A TANGLED TRANSACTION

Stratford Evening Post, Volume XXXI, Issue 34, 25 September 1911, Page 2

A TANGLED TRANSACTION

TO BE SIFTED BY SUPREME COURT JUDGE. MORTON V. BLENiNERHASSETT AND SONS. In the Supremo Court on Thursday at New Plymouth, before bis Honor Mr Justice Sim, George Morton sued Arthur Willi.un Blennerhassett, William Leonard Blennerbassett, and Richard Giles Blennerbassett (Blennerhassett and Sons), of Eltliam, for £250 lodged with defendants as stakeholders in connection with and agreement, for sale and purchase of land, which agreement was not carried out. Mr A .H. Johnstone (with him Mr AV. D. Anderson) appeared 1 , for the plaintiff,‘and Mr J. E. Wilson (with him Mr Gow) for the defendants.-Herbert Halliwell, of Hawera, solicitor, to whom the debt had been assigned, was joined as a plaintiff. 1 Plaintiff Morton deposed that fulsome time he had had negotiations concerning sections 3 and 4, block 7, Huiroa. It was on May 7th, 1910, when ho was at Blennerhassett’s private house at Eltham that AV. L. Blennerhassett suggested he should purchase the property from Heppell. On May 9th they visited the place. After having dinner with Blennerbassett at Stratford, witness wrote out an offer to buy the place at £8 per acre, and gave Blennerhassett a cheque for £lO to bind the offer. AVitncss was told by the Blonnorhassetts in Eltham two

(.lays later- that Heppell had refused the offer. Later Heppell came from Stratford,- and witness offered £8 2s 6d per acre. No mention was made of any deposit to he paid. Leonard Blenncrhassett was present. Witness left the room. When he returned, Blennerhassett said, “If you will pay £2SP deposit. Heppell will complete.” Witness asked, “Why should I pay such a big deposit?” Blenncrhassett replied that they were financing Heppell out of some trouble ho had got into, and they wanted money to enable them to do so. Witness asked, “Will my money be safe?” and Blennorhassett replied, “Yes, we can guarantee that it will be safe. Heppell is not handling the money.” Witness then agreed to enter into a contract for sale and purchase. (The agreement was produced.) He paid Blennorbassctt a cheque for £2lO. Just after he wrote the cheque he suggested to W. L. Blenncrhassett that the latter should pay interest on it. Blcnmerhassett replied that they were not charging Heppell interest, and that if they paid witness interest they would have to charge it against ■ Heppell. Nothing further was said then. Four or five days later he met t W. L. Blennerhassett in Stratford. Blenncrhassett said they had got Heppell fixed all right, and had taken a third mortgage to themselves from him over the property, and everything would be alright. Witness asked, “Arc you sure it won’t spoil the settlement?” Blennerhassstt replied “No,” and that they would see that witness got a title to the place. On the Bcaconsfield Road a little later witness met the elder Blennerhassett, who mentioned that Heppell had gone ,'iway for some time. Witness was not sure whether Blennerhassett said Heppell had gone to Hawke’s Bay or Palmerston North. Ho said to Blennerhassett, “As long as he’s not flying round with my money I don’t suppose it matters much.” Blenncrhassett replied, “No, we only made an advance against your deposit, and we’re going to got the balance out of what’s coming.” August Ist, ]f)l(), was the date fixed for settlement. When that date drew near witness’s .• solicitor, Mr W .7). Anderson, said there would bo some shortage owing to the adjustment of the first two mortgages. The third mortgage on the property had to be paid off, and the balance of purchase money under the agreement wasn’t enough. Witness had taken some cattle on to the place in July. Some time later Blenncrhassett, sen., sent word that he wished to see witness, who then called at his office. Blenncrhassett offered to sell witness the place as third mortgagee. Witness said, “All right, as long as it’s onthe same terms as my original agreement with Heppell.” Witness returned to Blenncrhassett half an hour later, and Blennerhassett had an agreement drawn out to sell witness the property. Blennerhassett r.v'icl, “We don’t want to go near any lawyers about it.” Witness road through this agreement, and found in it a clause stating that he should pay all back interest on the first two mortgages. Witness asked how much it amounted to. Blennerhassett replied, “Roughly speaking, about £-10 or £;;().” Witness asked, “Are you sure?” Blennerhassett then said, “Well, no, not to a few ’ pounds.” Witness refused to sign. He knew what the shortage was, from Mr Anderson. Later he met the two Blenc.eihassotts and Mr (low (solicitor) at Mr Anderson’s office at Stratford, by ippointment. The Blcnnerhassetts revised to release the mortgage. Witness .'llcrcd £lfb over and above what lie i.ad paid, but they did not accept. Witness told them that was the best ie could do, and that if they did not get the mortgage taken off and got dm a title he would sue them for the deposit. They met again about a reek later at the same place, and they .ill refused to release the mortgage. Witness walked down the street with too Blennerhassetts afterwards. Bleu-

