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IN THE 
 
 Supreme Courtof Canada 
 
 appeal from tbe SMftgntcnt of tbe ttourt of appeal for ©ntarlo. 
 
 Between 
 
 And Between 
 
 BURNS & LEWIS, on behalf of themselves and all 
 other creditors of the defendant Cheyne, 
 
 Plaintiffs, 
 
 AND 
 
 ELIZA BARNET CHFN'XE, JAMES D. WILSON 
 
 Defendants. 
 BURNS & LEWIS, on behalf of themselves and all 
 other creditors of the defendant Eliza Barnet Cheyne, 
 
 Appellants, 
 AND ' 
 
 JAMES D. WILSON. AND THE W. E SANFORD 
 MANUFACTURING COMPANY (Limhed) 
 
 Respondents. 
 
 GIBBONS MULKERN & HARPER, 
 T. B. MARTIN, ESQ, 
 SCOTT, LEES & HOBSON. 
 
 Solicitors for Appellants. 
 Solicitor for Respondent Wilson. 
 Solicitors for Respondents The Sanford Co. 
 
 l^onbon, dDnt.: 
 
 ADVERTISER I'RINTINO AM) I'L'BI.ISIIING CO. 
 
% \ 
 
IN THE 
 
 Supreme Courtof Canada 
 
 appeal from tbc 3«&flincnt of tbc Court of appeal for ©ntario. 
 
 Between 
 
 And Between 
 
 BURNS 6i: LEWIS, on behalf of themselves and all 
 other creditors of the defendant Cheyne, 
 
 Plaintiffs, 
 
 AND 
 
 ELIZA BARNRT CIIEVNE, JAMES D. WII SOX 
 AND THE VV. E. SANEORD MANUEACTURING 
 COMPANY (Limited), 
 
 Defendants. 
 
 BURNS & LEWIS, on behalf of themselves and all 
 other creditors of the defendant Eliza Barnet Cheyne, 
 
 Appellants, 
 
 AND 
 
 JAMES D. WILSON, AND THE W E SANEORD 
 MANUEACTURING COMPANY (Limit'ed),' 
 
 Respondents. 
 
 GIBBONS, MULKERN & HARPER, 
 
 T. B. MARTIN, ESQ, ^o^^cHors for Appellants. 
 
 SCOTT. LEES & HOBSON, Solicitor for Respondent Wilson. 
 
 Sdicitorsfor Respondents The Sanford Co. 
 
 l-'onlion, ®nt.: 
 
 ADVERTISER PRINTIN.; ANU 1UKI.ISHING tO. 
 1897. 
 
IND&X. 
 
 Summary ok Fkoci:i:uin(js, -.-,.... 
 
 Statkmknt ok Case, ........ 
 
 Oki)K:i Madk on Mcrioy fok Injunction, 3rd December, 1895, - 
 rLi:Ai)iN(;s : 
 
 Statement of Claim, loth December, 1895, ..... 
 
 Statement of Defence; of defendant Wilson, 23rd December, 1895, 
 
 Statement of Defence of defendant Saiiford Co., 23rd December, 1895, 
 
 Reply, 26th December, 1895, ---.... 
 
 Trial, April 16th and 17th, 1896, at Toronto, before the Chancellor. 
 
 Evidence f(jr Plaintiffs— Jos. J. Grpene, ..... 
 
 " Cross-cvamination, 
 
 " Re.cxaminati(jn, 
 
 Robert Cheyne, ...... 
 
 " Crcss.examination, ... 
 
 Reexamination, .... 
 
 Jas. D. Wil.son, . - - . . 
 
 " Cross.examination, 
 
 Defense — William Lees, ..... 
 
 Cross.exiunination, ... 
 
 " Re-examination, 
 
 J. J. Greene — re-callcd, ..... 
 
 Judgment, - . 
 
 ExiIIHIT.S : 
 
 No. 1. Guaranty, dated 1st November, 1895, between The W. !•:. Sanford Manufac- 
 turing Company (limited), Jos. J. Greene, William S. Dufficld, and 
 respondent Wilson, whereby payment of the chattel mortgage was 
 guaranteed, ---.... 
 
 No. 2. Agreement, dated ist November, 1895, by defendant Cheyne to give chattel 
 mortgage to defendants Sanford Co., .... 
 
 No. 3. Extracts from chattel mortgage, dated November ist, 1895, Eliza Harnet 
 Cheyne to James D. Wilson, ----- 
 
 No. 4. Extracts from chattel mortgage, dated 4th December, 1895, Eliza Karnet 
 Cheyne to Sanford Co., ...... 
 
 No. r. Order made on Injunction Motion, ..... 
 
 No. 6 December 21st, 1895. Statement of purchase of the stock of Cheyne & Co., 
 No. 7. Order, November i.st, 1895, from defendant Cheyne to Scott, Lees & Hobson, 
 No. 8. Memo, of Cheyne & Co.'s. liabilities, ..... 
 
 EORMAL JUDGMEr.T as entered, July 25th, 1896, ..... 
 
 Notice ok Motion to Court of Appeal, May istli, 1896, - 
 
 Reasons for Appeal, ........ 
 
 Reasons Against .Appeal of Sanford Co., ..... 
 
 Reasons Against Appeal of respondent Wilson, ..... 
 
 Judgment of Court of Appeal, ...... 
 
 Certificate of Court of Appeal, nth May, 1897, .... 
 
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BURNS vs. CHEYNE. 
 
 SUMMARY OF PROCEEDINGS. 
 
 lO 
 
 Writ issued 15th November, 1895. 
 
 Statement of Case. 
 
 Order tnadc on Motion for Injunction, 
 
 Pleadings. 
 
 Trial. 
 
 Judgment. 
 
 Exhibits. 
 
 Judgment as entered. 
 
 Notice of Motion to Court of Appeal. 
 
 Reasons for .Appeal 
 
 Reasons against .Appeal. 
 
 Judgments of Court of Appeal. 
 
 Certificate of Court of .Appeal. 
 
 STATEMENT OF CASE. 
 
 This is an action brought to have it declared that a certain chattel mortgage made b>- the 
 
 defendant Eliza Harnet Chcyne, to the licfendant James D. Wilson, was made with the intent 
 
 to defeat, delay and liindcr the plaintiffs jiiid the oth;,'r creditors of the defendant Cheync 
 
 20 generally, and with int' iit to give a pref. renee to The W. K. Sanford Manufacturing Company 
 
 (limited). 
 
 The action was tried before The Honorable The Chancellor on the i6th and 17th days of 
 April, i8y6, who dismissed the same without costs. The plaintiffs appealed to the Court of 
 Appeal for Ontario against such judgment, and the said appeal was, en the nth day of May, 
 1897, dismissed with costs, from which judgment the plaintiffs now apoeal to the Supreme 
 Court of Canada. 
 
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ORDER MADE ON MOTION FOR INJUNCTION. 
 
 in ihc Ijigh €ottrt of Justice, 
 
 Common flMcas Division. 
 
 TH1£ HONOKAIiLK 
 
 Mr. Justice Mkreditii. 
 
 Tuesday, the third day of 
 
 December, 1895. 
 
 Between 
 
 BURNS & LKWIS, on behalf of themselves and all 
 Other creditors of the defendant, Kli/a Barnct Cheyne, 
 
 Plaintiffs. 
 
 AND 
 
 ELIZA BARNET CHEYNE, JAMES D. WILSON, 
 AND THE W. E. SANEORD MANUEACTURLNG 
 COMPANY (Limited). 
 Defendant's. 
 
 Upon motion this day made unto this Court by Mr. Gibbons, Q. C, of counsel for the 
 plaintiffs, for an order and injuiictioii restraining the defendants, or any of them, from trans- 
 ferrinj:^, selling, or disposing of a certain stock-in-trade of dry goods and ready-made clothing, 
 situate at -j}, King Street East in the Cit>' of Toronto, and mortgaged by the defendant Cheyne 
 to the defendant Wilson, by indenture dated tl ,■ first da\- of November, 1.S95, until after the trial 
 20 or other disposition of this action, in presence of counsel for the defendants ; upon hearin." read 
 the affidavits filed in support of and in opposition to the said motion, and the depositions of 
 William Lees, Joseph J. Greene, W. S. Duffield, Robert Cheyne and James D. Wilson, taken for 
 use on the m(Jtion,and the defendant Wilson, by his counsel af(;rcsaid, hereby undertaking not 
 to take proceedings under the above mentioned mortgage until the trial of this action, or if pro- 
 ceedings are taken to keep an account of and hold the proceeds of the saL- of the said goods and 
 chattels subject to the further order of this Court. 
 
 1. This Court doth order that the said motion be and the same is hereby adjourned until 
 the trial or other determination of this action. 
 
 2. This Court doth further order that the plaintiffs do enter this action for trial at the nc.\t 
 30 sittings of ti)is Court for the trial of actions at the City of Hamilton. 
 
 3. And this Court doth further order that the costs of this motion be reserved, to be disposed 
 of at the trial or other determination of this action. 
 
 (Sgd.) A. E. MACLEAN. 
 Entered Dec. 6th, 1895. Clerk Weekly Couyt. 
 
 O. B. I P 300. 
 R. \\ K. 
 
En the ^iglt €ouit of Justice, 
 
 Common ipleae Division. 
 
 WRIT ISSUED 15111 NOVEMBER, 1895. 
 
 Between 
 
 10 
 
 BURNS & LEWIS, on behalf of themselves and all 
 other creditors of the defendant Cheyne, 
 
 Plaintijffs. 
 
 ANM) 
 
 ELIZA BARNET CHEVNE, JAMES D. WILSON 
 AND THE W. E. SANFORD MANUFACTURING 
 COMPANY (Limited), 
 
 Defendants. 
 
 STATEMENT OF CLAIM. 
 
 1. The Plaintiffs arc wholesale manufacturers of clothing, carrying on business at the City 
 of London, in the County of Middlesex. 
 
 2. The defendant Eliza K. Cheyne is, and has been for some months, carrying on business 
 at the City of Toronto as a retail dealer in clothing. 
 
 3. The defendant Cheyne is indebted to the plaintiffs in the sum of $1,342.90 and upwards 
 for goods sold and delivered by the plaintiffs to her. 
 
 *o 4. That on or about the first day of November, A. D. 1895, the defendants, the Sanford 
 
 Company, an incorporated company, carrying on business at the City of Hamilton as wholesale 
 manufacturers of clothing, being crcditois of the defendant Cheyne to the amount of $4,700 or 
 thcreaboULS, applied to her to make an assignment for the benefit of her creditors, she being at 
 the time wholly unable to meet her liabilities as they matured, and being wholly insolvent, as the 
 defendants, the Sanford Company, well know. 
 
 5. The defendant Cheyne refusing t(j make the said assignment, the said Sanford Company 
 persuaded and induced her to execute a chattel mortgage to the defendant Wilson on the first 
 day of November, A. D. 1895, to .secure tlie sum of $4,775 upon all her stock-in-trade, situate in 
 the Store occupietl by her in the said City of Toronto. 
 
 30 6. That the said chattel mortgage was made with the intent to defeat, delay and hinder the 
 
 other creditors of the defendant Cheyne, with the full notice and knowledge of the defendants 
 Wilson and the Sanford Coinpany. 
 
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1 
 
 10 
 
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 7- The defendants the Sanford Company, gave to the defendant Wilson a bond of indemnity 
 lo secure him against loss in respect of the said alleged advance. 
 
 8. The defendant Wilson had never seen the stock upon which the said alleged advance 
 was made, nor did he know the defendant Chcync, nor had he ever heard of her, but he made 
 the said advance with full knowledge of the intent aforesaid. 
 
 The plaintiffs .seek : 
 
 1. Judgment against the defendant Cheync in the sum of $1,342.90, and 
 interest from the ist November, 1X95. 
 
 2. To have it declared that the said chattel mortgage to the defendant 
 Wilson was made with intent to defeat, delay and hinder the plaintiffs and the 
 other creditors of the defendant C'heyne, and with intent to give a preference to 
 the defendants the Sanfortl Company, with the knowledge of the defendant 
 Wilson. 
 
 3. To have it declared that the same is null and voiil ; or, 
 
 4. That it may be declared that the defendant Wilson took the .said chattel 
 mortgage as and for the defendants the Sanford Ci-m])any, and that he holds 
 the same as their agent and in trust for them and th.-'.t the said chattel mortgage 
 may be set aside as being a fraudulent transfer to the defendants the Sanford 
 Company, by way ><f preference over the other creditors of the defendant 
 Cheyne. 
 
 5. For an account of the dealings of the defendants under the said .security 
 and payment over of the amount realized thereunder for the general benefit 
 of creditors of the defendant Cheync. 
 
 6. For such other relief as the plaintiffs may be held entitled to. 
 
 7. And for costs of suit. 
 
 The plaintiffs propose that this action should be tried at the City of Toronto. 
 
 Delivered this loth day of December, 1895, by Messrs. Gibbons, McNab & Mulkern, of the 
 City of London, in the County of Middlesex, solicitors for the plaintiffs. 
 
 STATEHENT OF DEFENCE 
 
 30 OF THE DEFENDANT JAMES D. WILSON. 
 
 1. The defendant James D. Wilson admits all the allegations contained in the first and 
 second paragraphs of the Statement of Claim, and denies all the other allegations contained in 
 the .said Statement of Claim, and puts the plaintiffs to the proof thereof 
 
 2. This defendant says that he advanced his money to the defendant Eliza Harnet Cheyne 
 in good faith, and without knowledge that the defendants the W. E. Sanford Company (limited^ 
 were creditors of the said Eliza Barnet Cheyne, or were in any niaiiiicr interested in the said 
 transaction. 
 
 3. This defendant denies that the defendants The W. E. Sanforil Manufacturing Company 
 (limited) gave to this defendant a bond of indemnity as alleged in the Statement of Claim. 
 
4- This defendant says that the mortgage referred to in the Statement of Claim has been 
 paid and satisfied. 
 
 This defendant submits that this action should be dismissed with costs. 
 
 Delivered this 23rd day of December, A. D. 1895, by Thomas B. Martin, of the City of 
 Hamilton, in the County of Wentworth, solicitor for the defendant James D. Wilson. 
 
 STATEMENT OF DEFENCE 
 
 OF THE DEFENDANTS THE W. F 
 
 . SANFORD MANUFACTURING COMPANY 
 (Limited). 
 
 1. These defendants admit the statements in the first and second paragraphs of the plain- 
 10 tiffs' Statement of Claim, and deny all other allegations therein, and put the plaintiffs to the 
 
 proof thereof 
 
 2. These defendants, on or about the 30th day of October last, were creditors of the defend- 
 ant Eliza Harnet Cheyne for upwards of $4,700 ; and believing that she was solvent and that the 
 other creditors h.id claims for small amounts only, and that owing to the action which said 
 creditors were likely to take, the affairs of the defendant F.liza Harnet Cheyne would become 
 involved, these defendants requested the defendant Eliza Barnet Cheyne to execute an assign- 
 ment for the benefit of creditors in order to prevent loss to these defendants, but she declined to 
 execute such assignment. 
 
 3. These defendants deny that they gave to the defendant Wilson a bond of indemnity to 
 20 secure him against loss. 
 
 4. These defendants say that the said mortgage is no longer a charge upon the stock-in- 
 trade mentioned in the Statement of Claim. 
 
 These defendants submit that this action should be dismissed with costs. 
 
 Delivered this 23rd day of December, A. D. 1895, by Messrs. Scott, Lees & Hobson, of the 
 City of Hamilton, in the County of Wentworth, solicitors for The W. E. Sanford Manufacturing 
 Company (limited). 
 
 REPLY. 
 
 The plaintiffs join issue on the Statement of Defence of the defendants James D. Wilson 
 and The W. E. Sanford Manufacturing Company (limited). 
 
 30 Delivered the 26th day of December, 1895, by Gibbons, McNab & Mulkern, of London, 
 plaintiffs' solicitors. 
 
-U. 
 
 TRIfVL. 
 
 Evidence taken before The Chancellor at Osgoode Hall, non-jury sittings, April i6th, 1896. 
 
 GlHBONS, Q.C., and McIntosh for plaintiffs. 
 
 Ritchie, Q.C, for Defendant Wilson. 
 
 C. D. Scott for Sanford Manufacturing Company. 
 
 JOSKFH JOHN GREENE sworn. -Examined by Mr. Gibbons. 
 
 Q. I believe yoi> are Secretary of the Sanford Manufacturing Company? A. I am. 
 
 Q. You did busmcss with Mi.ss Chcyne? A. We did. 
 
 Q. Who carried on clothing business in Toronto? A. Yes. 
 10 Q. When did th.it business connncncc ? A. Wc commcnccil to do business with them, I 
 
 think, in March, a year ago. 
 
 Q. That is March, 1895 — that was the commencement of the business, was it not? .A. I 
 think It was. 
 
 Q. Has Miss Chcyne any capital ? .\. She is worth something outside of the business. 
 
 Q. Small, 1 believe? A. 1 don't think she is worth a great deal. 
 
 Q. Very small, I think you told me before ? A. Not a large amount. 
 
 Q. Did you ever hear the amount? A. No. 
 
 Q. She purchased mainly upon credit ? A. Yes. 
 
 Q. And purcha.sed largely from the Sanford Manufacturing Company? A. Yes. 
 20 O. You became uneasy, I believe, in October, 1895? A. Yes. 
 
 Q. What had you heard to make you uneasy ? A. I heard that certain creditors were 
 \ taking action — legal action. 
 
 Q. Were about to sue for their claims? A. Yes. 
 
 Q. Were likely to bring action on oxerdue tiotes ? A. I suppose it was. 
 
 Q. Other wholesale houses, were they ? A. Yes. 
 
 Q. What did you do in con.scqucnce of hearing this? A. I sent down our Mr. Duffield 
 to Toronto. 
 
 Q. Who is the manager of this business — this Miss Cheyne business ? A. Mr. Cheyne. 
 
 Q. WHiat is his first name? A. I don't know. 
 30 Q. Her father, at any rate ? A. Yes. 
 
 Q. And in consequence of Mr. Duffield's visit did Mr. Cheyne come up? A. He came up. 
 
 Q. Representing his daughter? A. Yes. 
 
 Q. What had Mr. Duffield gone down to do? A. To secure an assignment from him if 
 possible. 
 
 Q. An assignment for the benefit of creditors ? A. Yes. 
 
 Q. You had become dissatisfied with the running of the account? A. We objected to an 
 extension, yes. 
 
 Q. They had been unable tn meet their payments ? A. He had not been paying as he 
 had arranged to do. 
 
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 20 
 
 Q. Aiid you came to the conclusio.i that the best thing to be clone was to take an assign- 
 ment for the benefit of creditors? A. Yes. 
 
 Q. That was talked over before Mr. liufficld went down ? A. Yes. 
 
 Q. Did he get the assignment ? A. No. 
 
 Q Mr. Durfield returned. Did Mr. Cheyne come to Hamilton then? A. Yes. 
 
 Q. Was that at your reqi.est ? A. No. 
 
 Q. Mr. Duffield's request? A. No, I think no^ 
 
 Q. Just by accident he came? A. Voluntarily, yes. 
 
 Q. Not having been rcc|ucstcd to come? ,\. Not that I am aware of. 
 
 Q. What occurred then ? Did you then discuss the question of assignment with him ? 
 A. Yes, I did. 
 
 O. I Ic did not want to assign ? A. No. 
 
 (J. Then there WIS a suggestion of a chattel mortgage? A. There was. 
 
 i). Who did that suggestion come from ? I see Mr. [.ees say.s, in his examination, it came 
 from him —is that so ? A. I believe so. 
 
 Q. Who is Mr. Lees? A. He is a solicitor in Hamiltcjn. 
 
 Q. You had consulted him in the meantime? A. Yes. 
 
 Q. And tt>ld him of Mr. Duffield's visit to Toronto? A. No, 1 don't think 1 did. 
 
 Q. Told him about your endeavors to get an assignment ? A. No, 1 am not sure that I did. 
 
 Q. What did you tell him, then, when >'ou consulted him ? You had been endeavoring for a 
 couple of days to get the assignment, both in Hamilton and Toronto, and then v'ou went to 
 consult Mr. Lees— did you tell him what you had been doing? A. I told hrni that we wanted to 
 get our money. 
 
 Q. Did you tell him Mr. Dufficid had been down t" Toronto with a view of procuring the 
 assignment? A. I believe not. 
 
 Q. Did you tell him that you had been discu.ssing during the day there with Mr. Cheyne as to 
 procuring an assignment? Did you tell him at any rate what you had been doing up to that 
 time ? A. Ni., I believe not ; not concerning the assignment. 
 
 Q. So how d.d he come to make the suggestion to you about the chattel mortgage. What 
 30 led up to that? A. I saw Mr. Lees before Mr. ("heyne came up and mentioned the facts to him. 
 
 Q. What facts? A. I mentioned the facts I have mentioned, concerning the condition of 
 the account and our desire to get payment for it, and asked him what was to be done. 
 
 Q. And what did he .say? A. He thought that it might be possible that a loan might be 
 effected on the stock if matters were satisfactory. 
 
 Q. Did he tell you that he had done such things before ? A. Not that 1 remember. 
 
 Q. Will you saj' he didn't ? A. I am not aware that he did at that time. 
 
 Q. I asked you before about this assignment. (Question 69, re;-d), " Q. He knew that 
 you were asking Cheyne to make an assignment ; you asked him in his j^rcscnce? A. Yes, he 
 knew. 1 think he knew 1 had asked him for that." Is that .so? A. The answer there indicates 
 4<- that I was in doubt. 
 
 Q. Have you discussed it with Mr. Lees since? A. Yes. 
 
 Q. And he says that the assignment was not mentioned? A. He does. 
 
 Q. So that is the reason you changed your view on that subject, is it ? A. Not necessarily. 
 The circumstances were a little peculiar. 
 
 Q. You still think now, although you answered then, " Yes, he knew," you say now, after dis- 
 cussing with Mr. Lees, that you are not certain about it — is that it ? A. I am lot certain about it. 
 
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 Q. You think you discussed with Mr. Lees the taking of the chattel mortgage, without telling 
 anything that led up to it— about the trip of Mr. Uutfield and tuc solicitors to Mr. Clieync's 
 house? A. Not without telling him a certain amount. 
 
 Q. What part did you tell him ? A. I am not just sure what 1 did tell liiin. 
 
 Q. Now Mr. Greene, have you any doubt in your mind that you naturally would tell Mr. 
 Lees what had been done— Mr. Sweet and Mr. Duffield had come over together and gone to Mr. 
 Cheyne's house with a solicitor, Mr. Kappele? A. I don't think Mr. .Sweet came down. Mr. 
 
 Duffield came alone. 
 
 Q. And did they go up with a solicitor to Mr. Cheyne's house, and they came back and re- 
 
 10 ported ? A Ycr.. 
 
 Q. Is it likely or unlikely that you would tell this to Mr. I.ees? A. I clout tl.ink it is 
 necessary that I sImuUI have told him. The conversation with Mr. Lees was rather hurried. 
 Q What hurried it? A. I just went and .saw Mr. Lees before Mr. Cheyne airivetl at our 
 
 office. 
 
 Q. How did you know he was coining to your office? .\. Mr. Duffield told me he was 
 
 coming. 
 
 Q. You told me a few minutes ago he came of his own accord, and had not been asked to 
 come ? A. Yes; he may have said or told Mr. Duffield when he was coming up. 
 
 Q. Something was then suggested by Mr. Lees that it might be that a chattel mortgage could 
 aobc given on this stock and the money api)i;eLl in payment of your cla.m ; is that it? A. Yes. 
 
 Q. Whom did he suggest would supply the money ? A. I doi.'l think he suggested anyone, 
 or mentioned any nan-.c at the time. 
 
 Q. How did he speak of him ? Vou told 1..0 before. Have you got a little memorandum 
 book in your pocket in connection with this suit in my way? A. No. 
 
 Q. Has it anything to do with this suit— the memorandum book }'ou have in your pocket ? 
 
 A. No. 
 
 Q. No entries in connection with the suit ? A. No. 
 
 Q. Who did he tell you that he thought would advance this money? A. I don't think he 
 
 told me. 
 30 Q. Before, you said, he said he was a client of his ? A. I am not prepared to say that that 
 
 was the case. 
 
 Q. You discussed with Mr. Lees this evic'ence in which you said, " He said he was 
 of hi""? A. i am not sure that we talked on that particular point. 
 
 Q. Then he told you that he was not a client of his, did he ? A. No, I wont say. 
 
 Q. Who did he say would advance the money ? A. He did not .say on that day. 
 
 Q. Did he say a client of his? A. No, he didn't 
 
 O. Wh?t made you change your mind since li.al j.vanu.iatior. .- A. .As far as that was 
 coicerned I naturally suppc)s<: any one that he could secure the money from was a client of his. 
 
 Q. Before, you said, " He said a client of his." ? A. I cannot remember whether he men- 
 
 4otioned any nam*^ 
 
 Q. Did Mr. Lees come down with you to see Mr. Cheyne when he arrived ? A. No, he came 
 
 down himself afterwards. 
 
 * J. By anpointrue It ? A. Yes. 
 
 Q. You had arrant^ed to ha\e him come? A. No, we telephoned him to come down. 
 
 Q. Did he suggest this chattel mortgage to Cheyt. or had you suggested it in the mear^'me? 
 
 :lient 
 
* '1 
 
II 
 
 A. I may have said to Mr. Cheyne — asked him th-^ question — if a loan could be secured would 
 he be willing to pay our account off. 
 
 Q. A loan by way of chattel mortgage? A. Yes. 
 
 Q. Did you tell him what effect that would have as to these pending suits? A. No. 
 
 Q. Did you discuss the effect of the chattel mortgage on the suits that were pending ? 
 A. Not to any extent. 
 
 Q. To what extent did you ? A. It may have come up incidentally. 
 
 Q. .Any discussion about the other creditors who were sued ; the whole object of this, as jou 
 have told us, was to protect yourself against these creditors, was it not ? A. No, no. 
 lo O. That was one object ? A. Not the object. 
 
 Q. That was one object? A. No, I don't say that it was an object. 
 
 Q. Did you discuss with him then what the effect of the chattel mortgage would be as regards 
 these other creditcjrs, or have you forgotten that ? .A. No, 1 ha\cn't forgotten it. 
 
 O. 'I'hen did you discuss it with him ? .A. No, not particularly. 
 
 Q. Did you discuss it with him generally? .A. 1 n.ay, or the matter might have been 
 mentioned in course of conversation. Hut he understood the effect of the chattel mortgage pre- 
 cisely the same as I did. 
 
 O. Was there anything said about the result and the effect of the chattel mortgage, that the 
 other creditors would be unable to touch this stock ? .\. No, not in so many words. 
 '° C). In substance? A. In substance it may have been. 
 
 Q. Was it? .A. I presume it was. 
 
 k) Did Mr. Lee.s, in your presence, tell him that he had an exactly similar case — Gibbons vs. 
 Wilson, mentioning it by name — and that the other creditors might kick as much as they liked, 
 they could do noti (ng ? -A. That is new to mc. 
 
 O. Was that said in your presence? A. Not to my knowledge. 1 will say, not to my 
 knowledge it was not. 
 
 Q. Was there any discussion by Mr. Lees about another case — did he mention another case ? 
 A. Not in the presence of Mr. Cheyne, that I remember. 
 
 O. Did he mention it to you ? .A. lie did subsequently. 
 30 Q. At that time ? A. No. 
 
 O. When he was giving you the advice did he say anything about the case of Gibbons vs. 
 Wilson ? A. No, not that I remember of. 
 
 Q. You knew this is the same Wilson — you know now ? .\. I diti not know anything 
 about it at the time. 
 
 O. If Mr. Cheyne says that in your presence, as a.ssuring Mr. Cheyne thai it would be all right 
 —that the other creditors could not touch this stock, that he referred t(j the case of Gibbons vs. 
 Wilson, and said they might kick as much as they like, but they could not do anything— will you 
 deny it, if Mr. Che>'ne says that? .A. Yes, I will deny it as far as my knowledge goes. There 
 was no discussion of that nature — not to my knowledge. 
 40 Q- What was this discussion that took place? A, The inducement held out to Mr. Cheyne 
 was that he would continue business and we would supply him with goods. 
 
 Q. And the other creditors could not touch the stock ? .A. That was a mere incident as 
 far as we were concerned. 
 
 Q. Was not that the inducement held out at the time? A. I say not. 
 
 Q. Was not it discussed at all ? .\. I say the matter may have been incidentally mentioned 
 but it was not dwelt upon by me as any inducement; it was brought up by himself 
 
<r3 
 
13 
 
 ^ 
 
 Q. Not by you in kny way ? A. No, not that I remember. 
 
 Q. It was discussed in your presence was it not ? A. I admit that it was incidentally 
 mentioned as the effect rather fan the inducement. The inducement to carry on business was 
 
 the first. 
 
 Q. Could there be any stronger inducement K ,d out to this man, to give you a preference 
 over his other creditors, than that he was to be enabled to carry on business and the stock was 
 to be protected ? A. 1 saj- the inducement to carry on his business was the first. 
 
 Q. Who were the creditors who were mentioned ? A. I heard the names of three or more 
 
 mentioned. 
 10 Q. That was a very important factor, ahat was to be done with those other creditors? 
 
