IN BANKRUPTCY. (Before His Honor Mr Justice Williams.)

Otago Witness, Issue 2511, 30 April 1902, Page 27

IN BANKRUPTCY. (Before His Honor Mr Justice Williams.)

RE ROBERT DYNES. j Application for order of discharge. j Mr J. S. Neave (of Gore) appeared for the • "bankrupt, .Robert Dynes, of Glenkenich, farmer, j Me C. C. Graham," official assignee, was also j present. j The Official Assignee's report set out that the bankrupt's statement showed liabilities £5306 18s and assets £4302 10s; that of the assets £2427 10s was shown aa the surplus from i securities in the hands of secured ciediiors, but, upon realisation, the bankrupt's properties \ ere, found to be secured \tp to their full value, | : rd all that was obtained from them for the i i j.secured creditors was £150. The remaining , : -sels cold well: Tho report also stated that ! i -c bankrupt's conduct had been most inisatis- j ■factory. He had not helpr.d to realise the ' : for the benefit of his creditors. On or.c • r.casion he sent the assignee's agent on a I v .'J-goose chase aiter some horses which he i:u.=t have known were not in existence. Then, , ."Tter reporting having found gome cr.ttle, he neglected to bring them m for sale, or to ; identify them, so that the agent could not act, i until compelled by an order of the court. The l>ai:krupt had kept no account books, so that j there was no means of tracing what money l>c j siad iec3ived and paid awoy. The • state hod paid a dividend of 6s Sid to the unsecured i cieditors, whose claims amounted to £4692. j Mr Neave said he understood tuat outside . the unfavourableiices of the official assignee's report there was no opposition by any of the , creditors. j His Honor: I see by the report that an r.idor , was made for him to deliver over something. J Did he obey that? ! Mr Neave said ho did The fact »v?.s that ] some stray cattle owned by the bankrupt wore ! found in a different part of the country, aryj ■ bankrupt had stupidly neglected to bring them J into the market according to instructions. He j was then prosecuted by the official assignee under the penal clauses of the act, and when he (learned counsel) became aware of the fists lie had the cattle brought to market, prior to ilia order being made. It was not suggested that that was anything move than stupid carelessness, and .having- been srntouced to four months' imprisonment, and, having paid the ! whole of the costs, amounting to £17, the man , had perhaps been punished sufficiently. His Honor: The act Bays that having been Lrought beforo the court undf.r the penal clauses ho cannot have an immediate discharge. , It is a cm a* for suspension fo:- a time, and tho question is, How long? Mr Neave, in further explanation of the bankrupt's conduct, referred to his transactions with -firms in Christchurch, arguing that in what the bankrupt htt>l done in thpt respect lie had done nothing wrong. It was also set out by tho assignee, in his report, that there tvas a discrepancy between the stock obtained hy the a.s e igneo and the list of stock given to tho creditors. At the meeting the explanation g;ven by tho bankrupt was that the stock, being ■largely sheep, had scattered over the country, and a. number had strayed and got away from the mobs, so that the severity of the winter lied caused a. loss of between 700 and 1000. That exnlanntion was accepted by the meeting as being correct in fact. The Official Assignee could not accept that explanation. The reply of the bankrupt as to the deficiency was vary unsatisfactory, not only as to the horses, but p.lso as to the sheep, l>igs, ar.d cattle. Mr Neave said that, at anyrate, wp.s the l.'c.nkrupt's explanation. The bankrupt had also gevin an account of his purchases and bales of stock in the fiix months preceding his bankruptcy, and since then no further inquiry iiad been made. There was a further objection by the assignee, iv that the bankrupt a m giving a verbal statement of h ; s affairs omitted ■j. debt of £750. The explanation was that or.c Mr Henderson had for a number of years been making advances to the bankrupt, being a friend of the family, and the bankrupt at the time of his meeting simply made no note of them. Henderson had a second mortgage over the farm, and when the creditors resolved to »*taelc tlae vuortsjsge wl»ie\\ laanlcfupt liad cxc- ' cuted in f?vour of Henderson, the latter, to ' sttt-le the action, gave the assignee practically on behalf of the bankrupt's wife and family. As to the faeb thrt the bankrupt kept j no accounts, he had to say that, usually, farmers were not looked to to keep books of ac- < cunt, but, at the same time, the bankrupt 1-ul" his bank book and *hia stock agents' ac- • i.nts, and was in- Such v. position that lie j . 