’ :.'i Imsset-t, sen., told witness that if lie refused their terms the place would he' sold I>y the mortgagees, and ife would have to pay dearly for not tak-i-’g their advice, as they would trot witness up to secure the third mortgage. He told them he had done his best, and again told them an action would take place if he didn’t get his title. Since then he had had conversations on the subject with the Blennerhassetts on several occasions, hut he had never got Ids title. On August 10th last he met W. L. Blennerlinssei I at Inglewood. Bleimerhassett said,

“AA’e'vc got word from Mr Anderson to say that you’ve thrown the place up.” Witness replied, “i have thrown the deal up, not tlie place.” Witness explained that when he could not get. Ids title to the place ho .saw the first and second mortgagees, and bought their mortgages. He then sold to the Registrar, and obtained a title in that way. He had paid all hack interest and rates, and they were pretty considerable. Blennerhassett replied. ■‘lf it goes up by public auction, we arc prepared to buy the property in ourselves, afi we are not. stuck for a few hundreds.” Witness told him that whoever bought the place by public auction through the Registrar would got a clear title to the place, and not be handicapped as he had been. Witness determined his contract wit.t Heppell in writing through big solicitor. In the interview in Inglewood. AA r . L. Blennerhassett said, “Now, weren’t you aware when you paid that £250 deposit that it was to he paid to Heppell y” Witness replied, “No; the money that you lent Heppoll, which I understood was about £l5O, was at your risk as financial agents.” Blennerhassett said, “AVell, we’ve got. a receipt out of Hepped 1 for £250, and, thank God, it’s in our safe now.” Jhe £250 had not been repaid. Cross-examination by Mr AVilson: AA itness understood Heppell was in trouble financially, and understood that Heppell had to complete the. pur. chase of the property in order to make good his.bargain with the.plain-, till. He didn’t know how much money ho required. Blennerhassett did not, to his recollection, ask him to pay over £450 to enable Heppell to complete. The sum of £-150 was not mentioned. Before the den] was made, Blennerhassett did not explain that they would have to advance £2OO in uldition to plaintiff’s £2OO deposit to enable Heppell to complete. Blennerhassett explained that Heppell was in difficulties but plaintiff said, “What .ms that got to do with me purchasing the farm?” and the answer was, ‘lf we can sell the farm it will enable ns to finance Heppell out of his irondo.” Ho didn’t know how much Blennerhassett was going to lend HeppeH. Mr AVilson: Whose agent wore tin Blennerhassetts ?

Mr Johnstone: That’s the question nt issue.

His Honor; So far they appear to have been the agents of the vendor to sol!. The date of the assignment to Halliwell was 20th October, 1910. He was aware of a re-assignment from Mr Halliwell to himself and Heppell.

Mr. Johnstone said that this reassignment was not operative yet. Mr AVilson said ho was in an unfortunate position. Ho had accepted vcpbaj notice of re-assignment, hutnow Mr Johnstone said the assignment was not opci-ative because it was, not made in writing.

;.His Honor: Do you want, Heppell joined as a plaintiff ?

Mr Wilson: No, your Honor, Heppoll is an undischarged bankrupt.

