RESIDENT MAGISTRATE'S COURT.

Colonist, Volume XXXIV, Issue 7034, 10 June 1891, Page 3

RESIDENT MAGISTRATE'S COURT.

IESTERDAT [Before H. Eyre-Ksnny, Esq , B.M.] J. P. Denas v. Elizabeth Campbell (Aware*).—Mr Hurley for plaintiff. Claim for £61 10 a lid, for goods supplied, dressmaking and board. Judgment for the amount, with Costs £3 12s 6d. J. A. Harley v. M. Scott.~Mr Harley for plaintiff and air Pitt for defendant. Claim for £75 on ft dishonored cheque. Mr Harley said this was a claim for £75 ■ on a bill transaction, the hiatory of which was thua :— ln 1889 Scott (defendant) wanted accommodation, and he asked J. A. Harley and B. Gilmer to join him in making a bill ; this was a promissory note made by Gilmer in favor of Harley and Sons, of whiohfirm J. A. Harley is the cole proprietor; this was endorsed by J. A. Harley and M. Scott. Scott paid Harley £5 for endorsing it, Gilmer did not get anything. It was discounted at the Bank of New South Wales. No security at the time was given, bat some time after Gilmer intimated to Scott that he did not feel comfortable, and got as security his cheque for £75, whioh they wera now suing for. The bill was not met, but Scott paid £5 10s, and got a renewal for £69 10s. The aeoond time it was not met, and the Bank mcd Gilmer. The costs ran the bill up to £74, and by arrangement with the Bank this was split; up into three bills, each still in favor of Harley and Sons ; none of these were paid. The Bank pressed, and then Barley paid by bills and oheques £76 13s in all, this amount being fcaohed by intereat. Harley was not aware at the time that Gilmer had the cheque, but he had known for some time. He called evidence a3 follows :— R Gilmer : lam an hotelkeeper. I recognise this cheque (produced) for £75, dated 7th October, 1889. I see the signature, and know it to be Mr Mandus Scott's, the defendant. It is endorsed by myself. The paper was pasted upon the back by me, because the cheque got worn by being carried in my pocket ; it is not* I thinkj endorsed under the paper. I think I endorsed it some months after I received it. This cheque was given to secure me against loss for the promissory note for £75 I accepted for Scott. The other parties were Scott and J. A Harley* (Mr Pitt admitted that such a bill was given ) This was made for Scott's accommodation, and he paid Mr Har'ey £5 for his name; I got nothing, nor did I get any of the £75. I think the cheque was dated about the time the bill was given, perhaps a day or two after. Mr Harley did riot know that I had gdt it. The £75 bill was renewed by a fresh one for £69 10s, dated February 7, 1890. I did not pay the £5 10s cash; I think Scott dia. The signature to it is mine, and it is in favor of Harley & Sons, It is endorsed J. A. Harley and M. Scott. I recognise their signatures, and also the bill produced as the one given by me as one of the renewals of the £75 transaction. I believe Scott filled in the body. I was sued on one of these £69 10a bills by the Bank of New South Wales. I don't know if this is the one. The action was settled by the amount being divided into three parts and| fresh bills made by the same parties, I recognise the bill produced, dated July 1, 1890, for £24 18s 6d, at 3 months, as one of these. Another of the same date and amount at four months I also recognise. (Mr Pitt : I admit all these, that there were 3 bills.) I recognise this bill produced, for £14 18s 6d, dated 4th November, 1890, to come due 7th Feb., 1891, as a renewal of one of the £24 18s 6d bills. All these renewals arose out of the original transaction made for Scott's accommodation I paid the balance, £1 18s 6d, and charged it to Mr Harley. Mr Harley did not know that I had the £75 cheque. I kept it for a long time, and then I gave it to Mr John Bogers ; I cannot recollect when, it may be 7, 8, ov 10 months ago. Mr Rogers is clerk for Mr Harper. I had told him of the transaction when I gave him the cheque. He told me he had some business matters with Mr Harley, and wanted the cheque held. I handed it to him. I think it was quite recently that the cheque was handed to Harley I think since the action was commenced. I authorised it to be handed to Harley, because I asked Mr Bogers to do so. I know that Harley has paid some money on account of this transaction. (Mr Pitt objected to this.) Bogers aaid that he was holding the cheque for all parties. Bogers must have handed it to Harley. Cross-examined by Mr Pitt: I keep the Masonic Hotel, and Soott is a tobacooniet, and I have had considerable dealings with him, and the five promissory notes for £9 18s 7d, £10 15 a 6d. £9 ISs 7d, £8 10? 