Superior Court of Bankruptcy.

Daily Telegraph (Napier), Issue 5710, 18 December 1889, Page 3

Superior Court of Bankruptcy.

YESTERDAY.

(Before His Honor tho Chief Justice.) RB HABMOOD A. BA.SKEB.

OV Mr h JemS"eaid there were gaol, all over thfworld, to which Mr. Sainsbury strongly Ob3 Mfßanner continued: Was an ezperi'that were not paid were entered in an i. hnok" Aβ the accounts weie iTtbey wSw bo struck out and initialled, !nl only transferred to the ledger if people untuaSv the case, cash as received was * suau/paid away, either for accounts or to tb L b Sy to Hi. Honor Mr Banner said the firm's practice for .years, and Swavery common procedure in the Old thought, a* Mr. District TudJe Ward had B aid, a. hanker was only IS to provide an overdraft, the, ou«J££w of the baßk being always able to '^m/b^ continued: In 1886 the firm ontPHd Mr. Gilbert's creditors a oertain in the pound, taking over hie aerate tSSwhiSwLadeferredpaymenteection. continued to carry on business. jfr Qjiberloo t WUs from tlrae to f Tfo what hlTbeen advanced on the *' tiSfinn The tank went into a hat of carnation, i diaoouut in 1888. •lithe ten flgueu gecured . al """Vi %«te were got from the securities. <_ci' , the n^ur(J «1 those to the bank. At the sec * £000 or £700 Mr Gilbert's bills uuto discount xnooey. *T it* w™ aftev haf that he went $00, it was an error. Money was £nt to fho firm on Mr Rhodes' buliulf by Mr_U. ■Sfrto the manager of tho Bank ot New f≤ Wales. The loan wae of £1400, and Mr Burke lent the incnoy as attorucv for YMV Bhodes; the se-.unty consisted of TUildinir Sooietv shares, and the loan was Sdfe December, 1883 These shares we never at any time held as security for two people. According to Mr Badham c the amount due to unsecured cSors was probably £2000 in escess of the amount given in the statement to the ■'2Kig7ee f but that was largely to beaufor by losses on realising bills 3?aVcount y Some of the assets which xiad been sold had been grossly sacrificed. \SiB Boaor (Said Mr Jardine reported that,

by Mr Banner's own showing, the firm was insolvent in December, -1886. Mr Banner said it was after that date that he borrowed the money from his wifo and father. He would not have been likely to put money into a sinking ship. The idea of insolvency was never even contemplated. Mr Jardine was then called to give evidence. He did not wish to retract any statement made by him on the report of the bankruptcy. ■ ;■,

In reply to Mr Sainsbury, the witness said that a number of wisecured creditors were not included in the statement; some of the difference of about £2000 might bo oxplained by the action the bank had taken. In reference to the creditors not included in the statement he did not suggest that they were excluded designedly. Sales in bankruptcy rarely brought good prices. Mr A. J. Cotterill was briefly examined. The Assignee was recalled. He explained that further differences between the amount in the statement of the debtor, of unsecured creditors, and tho actual amount of the unsecured debts, were due to claims that had arisen through bills given to the third parties, who had proved in the estate. This and an increase in the sum set out in the proof of debt of the Bank of New South Wales would account for the difference. The evidence being concluded, Mr Jellicoe addressed the Court, and contonded that the two charges which had been preferred against the debtor had been fully substantiated. He held that the evidence disclosed other misoonduct on the part of the debtors, and gross negligence in the conducting of their business. Mr Jellicoe reviewed at length the transactions of the firm, who he maintained had used trust moneys to bolster themselves up with, which was alone sufficient to show that they knew themselves to be absolutely bankrupt. An adjournment wag then made till ten o'clock the following morning.

THIS DAY.

Mr. Sainsbnry addressed the Court on behalf of the bankrupt. He thought a good deal had been made by Mr. Jellicoe of tho difference of the price of flour. None

appeared to be so lowasilO, andevidenco had

been given that flour had been sold as high as £12 He would ask the indulgence of the Court to call certain witnesses. Hβ was aware he should hare done so before closing his case, but Mr. Banner had been unable to fee a second counsel, while Mr. Jellicoo had

tho assistance of a very eminent local practitioner. His Honor did not soo that the price of the flour was a matter of great importance. At Timaru in August flour wae sold at £7, while a few months later it was worth £10.

■Mr Cornford did not wieh to press anything on technical grounds, but things should be done decently, and in order. Witnesses being called after tho counsel had summed up on the other side was a proceeding of which he had nevpr before heard.

His Honor thought tho price of flour here was dependent on what it was at Oamaru. Mr Cornford was afraid it depended a good deal on the necessities of vendors. Mr Sainsbury was surprised that Wβ learned friend should object. It whs not a question of opinion, but whut he wanted was that Mr Banner should state the basis on which he valued the flour.

The bankrupt deposed in his statement to Mr MeDiarraid he put tho value of the Hautere block at fifteen shillings per acre ; that valuation was arrived at after an inspection of tho block by Mr Horace Baker. That was in October, ISSB. The valuation was given by Mr Baker several months previously. The block was sold under compulsion for £1000. Mr Baker was considered tho most experienced valuator of land in the district.

