DEBT TO WIFE.

Auckland Star, Volume LXIV, Issue 204, 30 August 1933, Page 10

DEBT TO WIFE.

BANKRUPT ESTATE. ADMISSIBILITY QUESTION. (From Our Ovrn Correspondent.) HAMILTON, Tuesday. A motion for an order reversing the decision of the Official Assignee in rctus- ! ins to reject a proof of debt by the Bank of New Zealand, the wife (Mrs. Taylor) and the son (Ira Taylor) in the estate of Joseph William Taylor, engaged the attention of the Supreme Court at Hamilton today. Mr. Justice Smith presided, and six counsel watched tne interests of the various parties. The circumstances of the bankruptcy of J W. Taylor were explained at length bv Mr. H. E. Barrowclough. At the time of the bankruptcy Tayjor was encased in farming at Mornnfiville. Hie wife was a daughter of the late Alexander Bell, who approached his son-in-law and pursuaded him to take over a property at Ohaupo, over which he had a mortgage of £25,000, and which was in arrears. Taylor then became the mortgagor of the property for £'20,00 U. ; At this time Taylor had a small overdraft at the bank. No interest was paid ] by Taylor to hie father-in-law. Shortly afterwards Bell died and under his will he directed that this mortgage of 1 £25,000 be bequeathed to his daughter, so that Mrs. Taylor became mortgagee • of her husband. 'There was a condition that she pay £5000 in cash into the 1 estate. Mrs. Taylor then entered itltso ■ arrangements for raising the necessary ( £5000. Finally this money was paid by ' the bank and 'debited to her husband's ' account. . ■ Taylor filed his petition in bankruptcy, and when creditors were called 'upon to prove their claims Mrs. Taylor proved for £25,000, plus accumulated . interest, which brought her claim to about £34,000. Mr. Barrowclough held that the bank had recourse against both hue band and wife. If the wife was allowed to participate in the estate to the extent she claimed she would take virtually all the free assets and nothing would be left for other creditors. Mrs. Taylor and her husband were jointly end severally responsible to the bank for £7561. Counsel submitted that the wife should be admitted as a creditor only after other creditors had been satis- | fled. I The case resolved itself into lengthy legal argument and submissions.