BANKRUPTCY COURT.

Auckland Star, Volume XXIV, Issue 210, 5 September 1893, Page 5

BANKRUPTCY COURT.

OFFICIAL ASSIGNEE V. BANKS.

This morning at the Supreme Courb, before His Honor Mr Justice Conolly, Mr John Lawson, Official Assignee in the bankruptcy of the property of John Edward Banks, of the Thames, a discharged bankrupt, brought an action against Mary Ann Banks and Edward Grifier Banks, both of Kamsgafce, England, and the Union Bank of Australia, claiming thab a certain sum of £400 be declared to be vested iv the Official Assignee in the bankruptcy of John Edward Banks.

Mr McAliater appeared for the Official Assignee and Mr Hugh Campbell for the defence.

The pleadings for plaintiff stated thab the defendants, M. E. Banks and E. G. Banks, are the mother and brother of J. E. Banks and reside near llamsgate, England. J.E. Banks was adjudicated a bankrupt on the 7th November, 1892, and received his discharge on or about the 19th December, 1892. On the 25th November, 1592, J. E. Hanks was notified by the manager of the Union Bank thab £400 had been placed to his credit. Bankrupb did nob disclose to the Official Assignee, or at any meeting of creditors, the receipt of this sum of money. The Official Assignee asked that the £400 be declared to be property vesting in him aa Official Assignee iv J. E. Banks' bankruptcy, and that the Union Bank be ordered to pay him over the amounb.

The defence was that the £400 was intended, by the defendants as a loan to J. E. Banks, bearing interest. About the 2nd of December, 1892, he refused to accept the amount, writing a letter to Edward G. Banks to that eflect. Paymenb was therefore countermanded. Defendants received notice of J. E. Banks' bankruptcy from him on the 26th November and 2nd Decomber 1892, and had full opportunities of informing themselves of the real naluro of the transaction, and that the £400 was nob divisible among J. E. Banks' creditors under hia bankruptcy.

During the opening of the case, Ilia Honor pointed oub that the case was practically a question of law, and the point wiiß whether the £100 was vested in the Official Assignee. Alex. W. Thompson, manager of the Union Bank of Australia in Auckland, was examined by Mr McAlister, and deposed that on the 25th of November last be renoivod a telegraphic remittance from the London offico in favour of J. E. Banks, for tho sum of £400. Mr Banks, who resided ab tho Thames, was notified the same day that tho amount would be banded over after satisfactory identification, and tho letter was acknowledged by Mr Banks on the 29bh of November. Witness again wrote to Mr Bauks on tho 2nd of December, statin? that it had come to hiß knowledge that he, Mr Banks, was adjudicated an insolvent, and tho receipt or discharge of tho Official Assignee would be necessary before tho Bank could hand over the money. The money was in the bank to Mr Banks' credit ab this time. Witness received a letter from Mr Banks dated sth December, stating that he had received no advices from London, but advising witness to retain the money for the benefit of the Bonders until further notice. He received a letter from Ruesell and Campbell on the 6th January instructing him, on behalf of Mrs Mary Ann Banks, nob to pay over to Mr J. E. Banks, or tho Official Assignee, or any other person the £400. From tho 2nd of December until the date of receiving the letter on behalf of Mrs Banks he was prepared to pay tho sum to tho Official Assignee, and had the Official Assignee walked into tho bank between those dates he would have got tho money. On the 7th January witness informed Messrs Russell and Campbell that their letter was noted without prejudice. On the 24th February witneßs received a cipher cablegram from the London office countermanding payment of the letter of credit. On tho 10'bh of May, Messrs Russell and Campbell wroto demanding the money on behalf of tho defendants, and informing witness that power of attorney had been received. He replied to the letter on the 17th May that the payment of the money had been stopped by the London office. On tho 24th June he received nciphor tdegram from the London office that the stoppage was withdrawn and to pay the amount to Russell and Campbell if he could legally do so. Witness received a letter from Mr Lawson, the Official Assignee, on the 12th July, claiming tho money, bub prior to that Mr Lawson had a verbal communication with witness claiming tho money on bohalf of the creditors. Witness had a second communication from tho Official Assignee on tho 21st July making a formal demand for the £400. On the 24th July witness replied that ho understood a statement of the case was to be placed beforo Mr Justice Conolly, and ho awaited His Honor's decision the matter. Then tho writ was issued and the money waß brought into court. Witness was cross-examined by Mr Campboll. Heeaid prior to the obstacle of the Official Assignee there was no obstaclo of payment to Russell and Campball, coupled with tho fact of bankruptcy. Witness produced a fir9t cable despatch of 25th November, 1892, advising him to pay on credit J. E. Banks the sum of £400, present address Thames. Mr Campbell opened the case for the defonco, and produced a letter from the remitter of the money. This letter was received the day before the bankruptcy, and stated that hia request for monoy could nob bo roapondod to. Mr Campbell submitted that tho money was a loan, nnd was received after his bankruptcy. His Honor said that there wa3 no difference between a loan and a gift.

John Edward Banks gave evidence as to tho various letters, and wns cross-examined by Mr McAlister. Mr Gerald R. H. O'Hallornn, corresponding clerk ab tho Union Bank, gave evidence as to the writing and time of posting a letter to J. E. Banks on the 2nd of December.

Argument of counsel then commenced and was proceeding when we went to press.