SUPREME COURT.

Otago Witness, Issue 1911, 25 September 1890, Page 24

SUPREME COURT.

CIVIL SITTINGS. WEDKMDAYi 3EPTKMBKR 24. (Before hie Honor Mr Justice Williams. KOBSK'fSON ANI) ANOTHER V HttVDBS AND OTHKRB. Action to recover £5000 alleged to have been invested negligently and unauthorised^. Mr Jelliooe (of Wellington) appeared on behalf of the plaintiffs, Mary Jane Frances Kobertson and Frank Oarlyle Hobertson ; Mr Hoslting on behalt of the defendant, Oharles Ritchie Howdeu; &Ir Robert Stout, with him. Mr Solomon, on behalf of the defendants, Bryan Cecil Haggitt and .1 illiam Robertson Ketchen; Mr Chapman on behalf of the defendant, William James Mudie Larnaoh l and Mr Frnser on behMf of the defendants, the Perpetual Trustees, Estate, and Agency Company. This case was resumed ac 10.15 a.m. John Smith, clerk of the Waikouaiti County Council, produced valuations of the l<ind in the oouuty compiled for the Property Tax Commisdoner aud tho Blueskin Road Board. Mr Haggitt'B oroßß-ekamiuation was then continued. In answer to Mr Jellicoe, he said that Balm-jr's mortgage was prepared in his office. When witness spoke to Mr Larnach about tbe application made by Mr Stanford for a loan, he (Mr Larnach) was cross when he found he could not get all his own «ay, and he went away, witness thought, to get Mr John Reid's valuation of the Orakanui property from the National Insurance Company. The letter produced, written in 1867, was drawn up by witness's father. After reading it, witness could not say that the settlement was in the colony at that time. It certaiuly appeared, however, as if the settlement was here at that time. To Sir R. Stout : Before witness agreed to give Ihe losn to Stanford he was perfectly satisfied the security wr.s good and sufficient ; he was almost forced against liis will to belitve tbat. Mr Robartbou was informed of. the Investment, and made no objection to it. To Mr Chapman : Mr Larnaoh was in England at the time Balmar'e security was taken. Witness did not eommunic \te with Mr Larnach 's attorney ; he did not know he had one here at that time. Robert Loftus Stanford (recalled;, in a .swer to Mr Jtilliooe, said he did not atate the previous day tbat he mftde no piofib out of the land. He nnver made £300 a year out of it for grazing purposes, &c, and it was impossible that he could have represented to Mr Hagi-itt that be did so. He never made profit from butchers or drovers, and never repiesented to the trmtees that he did. Witness never had any conversation with Mr Haggitt about paddooklng. Spencer Brent, of the firm of Haggitt Brothers and Brent, said he had been in business since 1871. Witness acted as attorney for Mr Robertson from 1871 to the time of Mr Robertson's death, and had frequent communications from him. On 2Gth October 1877 Mr Robertson wrote to him, one* olause of the letter being to the effect that both Mr Ketchen •and himself would prefer if the funds were invested in one sum in landed security, Witness reoeived letters from Mr Robertson on the I4bh March' 1879, on the 10th September 1879, and on the 9th April 1880. At the time the loan wai made to Stanford witness was acting as attorney for Ketoheu. Stanford spoke to witness abjut his application to borrow money from Mrs Robertson's trustees. Witness received some particulars from Stauford about his property, and on the 13bh September 1881 he was at a meeting with Mr Haggitt and Howden when Stanford's apolication was considered. Nothing was done further than that it was agreed to get a valuation of tbe property from Mr John Roberts, and witness was instructed to write to him, but it was fouud he was out bf town. Subsequently witness saw Mr Keid, and asked him. what he thought of the property. Mr Reid spoke of tha natural grass on tbe land, and left the impression on witness' mind that what could be got from the grass would pay tne mortgage interest Witness was at a eecond mcc' ing.latein the evening, with Mr Howden and Mr Haggitt. The valuation was then again diecus»ed, aud it was agreed to advance the money. Ihe cattle were mentioned at that meeting, Mr Howden being apparently muuh influenced by the f.ict tbat the land was capable of carrying them. Witnf 88 ask^d Mr Reid for a second valuation addressed to the trustees, and it was forwarded, being similar to the first. Mr fllaok also made a valuation, but witness had searched foi it without success. It was not in the possession of his firm. Witness wrote to Mr Robertson, on the 4th November 1881, informing him that at last his money had been invested — £iOOO having be'-n loaned to Mr Stanford on the Rfcurity of his property at Blueskin for a term of five years at 7 per cent. To Mr Jollicoe : Witness alwayn paid the fire premiums yearly, gene; ally a sum of £\6 or so. The preml'im was afterwards raised. Witness never paid any rates.

