CLIENT AND SOLICITOR

Wanganui Chronicle, Volume LXXXI, Issue 19046, 25 June 1924, Page 11

CLIENT AND SOLICITOR

TROUBLE OVER AN INVESTMENT. CASE AT S.m’ COURT.

At the Magistrate’s Court yesterday Cornelius Casey, farmer, of Wanganui, proceeded against George McCaul, solicitor, for the sum of £29 0s 3d, being the balance of money in the hands of the Security Building Society, plus interest on the amount since December 1921.

Mr Currie, who represented the plaintiff, stated that his client regarded the defendant as his solicitor, and handed him sums of money to invest, and this he did on a security approved by plaintiff. A balance of" £29 0s 3d was left in the defendant’s possession on deposit, and this, it was alleged, was placed into the Security Building Society. Counsel explained that defendant and his partner, Collins, were the sole shareholders, directors and auditors of the society. In conclusion, he stated that the plaintiff now desired to recover the £29 0s 3d.

The plaintiff, in evidence, stated that for some time the defendant had acted as his solicitor, and, as such, received considerable sums of money from him. In August of 1920 he (witness), disposed of some property, as a result of which the sum of £9BB was paid to McCaul. Out of that amount £7OO was lent to another man. Through other investments witness said he received £250, leaving £29 Os 3d in the defendant’s hands. McCaul said he would invest the amount, and witness would receive interest upon it. He got one lot of interest, which came from McCaul. He did not, howevef, authorise McCaul to hand it over to the Security Building Society. Some time during this year he applied to get his money back, and he heard for the first time that it had been placed with the Building Society. He was now claiming the amount owing and interest at 6J per cent.

To the defendant witness said that the cheque for the sale of the property did not eome direct to him.

Defendant: You haven’t a very good memory have you?—l don’t know that I ever received £lOO.

Continuing, witness said he got several cheques for interest, but he did not remember getting one after July, 1923. He thought the cheques he received for interest were signed by the defendant. He did not authorise the payment of his money into the Building Society, but admitted that he had received the society’s cheques for interest.

Re-examined by Mr Currie, witness said that when he wanted money he would go to McCaul and get it. He knew the amounts he received were for interest, but that was all he did know.

The defendant pointed out that the plaintiff was an aged man, and did not possess a good memory. When he first dealt with Casey, he was in partnership with a Mr Collins, who had left New Zealand. Subsequently he was in partnership with a Mr Howie. Witness said he received £9BB 6s, which was paid in by Messrs C. P. and C. S. Brown, and out of this amount several sums were paid. He was not aware that the balance was paid into the Building Society, but, when he found out, £lOO was withdrawn. He. got a statement from his _ partner, and thought the whole of the money had been paid back to plaintiff. The money had been transferred to the Building Society account without his knowledge or consent, and he was surprised to learn that £29 0s 3d was owing. He was not acquainted with the transaction of £7OO with one Mclnnes, but he had paid three sums of £5O to the plaintiff’s family, at the plaintiff’s request. These various payments left £129 0s 3d, which was paid into the Building Society. This he ascertained subsequently, and it was probably done by transfer. The books showed that in July, 1921, Casey received a cheque for £lOO, which reduced his account to £29 0s 3d. In January, 1922, he got a cheque for interest on this amount, and later got another cheque. These payments had been ticked by the auditor, and he had no doubt that the plaintiff received them, although the bank could not trace the cheques at present. Witness explained that he did not keep the books, but trusted his partner to do them correctly. His Worship remarked that even if he did not keep the books, he would surely look at them before making a settlement. Mr Barton pointed out that he did not keep his own books, but he made a practice of perusing them before making a payment. Cross-examined by Mr Currie, witness stated that he had not been authorised by Casey to place the money with the. Building Society. When the society was formed, Collins, Morgan, and himself were the shareholders.

Mr Currie: Then you were committing a breach of the Building Society Act at the outset. One of the first provisions in the Act is that you should have seven shareholders?—l did not know at the time. The papers were submitted to Wellington when the society was formed.

The rules also provide for a committee of management of at least three. I put it to you that since 1920 the committee has consisted of only you and Collins?—That is so.

The rules also provide for an annual meeting ef shareholders?—Yes! The last one was held before Mr Collins left New Zealand.

The annual meeting consisted of yourself and Mr Collins?—Yes! Have you made the returns required by the Act?—Mr Collins informed me that he had done so!

You employed Mr Finlayson to go through your books, but he could not make head or tail of them, owing to the state they were in?—Yes. Continuing, witness deposed that Mr Finlayson said he was unable to put in a statement. The returns were filed, and put in as certified as being correct by Collins and himself. It might be said that they two were the shareholders, directors, manager, and auditors of the Building Society. Some of their clients’ money was put into the society, blit he was not aware that Casey’s was put in.

To His Worship: He relied solely on his partner, ‘and did not look at the ledger. Continuing, witness said that at the time the plaintiff was paid the £lOO, he was satisfied that that was all that was owing to him. He relied on the competency of his partner in keeping the books. However, he was not satisfied now with his book-keeping. When Mr Howie first asked him for the £lOO, he could not sign the cheques. There was mopey owing to Casey and others in the account, but until these were brought to a cash account, he could not tell what the position was. In addressing His Worship, the defendant contended that the plaintiff must have known that his money was put into the Building Society account, if he received cheques drawn on it. The fact that he accepted them over an extended period proved that he fuly acquiesced in his money being

there. The defendant contended that he was not personally liable for the amount owing, and submitted that it was a partnership liability, if it was a liability at all. Mr Currie said that it was natural that the plaintiff did not look to see whether the cheques were drawn on the firm or the Building Society. The plaintiff had instructed him that the liability was upon McCaul, and the liability was joint as well as several. The defendant pointed out that the society had a number of securities to be realised.

His Worship, in giving judgment, said that in this case two points had been raised: (1) That this was a partnership matter; and (2) that the plaintiff acquiesced in having his money placed in the Building Society. He (Mr Barton), however, could not lose sight of the fact that the plaintiff was a layman, and the defendant a solicitor. The onus, he pointed out, lay more heavily on a solicitor than a commercial firm. It had not been proved that the plaintiff had released the defendant, and had agreed to look upon the firm to deal with his money. It had been admitted that the plaintiff looked upon the defendant as his solicitor. His Worship said he was not satisfied that, although the plaintiff received three Building Society cheques, he could be held to have acquiesced in the money being invested in the society. The plaintiff was entitled to trust his solicitor in such matters. The fact of the matter was that McCaul trusted his partner so much that he did not even look at the books. His Worship said he could not find any answer but to give judgment for the plaintiff for the amount claimed (£29 Os 3d), plus interest from December, 1921, to date.