 A. It may have been to him. 
 
 Q. And to you ? A. Not necessarily. 
 
 Q. Was not it an important factor to you that the stock could not be touched by these 
 creditors? A. He may have understood it. 
 
 Q. Didn't you understand it -now, Mr. Greene? A. I understood it, certainly. 
 
 Q. Have you any doubt that Cheyne understood it ? A. I have no doubt that Cheyne 
 
 understood it. 
 
 Q. Is there any doubt that this was the inducement that Mr. Lees was holdmg out and you 
 
 were holding out to him ? A. I certainly have doubts. 
 2o Q. You have read your examination over pretty recently?' A. I read it over last week. 1 
 
 had a copy of it for a little while and read it over Saturday evening and then gave it back. 
 
 Q. Have you read it since? .A. No. 
 
 Q. Did you take any memorandum from it? A. No. 
 
 Q. You did not read it to-day, or any part of it ? .A. 1 looked at it. 
 
 Q. You did not read it ; what did you look at it for ? A. Just glanced at it. 
 
 Q. Didn't read it ? A. No, not the whole of it. 
 
 Q. Parts of it ? A. Yes. 
 
 Q. Did Mr. Cheyne agree then to give the chattel mortgage or vol ? \. No. 
 
 Q. Did you get Mr. Lees to go to Toronto, or what occurred next ? A. No. Mr. Cheyne 
 30 returned home. This was on Thursday evening he returned home. He came back on Friday 
 
 afternoon. 
 
 Q. Was the chattel mortgage then gi\cn ? A. The chattel mortgage, I think, was given 
 
 that night. 
 
 Q. Who went over to get it executed ? A. I believe Mr. Lees himself 
 
 Q. That is Mr. Lees, the solicitor. He went over— you mean he came down to Toronto? 
 
 A. Yes. 
 
 Q. The mortgage was drawn in Hamilton? A. I think it was. 
 Q. To a Mr. Wilson there? A. I didn't knosvat the time. 
 Q. You know now— Mr. Wilson, a tailor in Han.ilton? 
 40 not in business now. 
 
 Q. I believe you gave a guarantee or bond to Mr. Wilson ? 
 
 Q. Who did you give it to ? A. We gave it to Mr. Lees. 
 
 Q. Who is Mr. Lees representing ; you, of course, now, I suppose ? A. Yes. 
 
 Q. Anybody else at all ? A. Not that I know of. 
 
 Q. You have got rid of the client entirely ? A. Yc;. 
 
 Q. You gave a bond to him ; why did you give it to him ? This is the bond. The date 
 
 A. I understand, yes. 
 A. No, we didn't. 
 
 He 
 
 IS 
 
13 
 
 I 
 
 the 1st November, the same date as tlie chattel mortgage? A. We signed that on tlic 
 Saturday morning, the morning that we got the cheque. 
 
 Q. Who did you give that bond to? A. To Mr. Lees. 
 
 O. \'ou did not give it to Mr. Lees; you seem to be so well cf)achcd ? .\. I object tf) the 
 use of that term. I gave it to him to hold, to give it to .Mr. W ilson at his own iliscretion. That 
 was the understanding on which it was given. 
 
 g. Who asked for it? A. Mr. l.ees. 
 
 O. Why did he ask for it ? A. lie said the amount was large and he thought Mr. Wilson 
 should have it. 
 lo Q. You did not think he was acting for Mr. Wilson at all ? A. I didn't know. 
 
 O. You gave it to him mereh' as your own solicitor? A. Merely as our own solicitor. 
 
 Q. Not as Mr. Wilson's at all? A. No. 
 
 O. Who was acting for Mr. Wilson ? A. I don't know. 
 
 O. Did you ever hear of anyone acting for him ? A. I ditl subsequently. 
 
 O. When this suit w as brought ? A. \'es. 
 
 O. Has this b(jnd been in po.ssession of Mr. Leos e\er since ? A. I presume so. This is 
 the first time I have seen it. 
 
 Q. You were asked before when j-ou were examined — yJA;-. Gilibous reads question Jj in 
 witness examination — " Was not that discussed ; )-ou had the question of these others pressing, and 
 2o"yoi; had to give some inducement to a man to give a chattt:! mortgage to one creditor for their 
 "claim to the exclusion of the (jthers ; it had to be of some benefit to him ; you knew the effect 
 "of this chattel mortgage would be to keep off the other creditors?" What did you saj- to 
 that? A. In answer to it? 
 
 O. Yes? A. i don't kn. ' what 1 said. 
 
 O. What do you sa>- now ? A. I saj' I knew the effect of it. 
 
 Q. You s;ud then " \'es ; " }'ou knew the effect of it would be to cut off the other creditors. 
 Mr. Gihiwns reads question 26, "And that was discussed with him?" A. No, not to any 
 extent. 
 
 O. Then you said, "To some extent." Mr. Gibbons reads question .77, " Quite sufficiently 
 30 " to enable you both to understand it, was it not ? " What do jou sa)- to that now ? A. I simply 
 say so far as my knowledge of Mr. Cheyne was concerned that he knew the effect of it as well 
 as I did. 
 
 C). You answered " \'es " before? .\. There an- a number of(iuestions bearing on that; 
 1 think one answer modifies the others. 
 
 O. Question 2S and answer, "So that while xou were getting \()ur claim secured, the 
 " Che}'nes were getting what was practicallx' |)rotection iVom their other creditdrs ; the nther 
 "creditors could not touch the stock in the meantime until \du were paid? .\. I understand 
 "that." I'hat is the temptation you put upon him; that was your suggestion, w as it not? 
 A. No, it was not. 
 40 Q- Question 21) and ans-icer,"'y\y'\^\^ the tem|)tation >iiu put before him; th.it was your 
 
 " suggestion, was it not ? A. No, it was not our suggestion; nor was there a temjAation. He 
 " was a man, and he understood the effect of it just as well as we did." 
 
 Q. Question ^o and an.rwer," \'i)U j^laced .that effect before him, did you noi, in the con- 
 "vcr.sation? .\. Not as an inducement." 
 
 Q. Question J/ and ans-wer," \\'\y.\t did _\-ou do it for? .\. In the conversation that came 
 
 up. 
 
 You knew, of c<jurse, that there were other creditors ? .\. 1 did. 
 
14 
 
 Q. Wlicn he came down did he mention the amount of his habiHtics ? A. Vcs, he 
 mentioned to me the amount of liis Habilities. 
 
 O. What amount (Ud he j,d\e you? A. He ^'ave me— outsi<Ie of ours— about $4,000. 
 
 Q. How much were \-ou ? A. We were about $5,000. 
 
 O. So that made his habilities about $ij,000? A. Yes, somethin.<,ness. 
 
 Q. Did he ^ive you an>' statement of his assets? A. No, any information he iijave me was 
 simjjly verbal. 
 
 O. Did he ^nve \-ou any ai)i)roximate amount ? A. Yes. 
 
 O. About how much did he say the stock at 100 cents was ? A. I don't think lOO cents was 
 10 mentioned He said that his assets amounted to somethin.^- over $10,000. 
 
 O. You did assume that to be at 100 cents ? .\. I don't know that I thou-ht very much 
 
 ■aijout it. 
 
 O. You knew this woman had practicallx' little or no capital in the business, or to put in ? 
 A. He had paid us in tlie first place about se\en or eii^ht hundred dollars. 
 
 O. And that was about all she had ? A. She had some e(iuit_v in some propert)'. 
 
 O. Outside of that the $;oo y.m Ljot orii^nnall)' was all you heard of her having? A. I 
 think she had furniture and one thin;^ and another. 
 
 O. The eciuit\- in the property- amounted to nothintr, I believe? A. I don't know anything 
 
 about it. 
 20 (». ^'ou knew that out;idc of \ourself that there were these $4,000 of liabilities, and as far 
 
 as there were an_\' assets, they were about $10,000 ? .A. \'es. 
 
 O. .And >-ou knew in that case that the creditors were not to y^et paid in full? .A. No, I 
 
 didn't' 
 
 C). I want you to be careful. Did \ou sa>' anythini,^ to Mr. Che>ne that il this chattel 
 mortgage was given that before' Ion;; he could get a settlement from his creditors, anti that he 
 could get an easy settlement? .A. No, 1 didn't. 
 
 O. .Are you' willing to swear that you didn't ? A. I w ill swear to the best of my knowledge 
 
 I didn't. 
 
 O. Did you sa}- aii\-thing about that, that he would be able to get a settlement on his own 
 
 30 terms? A. No, I don't remember it. 
 
 O. Was there any discussion -now he sa\s that _\ou did discuss it over and over again — 
 was there an\' discuv.ion at all when this chattel mortgage was being put on, about the tact of 
 his being able to arrange with these other creditors ? .\. There was conversation with him to 
 the effect that when in a jjosition he could pa_v the other creditors. 
 
 (). I ask \ou again, was there anv discussion ; that after this chattel mortgage had been 
 put upon the proiKn't\' that the creditors would be ver>- glad to come to terms, an.l that he could 
 make a composition with them on easy terms? A. To the best of my knowledge there was 
 nothing said about it. 
 
 O. \'ou never discu:-<ed in an\- wa_\' the (juestion of settlement with the other creditors? 
 
 40 .A. ^■es, that was mentioned. 
 
 (). In whatwa>? .\. The arrangement we knew, if effected, would, we suiJjjosed, leave 
 him in a position to \>:\y the other creditors graduallv. 
 
 ( ). Did you think it improved his position to the other creditors to give this chattel mort- 
 gage on his stock? .\. I certainly thought it would. I would not have arranged with him to 
 continue in the business and suppi\- him with new goods if I hadn't thouglit he was in a position 
 to work it out. 
 
»s 
 
 20 
 
 Q. Voii had arranged with him to supply to him new goods? A. Ves, arranged to give 
 
 him $i,ocx3. 
 
 (.). Did >;>ii take aii)- security for that ? A. Ves, suhse<iiientl>-. 
 
 O. How long suhseiinent? A. 1 think it was a month. 
 
 O. Was there an>' arrangement that joii were to have secmit)' at tlie time \oii took the 
 chatte'l mortgage— at the time voii gave the goo<Is? A. 1 belie\e there was an agreement that 
 he would if we wished it. 
 
 g. Was it in writing? .\. 1 ne\er saw it to ni) knowledge. 
 
 O. Did >-oii e\er hear of a writing? A. k'es. 
 lo (Mr. Gibbons asks Mr. Ritchie for document.) 
 
 (,). So you had so much faith in this business that was going on that \du were going to 
 supply goods to him when you took this mortgage? Whose handwriting is that? A. I don't 
 
 know. 
 
 Q. Is that Mr. Lees' handwriting— was not it written in \our i)re.sence ? A. No, not to my 
 
 know ledge. 
 
 g. Vou do not know who wrote this out? A. I don't. 
 
 Q. Who did \()U instruct to write it out? A. I didn't instruct anjone. 
 
 O. It was done without any instructions from vou? .\. Ves. 
 
 Q. And without an\- arrangement? .\. \'es. 
 
 U. Mr. Lees took it ui)on himself to <io this, did he? .\. \'es. 
 
 Q Entirely without consulting nou ? A. he ma\- have mentioned that he wouUl do it. 
 
 O. Vou had nothing to do with the arranging w nh C"hc\ne yourself? A. Xo. 
 
 0. The first \-ou heard of it was from Mr. Lees? A. The first suggestion was from 
 
 Mr. Lees. 
 
 O. Was not the suggestion of the agreement the same time as the suggestion that >ou were 
 
 to give the goods? A. 1 am not sure. 
 
 O. Did you receive that about the same date? .\. I don't think I ever received it. 
 
 Q. This remained with Mr. Lees? A. Ves, in his hands. 
 
 O. Then about a month after sou took tiie chattel mortgage in pursuance of tliat agree- 
 
 30 meiit ? A. \'es. 
 
 O. An'' how long after that did sou take possession? A. I don't think it was ver\- 
 
 long. 
 
 O. A week? A. It ma\- ha\e been ; I am not sure. 
 
 O. Three or fo'.u- da_\s ? .\. I cannot sa\-. 
 
 (). It was within a week after getting the chattel mortgage that \ou took possession? 
 
 A. I think so. 
 
 O. And after the order had been made in this suit on the motion for injunction I believe 
 
 vou went on and sold these goods ; did >-ou sell them? A. The\- were sokl. 
 
 O. Who sold them? A. The matter was left entirel in our solicitor's hands. 
 
 O. Were >ou jjresent at the sale? A. Xo. 
 
 O. Did you get the proceeds of your chattel mortgage? A. \Ve did. 
 
 O. In full? A. ^'es. 
 
 (). Had you anything to do with the jjurchase? A. Xo. 
 
 O. It ' -as long s ' ecpient to your previous examination and long subsequent to the com- 
 mencement of this suit that that sale took place? A. I could not say when the sale took place. 
 I think it was in the first part of December. 
 
 40 
 
<ri\e 
 
 the 
 that 
 
 v^ to 
 (lim't 
 
 I) inv 
 
 from 
 
 were 
 
 ii'Tec- 
 
 \eiv 
 
 sum ; 
 
 jiie\e 
 
 com- 
 jlace. 
 
■i-AMHHI 
 
 i6 
 
 O. It was some time after your examination in Hamilton and alter the motion for injunction ? 
 A. I don't know. 
 
 O. Then the firsi mort},Mf,'e was on the 1st NoM-mSer. \'i>u say that second miMt^M^e was 
 not taken until a moiifli after that, tliat uuuld be tlie 1st December. Then the sale could not 
 be till sometime after that ? 
 
 Mk. KlTcilli:— The sale was about the middle of iJecember. 
 
 O. When was the sale? A. I di.n't know. 
 
 O. As near as ycai can tell me? A. I supiin'i" it was about the midille of Decembev ; 
 srunewhere's towards the middle of iJecember, I presume. 
 ic O. Vou ^fot paid j'our full claim at tie timetiiis chattel mort^rage was gi\en to Mr. Wilson ? 
 
 ;\. Yes. 
 
 O. Mow much? .A. $4,700 odd. 
 
 O. From whom did \du recei\e the cheijui? .\. {'"lom Mr. Lees. 
 
 O. Whose cheque was it? A. I think it was I'leir own che(|ue. 
 
 O. A checjue of the fi"-m of Scott, Lees & Ilobson? A. Ves. 
 
 ('K()SS-1>"\.\mini;ii by Mr. Ritchie. 
 
 O. Now will _\-ou say that it was about the last of October that you first heard that there 
 was any difficult)- so far a'. C'he\ne was concerned, ur Miss Jennie Cheyne ? A. Ves. 
 
 O. And in consetjue ice of that _\-ou sent down, you say, Mr. Duffield as one of the repre- 
 20 sentatives of the firm to employ a solicitor in ron.nto to try and j;et Cheyne to make an 
 assijfnment for the benefit of cicd.i*^'"-! ? A. I did. 
 
 O. And at that tiine what did sou understand was the amount of Miss Cheyne's liabilities 
 outside of \our firm ? A. We sup])osed tliat it was a very small amount. We supposed that 
 ue were creditors to the amount of about nine-tenths of his liabilities. 
 
 O. When was this ? ,\. L'p to the time that he came down to Toronto. 
 
 0. .And did you hear the names of the persons who were threatening- suit ? .\. I had. 
 
 O. .\nfl did you know the amounts.' .\. No. 
 
 O. L^id you hear the amounts at the time? .\. No. 
 
 O. .At all e\ents you supposed the liabilities, outside of x-ourself, were small? A. Ves. 
 
 O. When Mr. Chej-ne saw- \-ou hat did he say as to the outside liabilities — first as to 
 whether he was bein^ sued or not; \. hat did he say ? Vour opinion was that he had been 
 threatened with suit. When he came up and saw _\-ou, what did he tell you as to that ? .A. The 
 information he j^axe us, as near as I can remember at that time, was that his other creditors 
 were showin.tj him very little leniency, one of them in fact. 
 
 O. Did he tell \-ou whether or not he had been sued? .A. He said that the account of one 
 was in the solicitor's hands. 
 
 O. Did he sa\- anythini,^ more about it? .A. He spoke in a Ljeneral wa\- of the fact that he 
 had to pay all his bills in a short time. 
 
 O. On what terms have >-ou been sellint,^ him? .\. We sold to him under an arrangement 
 40 that he was to remit us weekb, . 
 
 O. What was the extent of the line of credit ; was an\-thin^r atjreed on as to that ? .A. No, 
 I think tlie air.ount was not prescribed. 
 
 O. .At all events it j^ot lar^e enou.L,di ; it ^^ot up to what amount? .A. .About $5,000. 
 
 O. I see the chattel morti^aLje is for $4,700 — in that nei<,diborhood — that would be correct 
 — about that ? .A. Ves, we sold him more goods than that. 
 
 30 
 

 17 
 
 O. Tli.it wa^ the l)al;mcc tlu'ii dm !* A. \'i's. 
 
 O 'I'lu'ii \iiii Na\- lu- \va>< tn RMiiit ui'i'kK? A. ^'l•■^ ; and Iv, did imt ki'i-p up lii'^ afjrfc 
 
 !Ticnt ill that respect. 
 
 O. iMir how loii^' a tiiiu' piiio- U> tlic U''\'""'U '»<" this chatti-l m(>^t^^•l^'l• did he tail tn l<ecp up 
 that UKrufiiuMit ? A. Im.i- sc\cii iiionth'-. 
 
 (). Then \<ui -^a)' ulu-ti he came to Hamilton that _\(iu had a discrssion with liim, and >oii 
 then asked liiin to mai<e an assi^rnment ? A. I did, 
 
 Q. And that he seemed unwilh'n^ to do? A. He was unuillint,^ to do it. 
 
 O. Did this take place before Mr. Lees was called in ? .\. N'es. 
 10 <>. When \ou found he would not make an assi>;nment did sou ask him aiiNthini^^ as to 
 
 what he could do? .\. 1 did. 
 
 0. .And what su^^'cstion did \du make to him, if an> ; what (|uestion did xoii ask? A. 
 Finally, the question I ])ut to him was, that if the ;unount can be raised b\' him on a chr.ttel 
 mort^ia^fc if he would be willin^^ to }>i\e that inorti^at^e and pay our claim. 
 
 Q. Vou asked him, if the amount can be raised by him by way of chattel mort^rajre, if he 
 would be willing to yive that mortgatje and pay jou out of the proceeds? A, Vc:', that is it, 
 
 O, And what did he sa\' as to that? .\. He very readil\- assented to it. 
 
 (). Then did )<>u know whether he had made an\' elVorls before that U) raise moiie)' on a 
 chattel mort^at^e ; did he sa)- anything' to >()U about that ? .\. I ilon'l remiMiiber that he did 
 
 20 sa)- anything about it. 
 
 (.). Vou do not know whethc- he told \dU that he had made ;in\- efforts in Toronto or not? 
 
 A. No. 
 
 O. After he said he was willinj^' to do it did >'ou li.ue an\- discussion as to the ti'rms or rate 
 of intere-,t or an>thing of that kind? .\. U ill, that was with the solicitor, who came in during 
 that coiners.ition that I had with him. 
 
 Q. Well, then, when did \'ou send for the solicitor? .\fter he told you he was willin-f to 
 
 give you a mort^aife ? A. \ es. 
 
 Q. So \()U had discussed with liim before the solicitor came there, and ascertained from 
 him that he was willin;^- to ;^ive \-ou this mortgage and to jia)- you out of the proceeds? 
 
 30 A. Yes. 
 
 O. Had ,\ou any (.liscussioii, i)rior to Mr. l.ce-.' coming, about supplying further goods to 
 him ? .\. We h- d ; that was part of the con\ersation. He knew. 
 
 O. He knew that if that was paid off that )ou would agree to give him further goods? 
 
 A. \'es. 
 
 O. To what extent ? .\. I thir'< I mentioned to about $1,000. 
 
 Q. And did \oii stipul.ate then thai he was to give vou sccuritv for that ; was there a con- 
 versation as to his giving \ou securit\- for it, if you wanted it? .\. 1 <Ion't think there was at 
 
 that juncture. 
 
 (). .\fter finding that he was w iiling to give the chattel inortgage, you telephoned, or how did 
 doN'on get Mr. Lees, or did vou send for him? .\. (^iie of the boy ; telephoned from the office for him. 
 
 (). Had thev been acting as solicitor-- fir von in other transactions? .\. Not to in_v kiiow- 
 ledgv-; I think that was the first transaction. 
 
 (.). Then \ou t<;lephoned ^L". Lees to come ; and what did he say, or what did he tell him ? 
 .\. He had a conversation with Mr. Cheyne. 1 intimated to Mr. Lees that Mr. Chevne 
 expressed himself as willing to give a chattel mortgage if .somebody could lenil him on it. .\nd 
 I handed him over then to the solicitor, Mr. Lees. n 
 
yiiii 
 
 , to 
 
 A. 
 
 ttcl 
 
 • he 
 
 n a 
 (Ij.l 
 
 Kit? 
 
 rate 
 •ing 
 
 : to 
 
 •oin 
 (Is? 
 
 ; to 
 
 ds? 
 
 iin- 
 ; at 
 
 (lid 
 liiii. 
 
 DW- 
 
 m? 
 yiic 
 Vnd 
 
i8 
 
 O. Then \-()U li.id no further discussion w itli hini ? A. Oh, I ma\- have taken part in the 
 discussion. I remained in the office wliile lie was there. 
 
 O. What did Mr. Lees eventua!l>- sa>- to him; what was said aljout terms? ,\, Mr. 
 Lce.s made some enciuiries as to liis position : took down some memoran lun as to liis affairs, 
 
 as to his assets. 
 
 O. Was there an\-thint;- else tlian assets tliat he encpiired about that \-ou know of? .\. I 
 
 am not sure. 
 
 O. You recollect him enciuirini;- about the assets? .\. \'es. 
 
 O. The amount of the stock ? .\. N'es. 
 10 O. Tlo \-()u recollect what he said wa- the amount of stock? .\. lie i^ave him some 
 
 particulars concerniiit; stock, book debts, etc., that showed his assets, as I mentioned, to be some- 
 thing- over $10,000. 
 
 O. Was there any discussion as to the character of the stock? .\. Yes, Mr. Lees made 
 enquiries concerninfr it. 
 
 O. Of Mr. Cheyne? .\. Of Mr. Chcyne. 
 
 O. .And what did Mr. C'hej'ne sa\- ? .\. He intimated that the stock was a t^Dod one ; and 
 he !4ave him some other information about it of a [general character. 
 
 O. What, if anythint;- was said about terms, as to when it was to be paid and the rate o* 
 interest, or anythini;- of that kind ? .A. \'es, that matter was arran!.^ed with Mr. Cheyne; the 
 20 amount that he was to pa\- weekl)-, and the interest that he was to pay. 
 
 O. How much? .A. $125, I remember, was mentioned first, ant! Mr. Cheyne objected to 
 that; and fuiall\',I believe, it was ai^reed that he should pa_\- $IC0 weekly. He thou:;ht, with 
 that arranL;ement, it would lea\e him in a pusilion to bu\- what l;oo(1s he would reijuire, and paj- 
 his creditors. 
 
 C). That is, Cheyne thouvjn if he could .et the |).ayminits down to $100 a week, th.it that 
 wouKI enable hnn to ;;('t on ? .\. N'es. 
 
 Q. And then Mr. 1-ees went away, did he, to sec; what he could dn? A, \'es, Mr, Lees 
 and Mr. Chewne went home ; this w.is 'Ihursda)- e\enin;>;. 
 
 O. Was the rate of interest di-.cu-.sed at that lime? .\. \'e->, Mr. Lees wanted ten |)ercent. ; 
 30 Mr. Cheyne objected, and 1 sided with .Mr. Cheyne; and fniall}- Mr. Lees thou!.',ht he could 
 arran.ye for eight, and I understooti that was the rate subsequently a;; reed upon. 
 
 O. Then it was arranged that if he could get a loan, pa\able $iOO a week, and with interest 
 at eight per cent., tiiat he wuuld take the mortgage? .\. Yes. 
 
 Adjourned at fivi -^'clock, to ten o'clock, April 17th. 
 
 17th .\iiril, 1896. 
 
 Ckoss-Kn.\.minati!)N 01 J. J. (ii-ii.iiNi:, continuctl. 
 
 Mk. Glul'.oNS, 0.( ., and .Mr. M( iNTiiMl for i'laintiffs. 
 i\Ik. RlTCim:, O.C., and M k. ScoiT fur Defendants. 
 
 1 
 
 Mk. Rill IIII.--I nia\- as well (Hit in this mortgage. This is a certified copy of the first 
 40 mortgage, proiiuced In- Mr. Gibbons, to Wilson, dated the first dav of November, 1X95; to 
 Wilson from ( lie\ ne for $.^775- I admit the certified cop\' to be put in to be used. This is for 
 $4,775, payable $100 a week at eight per cent. 
 
 4 
 
in the 
 
 A. Mr. 
 
 affairs, 
 
 A. I 
 
 1 sdiiie 
 ; somc- 
 
 iiiadt 
 
 c : and 
 
 rate iv 
 c ; the 
 
 :te(l to 
 t, with 
 11(1 pay 
 
 tliat 
 
 r. l.ees 
 
 rciiit. 
 
 C'l 
 
 11 Id 
 
 ntere.st 
 
 he first 
 !95 ; to 
 is is for 
 
19 
 
 O. Then was tliat $4,775 mure than [he unnmnt owiuL; h> the Sanfonl ('iiinpany ? A. Xd, 
 that was nni iiidiv, just siifllcient. 
 
 O. I wanted to knuw if that ua-. the exact aniount, or if it was a iittle mure? A. Xo, it was 
 the exact ami Hint. 
 
 C,). I tln'n!, \uu are mistai<en ahniit that? \. l'eilia])s I may l)e, l)ut that is m_\' imin-e^sion. 
 
 O. Ai all events it was $4,700 SI )metliin;.;? A. \'es. 
 
 O. Anil when were \iiu ])aiil the lunnunt paiil ? A. On S;itunla_\- mnrninL,^ ; I think it 
 would be Niivember 2nd. 
 
 O. Either the first ur the sirnnd iif N'n\eml)er? A. Ves. 
 10 O. After the chattel mnrt;.;.i;;e had been i.;i\ en I' .\. ^■es. 
 
 O. From whom did _\iiu receive the mune)? .\. We received the chefjue from Mr. [,ees. 
 
 g. Of Scott, Lees & liobson? .\. Ves. 
 
 O. So that that paid off the full amount owini; you ;it that time? A. Ves, it did. 
 
 O. Had you ever seen or had anv dealinjj;s with Mr. Wilson before? A. Xo. 
 
 O. Did \ou ever have any conversation with liim, or did anv member of your firm, so far as 
 you know, have anv conversation with him in coimection with this matter? A. Xo. 
 
 O. Voii said that )ou had arrani.;ed with C'heyne after he had aL;reed to <^ive you the chattel 
 mort;;a^e, o- about the same time that he ajjjreed I' j;ive you the chattel mortj^aj^e, that you 
 woulil make further advances of yoods? A. I ilid. 
 o O. That was after he had at^reed to t;ive the morti^a^e ? A. Ves. 
 
 Q. And \'ou said in the neii^hbi.ihiiod of about a thousand dollars? .\. I did. 
 
 O. And can \ou sa\- what date that was? Was that the da}- that the morttjaj.re was 
 executed, or the <la_v he ai^reed to <;ive it? A. I think it was the day he aijreed to ^ive it. 
 
 O. Then did vou, as a matter of fact, arran;.;e to m.ake any ad\ance of L;oods to him at that 
 time? .A. 1 did. 
 
 O. 'I'o what extent at that time? 1 mean to say, what was the extent of the order which 
 he had <4'iven and which \ou aL^reed to fill? A. We agreed to give him ,1 'ine of about a 
 thousand dollars. 
 
 O. You have told us th.at, but I .im asking you how much on this occasion did he ask you 
 ,oto ship him ; what was the extent nf the order the;- given? .\. I think he gave us ;m order at 
 once for about $500. 
 
 O. Did you fill the order? A. We did. 
 
 O. Did \ou ship him other goods afterwards? A. We did. 
 
 O. So that on the 4th dav of December, 1895, he vv;is indebted tnyour com|)any in a certain 
 sum ? A. He was. 
 
 O. I see this second chatti-1 mortgage is drawn up for $916.33. Did th;it reprrsent the 
 amount that C'hevne or Miss Chev ne was then owing yoiu' companv? .\. I think it i.nes. 
 
 Mr. RlTCIUi;, O.C, j)roduces cop)- of mortgage, which is admitted and markexl ICxhibit 4. 
 
 Q. Vou got this mongage, and afterwards the goods were sold? 
 40 His I.ORIiSllI!' — How do you mean? 
 
 Mr. RlTi'lIlK — This is the second chattel mortgage on this stock of goods, and under it 
 the whole thing was sold. 
 
 Hls LOKDSIIII' — It was not sold under the Wilsiui mortgage? 
 
 Mr. Kill nil". — Xo, my Lord; it was sold under this mortgage. Sanford & Co. sold in 
 Toronto, under this mortgage, through an .agent in 'Voronto. 
 