His Honour said that the assignment )r re-assignment did not prejudice the defendant's position.

His Honor: You have Mr Halliwoll’s authority to destroy that ?

Mr Johnstone: Yes. His Honor: Then tear it up. Put it in the fire.

The document was crumpled up, and thrown into the lire.

Hfe Honor: That’s right. Now see that it is burned. You are relieved from any further anxiety on that score, Mr Wilson. Cross-examination continued: The Blennerhassetts had been personal friends of his for sixteen years. Ho lid not consider himself a creditor of Heppell’s at all. As far as ho know, Heppll’s trouble was with regard to paying back' interest on the first and second mortgages. He had not been out of possession of the place. He was not paying any rent, but he could not work the property. He had purchased the place, at the commencement of this month, through the Registrar, for £3200, which was less than the amount of mortgages and fho interest. Under the previous negotiations he had to pay up back interest. Ho had made all arrangements with the bank to get a clear title in August of last year, but as ho could not get a title he was placed in an awkward position with the bank. His estimate of value, for the purposes of the sale by the Registrar, was £33/50.

To his Honor; His cheque for £2.50 was handed to W. L. Blennerhussett in the presence of Heppcll.

To Mr Johnstone: As he was writing the cheque, Blennerhassett said to him, “You’re writing the name in our name, ol course?’’ and witness answered, “Yes, of course.”

Reginald Noel Hopped, farmer, residing at Inglewood, said ho had hold this land under agreement for sale and purchase. Before that he had been in communication with the' Blcneerhassetts to raise money. His financial position was very shaky. He was being pressed, and the Blennerhassetts knew of his position. Tint firm had undertaken to raise £;(>()() for him. Offered the property at Li) an acre, was offered and said he would take CS bs. W. L. Bfenncrhassett told him he could got £8 os with L'KJO deposit. or £8 2s (id with £2d() deposit. Witness demurred, hut Blennerhassett urged him to take the £8 os, as they had arranged with Moiton to pay the C2bo into 'their trust account and advance against it. He never handled the deposit of C2b() provided for in the agreement. Shortly after that he executed a mortgage over the property, and that Mocked the sale to Morton. Witness did not complete, partly- on account of the third mortgage, hut also because Blcnnerhassets wore bolding some money of his, ami ho told them that rather than complete he would file, so that his creditors could get some money. He filed on 2f)tli November last. To Mr Wilson: When he made this

agreement In 1 needed more Ilian C 150, more like £00(1, In coinpl; te (.lie purchase. , When Bleniierluissetts raised Hie £SOO for him they dialled him 250 procuration foe, which was the amount to have been charged for "•citing £’(3oo. He only got £ lot), and was told the man was to get. another £SO from his bank at Ohaknne. He had no recollection'of signing m mortgage. His solicitor looked through everything, and told him to sign whatever ho initialled. He, admitted his signature on the mortgage produced. Blonnerhassots had told him they were advancing him £2OO against Morton’s deposit, and they held £375, ■ stock moneys, of his. He gave ;v receipt to Blcnnerhassetts for £2OO, hut Blennerhassetts told him that it was Morton’s desire that he should sign as a reccipt for the deposit a.s they were taking a big risk in financing him. And Blonnorhassett further offered to give him a cheque for £lO if he signed that receipt, and to see Coplestone (who had bought some of witness’s cattle) to get more money for him. Blennerhassett told him ho was going to pay Morton’s cheque into the firm’s trust account, and would advance witness money to complete oilier deals.