'a able to give to the assignee a _correct t.idcring of all his dealings in the six months j.i mediately prior to his bankruptcy. That, he pbmitted, was as much as persons in like ' i. finesses could be reasonably expected to do. lie severity of t\e winter and the drop in ■uarket prices injured bankrupt's position con-h-derably, and led to his troubles. Taking all ■these facts into consideration, he would ask his Honor to make the term of suspension as fchort as possible. The Official Assignee eaid the creditors felt vory strongly on the matter, but relied entirely on Oiis report, which put. before his Honor a irne and correct statement of the position. That was why they were rot represented in the court. The neglect of the bankrupt to assibt him had been consistent from the commencement of the bankruptcy. With regard to keeping pway from the creditors ihe fact of a mortgage to Henderson, he had a notice from sl stock agent, signed by the bankrupt, in which no mention was made of the mortgage. Owing to the neglect of the bankrupt, considerable losses had accrued to the estate, and there was a deficiency of 13 horses, 68 pigs, 367 sheep, and 125 cattle, the estimated value of which was about £1760 It really looked as if there Lad been more than negligence in the matter. His Honor : Do you think there is a chance of getting any more out of the estate? The Official Assignee: I think it is quite hopeless to expect that any more will be realised. His Honor said the order of discharge would "be suspended for two years. DIVORCE. AND MATRIMONIAL CAUSES. (Before His Honor Mr Justice Williams.) C3AJG V. CRAIG. A wife's petition for dissolution of marriage on. the ground that the respondent had been for four years and upwards a habitual drunkard, and had left his wife without means of support. Mr A. C. Hanlon apijea'ed for the petitioner, Alice Elizabeth Cr.tig. There was no appearance of the respondent, Kobert Craig, of Diui£Si- axnre&s driver.

Mr Hanlon sakl the parties to the suit were married in July, 1858, and shortly after the mairiage the respondent took to drink In the ct urge of two or three years their home was sold, p.nd the wife then did needlework and so on to get a home together again, but the lespondent continued his drinking habits. The petitioner managed to put a little money together and got ? home of her own. The respondent lived with her, and hart continued to dj so until the pies.nt. She had tsken in boarders, and had kept the house going in that way, but during the last lour years or more tJu- respondent had bseonie even worse than before. He had provided the petitioner with no money since 1897, and had done nothing towards supporting the home, and whatever n.oney hs h?d cuiied he had spent in drink. The petitioner wp.s now compelled to move for a divorce on tha ground that latterly the respondent would not only do nothing towards supporting the house, but had made use of violent and abusive language in the house, and talked improperly to his wife, the result of wHch was that he was preventing her from earning her living in that way. Evidence was given by Alice Elizabeth Cfaig (petitioner). Christina M'Kenzie. Agnes Curtis, Wilham de Noiville, and William Hjggin£o:i. His Honor granted r. decree nisi, to be made absolute after throe months. ' ' In reply to Mr H»nlon, his Honor said he •vculd. ;yake an order giving the wife the control of the children, three in number. CIVIL SITTINGS. Monday, April 38. (Be-fore His Honor Mr Justice Williams.) THOMAS BRYDOJfE V. HOBERT LEE. A claim to be declared the trustee, on behalf of the defendant, of 650 shares in the New Zealand Coal and Oij Company, and that the defendant be ordered to pay to the plaintiff the sum of £500. Mr J. H. Hoaking appeared for the plaintiff, and Mr W. A. Sim for the defendant. The statement of claim alleged — (1) That in 1898 the plaintiff and the defendant were temporarily in England, and in October, 1898, the defendant requested the plaintiff to apply for and take up in his (the plaintiff's) own name, but on the defendant's behalf, five shares of £100 each in a joint stock company incorporated in England called the New Zealand Collieries Railway and Oil Syndicate (Limited), which was then offering shares for subscription, and promised the plaintiff that if the plaintiff took up the five shares the defendant would on his return to the colony take over the shares and repay to the plaintiff all moneys which he (the plaintiff) should pay. (2) The plaintiff took up five shares in his own name in the syndicate, and paid in respect of the shares tdio sum of £500. (3) The defendant returned to the colony in December, 189 S. (4) Afterwards the syndicats disposed of the properties which it was formed to acquire to