 A. 1 believe so, 
 
 M 
 
 f 
 
I 
 
 20 
 
 Q. Rcali/inc; inDve than i-iuiuijli to ])ay off tlic W'ilsdii in<)rt|j;a_L;\', and Icavint^^ sdnit-tliini;' to 
 apply on this ? A. I presume it chM. 
 
 O. That is what xou lu'lii'vi.', at all events? .\. I i)eh'eve tliat. 
 
 O. Then, after tlie ^oods were sold, do you know if thi- Wilson niort,Lrav;e was paid off by 
 Scott, Lees & I Iol)S()n ; or do )dU know anythinij of that of )-our own know k'dt^re ? .A. No, not 
 of my own knowledi^e. I understand it was. 
 
 Q. \'ou do know, thoui^h, that the sale was made sometime shortly before Christmas, 1895 ? 
 A. I do. 
 
 O. Now, do you recollect whether that i;iiarantee that was sij^ncd, was ;;i\,Mi bef ireor after 
 10 the chattel mortLj:-.t;"e had been e.\ecuted ? .A. 'I he ;;iiarantee was yi\en on .Satmday niorm'ny. 
 I understood that 
 
 Q. Was that after the chattel mortL^acje was executed ? .A. .\ftcr. 
 
 Q. It is dated the same date; but you -.av' it was !M\cn after the chattel mortcjage was 
 executed. Now, at whose suggestion was it gi\en ? Howdid \ on come to give it ? .\. It was 
 given at the .suggestion of Mr. Lees. 
 
 Q. For what reason? A. Me thought it was right that we should do .so. The amount he 
 said was large. We really knew more, he su|)()osed, concerning the business, the value of the 
 stock, than he flid. 
 
 O. Had you made an)' statement to Mr. Lees as to what you tiiought the \alue of thi' stock 
 2Qto be? A. Nothing, e.\cei)t in a general waj- at the time that he was talking to Mr. Che\ne. 
 
 0. Then you said something about discretion; that was to be given on his discretion? 
 A. That was the understanding, he was to hold that chattel mortgage 
 
 O. The chattel mortgage? .A. To hold the guarantee, and if in his judgment he deemed it 
 best to deliver it he could do so. 
 
 O. But it was left in his discretion ? .\. It was left in his discretion. 
 
 O. Then for how long did C'bev'ne carry on business after that first chattel mortgage to 
 Wil.son was given rwhen I s|)eak of ("he\'ne I mean Miss Cheyne, ofcoursei; until the stock was 
 sold? A. I think he did, until a short time before. I think he ditl up until that time. 
 
 By Mr. Gibhons, Q.C. 
 
 -Q O. You say that Mr. C'hexne consented at once to this scheme when it was proposed by 
 
 Mr. Lees? A. Very readily. 
 
 0. Did he consent at all that day, Thursday? A. No. 
 
 O. He did not consent so read il}', tln.'ii, as one would think? .A. He said he would take 
 the night to consider it. 
 
 O. W'as he objecting as to what would become of the other creditors? .A. No, not 
 particularly. 
 
 Q. Nothing said about that ? .A. Nothing jjarticularly. 
 
 Q. If he says that he protested this wouldn't be fair to the other creditors; is that so? 
 Did he raise that ]K)int? A. Not to my knowledge. 
 40 Q' ^""" "^"'i)' that Mr. Lees asked him something about the assets. Did he ask him an\- 
 
 thing about the liabilities? A. I believe we did not. 
 
 O. What a remarkable memor)- you ha\e got, Mr. Greene. Air. Gibhoiis reads question jo 
 and ansiver," Did he ask any questions as to what, if any, capital Cheyne had? .A. He asked 
 " l^articulars as to his assets and liabilities." Is that what you told me before ? A. 1 sa)' that 
 he asked particulars as to his assets ; I thought he did as to his liabilities. 
 
by 
 
 
31 
 
 10 
 
 20 
 
 O. This is what you said before: "He asked particulars as to his assets and habilitics." 
 Iheii you were asked a^^'iin, at iiui-stioii 71, " \\ iiat statement (h'd he make as to liis liabiUtics? 
 A. C'heyne gave him the statement liimseif." That is, gaw Lees? A. \'es, part of tlic 
 conversation was with myself; part was with Mr. Lees. 
 
 O. Did Mr. C'heyne gi\e Mr. Lees a statement of his habiiitii^s in join- presence ? A. I am 
 not prepared to say that he did. 
 
 O. Was the list taken down on the desk? Did he give you from memory, as nearly as he 
 could, the names oftlio.se creditors? A. He gave me them. 
 
 O. Was tliat in Mr. Lees' presence? A. No, it was not in Mr. Lees' presence. 
 
 Q. Was that statement there v '.■-.. Mr. Lees came in ? .\. I believe it was. 
 
 O. On your desk? A. I don't .. .' ' ; or in my hand. 
 
 O. \'ou had had that statement .1 Jie liabilities? A. I iiad the statement of the liabilities. 
 
 Q. Vou .say you had seen Mr. Lees, who had never been your solicitor before; you saw 
 him before Cheync came down to Hamilton ? A. I beg to correct a statement I made yesterday 
 upon that point, I do not know whether it was important or not ; but we had engaged Mr. 
 Lees, the firm of Scott, Lees & Hobson, before that, on another occasion, in which you yourself 
 were interested. 
 
 Q. You had seen him, and consulted with him about this matter, before Chcyne came 
 down at all ? A. I had. 
 
 liv Mr. RiTciiu;, Q.C, t 
 
 Q. You .said Mr. Lees was not present when the statement of liabilities was given, but jcni 
 had the .statement there. Did he ever show that statement of liabilities to Mr. Lees ? A. No. 
 
 Mr. GllilujXS, Q.C". — He has told us all about it ; that he had it there. 
 
 Witness. — It was simply a verbal statement. 
 
 ROBERT CHKY.NE, sworn, examined. 
 
 By Mr. GiiiiiONs, Q.C". 
 
 Q. You managed, I believe, a businchS for \our daughter in the City of Toronto? A. Yes. 
 
 0. Started, I think, in the spring of 1895 ? .\. Yes. 
 
 Q. Had she an}' capital ? A. ^'es. 
 30 O. How much? Small? .A. Yes, small ; $750. 
 
 O. Mr. Greene spoke about her having an equit)' in some property in Toronto; was there 
 anything in that ? .'\. No, I do not think so. 
 
 Q. Did you ever have any discussion with Mr. Greene about it ? Did he know about 
 whether there was anything in it or not ? Did you ever discuss it with him? A. Yes, but I 
 don't think he thought there was much in it at present i)rices. 
 
 O. There had never been anything got out of it ? .\. .\o. 
 
 Q. You bought mostl)' the goods upon credit ? A. \'es. 
 
 O. I believe that in the end of 1895, a visit was paid to you from Hamilton from Sanford's 
 people ? A. Yes. 
 40 O. Who came down ? ,\. Mr. Alley and Mr. Duffield, and one of Kappelle's firm. 
 
 Q. A solicitor, anyway ? .\. Two solicitors, anj-wa)'. 
 
 O. And they came to you at the store? .\. No, at the hou.se. 
 
 O. For what purpose? A. To ask me to sign ; to make an assignment to them. 
 
 Q. To make an assignment to Sanford's people? A. Yes. 
 
 Q. To their nominee ? A. Yes. 
 
ICS. 
 
 :ies? 
 the 
 
 I am 
 
 .s he 
 
 ities. 
 
 saw 
 rday 
 
 Mr. 
 rself 
 
 amc 
 
 )i)U 
 
 No. 
 
 Yes. 
 
 here 
 
 bout 
 ut I 
 
 >rd's 
 
uamM^ma»mm>.. 
 
 32 
 
 O. What reason (lid they -jivc for that, if any? A. They said they had been informed 
 that day that ("alder and Johnson, and Hums & Lewis were about to brin^' an action a«,fainst us 
 in tin- nioiiiin^'. 
 
 Q. About to sue you ? A. Yes. 
 
 O. Von owed them for ^^oods overdue? A. Vcs, 
 
 Q. Was anj-thiii;^ ilone that nit,dit ? A. No. 
 
 Mk. klT( lllK, O.C.— Don't lead the witness ; he swore contrary to that in his examination. 
 
 Mk. GllJIioNS, O.C.— O. Did \'ou owe them at that time? Were there overdue debts to 
 an>' of the different creditors ? A. Nothini,' daiv^crous at all ; very small. 
 10 O. Vou owed something' to Burns & Lewis at that time? A. Yes, but Burns & Lewis 
 
 were not actuall>- due at that time. 
 
 Q. Calders were ? A. A small amount ; somethin;^ rd)ont a huntlrcd dollars. 
 
 O. The others were maturing' immediatel)- almost? A. Yes, but the)- hadn't said anything 
 about them. 
 
 Q, And some were overdue and unpaid ? 
 
 Mk. RiTcillK, O.C. — He has not said that. 
 
 Mk. GlIiliONS, O.C. — Q. Were there part o[ your debts overdue and unpaid? A. Yes. 
 
 Q. W^as there anything done on this night? A. Xo. 
 
 Q. You stood the imjiortun" ,, of the whole four ? A. Yes. 
 20 Q- Was Mr. Calder's claim, as a matter of fact, ii. Mr. I'arke's hands at that time ? A. 
 
 Well, Mr. Calder says not. 
 
 Q. Did you arrange to go to Hamilton that night? A. T'^e next day; I arranged that 
 night to go the next day. 
 
 p. And you did go down? .\. I tlid ; and took a letter from Calder, saying that there 
 was nothing due, nor he had no intention of taking any proceedings. I took a letter to Mr. 
 
 Greene. 
 
 O. A letter to Mr. Greene of the Sanford Company ? A. Yes. 
 
 (,). So that there was no necessity for this excitement ? A. Exactly. 
 
 O. Did that ai)i)ease them ? .\. Xo. 
 30 p. Wli.it occurred in the office after j'ou got there? Who was there? A. Mr. Greene and 
 
 Mr. Duffield. 
 
 O. When you first went in ? .\. Yes. 
 
 O. Did they still urge \-ou to make this assignment? A. Yes. 
 
 (). And yon still refused ? A. \i-s. 
 
 (). Then what occurred? .\. 'I'lun .Mr. Greene suggested this mortgage. 
 
 O. What was the suggestion ? A. That i should borrow the money and pay them, and 
 that thc\- would then sui)])ort me and carry me along. 
 
 p. Anything said about the other creilitors ? A. Yes, I would not sign it ; I would not 
 agree to it on that account. I asketl him how about the other cieditors, how would they be. 
 40 Well, he said, the)- could do nothing. 
 
 C). Had _\-ou given 1 list of the creditors? .\. Yes, I gave a list from memory just. 
 
 O. To Mr. C;reene? A. Yes. 
 
 (_). Did he take them down ? A, He did. 
 
 C;. \\ 'lat did that amount to, as far as you ga\e it to him, outside of Sanford's ? A. $3,Soo, 
 $800, $4,6«0. 
 
 1 
 
 I 
 
 4 
 
;)rmcd 
 list us 
 
 1 at ion. 
 hts to 
 
 Lewis 
 
 ything 
 
 cs. 
 
 ? A. 
 
 d that 
 
 there 
 :o Mr. 
 
 ne and 
 
 1, and 
 
 Id not 
 ey be. 
 
 $3,800, 
 
»3 
 
 O. lie said tho)' con Id do noiliinj;. 'lliat would l)c altoi^cllicr about $9,500, $9, 1I5 exactly ? 
 A. \'cs. 
 
 U. I believe Mr. I.ees was sent for, or cinie in while jou were iheie? A, lie was sent tor 
 after a while. 
 
 (J. Were )'oii still discnssiiiLj tne matter ? A. We had discussed it full), and I s.iid I did 
 not thinU 1 couUl ijet .ui)- jxmsou in I'oionto who would lend nu' ihi- nionej- ; and he sail! he 
 thoUL;iit that could be arraiv^ed ami he woiilil send for his solicit<jr ; and he did. 
 (J. Was there anj- discussion with Mr. i.ees after he came in ? 
 His LdKlisilll' -O. (irecne said that, did he? A. \'es. 
 10 Q. That he thoui;hl it coulil br arran;.;ed ? .A. Ves. 
 
 O. That Ik; thou;,;ht it could Ix' .irrauLjeil bj- whom ? .\. I fe thouLjht the mono)' could be 
 arranj^^ed, and he would scikI for his solicitor and see. 
 
 Mk. GlliHONS, Q.C. — y. Had you consented up to this time to give the chattel mortgage? 
 A. No. 
 
 Q. Did anj' further discussion occur .after INIr. Lees came in? A. Yes. 
 Q. Did Mr. I.ees take part in the discussion? A. Ves. 
 Q. In urging you to give thi chattel mortgage? A. Yes. 
 
 Mk. Rrrcilll', — I wish my learned friend would not lead this witness ; he is a hostile witness 
 to us. 
 20 Mk. (jll!l'.<)NS--(]. What was s.iid ? .\. .Mr. I.ees was spoken to about the mont'y, and he 
 
 saitl that he would s|)e,ik over the telephone to his partner ; ami he came back in a short time 
 and said the matter could be arranged at eight jwr cent. Thej- had a client, I understood him 
 to saj', who would advance the mone)-. 
 
 (). I lad \'ou consented by this time ? .\. X(<. 
 
 O. What was said then l)cfore you consented? What inducement or what argument was 
 used with you? .\. The argument was thi:;, that Mr, I.ees said the other creditors could do 
 nothing; they nn'ght kick, and no doubt they would, but in reality they could do nothing, and 
 they would sim[)ly have to wait ; and th.it I could no doubt make an easy compromise with 
 them when I got ready. 
 30 O. Did he say an_\'lhing about any other case? .\. Yes, he said that they had a case 
 
 exactly similar, and that it h,id been shown by that case that this was within the law, and so, 
 and that it was all right. 
 
 O. Did he mention the case? .\. "S'es. 
 
 O. Do you remember the name ? A. Well, Wilson, but I forget the other ; he did mention 
 the case. 
 
 (). Did vou have a list of your liai)ilities there ? .A. \<;. 
 
 Q, Did you give one while \ou were there? .A. No, I just gave it from memorj'. 
 O. Who took it d(jwn ? .A. Mr. Greene. 
 
 1 lis I.oKlisiill' — 0. Was that when I.ees was there? A. No, that was l)ef(jre. 
 40 Mk. (]1i;kons, O.C. — O. Did Mr. I.ees iliscuss with \-(iu .at all wlio were \-our creditors ? 
 
 .A. I don't know that I p.irti'i • mentioned each one o\er to him, but I tokl him .about the 
 
 amount. 
 
 O. On that occasion ? A. Yes. 
 
 O. I>':1 you, on any other occasion, discuss with him the particulars of who the other 
 creditors ucre? .A. On the train, on the w.iy down to Toronto, we discussed the liabilities and 
 the assets, etc. 
 
24 
 
 O. Did )'nii tlirii !,nvL' liitn fiLjiiirs ? ,\. \'cs, I did. 
 
 O. Did he take thcin down ? A. Vcs, Ik- made a nu-inorandiim ; I d<i not kimw what he 
 
 took down. 
 
 O. Did > oil i^rive him, as nearlj- as you roidd, the particidars of tin- other cir(h'tors ? A. I 
 think, just about tlu.: total, you know, soniethiiiL; about $4,500. I li- took llic assets tlown ratlicr 
 in !tcms ; rather in departments ; rather about how much stock I had in eacii departmenl. 
 
 O. The liabihtli.'s were |)Ut ^'cnerallj' wliat was (hie to Saiilord, and w ' ♦ was outside? 
 A. Ves, of course, lu; knew what was due to Saiiford. 
 
 (). W'lu-n did your (kiui^liter si^'.ii this a;.;reeii-,ent to jjive the second cli.itl'i iiiort^;.iL;e? .A. 
 
 I refused to siijii it tiiat ni'jlit, .iiid --aid I wnul 
 
 l>ai'k tl)e next <la\' to llanii' on ; and I did. 
 
 Q. Vou refused to sij^n what? .\. To sij^n anythin|j;. And then, i)efoic 1 came awaj , I 
 did si<^n it, or ratlier, e.xcus ; me, ai^reed to si^ni it ; and then Mr. Lees had the ciiattel inortya^fe 
 prepared while I was buj'ii i>' some new ^.joods ; and he and I came down on the train and we 
 
 went up to the In 
 further mctrtirape. 
 
 Hise, ai (1 
 
 m_\- (laui;hter si;,;ned botii the inortt^aye and that agreement for 
 
 Q. Then the mortga|;e and this agreement for further mortgage were signed at the same 
 
 time; 
 
 A. Vi 
 
 Q. I see Mr. Lees v as the witness? A. Ves. 
 
 (J. He came to s our house in Toronto to get it completed? .A. Ves, signed within five 
 
 20 minutes. 
 
 O. The ])laiiitil"l'; Hums 6^: Lew is, are creditors of 3 ours for a considerable amount — some 
 
 $1,300 
 
 unpai 
 
 1.^ A, V^ 
 
 (J. Did )ou meet your ])aymcnt of $100 ,1 week then ? .A. I did, and the interest. 
 
 ( ). .M.'ide no default in tin 
 
 .\. N< 
 
 O. When did )'<Jii iu".\t see .Mr I 
 
 ,ees : 
 
 to tl 
 
 le 
 
 foreclosure, and said tiiat he had bronidit d 
 
 .A. Ill; came in two or thr''c days prior 
 n a mortgage to sign for the new goods lately sent. 
 Q. That would be about the .ph December, would it, the date of this second mortgage? 
 A. \'es, it was onl)' a fvw days, three or four daj-s ,it the outside, to the 
 
 30 
 
 O. I see that this morti>;agc i^ for pj\6, payable forthuith? A. \'es. 
 
 (). How did you come to give that mortgage? .\. We'll, he said that he had matle it due, 
 but t'.iat it would be all right, that it would be all right. 
 
 O. That it would be all right? A. \'es. 
 
 f) \\'h;it do you mean? A. 1 understood him that it would not be foreclosed right now, 
 that it wouki be merel}' good as a securit)-. 
 
 O. I .sec it is drawn payable; forthw'Mi together with tlu; interest thereon. How long 
 before any action was taken on that iiiorLg.ige ? .\. Well, I think aboui four da)'s ; just within 
 a tla\' or so, anyway. 
 
 (> \'on had made no default on the prc\ ions mortgage ? A. \o. 
 
 O. Then, I believe, the)- sent Mr. IMackley down and took possession? A. lie just came 
 40 down at five o'clock on Tuesday evening, and said he hail come to take pfjssession uiuler the 
 mortgage. 
 
 (). Was any reason given by Mr. Le^ .r wanting this .sc ond mortgage then? A. No. 
 
 (). Tell me what occurred ; anvthing unthcr about the conversation? A. At the time the 
 sccG,.! mortgage was signed? 
 
 Q. Ves ? A. Of course he said hchad come down jn';t 1 ' ikc a mortgage on the new goods, 
 as per that agreement. 1 had agreed to sigr, a mort<^ ige ' r 1 l v goods. So my daughter — 
 
 S 
 
i\-e 
 
 i:Vi 
 
25 
 
 40 
 
 Q. Anythinsj; else said ? A. No, that was all. 
 
 Mis LoKDSHil'— It covers all the <^oocIs, docs'nt it, not onlj- the new? 
 Mk. GliiiiDNs, O.C._Ycs, my lord. 
 
 VVlTNKSS-— Well, he said it was for the new goods distiiictlj-. 
 
 O. Any reason pjiven for forcclosint;^ this morte^at^'c so quickly and taking possession? A. 
 No, none at all. I asked HIacklcy and he said he did not— 
 
 Q. Never mind about Jiiackle)-. No reason given by the Sanford people, as far as they 
 were concerned ? .A. No. 
 
 O. Did Mr. Wilson ever come to see your stock ? A. No, I never seen Mr. Wilson. 
 lo Q. Stock had not been taken, I believe ? A. No. 
 
 Q. Any estimate which you ga\e was just an estimate ? A. Yes, I had taken stock only 
 just a short time before I gave those. 
 
 Q. The only capital, I believe, that was ever put into this business was this original cash? 
 A. That is all. 
 
 O. So that the assets and liabilities, in the .statement which you gave, how did that com- 
 pare ? A. About equally, I think. 
 
 Q. Is that in the statement ^^iven to Mr. Lees or to Mr. Greene? A. In the statement 
 given to Mr. Lees ; Mr. Greene didn't take an exact copy of the assets, you know, but Mr, Lees did. 
 
 O. In the statement given to Mr. Lees, the assets and liabilities, how were they? A. They 
 20 were just about the same. 
 
 p. Did you hav<.- an\- further discussion with Mr. Lees on the train as to the other creditors ? 
 A. Nothing more than just a repetition of what was before, that they couldn't do anything ; that 
 it was within the law. 
 
 O. Anything then said about a compositio'i ? 
 
 Mr. Ritciiik, O.C— Surely my learned ( nd should not lead the witness in that way. 
 
 His LoKDSiiii'— The witness mentionen this before as being ('.'scussed at the previous 
 meeting. 
 
 Mr. Gihhons, O.C —Anything said on the train about composition ? A. Well, I could not, 
 ! cannot remcinber. 
 
 30 O. Do >-ou know what the goods brought when they were sold ? A. Not to a dollar or so, 
 
 but between fort>'-eight anfl f()rt)--nine hundrefl dollars, I think, altogether. 
 
 Q. Sold by public auction, I believe? A. Yes. 
 
 His Lordsiiii'— O. Is that the whole of the goods? A. Yes. 
 
 g. What rlid you value those goods at in your giving figure to Mr. Greene before; what 
 did >'()U \ alue this stock at, that was sold ? A. y\bout nine thousand dollars. 
 
 Mr. GlHliONS, y.C- O. Was t!- ^ taking it at cost ? A. Yes. 
 
 O. Did Mr. Greene understand that that was taking it at cost? A. Oh, yes, of course. 
 
 Q. Was it worth cost ? A. Oh, >-es, they were all new goods. 
 
 Q. If }ou could retail them ? A. Yes, all new, nice goods, 
 
 g. If you had to meet your liabilities as they came due, could thej' have been sold ? Your 
 liabilities were maturing at this time, Mr. Greene tells us ; could the>- have been sold to meet 
 these liabilities? A. I think, had Mr. Greene supported me as I e.vpected, and as I understood 
 from him that the)' would, I could have. 
 
 g. If your other creditors had waited ? A. Yes. 
 
 Q. But there was no pretence :hat you could meet your creditors' liabilities as they matured ? 
 A. No. 
 
? A. 
 they 
 
 only 
 :ash? 
 com- 
 ment 
 ^ did. 
 riiey 
 
 ors ? 
 that 
 
 ions 
 not, 
 V so, 
 
 /liat 
 
 our 
 leet 
 3od 
 
 :d? 
 
26 
 
 Q. Did Mr. Greene understand that, and you understand that, and Mr. Lees ? A. Yes 
 
 Mr. Ritchik, O. C— Surely that is ieadins. 
 
 A. Continued. They understood that all rii,dit. Thc\- knew I could not meet the $4,CCX), 
 because they at,n-eed to carry inc for that amount ff)r two j-ears. 
 
 Mr. RiTCiiii:, O. C— He s])eaks of the ori_-;inal dealing. 
 
 Mr. GlHHONS, Q. C— O. \'on arc talkin.^ about the beginning, not about the second 
 arrangement ? A. It was the same thing. 
 
 His LordsmiI'.— O. You say if Mr. Greene had supported you as he promised, you could 
 have met your liabilities. How do you mean? A. If he had given me uh.it new -oods I 
 lo required. "^ 
 
 Q. Did he not ? A. No, sir, 
 
 Q. What new goods was he to give you ? A. I understood he was to give me what I 
 required as I went along. 
 
 O. No limit? A. No, there was no limit. 
 O. Did he not give j-ou what you recjuircd ? 
 
 Mr. GlliliONS, O. C— You had made your payments under the first mortgage when they 
 closed upon you ' A. Yes. 
 
 O. There was nothing due on the second or on the new goods ? A. It was only thirty 
 days ; I did not agree to pay for them in thirtj- days. 
 20 O. When they closed down on jou, )-ou had reall)- nothing in default? \. No; I did not 
 
 consider I had anything in default to them. 
 
 O. In the meantime yon had had no means of pa\-ing your other creditors that matured ^ 
 A. No. 
 
 Q. And you ilid not pay any of them ? A. 1 had paid those that matured from the sprin^ 
 purchases pretty well. '^ 
 
 O. After the first November, after you gave your chattel mortgage, >-oii paiil nothing to 
 your other creditors? A. Not much, because they hadn't become due. 
 O. But they were maturing right along ? A. Yes. 
 Q. But as they were, you did not pa)- tlicm ? .\. No. 
 
 30 g. The g(jods were cov ercd by the chattel mortgage, and you did not attempt to pay them ? 
 
 -A. No. 
 
 Mr. Ritchie, Q. C— My learned friend siiould not lead, because I understand it is not the 
 fact. 
 
 Mr. GlHliONs, Q. C— Q. It is very certain that jou di<l not pay my clients Burns & Lewis 
 an}thing after the first of November? .\. \(x 
 
 ■ Q. Did you pay John C'aldcr, or did you pa\- anybody outside of Sanford, after the first of 
 November? A. No, I did not. 
 
 Q. It was not the intention that y,,u should pay them, was it, until you had paid this chattel 
 mortgage and the Sanford people ? 
 40 Mr. Ritchie, O. C— That I object to. 
 
 A. No. 
 
 Mr. GlHHONs, O. C- g. Why didn't you pay them? A. Because it was understood 
 between the Sanford people and me that I would not pa>' them ; that was one reason. 
 
 Cross-E\a.\iine1) by Mr. Ritchie, O. C 
 
 Q. When you .say that it was understood between the Sanford people and you that vou 
 wouldn't pay them, who do you refer to? A. Mr. Greene. 
 
\MH 
 
27 
 
 Q. He is the man ynu refer to? A. Yes, he is the man I was dealin : with. 
 
 Q. You have been in business for a good many j ears yourself? A. I h;ve been employed 
 
 for 
 
 d 
 
 jn business tor a goou many jears. 
 
 Q. And done business on \our own account? A. No, not very much. 
 Q. An)' connection with importing,' stock and cattle and large transactions? A. You mean 
 farm business ; yes, I had some in that. 
 
 O. And for many years as general manager for Robert Walker & Sons? A. Of one 
 department. 
 
 Q. So that you had had considerable experience in business, extending over thirty or forty 
 I ©years? A. Yes. 
 
 Q. You say your daughter put in $750 capital in this business? A. Yes. 
 Q. Did you represent to Mr. Greene or to the Sanford people that she was possessed of some 
 other estate ? A. No. 
 
 Q. Didn't you speak of some other property that she was interested in ? A. No ; she 
 never had any. 
 
 Q. Anc when Mr. Duffield came down here, in October, he intimated to you that he had 
 heard that some of )-our other creditors were about to issue writs against you? A. When he 
 came to my house that night, j'cs. 
 
 Q. Do )'ou recollect about what date in October that w as ? A. No. 
 ao Q. Do you recollect the day of the week? A. I think it was on a Wednesday night. 
 
 Q. And he went there with Mr. Kappeiie and Mr. Hickncll, solicitors? A. Yes. 
 O. And asked you about tliis, and wanted y(>u to make an assignment for the general 
 benefit of creditors? A. No, to ; 'le Sanford Company. 
 
 Q. For creditors generally ? A. I didn't understand that. I understood it was — 
 Q. Isn't that w hat j-ou have sworn to ? A. No, I saifl that he wanted me to make an 
 assignment to them. 
 
 O. Then you did not understanrl it was an assignment for the benefit of creditors ; is that 
 what I undersiaiul you to sa\- ? A. That is just how it was. The\- said that — 
 
 Q. Did you understand it was a general assignment to their firm for the benefit of creditors 
 30 or to them alone? A. I think it was to them alone. They said that the_\- thought I had a right 
 to give them that preference. 
 
 Q. The)' said that the\' were the largest creditors ? A. Yes. 
 
 Q. And that the whole Inilk of )()ur liability was to them? A. great portion of it. 
 Q. Did )(.u tell them at that time that there was nothing overdue? A. I saic' that there 
 was nothing overdue from those people of whom they spoke. 
 
 Q. .And then you told them that they were misinformed ? .\. Yes. 
 Q. That there was nothing overdue at that time ? A. Yes. 
 
 Q. And )'ou told them then that no |)erson was in a position to sue? A. That no person 
 had threatened to sv.e. 
 40 O. .And did )-ou also sa\- that there was nothing conn'ng due until the tenth of the next 
 
 month? .\. I dcin't remember that. I don't think I said that, because ni)' memor)- is not 
 
 I am not ver)- good at accounts. I do not think I would make any statement of that kind. 
 
 Q. Your memory is not a very good one? A. Not in that line. I had never much to do 
 with office work. 
 
 Q. Did you make any statement of that kind ? A. 1 simply said that there was only a 
 
 I 
 I 
 
■ 
 
28 
 
 small amount due to John Calder and nothing due to the others, because, if I remember ris^ht, 
 there were two acceptances for Burns & Lewis which did not mature f(jr a few days. 
 
