THE COURTS-TO-DAY.

Evening Star, Issue 7647, 25 June 1888, Page 2

THE COURTS-TO-DAY.

SUPREME COURT-IN BANKRUPTCY,

(Before His Honor Mr Justice Williams.) Be P. Forrester.—ln this case, which had been before the Court at previous sittings, His Honor now gave judgment as follows:

I think it. is quito elrar that tlin agreement between the bankiupt and his sou, transferring the stock-in-trade of the bankrupt to the son, is void as against the Asiignee. The evidence of Peter Forrester, jun., shows conclusively that he was a mere instrument in the hands of his father, who arranged the whole matter, the son having nothing to do even with fixing the price at which he was to purchase. The son had no capital at all, and the effect of the transaction, if valid, would be to hand over to the son the whole of the debtor's stock-in-trade in exchange for the soa'a bilk for L 137 Is, and for LB2 lOsrepresinted by what is alleged to be part of a past uue debt due from the father to the son. On the ninth of January, the date of the agreement, it is qui.e clear the bankrupt was unable to pay hiH debts as they came due. There were unsecured debts amounting to about L 1,200, and book debts to the nominal value of less than half that amount. The only other asset of the bankrupt was land heavily mortgaged, to which the bankrupt attached a fancy value, but which he must have known in any case was not an asset immediately available for the payment of his current liabilities. That the bankrupt, at the time of the agreement with his son, had the intention of endeavoring to make an arrangement with his creditors, either to get time or to pay a composition, is plain. He knew, therefore, that he was at the mercy of his creditors—that is, that if pressed he would have to file. Three days after the agreement was signed he called a meeting of his creditors, and, after further negotiations, he filed at the end of the month. The result shows that he was hopelessly insolvent both at that time and at the time he made the agreement with his son. The net result of the arrangement with his son would be that if the son succeeded iu carrying on the business the bankrupt's or editors would get the bills paid; if he were unsuccessful they would not. In any case, however, the son would have got paid LB2 10s, on account of the debt alleged to be due to him by bis father, whatever became of the rest of the creditors. That being so, I certainly ought to hold that the transaction was effected with a view of preferring the son's claim; in other words, that the transaction is a fraudulent preference, as defined by section 27 of the Bankruptcy Amendment Act of 1884. If the transaction is within that section, then by the second subsection the rights of Mr Isaacs, who makes a title in good faith and for valuable consideration from the preferred creditor, are preserved. The order, therefore, would be that Peter Forrester, junior, hand over to the Assignee any chattels made over to him by the bankrupt and undisposed of to Mr Isaacs, and that any chattels or surplus moneys in Isaacs's hands after satisfying his claim -under the Y>)Yl of sale be also handed to the Assignee. The Assignee is entitled to costs as against Forrester, junior, but must pay the costs of Isaacs. Mr Denniston obtained leave to appeal, if necessary. APPLICATIONS FOR ORDERS OF DISCHARGE. Be Robert Patterson. —Mr Haggitt appeared for the bankrupt. The Official Assignee said that it had been arranged that this case should stand over. Be William Murr White.—M r Meatyard appeared for the bankrupt. His Honor said that it appeared from the Assignee's report that he wished to examine the bankrupt on one or two points that required clearing up. The Assignee said that one or two things that had taken place since the bankruptcy required clearing up. Mr Meatyard submitted that the bankrupt was not there for examination, but simply to apply for an order of discharge. He objected to bankrupt being put into the box.

