SUPREME COURT.

Otago Witness, Issue 1899, 26 June 1890, Page 30

SUPREME COURT.

CIVIL SITTINGS. Wednesday, June 18. (Before his Honor Mr Justice Williams.) REID V. GILLIAND. Claim for possession of section 17, block XI, Waitahuna West. Mr John Macgregor appeared for the plaintiff, John Reid, of Dunedin, estate agent, and Sir Robert Stout for the defendant, John Gilliand, of Waitahuna West, farmer. The plaintiff, in the statement of claim, declared that he was the registered proprietor iv fee simple, under "The Land Transfer Act 1885," of a parcel of land in the district of Waitahuna West, containing 317 a3r 36p, being section 17, block XI, on the map of the district, and that the defendant, without right or title, held possession of the land, and had refused and still refused to give up possession to the plaintiff. The plaintiff therefore claimed possession of the said parcel of land. The defendant, in his statement of defence, deaied the allegations contained in the statement of claim. For a further defence the defendant stated that in the year 1882 he was employed as a shepherd by Messrs James Smith and Sons, of Greenfield, and that the said parcel of land being then open for selection under the provisions of the Land Acts relating to deferred payment lands, it was agreed between the defendant and Messrs James Smith and Sons that the defendant should acquire and hold the said parcel of land as trustee for them in order to enable them to evade the provisions of the Land Acts ; that in pursuance of this agreement the defendant acquired the land, and ultimately became the registered proprietor of an estate in fee simple in the land under " The Land Transfer Act 1885 " ; that on the Ist October 1885 the defendant, at the request of James Smith and Sons, executed a mortgage over the land to the plaintiff fot the purpose of securing the payment by the defendant to the plaintiff of the sum of £1300, with interest thereon, but no part of that sum was ever paid to the defendant or to sny other person at his request or on his behalf ; that the plaintiff afterwards caused the land to be sold in exercise of the power of sale contained in the mortgage, and the plaintiff became the purchaser himself, and was afterwards registered as proprietor of an estate in fee simple therein on the 19th December 1889 ; that the plaintiff throughout the transactions mentioned had acted merely as an agent and trustee for and on behalf of James Smith and Sons, who were the beneficial owners of the land, and the plaintiff had no beneficial interest therein whatever, and was merely a trustee or "dummy" for James Smith and Sons; that the defendant was at the commencement of the action, and still was, in possession of the land with the leave and license of James Smith and Sons. As an amended statement of defence, the defendant pleaded that he had worked the land, and acoounts had been kept between James Smith and Sons and the defendant, and in these accounts the defendant had beendebited with all moneys paid for the land ; and that if proper accounts were taken it would be found that the defendant had paid for the land, and that the land was now his, and that he was entitled to a transfer from the plaintiff.

Mr Macgregor took it that the proper course for him was to give evidence of the plaintiff's title to the land, and to prove that the defendant was in possession. With regard to the mortgage, he was prepared to admit that Reid held the mortgage as agent for James Smith, and that the land was conveyed to him as agent for James Smjth. He produced and put in the plaintiff's certificate of title to the seotion under the Land Transfer Act.

Sir R. Stout stated that the history of the transaction was this : There were about 2000 or 3000 acres of land on James Smith's run opened in 1882, under the Land Acts then in force. James Smith wished to get possession of this land which was opened on deferred payment settlement conditions. The law then was that no person could get more than 320 acres on deferred payment, that no person could hold more than one section, that no person could hold land if he had got other freehold land, and that they had personally to reside on the land. James Smitb and Sons resorted to the practice known as dummying the land by getting their shepherds, employes, and others to take it up. His Honor : You need not explain the process, Bir Robert ; I have heard of it before.