a company called the New Zealand Coal and Oil Company (Limited), upon terms under which each member of the syndicate became entitled as of right to have 130 £1 shares in the New Zealand Coal and Oil Company (Limited), credited as fully paid up allotted to him in respect of every £100 share held by him in the syndicate, and by reason thereof 650 fully-paid-up shares of £1 each in the company were allotted to the plaintiff for and on behalf of the defendant in respect of the five shares. (5) The plaintiff had frequently requested the defendant to repay to him the sum of £500, but the defendant denied that he ever made any agreement so to do, and refused to pay the £500. (6) The plaintiff was trilling to transfer to the defendant the 650 charoa. (7) The plaintiff claimed that it might be declared that he acquired and hpld the 650 shares as trustee for and on behalf of the defendant, and that the defendant might be ordered to pay to the plaintiff the sum of £500. The defendant's statement set out — (I) He denied that he ever requested the plaintiff to apply for or take up on the defendant's behalf any shares in the New Zealand Collierirs. Railway, and Oil Syndicate (Limited). He said that before the plaintiff took up the five shares the defendant promised that if the plaintiff on his return to the colony did not wish to keep the shares the defendant, if requested to do so by the plaintiff on their return to the colony, would endeavour to sell the shares for the plaintiff, and, failing a sale, would himself take over the shares. He denied that he ever made puy other promise to the plaintiff in connection with the shares. He admitted the allegations contained in paragraphs 2 and 3 of the statement of claim. The plaintiff returned to the colony in April, 1899, but did not at any time after his return request the defendant to sell the shares for him or to take them over himself. The defendant did not know whether 650 shares in the New Zealand Coal and Oil Company (Limited) were allotted to the plaintiff in Teapect of the shares, and he therefore denied that they were so allotted, and further »=>;«! tljal. ii tKey were -so oAlottecl tko <l©f<stt<l«Jlt denied thai they were held by the plaintiff for or on bs-half of the defendant. The plaintiff- inado no claim on the defendant in respect of the shares until August, 1901, and he denied that the plaintiff frequently, requestedthe defendant to repay to -him the sum -of £509 | paid by htm in respect of the shares. i - Mr Hoaking said the qxiestioa practically ! was whether a contract was made between the plaintiff and the defendant, under which the defendant was now liable to pay to the plaintiff the sum of £500. The evidence would be that of Mr Brydone and Mr Watson. Mr Watson was the general manager for the Coal and Oil ! Syndicate in New Zealand from the time it was formed, and when Mr Lee returned from England he was the local director, being joined j afterwards by Mr Brydone, and Mr Watson was therefore brought into constant communication with each of them m connection with-th« affairs of the company. Mr Watson's evidence would go to corroborate that of Mr Brydone, that Mr Lee was under an obligation to repay Mr Brydone the £500 for the shares he had taken up for him. Certain correspondence also look place. It was true that Mr Brydone did not make a formal demand on Mr Lee for the performance of his obligations until August, 1901. The fact was that Mr Brydone and Mr Lee were constantly together, and Mr Lee on several occasions spoke to Mr Brydone and referred to the ob'igation. Tt was a thing, he said, he would not lose sigtht of. Mr Brydone considered Mr Lee to be a man of meaiis and a man of his word, and, being on friendly relations with him, did not, of course, threaten him with a lawyer's letter and say " I want you to nay up the money," but considered that when Mr" Lee found it convenient to do so he would frankly come forward and repay the £500. Mr Lee, however, did not do so, and Mr Brydone in August, 1901. wrote a letter to him reminding him that he had not taken over .the shares. No reply was sent to the letter. One would have thought that when there was a direct charge to redeem the £500 worth of shares a business man would have sent arep«y if it was not correct. On the sth September Mr Brydone- sent a second letter, but again there was no reply. Mr Brydone then instructed his solicitors in the matter, and they wrote to Mr Lee on the 11th December, 1901. That elicited a reply of a very curt character <from the defendant's solicitors— namely : "Mr Lee has handed us your letter, and we will accept service on his behalf. Mr Lee made no such arrangement as you describe." Mr Brydone, npi wishing to. indulge in litigation rashly.

