Meeting of J. L. Morrison's Creditors.

Evening Post, Volume XLVI, Issue 21, 25 July 1893, Page 4

Meeting of J. L. Morrison's Creditors.

The creditors of John Laird Morrison, flaxmiller and broker, was held yesterday afternoon. Mr. Mentoath appeared for the debtor, Mr. Hislop for the National Bank, and Mr. Treadwell for the New Zealand Loan and Mercantile Agency Company. A written statement, a precis of which appeared in our issue of yesterday, was read. The debtor, under examination, said that the contract with Levin and Co. for flax at £19 per ton would finish at the end of July. The lease of the Featheraton- street property was deposited with the National Bank about three months ago. He signed the mortgage in May. Tbo Bask did not make further advances on the strength of his verbal promiße. The Official Assignee stated that he had taken the opinion of Mr. H. D. Bell with referei.ee to Johnston and Co.'a aotion in taking possession of the mills, and also with regard to the Bank's mortgage. The opinion was as follows .- — 1. Re National Bank— The Bank Manager states that ut the time of the execution of the flax lien the Bank actually advanced .£3OO, and that the acoonnt now stands at .£2OO more than it did at the date of the flax lien. This flax lien is good as to the moneys advanced contemporaneously with, or subsequent to, its date, but is not a security for prior advances. 1 think tho lien covers all the flax, dressed or undressed, cut or taken from tho lands described in the flax lien, whether the flax was cnt before or after the date of the flax lien. Flax is a crop, and crops are execpted from the provisions of seotion 30 as to after-acqnired property. JJ« Johnßton A Co. — 1 am clearly of opinion that these two bailments are in the naturo of mortgages to secure purohasemoncy. and not truly loans. I therefore think that you are entitled to chum the machinery, plant, ic. of both mills upon payment to Messrs Johnston A Co. of — 1, the balance of the rent to the end of the term ; 2, the reasonable expenses incurred by Johnston A Co., of the entry and taking possession. I understand from Messrs. Johnston A Co. that they will not dispute your right to redeem on those terms. Be National Bank's mortgage on Featherston-street leasehold— lf the bank establishes to your satisfaction tbat the lease was deposited with them by Morrison more than three months befoie the bankruptcy, and that there was a verbal agreement then that Morrison should give the bank a security on the property comprised in ths lease so deposited, then in my opinion the execution by Morrison of a mortgage to the bank, though within three months of the bankruptcy, was not a fraudulent' preference under Beotion 79. Very slight evidence ia sufficient to prove that snoh were the terms of the deposit. Snch a parol contract gave the bank no legal right to call for a mortgage of the land, though it gave it a valid claim upon the documont, but Morrißon's act in voluntarily or under pressure carrying out a parol agreement previously made by him ciimot be frandulent." The Official Assignee stated that Mr. Bell bad Been Johnßton & Co., who had decided not to retain the position which they had assumed with reference to the mills. The Official Assignee also explained that Johnston * Co. had let the mills to the Bank, so that the latter might have the fibre on hand worked up. A question for the creditors was whether Johnßton * Co. should be paid the balance dne on account of the purchase of the mills, so that the creditors might be able to sell them. Mr. J. Edwards asked why Johnston A Co. were working the Tnrakina mill without the permission of the Official Assignee. The Official Assignee said that he had no part in the arrangement between the Bank and Johnston A Co., regarding the working of the mills. He understood that the Bank was paying the wages men unpaid (is 8d in thei. Replying to the Official Assignee, Mr. H. B. Glegg, manager of tho National Bank, said that the Bank was paying Johnßton and Co. .£lO for the use of two mills. The arrangement was for the benefit of the creditors. Mr. D. Robertson said tbat he had mode all the machinery and had not received a penny. Mr. Glegg, in reply to the Official Assignee, stated that the men were Boutohing at the Turaldna mi 1 The Official Assignee expressed Burprise at learning that a great quantity of flax had been damaged by a flood, and he was informed that the fibre was discoloured by the muddy water. • Mr. H. Kember stated that the business was in such a state that assignment was not wise, and it was thought better the debtor should file. Ihe supervisors found that it would be impossible to carry on under an assignment. The Official Assignee said that the wages claims would eat np the greater part of the assets. On the motion of Mr. C. W. Benbow, seconded by Mr. Henn, it was decided to pay the costs in connection with the proposed assignment, amounting to .£lO 10s. On the motion of Mr. A. E. Mabin (Levin A Co.), seconded by Mr. C. W. Benpow, it was decided tbat the Official Assignee thouid realise the assets. Mr. E. WUliams moved that the debtor should be allowed his furniture to the value of .£3B ss, pn condition that he paid the rent, £26 ss. The motion was seconded by Mr. J. Gordon, and agreed to. The meeting then terminated.