DISTRICT COURT.

Press, Volume XLVIII, Issue 7847, 25 April 1891, Page 2

DISTRICT COURT.

Friday, Aphil 24. (Before Hia Honor Judge Ward). IN RE W. DE B. WILSON. This was a bankruptcy c-.se heard * Ashburton on April 7th, and fully £ ported. witaQn,wbotaafc-tnQ_,hiito ovewiraffc -v-rltl__ the I_-zvn.l- o£ J_.u«.tar_il&aiatf £2500. 00. Sepbenaber 23r_ tl__ Bank "**»*^ t man in pouosaioD. __. Roaroatee wastw Kiven to the Banfe Oy Joseph BentiY{_ -araier ac Southbridge and wltneaV father-in-law), and Glen and Mitchell The guarantee was signed in J. Ore. office, and Benny gave Orr a bill for sm to bo considered au indemntacation to On and Mitchell and Turner against aqy loss on Clio cheep when the; came to bo niiy by the Bank. Orr and Mitchell also signed the guarantee- to tho Bank. At thi. time there were bills current In Orr's knds t. the amount of 10_ In the £ on theaccaant witness owed him. On the day t&j auarautee was signed bills were glvea to Orr and Mitchell for the full amount ol their accounts. Orr and Mitchell BUt?|e. quontlycamotobankrupfc'shouseaiid&akea him for choquea for the full atnoant ot their accounts, and JS4oeach commlMion, Cheques were given, and tha billdestroyed by Wilson, who filed about five or six weeks afterwards. At the time _ta made arrangements with the Eauk Ms cheque, for dtabursenocnts were to hg countersigned by Orr aud Mitchell. The question of law whether tho agree* ment entered into with Orr and Mitchell

or whether the cheques were paid with the view of giving Orr aud loltohelLM creditors, the preference over tho otbar creditors was argued before his Honor, Mr Kussell appeared for the OiSckl Assignee, and Mr Harper, with him Mr Wilding, for the creditor., Orr g,a<J Mitchell.

Mr Harper opened tbe case, and, having stated the facta, said his first point waa that there was no fraudulent p-eferenee, inasmuch as that Orr and Mitchell wcro not preforred, as a matter of fact, ia -.n. way in the result. The bankrupt's account was overdrawn at the Bank to (the full limit of the guarantee and there were no funds which would go to the creditors from th© Bm% and there would also have been no funds to goto them bad these mid eh .c s nea vM been paid in, Osv anSfMlttfha'il.'&tva-.tyft paid 20a in the _3 over and abova otluif creditors, and it had t© be shown that (fed creditors were preferred apart from t&a question of intention, or motive, ot" ti#. on the part of the debtor to prefer. Cases similar in character were quoted bylearafd counsel to support his arguaien. tilt. assets rouefc be taken away from the othss creditors to show fraud, and in the git* sent case nothing of the kind bßppe«e4 Orr and Mitchell got no advantage oves the other creditors. .

His Honor said he understood Wt Harper's point to be that what was dsn# ila not In any way deteriorate t!h® pmpeofe ol the other creditoi'B. Mr Harper replied in the alSrmstife, and added that the Bank's debt was not increased, by the amount ol thise and therefore tbe other creditors wata tm hi any way hurt, Tho funds tetean by Orr and Mitchell from the Bask had Men replaced in the Bank andertfiegaarantee, and <bould not In any possiblttty go amongst the credlsore, file cheques given were signed fey Orr and Mltetteli, besfasi hy Wmon, and Orr find EHcteoll wsif responsible. Then the agree* ment made by Wllgon with Or*-* and Mitchell, by which he waa to mf mam a cocaml-saion, and ■ th»lr .*_&• was to enable them to hjalj© fiime? advances to th© debtor to earsy m W business, and waa not a frauctotaaC tiaWr action. Bill, were given at the s*W« time aa the guarantee, and •»©» mna in reefctacatioa ol » .mtoteka, by mm Benny was liable foi' "'& mm mW than £ UXK) which i«re©# ftOjgSt»||P upon promiisory notes obteiasa from W son, endorsed by Benny. The. wto» thing *.mo«nbed ta this r thaSs noaiwte bp been removed which could bay* beoa &* tributed aaJuong. the ofcbeg crgdltcfi;«*» their benefit, and therefore so ttmiolm £ reference had been madi to Qvxtffl Iltohell. ' . . Mr Wlidinstool- np similar |^»*» that of Mm , Harper, aad added, tatlm Court waa asked to decide wbotfees 1 %hm had been any intention to ptegar. « whether the circumstances refntca 68ca an inference. The Court should reprf th© transactions of October the 6tr» «»» iith m one transaction. It wa.l ciea. wm a mistake had b2en made. i • Hrßuaaeilreyiewfcl tm «vW*iwe» •*■ pointed out what ho consider** *® be discrepancies, and Bab»ltte4 «W B wlim tlie bills mm : g.vea tlw Urn' sactlon was at an end. It wa» « t®[ °* the evidence that they were not to »&*« cash. but bills, and had tho pMpWgl noiea &t,Mln their hand.. He fW II S that no mistake- waa mad- t **SJf these bilLs were 6igned. Orr am *»* heU found thejr cosid get #« _»J for their amount from the Bart Jf they considered It advisable to «f* and in giving np the pmmtMory ROW they were simply getting from fcr.}«■, counta then what they would gft xw»» Beany In th.cc months' time. --••€'®2# sidered thoy were perfectly safe, a* 84«w waa responsible to the Bank. &*_*** bona fide, and wanted to. •."•SKS there was no need to go through the mm ot signing cheques, He eooWha-e #«« him a letter, simply ackoowleddo'l » guarantee for the £1000. Then 0« MW* rently tried to friahtea the chegtw «w« Beany, by fccllingliira he waa i»M* _*f certain euta. If Orr was gen«te* h *K„ wished to relieve Benny ho woaW w« placed the matter in another «f|VH showing to Benny that if he paid tM Bank he coald notpay them. ,%«™2_ vored to show that Beany waa "SH!*iS? Bank and also to Orr and MW-W* Wilson agreed and.Ben»ygaMnftt(4»M pay in fotsr months' time, and thiw ws* clearly a fraudulent preference. osca *,S r Ing the point thft. ao assets had bsna-iw m-ved, he said that on the day the tee was made there wm a tana of® *a» which was drawn out; that the ftgw would honor Wilson's cheques to W* amount, and he was entitled tp»*^ w jEr money out. Orr and Mitchell we*** : prepared to eouaterslgo if the mon»?--'«sw paid to tbe creditors, . r His Hon-- replied that t_-7***» MJ prepared to countersign for. paymaas F anyone else. . __..__,r._ Mr Rnasall orgei that tne ptopsvttf M» deteriorated since the guarantee was w tered into, and not being of the asj*f vsUue tliere wm a loss to the e«|ff* It© held that the transaction entered WW bj Orr and Mitchell had »ffi*ieA tgl valoe of the estate, and was d©»!m«ff to it, If It were that the estate Wj» Injured by the transaction, then hard to say how the order momi m applied for, ~-._.-__ His Honor found that there tan* bif_ # J_ fraudulent preference, and refasea tm order. _ __ _i_ Coats. 3 Rulneaa each case; Ja_y aw allowed,