again instructed his solicitors to write to Mr Lea saying he had corroborative evidence of the arrangement made, and giving Mr Lee another opportunity to consider the matter. To that came a reply- "We have to acknowledge your letter, and merely to repeat that we wi.l accepi service."' Learned counsel briefly referred to the law of the case, and then called evidence. Thomas Brydone, plaintiff, said that Lee went Home having an option in lespect to the Kaitangata Company and some shtile fields at Orepuki. Lee aso was connected with the Castle Hill Company, but witness did not know whether Lee held an option over th?t. When witness arrived in London Lee met him on the railway station and asked witness for assistance in the bubiness. Witness promised to do what he could. The promoters weie anxious to have as many shares as possible taken up in the colony, and Lee and the other promoters urged witness to take some. Witness's intention had been, if there was a sale of the Kaitangata Company, not to take shares in any new buying company. Ultimately they got him to promise to take £1000 worth of shares and to go on the board. His name was put down for the £1000 worth of shares. As the negotiations proceeded Lee told him that the promoters were anxious to have more sharea taken up in New Zealand, so as to show the bona fides of the concern. Lee eai.-l that l?e had taken" a number of shares, and would liave taken 500 more, but he had npt the money, to pay for thqm at the time, and he askt-d witness to take up 500 in. addition to the 10(-0, saying that as he would be in funds when ne got back he would then take them o^ rr. Lee's recollection of the affair, a3 set out in the statement of defence, was not correct. Witness denied there was any such agreement as Lee described. Witness paid the £500. When witness returned to the colony he and Messrs P. Duncan and R. Lee were attorneys for the syndicate, and they ultimately formed the ioeal board. Witness did not approach Lee fiiiout the shares: he expected Lee to approach him, thinking it would be all right. Whilst travel ing together to Queenstown in December of 1893 Lee said iv conversation that he would make good the shares. In August and Septembei oi 1801 he wrote to Lee, but got no reply, and thereupon instructed his solicitor. Wit-ness had r.ever tried to dispose of the shares in any way; he always considered them Lee's shares. Mr Sim : At the beginning you were reluctant to hs/ve anything to do with the company? — Witness: Yes. But when you went into it you went into it with a good deal of vigour"? — I generally do when I take anything up. WPen was it that Mr Lee asked you to take up the extra. 500 shares? — I could not say. In the statement of claim it is fixed as October.— l think it would be about that time. Where was it he asked you? — I could not say. We were together a great deal in England and in Scotland. Wsis it not after your return from Scotland? — I could not say. How does it come to be fixed in the statement of claim as October? — I think it was about that time, but I am not certain. At that time the number of shares you were going to take had been fixed at £1000 worth ?—? — Yes. Did you know how many shares Mr William Watson was going to take? — I do not think so. 5 Yoi^ were in communication with him? — Yes. I was "Writing to him. Th« [suggestion that you should take up some more taares originated with Mr Lee? — Yes. Yoiiare certain of that? — Yes. No\ff, I want to draw your attention to a letter you wrote from Scotland to Mr Lee, in England. It was written on the 21st September in the Scottish Conservative Club, Edinburgh, and you said : "I am glad to hear you are getting plenty of applications. If it becomes necessary I may take up some more for Willie and myself." That refers to Mr Watson?— Yes. You believed at that time it was going to be a very good thing indeed? — Yef>. I believed it was to be right enough. A first-rate concern? — Yes. There was no difficulty in getting applications in New Zealand for shares, was there?— l do not know. I was not here. But you were in communication with Mr Watson ?— Yes. There was £10,000 woith resprved for New Zealand?— l suppose that was the number. And there was no difficulty in getting them off?-No. You heard wbiie at Home that they had been got off? — I suppose I did. And it was not a question of letting everybody who chose come in, but you picked and chose, did you not ?— I do not think so. I was not here. There were some people who were not to be allowed to come in '•'- -I do not know what was done. Did you not express an opinion on the subject?