Mr Sainsbury said Mr Jellicoe had claimed that he had substantiated the two chargos he had formulated against the bankrupt, and that the evidence had shown general charges sufficient to suspend tho bankrupt's discharge. The two chargoe on which he asked the bankrupt to bo committed were that first, since tho 31st December the firm could not have , reasonable expectation of paying the debts incurred to Allen and Co., Levin and Co., and W. and G-. Turnbull.

Eitfht months after the bankruptcy the charges were made. When the charge was sifted it was found that from Levin and Co. no goods were got after the 31st December, and that chat go must be dropped. His Honor: What has that got to.do with it. The date is immaterial.

Mr Samsbury said if it were laid as a charge it was a fact that no debt was incurred after that date. The debt to W. and G. Turnbull had been entirely dropped. His Honor would see there was no foundation for that charge. The debt to Alien and Co. was incurred in August. HieHouor: There was a contract then, but no dobt.

Mr Siiinsbury thought tho bankrupt's statement bore on its face the atarap of truth. Mr Jellicoe had more than half insinuated that the solicitors had aided the bankrupts in getting large supplies of Soar, co that money could b« realised"

His Honor did not think Mr Sainebury might trouble to deal with that debt, as the charge coald not Ho. There was no authority which would justify him in concluding that these goods were got for the purpose of making an extraordinary Bale. The bankrupt was insolvent at the time, but the mere fact of euch a person making a profitable bargain and selling the goods in the course of trade did not amount to incurring a debt without reasonable expectation of being nblo to pay. It was unnecessary, therefore, to trouble with that debt.

Mr Sainsbury thought tho second charge of making a transfer of property at Woodvillti for the purpose of defrauding the creditors bad been made too much of. The bankrupt's statement was a sufficient answer to the charge. Tho ovidenoo was that tho bankrupt told Mr MoDiarraid so, and he arranged with his partner after his retumiusr from England that thero should bo a transfer to Mr Berry.

His Honor said the great objection was, if there was anything of tho sort it should be in the books.

Mr Sainebnry considered His Honor must treat the evidence as true, in tho absence of anything to the contrary. It was not to bo assumed that a hankrupt was not telling the truth because he had been compelled to go to the Official Assignee. Tho ltist of the bills became due in March, and it was only then he was able to take up the securities from the Bank. Immediately he was able to take them up ho went to Wellington, and arranged for the trunnfer. At that time the bankrupt hi*d an honput belief that he would be ablo to carry on. The first threat from the Bituk was on the Mth March. There wan a reasonable belief up to tho very last that he would bo able to carry on.

His Honor: Mr Banner could not givo us the date when he left for Wellington.. He could not tell us yeeterday.

Mr Sainsbury: It was earlier than the 14th March.

Mr Cornford: Ho would not swear it was not in April. His Honor : This is one of the thing's that shows tho advantages of allowing your transactions going through your banking account. The bankrupt said the entry in tho cash b iok was dated Tth March expense? to Wellington £6 108.

His Honor : You nay your oash book will contain an eutry in its proper sequence as to the date.

Bankrupt: Yes, Your Honor. Mr tiaitifbury submitted there could be nothing fraudulent in abankrupt executing a mortgage the day before he filed, in pursuance of a promise previouxly made. His Honor said, in order to constitute an offence, there must be a clear intont to defraud. The question was whether there was a real intent to defraud the creditors.

Mr Sainsbury submitted that beting so, the onus of proof fell on tho other side. Was it conceivable that if the bankrupt wiehed to prefer any of his creditors he would have passed over his own relativos. Would he not have cboeen them in preference, and yet such a thing had not been even suggested.

(Tho caah book was hero produced, showing the entry for the Wellington expenses on the 7th March).

Mr Saiusbury thought that disposed of tho charge, quite irrespective of the other point. No hostile proceedings had been threatened at this date. There was no ovideueo that ho was insolvent at the time. The trouble with the Bauk was not a final trouble. Tho Bank had not carried out the arrangement made by Mr Ehind, tho general nanuger, who had promised that certain bills should be provided for, time being given the bankrupts. Had the criminal intent to prefer creditors been present in his mind, those he wonld have preferred would have been his wife and father. Tha amount owing to his wifo was £3700, on which the Assignee said a dividend of eighteenponpo itt pound would be paid. There was also owing to tho bankrupt's father £i;i3o, whioli waa unsecured. Under tho Land Act the suotiou being a deferred paymeut ouo would not havo panged to tlie Official Assignee, but tho bankrupt would not have b«»en influenced in any way by that fuct. The proper course to have taken with Mr Capo's money would havo been to put it in a trust account till a fresh investment bad been found. The bankrupt left Napier on tho 22nd Februiry, ami the raortyage was not paid off till the 29th February. Much had been made of Mr Liddle having gone to Africa, but thero was no secret niado of his going. Mr Liddlo had all to do with the finanoial transactions, while Mr Banner remained in the office, und therefore be was not thoroughly acquainted with the falling in of Mr Hyland's mortgage. Hβ pon. eluded by asking that the humiliation might not be put upon the bankrupt of having his discharge withheld. His Honor withhold lijs decision. EE A. IT'IEAX. Mr P. S. McLean appeared for the bankrupt, and Mr E. H. Williams for the opposing creditors.—Deferred. KTS ItOBKBT K'jSKX. Discharge granted. Mr Cornford for the bankrupt