Sir R. Stout said that was practically what they had done with this land. An inquiry wag held before the Waste Lands Board, and the board came to the conclusion that there was not evidence sufficient to show dummyism ; but he would Bhow that Gilliand was acting for James Smith and Sons. It was perfectly transparent why they wanted to make out that Reid was acting as agent for Smith— that was another trick to complete the dummyisra. The result was that about half the land was now in Smith's possession. What took place with Gilliand was this: He went on the land and worked the land; the proceeds of the land were derived by James Smith and Sons, who kept a running account with Gilliand, debiting him with this and with that; and in the last account made up iv 1889 they brought down a balance of £271 0s 3d as being owing by Gilliand. So far as the mortgage of £1300 was concerned, Gilliand never had a penny of money from John Reid, and never a penny from Smith. Learned counsel submitted as a question of law that the defendant was entitled to one of two things. It was abundantly plain that the Smiths were suing for the land of which tho defendant was in possession. The defendant had been in the nature of a trustee for them, and, if so, he was entitled under the Trustee Act to all his costs, charges, and expenses—that he was entitled to be paid for his labour on the land for eight years. If tbfr defendant was not entitled to tha*;, then he was entitled to show by accounts that practically be had paid for the land, aud he was entitled t.o have a trausfer of the land. It was perfectly plain that the mortgage transaction was a dummy transaction, that no money was advanced, and that the pretended payments by Jatnes Smith and Sons were all bogus. He would show that, some of the accounts were made out with John artin Smith, and if James Smith said he was not bound by the transactions of John Martin Smith, his son, then he (Sir R. Stout) would produce accounts to show that all the heaviest p-iyments charged against the defendant were made by J. M. Smitb. The wholn transaction, he maintained, was an attempt to evade the provisions of the Land Act, and an attempt to get hold of the whole of the land. John Gilliand deposed that in 1882 he was a shepherd for Messrs Smith and Sons at Greenfield M'Kay, Wymer, Durrent, Jamieson.Low. aud Kdie were also workiug at Greenfield. Hughes worked occasionally there. Willis m Smith was the head shepherd. Witness remembered ri>n 106, comprising close on 3000 acres, being opened at Waitahuna West iv April 1882 Tho land was put up for sale by auction at Lawrence. Witness and the other people mentioned as being in Smith's employ applied for separate sections, and all became bidden? at the auction. Practically the whole of the section* on Smith's run went to his employes. Witness

got no money from James Smith, but he got an account up to 1885 from J. M. Smith. He never got a penny of money in connection with the land from James Smith, and he never got any money from John Reid. There was one time, if witness remembered rightly, when John Reid wrote to him for interest, and witness wrote to James Smith telling him so. Witness spoke to any of the firm — whoever he met first — with regard to the land. He was positive that he never got any money from John Reid either before or after the mortgage. He signed the mortgage at the request of James Smith, and at the time he had no account except from J. M. Smith. Last year he got an account from James Smith showing that witness was due him £271. In everything that witness had done in this matter he had done what the Smithshad told him. James Smith got the proceeds of the sale of the crops. Witness had personally not made anything out of the farm. He was willing that an account should be taken of the working of the farm, and that he should be paid wages. In the account handed in, that was made up by J. M. Smith for payments in connection with the land, there were payments made on Smith's own account, and unauthorised by witness. Division fences were put up after witness took up the land. Witness got a receipt for fencing on the day the inquiry was held at the Land Board — in January 1885. The receipt was dated March 1883, and was handed to witness by William Smith, the shepherd. The receipt was given to witness for presentation to the Land Board. Mr Aitken Connell appeared at the inquiry, but was not engaged by witness. James sen., psid Mr Connell for appearing at the inquiry. The declarations were made before Mr Herbert, of Lawrence, who was Mr Smith's son-in-law. Witness signed anything that the Smiths presented to him. By Mr Macgregor : In James Smith's account, showing a balance of £271, there was a payment lof £520 towards making the land freehold. He gave an order authorising John Reid to pay J. M. Smith £600 odd, and he also gave orders for the payment of other sums. He bad read the printed copy of the evidence given by him before the Land Board. It was a correct statement of his evidence, but it was not true. To Sir R. Stout : Witness and the others took up