Mr Wilson : Do yon suggest that you connived with Blennerhassett to use Morton’s money to pay your debts? Witness: No. He said to me, “Clcorgo is an old friend, of lours, and lie has agreed to assist, us:” Mr Wilson: So you. agreed ■to this improper use of'Morton’s: money? His Honor: Not necessarily; If the money wore used in the'Completion of this sale to Morton- in; getting him' a clear title, Morton would get the benefit of In's money. . •■ ■■• . Mr Wilson: Didn’t Blchnovhassott endorse Morton’s cheque and hand it to you ? Witness: 1 have never to this day soon Morton’s cheque. Further questioned, witness said that the money given by Blennerfiassets was against stock and not against land at all. He hadn’t, received any money on account of the stock sold, and il Mr Wilson held a, receipt for the money it had no business to lie in existence. A man named Coplestone was to pay .2375 for 7~ cows, less commission ard small amount owing by witness to Bienne; - - hassotts, who made the sale. His Honor: Yon say that yen paid the money to the witness, Mr Wilson? Mr Wilson: The nionev war p-id +e his credit, and Ids acknowledgement taken. , ' The witness said that Bleiinorhassett had always told him that 'although Coplestone was a man of means he was short just then, ami they were advancing Tdoaoy for Coplestone. He always understood that t ; b<* l lnbney advanced to' 1 him on IVIa t \ ll 11th was against thohb cows. The reason why he didn’t’complete the deal'was because Blonnerlmssett hold moneys of his which he could not obtain, and on his solicitor’s advice ’he decided I ‘to allow the D.O.A. to square up his estate.

Re-examined by Mr Johnstone: Ho had seen' BjAnnerfmssett’s commission claims agaihst him. The‘firm had had nothing to do with the sale of his Waitara Road farm, and nothing to do with the sale of his stables at. Stratford, so at least £2OO of'their charges had no business to be' on the bill.

To Mr Wilson: He had given the firm authority to sell the' Waitara Read farm, but Kemp and Sawle sold

This completed the plaintiff’s case, in opening the case for the defence, Mr Wilson said the whole point was whether Blonnerhassott and Sons were agents for Heppell or stakeholders for both parties. Ho contended that they were agents for Heppell. The position was this, that Heppell was in difficulty in, completing the purchase of a property ho proposed to sell. They “found” Morton, brought the parties together, acid asked Morton for a deposit of £4.50, and later for £250. They explained to Morton that Koppell’s position was that he must have £450 to complete the purchase of the property. If Morton was not prepared to advance £450 they would advance £2OO, making with ;v deposit of £250 from Morton the £450 required by Heppell. The defendants said that Morton paid the money to them ns agents for Heppell. The references made by Morton to Blennorlmssett

saying that the money would not got into Hoppcll’s hands were right, because tiie Blenuerbassetts were going to pay the £450 to the vendor, '.met so the money would hot go through Heppcll’s hands.

William Leonard Blonnerhassott, one of tiie defendants, deposed that lie negotiated the sale of Heppcll’s property to plaintiff Morton. Heppcll’s position with regard to the property at the time of the sale was that Heppell came into the office one day and asked how money matters wore. Witness replied, “Oh, if you can find the security I 'think wo can find you a fair amount of money.” Heppell replied, “,r can put you on a good deal if you can finance it.” Heppell also said the'n that. Kemp and Sawle could effect an exchange of the stables and the farm at Waitara. Kemp and Sawle would give witness’s firm half the commission, and he (Heppell) would •rive witness an extra £SO if lie could got tiie deal financed. Witness’s firm went farther into the matter to sec what they could do about it, and got the money partly promised by a certain money-lender. However, that, fell through. His Honor considered it necessary to go into the whole history of the financial relations of the (inn and Heppell. Witness, continuing, said that ITcp])o 1! required £l5O to enable him to complete the deal. 'They sold the propertv to Morton on the terms that he was to take over the first and second mortgages. The sale was finally made at £S 2s Gd, and Morton was to pay cash over and above the mortgages. Morton paid a deposit to wit-

