Aramoho Meat Freezing Works.

Wanganui Chronicle, Volume XXXXVII, Issue 11734, 11 September 1902, Page 5

Aramoho Meat Freezing Works.

THE COURT CASE,

At the Supreme Court', Wellington, on Tuesday, in the Aramoho Meat Freezing Works case, the examination of the plaintiff, Thomas Mitchell, was resumed by Mr Jellicoe. The witness verified the accuracy of a statement of his affairs based on the balance sheet of January Ist, 1901, showing the value of Mr Reid's securities, for the £15,000 loan to be £50,850; of his additional security for his guarantee to be £11,110; and of .plaintiffs other properties not comprised in the foregoing to be £17,349. Witness had a conversation with Captain Todd' a week or ten days after signing the deed, and told the .captain that Mr Stevenson would not allow him to carry out the arrangement made in London. Witness had signed the letter appointing Mr Johnson at £300 a year, and a three years' engagement. Cross-examined by Mr Gully, plaintiff stated he had been dissatisfied with Mr Johnson's conduct of the Arainoho business prior to his departure for England, and told Mr Johnson so; but did not wish to proceed to the extreme course of getting rid of him, as theu intention a.t the time was to dispose of the whole business, and he considered quietness was the best. He be--lieved Mr Johnson had faked up the statement of the loss on the retail business, and commiinicated that opinion to his son. He wrote to iMr Johnson on one occasion to get a little off his client. (Laughter.) When Mr Johnson heard the proposal of an arrangement with Nelson Bros, -on, witness's return from England, he. looked more disappointed than otherwise, but still pretended his willingness to work loyally with them Mr Johnson concealed the arrangement between Mr Reid and the defendant company as to the option on Mr Reid's securities, and witness also complained of his general management of the business. He could not say that Mr Johnson had falsely represented the position of his business while he was in England or after he came back. Mr Reid first told him of the option on his securities in January.

In what "way did Mr Johnson or Mr Stevenson prevent the carrying out of your arrangement with Nelsons between your arrival back and the end of December? — They kept putting me off with alternative schemes. ~ In further cross-examination, plaintiff said he had not made any arrangement with Nelsons about Mr Reid's guarantee, as there was no necessity. During the time mentioned by counsel, both Mr Stevenson and Mr Johnson appeared to want their office to consent to something1 that they expected would be sanctioned. It was stated that Reid required £5000. The Loan Company had brought gentle pressure on him with regard to his account between February and October, previous to his departure for England. He went Home* with the object of getting fresh capital into his business, and a further reason was his wish to revisit the country after twenty-eight years' absence. He told Mr Stevenson that as his brother at Home was thinking of selling out, he would see liow his brother stood, and if the sale came off he might think of coming to the colony. Witness saw him, and the idea wasl aabndoned. After that he saw a number of firms with reference to obtaining further capital or disposing of his business. He explained the arrangement arrived at with Nelsons as to the advance of £5000, and said, further1, it was in con templation that thoy should take over the Aramoho works, which, of .course, would include- the Loan and Mercantile account. He expected to be able to satisfy the Loan and Mercantile Company if Mr Stevenson would wait until Mr Nelson's arrival, but he made no arrangement with them on the matter. He explained his position when in London to Captain Todd, who was acting on behalf of Nelson Brothers, on the. balance sheet of the previous 31st December. Captain Todd had come to his lodgings and assisted him to put the document in shipshape. He explained that he proposed reieasing securities on £9000 worth of property by the aid of £2000 of what he was to get from Nelson Brothers, and to raise the further amount necessary on his book debts, retail plant and stock. He did nofc conclude any definite arrangement with Nelson Brothers on that mattter. He was quite satisfied that the arrangements ho 'proposed would meet the requirements of the defendant company. He told Captain Todd, after coming back, that the Loan and Mercantile Company were pushing for their account. Mr Stevenson was aware of the cature of the proposals with regard to Nelson Brothers, and witness told him that Mr Nelson was coming with a view to buying the business. If the defendat company had told him the real state of affairs on his return, he coulid have made arrange'nienta to meet them. He thought he was dealing with honest people, and that Sunday School tea/cihers (as two of the defendants Avere) would not act as they had. (Laughter.) Plaintiff was cross-examined by Mr Harper to show that he was conversant -with the financial situation before making the agreement with Nelsons, and that he received gloomy accounts, from his sou before returning home. He stated there was a "social' given by all the men in the works in honour of his return home, Mr Johnston being in the chair. (Laughter.) Plaintiff was questioned by Mr Barnicoat, and stated that Mr Stevenson was aware of a proposal made on his return from England by which the Loan Company should receive £15,000 in cash, and security for the balance of their account. . Mr Jellicoe pointed out that, most of the evidence with regard to the different transactions would be found in the documents handed in. . . Replying to Mi- Barnicoa1. plamtjtt admitted having inserted an advertisement hi the Wanganui papers with reference to the assignment of his interest in the Aramoho works, ah people were bothering him aobut accounts? That was after he had discovered the state of affairs, but before he had taken legal advice or become aware that he had a cause of action. It came as a surprise to him to hear that the defendant company would be willing to dispose of the property if they had back their money. He was aware that Mr Johnson had advertised the property for sale after the three mouths allowed for redemption, but he believed the defendants intended to stick to it. He had not made any offer to get it back. At the conclusion of plaintiffs crossexamination, the Court adjourned uptil 10.30 yesterday morning.