— Not that I know of. At any rate, one thine; you are absolutely certain about is that you wero to be a bare trustee for Lee? — Yes. •Vrcd thcr? was never a-t. *my time »*3y <j-utss-tion of his selling sharea on your behalf? — No. On the 2nd December, 1898, you wrote to Mr Lee : " I have told Angus to see you about the five shares beyond the 10 which you got mo to take up, and which you said you wonld get taken up in Dunedin ;" and later on you wrote: " You will probably get somebody who will take that 500 of mine off your hands that you said Duncan would take. I have enough without, but do not hawk them." — I still considered he would sell them for me. You apparently thought it was a good thing? — Yes. As a matter of fact you kept all your shares? — I did not try_ to sell them.And you piil Mr Watson down for an extra 400"? — 1 cannot remember. Mr Lee says you put Mr Watson down for another 400, making .his holding 1000? — I do not remember, but I will not deny it. At anyrate, whatever arrangement was made between Mr Lee and ycu in regard to these shares that arrangement had to be carried out v-hen he returned to New Zealand? — Yes, after he came back to New Zealand. It was not said " as soon as "• he came back. Who -was your attorney? — Mr Angus. Did you write to Mr Angus about the shares? — I suppose so. And also to Mr Watson? — I expect so. Watson knew you had taken 500 shares more than you had intended originally? — Yes, on behalf of Mr Lee. And for some time after your return to New Zealand shares were readily saleable? — A number of shares were sold at the cost pric<-. People were anxious to get into the company? — Yes. You received and retained dividends on the shares ' — Yes. •• A dividend of 10 per cent was paid in December, 1890 ; £2 10s per share on the 3rd September, 1900; and 3 per cent, on the 10th October, 1901?— Yes, I got them. You were friendly with Mr Lee at Home and after you had both returned to the colony? — Yes. But towards the end of 1809 you were in disagreement about the management of the company? — That is so. And in February, 1900, Mr Lee resigned from the board? — Yes. Before he resigned the relations between you were a iittle strained, were they not?— Yes. Since his retirement from the board your acquaintance has been only a bowing one, if it amounted nvan to that?— Y«a.

Mr Lee says that shortly after your return to tho colony he said to you: " Wptson can sell those shares for you. Ido not care to take any more myself'. 1 " — I do not remember that he said that. If he states that he said so will you not contradict him?— l think so. And lie says you replied- "All right, I will sse Willie "-th.it is, Mr Watson?— When was that? Withm a month of your return? — I do not remember that. Tho shares were not specifically mentioned by youiselr or Mr Lee after your return? — Except on the occasion when we were going to Queenstown. At that tiniu you were rather in disagrecmont about the affairs of the company, were you not ?- 1 cannot say wo were. Did Mr Lee threaten on that occasion to resign from the directorate? — I do not know. Would you say he did not threaten? — No. Wiliia-ni Proudfoot Watson, examined by Mr Hosking, said that after Mr Lee's return in 1696 they had conversations about the business of his trip, and Mr Brydone's name came up. The £10,000 worth of shares' allotted New Zealand were taken up, witness thought, after Mr Lee's •return. Mr Brydone had applied for £(300 on witness's behalf, mid witness took another £400. Mr Lee subsequently sold £1800 worth of his shares. Sales were made by him on 17th September. 18th October, 21st October, aixl 7th November, 1899, and there was one share sold in January, 1900. Witness sold three Whares for Mr Lee to Mr James Chalmer at par. , Learned Counsel : At that tune do you remember anything being said by Mr Lee in regard to any shares?— At the time Mr Lee sold a large parcel to some people in Wellington he said : " I really ought to make five of these Mr Biyrione s, but I will see to that later on. ' Did he say why?— He considered he was under some obligation. Mr Sim: Did he say that? — Yes, he wa3 perfectly frank about it. It was voluntary info mat ion on his part. Mr Hosking: Did you understand there was an arrangement with Mr Brydone? — I understood there was no doubt that he would take over Mr Brydone's five shares. Did he tell you ho>v there enme to be that obligation? — He did not txpiain thpt particularly. He simply said that Mr Brydone had taken another £ 500. Mr Lee asked him to take r.r-othcr £500, and he would take them off him later on. Then you were very friendly with Mr Lee at that time. I suppose he was constantly in and out of the office? — Yes, at that particular time I was in his entire confidence. The allotment of these phares in the syndicate was made in London was it not? — Yes, except what were applied for here. Was it on more than one occasion that Mr Lee referred to the subject of these 500 shares ? —Yes. How many?