John Reid, at one time of the firm of Held and Duncans, sild he had a ruoder ito amount of valuing lands about Otago. He h;iil been engaged in it for considerably over 2.> years. Previous to 1881 he wont into business, and it was part of hie duty to value securities. The National Insurance Company hal employed him be'ore that to value on their behalf, and he had continued to act for them since. In JRBI he was asked to make a valution of Mr Stanford's property at Orskanui. He went to the property and found it in good order. There wns no eridence at that time of damage by rabbits ; they had not commenced. The buildings were in good order There was some manuka scrub on the land but th« goree was well kept. Witness had no recollection of telling Mr Brent that the land would carry from 100 to 150 sheep. Witness sent his valuation to Mr Jack, bsing particularly careful about ft.

To Mr JV'ilicoe : Witness started the business of vainer in 1877 He hal b a en a farmer and was * farmer now. ft took him about three hours to valufl the Orakanni property. He did not r'de over it. 1 but walked over as much of it as ho could in thn time He could not. cay who told him how much o' the lnnd had been linger plough. It was prob»We Mr Stanford gave him an psfcirnare— about 200 acres altogether. He did not think much of the nitural grans, as it did not show well. He saw no sheep on the land, but thera were r ome cattle on tfc. He did not HO round all the biundariea ; perhaps he w»nt round a fourth of it, but he satisfied hirueelf that the whole fence was in good order. If the land with manuk* bush on it had been Bold It would have brought £10 an acre at the time. Witness did not know tbit Mr Stanford bad been hit own architect in connection with the building. Witness had never bought or sold a eohool. He did not consider about the rateable value or tha insurance premium Witneoß never heard that Mr Larnach was interested in the property before it was sold to Mr Stanford. To Mr Solomon: Witness did not think there would have been any difficulty in aelllrg the land at the prioe he put upon it. Thotnus Oalcutfc, manager of the New Zealand Mortgage and Investment Association (Limited), said he had been 3S years in the colony. He was valuer for the Government of 'and bought for rj-'l-way purposes, aud had also valued, other lnndi He know the Orakanui land in 1881, ha"inK often to pasture cattle on ib beforn Mr Stanford's tiniP. Ihe v-ilue ol the land -»t that time, without, buildings atlO. improvements, he estimated at £2810 or J52850. Perbtifi* it would not have gone In one bl-ick. but if it Imd been cut, up into sections of 50 or 100 acres It might have brought that figure. r !'o Mr J-'llicoe : Witrif>°' company had no country lands on '.hoir lianas In Otago ; they hid a fo» town Ihi ds. Ho wr.s no' interested in kepp'.ng up tha V-.1D6 of lands. If he had out up tho I mii he would liave dividpd it according to tho lay and contour of the country.

JMinunrt Hwl Xenyon. of the fiun of Kenyon and Ho&klng. said he e.ct-wl at ono time aa attorney for Mr Howden. The attorneys were produced.