the land on Smith'B account. When the investigation wa-> asked by Mr Gooday, witness saw J. M. Smith about the evidence they were to give before the board. The evidence was arranged beforehand. There was an arrangement that witness was to get 12s 0d per week for bio keep while on the land, £20 a year bonus, and his usual wages, which were £1 a week while on the station and £1 extra for each trip. Alexander Anthony Wymer and John M'Kay were also examined, detailing the relations that existed between Messrs James Smith and Sons and themselves. Mr Macgregor called James Smith, who deposed that he was the senior partner and managing partner of the firm of James Smith and Sons. He did not leave the active part of the business, except the outside business, to his sons. He arranged with John Reid to advance money to Gilliand. He thought; that was in 1885. Gilliand gob fixed for money and wanted witness to advance him some. He said : " I owe your son John moneys, but he won't give me any more." Witnesß knew from John's statements that Gilliand owed him money. Witness told Gilliand that he had no security and that the only way witness knew of for him to get out of his difficulties was for him to make his property freehold and mortgage it. Gilliand asked if witness knew anyone he could get the money from. Witness said he did not know, but he would try to get someone ; and probably his friend John Reid, being in the way of advancing money, would lend him some. Witness saw Mr Reid, who was not at the time prepared to do anything. Witness said he could do it himself, but the man, though a good workman, was inolined to be reckless in his expenditure. Witness held at the time £1000 of a widowed sister's, and he thought this might prove an investment for her. Mr Reid suggested that the mortgage should be taken in his name. Witness asked Gilliand how much he required, and he said he owed John £700 and to make the land freehold he would require over £500. He also said he wanted an extension of his house, so that he would probably require £1500 to make him right. Witness said he would communicate with Mr Reid, and let him know the result. After communicating with Mr Reid, witness told Gilliand he would be prepared to advance £1500, without security for the excess over £1300, provided he would work the place decently, consulting with witness occasionally as to what he should do for his own benefit. Gilliand agreed to thab, and signed an order to Mr Reid to keep off John's £720 and other amounts which witness was advancing then. This was, witness thought, some months before the mortgage was completed, and meantime witness made advances from time to time on the strength of the mortgage. Witness told Gilliand that these transactions had nothing to do with the firm in any shape or form. Gilliand ceased shepherding for the firm after January 1886, and started on the farm on his own account. Witness never heard of Gilliand getting a bonus. He had no connection whatever with the transactions between Gilliand and his son prior to 1884 He had not the slightest interest in Gilliand's land beyond that of a mortgagee, and he did not want to get Gilliand's land. His object in arranging the mortgage was, in the first place, to accommodate Gilliand. Prior to the inquiry before the Land Board witness did not know of the nature of the transactions between Gilliand and his son John. He never asked anyone to take up deferred payment land on his behalf. He never su nested to Gilliand that he should apply for deferred payment laud as a dummy, nor did he ask Wymer. He never spoke to them on the subject. Some of the men told him they were going to take up land/and witness said that I if it would save them any trouble he would write up to Lawrence and they could make their declarations before him, as a Justice of the Peace, if they wished. Witness had not the slightest interest in any of the sections in the 3000 aces that were opened up there, excepting this section in dispute. Gilliand had a heavy crop of oats the first year, and they were sent to Messrs Wright, Stephenson, and Co. Witne s got | Gilliand to give him orders upon Messrs Wright, Stephenson, and Co. for the payment out of the proceeds of advances that he had made After witness took Gilliand over on his own shoulders the transactions were kept in the same account. , A balance was made last week, the account showing an indebtedness by Gilliand of £271 0s 3d. The reason the account was made up was that Gilliand had been going about the place stating that witness was owing him n. large sum «f money, and rhat he could not get it. Witness tax^tl Gilliand with this, and he s>»i.] ha had not got Hie profits on his turnips, but witness showed him from the accounts that he had got credit; for the pr,.fit,p. When the balance was struck, and after (ri'.lianrt had hid the accounts for two or throe welts. no exception was taken to any of thp items, the accounts were balanced oft in the books, and Gilliaud signed an I O U for the balance of £271 On 3d. Witness got the proceeds of Gilliand'g crop in 1885, but after