— Several times. He always broached the stibject himself. Cross-examined by Mr Sim: You consider the company a good speculation? — Yes, 1 do so now. ■ You have not sold any of your shares? — Not -one. < And Mr Brvdone has not sold any of his? — No. You advised him not to sell any of his shares ? — I never did. I do n-ot take it on myself to acivise anyone. Thei'e was an arrangement made about the shares you wero to take/ — There was no arrangement between Mr Brydane and myself. You sRy be put your name down for £6GO ycrth? — We never spoke of it. Wo were both interested in the affair, and he took the liberty of putting me down for £600. So Mr Brydone put you down for £600 without asking you or writing to you? — There was no correspondence whatever — in" fact, I got raiher a start. If he had put you down for more what would you have said? — I don't krow what I would have said. If it had been beyond my means Writing in September, 1898, Mr Brydone says : " 1 am glad to hear you arc- getting plenty of applications. If it becomes necessary I will take some- more for Willie and myself." You ari the " Willie" referred to? — Yes. At that time he put you down for £600? — Yes, that is -what I w.i» committed to. You ultimately took 1000?— When Mr Lee came out I put down another £400. You could have got off more than £10,000 woith? — Xo, ii was a pretty hard struggle, and I was glad when it wan done. As a matter of fact you could have got more off?— No. Will you swear that people gat all they aßked foi ? — Yea. Was there ever any question between Mr Lea and yourself of using shares belonging to Mr Brydone to satisfy applicants?— No. You will swear positively that never at any time was lhwc any nuestion between you and Mr Lee of using Brydone's ali n ros to catisfy any applicants? — No, 1 never di«cussed Mr Brydone's shares I want you to consider t'mt carefully?— If I said anything I have completely forgotten it. Will you kindly look at that letter? Learned counsel here handed witness a letter plated Dunedin, 11th January, 1899, in which tbc following sentence occurred : — " wants £300, so we might take*them from Mr Brydone. but we can- talk this over again." Is that your writing?— Witness replied that he remembered a circumstance mentioned in the letter. The position was that people wero anxious to get shares in the company. Mr Lee says that- he spoke to you about th?3c shares, and that you advised Brydone to keep his. Will you contradict Mr Lee? — Yes. You admit your memory is defective in tlii~> ipsnect?— Yes, in that respect. It is defective in regard to Brydone's .--liares ' — No. So far as that conversation is concerned it is. As a matter of fact, both you and Mr Brydone kept your shares? — I kept mine. And Mr Brydone kept his? — He sold 300 in the Coal and Oil Company in 1900. As a matter of fact, there was. no difficulty iv getting rid of these shares in 1899? — I did not concern myself much about sales. Mr Lee sold in October, 1901, to Mr Sinclair Thomson? — That was in the new company. Mr Hosking: There were no sales of _the interest in the old company in 1900. His lloilor: Were shares iv the new company sold after that? Mr Hoskinj; : Yes. * Mr Sim : Take the sale Mr Lee mpde to Mr Cilroy in 1900. You came to him and said that Gilroy had shares in the Kaitangata from the very first?— Mr Gilroy said he was sorry to see the end of the old company. Lee was standing by at the time when G-ilroy said he would like an interest in the new company? — Mr Leo gave him one share. Did you not suggest to Mr Lee that he should let Gilroy have a share? — No; I did nothing of the kind. If Mr Lee says you did, will you contradict him?— Yes. You sold some shares to Chalmer? — Yes. You came to Mr Lee and asked him to let Chalmer have those shares? — Yes; I simply said Chamber would like a little interest in the new company. Mr Lee acquiesced. Did Mr Lee suggest to you that you should give some of these applicants gome of Brydone's shares? — Never. Tho relations between yourself and Mr Lee T7ere then friendly. They h*v» luum for some

