SUPREME COURT.

Evening Star, Issue 7280, 3 August 1887, Page 2

SUPREME COURT.

♦ ' —- CIVIL SITTINGS. Tuesday, August 2. (Before His Honor Mr Justice Williams and a Special Jury.) William M'Lkod v. the National Bank ok New Zealand and thb Official Assignee in Bankruptcy of the Propboty of John M'Lbod. —An action to have the sales of certain shares by the Bank decreed to be fraudulent, collusive, and improper; and that an inquiry be ordered as to the real value of the shares at the sale; that accounts be taken, and any balance found due be paid to the Official Assignee; and for such other relief as the Court may think right. Mi Denniston appeared for the plaintiff William M'Leod, Mr Chapman for the National Bank of New Zealand, and Mr Solomon for the Official Assignee. Mr Chapman moved foi a nonsuit on the ground that the Official Assignee in bankruptcy not having absolutely refused to bring the action, but only requiring a reasonable and proper guarantee before doing so, the action should not have been brought by the plaintiff, and the Official Assignee joined as a defendant; and also on the ground that there had been no proof of the sale having been made at an undervalue.

The points were fully argued, Mr Denniston contending as to the first that it affected merely the questionlof costs—that all the parties being before: the Court the main issue should be determined; and Mr Solomon submitted, on the authority of cases cited, that the conduct of the a ssignee in the case had been entirely right. His Honor expressed the opinion that there bad been nothing unreasonable in the conduct of the Official Assignee in asking for an indemnity, and overruled the nonsuit points. The parties being before the Court, His Honor directed that the trial of the main issue should proceed. On the second point, and as to whether it affected jurisdiction or merely cofifa. His Honor remarked that ho did not decide the question finally, but his impression was favorable to Mr Denniston's contention.

Mr Chapman then opened the case for the defence, which was, in effect, a direct denial of the accusations of improper dealing on the part of the bank contained in the statement of claim.

For the plaintiff, Mr Denniston called Charles Ziele, Arthur Morrison, William Scoular, and William M'Leod. For the defence, Mr Chapman called William Dymook, Alexander Michie, Percival C. Neil), Montagu Pym, James Rattray, R. Park, Edward F. Sainsbury, William G. Fonwick, James Ashcroft, and C. Ziele.

Mr Chapman, in addressing the jury, Baid the case as set out by the statement of claim was that tho transaction was a dishonest and fraudulent one, and he submitted that they could only find tho issuo against the bank if they had evidence that it was such a tainted transaction, He put it that from the first the bank had shown an extraordinary amount of patience; and if the seourity had been land, they might have put it in the hands of the registrar, and no one would have bad the right to say anything about it. The instrument gavo the bank the fullest power of sale as it thought fit, and the bank from first to last had tried to make the best sale possible He was content to rely upon the honesty of the witnesses he had called, and the perfectly straightforward nature of the transaction as they related it. Mr Denniston, in replying, said the question was; Had the bank taken in the transaction all reasonable means to prevent the sacrifice of the -property when they sold on no real idea of the value, but simply divided the amount of the debt and sold the shares to cover that amount? He had been careful to say nothing about the character of the gentlemen engaged in the transaction. The legal terms used were the same as in hundreds of cases where the Court absolved the parties entirely from any moral fraud. There was no suggestion of anything of the kind, but these gentlemen hadßimply assumed that they were entitled to these share* in law, and had sold them, dividing them among themselves as a kind of family party, without any regard to the interests of the mortgagor. His Honor summed up, saying that the power of sale was given to enable the mortgagee to get his money, and he was within his rights if he used it for the bona fide purpose of getting back his money. If he took honest steps for this purpose, although he might be in effect acting harshly, he was still within his rights, The plaintiff, if he had not got to prove moral fraud, must prove that the bank was aware that the shares were being sold in July, 1886, at an undervalue. That was the issue he should ask them to answer—Did the bank knowingly in July, 1886, sell the shares at an undervalue; and, if so, at how muoh undervalue ? ' The jury retired at five minutes to six to consider their verdiot, and returned to Court at six o'olook with a verdiot for defendants. The issue put was: Did the bank sell the shares in 1886 under value? The answer was No.