THE COLEMAN BANKRUPTCY.

Auckland Star, Volume XLIX, Issue 168, 16 July 1918, Page 2

THE COLEMAN BANKRUPTCY.

LAWSUIT OVER £360. WELLINGTON PARK DEAL. i A TANGLE OF MORTGAGES. An action arising out of the bankruptcy of the late WUliani Colcman solicitor, -was begun at the Supreme Court this morning, when the trustees of the late John Owen, of Auckland, proceeded against the Official Assignee, as administrator in Coleman's estate, to determine the disposal of certain moneys. Mr. J. R. Reed, K.C., and Mr. W. D. Anderson appeared for the plaintiffs, and Mr. R. McVeagh for the defence. The facts of the ease, which were agreed upon between the parties, centred in Coleman's connection -with the Wellington. Park estate, Tamaki West. Mr. Reed stated that the late Mr. Thomas Morrin, who formerly owned Wellington 3Park, had mortgaged it to the Auckland Savings Bank for £9000. and also gave a second mortgage to Mrs. Morrin for £4760. Mrs. Morrin, in turn, gave a sub-mortgage to the trustees of the late •Mr. A. H. Morrishy for £1250. Coleman was solicitor for these -trustees, who "were not resident in Auckland. Mr. Edward Coleman, who was m his brother's office, and Mr. Owen had both suffered loss through Morrin, and they decided to recoup themselves, if possible, by speculating in the purchase of Wellington Park. The two Coleinans wrote to Mr. Morrisby's trustees and suggested that the latter should sell the second mortgage for the amount of the submortgage upon it (£1250). This was agreed to. In 1905 the Savings Bank sold up the property. Edward Coleman and Owen, having a lead over other 'bidders, in consequence of the second mortgage transaction, got the property for £9550. They .paid the Savings Bank £2000 and gave a mortgage for £7000 Snore. A memorandum to the Morrisby trustees was executed, but this had been lost. • It was worthy of notice, remarked Mr. •Reed, that throughout the correspondence with the trustees Edward Coleman .accepted full legal liability in this matter, whereas William Coleman's letters invariably assumed that the trustees ■had lost all their rights in the matter. ■and that the debt was merely a debt of 'honour. A month or two later William Coleman .acquired hie brother's interest, which he held till his death in 1915. In the interval he gave a mortgage for '£4,600 on the property to one Louisa Jane Harris. This was done with the consent of Owen's trustees, but Coleman appropriated the whole of the money to his own use. THis transaction, however did not come into the present proceedings. After Coleman's death, proceeded counsel, the Morrisby trustees wanted the £1,250 owing to them, and in due coarse the Official Assignee took a course that Ted Owen's trustees (the present plaintiffs) to pay the whole of the money. Later the Assignee seemed to realise that he had made a mistake, and it was then agreed that Wellington Park should be put up for sale, without prejudice to the parties' rights. It realised £18,250, and after the Savings Bank's first mortgage claim was settled there remained £10,370. If there had been no obstacles in the way Coleman and the Owen trustees would have taken £5,188 each. The Assignee agreed that £4,825 due on the Harris mortgage should be paid first out of Coleman'e share. This left £360, which the plaintiffs now claimed should be used towards paying a half share in the £1,250 due to the Morrisby trustees. The Assignee, on the other hand, claimed that the plaintiffs were liable for the whole £1,250, and that the £360 was an ordinary asset in Coleman's estate. Mr. Reed went on to submit that Edward Coleman and Owen were partners in the speculation, ana that even if they were only co-owners, the administrator could take only the bankrupt's interest. He also claimed that partnership creditors had precedence, and that the £1,250 was a partnership debt. Legal argument is proceeding.