time the revc-rsc of friendly'' — Relations havt been strained. Worse than strained? — I do not think thej could be worse than strained. Re-examined by Mr Hosking: What was thf cause of this unfriendly feeling? — It was ovef one or two things in connection with the man- 1 agement of the Kaitangata mine. Had it anything to do with the Aitchesoq business? — Nothing whatever. There was a disagreement with you as to thft way the mine was to be- managed — Well, Ml Lee wanted someone to be put in. It was a question as to who should manage the mine? — Quite so. It has been suggested that there- was an enormous run on these shares. With reference td Mr Maitland, he was one of the directors of the Kaitangata Coal Company, and the direc» tors of the old company all took up shares in the new company except Mr Maitland? — Mb Maitland took up £300 afterwards. This closed the case for the plaintiff Mi Sim, in opening the case for the defenca said there was no suggestion cf bad faith. If was simply a case of two honourable men differ? ing in their recollection of what took place twff years ago or longer He would lead evidence in support of Mr Lee's version. It was com* mon ground that whatever Mr Lee was to dj had to be done on his return to New Zesdand\ and it was admitted that no formal roquent! was made to Mr Lee until August of 1901 1 , By that time ihe shares were going down, »nd they had kept going down until they became unsaleable. Robert Lee, examined by Mr Sim, stated that he went Home in 1897 in connection with. tW proposed syndicate. In England he met Mr* Brydone, who was one of the vendors Of the Orepuki concern, and witness's principals dasired an alteration in the option. Both witness and Mr Brydone were anxious to get tho syndicate 'going, and that it should take the shale concern with it. "In September, 1898, Brydons wrote to witness from Edinburgh saying that if necessary he would take more sharea fov Mr Watson and himself. Before that letter there had been no suggestion that Brydone should take more than £1000 worth. Tho letter was the first suggestion to that effect. Witne93 proposed to take £4000 worth of shares in tho syndicate apart from the shale interest. The conversation about the extra £500 took place either in Edinburgh or London. Brydone said:- " 1 don't care much to increase my holding ; I thought they could have been got off in New Zealand." WUiiess was anxious for Mr Brydone to take as many as he coxild, and he was quite -certain if he still wished to sell when he arrived in the colony witness could take in hand to sell them for him If not, witness would take them himself. Learned Counsel: Wp.s the number he proposed to take up mentioned? — Yes; £500. Was anything said about Watson taking some ? — Mr Brydone said he would take it upon him to put Watson down for an extra £400. Did you ask Mr Brydone to take up shares on your behalf? — No. Is this promise you told us of the only promise you made in connection with the shares? — That is the only promise. Mr Brydone evidently thought the company was a very good investment? — Yes. He had- great faith in its future prospects?— Yes. Had anything been don« in. the way of getting off the £10,000 worth of sharea reserved for New Zealand beforo you arrived in New Zealand?— No. Who got them off?— Mr Watson. Was it done easily, or did he have any difficulty? — He several times expressed himself aa sorry there was not £15,000. Now, Mr Watson says that Mr Brydone'fl £1500 worth of shares were mentioned on one occasion, and you said £500 of those belonged to you. Did you ever say that to him?— No. Mr Watson says he was sure he applied foi the extra £400. Is that true?— No. You say thnt was done at Home by Mt Brydone?— Yes. Was this £500 worth referred to at any conversation between Watson and yourself ? — Yes ; Mr Watson I looked on as Mr Brydone's principal man. He said he had a letter about these shares. What was said about those shares? — He seemed to know all about it. He said that Mr Brydone had taken £500 more than he first intended, and he was quite sure about keying them. You pay that Mr Watson also told you that Mr .orydone had put him down for an extra £400 over and above the £600?— Yes. His Honor: Neither Mr Brydone's nor your shares, Mr Lee, were any part of the £10,000 reserved for tho colony? — Mine were not, and I think Mr Brydone's were not. Mine -were taken up at Home. That would be the case with Watson?— l camiot say whether they were taken off the £10,000 or not. Mr Hosking- They were taken up in the colony. Mr Sim : Apparently Mr Watson knew all about thia extra. £500. Did you make any suggestion? — -Mr Watson asked mo to give up some of my shares for a man in Lawrence and to Gilroy, and I reminded him that Mr Brydone was inclined to sell this £500 worth. He said, " I am going to keep my £1000, and I want Brydone to stick to his.'-' He would not heai of Mr Brydonr- selling them. That was the position Mr Watson took up ?—? — Yes. I looked on him as Mr Brydone's agent. Then in 1899 Mr Brydone returned to tht colony, and you saw him frequently? — Yes. Did you speak to him about these shares?—