6d eal £8 10a 6d due 15th January, 1890, and the following months [respectively, were all given by myself to him for goods supplied- to me, and he met them. (Mr Harley objected! to this evidence as being outside the case. The .bills were put in and accepted by the Bench.) The letter dated 15th January, 1890, in reference to the £69 10a bill was signed by me. (air Harley raised the objection that what passed between Gilmer and Scott without the knowledge of Harley waa not evidence.— Objection disallowed.) This letter was an agreement by whioh I agreed to indemnify him against liability in respeot to the £75, in consideration of his relieving me of the liability of the five, bills, amounting to £47 13?, I had given to him for the amount I owed him. At the date of that letter the five bills in favor of Soott for goods were current, as was also the £69 10a bill. I did not band the cheque I held for £75 back to Soott, I would not unless he paid me the difference between the five bills and the £75. I don't know what good the cheque could be to Rogers. On the 21st March, 1890, 1 made a composition with my creditors, and I think it was after that I handed the cheque to Bogers. Harley was a considerable creditor in the estate. Messrs Cook; Shields, and Betbwaite wero trustees in my estate, and.Mr Harley exeouted the deed. I cannot fix the date when Harley got the cheque (Mr Harley : I admit it was within a week before -the aotion commenced -4th June.) I never presented the oheque for payment. Mr Harley rendered his account to me. I have never been charged by him with any amount on account of this transaction. Re-examined by Mr Harley: I never tod Harley that I had signed the agreement of 15th Jan., 1890. I took the bills to Harley to get them renewed. I never told him that there was any change in the position. Soott told me to speak to Harley about the agre?ment; I told him I would not say anything about it to him. Soott" proposed the making of the agreement. John Rogers ; lam clerk to Mr Harper. I know the parties, Scott, Gilmer, and Harley. I reoognise the oheque for £75 : it was in my possession. I got it from Gilmer. I had at that time acquaintance with Gjlmer's affaits. I knew the oheque had been given to cover a bill of Boott's, endorsed by Harley. I knew of the whole transaction. I asked Gilmer for the cheque. Harley did not tell me. to aek. Gilmer told me of the arrangement, and from what he told me I thought that Soott was trying to get out of the liability, and saddle it •on Harley. Harley did not know what I waa, doing. I got the oheque about 15 months ago, about the time the aeoond bill fell due. Harley first knew I had the cheque when the Bank of New South Wales issued a writ against Gilmer. I told him then; I gave him the cheque about a fortnight ago, became he asktd ate. - Bis

solicitor (Sir Harley) was present I also presented the oheque for payment the day after I handed it to Mr. Harley. It waa ieturned marked "sale." Harley and his Bolicitor were present when I presented it. Cross-Fiamined by Mr Pitt : Harley Bftid, when I told him that I had the oheque, that he would make Scott pay the bill. I never took a not 9of the time I got the cheque from Gilmer. I could not say for certain whether it was before or after Gilmer made his composition. It was about the time Gilmer was making some arrangement with Scott to take npsome bills cf Soott's. Ie waa sot then signed ; long after he told me that he had signed. • Re-examined by Mr Harley: I never told Harley of this agreement I knew of until about a week ago, after plaintiff's solicitor had writ en demanding payment of the bill. By the B <uch : I did not tell him that be* (ore I hauled him the cheque. J. A. Barley : I am the plaintiff. I remember sig; ing the bill for £75 for Soott's advantage. 1 remember it being dishonored and renewed for £69 10a. I think it was renewed a seoond time for the aame amonnt. I remember it was split np. I waß threatened by the Bank with a writ at the same time one was issued against Gilmer. I heard the agreement between Scott and Gilmer read in Court; I first heard of such an agreement after notice was given to Scott of this action. Gilmer never told me that the position waa altered between the parties. I believed that it was prolonging the agony as far as possible when I renewed the bills. I know Scott got the credit for the amounts at the Bank, for I saw the books. I have paid on this account two bills of £24 18s 9d each, one cheque of £13, and one is now floating for £13 16s, which