After the luncheon adjournment, Sir Robert Stout intimated that defendants did not intend to call further evidence. Mr Larnaoh was not present, and he would not ba called, but he might be examined by.tho other s : de if deaired. The interrogatories seno to Mr Larnach and hia letters would be put in

Mr Jellicoe then rodved for adeoreoin terms of the stßlemSnt of claim. After stating the duties of trustees iv such cases as the present, he submitted bhat tie Orakanui Investment was not onea prudent man wouM have lent money upon. Mr Reid, in his valuatioK, eaid that besides the college of 22 rooms there were 800 acres of land, 600 of which represented scrub and tussock, 250 of which had beon under the plough and English «rars, while Ihere were 40 acres of manuka. A seciuity of that nature was of course to some ext«nt a security, because It was a security for land t still it was not a proper security for trust money. It was, he subin'tted, not a security at all for any sum beyond the value of the land as I.nd. The security for more th»n this was the solvency of the borrower and the nourishing business supposed to have be r -n carried on by him at thattime. It was the d'-ity of tbetrustePß, he submitted, to avoid all »ecuriMes of, that class which were attended with hazard. To lend £4000 on land valued at £5000 was rashly to disregaid the ordinary rule; iv f>iot, no move than £3000 (roughly speaking) should have Deen advanced. Then as to the advance on the Oamaru property. It was made in Messrs Kagglttßrothero and Brent's office, and, prior to being made, that firm, including Mr Ha^gift, bad noted all that appeared in the title deed They must be talteu to have been awore in 1874 that the property on which they were asked to advance J2IOOO had been sold by the then owner for £550. There could be no doubt as to that belug -the price that was paid, whatever the subsequent transaqtions might have h een between tbe buyer and the selle- in the course of their after career. Then again, looking ,"at the deeds, It would he seen that in 1877— one year before the advance was made — Julius sold the property to Balmer-for £800. Kow, what was the history of the trautaotion? Balmer required money, and went for it to a person with whom ho was accustomed to bave^eallngs, and be told this gentleman he wanted t* borrow m^ney, and that he wanted him to make a valuation for thit purpose, ihafc was Mr Sumpter's evidence ; and Mr Sumpter, without reward, prepared a vUluation showing fchnt the property at Oamaru was of the value of £1500. That valuation was sent to financial agents at Ounedtu (Messrs Black, Quick, and Co.). for the purpose of getting a loan, aud they passed it on to Mr Uaggltt, who for tho present accepted the borrower's valuation of the property. Then Mr Iloi'den took upon himself to telegraph to Mr Lees, a meat preserving gentleman. It was not known what Mr Howden asked, but it was known that Mr Lees replied that the house Mr Sncnpter valufd at £600 was an old building and of little value. His learned friend then told them that Lees was a gentleman who knew more of property than any other man in Otpgo. There wks nothing left, therefore, as security for any sums advanced except the laud. Now, as to its vniue. Mr Sumpter said he frequeat'y sold land iv the Oamaru district, and that ho knew whnt land was fetching in thnt particular locality Mr Sumpter said that the value of the land as. land was only £900 -and that was the seour}ty upon vi-hicb the trustees hed invested £10:)0. Mr JeUicort'then referred to the class of evideuce brought forward by the o* her side und pointed out that, chey hid adduced nothing to controvert Mr M'Konzle's BCtitemen.ts us to the value of tho Oralcanul property. He then referred to the law poiuts on the matter and quoted a number of cases iv support of his ciuteutions. In conclusion, IVfr Jellicoa said that at a later stage he would require to read several letters which had been put in, but it would not ba for the objeot of opening up new matter