I only remember mentioning it to him on. the etreet that Mr Watson could sell some shares for 'him if he wanted to part -with his £500 worth. All Mr Brydone remarked was " I will see Watson." t You got some letters from him before he returned. He wrote on December 2. "'. . . I bave told Angus to see you about the five Bhaxea which you got me to take, and which you said you can. get taken up in Dunedin." Did Mr Angus ever see you? — No. Writing ta you from Nice, he said . " You will try and get somebody who will take that extra £500 of mine o£E my hands. You said Duncan •will take them " ? — I made the remark thai Duncan was going to take an interest. When did you say that? — 1 said it when I nas at Home. His Honor- What did you say about DunCan? — I mentioned that Mr Duncan was going to take an interest if Mr Brydoce was still of a mind to sell. I thought Mr Duncan would take them. The reason I mentioned it was j ■that I looked on him as an ontsider, because Mr Watson said the £10,000 would be -taken up by the old shareholders and the directors. Mr Sim: As a matter of fact did Mr Duncan take any shares? — Yes. Mr Watson gave him some. I did not interfere in the sale of the shares at all. Speaking about the parcel that was sold to Mr Symons after Mr Brydonp's return, did you say, " I really -ought to make five of these Mr Brydone' s-"? — I never remember speaking to Mr Watson about them. I sold them through a broker. Mr Watson had nothing to do with them. Mr Watson says you spoke to- him from time to time about these shares. Is that true ?—? — Never, except when he asked me about them. How many times did he aak you? — About three- times. | Mr Hoaking: I do not ndmit any authority en Mr Watson's part to bind Mr Brydone. ! Mr Sim: Then you deny you over told Mr .Watson that this £500 worth was yours 9 — Yes. j Apparently two calls were paid on these i shakes by Mr Brydone after he returned to Dunedin. Did he speak to you about the calls he was paying? — No. Mr Hosking: Is it not a fact, Mr Lee. that the company was looked on as right enough until the disappointment was found that thtrn was sulphur in the oil? — I do not thir.k thais the fact. Was it right in May when yon sold the shares? — Yea. When did it become not right enough' — I could not tell the exact date. Was it not after August'— T could rot tell. ' There was a sale in July. 1901, or a month before Mr Brydone wTote- to yon. Wns it between July and August that the trouble about the shfle arose? — It all depends on how you look on the trouble. The difficulty of purifying the shale has crept up 'lately, has it not. and been rather a trouble to the concern' — I know it has crept up, but I cannot say the date. You thouaiht it was good enousrli to ask S\ % shore for the share 1 * ir May — No How much did you get" I sold at cost price —520 for £400. You augfrest that Mr Brydone said be w-<iild take up the 500 shares. If he was willing- to take up 500 why-, did you volunteer to say, " If you do not -witnt them I will take them off your hands"? — Mr Brydone FRid he was anxious to show that he and Vat^ori had faith in the concern, and he was talnn? the shares up to show that, but that at the same time it was inconvenient to him Do you mean to say the conversation is as you are putting it? — I cannot tel! you word for word. Bui -was ihat the effect of if— Ye« Mr Brydone said, he had £ 500 worth more than he wanted to take up. Was there any difficulty about getting the shaTes off in London?— l think it was Mr Brydone's anxiety. Had Mr Brydone anything to do with the floating oi the company? — He was interested in it. What was your anxiety to se° him? — lo {,et the option of "the shale works altered Was that all 9—l9 — I wanted to tell h.m what ) had done. Did yon j-.0l pres? him to ta.ko an interest in floating the concern 9—l9 — I asked him to interview ray directors and give his views on the matter. Was not that w.th the View of gettu-.?: h:s help to float the concern 9 — Of course, I knew he was as anxious as I was. Did you not write to Mr Watson nnd say that Mr Brydcr:e had been of the grea'.er-t help to 7011 "in getting the concern floated 1 ' — Y<»E. Further cross-examined Thovign wl'.'is naid he had taken all ho cou'd tike, he could have taken four times a« rnnch, but wbat ho had taken was. he thought, all h» wa .ustttWl in taking. Witness sooka to Mr En ''o:"> :il-ou taking the sh.-ire? off his handi fo; t' . r. .1 rr. ° —Mr Brydone ccc- sa:d he rf.d ' ct f-inU .1 would be ccm\eiien'. t^ h m tr <;t'c!c to th15 shares, that lie would sel the extra fvcshares, mid ho askcl witn<-=< if he k:;c-w an--one i:i Dur.ethn vho would take them Witness <=a:d he thought Mr TruHCRn mig-ht, a:icl that ha would take them 1,.!r.-i?K 1' Mr Dun<an did not take them— tha'. waF if V' Brvdo:.r was stili detenniTcd '- o'l -'.v' when Mr Brvdono cainf to Xtv,- ''^v rn^ 1 ? rail *-nt eaprc-t s^ll'na tircru. After wi 4 r.es c J'J-J bee.i further c"----exr • .i counvl itldre&s-'i th" mint ard His Honor re39rvpcl ju^gr-apt

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