 Q. As a matter of fact, there was nothing overdue to Burns & Lewis at that time? A. No, 
 that is my recollection, Mr. Ritchie. 
 
 Q. This happened at your house? A. Yes. 
 
 Q. You were asked the question : Burns & Lewis, Johnston and Calder were not pressing you, 
 and j'ou said no. That is correct ? A. That is correct. 
 
 Q, You were asked the question : You owed Johnston and Calder at that time? Answer, 
 Not much. But you owed them something? Answer, A little ; a hundred dollars? A. Yes. 
 lo O. That is all that was owing overdue at that time, $ioo? A. That is all; yes. Burns 
 
 & Lewis had been due, but had been renewed. 
 
 Q. It was outstanding at that time? A. Yes. 
 
 Mr. Gibbons, Q.C. — And was maturing on the fourth of the month. 
 
 Mr. Ritchie, Q C— O. You were ow ing at that time to Sanford $4,500 or $4,700 ? A. Yes. 
 
 Q. And you said that the agreement at that time was that they would give you a credit of 
 six months ? A. No, that was never mentioned. 
 
 Q. Thirty-six, " And that had been owing for .some time, had it ? " speaking of the $4,600. 
 Answer, " It hadn't been due very long ; I had six months to pa)- it." Was thai true? Was 
 that the extent of credit that they were to give )'ou ? A. No, I understood that I was to have 
 20 that $4,oco carried for two \ears. 
 
 Q. Then you say that the forty-six hundred dollars, question 37, "The account had been 
 incurred six months ago, had it ? " Answer, " Yes, on six months' credit." Now, which is true ; 
 that j-ou were to ha\e six months' credit, or two jears' credit ? A. Both ; that was what they 
 said, that they would carry it on fwr tw(j years, to give it a fair trial. 
 
 Q. Who told you that ? A. Mr. Sweet. 
 
 Q. Who is Mr. Sweet ? A. He is the manager there. I think Mr. Greene was present, too. 
 
 Q. Your affairs were not discussed at that time when Mr. Kappelle was at your house? 
 A. No, it was just signing the mortgage. 
 
 Q. Except that you informed them that the\' were misinformed ; that there was only $100 
 30 overdue? A. Yes, and I to(jk up a letter the next da}-. 
 
 Q. Then you .said that you would go up to Hamilton the next day? A. Yes. 
 
 Q. That you volunteered \-ourself ? A. Yes. 
 
 Q. And you informed them that the>- had been misinformed as to your liabilities? Now, 
 there was an assignment, jou sa\-, prepared and presented to you at that time? A. Yes. 
 
 Q. Did you read the assignment over? A. No; I forg !t which of the four had it in their 
 hands ; they said they — 
 
 Q. So that you cannot tell us what the form of assignment was? .A. No, nothing more 
 than what they told me. 
 
 Q. Will you tell us what thej' told you ? A. That they thought I should assign to the 
 40 Sanford people. 
 
 Q. For the general benefit of creditors ? A. Well, I understood it was— 
 
 Q. Wasn't Mr. Dufifield's name now mentioned as the person who was to be the assignee? 
 Isn't that what you swore before? A. That is the same. Duffield and Sanford are the same. 
 
 Q. .At all events the person that the\' wanted juu to assign to was to Duffield? A. They 
 said to the Sanford Co. That is the word the)- used. 
 Q. That is what they said ? A. Yes. 
 
•i-ht, 
 
 No. 
 
 you, 
 
 iwer, 
 
 e.s. 
 urns 
 
 Yes. 
 it of 
 
 600. 
 iVas 
 lave 
 
 »een 
 •lie; 
 hey 
 
 too. 
 
 ise? 
 
 100 
 
 o\v. 
 
 leir 
 
 ore 
 
 the 
 
 ?e? 
 
 ie>' 
 
29 
 
 Duffield, I think-, was the 
 
 y. Are)()ii sure that is what you swore to before? A. Ve- 
 man that had the assignment in his hanrls. 
 
 An ^' ^"n"«- m' 'iV": ""T ^'^^ '"'■•"" ""'' "'^^>- ^^""^^'' )"" t" '"^*'<'^ an assignment to? 
 Answer, To Dufiuld, I think?" A. \'es, I re|)eat that. 
 
 Q. " I think it was Duffield." Now, is that true or is it not ? Was it to the Sanford Com- 
 pany or to Duffield ? A. When I assigned to hin, F thought I was assigning to the other 
 
 Q. \ ou were asked to assign, at all events, to Duffield? A. CY-rtainly, I think Duffield uas 
 menfoned. but ,t was particular!), the Sanford Manufacturing Company that they particularly 
 said the)' wished me to assign to. "•« ^ 
 
 '* -.H?- ^kT "'r r' ''*'"' "•' ""'' ''"■ '^^'■- ^'■'''"'" '■" "''"^^■■''"" >•"" '^■'"' a l-iK conversation 
 uith him before Mr. Lees came in at all ? A. Ves, we had quite considerable conversation 
 
 g. Quite a lengthened discussi. .n, and Mr. Greene then wanted you to make the assignment ? 
 Calder'' " ' ''''"" '"'^''^"^ " '"' ^'''" "'"'i''''"''^''"" = ^^"^ '^'"'-"'- ''^''^^ ' had shown him from 
 
 Q. Did he .sa)- how he desired the assignment should be made ? A. Then, in Hamilton ? 
 
 Q. Ve.s? A. Xo, I flon't think so ; because I refused positi\el\- to do it 
 
 Q. Then did you tell him then that there was no necessity for you to make the as.signment 
 that ).ou could carry along all right? A. \'es, I thought I could. 
 
 Q. That is the reason that you did not want to niake the assignment ; vou wanted to con- 
 20 tiinie in business and make monej- out of it ? .\. ^'es. 
 
 Q. If you ha.i felt at that time that you were insolvent, you woul.l have assigned to your 
 creditors generally ; if you had felt that it was useless for ^ ou to carrv' on ? A Oh yes if it 
 was useless. I felt it was useless without their support, \-ou know. ' 
 
 Q. At that time, even without their support, you refused to make the assignment when 
 the\- asked you, because you thought you could carry on ? A. \'es, I thought pen. .ps thev 
 would not press me to do it. •-> i • t- j' 
 
 O. That who would not jji-essyou? A. Sanford. 
 
 O. And you did not think the other creditors would press you ? 
 think they would. 
 30 Q. You had no reason to think they would jji-ess you ? A. No. 
 
 Q. The\- hadn't intimaterl a.i\- desire to press' jou ? Then at that time x-our as.sets 
 exceeded your liabilities by how much ; a thousanri or thousand? 
 
 Mk. GlliltONS— How could they? 
 
 Mk. RiTCIlIK, O.C— O. You had fixtures in there? .\. Yes. 
 
 Q. Now, taking your fi.xtures, and \our stock-in-trade, and book-debts, how much would 
 your as.sets exceed >our liabilities at cost price ? A. I don't think they w<nild have exceeded any 
 
 Q. \ ou have .stated, )-ou know, that there would be about ten thousand dollars- did vou 
 not ? A. Yes, assets. ' •* 
 
 Q. And you.- liabilities would not amount to ten thousand dollars ; the\- would be less th-m 
 40 ten thousand dollars? A. No. 
 
 Q. The figures uhich you gave us-? A. I onl)- gave those from memory, at the same 
 time .saying that there were ot'„:r small ones which I could not remember. 
 
 Q. You .see those that you gave from memory did not amount to that? A No I knew 
 that I did not give all there. I onls- gave as near as I could, vou know 
 
 Mr. Ritchie asks Mr. Gibbons if he has the statement which is referred to 
 
 Mr. Gibbons .states that he has ; and Burns & Lewis are put down at $500 instead of $1,300. 
 
 -\. I had no reason to 
 
30 
 
 
 A. Yes, at the same time I told them that th 
 You see I had no book. 
 
 Mk. Rik Mil:, O.C.-Q. After askin;,' you to make th 
 
 ere should be $800 more to Burns & Lewis. 
 
 e assit(nment jmkI j-oiir lefusal, they 
 said if \ou did not make the assi^m„,e„t you would cither have to pay them up I am reading 
 now from your answer question 63 : " Wl-.en you refined to make an assignment, what did they 
 " say then ? Answer, The)- said I had either to pa\ them up - if I n\ r.uld borrou the money and 
 "paj- them up that thej- would cariN me alon--pay that much up, what it was then." That is, 
 pay them up what was then owiiij.; to them then the\- would carry jou aloiiy. Now, that is 
 what was said to you ? .A. \'es. 
 
 ,0 Q. That you had to pa\- them up that amount? A. Yes, and he suggested that mode of 
 
 doing it. 
 
 g. And if you did n.jt do that, the>- were going to enforce pajment of your account' 
 A. Yes. 
 
 Q. Ifjou did not make an assignment? A. Yes. 
 
 Q. Then when >ou speak about them giving \-ou a certain line of credit, was there anything 
 in writing? A. No, I do not think so. 
 
 g. Then >oi,r \erbal understanding was, y,,Li say, that >-ou would have a credit of Ij.coo? 
 A. $4,000. I was to ha\e a line of credit. 
 His LoKliSllli' — When was that? 
 ao Mk. Ritchik, O.C— At the heijinniiur. 
 
 Hl.s LokDSIlll'-When you arc asking if there was nothing in writing about the line of 
 credit, \'oii mean at this time or at the beginning? 
 
 Mk. Ritchik, g.C— .At this time. 
 
 g. Qiies/ion 67, " That was understood when \-ou incurn'd the account with them, that the\' 
 " were to carr\- tlie business along for a certain amount ? .\nswer, \'cs, I had no writing at all ?" 
 A. Yes, I had no writing at all, but that was the understanding. 
 
 g. Q/^es/ion 6S\ " 1-or wiiat am.umt? .\nswcr, Thirt)--fi\e hundred to four thousand 
 " dollars." That is \our answer, and then you sa\- that was a verbal understanding that you had 
 with Mr. Greene. That was when j-ou opened the busines. ? A. \'es. 
 30 g. And were \ou to gisc notes for the i)urchases from time to time? A. No, the\' never 
 
 asked me for them. 
 
 g. But they were sold, I suppose, on certain terms of credit, having regard to the class of 
 goods sold ; some being sold, I suppose, on three months' and others on four months' credit? 
 A. No, it was ail on the one line ; it was just rcadx-made clothing and some woollen.s. 
 
 g. What is the line on them ? A. .Six months. 
 
 g. Then, as a matter of fact, at the time the Wilson chattel mortgage was given, you had 
 exceeded your line of credit? A. ^'es. I thought I was o\er about" six or seven hundred 
 dollars ; and I was expecting to have to pa\- that and to be carried on for the other. 
 
 g. Were \-ou to make weekly pa\ments to them ? .\. I did, yes. 
 40 g. Was that the understanding, that you were to make weekly payments? .\. .\fter I <rot 
 
 the mortgage. ' " *^ 
 
 g. I am speaking of the original imderstandinj. 
 weekly. 
 
 g. Now, I ask y.<u if that was the arrangement, that y were to make weekly payments ? 
 .A. I was to make payments from time to time as I could. 
 
 g. Did they complain, when you went up there, that >'ou had not been treating them fairly; 
 
 ? A. I do not knf)w that I was to do. 
 
cnvis. 
 
 they 
 
 they 
 
 and 
 
 it is, 
 
 at is 
 
 ieof 
 
 unt; 
 
 fii 
 
 »g 
 
 oo? 
 
 L' of 
 
 he)- 
 
 11 ?" 
 
 itul 
 liad 
 
 vcr 
 
 ad 
 
 :ot 
 
it 
 
 that you had been payinii other creditors, lea\iii<,' them cut in the lokl ? A. 'I'he\ lh(iii;.;ht that 
 I shouKl have paid them mure. Miit. as a matter of fail, I <;a\e them all tlic mdiiey — 
 i). N'ou, ill (|iiestioii 6S, ".S(( that the>' were not acliiii.; stiai^;ht wilhjuii?"— 
 Mk. (illil'.oNs, {,).{'. I wisii )(ui would let liim fmisli his aiisvvcr. 
 VVn'M':ss--I ^ave them all the money in the start. 
 
 Mk. KiTcilll':, y.C'.— What was tlu- last |i,i>nifnt joii made u, them hefore the chattel 
 mort-fage ? Had you !;i\cii them any p^'vmeiit within six iiK.iiths, du y u tliiiik ? .\. (Jne or 
 two, I think. 
 
 (J. Will ytiu swear to twD? .\. .No; I would not he [upsitive. 
 10 O. Mr. Cireene tells me that for seven months piior to this time you hadn't ()aid then, a 
 
 dollar? A. I f^^ase them the iiione)- in the start, ycii kiio\\. 
 
 y. He sa)s that for seven months prior to this mortj^age )(iu hadn't jjaid himadolla.? 
 A. I gave him the $750. 
 
 y. That is, on the account ? .A. \'es. 
 
 Q. Did >()u, lor seven months priorto the time this mort!^'a};e was given, pav them a dollar? 
 A. No, because I paid them all the money at the fir^t 011 this. 
 
 Q. Notvviths. raiding that, the $750 \^as to be paid and V'-u were to p.iv them in weekly 
 payments, were )'oii not? A. As I could, )dii kimw, but 1 had no— 
 
 Q. Answ r 64, " Perhaps I hadn't been payin;;- them a-; m'>ch weeklv as I should have 
 ao"doiie in the meantime? " .\. Ves, that is ri;;ht. 
 
 O. " JUit 1 had been paving othirs, the)- thought, more than them." That was so ; ihey 
 complaiiXMhil' that ? A. \'es. 
 
 y. As a matter of fact, )-ou had paid others had )iiu no* 
 
 His LoKDsilll'— That is from week to week? Von want to know whether, on the running 
 of the business he had paid others instead of Sanford. 
 
 Mk. RlTi'iiiK, n.C— O. \'()u have alrcad)' told ns that in the runnin;^ of the business you 
 hadn't paid Sanford'.s anything? A. No, I hail not, I paid them $750. 
 O. That was at the beginning? A. \'es. 
 
 His LoKDSllle— O. During that seven months, had you |j,iid ,iiu other of jour creditors? 
 30 A. Ves, but not more than I jiaid Sail*" rds. 
 
 O. Hut more than yon had jjaid Sanfords during the seven months? .\. Ves, thev were 
 all at shorter dates. 
 
 Mk. RlTCIlIK, O.C. — O. Question 65, "What were you to pay them weekly? Answer, No 
 " definite sum ?" A. That is it. 
 
 y. Question 66, " Hut you were to make them a weeklv pav nient ? .\nswer, Ves." That is 
 true, and that is speaking of the original understanding? A. If I could, v ou know. I was not 
 bound. I had si.K months if I wanted to ; but still they said if I mailc anv f)avments in the mean- 
 time I would get a discount, and that was the understanding. 
 
 O. Then tiuestion 68, " So that then they told you that yon had either to make an assignment 
 4o"to them or to pa\- ihem up? .\nswer, \es, that is true, that is what happcncfl in ' ^•imiIton.'' 
 Question 69," If you couldn't keep your weekly |ja_vmcnt up, vou, I suppose, coi Jd not pa)- them 
 "up? .Answer, No." Question 70, "What v as done next? .\nswer, I think Mr. Greene asked 
 " me if I couldn't borrow the money in Toroiuo, or something ; I said, I did not think s(j ; I could 
 " not borrow it at a rate I could pav- ; in fact, I said I had mentioned it to one m.in - so I had — 
 "but I could not do anything." Is that true? A. Ves. 
 
 i 
 
 I 
 
•5 Z' 
 
 i 
 
 .;:%v 
 
33 
 
 O. Xow, all this vvas stated befdir Mr. I.ccs came in ask 
 
 Toronto? A. I 
 
 111" \-oii a 
 
 bout 
 
 cduhlii't >;av \JietluT it did or whether Mr. I.ee 
 
 j-oiir borrowiiifT in 
 
 Q. Perhaps the rest of yotir examination will show that. Guest 
 
 s was pr_sent there or i ot. 
 
 ion 71, 
 
 The 
 
 only way you 
 
 " could borrow it, 1 suppose, would be on )-our stock ? Answer, \'es, and then I couldn't succeed 
 " ni Toronto at a reasonable rate. " Did \-ou tell them that, that j-ou couldn't get it at a reason- 
 able rate? A. Ves. 
 
 O. "So thcn}-ou told them \-ou could not raise the mone^• ? .Answer, No, not here." That 
 is in Toronto— \ou were exaniini'd in ["..runto, I believe. Then question 7^, " 1 hen what did he 
 "say? Answer, I think he sent for .Mr. i.ees?" A. Ves. 
 'o O. So that it was e\identl>- after all this discussion tf.ok place that you sent for Mr. Lees? 
 
 A. He said, I think the monc\- could be arranged here, I will send for our solicit(;r. 
 
 O. So that in your answer to question 74, " He said perhaps there could be a part)' found 
 "ii. Ilannlton who would advance the n;i„u\." Then you sa\- he sent for the solicitor. Xow, 
 w hat was tlie first thing that Mr. Lees said to you when he came in ? A. 1 was introduced to 
 Mr. Lees, and then Mr. Greene explained the position of matters to him. 
 
 O. What was the first thing \ou stated in y mr examination that- Mr. Lees had asked you? 
 A. I forgot. 
 
 O. He was told of course that \-ou wanted to see if you could borrow mone\- on the stock, 
 in Hamilton ? .\. That was the purport in it. 
 ^° O. \ou had alreati>- ipformed Mr. Greene that you coiililn't ijc^t it at a reasonable rate in 
 
 loronlo? A. lie sugge sti'd the niort;;,i;;v, and 1 said I could not ntjgotiate it. 
 
 O. The mortgage was suggested hmg before Mr. Lees came? .\. \'es, that is ritdit. 
 (,_). Jk'cause in your prior answers you know you said th.at the onl_\' way you could borrow 
 the monc)- would be on )our stock? " Tlu' only way you could borrow it would be, I suppose, 
 "on _\dur stock? .\nswer, \(!s, but 1 could not succeed in Toronto at a re;'sonabl.- rate'" 
 A. Vc's. 
 
 („). Then when Mr. Lees came -ii, _\-ou said that the first (juestion he asked )-ou was what 
 rate \-ou could pay for tlu; mone\ ? .\. \'es. 
 
 O. That was the first thing that was asked ? A. \'es. 
 30 (). So that I su[)posc it was explained to him that you wanted to borrow monej' on \'our 
 
 stock that }-ou had in Toronto? .\. \es. 
 
 O. Was the amount mentioned that you wanted to borrow? .\. \'es. 
 
 (j. And did \-ou tell Mr. Lees the amount of stock >()U had? .\. \'cs, I think that was 
 ex[)lained to .Mr. Lees. 
 
 (J. Do J-ou recollect Mr. L(."es taking it down in a little note book he had there at the time, 
 the details? .\, I (Iou'l h lUember Mi- Lees ; it was on the train he took it. 
 
 O. Let us confine ourseKcs to what hap])ened in Hamilton? .\. 1 do not remember that 
 he did in Hamilton. 
 
 (_). Hut you do recollect asking as to the rate of interest ? .\. \'cs. 
 4° (J. .'\Md what } ou -aid was, 1 did not know exacliv? .\. N'es. 
 
 (J. Tlu-n )-ou asketl what he thought he conM get it for? .\. That is right. 
 
 (j. Then xoic s,iy Mr. Lees asked tlu' amount of stock we had ? .\. Ves. 
 
 (}. 1 aiii reading now from >dur answer to (|uestion S3, there you say, " I think it was Mr. 
 "(ireene that asked Mr. Lees if he knew an>- person or had a client or ai:yone that would loan 
 "money in that wa>'. And then he asked us the rate of interest we could pay. I said I did 
 " not kno.v exactly ; what could it be had for, did he think ?" A. Ves, that is ri'dit. 
 
iiifT in 
 
 t. 
 
 y you 
 
 icceed 
 
 ;ason- 
 
 That 
 iid he 
 
 Lees? 
 
 found 
 New, 
 ed to 
 
 you ? 
 
 ;tock, 
 
 ite in 
 
 trrow 
 pose, 
 
 ite ?" 
 
 what 
 
 your 
 
 was 
 ime, 
 that 
 
 Mr. 
 
 loan 
 
 did 
 
 J 
 
33 
 
 lil 
 
 A. Y 
 
 O. "Then Mr. Lccs asked the amount of stock we had, ami I t^avc h 
 
 cs. 
 
 Q. " He said he had a client that they had a consiticrabic 
 
 It of I 
 
 nn a roii: 
 
 to If 
 
 rii id 
 
 ea : 
 
 f.) 
 
 amount oi monej 
 
 " was loanint^r, and I asked him how miicli he would do it for. Well, he said, I think an\thini( of 
 "that kind should be worth about ten per cent. Well, I said, I conkln't pay ten per cent. So 
 " Mr. Greene said. No, he couldn't pay ten pes cent. ; that is ton nnich money ; he ouj^dit to pay 
 "about seven per cent." A. Ri;4ht. 
 
 O. " I said, I couldn't pa\- that anyway, so Mr. Lccs said he would see his j)artncr and he 
 "would see his client and let us know ; and so he disapjjeared ? " A. So he disappeared to ^^o to 
 10 a tele|)hone, I understood. 
 
 Q. That is all true? A. Yes. 
 
 O. That is when you were examined some months aj^o, detailinj^ shortl}- after' the date of 
 the tran.saction — ? A. That is quite correct. 
 
 Q. That evidence was given within a month after <,nvini;- the chattel mort5,^age ? A. Oh, 
 yes, that is all right. 
 
 O. Your evidence would be verv much better than now about these details ? .\. I recollect 
 it all right. 
 
 Q. At all events you were examined right on the — ? A. Sometime in November. 
 Q. Yes, you were examined on the 30th November? 
 20 Mk. (jilMiON'S, O.C.— There is no disjjute about these things. 
 
 Mk. RitchJK, Q.C— 0. Question 84, " He said he would see his partner and his client and 
 "let you know? Answer, Yes, and I should suppose it was an hour before he returned ; and he 
 "came back and said that his client, a Mr. Wilson, would advance the mouev at eight per cent." 
 That is the whole thing in a nutshell ? A. Yes. 
 
 O. Is that correct? A. Yes. Perhai)s not a whole hour, but over half an hour, I 
 think. 
 
 O. 1 am speaking of what you said before? A. Yes. 
 
 O. Question 85, " And you agreed to do it, or did y(»u agree to do it then ? Answer, I did 
 "not agree to do it then. I said 1 w<iulcl consider the matter r.ntil the next day. I went back 
 30" the next da>' and I ditl." That is correct. Then the whole gist o ;t was that you didn't want 
 to make the assignmern, that is )-ou did not make the assignment t i.j\- were going to pre>;^, xoli ; 
 but they said if you would borrow the money and pay them u\) what was then owing them thc\' 
 would advance yon further goods? .\. \'(iu are a--king me if — 
 
 Q. I am asking you if that was the gist of the whole of the conversation? A. Repeat it 
 again, please. 
 
 Q. They wai ted _vou to make an assiginnent ? .\. To sign the mortga % then. 
 Q. They wanted you first to jnakt' an assignment to Huffield ? .\. Ves. 
 Q. That you declined to do? A. \'es, did not want to do. 
 
 O. Because you thouidit you could carry on. I'hen tluy told you you would have to pa\' 
 ^othem up, and if >()U borrowed the money on mortsjage on your stock and paid then the past 
 debt that thc\' would advance you further goods ? A. \'es. 
 
 O. That is the gist of the whole thing? A. I either h.ui to sign the mortga';e or an assign- 
 ment. 
 
 O. You had either to ])a>- them off or to make an assignmert. I'hey ditl not ask )ou to 
 give them a mortgage ; it was a mortgage to some man to get money to pay them off? A. Both 
 them and Mr, Lees said — 
 
*rj^^ 
 
 and 
 
 .'( f'J" 
 
 So 
 
 pay 
 
 I lie 
 o to 
 
 i of 
 
 oil, 
 
 lect 
 
 and 
 Ihe 
 •lit." 
 
 did 
 ack 
 ant 
 )Li ; 
 K>- 
 
 t it 
 
 )a_\- 
 a-,t 
 
 to 
 Ah 
 
34 
 
 w 
 
 Q. The conversation which j-ou liad witli Mr. Greene before Mr. Lees came in was about 
 borrowing money on your stock to pay them off? .\. \'cs. 
 
 O. Then, when Mr. Lees came in, the same conversation tools place, that is, with reference 
 to borrowint,r from some client to pa\- them olT? Then, in answer to question 87, after sa>'inj,r 
 it was put in a nutshell, "They told me if I would borrow the money and |)ay up the present 
 "indebtedness they would carry me on " And that was the inducement to you? A. The way 
 they put it was if I would si<,m the mortgage. The_\- tlid not say about liaxini; them off. 
 
 O. You were sufficient of a business man to know if you were giving the mf)rt'Ta"-e to 
 Wilson— ? A. I did not know it was from Wilson. I never saw Wilson, I sa\-. I knew it was 
 10 Mr. Lees' client. 
 
 O. You knew it was Mr. Lees' client chat the money was to be borrowetl from? A. Yes, 
 certainly 
 
 Q. And you knew that his name was Wilson, because you stated his name was Wilson? 
 A. Perhaps I was. I don't — 
 
 Q. You arc not sure? .A. I don't remember just whether hi.s name was mentioned or not. 
 I know I reckoned— I knew I was dealing with a client of Mr. Lees, anyway. 
 
 O. I see, in answer to c|uestion <S4, that you expressly swore that Mr. Lees came back and 
 .said that his client, a .Mr. Wilson, would advance the money at eight per cent? A. I say. per- 
 haps he did inention Wilson. 
 20 O. Ikit you had forgotten it now until >our recollection was refreshed as to what you swore 
 
 to before? \. I do not remember clean}- now that he did, but I suppose it n ust be so. I do 
 not say that he did not. I'lie name was not of an\- importance to me. I knew I was dealing 
 with his client. 
 
 O. Then did you think at that time that if you |)aid off this debt, and they advanced you 
 further goods, )-ou could carr\- on and ija_\- off all J 3ur other creditors? A. No, sir, I know I 
 could not after that, because 1 knew I could not get any more credit outside. 
 
 O. In question 90 you were asked, " You were presented the alternative of making the 
 " assignment or raising the monc\- on the mortgage and paying them off," that was the alternative ? 
 A. That is what I have said all along. 
 30 O. Then (juestion yi, " Whereas if you did that and had time— that is, if you had given the 
 
 "mortgage given on the chattel mortgage, you would be enabled to carry on? .Answer, Yes." 
 Is that true? Whereas if you did that, that is gi\e the mortgage and had time given on the 
 chattel mortgage, you would he able to carry on ? A. Yes, because I had an understanding 
 with Mr. Greene that when I paid $700 that the mortgage would be allowed to stand. 
 
 Q. Do }ou recollect then that the i|uestion was discussed as to how much you could pay off 
 weekly on the mortgage? A. Ves, but I — 
 
 Q. What amount was suggested ^ A. $100 and interest, but it was onl)- to go, as I under- 
 stood, for a .",w weeks until it was rednced a little. 
 
 Q. Was $125 mcntionetl ? .A. \es. 
 40 His LORDSllll' — That is on the Wilson nK)rtgagc ? .A. Yes. 
 
 Mr. Ritchie, Q.C— O. Vou were discussing then how much \'ou could pay off weekly on 
 the mortgage ? A. Yes. 
 
 O. And Mr. Lees wanted \ou to payoff $125, and you .-aid \'ou could'nt pa)' offtha. much 
 and carry on? A. No, I said also that 1 could not continue paying the $100 a week until the 
 lortgage was exhausted. 
 
 O. Who did }ou sa\- this to? .A. To Mr. Greene, and I said if it was reduced say until I 
 
bout 
 
 ence 
 
 ;scnt 
 \sa}' 
 
 c to 
 was 
 
 Yes, 
 
 ^on ? 
 
 not. 
 
 and 
 
 pcr- 
 
 I'ore 
 do 
 
 you 
 w I 
 
 the 
 ve? 
 
 the 
 
 es." 
 the 
 ling 
 
 off 
 
 ier- 
 
 on 
 
 uch 
 the 
 
 il I 
 
 ■ 
 
35 
 
 had paid six or seven hundred dollars and the inortLjaf^re alloucl to remain ; and Mr. Greene 
 Slid, well, 1 dare say tliat can he arran,i;ed all ri_L;ht when yon pay a feu hundred dollars. That 
 
 11 
 
 I! 
 
 i 
 
 
 I 
 
 was 
 
 the 
 
 exact conversation. 
 
 Q. Hut $1.^5 was mentioned first ? A. \'es. 
 
 Q. Then it was rctlucntl to $icx:), anil the interest ? A. $107.50. 
 Q. Did )()n make an>' of these ])a)inenls ? A. 1 did. 
 Q. How mail)' ? A. Ivich week until — 
 
 Q. How many pajinents altoi^cther did j-ou make? A. 1 think it was four. 
 Q. To whom did you make these payments ? A. I sent up by cxjiress to Wilson, with the 
 10 exception of one ; i)erhaps I paid one into Oak Hall, but I am not \ery clear. 
 