Sir Robert Stout, on behalf of defendants Hagsjitt and Ketchen, shortly referred to one or two authorities cifcpd by Mr Jellicoe, ■which he held had no bearing on the oise. He asked, Wh<)t were the deed's that the court had to interdict ? There were two deeds. There was first the deed in Scotland, which was a Scotch deed. Thf re waa a second deed in New Zealand, in purouance of the Scotch deed, because the Soonoh desd provided for the payment of the money And It was said about thir that Krtchen a breach of trust in getting the 'noney. The fact was b.3 never got the money. He had no attorney here until four years afterwards. Wherein was the breaoh of trust ? and if them wis such, why was ho not sued for it ? Under tho general investment olause in the deed the trustees bad a right to invest the money, and the o"ly question tbeu was— where? Undef- tbat clause thtJ court would understand th-.t the money was to be invested in New Zealand, and ;t also gave power to the Scotch trustees to invest their money in New Zealand, or abroad, or elsewhere. Under the indemnity clause in the deed, hoßUbtnitted, the trustees were not responsible for anything but groes negligence, As far as Mr Haggitt and the other defendants were concerned, -there must be some proof of wilful neglect, or there mupt be gross -negl'gence. Now. what was the evidence of gross negligence? First, so far as the Oamaru mortgage was concerned, not a single tittle of, evidence was called concerning it by the plaintiffs,' and according to Mr Haggltt's evidence the mortgage must be retnruingat present something like 9 per- eenl.. on the sum invested. If his Honor took fromthe£looo the sum of £170 or£lßo received, and then considered that the rent was £45 for one, and 10s a week for the other it would leave nearly 9 per cent, on the investment. On the Kakanui property it was also seen that tbere was no loss. If thfl Blueakln property bad nor, b"en taken into consideration, he asked, woul i his Honor have called in the defendants at all to give evidence in defence? There was nothing against them, and therefore his Honor would not have taken that step What steps had b»en taken in connection with the Oamaru land ? Mr Howden himself inspected the property, not being satisfied with Sumpter's valuation of it, and 9ven after tbat it waa agreed to a3k Lees to va"ue tho property for th p m, and this lie did. Besides that Mr Hnggitt was well acquainted with the place, po that even if tho trustees had not obtained the valuations from Sumpter and Lees they would have been ju-tified in acting on the knowledge which th^y themselves posse<sed of it, both of them having seen It and inspected it. Another point was that no complaint seemed to havj b"en made by either Mr or Mrs Robertson p.bout tho investment, but on the rontrary they sent out a letter from Franca approving of It. Now, about the Blueskin property. Peculiar testimony hud been given jib to its value Mr M'K°nzie w«b the first, and he valued it from a small graziug farmer's point of view ; and then there was the evidence of the rouseabout M Connell, which was of ro value at all. The fact was that the Orakanui property coat Mr Stanford over £5400. He then spent, on tbe property and improved to the extent of something like £3000 The trustees therefore wt-re aware when Mr Stanford's appl'cation wm b"fore them that it had cost him £8000, Including th-i improvements he had put on it, so that they were not lending In exce»s o' half the value. Then how did the trustees proceed to perform thtslr functions ? First, Rlack'n report was taken, and afterwards two others— one from Pym and one from Reid Howden called ou Reid and Hapgtfcfc went to Pym, and fchpy consulfc-d with them ahout the valuations, so as to find out as much as possible about the property before they took it on their hands. Then" Howden and Haggitt met and discussrd the mater and what more could they do? VThere was the wilful neglec', md whore did the gross negl'gence come in? So far, then, there was not the least thing to show that the r e was Rroaa negligence If the other side wisher"- to 3how thpre was any n('Kl fi(> t, they should have brought evidence to show the value of the, Innd at the time the advance was made, and if negligence was alleged the court should have It stated what act, the trusteps could have taken that they did Dot take In all the caees cited there was a dlstiuctlon bnr.ween them and the present one. Learned counsel thea went on to refer to authorities in support of the defendants' case. He submitted that so far as this case was concerned no trustee could have done more than was done to ascertain th« value of the property on which th.* loan had be,en imde. Everything -was done that could postlhly be done, and he would undertake to say that the trustees did what hardly any trustee, ever did in this colony -to go perfonally and question the valuers as to how they arrived at their vnluation, and talk and coufor with them abou v , it. He 6nbn>ittPd that if tbe decrease in the value of landed property in the colony had noh talwn ulace not a singlo word of thn dispute wouM hr.vo coaio before the courl.. The decree should be in favour of defendant! . At 6 20 p.m. the ciurt adjourned t'll 10. .5 a.m. next rrornintf-

"Still He's There."— We regret that injdverrently the pampp of Mr J. A, Mason »nd iv's pood Httle horse Joker (-/no of the fivers of tbe hunt), wero omittad in th.} li*t of Btraight goers during the Wantvnnd week. — A doublp-deok electric cai, carrying 175 persons, is being experimented with in Pittsburg.