Per Press Association. WELLINGTON. September 10. On the Court resuming the hearing this morning of the suit Mitchell v. N.Z.L. and M.A. Company, claim £10,000. the plaintiff was re-examined by Mr Jellicoe. He stated that the., defendants had prevented him from carrying out his arrangement- vitn Nelson Bros, by .concealing that the defendant company had stepoed into Reid's shoes as witness's creditor, by buying the securities at a discount from Reid; at the same time concealing from Reid witness's arrangement with the Nelsons, by concealing from witness an arrangement between the defendants and Reid to make witness, bankrupt or force him to assign by the betrayal of vitneifs's interest by the defend- j

ants Johnson and1 Stevenson. If witness had known these facts he would, on returning from Home, have formed a company or reconstructed three or four times over.

His Honor said he could, not understand lioav the defendant company's purchase of the securities injured tho» plaintiff, who would have had to...pay someone, whether Reid or the defendant company. Witness: The whole scheme was a plot against my property. His Honor said the defendant company had a right to buy Reid's securities if it wished.

vVitness's complaint was that the facts was concealed.

William Reid, farmer, of War.ganui, aged 80 years, gave evidence as to leuding the plaintiff £it>.ooo and also guaranteeing the plaintiff £5000 at the Bank of New Zealand, •with a view to the erection of freezing chambers and the extension of the wox'ks. Subsequently, when the extension was not proceeded with, witness expressed surprise, and plaintiff stated that he was thinking of going from the Bank to the defendant company. Witness expressed surprise at this statement, saying he had advanced to plaintiff in the first place to enable the latter to leave the defendant company and go to the Bank. Plaintiff replied that the defendant company, was losing the Wanganui Freezing Company's business and thought the plaintiff's business could be worked up. Witness eventually agreed to transfer his £5000 guarantee to the defendant company. Stevemon told witness that as an, old friend he would see that witness did not lose. Stevenson suggested to witness the appointment, of Johnson as a competent manager of the business, arid to increase his guarantee from £5000 to £8000 to enable a lighter to be completed. Witness reluctantly agi'eed to do so and to deposit with the company as security for the £8000 guarantee the securities given to witness by plaintiff. After Johnson was engaged as manager Stevenson^said that Johnson was looking after witness's interests', and witness did not see Stevenson much after that. Witness differed sometimes with the pliaintiff on subjects pertaining to the management, but these differences of opinion did not shake his confidence in the plaintiff. Witness had full confidence in Johnson. Johnson told witness that the plaintiff was going Home partly on holiday and partly on business to raise funds for improvements. Johnson frequently told witness about the works", but his statements turned out to be conflicting. The works flourished at first, so much so that there was £7000 profit on six months' working, but very shortly Johnson, repoi'ted a £2000 loss on the retail business. Subsequently witness's confidence in Johnson waned, and finally disappeared when witness got notice of the taking over of his securities by the company. Witness was never informed by the defendants of the cablegram sent by plaintiff in June, 1901, that satisfactory arrangements with Nelsons would be concluded on plaintiff's, l'eturn with Nelson to New Zealand, and that plaintiff was endeavouring to terminate the contract with the N.Z. Shipping Company. Johnson said the plaintiff would-be unable to arrange in London because of liis indebtedness in New Zealand, and never told witness the conditions of any offer made by the