His Honor: Very well, then, you won't get the discharge till he does, that s all. The Bankrupt, in answer to the Assignee, said that no machinery had been removed from his premises just previous to his filing except a machine that he had borrowed from the Government. He had had a patent right for filters, but sold it to Lane and Go. for L3O more than three months before filing. He also sold to them a large boiler for L7O. He did not receive cash for these, but was credited with the amounts. There was no arrangement for him to get back the patent right when he got his discharge, unless the money was paid to Lane and Co. for it; and it was practically valueless, as he had sold only six of the filters during two years. He had, since his bankruptcy, tried to secure the right of Addison's Pit, without consulting the Assignee. He had friends who wished to help to start him in business when he was discharged, and he had to make some arrangements beforehand. His furniture was at present stored in the South Dunedin Arcane, and he had not taken a house to reside in. Mrs Fodor had a mortgage of L 1,400 over his old house. He did not know at the time he borrowed the money, nor when he built the house, that it was partly on the road-line. Mrs Fodor and Michael went to him before he left the house and wanted him to make a cheffonier, wardrobe, and other articles fixtures, but he refused to do so. Mr Lambert, who bought the property, threw witness's furniture into the street.

The Assignee remarked that that was bankrupt's own fault, as he refused to give up possession of the premises. His Honor remarked that the creditors appeared to have recommended the bankrupt for his discharge, and that his books appeared to have been well kept. Did the Assignee think there was anything behind ? The Assignee thought that there might be; but the dates of transactions with|Lane and Co. could be found in the books.

William Henry White, son of the bankrupt, deposed that the transactions referred to took place more than four months before the bankruptcy. The Assignee remarked that that disposed of the question of fraudulent preference. The last witness he had found to be a very straightforward young man.

His Honor said he saw no reason for suspending the bankrupt's discharge, and the order would be granted.

.Re Henry Micaiah West.—ln this case an order of discharge was granted. Re John Leece Moore.—Mr Sleigh appeared for the bankrupt. The Assignee said that the bankrupt had not assisted in getting in the book debts. Case adjourned till next sitting day to give bankrupt an opportunity of assisting the Assignee in getting in the debts. Re Thomas Hutchinson.—Mr Thornton appeared for the bankrupt. The Assignee remarked in connection with this case that from the bankrupt's position he should have filed before he did. His Honor said that he thought, from looking at the bankrupt's balance-sheet, that he must have been to his own knowledge unable to pay his debts for some time before he filed. He should have filed sooner, or else have called his creditors together and obtained their advice as to what he should do; otherwise he was carrying on at their expense and not giving them a Bay. The bankrupt's discharge would be suspended for six months,

Re Bkcnton.— Mr A. Adams appeared for the bankrupt; Mr Thornton to oppose the application for an prder of discharge. In the opening of the matter it was stated that the Assignee had, by consent of the principal creditor, Mrs D'Albedyhll, sold the assets in the estate to certain friends of the bankrupt for L6O; but that Mrs D'Albedyhll did not on that account waive her right to oppose the bankrupt's discharge. The bankrupt, examined by Mr Thornton, said the verdict in the libel case of D'Albedyhll v. Brunton was given on April 13, and that on the 16th or 17th of the same month he paid his solicitors, Adams Bros., the sum of L3O. He did not at the time come to any decision as to filing his schedule. He had told the Assignee that the L3O was paid by him before the judgment was given ; the Messrs Adams told him that it was so—that the giving of judgment was one thing, and the entering up of judgment was quite another. He did not remember Mr Thornton asking him if he paid the L3O before " the verdict" was given; all he had said was that he paid it before the judgment—he did not intend to imply that it was paid before the verdict was given. There was an understanding that he was to pay Messrs Adams what ready money he had. He remembered the question of fraudulent preference being mentioned, but the whole conversation did not trouble him greatly, for he acted on the advice of his solicitors all through. He had nothing to do

