TWO PARTIES DEFRAUDED.

Otago Daily Times, Issue 20584, 6 December 1928, Page 10

TWO PARTIES DEFRAUDED.

WHO BEARS THE LOSS? AN INTERESTING JUDGMENT. (Special to Daily Times.) AUCKLAND, December 5. The question who bears the loss, when two innocent parties have been defrauded by a third was one of the principal issues decided in a lengthy judgment delivered by Mr Justice Frazer. in the Supreme Court The case was on 6 arising opt of the defalcations of J. H. V. Mansill, who acted in the transaction as solicitor for both parties. The plaintiffs were John and' William Andrew Kirkness, retired farmers, and the defendant was Joseph 'George She Won, builder, Manurewa. The action was for possession of a memorandum of mortgage and memorandum of discharge. The plaintiffs were the registered proprietors of a piece d£ land'at Titirangi,. their interest in which they mortgaged to defendant to secure - payment to him of £450 principal and quarterly interest. . The plaintiffs paid off the principal and interest'on June 10, 1927, to Mansill," The mortgage moneys were misappropriated by Mansill, who is now serving a sentence of imprisonment for theft and forgery. There was a conflict of evidence as to the negotiations for the repayment of the mortgage debt before the due date, and as to the-productioh of the memorandum of discharge at.the time of settlement. His Honor held that the defendant signed the memorandum of discharge early in 1927, and left it with Mansill, whom he authorised to accept the repayment of the mortgage debt before the due date, and year he told Mansill not, to accept repayment, and instructed him to cancel the memorandum of discharge. ' Mansill, in breach ' of his instructions, ‘ d.id not cancel the instrument, and on June 10, 1927, accepted repayment in Circumstances that indicated that he purported to act a solicitor for both parties, and at the time of accepting repayment he produced the memorandum of discharge to William Kirkness. Mansill obtained defendant’s signature to the memorandum of discharge in such a maimer as entitled plaintiffs to act on it, and defendant was accordingly estopped from saying that Mansill was not his solicitor whan he produced the document. “ Where, one of two innocent persons,’! said his Honor, “has to suffer through the fraud of a third, the loss much fall on him who, by Llk indiscretion, enabled the thirds person to commit the fraud.” Judgment was given for plaintiffs for possession of the memorandum of. discharge and of the memorandum of mortgage, with costs ns on a claim for £450.