PROMISSORY NOTE TRANSACTIONS

Otago Daily Times, Issue 14440, 5 February 1909, Page 7

PROMISSORY NOTE TRANSACTIONS

A TRADERS DIFFJGTIjTIES. In flic Magistrate's Court yesterday, before .Mr 11. !■'• V. iddowson, S.M., a kwi wa.s heurd in which Charles 11. Suit-hum (trustee in the estate of i'\ W. Boll) sued George feUier. .Mr 0. E. Stalham up. pcarcd for pliiinliir and .Mr 11 (Jcoko lor defendant. The claim jji this case was for tlio delivery to thc< trustee of two proinistory Holes for £16 and £14 respectively, for which u promissory note security for £30 had Leen given and accepted;.or, failinj! delivery, the payment ot a .stun of £30 and £5 damans for detention uftlie documents. t'omisol for plaintiff said the facts of (lie claim were that Bolt became indebted to defendant ,„ (lie .sum of £30, for v.-liiel. two bills d £14 and £16 rofi]>celivojv were given it;; security. Tlio find, ol the bills (ibe one for £14) became duo, and Jiolt, Laintii:a!i!-- to meet it, approached d"fei.>iaiii lor u renewal, but was informed that i.he money must be. pai<l or legal proceedings v.ould bo taken for recovery. Ultimately the matter was arranged bv 801 l giving J'.sther a further bill for £30 as additional Mcm-ity for the payment of the bills previously held. Defendant did net Rive up the bills for £14 and £10 (whieli it was imdersU;od bail lieim discounted by one William Miller). Bolt at. the time was in linaneial simiis, and .tuhsetpienlly assigned his estate, ami the effect, of the transaction with defendant was Hat. Hie csi.-i'e was claimed tiwin for £60 of securities where only £30 was due. This meant that dividends would be required to l;e paid upon double the amount that was owing. Charles lladlield Slalliam (trusli* in the testate of F. W. Molt) staled lliat <!efendaut was present at a mooting n[ ercdiiors, iimi wa* down on the list for £30. Defendant afterwards met witness] in the street, and stat.'d that he intended to claim on the estate fi.r £60, and'lie subsequently lold witness that the hills kid been discountod by William .Miller. Witiuv* hud since demanded lb" retired bills from defendant, lilt! I hey Ikiil not boon delivered.

To Mr (Volte: At 1 lie time lie (witness) mmln application for tlie relinsl bills lo Jvillicr he knew the bills hud been disromiliil, but il was Kslher's res]!oiisibility to lind litem.

To Mr ('. F. Hlnlliain: Tin; claim of Miller for £'3U. as holder of securities, dej.Mided upon I lie result of Ihe pre*eni action. As irihlee in tho estate, he could hoi ieco(;nise two claimants for sums of iIJU each when only £50 in all was owing, and tho chief creditors, in the estate had instructed him to (jet the retired bilk hack »|jttin. Esther gave liolt a letter slatimr thai only £30 w..« owinj;. Evidence given by F. W. liolt in (Jliristchurch was read in connection with the claim. Mr Cooke contended lluif plainlill' should bo nonsuited, as it was practically admitted ihat tla? bills were in the possession of someone else, and could not therefore be returned by defendant. llr C'. E. Slntliam: There is an alternative claim for £30 in the oven! of the hills not licitig returned. Air Coolie: Ye«: am! defendant has no eecitrily if ho paid that sum. The bill for £30 wa s handed over lo Miller as security for the paymdiil of hills for £14 and £lb\ Defendant did nol discount the lasl-nien-tioned bill and liandej it over. Defendant was ipiile within his righls in claiming on the estate for tho full amount of the ilocunionlary security which ho held, but he rould not receive moro tlia-n the £30 due, although dividends might ho payable on Ihe sum of £60. It. was clearly the trustee'!; duty to disallow Esther's claim for £30 when Millar made a. claim. Counsel quoted authorities in support of his contention that defendant could claim up lo tho full amount, of his security. The extra security given was the outcome of a bargain between Jiolt and defendant lo sav.j tlie former from beinjr summoned. All defendant expected lo get out of the transaction at any time was the £30 acln■ally due, and the £30 bill was held merely as security for ihu payment of Ihat sum. Plaintiff could take action to prevent moro than the sum owing being |«iid out of the e;,lale. It was a common practice lo give security for double or treble the amount of this actual indebtedness. Six months had ehipvd between tho deed of assignment ami tlie institution of the present proceedings, and Mr .Sfathaui should have done something regarding Miller's claim.

'leorge Fsllier, linancial agent, staled that he had many lraiisiiefifHi s with Ikill in bills exk'.nding over a number of years. In regard to the bill for £14, which became due and was not met, ho informed Bolt that he had discounted it and one for £16 with Miller, and arranged Ihat if security for £30 owing waa given to him he would not sue. When lliis was done the security bill for £30 was handed over to Miller a's security for the two bills of £16 and £14, mil witness did not discount Ibe security bill for £30. He claimed for Ihe £30 on the estate bcaMse lie was liable to Miller for that amount.

/J'o Air (,'. K. Statliam: lie knew al. the time there was a possibility of Holt soiling into linancial iliiiic-ultins, ami he wisiied to. protect himself f<> thai ho would have as huge a claim as possible on the estate for a dividend. He did not consider that in jjoing ihis he was acting in a fraudulent way against other creditors.

Afr rilatliam: Had you parted with these bills It-fore you attended the mooting of Hull's civJitorsr-Vvitness: Miller held the bills then.

lieally you had no voice in the matter, then?—l did not wish it to appear that Mr Miller was inlercsled. He did not know, when Holt came to him, that ihe latter was going to assign his estate, otherwise be would have sued him at the time.

Tne .Magistrate: Why did you sign Ihe Heed of assignment?— Witness: 1 signed in perfect good faith. 1 explained the position lo Mr SUithiiin.

Where were the hills then?-Mr Miller had them. A billhroker does not care, to fay thai he handed bills over to other p.ople. Witness added Unit lie bail tried to arrange the matter with Air Statliiim, as lie did not wont it to go lo court.

Th'.' Magistrate said that, ibe other creditors were being tukou advantage of, but he did not see how Mr Ksilier could rolurn the bills.

Mr Stalham said the nit at o would realise nbonl 7s 6d in the pound. Mr Esther would gei 15s in the pound instead of 7s 6d. Ho would ask for judgment for 7s 6d in the pound on £30, failing judgment for the return of the promissory noies.

The Magisirate mentioned the possibility of a. nonsuit on Ihat point, and remarked ihai Mr Stalham was tpiite justified in bringing his claim. Mr Siatlmiij liven asked for jmlsnient for 7s ill the pound already paid on'£3o. His Worship: 1 have bad no < viilonce on that point. At present I am inclined lo agree with Mr ('coke's argument, i will take lime to consider. Judgment will be rejervwl.