coven the lot. I first knew of tb.9 cheque from Rogers. I asked for the cheque because I had pjid the amount of the £75 bill. I first knew of the agreement since the summons was issued. Cross-examined by Mr Pitt : None of these bills have gone through my books, but I have a memorandum in my ledger, " Past due bills account, R. Gilmer." (Mr Pitt submitted this was a proper account, and the Bench allowing it, the ledger was put in.) I have no account against M. Scott in my ledger. On 21st May I sent, through Messrs Adams and Kingdon, a notice to Mr Scott demanding payment, and received from Messrs Pitt and Moore a reply, dated 26th May, stating that Mr Gilmer waa responsible. I see there is no mention of the cheque then. I had not the cheque then ; as soon as I got the cheque I paid it into my account, but it was returned, and to be quite formal it was presented by Rogers over the counter. Mr Pitt: I am informed the cheque was presented 29th and 30th May. Re-examined : I opened the past due bills account on the suggestion of the Bank. Manduß Scott : lam the defendant. The £75 bill was drawn for my aioommoclation, it was renewed for £69 lOd, I paying £5 10s off it, still for my accommodation. I think that was the bill Gilmer. was served with a writ upon. The agreement waa drawn daring the currency of this. This was renewed with the expenses of the writ added, and the whole split into three bills, two of which have been paid in fall, and of the third one half. I never mentioned the agreement to Harley, it was not my place. Saeing that Gilmer could not meet tie bills doe to me I suggested this couree, the object being to Beoare myself and get Harley to be the endorser for Gilmer instead of for myself. I asked Gilmer several times to tell Harley of the agreement, and he laid '• Oh, let it be, let it be," and put it off. I said, " Wall, it is your own trouble." I could not say that Gilmer had not told H&rley I did not iecollect the oheque, or it would not ba where it is now, but seeing it now oalla to my mind the circumatanoe of giving it co Gilmer to indemnify him against the promissory note for £75 when it was first made. It was given the day I received the bill (June 4tb), but post dated the day the bill fell due (7th October), I think both Gilmer and I went to Harley to get his signature to the first bill. Gilmer went himself to get .the otheis s : gned. I don't think Harley knew of the existence of the oheque. Cross-examined by Mr Pitt: After the agreement was signed no mention was made of the cheque, as I had forgotten it, otherwise most decidedly I should , have withdrawn it, and Gilmer should certainly have given it back to me. This closed the plaintiff's case, and no evidence waa called for the defence. Mr Harley submitted that plaintiff was entitled to recover. Defendant had admitted that the first bill was an accommodation for him, he paying £5 for Mr Harley's name, and the whole of the renewals were in respect of the same thing. Ultimately Harley paid the whole amount of £75 It appeared as if it was going to be set up that Harley took up the burden of these bills, and became the accommodator of Gilmer. The agreement may have affected a change so far as Scott and Gilmer were concerned, but the alteration having been made without Harley's knowledge, it could not affect his position * at all. Harley puts his name to the bill, is worried by the Bank, and from beginning to finish believes that he is the accommodate* for Scott. Scott practically admitted that he got rid of certain bills, and got Harley from the position of accommodator to himself to aecommodator for Gilmer, and liable to himself instead of being endorser, and both Scott and Gilmer awear that Harley was not told of this agreement. The only thing in the whole transaction that militated against Harley was the fact of his entries in his ledger. He had explained this was done at the suggestion of the Bank, and at most was. only an error in book-keeping, in any case he could charge Gilmer, as co-aurety, and also Soott with their share of tbe bills. It was evident the money had been paid by Harley for Soott's accommodation, and he should be indemnified. Tbe qaestion arises, if the proper course had been taken in sueing upon the cheque. He submitted that it had. Hia Worship asked if tbe cheque would not be subject to the equities, but tbii was different to an ordinary trade oheque. It was given in indemnity, in other words, security. One surety iB entitled to the security of his cosurety upon payment of the debt. When Harley bad paid the whole o! the debt be