IN BANKRUPTCY.

Clutha Leader, Volume XL, Issue 64, 17 February 1914, Page 3

IN BANKRUPTCY.

I EE J. G, PATERSON. At Dunedin, on Friday morning, a bankruptcy matter was 'brought before Mr Justice Sim. It was an application bv the Official Assignee for an order that John Krmwt Thompson, of Balclutha, merchant, trading under the name of "The Import Company," do pay to the Assignee the sum of £4(l received from John Gillies Paterson, a bankrupt, on or about July 7th of last year. The grounds of the motion were fraudulent transfer of the whole of Paterson 's propert to Thompson, and an act of bankruptcy within the meaning of section 2(i of the Bankruptcy Act, 1908; and also (l>) that the said payment constituted a fraudulent preference within the meaning of section 79 of the Act. Mr Fraser, K.C., appeared for the Assignee, and Mr Finch for Thompson. The facts as disclosed in the argument were these: On July 7 last, Paterson, being presso-J for payment by the Import Company, borrowed money on a bill of sale and with the proceeds paid the Import Company £4O. The company continued to supply liim with goods which were necessary to carry on his business until his bankruptcy in September, at which time Paterson owed the company another sum of £:IS for goods supplied. The debtor having gone bankrupt within three mouths of July 7, it was contended on behalf of the Assignee that the payment of £4O, being practically the whole of Paterson's property except a small mail contract, was a fraudulent preference.

.It was contended on behalf of Thompson that as the effect of the actions of Paterson and Thompson enabled Paterson to carry on his mail contract and thereby earn for the estate £57 10s, and that as Thompson was shown to have supplied him with £!8 worth of goods (nearly as much as the money he had received), these facts were Complete evidence that it was a bona fide payment made in the ordinary course of trade, and not a fraudulent preference. His Honor listened to the argument, and said he would take time to consider.