Nelsons to plaintiff. About June, 190*1. while plaintiff was at Home. Johnson told witness there had'-been two losses, that plaintiff's account with^the company had reached £22,000. that plaintiff's expenses while away wero £1700 a year, that these, with interest and charges, were morj than the works could keep up, and that there was nothing ahead in the** circumstances but bankruptcy. Witness then proceeded to relate incidents connected with the various interviews he had with Johnson on the subject. At all the conversations he was depressed at the state of the business and the ruin that awaited it. and Johnson's anxiety to relieve the trouble om M ritoess's mind. The trouble was that he was "liable to lose nearly all the savings of his life and that he was; apt to handle a bankrupt's estate. Whon Johnson proposed that witness should sell out to the company, witness told him he could not be any worse off, as he could, pay off the guarantee and hold his securities. Witness suggested that he should register his bill of sale, and Johnson said if he did sa it would make Mitchell bankrupt directly. After a number of further interdews "with Johnson, the latter proposed that witness should sell out his interest, as when Mitchell returned the thing could not carry on. Johnson next represented that-, in view of the state of Mitchell's business, he should take £3000 for his £16.140. Witness was so stunned by the proposal that he could not remember what answer he gave, but as the result of negotiations witness was prepared to make a sacrifice. He did not see Stevenson at that time, as all the business was done through ■Johnson. Finally he came to an agreement with the Loan Company on the 7th September.

Counsel read a clause in the agreement by which witness contracted with the company "to take all necessary steps to acquire the' freezing works and other property of Thomas Mitchell or so much thereof as shall be agreed upon between them, and to that end shall take all necessary steps to compel the said Thomas Mitchell to assign his estate for the benefit of his creditors or to adjudge him a bankrupt or otherwise to acquire the said property." Witness said he had no recollection of signing any document of the kind, nor had lie any intention of making the plaintiff bankrupt or acquiring his property then or at any other time. He could not say who brought the document or where he had signed ; but he admitted that he must have done so if his name was to it. Neither did he know he had agreed to contribute equally with the company all moneys necessary for acquiring and carrying on the business. Ho recollected having signed a paper, but he could not say where or when, as his memory was very defective and lie had entirely forgotten it. Witness saw Mitchell a few days after his arrival, but witness's confidential adviser, Johnson, wanted to keep <bo arrangement with the Loan Company sesveN and witness did so. He remembered the plaintiff coming to him early this year :u>d driving him to Watt's, where he told them what he had done. Before the convt-rs-.-tion with Mitchell at Walt's house, Mrs Mtichell called and told him whac was being done with Nelsons, and Tysers, and '» day or two afterwards plaintiff awl his s'-n ! called and showed him a prospectus for the [ formation of a new company. As the result lof witness's having found out something he took action. He disposed of his securities under the terms of the option to the defendant company. He was not advised by any other than Johnson in the transae* tions referred to Cross-examined by Mr Harper, witness stated that he did nop object so much to signing the first, agreement submitted to him, buiti he did object strongly to the second, and his signature was obtained by misrepresentation. Johnson impressed on hhn the great necessity for having something done before Mitchell arrived there. The Court adjourned until the morning.