MONEY-LENDING.

Star (Christchurch), Issue 9307, 6 August 1908, Page 3

MONEY-LENDING.

AN INTERESTING CASE. This morning at the Magistrate's Court, before Mr H. AY. Bishop, S.M., 0. H. Clarke, J. H. Stringer and H. P. Bridge claimed fironi Huston Curlett £«50 5s i)d refund on a money-lending transaction between Clarke and the defendant. Mr Russell appeared far the plaintiffs and Mr Creeswell for the defendant. In opening his case, Mr Russell said that the plaintiffs really asked that the transaction should be reviewed. Curlett had lent Clarke £155 18s, and ; Clarke had paid a £50 bonus under n. bill of sale, which made the interest at ! the rate of 137 per cent. The bill of sale was unreasonable. One clause mad*? it possible for Curlett to demand payment of .the full amount at any time. Another clause made it possible for Curlett to inspect Clarke's stock at any time and to charge £3 a year for these inspections, also Curlett could take any action, no matter how frivolous, to protect himself, and by the mere paying of expenses could make Clarke liable for them, and for interest thereon. Stringer and Bridge had been joined because Clarke's estate Had been assigned to them. • H. P. Bridge, of Stringer and Bridge, said that Clarke's estate was placed in the hands of his firm on January f for realisation. He produced a registered bill of sale on the estate. He had found that the whole of the money under the bill of sale had not been, advanced. He ©aw Messrs Dougall and XJphain/ the defendant's solicitors, at the time to endeavour to get a reduction of the bonus, but Mr _ Curlett refused, and the firm paid Curlett £214 9s 9d in settlement, without prejudice. The amount was made up as follows : — Actual cash advanced, £,iud 18s; bonus, £50; interest, £3 6s 9d; costs, £5. Clarke's- liabilities in • January were £1618, and his assets which afterwards produced £678 net. Curlett had security over these by a bill of sale. To Mr Cresswell: On August 23 Clarke held a meeting o ; f creditors, and shortly afterwards bis estate was placed under supervision. The bill of sale was signed on September 21. Dur-. ing the supervision witness had to complain of Clarke's method of carrying on the business, which was unsatisfactory. Witness thought that the assets were good,, enough security, under the bill of sale. He would regard it as a defective security if it covered only the stock remaining in Clarke's shop, and not now stock. Clarke had a right to call advances under the bill of eale up to £350, but even then a £.60 bonus was too much. He did not see why the £50 bonus was added to the principal, and interest charged on it. Mr Cresswell applied for a nonsuit on the grounds that the contract had been broken by Clarke, who, therefore, had no right to come into Ccrart. The terms of the bill of sale had 1 been, arranged without any suggestion of trickery, over-reaching, or underhand work. When a man lent money he should bo able to make his own terms. Curlett made the advance to Clarke when the latter's finances were in a moribund condition. Clarke was a business man, and thought the terras reasonable. Mr G. Harper had reviewed the bill of sale on Clarke's behalf, and had said it was reasonable. The £50 bonus was all that Curlett would have mad© out of the transaction. Before Clarke signed the bill of sale he was hopelessly insolvent, and after that he did not carry on his business properly, though Curlett worked hard to save it. It was not true to say that the interest was at the late of 187 p?r cent, because the £o\) was really paid under a bill of sale that allowed Clarke to borrow up to £300. Mr Cresswell quoted the case Carring- ] ton, Limited, v. Smith (Law Journal, , 1906, X.8.D.) to show that where a borrower agreed to the terms be confirmed their reasonableness. He. also ! quoted Matt We on Money-lending (p. j 144), where it was laid down that ' where a money-lender refused to give a reduction because the- entire' agreement had not been carried out by the borrower, the transaction could not be held to be a breach of the Moneylenders Act if it had not been so 'at the time of the transaction. Mr Bishop said that if he granted a nonsuit the parties, could bring the action on again in different form, or could appeal on the facts and; have the case returned to him for rehearing. Ho would be hardly convinced that it was not better to hear all the evidence. Mr Cresswell then said he would proceed. ' J. J. Dougall said that when the bill of sale was arranged it was dis- j cussed fully and Clarke's father took it to Mr G. Harper, -who said that under the circumstances it was a proper document to sign. Before signing Clarke did not say that a meeting of his creditors had been held. Clarke did not keep the contract in regard to leading a sober life. After the money had been lent, Clarke was often under the influence of liquor. Clarke did not pay his rent, and therefore jeopardised' the security. Before the transaction was completed witness advised Clarke to go bankrupt. Huston Curlett, the defendant, said he agreed to lend Clarke £350 at 6 per j cent, the bank rate, and Clarke was to give him a bonus of £50. He lent the money to help Clarke. It was the first transaction between them. Clark© broke the agreement in a variety of ways. To Mr Russell: He had known Clarke's father for twenty years. He never demanded the money at any time. . , . (Left sitting.)