called upon Gilmer to transfer it to him, and it was done. This matter was settled by Statute Law (Sections 81-2-3, Mercantile Law Act. 1880). If it was said that Gilmer should have given up the ohequs when the arrangement was made with Soott, he would point out that be bad no right to do so, nor Scott the right to ask for it co long as be held it as security against the debt owing to Harley. Mr Pitt submitted that judgment should go for defendant. At the time of renewal of the first bill it accrued to Soott, who held five bills of Gilmer's, and it seemed a prudent thing to get these bills doe to him and the responsibility of tbe other one shifted on to GHmer's aboulders, hence tbe agreement. Immediately that agreement was .made Soott was en'itled to have bis oheque returned. His friend bad attempted to say that Harley all through looked to Scott, but though he has a right to look on Scott or Gilmer, be elects to look to Gilmer, and both these saying that Harley was not aware of tbe arrangement it was Btrange that the entries were made in the books as they were. The point was oould Harley recover for this cheque. He submitted that Harley took the oheque with itß equities, and under circumstances such as to exoite suspicion, baying a knowledge of tbe oiroumstanoeß of Gilmer getting the oheqie. He was bound to inform himself of the particular*. Another oiroumstanca not very clear was the date at which Rogers got the cheqae, but it wae quite clear that Rogers w*s a mere gratuitous holder for Gilmer. Roger* says Gi'mer consulted him before he signed the. agreement, therefore he knew that Soott was no longer liable under the bill. As far as appeared before tbe Courk there was no reason why Rogers should hold the cheque other than as a mere custodian for Gilmer. It did sot appear that Harley gat c any value to Rogers for the cheqae, and 'Harley bad no idea of recovering upon the oheque, for on the 21st May list he asked for payment upon tbe bill transaction, and was then informed that Gilmer was liable. The cheque was lodged with Gilmer as indemnity, and wben the agreement waß signed tbe position was reversed, and Gilmer bound to indemnify Ssott. It was a most extraordinary thing that Harley, , a large oieJitor against Gilmer, gets a cheque from him against Scott for £75, and 18 months old, and which he never utilised; that ought to have pat him upon his guard, but from what Rogers told him he took it knowingly. The fact, was Harley was casting about for some means target at Scott, and as be could not come upon him. through the bills,, he has taken the present totion. In support of their , contentions, Mr Pitt •jueted the cm«* of 4«hn f, Gordon, 2 Appeal

Oißes pin 216; Down v. Haliingandotherß 4 Bamewell and Cresswell'a Reports. pPsa £ s 330; ; London and County Bank v Groom, 51 Law Journal EaporW, Qaeen'a Bench Divmon, page 259; and Mr Harley, Section 81 Menantile Law Act, 1880, and Dewing v Earl ofWincbe^sea, Smith's Leading Cases. t« 5 said that this was a hard case n u iv'- Harl^ andhe could not svmSSS P8 *i! ith im ' but hfe was boon/ to ThSm ?t prin^ les ° f and equity, ■infpr $ \f c could not^cogniseas security under the Mercantile Act. The aereement between Scott and Gilmer was to gfvfSEr an indemnity on this particular B bls ThL at that tune I think it was Gilmir's duty to hand the cheque back to Scott, as the object for which it was given was accomplished when the first bill was met, the retiring applied the same as if it had been paid. When the agreement was made he had no doubt whatever that Scott had a right to ask for the cheque back, it was quite inequitable for Gilmerto keep it. After being kept for Sk longtime, the length not at all certain for some reason not disclosed, and about which there seemed a good deal of mystery, Rogers got the cheque, and afterwards with Gilmer's consent hands it to Harley. It seemed to him that when Harley took a cheque thus, more than two years old and tattered, that certainly he took it with all the equities, and these were certainly that it was Gilmer's duty to return it when the first bill was met, and it was his duty to return it when the agreement was made, therefore Mr Harley could not sue for recovery upon it. Judgment was then entered up for defendant, with costs £5 log. Mr Pitt asked if the Court could make &n order for the cheque to be returned to Me Scott. His Worship said he could not, it belonged to plaintiff. Mr Pitt said he would have to sac for its recovery. Mr Harley said he would bring the case on again next week in another form. The Court then adjourned.