 (,). Do you swear that you paid one into Oak 1 iall ? A. I made one payment to Oak 1 lal! ; 
 I cannot tell — 
 
 Q. Will you swear that you made one payment to Wilson at Oak Hall? A. I could not 
 without havin;4 the book. 
 
 Q. At least j-ou did express some to Wilson ? A. Yes, at least three; and I paid money 
 into Oak Hall once. 
 
 O. Will you swear that you paid monc\- into Oak Hall after or on this Wilson nmrt^a^e at 
 any time? A. I would not swear positivelx-, Mr. Ritchie. 
 
 O. Then you knew Wilson's address and name? .A. Just Hamilton. 
 20 Q. Vou knew his first name, in order to cximcss it to him? A. Y'es, Mr. Lees '^u\c me 
 
 that. 
 
 O. Was it on Thursday that this conversation took place in Hamilton, that we have been 
 discussinf^ just now ? .-\. Tlie first daj-, yes. 
 
 O. Then after this alternative was presented to j'ou, you said you would yo home and 
 consider it ? A. Yes. 
 
 Q. You went home on Thursday night? A. Yes ; I wouldn't do it then. 
 O Then \'OU went back on the Friday, did you ? A. Yes. 
 
 O. And saw Mr. Greene, and told him you were prepared to give the mortgage? A. I 
 went back with the express determination not to do it. 
 30 O. But you went there and told him you would do it e\entually? A. .\t hist, after a long 
 
 argument. 
 
 O. You told Mr. Greene that you would do it? .A. At last. 
 
 Q. Then this conversation on Friday took place with Mr. Greene? .A. .And Mr. Lees. 
 O. Mr. Lees was not there at first? A. I don't reincmbcr just how long it was after, but 
 lie was in tjuite a while before he drew up the mortgage. 
 
 Q. Ccr*^ainlj', but you saw Mr. Greene on that day, on the Frida\-, before you saw Mr. Lees? 
 A. Oh, yes. 
 
 Q. You went there? A. Yes, I did. 
 
 O. Then he was sent for, and drew the mortgage ? .A. 1 le was sent for, and wc had a long 
 40 talk and persuaded, and after a while I was jiersuaded to do it. 
 
 O. ^'ou say, in question 94, " When you went up the next day the inatter was carried 
 "through? Answer, Yes, the mortgage was made out, and .\Ir. Lees came down with me, and 
 "it was executed at our house?" A. That is right. 
 
 O. Then the same night it was executed Miss C'heyne signeil an order to pav the mone}' — 
 an order on the mortgagee ;o pay the money to the SaL)l<jrd Compan\- ? A. Yes. 
 The Court — To pay all the money? 
 
;i| 
 
36 
 
 E'M' 
 
 Mk. RlTClllH, Q.C.— To pay the proceeds of the Wilson mo|•tc,^•^<,rc. That is what he says • 
 the bulk of it. 
 
 Witness — The uhnlc of li. I iic\fr t;-ot any, nor she nevt-r tjot an)-. 
 
 O. " Miss ("hcyne would be the one that executed it, I suppose? Answer, Yes, and an 
 "order made to pay the money, nearl\- all the mone)- to Sanfords." A. To pay their account. 
 Q. And )X)U have no doubt that was paid by Wilson .> A. I do not remember that I ever 
 got anj- receipt or an)'thin;j; of that kind. 
 
 O. \'ou ha\e no doubt that was carried out ; tliat was where the money went, to Sanfords? 
 .A. I don't know an_\lhin;^ ;i!)out it. 
 10 (J. lUit thconlcr was then L;i\en to iM'-. I.ees? A. \'es, and I never saw the UKJuey, and 
 
 I don't think I e\er j^^ot the; receijjt. 
 
 O. So that what do you speak of when \-fiU sa\- that they t,'ot all, except what was necessary 
 to pay the expenses and the re-insurance ; what was that ; to insure the _^()oi!s in the name of 
 Wilson? A. Yes, I understand that tiu' companies ha\e a rule that when a chattel mortj^Mge 
 is given they cancel their polirj-, and new policies ha\e to be taken out in consc(|uence, and Mr. 
 Lees attendetl to that ; but 1 ilon't tiu'nk the money for the ])olicics was included ; I thiid< it 
 was enough for them ; it was enough to cover his expenses, and he afterwards sent me a bill for 
 the insurance. 
 
 O. Who sent \-ou a bill for the insurance? .\. Mr. Lees. 
 20 O. .And did you pay that ? .\. NO. 
 
 Q. When Mr. Lees came down to Toronto t(- get the mortgage executerl, did he go into 
 the store to take a look at the stock ? .A. \o, sir, he went as far as he could. We went to the 
 door, and we could not get in. 
 
 O. Question 122, your answer is, " \'cs, he first came down and took a cursorx' glance at 
 " the stock in the store ? " .A. Lookeil in through the store door. 
 
 O. That is what \du mean by a cursor>- glance at the stock in the store? .'.. He saiil that 
 would tlo. 
 
 O. He went down to look and see if tlie place was in existence, at all events? A. Yes, that 
 was all. Of course, it would take you a good while to make — 
 30 O. You came down on the train, you sa_\-, \iithMr. Lees? A. Yes. 
 
 O. .And you say there was a discussion then with him as to other creditors, that they could 
 not attack the transaction ? .\. N\s, 
 
 O. What were you discussing then, as t(» whether it could be set aside as a preference or 
 not? .\. Yes. 
 
 O. .\s to whether it could be set a^u'-' ;is ;i preference of the Sanford people o\er the other 
 creditors? .A. \'cs. 
 
 O. Aiul he assured >ou that it could not be, that it woukl be i)erfectly valid ; and that was 
 the extent of the discussion, was it ? When was it that he mentioned something about Wilson 
 and some suit that it came up in? .\. That was in Mr. Sanford's office. 
 40 O. Was that when Mr. (ireenc was there? .\. Yes, Mr. Greene was there. 
 
 O. .\nd what were \-ou discussing then, as to whether it could be attacked as a preference? 
 A. 1 asked then what would becouK of the other creditors, what could I do with them. 
 
 O. Were you asking as to whether the chattel mortgage could be set aside as a preference, 
 whether it could be successfull)- attacked := .A. I don't know that I put it in those words; but 
 I said, what could I do w ith the rest of the creditorj. And that was the reason why I didn't 
 sign it the first day. 
 
layf 
 
 cl an 
 
 niint. 
 
 ever 
 
 rds? 
 
 and 
 
 ■isary 
 le of 
 
 Mr. 
 
 :k it 
 
 1 I 
 
 or 
 
 iiitn 
 the 
 
 2 at 
 
 that 
 
 that 
 
 )uld 
 
 or 
 
 ther 
 
 vas 
 son 
 
 cei 
 
 nee, 
 but 
 rln't 
 
37 
 
 Q. Did yf)ii ha •conversation when Mr. Greene was there alone, or was it after Mr. 
 
 Lees came in ? A. lit,. 
 
 Q. Yon say jon had it in both |)laccs? A. Yes. 
 
 Q. H<»th when he was there ruui wlien he was not tliere? A. \'es. 
 
 Q. And you were -lisrnssin;; tlic question as to whctlier this transaction would stand or not » 
 A. Yes. 
 
 Q. You knew the effect, I suppose, as a business man ? That the iffect of oi\iiifr a chattel 
 mort},'age would be to prevent the other creditors comiii<,r in unless it would be attacked suc- 
 cessfully? A. I suj^pose so ; I never had much to do with financing,' affairs. 
 10 Q. You have f^iven chattel mortt,'atfes 'jefore? A. Only on furniture. 
 
 Q. And on stock have \'ou not, too' \ \'.,, sir, I don't think .so. 
 
 Q. As a matter of fact, one reason that they insisted upon yettinf,^ this secin-itj- was that 
 they claimed you had paid $300 of their money, after the Wilson mortj^a^rc. paid it off in reduc- 
 tion of a chattel mortga{fe on the furniture? A. Who did ? 
 
 Q. I .say the Sanfords claimed that after the Wil.son mortgage was given, instead of remit- 
 ting them for the new goods, you were u.sing the money in paving off a chattel mortgage on 
 your wife's goods ? A. I had a distinct, definite understanding with Mr. Sweet. 
 Q. Who did? .A. I did. I told him I was going to do it. 
 
 Q. You paid off $300 on your wife's household goods out of the proceeds of the store? 
 20 Mr. Gikhon.S, O. C— Ha .says he had an arrangement with Mr. Sweet that he (oulil ajjply it, 
 
 Mk. RlTCllli:, Q.C. — We claim he was diverting funds to pa>- off his wife's dcbt.s. 
 WiTNE.s.s— My wife had no debts in it. 
 
 Q. It was a chattel mortgage of your wife's ? A. Yes, to Mr. Willis. 
 
 Q. And you paid off the $300 in reduction of that ? Now, when they came down after 
 they got this second chattel mortgage which was filed, after that didn't they tell you t'lat the reason 
 that they insisted on getting it was that _\ou had been diverting the funds in that wa> ? .\. Mr. 
 Greene did ; but I had a permission from the manager to do it. 
 
 Q. Who was Mr. Sweet ? A. He is the business manager of Sanford & Co. 
 O. In Torontcj? A. In Hamilton; I told him in the store that I was going to pa)- the 
 30 $3(X). 
 
 Q. And out of what were you going to pay that ? A. Out (jf the monc\- we took in. 
 Q. Out of the proceeds of the goods ? A. Yes. 
 
 Q. When was it you told Mr. Sweet that ? A. At least a m(,nth before we had the chattel 
 mortgage. 
 
 Q. Then you said he mentioned some case ; you didn't think (jf that when }-ou were 
 examined before? A. Perhaps I wasn't asked it. 
 
 Q. None of these questions about effecting compromises with creditors ever came up 
 before? A. I did not have any examination like you are putting me to now. 
 
 O. Oh, )'es, you were examined here at the instance of the other side? A. 1 answered 
 40 every question. 
 
 Q. And you said nothing about anj- conversation coming down to the train, when j-ou were 
 
 examined before? A. I was not presseti like I am now. I answered all the questions Mr. 
 
 Wright asked me. I feel just the .same now as I did then. I was willing to answer anythin". 
 
 Q. Some time after you had given this chattel mortgage, did you go to see Mr. Parkes'? 
 
 A. I never went to see Mr. Parkes until after the>' had pressed nte with that assignment. 
 
 Q. Did you have any con\ersation w ith Mr. Parkes as to w hether this could be set aside as 
 
Mr. 
 
 )t? 
 
 ttel 
 
 iic- 
 
 liat 
 uc- 
 
 nit- 
 on 
 
 ter 
 
 td 
 
 re 
 
 I 
 
 2(1 
 
 re 
 
 is 
 
38 
 
 .*H 
 
 a preference? A. No, I never asked him anj-thinf; ; lie volunteered things. The reason I went 
 to M.. Parkcs was because the)- said it was J'arkes tliey understood was goin^f to bring those 
 actions the next morning, and I went down to see him, and he s.iid it was a falsehood, that he 
 had never said so. 
 
 Q. Do you recollect telling an>'one that yoi- had found out from Mr. I'arke.s that it could 
 not be successfully attacked because there had been an almost similar case? .\. lie s.aid so at 
 once. 
 
 Q. Did he give you the name of the case ? A. He got a book down and re.id it out. That 
 wa.s after it had been given, of course. 
 10 O. He threw out that suggestion himself? A. Ves ; I don't know what ma.le him do it. 
 
 I did not ask him to do it. 
 
 Q. What led you to po to Mr. I'arkes? A. I'o see whether in fact he had such instructions 
 or had said he was going to. 
 
 Q. That was before \ou went up to Hamilton at all? A. That was the morning before I 
 went, and Mr. I'arkes said it was a ^.ilschood. 
 
 Q. It was then that he read this ca.se to you ? A. No, I think not. It was after that I 
 think. 
 
 Q. What led \()u to go after that to him ? A, He was worrying me for a payment of $i lo 
 to John C'alder, and he kejjt calling me u|) by telephone, and I would go down and see him and 
 20 come back again. That is all. 
 
 Q. Then how did the discussion aiise about the case? A. He had heard that I had given 
 this chattel mortgage, xou know, and lie was very sore about it, and talked a lot about it. I did 
 not ask him anything. 
 
 Q. Then how did he romc to <:\y that I could not be attacked? A. I could not say; it 
 was just his own. He was giving me a great lecture about it, yfui know. 
 
 O. And he took down the \ olume of reports and read it to you ? A. Yes. 
 
 Q. And he told you the name of the case? A. Yes, he said this same man Lees and this 
 .san'c man Wilson, 
 
 Q. And he read j-ou the name f)f the case, and he read the case there to you ? A. Yes, he 
 30 did ; that was after all had been done. 
 
 O. And did y(ju tell him that you had knf)wn of that case before ' ou gave the mortgage? 
 A. Oh, no, I didn't discuss anything with I'arkes. He was ineicly, as it were, abusing me that 
 is all. 
 
 Q. When he was reading it to you, vou did not tell him >'ou knew anything about it? A. 
 No, I did not say anything to him. 
 
 Q. And you led him to believe that you did not know anvthing about it? A. I did not 
 know that I did. I don't know whether I did or not. I did not pay any attention to what he 
 said. I did not consider it was any of his business, anyway, because Mr. Calder told me he had 
 not given him any instructions ; he was acting on his own. 
 40 Q. You know Mr. Scott, who is here ? A. Yes. 
 
 Q. Do you recollect, after you left I'arkes' office, going over to Mr. Scott's and telling him 
 of this conversation which jou had witii Mr. Parkes ? A. I went into Mr. Scott for something 
 that Mr. Lees told me to go there about, and I mentioned the conversation with Parkes at the 
 time. 
 
 O. This was after you had seen Parkes ? A. Yes, the ne.xt day or so. 
 
 Q. The next day after >ou had seen Parkes j'ou went in and saw him, and told him that 
 
39 
 
 B 
 
 Parkes had called your attention to a case that was almost similar? A. I ttjld him I'arkes had 
 given me a lot ot abuse. 
 
 Q. Did you not tell him about the case that Parkes had told you about? A. Likely I did. 
 Q. So that you thou^^ht you were giving him some information? A. Oh, n.), I knew as a 
 lawyer he would know all about it. 
 
 Q. You knew, as -x layman, you did not know it before? A. I knew from what Mr. L_cs 
 told me. 
 
 Q. Then you knew it after what Mr. Parkes told you, and then you went around to tell 
 Mr. Scott? A. No, I did not. ! d(, not know that he did not mention something about- I'arkes 
 10 before I did. 
 
 Q. Did you also tell Mr. Scott that you were a little surprised to find that there was a case 
 exactly in point ? A. I do not remember it. 
 
 Q. Will you swear you did not ? A. I don't hardly know how to answer that, because Mr. 
 Lees told me of a case, you know. 
 
 O. You have said that before. \v^e have heard that in court to-day for the first time. Hut 
 after you went to Mr. Parkes — ? A. I did not tell him that 1 was surprised, because I was not 
 surprised, because Mr. Lees had told me. 
 
 Q. Didn't you say to him that you were surprised because there was ,\ case identical in 
 poii^t? A. No, because I was not sii prised. Mr. Lees had told me all about it. 
 20 Q. Then what he told )-ou was, that if mone)- was borrowed on mortgage to prefer a 
 
 creditor, and paid that creditor, that it could not be attacked ; is that tiie substance of it ? A. 
 Parkes, you mean ? 
 
 Q. Yes? A. Yes, that is the si'bstancef)f it. 
 
 O. Did you ever give any writccn statement of your assets and liabilities to anvbocly ? A. 
 I do not know just now, Mr. Ritchie ; I could not remember. 
 
 By Mr. Gihhon.s, O.C— O. I had understood, in the first place, that yci-r .iHughter had 
 had this equity of redemption. I believe it was your wife? .\. Yes. 
 Q. So your daughter never had anything at all ? A. No. 
 
 O. All .'■he had in the world was the money that was paid to Sanford at the st.irt ? A. 
 30 That was all. 
 
 O. So that if you had held your own in the business that would be ,ill the nominal surjilus^ 
 A. Yes. 
 
 Q. The business lor the first _\ear, I su|)pvjse, would nf)t naturally |)ay ? .A. No. 
 Q. Then this statement of assets and liabilities was \\i,(. correct? \'ou hail otiicr liabilities? 
 A. Oh, yes ; they knew that the- ' were other liabilities. 
 
 Q. You did not profess to give them al ? A. No ; only from memoiy. 
 O. As a ma; ^•- of '"-'Tt the liabilities at this time were a good deal more than $4,600 or 
 $4,700? A, Yes. 
 
 Q. i see on this memorandum Btn-ns & Lewis are put down at $500. .\.s a matter of fact 
 4othey were over $1,300? A. Yes, I tolu them that, that there was o\er $800 that I had not put 
 down there, 
 
 Q. So that your liabilities must have been quite equal to your assets at oiu; hundred cents, 
 if not more? A. I would say quite (Mjual anjway. 
 
 C Burns & Lewis' bills had come tlue and had been renewal ? A Yes. 
 
 Q, And another considerable bill, I believe, was maturing in a few days? A. Yes. 
 
 Q, The others at short dates ? A. Ves. 
 
aci 
 
 .•cs 
 
 ise 
 
 i)t 
 
 in 
 
40 
 
 m 
 
 O. All your liabilities matured in a few weeks ? A. Yes. 
 
 O. Did Mr. Greene know that ? A. Oh, yes, of course, he knew all. 
 
 JAMES, D. WILSON, sworn, examined. 
 By Mr. GinnoNs, Q.C. 
 
 Q. You were a merchant tailor, I believe, doing business in Hamilton ? A. Yes. 
 
 Q. You know the firm of Walker, Scott & Lees ? A, I did know the firm of Walker, Scott 
 & Lees, and Scott, Lees & Hobson now. 
 
 Q. Yes, you knew the former firm of Walker, Scott & Lees? A. Yes. 
 
 Q. They were your solicitors for many years ? y\. Yes. 
 lo Q. Your general solicitors? A. Yes. 
 
 Q. And Scott, Lees & Hobson continued to be ? A. Yes. 
 
 Q. You lent money, I believe, mainl>' what m(jne}' you did loan upon real estate? A. Yes. 
 
 Q. And you have had two or three instances of chattel mortgage ? A. I have, yes. 
 
 Q. All through Messrs. Scott's firm ? A. Oh, I have had from other firms as well. 
 
 Q. Who ? A. Smith & Martin. 
 
 Q. V" 'n was that? A. Within the last— I had one loan as late as last week ; Farmer & 
 Farmer las^ .reek. 
 
 Q. It is recently that you have gone more into chattel mortgages, because, I see when jou 
 were examined before that you had just had several, you said ? A. Yes, several. 
 20 Q. Two or three ? A. Yes. 
 
 Q. Two or three up to that time ? A. It was not chattel mortgage last week. 
 
 Q. I am talking about chattel mortgage? A. You said mortgage — mortgage on real estate. 
 
 Q. I am not half as smart as }-ou are, so 1 stand corrected. I am talking about chattel 
 mortgages. How many chattel mortgages have jou ever taken in your life? A. I couldn't saj'. 
 
 Q. Two or three ? A. Yes. 
 
 Q. All through Mr. Scott? A. Well, I could not say whether the)- were all through Wr. 
 Scott or not. 
 
 Q. Do you remember taking iiny through anybody else? A. No. 
 
 Q. All transactions of the same character, weren't they ? You had previous litigatitm, hadn't 
 30 you, similar t<3 this suit, by the Sheriff of Goderich ? A. 1 did. 
 
 Q. A well known case of GiLbtJUs v. Wilson ? You are the same Wilson ? A. Yes, 
 
 Q. Just as innocent now as in that case, I suppose? A. Yes. 
 
 O. You hadn't got any fuller of guile; you still remained as simple minded a man as you 
 were in (libbons v. Wilson? A. Ves, I should sa\' so. 
 
 O. Vou were very simple then, 1 see, b)' your examination in Gibbons v. Wilson. You had 
 never seen the stock, had you ? A, (iibbons v. Wilscjii. 
 
 Q, You remember that suit ; where was that stock ? A. It is some years ago. 
 
 Q. You remember it well? A. I do not 
 
 O. Where was the stock of goods that you lent the money on? A. I could not say at the 
 40 present time. 
 
 O. You haven't an^- remembrance ; \-ou nc\er saw the stock an)'wa>' ? A. No. 
 
 O. You never saw this stock ? A. No. 
 
 O. On wliuh you lent this $4,775 ? A. No. 
 
 Q. Never heard of the Che\nes b, fore? A. No. 
 
 O. Didn't know whether it was a man or a woman you were lending the money to ? A. 
 Oh, )es, I knew. 
 
:ott 
 
 fes. 
 
 ■ & 
 
 ou 
 
 ite. 
 ttel 
 ay. 
 
 Iv. 
 
 lit 
 
 ou 
 
 lad 
 
 A. 
 
41 
 
 lO 
 
 Q. You told lis be<"')re that it was the wife of this man Ches-nc? A. Yes. 
 Q. You did not know it was tiie dauf:jhter? A. No. 
 
 Q. You never saw the goods ; you trusted entirely to Mr. Lees and Mr. Scott? A. To Mr. 
 Scott, yes. 
 
 Q. Who was your soh'citor and adviser, Mr. Scott, of the firm of Scott, Lees & Ilobson ? 
 A. He wasn't m>' solicitor or adviser in that particular. 
 
 His LokOSHIl'— O. You say you trusted to Mr. Scott in this Cheyne case ? A. Yas. 
 
 Mk. GlliliONS, O.C.— O. Scott, Lees & Ilobson ? A. Vcs, he was my le<ral ad\iser in that 
 case. 
 
 Q. He was your general legal adviser for j'ears ? A. Yes. 
 O. You told us in this other case it went so far that >ou had a general guarantee from him 
 that all the securities that he had were right ; is that so ? A. A written guarantee ? 
 Q. No, a verbal guarantee ? A. I had not. 
 Q. I have a general guarantee from my solicitors " — ? 
 Mk. Ritchie, Q.C— What is my learned friend reading from? 
 
 Mk. GlHBONS, Q.C— From his previous examination in another suit. We can ask him if 
 he said that at another time, surely. 
 
 His Lordship — You may read it and ask if he said that. 
 
 Mr. GlliBONS, Q.C— O. Did you state in the previous examination in Gibbons v. Wilson 
 20 that I have the printed Appeal Book of here, " I have a general guarantee from my solicitors 
 that all my loans would turn out right ? " A. How long ago is that ; some years ago, isn't it? 
 Q. Yes ? A. I don't remember. 
 
 Q. Did you have a verbal guarantee from him ? A. No. 
 Q. Never had? A. No. 
 Q. Nothing of that kind ? A. No. 
 
 Q. Did you say this, " In the event of my losing on this transaction, Mr. Scott, my solicitor, 
 " would be responsible to me." That is in Gibbons v. Wilson 
 well ; is that what you said in that suit ? A. I could not .st 
 Q. Was that true, " In the event of my losing on this tr . 
 30" would be re.sponsible to me?" A. I may have, yes. 
 Q. Was it true? A. No doubt it was. 
 
 Q. " I have a general guarantee from iny solicitors that the loans will turn out ail right." 
 Did you say that ? A. 1 suppose I did if it is there. 
 Q. Was it true, if )-()u St.." i it ? A. Yes. 
 Q. Has it continued through? A. No, I don't know. 
 
 Q. Was there any break of it? When did the break occur? A. There never was any 
 written guarantee or \erbal. 
 
 Q. Then this what you said before >'as untrue, is it ? A. Well, I camiot recollect whether 
 I said it. 
 
 40 Q. You just .said to me a minute ago ? A. I don't remember saying it six, seven, eight or 
 
 nine years ago. 
 
 Q. I read it to you, and you said that no doubt you did say it, and no doubt it was true ? 
 A. No doubt it is true, 
 
 Q. We will leave it at that, for if we start again we will get oft' from it. Vuu employed no 
 other solicitorthan Messrs. Scott, Lees & Hobson in this matter? A. Not until I was examined. 
 
 Q. Then jou went to Mr. Martin ? A. Yes. 
 
 ' remember that suit perfectly 
 on, Mr. Scott, my solicitor, 
 
 t 
 

42 
 
 Q. At whose suggestion ? Whose recommendation ? Mr. Scott's? A. No. 
 Q. Who sent you to Mr. Martin ? Who suggested Mr. Martin, that jou had better get 
 another sohcitor ? Whose suggestion was that ? A. I could not say. 
 
 Q. Up to that time Messrs. Scott, Lees & Hobson had been your solicitors generally ? A 
 Yes. 
 
 Q. You never before or since the giving of this mortgage saw this stock ? A. No. 
 Q. Nor saw *he Che)'nes ? A. No. 
 
 O. In the Wilson case you hadn't any idea? I see in that case the money went to John 
 Stc.vart, Son & Co.? A. I couldn't say at the present time. I do not remeniher. 
 lo O. I see in that case you said you hadn't the slightest idea who it was g(jing to ; you made 
 
 no intjuiries ; you did not make an)' inquiries in this? A. I did not. 
 
 O. A loan was being asked from jou for $4,775 on a merchant's stock in Toronto' 
 A. Yes. 
 
 O. You made no inquiries whatever as to why it was wanted? A. I asked— I was told it 
 was wanted on chattel mortgage on a stock. 
 
 O. But >'ou made no inciuirics whatever as to what was to be done with the money ? A. No. 
 O. Never asked a single question ? A. No. 
 
 O. I .see you did not ask a single question in the other case up at Goderich either ? A. I 
 don't .suppo.se I did. 
 20 Q. \'ou had another case of this kind, too, ft Niagara Falls, hadn't you, with a man named 
 
 McGuire? A. I believe I did. 
 
 O. In which Scott, Lees and Hobson used you in the same way— you did not make any 
 infjuiries in that case? A. I don't know as I did. 
 O. In tin's case not one single word, simplv— 
 I lis Lordship — That worked well in the other case, didn't it? 
 Mr. GiBliON.s, Q.C.— I suppose it did, my Lord. 
 
 O. So that you did not want to inq lire ; you found it was better policy not to inquire in 
 the other case? A. I took Mr. Scott's word lor it that it was between ten and eleven thousand 
 dollars. 
 
 30 O. .And you thought it was not wise to make any further inquiries? A. I did not think it 
 
 was necessar)'. 
 
 O. You had been examined in that previous suit and you knew it was a bad thing to make 
 inquiries? A. I did not know that. 
 
 O. Who did you give this cheque to? A. The cheque, to Mr. Scott. 
 
 O. Who ittended to the registration of the mortgage ? A. I suppose Scott, Lees & Hobson. 
 
 O. Who kei)t it after it was filed ? .A. I had a copy of it. 
 
 O. Who attended to the insurance of the stock, do you know, or was it attended co ? A. 
 I think Mr. Lees. 
 
 O. Did you get the poh'c)' ? A. I did, two policies. 
 40 O. Who attended to the insurance? A. I think it was Mr. Lees. 
 
 Q. You left al! that matter to your solicitors ? A. I did. 
 
 Q Who searched, do you know, to .-^ee whether there were any prior encumbrances or 
 executions ? A. I could not say. 
 
 Q. You left that to Scott, Lees & Hobson ? A. Yes. 
 
 Cross- Examined by Mr. Ritchie. O.C. 
 
 Q. You are a retired merchant, I believe? A. lam. 
 
 •:^^, 
 
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 A. 
 
 ohn 
 ade 
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 >Jo. 
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 led 
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 A. 
 
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43 
 
 30 
 
 Q. And your source of income is from investments on real estate or chattel mortga<,^es ? 
 A. And stocks. 
 
 Q. P'or how man>- years past ha\ c you JDCcn lending on real estate securities and mortgages ? 
 A. Fifteen or eigiiteen years. 
 
 Q. Now, will \ou tell us shortly what transpired with reference to this particular loan ? Did 
 you ever see Mr. Cheyne in connection with it.' A. I did not. 
 
 Q. Did you ever .see any of the Sanfords in connection with it? A. I did not. 
 
 Q. Who was the person yf)U did see ? A. Mr. Scott. 
 
 O. Will you tell us, did Mr. Scott go to see you ? A. Mr. Scott came to my store and ti.ld 
 lome he had a first-class loan on a clothing stock in Toronto, retail merchant tailor and clothing 
 stock often or eleven thousand, which he wanted $4,775 on. 
 
 Q. Did you know an)thing about the clothing business yourself? A. I have been in the 
 merchant tailoring business all my life. 
 
 Q. That is the business jou had been in before you retired ? A. Yes. 
 
 Q. And did he have any details of the stock ? A. Yes, he showed me how much the stock 
 was. 
 
 Q. Did you go over that with hiii ? A. 1 did, between ten and ele\en thousand dollars. 
 
 Q. What was the class of .stock principally ? A. There was — 
 
 Q. Were they staple articles ? .\. Yes, cloths and clothing. 
 
 Q. What you call staples? A. Yes. 
 
 O. Did he tell you who owned it? A. Ves, Mrs. Chej-ne. 
 
 Q. You thought it was Mis. Cheyne? A. Yes. 
 
 Q. Did you say anything to him ? A. 1 asked him if it was good securitj-, and he said it 
 was. 1 asked him was it likely to be losed down soon, and he said, no, it was going to be a 
 running concern, that there was $1,200 new goods going in inside of a week ; bet-vccn a thousand 
 and twelve hundred dollars. 
 
