A DISPUTED SALE.

Otago Daily Times, Issue 20892, 5 December 1929, Page 2

A DISPUTED SALE.

CLUTHA LEADER CASE. HEARING OF EVIDENCE CONCLUDED. His Honor, Mr Justice Kennedy, was again engaged in the Supremo Court yesterday in hearing the case in which William Twaddle, a stock agent, of Balclutha, representing a syndicate, proceeded against Albert Eden Bussell, a journalist, Robert James Millis, a linotype operator, and James Radcliffe M'Naughton, a printer, all of Balclutha, claiming an order directing the defendants to perform an alleged agreement for the sale of the Clutha Leader newspaper business for £OBOO, as well as the sunt of £SOO damages for withholding and delivering performance of the agreement. As an alternative the plaintiff claimed the return of a deposit of £OBO with interest from August 3 to the date of judgment and the sum of £ISOO damages for breach of agreement. As a further alternative the plaintiff asked that the agreement should bo rectified so as to express the true agreement and that the defendants should be ordered to perform it. The plaintiff was represented by Mr A. T. Donnelly, of Christchurch, and Mr F. B. Adams and Mr W. G. Hay appeared for Russell, Mr C. L. Calvert for M'Naughton, and Mr R. S. Brcmner for Millis.

The defendant Mill'm continued his evidence. stating that he had been largely instrumental in forming the syndicate, but he did not tell M'Naughton that ho .was a member of tho syndicate. The witness Kelly, recalled, staled that ■M'Naughton knew that Millis was a member of the syndicate, Mr Calvert, in opening tho case for tha defence, submitted that the plaintiff must be non-suited. The case came under a class in which a professed agent was acting for a non-existent principal. Tho contract had been signed by Twaddle as agent for a company to be formed. A company could not afterwards ratify a contract previously professed to have been made on its behalf. The plaintiff had entered into an alleged contract as agent for a non-existent principal, and all the dealings_ had been on that basis. Any ratification would have been impossible at law, and the plaintiff had not come into the proceedings as plaintiff until the repudiation of the alleged agreement. His Honor said that ho would reserve his decision on the non-suit point. The -whole case, Mr Calvert continued, was based on an entire misconception of what took place at the auction sale. Tho whole of the pleadings had been based on tho supposition that M'Naughton had objected to signing the deed of covenant. What he hod objected to was clause 4 of the conditions of sale. That had been a joint, and several covenant. He had stipulated that he would not sign a part -" the clause which he had marked, lie had clearly meant that that portion of the clause should bo deleted. He had, therefore, given notice to all the solicitors and the auctioneer in these words: “ I do not intend to sign clause 4 in the agreement.” _ It had been clearly shown in the evidence for the plaintiff that it had been clause 4 that he had objected to. The keynote of the whole position was that Russell, Walter, and Kelly had been convinced that the objection had been too late to he effective. They had been convinced that M'Naughton could he compelled to sign. Accordingly the auctioneer had opened the bidding after being definitely told by everyone concerned except M'Naughton that M'Naughton would have to sign. The sale had then proceeded on the conditions which had been handed to the auctioneer. In Mr Kelly’s office after the,alleged sale the conditions had been deliberately signed by both the auctioneer and the plaintiff without any alteration whatever. There had been no mistake. The document had boon so signed as to embody the actual conditions on which the bids had been taken. _ From the date of the sale the proceeding* had clearly been carried out without M'Naughton’s authority. The idea of compulsion had coloured the whole proceedings up to Saturday, ’August 31. During all that time Russell and Walter had been convinced that M'Naughton would eventually hive to sign, while M'Naughton-had been equally sute that he "could not be made to sign. Evidence would be tendered by M'Naughton that he had never at any stage agreed to sign, and on the contrary had expressly forbidden his solicitor to have anything to do with any transaction that prevented him from carrying on business afterwards in Balclutha. Russell had believed that M'Naughton would sign. Otherwise ho would not have made a laughing stock of himself by writing a leading article saying farewell to ins readers. The article had appeared on tho Friday, and the change nad been duo to take place on the Monday. On the Friday Mr Walter had taken counsel's opinion and had told Russell that M'Naughton could not be compelled to sign the deed. Russell had then to make up his mind what he would do. Ha had never thought of binding himself to a covenant from which the other partners had been excluded. He had. therefore, declined to sign the deed. This had amounted to a repudiation of the contract if there had ever been a contract. In justice to Mr Walter it should be emphatically stated that there had never’ been any attempt to lead the plaintiff on until the date of completion and then tell him that his rights had gone. The preBent position was just as it had been on August 31. Russell would complete even now without signing the deed of covenant. Mr Adams: That’s the first we have heard of it.