that he made advances to pay harvesting, threshing, &c, but he did not get the crops. Gilliand did contracting work on the farm, and his earnings were religiously credited to him in tke account. The interest paid to John Reid aud Son appeared in the account as a debit against Gtlliandi Witness engaged Mr Connell to appear for himself and his two sons before the Land Board. Gilliand told witness he had an account from Connell for appearing for him, but witness did not pay it.

By Sir Robert Stout: Witness did not tell Gilliand that he had paid Connell quite enough. The moneys paid by his son to Uilliand or on behalf of Gilliand did not appear in the firm's books at all. His son kept a book of his own. There was no record in the firm's books of the cheques drawn by his son against the firm That was a matter of adjustment between his son and the firm. Witness arranged that his sheep aud his son's sheep should be depastured over the whole block, and that the men should get 2s an acre for the grazing of the sheep. These amounts had not been credited because no accounts for grazing had been sent in. Gilliand never Bent in bills for his wages or his trips, but these were credited, because the amounts were known. Witness suggested the payment of 2s an acre, either to his sons or to the head shepherd. Witness had no recollection of having ordered the fencing for the ring fence for the whole block, but if ho did order it, he had no doubt he did it at the instigation of Bomeone< Witness believed that Gilliand and Wymer must have said it would be iuconvenient to go up to Lawrence to make their applications, and possibly he might i aye suggested to them that, to save them trouble, Mr Herbert should act as their attorney. The fencing might have been paid for by the firm's cheque. He could not explain how it was charged to John Martin Smith and how it only appeared in John Martin Smith's note book. John Reid deposed that he took a mortgage from Gilliand for Smitb. It was witness who suggested that the mortgage should be taken in his name. This concluded the evidence, and after the evidence in the case of Smith v. Gilliand had been taken, learned counsel addressed the court. The case was adjourned till the following morning for the examination of the plaintiff upon a certain point. SMITH V. GILLIAND. Claim £150, or the possession of certain goods. Mr J. Macgregor appeared on behalf of the plaintiff, James Smith, ot Greenfield, farmer) and Sir R. Stout on behalf of the defendant, John Gilliand, of Waitahuna West, farmer. The plaintiff alleged iv the statement of claim that on the 7th July 1887 ho hired to the defendaut at a weekly rent of 10s eight draught horses with harness, two double-furrow ploughs, a spring cart with horse and harness, horsepower and chaffcutter, reaping machines, and other articles; that in the month of October 1889 the plaintiff terminated such hiring, and demanded possession of the horses and chattels, but the defendant refused, and still refused, to give them up. The plaintiff prayed judgment — (1) for the possession of the horses and chattels, or for £150 in case possession could not be had ; and (2) for an injunction restraining the defendant from selling or otherwise disposing of any of the said horses or chattels. The defendant pleaded that the horses and other property were prior to the 7th July 1887, and had always since been, his property. The plaintiff was called by Mr Macgregor and examined in snpport of the claim ; aud the defendant was the only witness called for the defence. The case, like the preceding one, was also adjourned. The court rose at 5.30 p.m. Thuhsday, June 19. bbid v. giixiaot) and smith v. gilliand. In these cases, in which Mr John Macgregor appeared on behalf of the plaintiff and Sir Robert Stout on behalf of the defendant, John Reid, recalled in the former action, stated that the reason he suggested that the mortgage from Gilliand should be in his name was that Smith said he would have a better hold over Gilliand if the mortgage was in the name of a stranger. His Honor reserved judgment. BBAL V. BROWN AND HERBERT. Claim £342 10s, balance alleged to be due of commission upon the survey of a railway line, and the preparation of plans and specifications in connection with it. Sir Robert Stoufc appeared on behalf of the plaintiff, Latham Osborne Beal ; and Mr Haggitt on behalf of the defendant John Francis Herbert. There was no appearance on behalf of the defendant James Clark Brown. The statement of claim set forth that in the month of April 1886 the plaintiff was employed by the defendants to survey the line of a proposed railway known as the Eaitangata Lake railway, and to prepare the plans and specifications for tho same, and it was agreed that the defendants should pay to the plaintiff therefor a commission at the rate of 3§ per cent, on the cost of the railway ; that in pursuance of the agreement the plaintiff made the survey and prepared the planß and specifications ; the cost of the railway, as estimated by the plaintiff, was £17,500, and a commission on that sum at the rate of 3| per cent, amounted to £612 10s but as the railway had never been constructed the plaintiff was willing ti deduct the sum of £75 as an allowance for supervii-ing the construction of the railway, which the plaintiff would have done had it breu constructed ; that the defendant Herbert had paid the plaintiff two suras of money amounting to £230, leaving a balance of £307 10s due and owing; that the plaintiff afterwards, at the rf quest of the defendants, prepared ?u extra copy of the plant;, and said that £35 was a reasonable bum to charge for it. The plaintiff therefore praye 1 judgment, againbt the defendants for tho hum of £342 10s

The defendant Herbert filed a statement of defence, in which he denied that he employed the plaintiff; and admitted the payment of "the sums of money mentioned in the statement of claim, but pleaded that he paid them for and ao the request of the defendant Brown, who alone was indebted to the plaintiff iv respect of tbo cause of action. For a further defence, the defendant pleaded that if the allegations contained in the statement of claim were proved, the sums of money admitted to have been received by the plaintiff were bufflcient to satisfy the claim.

Sir B. Stout, in opening the case, said that the letters, which he would produce, from Mr 1 [Tprbert, as well as conversations with Mr Brown, would abundantly prcsvo that the defeudauts who employed Mr Beul In do the work mentioned in the statement of claim. The defend&nfcs first i-aw Real regarding the matter on the Ist March 1886, when they went to Heal's office. Herbert told Beal what they wanted done, and suggested 3 p u r cent as the commismoii. Beal sai 1 that 5 per pent, was the usual eorainissicn, and that 4 per cent, was the lowest he could take, but ultimately, to ror-efc the defendants, ho ngreed to accept 3k pir cent. After this agreement had beeu come to, Beal went on with the work, aud in April 1886 ho wrote to Herberb informing him that he had completed the survey of the line. Learned

counsel read a number of letters that passed between the parties, and contended that, in face of them, there could be no doubt that Herber t land Brown employed the plaintiff to do the work, that the estimate the plaintiff had made was a fair estimate, and that the price the plaintiff charged was a low price. The plaintiff was examined at some length in support of the claim, and at the conclusion of his evidence an adjournment till the next day was agreed upon. The court rose at 4.30 p.m. Friday, Jonb 20. beal v. brown and herbert. Claim £342 lO.i, balance alleged to be due of commission upon the surrey of a railway line, and the preparation of plans and specifications in connection with it. Sir Robert Stout appeared on behalf of the plaintiff, Latham Osborne Beal; and Mr Haggit on behalf of the defendant John Francis Herbert. There was no appearance on behalf of the defendant James Clark Brown. In this case, which was resumed from the previous day, it was intimated that the parties to the action had agreed to >\ settlement, the terms being that judgment should be recorded against both defendants for £261 2a, without costs. Judgment was entered up accordingly, and the court then rose.