AN UNUSUAL CASE.

Star (Christchurch), Issue 9910, 27 July 1910, Page 1

AN UNUSUAL CASE.

[Per Peess Association.] WELLINGTON, July 26. Judgment was given by Mr .Justice Chapman to-day in the case William E. I. Banks v. the Cheltenham Cooperative Dairy Company, Limited, a case heard in Palmerston North. Plaintiff claimed to recover £250 paid by him to defendant company and to have cancelled a promissory note given by him to defendant company and still held by it. He was brother-in-law of one Ross, who married plaintiff's sister. Ross, while employed as secretary to the defendant company, misappropriated various sums amounting to over £SOO of its money. This state of affairs was disclosed to plaintiff, hut the amount was not known. The directors of the defendant company consulted their solicitor, Mr Sandilands, about the matter, as the time allowed for giving notice to a company which was liable on a fidelity bond for Ross's defalcations would shortly expire. The bond was for £l5O. A conference was held between Mr Sandilands and plaintiff and his mother to see whether any arrangement could be come to so as to avoid a prosecution. Mr Sandilands said that if the dairy company did not give notice to the insurance company before a fixed, period it would not be able to recover the £l5O insurance, but if £SOO were paid he promised that the dairy company would not give, notice to the insurance company, and there would he no prosecution. As the result of the interview' plaintiff agreed to pay £250 and to give a promissory note for the same amount-, on the understanding that Ross would not be prosecuted. Despite the undertaking given by Mr Sandilands, a shareholder of the dairy company, acting quite independently of the company, prosecuted R-oss to conviction and sentence. The present action was brought to have the promissory note redelivered to plaintiff and the £250 returned to him. His Honor held that under dire pressure plaintiff and his mother entered into an agreement to stifle a prosecution , that plaintiff gave the note pursuant to this agreement, and that lie was entitled to have it redelivered to him. The more difficult question, his Honor said, was whether plaintiff was entitled to recover his money. After dealing with several authorities bearing on the case before him, his i Ho-nor deduced that if it were possible, where the equitable ground on which relief was claimed was misrepresentation as to the validity of the agreement whereby the plaintiff had oeen led to form an erroneous judgment, why should it not apply where there was an equally good equitable ground for relief of another kind, namely, that this illegal agreement was not truly a contract, because the assent of the plaintiff was improperly obtained by a person who had the advantage of him ? Every fact bearing upon the situation of the parties had to be considered, including even the apparent ignorance of plaintiff and his mother of the fact that a stranger might intervene and upset all their calculations. When all the facts and circumstances were fully ! considered it was seen that the situation of plaintiff, with whose situation must "be considered that of his mother, was one in which he was not a free agent. His Honor could see no differ--ence between, one class of illegal agreement and another, so long as both were against public, polioy. He .thought.that plaintiff was entitled to succeed in the action in both branches. He mentioned that a meeting of the company had resolved to return the money. That fact had no hearing on his decision, but it freed the company from all imputation of dishonestly retaining plaintiff's money. He did iiot think it would be right to allow plaintiff interest or to allow tho cost of the jury, which was unnecessary and an unauthorised expense. Judgment was accordingly entered for plaintiff as prayed, with certain costs.,