with the arrangement as to the sale of the assets, but left the matter to Mr Adams and his own friends. Some letters passed between witness's solicitor and Mr Thornton's firm, the latter pressing for a settlement of the amount of the verdict, and the Messrs Adams replying that witness had given them no instructions as to making the definite settlement required. Witness could give thein no instructions to settle, as lie had no means of paying the claim. He filed on May 3, and did nothing iu the meantime to make a settlement ; he was unable at that time, and besides that had no means whatever. He filed the day the bailiffs were put in. Several members of his congregation, including Messrs Eaton, Hercus, Scott, and Haycock, called on him after the action, and one and all said they supposed it would end in his having to file. Not one of them or of hiß congregation made a suggestion as to pulling him out of his difficulties. To Mr Adams: For several days after the trial witness was opposed to filing. He waa not in a position to make a settlement, having surrendered everything and having no property. The Assignee, called by Mr Thornton, stated that when he examined the bankrupt at his office the latter said that he paid the L3O to Adams Bros, before the judgment. An arrangement for the sale of the assets was in progress, but that payment upßet it Nothing was said about judgment " given" or judgment "entered up." His Honor said that he placed no reliance on the payment of the L3O, or on the statement that it was paid before judgment. He did not think it was proved, nor did he suspect that there was any want of bona fides in the bankrupt's making that statement. But he could not shut his eyes to this fact—that this bankruptcy had been brought about by the direct misconduct of the bankrupt. He had published a libel, and damages were awarded therefor, and it wag in consequence of the publication of that libel and in order to escape the damages that were awarded that he filed, and he now came to the Court and asked to be discharged. It was admitted that practically the only debt was the amount of damages awarded. He (His Honor) thought this clearly brought the matter within the 157 th section of the Act, where it was laid down that if the Court thought that the bankrupt had been guilty of misconduct it conld suspend his order of discharge. As to the action, if at an earlier stage the bankrupt had tendered an apology, it would never have been brought; but he did not do so, the case went to trial, and damages were awarded. What the opposing creditor said seemed reasonawe—namely, that she ought to be put in the same position financially as before the action, and that till then the bankrupt ought not to have his discharge. He (His Honor) proposed to suspend the bankrupt's discharge till a reasonable compromise is come to with the only creditor. There was no special reason why the bankrupt should have an immediate order; he was not a trader, and business credit was not therefore essential to him. It was true that it was not desirable that a minister of the Gospel should be in the position of an undischarged bankrupt, still at the same time it was not desirable that a minister of the Gospel should be defendant in an action for libel. He would not suspend the bankrupt's discharge for a fixed term, but would hold it open for him to make a fresh application when the only creditor should have been placed in substantially the same position as before the trial; when that was the case she could withdraw her objeotion to the granting of the discharge. Be Frederick Richard White.—Mr W. Macgregor appeared for the bankrupt. The said that the bankrupt's wife had filed since her husband had done so, and that there was a want of proper accounts to show the monetary relations between them.

His Honor said the case was not one for immediate discharge; but as the case had been for some time in the Court the bankrupt's discharge would be suspended for sir months only. Re Christian Hansen.—Mr W. Macgregor appeared for the bankrupt. His Honor said it appeared that there were no assets, and while he would not say there was evidence of fraud, there was evidence of complete incapacity for business and muddling. The bankrupt's discharge would be suspended for twelve months. Jie Thomas Woods.—Mr W. Macgregor appeared for the bankrupt. Order of discharge granted. lie William Timms.—Mr W. Macgregor appeared for the bankrupt. His Honor said that the debts in this estate were 1.76 and the assets nil, while there had been two previous compositions. The bankrupt's discharge would be suspended for twelve months. Re Timothy Hynes.—Mr D. Reid appeared for the bankrupt. Order of discharge granted. Re James Seehof. Mr Wilkinson appeared for the bankrupt. The Assignee made a statement to the effect that the manner in which the bankrupt had made certain entries in the books of Paterson and M'Leod, when he had been employed by the Assignee as bookkeeper, created an uneasy suspicion in his mind. The erroneous entries in question were not discovered till after the bankrupt had left Dunedin for Melbourne. His Honor said that the position was that if the bankrupt wanted his discharge he would have to come here and get it. Re Michael O'Connor.—Mr Stuart appeared for the bankrupt. Order of discharge granted. PUBLIC EXAMINATION.

Re James Pickering.—This case was ordered to stand over for three weeks. Re Edward Landobf.—Mr Calvert in this case asked that, a petition for adjudication having been filed, the Court would grant an order appointing the Official Assignee aa receiver in the estate. Order granted as asked for.