Mr Hay remarked that M'Naughton’s position was the same. Mr Calvert adding that Millis’a attitude in the box had shown that he also would complete. Mr. Calvert stated that he regretted that evidence which would bo tendered by the defendants would materially contradict that of Kelly, It waa already known that Kelly, while a member of the syndicate, had failed to acquaint his client of the fact. He' had diverted an oiler from Russell to M‘Naughton, and mentioned it to a member of the syndicate. M'Naughton would say that he had in-, structed Kelly as soon as he had receivednotice of dissolution that he would not sign a deed of covenant restraining him-: self from carrying on business. M'Naughton had not attended the conference at which it had been decided to sell the business, ( and he had not known what had been decided. He ‘ would deny that Mr Kelly had conveyed to him the contents of the letter in which Rusesll bad offered to Bell. He had- not authorised a letter declining the offer and had not known that it had been sent. About this stage M'Nauphton had been losing confidence in Mr Kelly. M'Naughton would say that the first he had known of the sale had been when he had read an advertisement. He had asked Mr Kelly who had authorised it, and the reply had been that Mr Walter and Russell know all about it. The defence was that there had never been a completed contract. It was true that for months preparations had been made to hand over the business, but the parties had merely muddled through in the hope that at some time the trouble would straighten itself out. He had indicated the terms on which the defendants were still prepared to sell. John Thomas Walter, who had acted ns Russell’s solicitor, described the legal proceedings. He denied that Kelly had over asked him his opinion as to whether M'Xaughton could be compelled to sign the deed of covenants. Mr Donnelly: You have hoard Mr Hay’s criticism of the personal conduct of Mr Kelly, and his timid suggestion that Mr Kelly’s diary was made up after the case for the purposes of the case. Mr Hay: 1 didn’t suggest it. 1 merely asked him.

Mr Donnelly (to the witness); Did you supply the information for the crossexamination?

Mr Hay (with heat); I cross-examine on my own initiative. ■

Witness added that prior to the sale he bad had no complaint regarding Mr Kelly.- They had been the best of friends prior to the action, and he thought they were still. He had no personal coinplaint whatever against Mr Kelly, and he did not consider that Russell hail any. In reply to a further question from Mr Donnelly witness said that the reason why Russcll_ would not sign, was because ho considered himself under no obligation to do so.

Peter Edward Nielson, the auctioneer, described the proceedings at .the eale. The defendant Russell, in giving ’evidence. said that he had understood nt the sale that the goodwill lin’d been sold. Ho did not know, but had suspicions at the sale that MilUs and Kelly were members of the syndicate. It was important to him that M'Naughtoa would not sign

the deed, because M'Naughton was getting an advantage. He went on with the bidding, believing that M'Naughton would have to sign. A man named Pickard had been his nominee at the sale. Mr Donnelly: Then the statement in your report of the sale that he was acting for a Dunedin syndicate was not a true statement. What was your object in making that statement? Witness: The fact that he was a Dunedin man was the foundation for it, I suppose. Mr Donne] ly: Why did you put. an untrue report in the paper?,. Was it simply that you did not want it known that you had got a Dunedin man to bid for you? Witness: There is something in that, too. I did not think it necessary to tell the public my business. Mr Donnelly Why did you pay in the report that M'Naughton was pot a party to the sale of tire goodwill, and that the sale proceeded under that stipulation? Witness; I admit that it is loose construction. I wrote it hurriedly. In reply to a further question witness stated that he had been thoroughly satisfied with his price, and that he had not been “ sore ” over losing the property. He had, however, found but some things when he wrote a letter to a member of the syndicate denying that ho had been anxious to sell. He admitted that if the syndicate had not been formed he would have purchased the business cheaply. Mr Donnelly; The sole reason why you repudiated the agreement, then, was the fact that M'Naughton had refused to sign the deed of covenant? "Witness: That is not exactly correct. I refuse to sign anything which M'Naughton did not sign, Mr Donnelly; How did that affect your pocket? Witness: Because he would get his share plus the right to start business immediately. Witness added that he could not say when he first knew that M'Naughton had been given a posiiton with the new company. M’Naughton gave evidence on the lines of Mr Calvert's opening address, and this closed the case for the defendants. The ease was adjourned until to-day for legal argument."