ness’s (inn of £250, which they placed to Hcppell’s credit, receiving a receipt for it. When the deposit was paid, witness asked Morton to pay the whole £l5O. hut Morton didn’t agree to tint lie asked Morton to pay £450 because if Heppoll didn’t get that sun Morion couldn’t get the property, is Heppoll would not lie able to complete the previous deal wit.’ Jameson. Witness made Morton aware that his £750 would have to lie used by Keppell. H explained that when the day of completion came the only way in uliich the thing could be, list'd was for them to lend Heppel £2OO until that date. That was done and the mortgage was signed in Mr Aiir derson’s office. Witness paid in a cheque for £450. Both Mr Gow and witness gave Mr Anderson clearly to understand that this £l5O was not , to lie paid until everything was in order and the mortgage regular. Mr Anderson honoured the cheque, complete ing the financial transactions vesting the property in Hoppell, who then had a clear title except, for the back interest and rates. His Honor said he understood the title had never been completed. Mr Wilson replied that Heppell’s title was completed and the mortgage of £2OO to defendants registered. Witness, continuing, said that he added the £2OO advanced on the mortgage to Morton’s cheque, and handed the lot to Mr Anderson, who was acting in the completion of the previous purchase. He had never led Morton to believe that the money was not going to bo used by them to com-, plcte Heppell’s previous purchase. He gave Morton clearly to understand thtat the more cash lie paid the easier it would be for Keppell to complete. Cross-examined, witness said he did not know exactly what Heppoll’s financial position was at the time of the negotiations. He know tilings wore not too well, but not that he, was being pressed by the creditors. Heppoll was at the office half a dozen times asking for money, and witness gave him £l7 in all. Kemp and Sawic were in conjunction with witness in putting the deal through. Mr Johnstone : How w.as it you charged Heppoll £2OO then P Witness: Wo were charging 21 pci cent on £6OOO. Mr Johnstone: You charged full commission?—Yes. , Why?—We wore going to divide it. How?—Well, wo were going to ‘‘contra” it. Mr Johnstone: They’ve been waiting eighteen months for it. Witness : Have they ? In the course of further cross-ex-amination, Mr Johnstone asked, “You knew Hep pell was in a dirty r /osi tion ?” Witness: Yes. Mr Johnstone: Why did yoti take receipts from him and pass no money ? Witness; It was credited to him. Witness admitted in regard to the £375 for the cattle that Heppel! did not get the money. It was the usual thing with stock and station agents. They accounted to him for the money. Mr Johnstone pointed out that all the defendants had to pay out for Heppell was £450, yet they had £825 credited to him. Witness replied that they had their commission to protect. Mr Johnstone : Why not take a mortgage for your commission ? or you could sue for it. Witness: A bird in the hand is north two in the bush. Mr Johnstone (flourishing a paper): There’s £335 for commission on this little bill. Witness, in reply to another question, said it was not in order to protect their commission that they stop pod the deal from going through. Witness admitted that part of the commission was duo to Kemp and Sawic. Mr Johnstone: In other words, to secure your commission you collared Morton’s £200?—No; the firm was merely advancing £2OO against Heppell’s equity in the farm, the £2OO to come from Morton. Resuming: Morton made an offer and paid a £lO deposit. They explained to Morton that if ho paid £250 it would be easier for Blennerhassett to get Heppell financed in ids deal with Jackson. But. they were not financing Heppell. They wore helping him as far as possible, and had promised to raise money for him. They were Heppell’s agents. Mr Johnstone: Then why. wasn’t the money paid to Heppell.? , „ . j We’ve accounted to him for it.. Mr Johnstone: But why didn’t yon hand the money to him? Ho was there. Do you think, as an honest man, that Morton would have paid it. to him ?—No. Defendant said that the reason why they were handling the deposit was that there were so many deals on one after another. Agents often handled the deposits, deducted their commissions, and paid over the balance. As a matter of fact, they were not taking much risk, for they fully expected the deal to go through. Morton knew the £450 was being paid to enable Heppoll to complete with Jackson and enable Morton to get his title. Morton never intended to finance Heppall, and didn’t know that, the money was going to Heppell. Ho didn’t know Jackson either in the matter. His Honor; 'Whom did yon consider von were holding tin’s money for? Witness: For Heppell. His Honor: Then, if lie had demanded the money, you’d have paid it over?—l suppose we would have had to if lie had demanded it. Mr Johnstone: You’ve found that cut since? To His Honor: He did not think lie would have paid to Heppel] in the circumstances. Counsel addressed the Court at some length, and his Honor reserved bis decision.—“Taramiki News.‘ ’