 Q. You say you did not make any inquirj' about as to what was to be done with the money ? 
 Did he make any statement to >()u as t(j what the money wa- required for? A. No, he did not 
 
 Q. Then what further discussion took place? A. Between Mr. Scott and I ? 
 30 O. Yes? A. Mr. Scott asked me if I would accept the loan, and I said I would. 
 
 O. Was that after he had told you it was a good loan? .A. Yes, he told me it was a good 
 loan. I asked him how it would be paid. He said it would be jiaid wceklj-, in payments of 
 $100, with the interest paid at each time of the paj-ment of the $100. 
 
 Q. And what about the rate of interest ? .\. Kight per cent. I asked him what the rate 
 was and he said eight per cent. 
 
 O. Then what happened after that ? A. Wh\-, not the folloNv ing day, but the day after, he 
 came in and I gave him a cheque for it. 
 
 O. The following day or the day after ? A. .Not the following day. When he sjjoke to me 
 first it was the 31st October. 
 ir Q. What day of the week was that, do you recollect? A. It was on a Thursday, between 
 
 fve and si.x o'clock at night. The following day was the firs, of November, I was in liuffalo ; 
 on the Saturday morning, that was the 2nd November, Mr. Scott came in and got a checjuc 
 from me for the amount. 
 
 Q. Are }ou .^ure of the date, the mortgage is dated on the first ; do you know what date it 
 was ? 
 
 Mr. GlIinONS, O.C.— He says the day, and you should not change it. 
 
44 
 
 A. I save the cheque on the second of November. 
 
 Mk. RrrciHK, Q.C. —Was your cheque for the exact amount ? A. Yes, it was for the exact 
 amount. 
 
 O. Then what was the security that you were rclyin^r on w! .-n you macie that advance? 
 A. The security of the stock of cloths, clothing; and assi^jnment .>! book debts. 
 (). That is included in it, is it? A. That is included in it. 
 Q. Did you understand that there was any other security to you ? A. No. 
 g. Did you not hear of a guarantee which is .said to have been },riven about the same time 
 from Sanford Mannfacturinf,r Company to you, a .tjuarantee which was handed to Mr. Lees? 
 10 A. No. 
 
 Q. Did you ever hear of that ? A. I did not. 
 
 O. You ne\er saw it, and never heard of a guarantee ? A. No, 1 never saw it. 
 O. If Mr. Lees got it there »vas no communication made to you about it? A. No, none 
 whatever. 
 
 O. Was this a bona fide actual advance made by you upon the .securit) of that stock ? A. 
 It was. 
 
 Q. "Was there any agreement or understanding of any kind other than was shown on the 
 document itself ? A. None whate\er ; no. 
 
 Q. Can you recollect w licther anything else passed between Mr. Scott and yourself other 
 2othan what you have told us, that he gave you the details of the stock ? A. The details of the 
 stuck, amount of the stock, and he told me the rate of interest, and how it was to be paid. That 
 is all. 
 
 O. Did you have any discussion with him about the liabilities of Cheyne, or Miss Cheyne? 
 Did he ever say anjthing about that at all ? A. ! think not. 
 
 O. Then did you have anything communicate I to you by Mr. Scott in connection with this 
 loan other than what you have told us now? A. None whatever. 
 
 Q. How many pajments were made to you under that mortgage? A. Five. 
 
 Q. Which are the five— are you speaking of the last one? A. Four without the last. 
 
 O. Did you get all these pa>'ments yourself ? A. Direct to me? 
 30 O. Yes, of $100— did the.v come to you ? ;\. I understand the first one was sent to Scott, 
 
 Lees & Hobson ; the others were remitted to me direct. 
 
 g. Then I sec that you got on the 31st December—? A. That was the principal, and that 
 was the interest. 
 
 g. What do you call this book ; j't.ur mortgage book ? A. Yes, that is m\- private invest- 
 ments, 
 
 g. This is the book containing the inemorandum of your own private investments ? A. 
 Yes. 
 
 g. The first payment is headed Eliza B. Cheyne $4,775. 2nd November, 8%. Then on 
 the 14th November $100 was paid ? .\. $100 and $7 interest, but the interest was°a little— 
 40 g. I see you have got separate columns here, one showing payments of principal and one 
 
 showing payments of interest? A. Yes. 
 
 g. And there were four payments of $100, and the interest on each payment; of course, 
 the interest varying as it was rcfluoxi ? .\. Yes, the first payment was a little short ; it was a 
 little over, because there was more than the seven clays. 
 
 g. On the 2 1st December )ou got $4,439, balance of principal, and $17.89 interest? A. 
 
 Yes. 
 
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 Q. From whom did you jrct that ? A. This $4,439? 
 
 Q. Yes ? A. I got that from Mr. Lees. 
 
 Q. Did you ever take any proceedings under this mortgage of yours to realize? A. I did 
 
 Q. Did you ever instruct any proceedings to be tiken to realize ? A. I fh"d not. 
 Q. When did you first hear that :he goods had been sold ? A. The first I heard was - 
 Q. Did you know anj'thing about the sale ? A. I did not. 
 
 Q. Then you did not hear anything about it until aiter the sale took place? A. Not until 
 after the sale took place. 
 
 lo Q. Have you learned since then where the goods were sold ? .\. That they were sold ? 
 
 Q. Yes, you have learned since then that they were sold ? A. Oh, ye.s, I did, yes. 
 
 Q. Then you were paid off the bahnce cf the mortgage ? A. I was, yes. 
 
 Mr. Gibbon.s, Q.C.-AIl this dealing with the stock was after the action was brought- a 
 motion was made for an injunction to prevent dealing ; the allegation was made that the defend 
 ants were perfectly good, and, as I understand, the rule is where the parties are good and pro 
 ceedmgs are pending, the Court would not interfere by injunction ; and in this case by consent 
 It was arranged that an undertaking should be given ; the only mortgage e.xistin- and the on.v' 
 one known of, was that to Wilson, in which it was undertaken that he would not'proccod i„ the 
 meantime, and if he did realize to keep an account and hold the proceeds of the sale of the said 
 20 goods and chattels, subject to the further order of this Court. The other mortgage Nsas ^.iven 
 after the action was brought. ^ '^ 
 
 Mr. Ritchie, Q.C.-I submit no case has been made. If your Lordship will just have it 
 noted, I will call Mr. Lees and discuss it afterward.s. 
 
 WILLL^M LEES, sworn, examined. 
 
 By Mr. Ritchie, O.C. 
 
 O. You are a member of the firm of Scott, Lees & Hobson ? A I am 
 
 O. Of Hamilton ? A. Yes. 
 
 Q. And I believe that you had something to do with procuring an advance from Mr 
 Wuson on a stock of goods in Toronto, (jwned by Miss Cheyne ? A. I had. 
 30 Q. What was the first you heard of it ? A. It was on Thursday, October 31st when Mr 
 
 Greene spoke to me about the matter. 
 
 O. Mr. Greene is of the firm of the Sanford Company? A. Yes. 
 
 Q. Had your firm done business with the Sanford Co. before as .solicitors? A We had 
 
 Q. Will you tell us now what was said ? A. I discussed the matter with Mr Greene ' 
 
 Q. Where did this di.scu.ssion take place ? A. It took place in our office, I think the first 
 discussion. I think he came in and I was busy, and he asked me if I would come over u itii 
 him to his office. 
 
 Q. He asked you at all events to come over to his office? A. \'es, or over the telephone 
 There were two days, and I cannot remember just now how I came to to o\er whether it \ is 
 40 through the telephone or whether he asked me in the office. I was over there on Thursdav uul 
 on rriday. 
 
 Q. At all events where did the discussions take place with reference to the matter in vour 
 office or m the office of the Sanford Company? A. In the office of the Sanford CompLny 
 
 Q. When you first went over th( ,., on the Thursday, who di.i you see there? \ I -,»• 
 Mr. Greene and Mr. Cheyne and Mr. Duffield. 
 
 Q. Was Mr. Duffield there all the time? A. No, onlj- part of the time 
 
46 
 
 Q. Then what was the first thiiiR that was said to you ? A. Mr. Greene told me that the 
 firm of Cheyiie & Co. owed them a lar^e amount of money and that he was not able to make 
 payment (^f it. That the liability was in that '^hape, that it was a larjje amount, or mostly all due, 
 I understood, alth()U}j[h I did not see particulars of the amount at that time. I just had the 
 lump sum, and he asked me what I thought had better be done alx)ut the matter and the result 
 was that I su^f^rested it would be a ^niod idea if Mr. Chejne cou'ul procure a loan on the stock 
 and pay them off with the proceeds. Then we went in, or Mr. Greene, I think, went in himself 
 first to see Mr. Cheyne, and afterwards I went in. 
 
 Q. Then when you went in, what took place' A. Mr. Chejne asked mo if I .houf^ht I 
 10 could jfet them a loan on the stock. I told him I did not know, that the only thing I cotild do 
 would be to try ; and he asked me about what interest I thoujrht it could be obtained for, and 
 about what the terms of repayment would be, etc. So I asked him how much he thouf^ht he 
 could pay a week, and he thought he could pa)- $125, a week ; and he said he was willing t'-pay 
 eight per cent, interest, and thpt he would like to a.scertain if i could get a loan. 
 
 Q. Me said he could pay how much a week ? A. $125, a week. However, he then left; 
 that interview was a comparativelx' short one while I was there. And he said he thought he 
 could possibly get the money in Toronto, and he came down to Toronto, and returned the nc.vt 
 ilay, saying that he had been endeavoring to get an advance in Toronto but hadn'*^ succeeded, 
 and that he would like if I could raise the money for him. During that interview on i'hursda)-, 
 20 however, I called up my partner, Mr. Scott, on the telephone, and I stated the circumstances, or 
 rather the rmount of stock as taken dowti on a slip which was handed to Mr. Wilson ; and I 
 called that down to Mr. Scott over the telephone, and he said that he would see what he could 
 do with regard to it ; .nd he cal'ed me up a while afterwards, and said that if that stock was 
 there that the matter could be arranged. 
 
 O. Did you take a statement of the stock? A. I did. 
 O. What on? A. I took down in a note-book ^' hich I had. 
 O, From whom did you get that? .\. From Mr. Cheyne. 
 O. At that time? A. Ves, ! took it down from him. 
 
 O. It makes a total here apparently of $10,140— $5, coo clothing, $2,500 tailor's goods, 
 30 gents' furnishings $100, fixtures $840, book debts fully good $800, never less, a total of $10,140. 
 Now, dill you take that down at that time from him ? A. I did. That is the only information 
 I had as to that. 
 
 O. Did you ever get any .statement from Mr. Cheyne as to what his liabilities were? A. 
 No, his liabilities were not discussed while I was there. 
 
 O. Did you at any ^ime until after the chattel mortgage was executed, know the amount of 
 his liabilities? A. No, I did not. 
 
 Q. From him or anybody else ? .A. I did not know it for two or three weeks afterwards. 
 Q. YoM say it was not discussed while you were there? A. No. 
 
 O. And you were not shown a statement of liabilities by anybody ? A. No, I was not. 
 40 Q. Then you say that after asking )ou if you could get the loan and discussing it and talk- 
 
 ing about the rate of interest that he said he would go to Toronto? A. Yes. 
 Q. And that he might get it there ? A. Yes. 
 
 O. Then what happened the next day ? A. The ne.xt day he came back to Hamilton, and 
 I was called over to Sanford's, and Mr. Cheyne said he would like to get that loan but that he 
 would like to reduce the payment to $100, a week. Pie said he had been figuring the thing out, 
 and if the payments were reduced to $100, a week, bethought he could pull through satisfactorily. 
 
It the 
 make 
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 stock 
 iuiself 
 
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 A. 
 
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 talk- 
 
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47 
 
 i I 
 
 He said he thought he could pay $125, but he wanted to make sure that he would have no 
 difficulty in paying the $i(X), a week. 
 
 Q. Then what did you do then ? A. I went home. I arranged to go to Toronto with Mr. 
 Cheyne on the 7 o'clock train, and he remained at Sanford & Co.'s, giving an order for his goods, 
 picking them out he went back into the warehouse. 
 
 Q. Did you understand, or did you know that thero was some arrangement about furnishing 
 other goods? A. Mr. Greene told me he was willing to keep him supplied so long as he- 
 was satisfied with the way Mr. Cheyne was conducting the business. 
 
 Q. I sec that there was some document drawn up with reference to the giving of securit)' 
 10 for future advances? A. Yes. 
 
 Q. That was drawn by you at the time, was it ? A. It was. 
 
 Q. When was it executed ? A. Executed the same night as the chattel mortgage. 
 
 Q. Then you came down to Toronto, and what time did you get here ? A. About half-nast 
 eight. 
 
 Q. Did you go to the store to look at the goods ? A. Yes. 
 
 Q. Was the store open ? A. No, the store was not open. Mr. Cheyne said he hadn't his 
 key, but he thought his clerk would be there ; when we got there his clerk had gone. Howe\er, 
 the store was lit up with electric light, and we could see from back to front. 
 
 Q. Did you, prior to the time that the chattel mortgage was executed, hear anj-thing about 
 20 a demand for an assignment for the benefit of creditors ? A. I never heard of that. 
 
 Q. Was there any discussion about that i.i your [jresence ? A. That was never mentioned. 
 I did not know that Mr. Duffieid had been in Toronto, even. 
 
 Q. Mr. Cheyne said in effect that in your presence the question u-as discussed as to what 
 would become of the other creditors in case this mortgage was given, and that you replied to that, 
 to the effect that the other creditors might kick all they wanted, that they could do nothing, and' 
 that after the chattel mortgage was given he could compromise with the other creditors when he 
 got ready ? A. I never had any such discussion with him at any time. Mr. Cheyne tried to 
 impress me with the fact that he was in good shape and would pull through ; and he told me 
 that Calder's liability was under $200, and that was the only liability that was mentioned. 
 30 Q. You knew, (jf c(,ursc, of the Sanford liability ? A. Yes, apart from that, of course. 
 
 Q. Now, he says that on the way down on the train with him on the Thursday or Friday 
 night, whatever night it was, that a somewhat sii.M'lar nvcrsation ttx)k place, a conversation to 
 that purport ? A. There w as no such conversation. /e were sitting in the smoking compart- 
 ment of the Pullman and there was another passenger there, and the three of us were talking 
 nearly all the way down. 
 
 Q. He also says-he does not say that he told you the details, but he gave you the lump 
 amount of his liabilities as being .something like $5,000 outside of the Sanford claim ? A. He 
 never mentioned that. 
 
 Q. Did he ever mention it in your presence at any time ? A. No, he did not ; he told me 
 40 yesterday, in conversation out there, that he never mentioned anything to me but the Sanford 
 liability and the Calder liability. 
 
 Q. He alscj said that there was some statement made, while you and Mr. Greene were 
 there, to the effect that he couldn't pay this $100, during the whole period over wh-'ch the 
 mortgage was, that he was only to pay it -for to pay six or seven hundred dollars an.l that 
 then Greene had agreed to get an extension of time. Was there anything of that kind said ? 
 A. There was nothing said at that time, but the next time I saw him— I think it was over the 
 
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48 
 
 
 tclcphnne— he asked mc if I thoiif,'ht that when the loan was reduced down vn $3,000, whether 
 Mr. Wilson would be williij; to let the matter stand at that figure. I told him I did not know, 
 that it would be a matter for Mr. Wilson to decide, and I supposed it w(nild largel>- depend 
 upon the state of his stock at that time. 
 
 Q. When was that conversation? A. That would be a couple of weeks afterwards. 
 
 Q. I want to know, even before the taking of the chattel mortgage, was there any discussion 
 at which you were present when the (juestion of having the mortgage extended after $500, or 
 $600, or $600, or $700, had been |)aid ? A. No, it was never discussed a«^ all. 
 
 Q. Hut a couple of -A'ceks afterwards you say he did, over the telejihonc, ask yon if Wilson 
 10 would consent, when it was reduced to $3000, to consent to have it stand f(jr a longer jjeriod ? 
 A. Yes. 
 
 O. Did you have any conversation with Mr. Wil.son yourself in connection with the loan? 
 A. I had none. 
 
 Q. That was between your partner and Wilson ? A. Yes. 
 
 O. Let me ask you generally if at the conversation which you had with Chcyne at any 
 time there was any suggestion on his part, or a suggestion on the part of anjbody, that if this 
 chattel mortgage were given he could keep the other creditors off? A. None whatever. The 
 subject was not mentioned. Mr. Cheyne was very anxious for the loan, unusually anxious for 
 the loan ; he was trying to create a good impression with mc all the time. 
 20 O. I sec here that there is a bond of guarantee taken from the Sanf(jrd Co. and from two 
 
 of the managers of that Co., Greene and Duffield, to Wilson. Under what circum.stances was 
 that taken ? A. I said to Mr. Greene this amount is a large amount ; I said, you know what 
 goods he has there ; I .said of course" the value of this .security depends largely upon the amount 
 of goods there ; your warehouse manager, Mr. Sweet, ha:; seen this stock frequently, and this 
 loan is b(,'ing repaid at the rate f)f $100, a week, and stock of that kind can depreciate unless it 
 is properly kept up ; you tell mc it is going to be kept up ; I said I think it is only fair under 
 the circumstances that ! shall hold a guarantee, and I said I shall not deliver it unless I see fit. 
 I said of coiMse the idea of borrowing this money has f)riginated with me, I am under no 
 liability in the matter, but if there was any trouble I might feel a certain moral responsibility in 
 3° the matter. 
 
 Q. Then that was got, and did you ever communicate to Mr. Wilson the fact that it was 
 given ? A. I never did. I put it in my private box, and it has been there ever since until 
 yesterday. 
 
 O. Then, at all events, after the chattel mortgage was executed, did }ou ha\e a cheque for 
 the amount from Mr. Wilson? A. Yes, Mr. Scott got a cheque, I understand, 
 
 Q. To whom was it i)a}'able ? A. To our firm. 
 
 Q. What was done with the mone)- which you got from Wilson ? A. I had an authority 
 from Cheyne & Co. 
 
 O. At least from Miss Cheyne? A. Miss Cheyne, to pay the amount of Sanford & Co.'s 
 40 claim to them, and the balance of the loan was to go in jjriyment of the costs. 
 
 O. So that substantially the loan w as to pay off the claim of Sanford & Co ? A. Yes. 
 
 Q. And did you pay it off? A. I did. 
 
 O. Mr. Cheyne has alsf) said that when the discussion was raised about the effect on other 
 creditors that you then made the statement that they might kick ; that in a similar case, 
 mentioning the case of Gibbons v. Wilson to him, it was sustained, and that they might kick all 
 
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 they wanted? A. I never mentioned the case of Gibbons v. Wilson to him ; he mentioned that 
 case to mc. 
 
 O. Did you i-vcr mention nn\- case to him ? A. No, he mentioned the case of Gibbons v, 
 Wilson to me a[)out a week afterwards. 
 
 Q. What was it he said to you about a weeU afterwards? A. I had occasion to call him 
 up on the tclcphon? ; there was trouble with the insurance companies. We h.id to i)ut it into 
 two or three diffcrch: companies, ouint; to the chattel mort.t,'a{,'c beinijon the stock, the insurance 
 companies objected lo the risk. Certain companies won't take risks wliere there is a chattel 
 mort^ragc, and I called him up in connection with some policies that had been cancelled, and he 
 10 told me that Mr. I'arkes hati just been in a few minutes a^n, and he .said he had ^jot him over to 
 his office, and that he had taken down a volume of reports from the shelves and r^-ad him the 
 case of Gibbons v. Wilson, and he asked me if 1 knew that case ; I said 1 had heard of it. The 
 only discussion where a reference was made to that case wa.s over the telephone at that time. 
 
 Q. That was sometime after the chattel mortgage had been executed ? A. Ves. 
 
 Q. Now, subsequently, another chattel mortgage was got, of the 4th December, 1895 ? A. 
 Yes. 
 
 Q. Apparently given in pursuance of the agreement as to security dated ist Nijveinber. 
 You got that executed ? .\. Yes. 
 
 O. Were the goods sold under the Wilson mortgage? A. Thej- were sold under the 
 aoSanford mortgage. 
 
 Q. So far as \'ou know, do you know wlicther Mr. Wil.son knew anything about the sale at 
 all until after it had taken place? A. Not sr far as I know. 
 
 O. Who were the solicitors acting in connection with that sale? A. We acted. 
 
 Q. On who.se behalf? A. On behalf of the Sanford Manufacturing Comi)any. 
 
 Q. And where were the goods sold ? y\. .At Suckling & Co.'s, Toronto. 
 
 Q. Thej- are trarle auctioneers here ? A. Yes. 
 
 Q. Do jou recollect when thc>- were sold ? A. I think it was the 17th December. 
 
 Q. Sometime shortly before Christmas, anyway ? A, A regularly advertised sale, adxertised 
 in all the Toronto papers, or several of them, at all events. 
 30 O. And )ou got the proceeds of that sale- -your firm ? A. Yes, wc did. 
 
 Q. What tlid you do with the proceeds ? A. Mr. Blackley g(jt certain notes in the matter, 
 and Mr. Hlackley discounted those notes and paid the proceeds over to us. 
 
 O. Who is Mr. Blackley ? A. Mr. Blackley is the assignee who conducted the s.ile. JIc 
 took the stock under the chattel mortgage and conducted the sale. 
 
 Q. He took the stock at whose instance? A. At the instance of the Sanford Manufactur- 
 ing Company. 
 
 O. And arranged to have the sale, and the purchasers' notes he discounted and handed the 
 amount over to you ; and what did you do with the amoimt which came tf) \'our hands ? A. 
 paid them over to Mr. Wilson. 
 40 Q. How much of it? A. We paid the whole of it. There was something about twenty or 
 
 thirty dollars short, I think, in the proceeds of the stock ; but .Mr. BIaokle\-, who was collecting 
 the book debts for some time, told me he had about $100, on account of the book debts. 
 
 Q. The amount that was paid over was only something about $4,300 I see; wc arc told 
 that the proceeds of the .sale were about $4,900? A. There was a large -cnt claim of about 
 $600. The net amount which Blackley handed over was .$4,280.89, and we got a refund of in- 
 surance premiums of $41 ; that made $33.20, however; there was about $130, more that Mr. 
 
that 
 
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 HIackIc) had undertaken to fliscliarKc tlic Wilson niort^si^r,- in pursuance of tht- undertaking, 
 which is at the foot of a st-temcnt which >ou have. 
 
 O. This shows it, does it ? A. Yes. 
 
 O. Thni this stock apparcntiv was sold to I'attcrson & Co. on the 2 1st ncccmbcr? A. 
 And Wyld, Giasctt v\: l)arli-i- indorsed the notes, and they would not endorse the notes unless 
 Hlackley ^^ave the undertaking,'. 
 
 O. They had found .)Ut 'hat tlicrc was a prior chattel mortBa(,'e ? A. Yes. 
 
 O. So tiiat aciordin^f to tliis the total amount of the sale 'vas $4,.S97.34 ? .A. \'es. 
 
 O. And it was sold at sixty cents on the dollar, apparently .> A. Ves, it was withdrawn 
 ,0 at auction. It was only .about 55 at auction, and it was afterwards .5old at 60 cents on the 
 dollar. 
 
 Q. 'I'he amount of the stock bein-^ $8,203.52 .nt 60 cents !)rinps it up to $4,82 ;.34,ar.d then 
 there i.s interest addeil f,)r some reason ? A. In pa\iii!; over this $4,822, Mr. Ulack'.ey deducted 
 a certain amount to pay his fees and advertising. 
 
 (}. Hlacklc)' puts in here, " Received settlement as above from Patterson & Co., ;.nd I 
 "hereby undor'ake, on behalf of the Sanford Company, to .{et a di.schar-^c cf ;dl jirior encuni- 
 " brances a^ain.st the Cheyne stock, and u-idertake lo return the notes and cash this day received 
 "from I'atter.s.m & Co., less the iMnMunt of^oods sold in the mear,...ne, if the title is not perfect, 
 "and undertake to sa\e Patterson i<v Co. haiinless. (Signed; b. Hlackley ? " A. Yes, that was 
 20 drafted !>)• Mr. Kerr, a solicitor here, J believe. 
 
 O. Solicitor for whom? A. lie was ai:tin<,r f(,r the purchasers. Mr. lilackley retained 
 about $2CX) odd, so that the sale realized, apart from Mr. HIackiey's fees, a little more than 
 enoiifih to |)a)' off Wilson's moitLjaL^c. 
 
 (J. So that lliere w.is eimui^h to p.iy off Wilson's Ir^()rtf,^'l^c? A. Ves. 
 
 O. I see you have -^ot the second mort.t,nit,rc made jjayablo forthwith. Cheyne sajs that 
 when he ^Mve the mort^'a^e jou made some rei)rcsentation that while it was p;i>able forthwith 
 it was not ^oin^j to be acted oii. Why was it the mort'iant; ^^^s acted on "> .'\. Mr. Sweet had 
 been in Toronto; Mr. Sweet, of the fiin of Sanford iS; Co., h.id been in loronto— 
 
 (J. W.is it in consecjuence of any information that w.is jrot afterwards? A. It was in con- 
 3oSC(iuence of the fact th.-t .Mr. ( heyne was withdrawing; money from the business for other 
 pnr|)os(.!s, 
 
 O. Then tliat money was paid over b)' you to Wilson in payment of the mort},r;ijrc ? A. It 
 
 was. 
 
 Mk. RlTCim:, O.C— I w ill put in the order to p;i)- the Wilson mort-^ai^e in settlement of 
 the Sanford Co.'s claim. 
 
 Witness— 1 hat is an order directed to my firm. 
 
 Hv Mk. GiiiliONS, O.C. 
 
 O. When was the first \ou heard about this? A. On Thursdax-. 
 
 O. Where ? .A. I could not just recollect whether it was in my office or over the telephone ; 
 .]ol>ut at the time Mr. Greene came to m) office one of those days, he was only in there about 
 two minutes. 
 
 O. When were you first consulted about this tran.saction, and wh :onsuIted you , .A. Mr. 
 Greene consulted me. 
 
 O. Ves ; where? A. It was either in his office or my office. 
 
 O. I was askinjr you where it was ? A. I cannot say. I have said on one occasion I went 
 o\cr on a telephone messat^e. 
 
 

s» 
 
 Q. Mr. Greene has UM us that before Mr. Cheyne came down at all he consulted you about 
 the matter, and that when Mr. Chcvnc came down lie telephoned t() you to come over. Is that 
 true? A. My recollection is that Mr. Cheyne was in the office whe-i he first spoke to me in 
 this business. 
 
 Q. How did you come to be in the off ,e? A. I say my recollection is that Mr. Cheyne 
 was in Sanford's office. 
 
 O. How did you come to be in Mr. Sanff)rd's office? A. because I was over there in about 
 two or three minutes ; it is only about a block. The time he came to my office he Mas only 
 there two or three minutes. 
 
 ic O. r3id he tell you the situation ? Did he consult you? A. He told me that they were 
 
 interested in thi- man. 
 
 Q. Where did he first consult ynu to get your advice to try and get this chattel mortgage? 
 A. The real discussion of the matter took place over in his office. 
 
 Q. Where did he consult you about it ? A. On Thursday. 
 
 Q. In your office or his? A. As I tell you I went over to his office. 
 
 Q. Did you discuss it in your office? A. We had no discussion in my office. 
 
 Q. You had no discussion at all in your office? A. He might have told me that Mr. 
 Che)"ie was in his office. 
 
 y. Nothing more? A. No. 
 20 Q. He did not consult you before Mr. Cheyne came down ? A. He might have mentioned 
 
 it in two or three words ; he might liave said Mr. Cheyne, of Toronto, was up here, and he owes 
 us $4,700. My recollection of it is that he was over in his office at that time. 
 
 O. Do you keep any memorandum of these interviews ? A. Not of the hours ; I do of the 
 charges. 
 
 Q. Have you got your charges book with you? A. I have. 
 
 O. Let me just sec it. (Hook produced by witness). 
 
 Q. What did he tell you when he did see you in order to consult you ? You hadn't been 
 his regular solicitors, I believe; you had done soniething for them, but their regular solicitors 
 were La/ier's firm ? A. Mr. Lazier had been their solicitor for twenty-five or thirt}- years, I 
 30 believe. 
 
 O. They came to >-ou in this special matter to consult you? A. I had looked after another 
 large matter before, and I underst(jod Mr. — 
 
 O. What dif! the>- come to you for, to get counsel as to what was best to be done? A. I 
 suppose it was. 
 
 Q. Did they tell you the circumstances, then, to start with? A. He simply told me that 
 he owed them that amount of monc\-. We did not go into details ui til we got over to his office. 
 
 Q. You \\cnt into the details when you went over to his ofiice, did you ? A. Yes. 
 
 Q. What details did you go into? A- He just told me what the amount of the claim was. 
 
 O. .And the amount of the stock, and then \ou stopped there? A. He told me about what 
 the amount of the stock was. 
 
 O. He never told you anything about the liabilities— he was wrong about that, was he? 
 You were present at his pre\ious examination and you saw what occurred on Mr. Greene's 
 examination in Hamilton, where he said that you asked what the liabilities were at that time 
 and that he had given you a list of them in his office? A. I did not know it was put ijuite as 
 strongi)- as that, but something to that effect. 
 
