nor said that possibly the explanation which Mr Lee Smith desired to make might have reference to what had been said outside the court —in the newspapers, perhaps—and he could now say whatever he wished.

Mr Lee -fcmith said he would like to explain why he had taken what raighfs seem to be the peculiar position of asking Mr Fraser to withdraw from the case. When he found that the liquidator was disputing the claim on the ground that the goods had been sold by a company which at the time of the sale had not beeu registered, he made inquiries and he was told that a plea of that kind was only set up to withstand supposed fraud or an attempt at fraud, as in the case of a bogus claim and so forth. Having been told that, he thought that the liquidator must suspect the company of fraud, and he thought the best thine he could do was to take Mr Fraser out of the case and go to the pourfc and ask to be allowed personally to explain the matter and show that there had been no subterfuge on the part of the company. He desired to state that there was no justification or warranty for the imputation that anything of the kind had been done. The position was thus : When the goods of the old Southland Fibre Company were being takeii over by the amalgamated company of Donaghy and Co., two of the valuers Messrs Anderson and Passmore, came across some twine in large bales, and theae goods were objected »? °^~ Sl-°uiid that the twine was not good. Mr iisher who was not a valuer, but who occupied the position of representative of the company whose goods were beiug taken over saidhe considered the twine sood. and in support of that opinion he offered to take the goods over on behalf of the J. G. Ward Farmers' Associatiou. fhe valuers then said if Mr Fisher would ->ive au order for the goods they would take them into stock on behalf of the new company. Mr Fisher gave the order, but wlien the time came for delivery, in consequence of the position of the association, he could not take the goods, but promised to do so later. There being no local facilities, owing to the lack of machinery, for using the twine, which was found to be iv worse condition than was expected, it had to be brought to Hunedin to be made the best of, and it took some time to sort and get it made up into rope, clothes liDe, lashings, Ao. It was no use for ordinary use. He (Mr Lee Smith) wished to state that the reason why the claim was uot put in earlier was that the Ward Association did not go into liquidation until about the time that the twine was brought to Dunediii, and itwas for the purpose of assessing the damage that the twine was so brought to Dunedin. He had no more to say excepting this: That during the whole of his 37 years' busiuess experience he had never kuown of a plea of the sort now raised being put in as a defence unless fraud was alleged *, and he ventured to say thafc if ths case had been tlie other way -that was to say, if the twine had gone up in price, as it often had in the nast, by £8 or ■£10 a ton—there would have been a howl ot indignation if the company had attempted to get out of the sale on the ground now taken to pret out of this purchase, for no business man would tio anything of the kind. He had to thank his Honor for allowing him to explain the nature of the transaction.

His Honor: The explanation is a perfectly reasonable one.

Mr Hosking: I think I may be allowed to make this observation witli reference to Mr Smith's statement as to the character of the defence His Honor: That is a different matter. Mr Smith's personal explanation is a reasonable one.

Mr Hosking: He assumes that the objection was taken because there was some suggestion of fraud. I will say candidly that that was the reason. Having heard Mr Smith's explanation now I accept it, but for all that I cannot withdraw the legal objection taken by the liquidator. Mr Lee Smith : Am I suspected now of fraud » Mr Hosking: Not now suspected, but the liquidator cannot withdraw bis objection in the interests of the unsecured creditors.

His Honor: If a. liquidator has a good legal defence, he is in the position of a trustee Mr Fraser : Liquidators have been censured by the court for _ attempting* to strain their legal rijrhts, . '■ ,

His Honor: A liquidator is not acting for himaelf.

Mr Fraser : I admit Unit the money does not go into his own pocket. Hut a liquidator is supposed to be better than an ordinary man. Mr Hosking repeated that it was the liquidator's duty to bring any legal objection before the court.

Mr 1< r-jser th«n proceeded to argue the points raised. He submitted that the contract was good undar the Statute of Frauds, and that the parties to the contract had practically adopted tlie contract by their subsequent actions. This was, to use an Americanism' "a square deal." His Honor disallowed that portion of the claim wliich related to the twine sold hy the company before incorporation, and said that he did not deem it necessary to decide any other questios, though he thought it.possible that consideration of damages would have reduced the claim.

The questiou of costs being raised, Mr Hosking said that he did not ask for costs. ire had not asked for *.ny unless where the whole of the claim had been disallowed.

Mr Sim appeared iv support of a summons that the liquidator, be ordered to pay Richard Powell Cooper (trading as William Cooper and Nephews) Bhare of moneys collected on account of shoep-dipping powder, <tc. The mattter was argued at considerable length, and

His Houor took tiiae to consider.

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