 Q. And you have discussed that with him since? A. 1 have. 
 
 40 
 
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 that 
 
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52 
 
 Q. And you have been arj^iiinj,' with him that that was not so ? A. No, I ha\ e not been 
 arj,niinfr with him. I pf)intcfl out to him that it was mcntionecl after— 
 
 O. And you tried to convince him and yourself that wiien they were consultip'^ you in this 
 matter about securing; the claim of $4,775 that the position of Clieync wasn't discussed at all, 
 whether she was a woman worth a million or without capital, or with other liabilities or without 
 any — none of that was discussed, was it? That is what \-ou want us to thinls ? A. That is a 
 pretty Ion<r question. You start out by sayiii-; that I tried to convince m\'self and him ; 1 object 
 to it being put in that way. I drew his attention to the fact that it was not m.;ntioned at all. 
 O. You tell us that when you were Ljoinii tf) i^n'vc him advice about a claim of $4,775 the 
 10 position of the debtor was not discussed ? A. TIk' liabilit)- was not discussed. 
 
 O. Whether it was a person of small or lar^e or no capital, that was not discussed ? A. Mr 
 Greene j^avc me the information in ihat way — 
 O. That was not discussefl ? A. No. 
 
 O. You, a commercial law>er with a j^reat practice, advised your clients without knowing 
 an\thinj,' about the premises, did )ou ? A. I knew what stock he had. 
 
 (). Do \'ou take chattel mortj^agcs for e\erybod>- as soon as being told what stock they 
 have got ? Do you suggest that? A. I am guided b\- the circumstances. 
 
 O. Of course, that is the difference ; you have got to know the circumstances, haven't >-ou? 
 A. Each case stanfis on its own bottom, j'ou know, 
 20 O. Then you have got to find out the circumstances of each case, haven't you? A. It 
 
 depends upon the position my client is in the matter. 
 
 O. 'Ihe first thing, before you can give advice, is to find out the position of your client and 
 the debtor, to consider what ought to Ix' done? A. It depends upon the object to be accom- 
 plished. Sanford & Co. had a debt there of $4,700 ; and they wanted to get their money. 
 
 O. If there was a large surplus in the business it would not be a way to get the money, by 
 chattel mortgage, would it? A. I thought that was the best way to get the money. 
 
 O. Y(Hi would not think that was the way to go to work to get a debt from a man with 
 capital, would \-ou, or with a surplus in the business? A. If he was willing to give a chattel 
 mortgage. 
 30 O. I want you to be candid with mc. Do you pretend to tell me, if you do swear it and 
 
 we will end it now ; do you pretend to tell me that you would give advice to take a chattel 
 iTKjrtgage from Miss Cheyne without imiuiring at all what were the circumstances, what capital 
 she had, what her liabilities were, or anything of what kind? Is that what )-ou want us to 
 believe? .\. What I would look at in the case of a loan. 
 
 O. Answer my question. A. I clon't know what the question is ; there are about four 
 branches. 
 
 O. Did you give j-our advice without making inquiries? A. If this man had sufficient 
 asscis to borrow $4,700 on a chattel mortgage and could borrow mone\' on a chattel mortgage, 
 Sanford & Co. could get their money in that way ; and that is all I conceived to be my duty in 
 40 the matter. 
 
 O. What necessity was there for them getting the money in that waj if the party were 
 good ? A. It was a large amount of money, and it seemed to me if he raised the money on the 
 chattel mortgage and thev got their money, that would be the best way of their getting it. 
 
 O. Would you give that advice, or did you give that advice without making any inquiry as 
 to the character of the part)-, that is to say their capital or liabilities? A. I gave Mr. Greene 
 this advice, that I thought if Mr. Cheyne had sufficient assets there to justify a loan of that 
 
 
53 
 
 amount that that money could be burrowed in that way ; so that the only question to be con- 
 sidered in my mind of course was what amount of assets had he there, and what amount would 
 he rwjuire on it, and was he wiilin<f to .t;ivc a chattel mortgage. 
 
 Q. And you gave all this advice without making any inquiry as to the circumstances of 
 Miss Cheyne, her capit.d or liabilities ? A. I discussed with Mr. Cheyne the amount of busi- 
 ness he had been doing and the prospect ; he had only been in business about six months, that 
 the fall trade was slack, and that the business was going to improve. 
 
 Q. You gave this advice without making any inquiry about what Miss Cheyne's liabilities 
 were or what her cajjital was ? A. No, I said I would go in and rliscuss these matters with Mr. 
 10 Cheyne, and I did go in and discuss that with Mr. Cheyne. 
 
 Q. Then you did discuss what her liabilities were with Mr. Cheyne? A. I did not. If I 
 had asked Mr. Cheyne what her liabilities were, he would have told me that they were compara- 
 tively nothing ; that was the impression he gave me at the time. 
 
 Q. Did you discuss them with him ? A. No, not at all, except about Caldcr. 
 
 Q. Y(m did not discuss his liabilities with Mr. Cheyne ? A. No. 
 
 Q. Or what this woman's capital was ? A. No. 
 
 Q. Never asked Mr. Cheyne any of the ordinary particulars that an ordinary solicitor would 
 ask his client about the security? A. I did ask him about the security ; 1 asked him about the 
 assets. 
 
 20 Q- But you did not .say anything about the liabilities? A. The impression I had that day 
 
 was that .he Sanford Co. were almost the entire liability. 
 
 Q. Did j'ou ask an\' questions? A. I certainly asked a luunber of questions. 
 
 Q. Did \ou ask any questions about the liabilities? A. 1 did not ask him for a list of his 
 liabilities. 
 
 Q. Did )'ou ask any questions about the liabilities? A. No. 
 
 Q. Where did you get the impression that there were no othc" creditors ? A. Mr. Cheyne ' 
 was telling us he could pull through all right if he could only make a lonn in that way, it would 
 ease things up wonderfull\-, and that he had only been s-x months in business. That is the way 
 I got the impression. The only liability he mentioned was about Calder's that that was not 
 30 large, that he owed Calder less than $200. 
 
 O. Did you sec a memorandum list, taken dow.i at the time, lying on the desk ? A. No, 
 I did n;t. 
 
 O. Mr. Greene's own writing ? A. I never sa\/ it, no. 
 
 Q. And so you gave advice to your client Mr. Greene in this transaction with no other 
 particulars than you have told us, is that it? A. Yes. 
 
 O. And \ou say that the debtor, Mr. Cheyne, was anxious to get the mortgage that day ? 
 A. He was ver\- anxious to get the loan. 
 
 Q. Now is it a matter of fact, because both he and Mr. Greene swore that he would not 
 consent, to give it at all that day, and he went back to Toronto ? A, No, he said he would rather 
 ^ogct it in Toronto if he could get it, 
 
 Q. That is not what Mr. Greene or the debtor say ; they both say that he declined the first 
 day to give it. Nobody said a word before about going back to Toronto? A. He said he 
 thought his own solicitors, Messrs. McKeown & Fraser, could raise the money for him. Ihat 
 was the impression he created in my mind. 
 
 O. Then he was not so eager to get it from you as you have told us a minute ago ? A- 
 He was verj' anxious to get the loan. 
 
:on- 
 
 3Uld 
 
 s of 
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 thal 
 
 ities 
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 uld 
 
 the 
 
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54 
 
 Q. Not from you ? A. The second day he came up he was anxious to get it from us. 
 
 Q. The first day? A. He was eajrer to get a loan, but would prefer to get it in Toronto, 
 lie said he thought he could arrange it at a less rate of interest in Toronto. 
 
 O. That is the only reason he put it off the first time ? A. \'es. 
 
 Q. That is the only reason it was put off; is that so? A. That is the only reason he gave 
 for putting it off I suppose his reason now was to consult Fraser & McKcown. 
 
 O. You still have further information to give us? A. You ask me what was his reason, 
 and I told you the reason he commum'cated. 
 
 Q. Where is your first entry, in connection with this matter, in your bl.ttcr; is this your 
 lo blotter? A. Yes; 31st October. 
 
 O. " To long attendance with Mr. Greene, and afterwards at your office and advising," 
 .something or other. What do you mean by that " To loiig consultation with )-our Mr. Greene, 
 " and then afterwards at your office?" A. That word long, you will see was filled in there, 
 interlined afterwards ; that is intended to qualify the whole item. Ik-fore our charges are put 
 in the individual accoui-ts, our book-keeper comes in and goes over them with me at the end of 
 the month. 
 
 Q. Is that your writing ? A. Yes. 
 O. Is that "long" your writing? A. Yes. 
 Q. Yf)u put it there ? A. Yes. 
 20 O. " To long interview with Mr. Greene, and afterwards a further interview at his office," 
 
 that was made at the time? A. Yes, "long" was put in aftcrward.s. 
 
 Q. What do j-ou mean by afterwards? A. I suppose it was put in two or three days aftcr- 
 ward.s. That is my imi)ression. 
 
 Q. You would remember it better two or three dajs afterwards than you vvould two or three 
 months afterwards ? A. You can see that the figures arc changed there also. 
 Q. You increased the charge, did you ? A. I increased the charge. 
 
 Q- Jt began to grow more \aluable as time went on. You would remember, I suppose two 
 or three da>'s after this entry ? A. y\s I sa\', our book-keeper is in the habit of going over these 
 entries at the end of each month with me, and some charges I reduce and some I increase. 
 30 Very frequently I do not fill in the amount at all until the end of the month. 
 O. I see you charge for advice again on the first? A. Yes. 
 
 Q. Attendance on Mr. Greene and with Cheyne and advising. Then you charge again, I 
 see, on the same date, Sanford for drawing agreement to give further securitj-? A. That is 
 November 1st, }'es. 
 
 O. Did you search executions ? A. ^'es. 
 
 O. On whose behalf? Not Mr. Wilson's, because 1 see your firm was not acting for Mr. 
 Wilson. On whose behalf did you search the executions? A. I was interested in knowing that 
 there were no executions. 
 
 Q. On whose behalf di(' \ou search executions ? A I suppose on my own behalf as much 
 40 as an_\bf)dy's. 
 
 O. And chattel mortgages you searched? A. I searched chattel mortgages. 
 
 O. On whose behalf did you do that? A. I made the charges to Miss Cheyne there. 
 
 Q. On whose behalf did yn\ do it— Miss Cheyne did not want you to search executions for 
 her, she had no interest, she knew tliat there were no executions ? A. I did it on mj' own 
 behalf, and on behalf of Sanford & Co., in this way -Sanford & Co. were supplying him with 
 goods, etc., and thex- wanted to know whether everj-thing was correct, etc., I suppose. The}- had 
 
 
ItltO. 
 
 ja\e 
 
 son, 
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55 
 
 ic 
 
 taken an agreement to give a mortgage and that searching was the next clay. I telephoned to 
 our agents. ' 
 
 Q. you >,uw think that u as for Sanfords ? A. That was to find out the true position, 
 y. Sanfords were the real parties interested in the whole deal ? Wilson uas the mere 
 .nachme you used ? The Sanford people guarantecrl this mortgage? A, I haven't said that, 
 y. Dk\ they guarantee it? A. Sanford & Co. executed that guarantee. 
 Q. At whose instance? A. At my suggestion ; at my request. 
 Q. Who drafted it? A. I think Mr. Hobson drafted it. 
 
 Q. Did )-ou read it before it was signed ? A. F glanced over it ; I supp . ;e I read it 
 Q. You witnessed it, I see. A. I witnessed it. 
 Q. Did you read it ? A. I glanced over it. I presume I read it in that waj- 
 Q. /^eac/s g,anu^fre, Is that true? A. It is not true in this wa>-. that such an agreement 
 never had been made. 
 
 Q. Then it was false ; it was not true? A. I don't want to put it in that way 
 
 Q It was either true or untrue ? A. That is the usual v ay of drawing a guarantee. I pre- 
 sume that form as taken out of Bryant's conveyancer. I got down to the office very late that 
 night, and asked Mr. Hobson to draw the agreement. 
 
 Q. Then there was no agreement with anybody to give a guarantee? A. There was no 
 agreement with anybody to give a guarantee. 
 20 Q. Who insj)ired it then ? A. I did. 
 
 Q Who agreed with you to give it? A. Mr. Greene was quite willing. Mr. Gree.ie sai.l 
 he hafl no doubt the stock was there, and that the security was good. 
 
 O. On whose side were you a .ting? A. For Sanfords. 
 
 O. Was it for Sanfords that yon were taking this bond from themselves? A. No it was 
 just as I explained. 
 
 O. Who was it to protect ? A. I'liat is a hard job to say who it was to protect. I think I 
 expla.nec before how that was given. 1 said the amount was large ; that the value of the 
 security depends upon the amount of goods there ; that stock and that, of course, could depre- 
 ciate ; atu then, as this Klea has originated with me, although I am under no liability in the 
 30 inattcr, still I thought it was fair to put it into my hands to be delivered, if I saw fit, but not to 
 be delivered unless I saw fit. 
 
 O. That is to sa)', if there was any necessitj for it, it was to be protection for Wilson • if 
 there u as no necessity, it was not to be a protection ? A. It was left to mv discretion 
 
 O. .\iKl supposing there ha<l been a shortage and had been a loss, would you use the bond ' 
 A. I uould have considered the matter at that time. I cannot say what I would have done 
 
 (J. I hat was left entirely t<. you ? A. I was at liberty to deliver that guarantee if I saw fit 
 
 O. P.verythmg was left pretty well to you by Mr. Wilson? A. \ot b)- Mr. Wilson 
 
 O. Oh, no, Mr. Wilson, you casually know him, I suppose? A. I know Mr. Wilson! 
 
 O. You did know him at any rate ? A. Yes. 
 
 O. And he had been a client for years of your firm and of the old firm of Walker Scott ? A 
 We have m,.de a few collections for him, etc. 
 
 O. He has told us here, I sec, in the examination that they had been doing his business for 
 yeans, that they were general solicitors for him, lending his money and doing all classes of busi- 
 ness. Have you got your books here? A. No. 
 
 O. I lave you an account with him in your books ? A. I suppose there is an account there 
 J supjjose we have lent money. 
 
 40 
 
ed to 
 
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56 
 
 Q. Your clients are so numerous that this little one you hardly knew as a client • is that 
 u hat you say A. As (ar as n.y recollection ^rocs. ue have not ha.l a law hill aL^ainst hin, lor thrcr 
 '.r fuur years hut .t may have been. Mr. Wilson- 1 lo.U after one part of rhe l.u.ine.s a, 
 >'^•^<••■ l<".l< after an.v matters like Mr. Wilson is interested in, of loans. 
 
 g Were you a witness in the (lihhons v. Wilson case? A. No I was not 
 g. Mr. Scott was a witness there.' A. \,, Mr. Scott was n<.t a' witness there- 
 g. \ou say that Mr. Wilson knew nothin- about the sale of this stock in T..ronto> \ 
 Nothniuthat I knowofabout it. «">onto. .^. 
 
 {}. Not a word said to him aliout it? A. Not that I know of. 
 10 g. V'ou sent Mr. Ulackley over? A. No. 
 
 g. Who sent him over? .\. Sent him tner where? 
 
 think^; d'id '^'"""'" '" '''''''" '''^''''"'""' ^^'•^^ ^""^ ^^'- '^'•'*^'^1^>' "ver to take possession ? A. I 
 g. Didn't consult Mr. Wilson at all about that? A. No 
 
 g. He really was ,iot interested ? A. I saw Mr. Jilackley and handed him a warrant but 
 I had nothm- to do after that until the monej- came in. ^varrant. but 
 
 ScotSt^d'Mr "T '''t " ''" "'"^ '' '^" ''"'' ' '^- '^"'^"^'"^ ^'^^ -'^ '" Toronto. Mr. 
 acott attended the sale m Toronto. 
 
 g. That is your partner? A. Ves ; I am out of tou n three or four days in the weel- nwl 
 20 never attend to those matters at all. ^ '""' 
 
 .0 pa?„ve™ ;;:i";;' 't^T '"' '■"" '" '■""" "'^-"'•'" -"'" "■= ="•""" "-'«•■'«'-• 
 
 g. And that you kept j-ourselves? A. Ye.s. 
 g. That was to you ? A. Ves. 
 
 » J.i uXuZ r A."v:::' "*' '" "" ""'-""* '""" '"""■"■=' "•™'«^'«^- "■'"-' -j™. 
 
 finn ^M ™:;l"i,""" "" '"'""""■ '■""'"^ "' '■•"" ""■'■•"^ '"-^ ^ -^^ ' "■-■''' " I— ">■ -">■ 
 g. Did Mr. Scott know >-ou held it ? A. He did not. 
 g. You came down with Mr. Che\iie to Toronto' A Yes 
 
 Q And did not discuss at all business on the way, you say; A. Very little discussion 
 g. No discussion at a'l at the house either? A. Very little. 
 g. Any ? A. There was no discussion at the house, 
 g. Or on the way down ? A. Very little. 
 
 g. Any ? A. No ; we mi-ht have talked about business a few nn'nutes There we,-,, tl,.- <n 
 40 of us to,et cr. 1 do not know who ti,e stranger was. and we three uere tethl ''"" 
 
 lccti,2'af r!l ' ''''' ^' '" • ''■ '■'^'^'■^ '^ ""^'^"'^ "•" b-i-- passed in n.y recol- 
 
 g. When did >ou first find out that there were other unfortunate creditors bein, left in this 
 
57 
 
 mi^in'Tf"" ']?' '"'ir'r' *'r ^""^^^-^^'"'" •"•' >■"" •'-- t'>='t ? A. I h.-a..l that there was a 
 iiK-'ctiii},' f)| Lifditdis c.illi'il III I (in into. 
 
 O. Voii were surprised ? ,\. \'cs, roinplftcl)- surprise!. 
 
 O. Vol. alwajs an- s„r|.iise.l about flu-sc things, a.i.l you were as d.ilv surpris.-.l as usual 
 
 who., you f;..,n.I ,ha, .hnv was a iiuvtin, of a-e.litors ? A. . .lo.i't think you .h'uM put itZt 
 
 clays^ftcrwards: ' "'"" ' ''"'"'''' ^^ ''"' '"'' ^"" ''""' "'"'"' '^ ' '^ ' ^"''l""^^' " "'^^''^ '"• ^''^ 
 locemlui .?'"" "I/''" '""','""";■ ^"". "'"'' '''"""^"' J'""'"'-" = >'"" '^•""*- •'""" ■•''■"-'« ♦•'-• first ..f Dc- 
 
 A That •:;,;: Xi:^:!:^^'' ''' "'^""'^ "^ ^^^•'""■■^- ■-' ^"^ -"'•"^'- '-•^•' '--«^'«^^ 
 
 (J. That is two or three weeks after the mectini,' <.f the unfortunate cr. .iitors ? A That 
 was two or three weeks. 
 
 O. And you i^rot another liiatti'I mort^a^'c? A. Ves. 
 
 O. 1 hat was after thi- order ma ie in the injunction action ' .A \ es 
 
 O. And you a.lvised, I beheve. that that new deal iKlped you rather, that x o,, could sell 
 nndei a .lew .nort.^a^re ; j-ou were not disobeyin.^^ the injunction of the court, an.l you were 
 making,, your title still stron.,a-r? A. I ha.l no such idea in view at the time 
 
 O, I h,-it was an after tho,l^du^ I believe ; you have e.vpressed that I believe ve.y stron-rly 
 .o ha >..u Uv.u,ht you ,ot ,.er the eftbct of this consent or.ler by sellin, under the San^; J 
 ou.cr? ,\. .\,,, I never put it m that wav. 
 
 are cL!.Ir' -'t'r'r'"''^' '•''"'' '^''''^'^'' ''■ ^^ ^''^ '">■ ' '"^^"--' '* '^"•mally you 
 arc entirely mistake- about it. .> / " 
 
 Q. -^ll '■'".^•lit. I am very .^hul How d.,, you make the mort^a^e payable? A It w-,s 
 l.ayabie forthwith, as the debt was payable that \ /ay. - - 1 > '°'^ ^\- 't uas 
 
 H- l'-; ''"'"m k'' '.'" "'' "^"^ l^ccembe.-, and when did 3 on take possession under it? A 1 
 think It would be about-I couldn't >ell that. If you will tell methc date of the sale 
 
 P-M,e iuuTa ! I'r ■' , '■'; ,'";"■ ' "^■'-'K^^-'"'"-^- ^'^ ^•''•- ' ^ho^^^'^t Mr. HIacklcy' had the.se 
 p.ipcrs anti I asked him, but he hadn t -^ot them. 
 
 '°d.n. ?■ '"'!'"' ""■'' ''T '"^l"' ^■"" ■"'"' '''" '^'^''"''' '"°''^^'*''^'^ ^ '■^- -^'^""t a week after. The 
 lav the mortt,mK'e was taken he promised to make regular .-emittances. Mr. Sweet had seen 
 h.m in loronto and he als., promised to m.ke prompt remittances, and he did not d. , it • and 
 they heard he was lakm.,- $300 to pay off aP outside mattei-o.itside of the business ai.o.^ther 
 
 6. Co. consulted j-ou about a customer in Toronto, a Miss Cheyne, that owed them $4775 that 
 w.thout niakins any inquiry a. to her position and capital, y.u. advised them to take a chattel 
 
 ..ort,a.c? A. do „„t put it in that way. . .-,• . rt -d ,he ar..un., of the stock and ho 
 
 amount of the.r debt, and as I say, the impression was created on me at that meetin-r that the v 
 were almost the whole body of the creditors thcm.selve.s. " ^ 
 
 40 Q. And you still tell me-? A. From things that were said. 
 
 Q. And you still tell me that you did not -ive advice as to what action thev should take a 
 recja.. s their customer, u ithout findin.^r „ut her position ? A. I did not strike any balance ' ' 
 
 lU MR. klT,ni..:,().C_0. anen I understand that your char^^es were made in the book- 
 V. ... It .c,.,in;,r into ,- -tails there-a,^.-n-nst the Sanford Company as to some of the ciuestions and 
 as to i he others against Miss Cheyne? A. Ye.s. ^ questions and 
 
was a 
 
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 That 
 
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S8 
 J. J. GREKNK, recalled. 
 
 Bv Mk. Ritciiik, O.C— O, ^'ou heard a stn-mcnt made by Mr. CliLyiie, that at one of 
 the interviews that took place in the Sanfonl Co.'s office prior to the i^M'vint,^ of the chattel 
 mort^^atfc that some case of Giblx^ns v. Wilson was referred to? .\. I did. 
 
 O. Is there any truth in that ? A. \o, sir, there is none. 
 
 O. He also made the statement that when the matter was beinij discussed Mr. Lees had 
 said .somethint,^ to the effect that the other creditors mi-ht kick all they liked, but that die\- 
 could do nothings and that he, Chexne, could comi)rumisc with them when he t^nt read)-. Was 
 anything' of that kind said at any of the interview s ? A. Notlu'nt,^. 
 10 O. Nothin<r to that effect? A. Nothini,^ to that effect. 
 
 O. Now, j'ou also heard him state that in the little list of liabilities which you had taken 
 down that these did not contain all his liabilities, because he told of some others which were not 
 taken down. What do you say as to that? A. Me gave me that as a complete list of his 
 liabilities. I think you will find, if you exnmine that slip, <^hat there is one added on that he 
 thought himself of afterwards. 
 
 Hl.s LoKOsiiii'- O. How much is contained there? It foots up to how much ? .\. $4,000. 
 
 Mr. Ritciiik. Q.C— It is first $3,700, and then there is added on $300 more, making a total 
 of $4,000. 
 
 Q. Is it correct that he told \-ou his liabilities exceeded that? A. It is not (referring to 
 20 Exhibit 8). 
 
 O. He also says tlwit he stated that you agreed to give him originall\- a credit of two ^ears 
 to the extent of from $3,500 to $4,000? A. It is false. We do not do business in that way. 
 
 C,j. Is it false both as to the terms and as to th.e amount ? A. It is. 
 
 O. On what terms do )-ou say >-ou sole to him originall>- ? A. He was to make us weekly 
 payments and give 'is weekly statements. 
 
 O. To render _\'ou weekly st.ucments ? A. Yes, he was. 
 
 O. Did he ever make _\ou weekly payments during the seven months he was in that 
 business ? A. He did not. 
 
 Q. Did he ever render you weekly statements ? A. I think he did. 
 30 O. il,nv man)' ? A. I think he may have rendered two or four or fi\e. 
 
 O. So that there was no specific period of pa)-ment ; he was to pa\- by weekl)- pa\-monts? 
 A. That was it. 
 
 O. bid yon understand whether he was to buy an)' other place outside of )'our firm = Any- 
 thing said about that ? A. There was no understanding he would not do it. As a matter of 
 fact I was told that he did. 
 
 O. And bought for cash afterwards? A. And bought for cash. 
 
 O. You have told us in chief that \;ou understood up to a certain time that )-Mur firm re|)re- 
 scnted at least m"nc-tenths of the liability. When ditl you become awar- that he had bought 
 more largely from outsiders? .\. \\h,;n he furnished me with the infonnation onijincd on that 
 40 slip of paper HCxhibit <S). 
 
 U. That was in II;inu'lton ? .\. In Hamilton. 
 
 O. Mr. Cheyne also said, though he docs not i)ut in so many words, that there was an un- 
 derstanding when you were there, or when \'ou and Lees were there; an understanding some- 
 thing that he was not to pay other credilvirs, that when he gave the chattel mortgage he was not 
 to pay other creditors. Is that true? W as there an)' such understanding? AV'Vhere was no 
 understanding to that effect. 
 
59 
 
 Q. Was there any a<:jrecineiit to that effect ; A. Tliere was not ; he was to be at liberty to 
 
 pay otlier creditors 
 
 do it ? 
 
 Q. What statement did lie inai<e as to paying others, if any ? A. About h 
 
 lis abiHty to 
 
 Q. Yes? A. He tlioiiLjht with tlie arrangement that was made with that chattel mortgage 
 that he would be able to pa}- it. 
 
 O. That was about $ioo, a week ? A. \'es. 
 
 O. He was paying $ioo, a week ; did he tell you or did )-ou get the information from him 
 as to how much he would usuall)' take in a week in the business he was carrving on ? 
 lo Mr. GlIiliON.s, O.C— I do not know that my learned friend should go in^to all this as a 
 
 .sort of re-examination. He went into all this in a different way originally, and now they have 
 had the lunch hour, and he should not go into ihis. There is nothing about this that he should 
 have gone over again. 
 
 Mr. Ritchie, Q.C— O. JJid you understand from him how much he was supposed to take 
 in a week? A. He made the statement to me that in good— when trade was good— he would 
 take as high as four and fi\e hundred dollars a week. 
 
 O. Then I see you took a second mortgage, which was made jxij-able forthwith. Cheyne 
 tells us that when Mr. Lees got it he intimated to him that while it was made pa\-ablc forthwith, 
 you were not going to proceed at once. Why did you eventually proceed? A. The under- 
 20 standing was that he would make us weekly pa\-ments ; that we would furnish him as he paid 
 with new goods. We were also informed that he paid $300. or thereabouts on a chattel mort- 
 gage on his wife's furniture. 
 
 Mr. Ritciiik, Q.C— Th.at is the defence, my Lord. 
 
 Bv Mr. GllUiONS, Q.C— .\nd what did you tell me this morning was the amount of the 
 liabilities that he gave you outside of Sanford's ? A. I told you this morniu" — 
 Q. Did you tell me it was $4,700 or $4,800, this morning? A. No, I did not. 
 Mr. RlTCllli:, Q.C— It was Cheyne made that statement. 
 Mr. Gihhoxs, Q.C. — Xo, this man made that statement. 
 W^lTN'Kss — No, ! beg j/our pardon, I did not. 
 
 Q. Didn't you tell me in my examination f.f you that the assets were nominally $9,000, and 
 that the liabilities he made $9,600? A. No, I did not. 
 
 Q. Did you hear anything about Burns & Lewis having a further claim of $800? A. I 
 did not. 
 
 O. Von did not hear an\thiiig about their having goods in there? A. About him having 
 goods in there. 
 
 Q. \'es? A. I understood they sf)ld Chev'nc. 
 
 0. You did not hear anything about their having $.Soo, of goods that were insured in their 
 name ? A. No. 
 
 O. Never heart! of that ? .\. No. 
 40 Q. Never heard of that until this minute ? A. This is the first time. 
 
 30 
 
 Mr. (illiHONS— My Lord, I want to put in the examination of the rlefendant Greene— I read 
 to him nearly all the (jucstions I want. 
 
 Mr. Ritciiik, Q.C._The\' nuist be taken down by the reporter. He cannot put them in 
 as he was not cross-examined. 
 
I 
 
6o 
 
 His Lokdshii'— You can jnit in those that you examined him upon, but you cannot read 
 them <fenerall_\' at lartjc 
 
 Mk. GllUioxs— I thinl< I read all of them. I think they were read at the time, and taken 
 down b)- he reporter, but I think I should note them. 
 
 His LoRDSllir — It was another reporter when they were read. 
 
 Mr. GlliliONS, Q.C.— I did not know the reporter had changed. I read to him, I think, 
 these cjuestions. 
 
 Mk. Ritciiik, O.C— I submit it is not fair to read them now. I took a note of them as 
 tliey were read. 
 10 His Lokdshii'— If he did read them he can take them down now, or he can recall Greene. 
 
 Mk. GlliliONS, Q.C.— I read all these questions to him one after the other, .so that I think 
 myself, in a sense, thej are before the Court when put in that wa)'. I refer to question 27. 
 
 Mr. Ritchie, Q.C— 23 to 29. 
 
 Mr. GlliliONS, Q.C— All ritjht ; I referred also to the inquirj- about the liabilities. 
 
 His Lorusiiii' — Yes, )()u asked him as to a contradictory statement of his about that, at 
 questions 69 to 72. 
 
 Mr. GlliliONS, 0.r.—(?//('.s7'/()« (^p, "He knew that j-ou were askin<j Cheyne to make an 
 assignment. You asked him in his presence? Answer, Yes, he knew. I do not know whether 
 he was asked in his presence. I think he knew I had asked him for it." 
 20 Question yo, " Did he ask any questions as to ,vhat, if any, cai)ital Cheyne had ? Atiswer, 
 
 He asked particulars as to his assets and liabilities." 
 
 Question 7/, " What .statement did he make as t(3 his liabilities ? Answer, Chejnc ijave him 
 the statement himself." 
 
 Question y2, " What amount of liabilities did he give him ? Answer, I think something 
 like eight thousand dollars. It might have been nine, perhaps eight." 
 
 Question 81. I put this to him. Suggest who ? He said a client of his. 
 
 Mr. RiTCllli:, O.C— Question So, " Had the solicitor told you he had found him ?" 
 
 Mr. GlliliONS, O.C. —Yes. " 1 lesaid bethought he could get a loan." Question 81, " Suggest 
 whom ? .Xnswer, He said a client of his." 
 
 30 
 
 Argument by Mr. Gibbons, O.C. 
 
 His LoRKSllll' — This is a case of difficulty, a case of somewhat conflicting evidence. The 
 difficulty of interfering is that tht duties of the Court are limited by special legislation, and I 
 have to .see that the case falls within the scope of the Statute. Anfl I do not think I can act as 
 might be done in a case in luigland, where there is a general Insolveticy and BankrujjtC}- Law, 
 U]jon a general pro|)ositi(jn that the transaction offends against the spirit of the law. I have to 
 (leal with the case on narrtnver grounds, and while the effect of the case is most effectual to give 
 a preference to Sanford & Co., and to ])rotect Wilson in his advances, it is by no means a satis- 
 factory state of the l;iw that such should be the case; and my intention is, while 1 feel compelled 
 to uphold the trans,u:tion, to let Wilson and the others ])ay their r)wn costs. It pcrhajjs is a 
 40 strict, sharp business matter, but not one which the Court will encourage by gi\ ing costs to those 
 who engage in it. 
 
 Now, what lies at the root of the whole matter seems to be this, that Cheyne was .ippro.iched 
 fi .it of all to make an assignment for the general benefit of creditors, and his action at that time 
 is a very strong circumstance to show the position that he took. I tokl them, he s.ij's, that there 
 was no necessit)' for an assignment, as I thought i could carr\' along all right, if I had felt it 
 
6t 
 
 was useless to carry on I would have assigned. I could carry on with their support. They said 
 if I would pay up they wcjuld carry mc along, and they suggested how 1 could pay up. This 
 was the alternative if I would not make the assignment. Then he says, if Greene had supported 
 me, as promised, I could have met the liabilities. Now, at that point, the intention in Cheyne's 
 mind was not to wind up b) an assignment but to carry on the business, and if the support was 
 given and the money advanced and the promises made— which he says were made— carried out, 
 then he could have carried on, not set his creditor at defiance, but have made the payments 
 which v'ould have reached not only the chattel mortgage but the other creditors. He says that 
 this was based on an understanding. This understanding is denied by Mr. Greene, but he .sa}-s 
 icthat there was an understanding that after he paid a few hundred dollars the mortgage would be 
 allowed to stand. I .said, I could not continue paying $ioo, a week until the mortgage was 
 exhausted. I said, if, when I paid $700, or so, the rest would be allowed to stand ovt r I could 
 carry on. Greene said he thought that could be arranged after I had made these paj'mcnts. 
 Then he said, when the whole amount was exacted, he knew he could not carrj- on. 
 
 Now, we cannot for all purposes consider Sanford and Wilson as the same. There was no 
 doubt a complication in the way in which the matter was worked out. This firm of solicitors, 
 Scott, Lees & Hobson, split themselves up so that Scott acts for Wilson and Lees acts for San- 
 ford ; but all that transpired with reference to Greene, for instance, I cannot impute to Wilson, 
 the knowledge that there was this understanding, not in writing, which Mr. Cheyne was relj'ing on, 
 20 that he .should be supported in a particular way. If that could be made out, and if I could find 
 that there was this promise to carry on in a particular way, which was \iolatcd afterwards, then 
 the whole thing would look very much like a scheme at the outset to entrap Chcjne into it. 
 One mischief which ought to be remedied .n a ca.se of this kind is that the Legislature should 
 prohibit all secret transactions about what manner of support should be given, and how a person 
 should be enabled to carry on the business, by enacting that all bargains of that kind should be 
 put in writing, so that in black and white it should appear what the nature of the terms was. 
 Here I find no enforceable agreement as to what the future supply W(juld be as between .Sanford 
 and Greene and Cheyne, it is all left to the contradictory rec(jllection of these people. Hut it is 
 evident that Cheyne went into this thing, not as argued by Mr. Gibbons, with a view to get on 
 sounder the cover and protection of this large mortgage, but with the idea that if the support were 
 given to him as promised, as he understood it was promised, at all events, he would be able to 
 carry on his business and the need of making an assignment or of winding up would be 
 obviated. Now, when Wilson is brought in it is no doubt a very suggestive thing that this was 
 probably carried out, not on the ordinary lines of a business transaction, but apparently on the lines 
 of this decision in Gibbons v. Wilson, that this sort of dealing was not within the statutory pro- 
 hibition ; and it may be that the (;yes were clo.sed, or iliat enquiries were nm made or not 
 communicated, at all events, to Wilson, which would give him the information which might have 
 been fatal to the transaction. He does not make encjuiries, but turns the whole thing over to 
 his solicitor, Scott. Then the money is advanced — no doubt the money is advanced by him 
 40 and is put into this thing, and is paid over afterwards to the Sanford ('om|)any, which pays him 
 in full. I do not think I need go into the subsequent dealings which took place, where the San- 
 fords exacted a mortgage payable fijrthwith, under which they sold and turned the money over 
 to Wilson, because the point attacked here is the mortgage for $4,700, as an invalid transaction. 
 I do not think it is upholdable on the evidence that the parties entered into it with a view to 
 defeat and delay the other creditors. The statement made by Mr. Cheyne that there was a case 
 covering the matter, that he could put the other creditors at defiance and go on in spite of them 
 
6a 
 
 and use this as a means to ^ain a cf>mi)osition and -^o on in his own way and his own time, is 
 denied emi)hatically both b\ Mr. Lees and Mr. Greene, so that I cannot find that that fact is 
 proved as pre-existing^ in the minds of those who were deah'nj,'. 
 
 Then the money was uiu|uestionably advanced, and the point is whether Mr. Wilson l<new 
 that that was money to be applied in any fraudulent way. The circumstances fall short. It 
 does not seem to me an ordinary business transaction, but it seems to have been prosecuted on 
 the lines that it was a lej^al thing to do to lend the money in this way, if there was sufficient 
 stock to answer it, and look no more and no further than that. That seems to be an unsatis- 
 factory state of the law, and it is the law ; and while I ha\e to dismiss the action, I dismiss it 
 lo without costs. 
 
 Mk. RlTCllIH, Q.C. — As far as costs, as far as the defendant Wilson are concerned, it is 
 ilifferent. 
 
 Ills LoKDSuil' — There is a security taken from Sanford to Wilson, which is a very 
 suspicious element. I give credit to what Mr. Lees says, that it was an escrow, still there it 
 was ; and if he has put himself in the hands of solicitors who do that, I cannot help it, and I 
 dismiss it without costs. 
 
 Mr. RnviIIi:, Q.C. — It mattered not if a solicitor communicated all these matters to the 
 party, still it would be upheld. 
 
 lll.s LoRDSIIir — Suppose this indemnity had been given. 
 20 Mr. RiTCIliK, Q.C. — In the same case, Gibb(jns v. Wilson, indemnity was given in that 
 
 case. And the case which came before His Lord , hip Mr. Justice Meredith, very recently — 
 
 His LoRDSilil' — I will not change on account of that. I think it is a case eminentlj- 
 requiring ventilation. 
 
 Mr. Ritciiik, O.C — I think your Lordship used a word, that it was not upholdable, I 
 think your Lordship meant that it could not be invalidated on that ground. 
 
 His LoRUSiiii'— Ves. 
 
63 
 
 EXHIBITS. 
 
 KXIIIHIT No. I. 
 Guaranty. 
 
 This IndkntukK, made in flupHc.itc this first day nf November, in tlic \ear of our Lord 
 one thousand ei^fht hunched aiul niiR'ty-fivc 
 
 Jktwccn The W. K. Sanford Manuf-icturinff Company {'limited), of the first part ; Joseph 
 Greene and WiUiam S. Duffield, both of the City of Hamilton, in the County of VVentworth, of 
 the second part ; and James I). Wilsoii, of the said City of I lamilton, Merchant, of the third part. 
 
 V^IIKKI'.AS one Kliza Barnet Chcyne, of the City of Toronto, in the County of York, carry- 
 
 loing on busit.ess as a retail dealer in ready-made c'othin^s has applied to the party of the third 
 
 part for a loan of $4,775, which she promises to pay with interest at the rate of 8% per annum 
 
 in instalments of $icxd per month, the terms of which are to be set out in a chattel mortf^age to 
 
 be made by the said l"li.'.a liarnet Chcyne to the party of the third part. 
 
 And Wiikukas the amount (jf the said loan is to be iiaid over to the parties of the first 
 part, creditors of the said E!iza Barnet Chcyne, and the parties hereto of the first and second 
 parts, respectively, have ;.g[recd with the i)art>' of the third part that they will [guarantee to the 
 party of the third part the repayment of the said moneys with interest at the times to be men- 
 tioned in the said chattel mortt,faL;c. 
 
 Now Tins Indknturk VVitnksseth that the parties of the first and second parts, respec- 
 2oti\ciy, in consideration of the premises and of the sum of one dollar ($1) to them in hand paid 
 by the })aity of the third part, hereby j^ua.-antee to the part>' of the third part the due payment 
 by I^liza Barnet Cheyne of the instalments of principal and interest secured by the said chattel 
 mort<rage, as and when the same shall become clue ; and the parties of the first and second parts, 
 respectively, hereby covenant with the jjarty of the third part, that the said Kliza Barnet Cheyne 
 will do, perform, and keep, all the covenants, provisoes and conditions contained in the said 
 chattel mortgage. 
 
 In W'itn'KSS Wiikkkok the parties hereto of the first part have hereunto affixed their 
 corporate- seal by the hand of their Sccretary-Treas. and the jjarties heretcj of the second part 
 lia\e hereunto set their hands and seals t!ie day and year first above written. 
 
 50 ,. . . W. E. Sankoki) Manukacturinc. Co. (limited) 
 
 (Seal.) 
 Ber J. Grkkne, Sec.-Treas. 
 
 JosEi'H Grkenk. (Seal.) 
 
 W. S. Dun-iELi). (Seal.) 
 
 Signed, sealed and delivered in the 
 presence of 
 
 William Leks. 
 
 
 EXHIBIT No. 2. 
 
 Agreement. 
 
 Toronto, November 1st, 1895. 
 To The W. E. Sanford Mfg. Co. (limited), Hamilton. 
 
 For valuable consideration, the receipt whereof is herebv- acknowledged, I hereby agree, in 
 40 case at an>' time I make default in the payment of my pre.sent or future indebtedness, or in case 
 
\ 
 
64 
 
 at an>' lime yoii (Ifniaiid tlie s;iine, that I will tjive you a (.food ..-id siiffici.-iit chattel rnort^rat^'C 
 ii|i<)ii all m\- present and future stuck in trade, and other floods and chattels, includin^i the stock 
 in trade and other [.joods iind ch.vttels connected with the present l)usiness carried on \ty nie 
 under the name of (he) lie iS; Co., or any future business carried on by me. And I will also 
 assi'Mi, transfer and set over to you all my i)r(!scnt and futun; book delits, d.iims and choscs in 
 action, and my present and future books and papers, as collaltiral seci.rits' for the pajnient of my 
 present and future indebtediH'ss to you, including' any sum or sums which you ma)' see fit to 
 advance for me, or on m\ behalf, or at ni)' reijuest, at an\- time. 
 Witness my hand and seal. 
 
 »o Witness : 
 
 William Lees. 
 
 Eliza H. Ciievne. 
 
 (Seal.) 
 
 -J i 
 
 >. 
 
 0^ 
 
 EXHIHIT No. 3. 
 
 ^ Extracts from Chattel Mortgage. 
 
 .. 4 „ frhis Indenture made the first day of November, 1895. 
 
 ,^ ' ', . hjctween I'^liza liarnet (■h':)'ne, of the ('it\- of Toronto, in the County of York, spinster, 
 
 hor<nnr4t<-''' called the mortL;;ii;or, of the first part ; and James \). Wilson, of theCit)- of I l.imilton, 
 in the Count)- of Wentworth, merchant, hereinafter called the mortf^ai^ee, of the sccoiui part. 
 k'Jnsideration $4,775. 
 I^ -Ci «)n i,roods rcferrcfl to in schedule " .\," as follows ; 
 20^ rAll the stock in trade and other jroods and chattels of the within named mort.c[a[Tor, includ- 
 '^i^ file stock in tr.ide and other |,roods anti chattels of the said mortgagor in connection with 
 ' the business carried on by her under the name of Che)nc & Co., on the witliin mentioned 
 ' |)rcmiscs. and comprising amongst other goods, t ady-made clothing and clothing in process of 
 Manufacture ; and also tweeds, cloths and tailors' trimmings, supplies and si 'dries and gents' 
 ff) ^irnishings ; also the shop and store furniture, fittings, fi.xtures, machines, tools antl utensils. 
 .*\ 2\lso all other goods and chattt'ls now or hereafter situate on the within named premises, whether 
 uQ' ... ^f a description similar to or difftieiit from the above. 
 ^ \t-Z I'rovided the mortgagor shall pay unto the mortgagee the said sum of $4,775, interest 8% 
 per annum, on the days following. The said principal sum to be repayable at the rate of $100 
 30 per week from the 4th of November. 1S95 ; the first payment to be made nth November, 
 1895, etc., etc. 
 
 EXHIHIT No. 4. 
 Extracts from Chattel Mortgage. 
 This Indenture made the fourth day of December, 1895. 
 
 Hetuccn V.Wv.ix Harnet Chcxne, of the ''ity of Toronto, in theCouiity of York,the mortgagor, 
 of the first part ; The W. IC. Sanford .Manufacturing Company limited;, the mortgagee, of the 
 second part. 
 
 Consideration $916.33. 
 
 On goods referred to in Schedule " A," as follows : 
 40 All the stock in trade of the within named mortgagor, consisting among other goods of 
 
 rea(')-made clothing, clothing in process of manufacture, gents' furnishings, cloths, aveeds, 
 
f 
 
 1^. 
 
 in 
 
6s 
 
 tailors' triminiiiLjs and tailor^' sundries and supplies, sewint,' machines, stoves and other imple- 
 ments, aiifl tailors' utensils, tools and ap|)liances, also the shop and store furniture, fixtures, 
 fittinijs and utensils, in< ludin;4 safe and show cases. 
 
 Also all other t^oods and chattels of e\er\- Uind, and whether of a description smilar to 
 different from those above mentioned, now or hereafter situate on the within premises. 
 
 Repayable as follows : 
 
 The said jjrincipal snni to be i)ayabie forthwith, together with interest at 8 per cent, pei 
 annum, as well after ,'.s before maturity, etc., etc. 
 
 or 
 
 EXHIBIT No. 5. 
 Order of 3rd December, 1895. 
 This Exhibit is printed herein at pages 58 and 59. 
 
 EXHIBIT No. 6, 
 Statement. 
 
 20 
 
 Messrs. Patterson & Cfi'y to 1). Blackley, .Agent. 
 
 To amt. of Stock re Chcyne & Co., 
 B)- shortages on finnishings. 
 
 Woollens, 
 
 Clothing, 
 
 Silk, 
 
 .\t 60 cts. on the $ 
 IntCiOst at 7%, 
 
 30 
 
 Credit 
 Deer. 21, by i ,h, 
 
 " note at 2 mos., 
 " " 4 " 
 
 •' " 6 " 
 
 Toronto, Deer. 21st, 1895. 
 
 $71 65 
 
 $8,202 52 
 
 57 63 
 
 
 16 00 
 
 
 20 00 
 
 
 
 $165 28 
 
 
 
 $,H,o37 24 
 
 - 
 
 4,822 34 
 
 - 
 
 75 00 
 
 $4,897 34 
 
 $1,607 44 
 1,084 13 
 1,096 67 
 1,109 '4 
 
 $4-897 34 
 
 Received settlement as above from Patterson & Co., anrl I hereby undertake, 
 
 The W. I''.. Sanford Co. f limited', to get a discharge of all prior encumbrances 
 
 ' ■ ■ ■' notes and cash diis day receixed from 
 
 is not perfect, and under 
 
 1 lie v\ . 1.. .T.unoiu V o. 111111111.11, 10 i^LL i iii.-iv.il ii_m„ -'I 1 
 Ciieyne stock, and undertake to return the notes and cash 
 Co., less amount of goods sold in the meantime, if title is 
 P.itterson & Co. harmless against any liability. 
 
 (Signed) D. BlackM'.v, 
 
 on behalf of 
 
 against the 
 
 Patterson & 
 
 take to save 
 
 40 
 
 D. Bla( Ki.r.v, 
 
 \gent The \V, K, Sanford Co. (limited). 
 
pie- 
 res, 
 
 p or 
 
 per 
 
 fnf 
 tlie 
 1 & 
 ave 
 
66 
 
 EX HI HIT No. 7. 
 Order Jor Payment. 
 
 Toronto, Nov. 1st, 1895. 
 To Messrs. Scott, Lccs & Ilobson, Hamilton. 
 
 Plca.-ic pay to The VV. E. Sanford Mf^. Co. (limited), the amount of their claim acjainst inc, 
 viz.: four thousand seven hundred and thirty and VV'o dollars ($4,730.69) out of the jirocceds of 
 the chattel mortj^aije t:;iven by me to J. D. Wilson. 
 
 Witness: (Signed) El. I/.A 15. ClIKVNE. 
 
 William Lees. 
 
 10 EXHIBIT No. S. 
 
 Memo, of Cheyne's liabilities referred to in exidence at pages 58 and 59. 
 
I8J 
 
 ^5' 
 
 ist inc, 
 cods of 
 
 IE. 
 
67 
 
 JUDGMENT AS ENTERED. 
 
 / 
 
 In the Ijigh OTouit of Justice. 
 
 (Sc.-il.) 
 
 lO 
 
 IJetween 
 
 BURNS & LEWIS, on behalf of themselves and all 
 
 other creditors of the defendant Chcync, 
 
 Plaintiffs. 
 
 AND 
 
 ELIZA BARXET CHEYXE, JAMES. D. WILSOX, 
 
 AXD THE W. E. SAXI'ORD MANUFACTURING 
 
 COMPANY (Limited; 
 
 Defendants. 
 
 20 
 
 ) Law Stami)s | 
 
 \ $i.;o. j 
 
 , . SATURDAY, JULY 25x11, 1896. 
 
 This action havini;- come .m loi- trial at Ost,n)()dc Hall, in liie City of Toronto, on the i6th 
 and 17th da\s of April. 1896, before the Honorable the Chancellor; upon hearing the 
 evidence, aiul'uhat was allc<:c(l l)y counsel for all parties, TllK COURT WAS I'LEASED TO DIRECT 
 that the said action be riismissed out of this Honorable Court without costs. 
 
 .Xnd this Court doth order and adjudije the same accordinL,dy. 
 
 Judj^ment entered this 25th da>- of Jul\-, 1896. 
 
 J NO. M.XCliETH, 
 
 J. B. folio 82, No. 47. Deputy Clerk. 
 
 NOTICE OF nOTION. 
 
 Take Notice that the Court of Appeal will be moved on behalf ol Uk- plaintiffs, on Tuesday, 
 the first da\- of Sei)tcmi)er, 1896, at 10 o'clock in the forenoon, or as soon thereafter as Counsel 
 can be heard, b\- way of apjical from the judunient delivered herein by the Honorable the 
 Chancellor, on the i7th day of .April, 1896, disnu's^^iiv^ the action without costs, and for an order 
 or iudL,nnent directint( judL;nicnt to be entered herein for the plaintiffs with costs upon the 
 
 3ogrountls : 
 
 I. That the said judgment is contrary to law and evidence and the weight of evidence. 
 
t 
 
 ft 
 
 I 
 
f" 
 
 68 
 
 th. \ The cvidaKe shows that the intention of the defendent Chcync, with the knowlcdL^c of 
 the other defendants, was to protect the stock fn.,n seizure by the other creditors, so that she 
 couifl carry on her business without paying,' her debts. 
 
 3. The defendants the Sa.iford Company procuredthcdcfenda.it \\iis,„i to make the 
 formal advance, but thej- stonri behind him and indemnified liim 
 
 4. The advance was in reality a preference by the debtor I., the Sanford C.-mpany an.l 
 should be treated as such. "1'"m>, ano 
 
 And upon other fjroiinds. 
 
 And Take Notice that in s- pp. ,t of such motion will be read the pleadings and i>roceedinL^s 
 .oherem, he evidence at the trial a - tie exhibits referred to. the jud,nnent of -^the llonorrb 1 
 C hancellor, and such other matter as Counsel may be advised. 
 Dated May isth, 1896. 
 
 Gibbons, Mulkern & Hakpek. 
 
 T^-Mf c T o ,, Solicitors for I'laintifls. 
 
 To Messrs. ScOTT, Lees & HoBSON, 
 
 , . Solicitors for Defendants Sanford, 
 
 And to 
 
 T. B. Martin, Esq., 
 
 Solicitor for Defendant Wilson. 
 
 20 
 
 REASONS FOR APPEAL. 
 
 I. The evidence in this case shows that the intention of the debtor Cheyne with the 
 knowledge of the other defendants, was to protect the stock from seizure by the other creditors 
 so that she could carry on her business without paying her debts. This was the inducement 
 held out by the Sanford Company and the solicitor for the mortgagee Wilson • and it is a case 
 where the intent to defeat, dela>- and hinder, was the real motive on the part of the debtor with 
 the knowledge of the mortgagee. Cheyne had no interest in giving a preference to the Sanford 
 Company, and had no desire to do so. What she desired uas to benefit herself uhich she woulrl 
 do by putting matters in such a shape that the other creditors could not interfere with her 
 business. This was the scheme entered into and suggested to her by the solicitor for the 
 •30 mortgagee. 
 
 Coitwalls V. Mulholland, 3 E. & A., 194. 
 Merchants Bank v. Clark. 18 Grant. 594. 
 Boyd V. Glass, 8 Ajjpeal 632. 
 
 2. The Sanford Company procured Wilson to make the forma! advance, but they stood 
 behind him and indemnified him. 
 
 3. It was in reality a preference by the debtor to the Sanford Company, and should be 
 treated as such, and relief given as if it had been a chattel mortgage from the defend.int Cheyne 
 to the Sanford Company. See particularly the remarks of Chief Justice Strong, Molsons Bank 
 V. Halter, 18 Supreme Court, page 88. 
 
 40 Geo. C. GiiiiioNs, 
 
 Counsel for Appellants. 
 
r' 
 
 and 
 
r 
 
 69 
 
 REASONS AGAINST APPEAL 
 
 OF DF.FKNDANT SANFORU CO. 
 
 The respoiulents The \V. Iv Sanford Manufacturing Coinpan)- (hinited) submit that the 
 jiici^mient of the Honorable the Chancellor, directing judgment to be entered for the defendants, 
 is right and should be sustained and this appeal dismissed for the following among other 
 reasons : 
 
 1. The findings of the learned Chancellor are on all points in favor of the respondents 
 and against the a|)pcllants, and are right and should not be disturbed. 
 
 2. The securitj' taken b\ the respondent James I). Wilson was made b)- \\a\- of securit)- 
 10 for a present actual bona fiile advance of money, and is therefore within the protection of the 
 
 third section of the Act respecting Assignments and I'references hy Insolver.t I'crsons, and said 
 respondent was without knowledge of any fraudulent intention (if an)- such existed) on the part 
 of the mortgagor. 
 
 3. The money so advanced by the said James D. Wilson to the said Eliza Barnet Cheyne 
 was paid b_\- the latter to these respondents, and such payment cannot be disturbed. 
 
 4. These respondents further submit that they took a subsequent securit)- on the same 
 subject matter, and sold anrl re; ' zed thereunder and paid the amount secured by the chattel 
 mortgage held by their co-resp.tndent James D. Wilson, and such payment can under no circum- 
 stances be attacked. 
 
 20 John J. Scott, 
 
 Counsel for the respondents The 
 W. E. Sanford Manufacturing 
 Company (limited). 
 
 REASONS AGAINST APPEAL 
 
 OF DEFENDANT WILSON. 
 
 Tlie respondent James D. Wilson submits that the judgment of the Honorable the 
 Chancellor directing judgment to be entered for the defendants is right and should be sustained, 
 and this Appeal dismissed for the following among other rea.sons : 
 
 1. The findings of the learned Chancellor are on all points in favor of the respondents and 
 30 against the appellants, and are right, and should not be disturbed. 
 
 2. The security taken by this respondent was made by way of security for a present actual 
 bona fide advance of money, and is therefore within the protection of the third section of the 
 Act respecting Assignments and Preferences by Insolvent Persons. This res|K)ndent had no 
 knowledge of any frainlulent intention (if any such existed) on the jjart of the mf)rtgagor, and 
 in fact, did not know until after this action was brought that his co-respondents The W. E. San- 
 ford Manufacturing Company (limited) were in any way interested in the matter. The bond 
 referred t>/ was handed to the solicitor for his co-respondents The W. E. Sanford Manufacturing 
 Company (limited) as an escrow, and was never delivered to this respondent, and until same 
 was .^buwn to him at the trial had nu knowledge thereof. 
 
t the 
 ants, 
 )ther 
 
 k'lits 
 
 iirity 
 ■ the 
 said 
 part 
 
 ;yne 
 
 ame 
 ittcl 
 uin- 
 
 thc 
 led, 
 
 and 
 
 :iial 
 the 
 no 
 md 
 an- 
 )nd 
 
 me 
 
f" 
 
 70 
 
 3. This respondent further submits that his co-respondents The \V. K. Sanford Mamifactur- 
 inj; CnmpHny (limited) took a suhscciuent security on the same >M!bject matter, ruid sold and 
 realized thereunder and paid the amount secured by the chattel mort^'aj,'e held by this rcsi)oiid- 
 ent, anrl such payment can und'jr no circumstances be attacked, 
 
 T. H. Martin. 
 Counsel for the r(;sp()ndi'nt James 1). \\'ils(»n. 
 
r 
 
 tur- 
 ;ui(l 
 11(1- 
 
7' 
 
 JUDGMENT. 
 
 No written rcasdns for the jii(Ijime-<t of the ("ourt were ^,m"voii by the Jiidi^es; but the 
 Jii(l<,'cs stated that they considered themselves bound by (iibbons vs. WiNon, 17 A, R. 
 
 CERTIFICATE OF DISHISSAL. 
 
 TIKSDAY, THE nth DAY OF MAY. A.I). 1.S97. 
 
 Hl-nWKKN 
 
 10 
 
 BURNS & LEWIS, on behalf of them.selvcs and all 
 other creditors of the defendant Cheync, 
 
 IMaintiffs ( Appellants ), 
 AND 
 
 ELIZA BARNET CHEYNE, JAMES D. WILSON, 
 AND THE W. E. SANFORI) MANUFACTURING 
 COMPANY (Limited), 
 
 Defendants { Respondents ) 
 
 This is to certify that the appeal of the above named appellants from the Jud^mient of the 
 Honorable Mr. Chancellor Boyd, pronounced on the 17th day of April, 1896, havin;,^ come on to 
 be argued before this Court, on the 24th day of November, 1S96, whereupon and upon hearing 
 (Counsel as well for the appellants a.s for the respondent James D. Wil.son and for the respondents 
 The W. E. Sanfoid Manufacturing Comp ny (limited), this Court was pleased to direct that the 
 20 matter of the said appeal .should stand over for judgment, and the same having come on this day 
 for judgment IT WAS OKDKRKD AND ADJUDGED that the said appeal should be and the .same 
 was dismissed, with co.sts to be paid by the appellants to the respondent James D. Wilson and 
 to the respondents The W. E. Sanford Manufacturing Coinpany (limited), forthwith after 
 taxation thereof 
 
 (Sgd.) A. GRANT, 
 
 Registrar. 
 
> . 4#. .