MEETING OF CREDITORS.

Evening Star, Issue 9154, 8 June 1893, Page 4

MEETING OF CREDITORS.

11K .1. O HAN'T. A meeting of creditors in the estate of .lames Grant, of Highcliff, gin-donor, was hold sit the Official Assignee's oltice yesterday, Mr i'aul (acting-Assignee) presiding. There were two creditors present. Mr Woodhouse appeared for debtor, and Mr Callaway for the Kquitablo Insurance Company, who liad petitioned in the Supreme Court to have the debtor adjudicated a bauktupt. Bankrupt's statement showed : Unsecured creditors, £1,821 2s 7d; assets, £3O. _ The creditors are the Imputable Insurance Association of New Zealand (in liquidation), whose claim is £1,524 3s 9d, and Lancelot Douglas Nicol, who claims £296 18s lOd. The assets consist of property, bankrupt setting out in his statement that his interest was under the will of his late father James Grant, of Oranton, Inverness-shire, Scotland, in the sum of £+oo, subject to the life interest of his two sisters, and contingently on his surviving them. Mr Callaway objected to Mr Nicol's proof being received, and it was agreed to allow argument on the point to stand over until the bankrupt had been examined. Bankrupt, examined, said he had been about thirty years in the colony, and thirteen years at Highcliff as a market gardener. It was leased land that he occupied. Thero were about three acres, and the rent he paid was £l2 a year. He growa little of even-thing, selling the produce in Dunedin. lie had very little money when he first leased the land. The farm did not pay. For one thing, lie was in a bad place, the wind damaging his crops. }U had received no legacies or money from any source, except from his own boys. Mr Nicol and witness were related by marriage, their wives being cousins. He had not speculated in any shares except the Fquitable shares. He authorised Mr Nicol to buy tli4 shares for him through a broker, and he paid about £l7O for them. Ho could not say whether Mr Nicol ever told him what he paid for each .share. He borrowed £l7O from Mr Nicol to jwiy for the shares. He believed Mr Nicol advised him to make the purchase, but Mr Nicol did not tell him that lie himself was a large shareholder in. the company. Witness did not remembersceingtheshare transfers after he signed them, but they were never in his possession ; they must have been in Mr Nicol's possession. When witness bought the shares the comjiaiiy had a great name among the public as a good speculation. Mr Nicol must have known witness s financial position when witness asked him to buy the shares for him. Witness had been up at Mr Nicol's (dace of business (Messrs Hogg, Howison, Nicol, and Co.) several times. He had only once in Ids life spoken to Mr Hogg, and all they said then was "Good-day." Witness did not know that Mr Hogg was one of the directors. It was in 1884 that ho borrowed from Mr Hogg. He never received one penny in money from Mr Nicol. What Mr Nicol told witness was that he had bought shares in witness name to the amount of £l7O or thereabout. He did not know how many shares were bought, and he could not remember the date of the purchase, but it was about 1884, he thought, A few weeks after the first share transaction there was a second transaction, but witness did not remember how many shares were concerned in the second transaction. Witness was quite positive that it was £l7O Mr Nicol said he had expended on behalf of witness. Mr Nicol was not to charge witness a highor price for the shares than he actually paid for them. If Mr Nicol charged witness £l7O and paid only £156, witness could not explain the difference. Witness did not remember Mr Nicol telling him thatadifferent price was mentioned in the transfer than what the shares were actually bought for. The £l7O was used for no other purpose than for the purchase of the shares. Witness did not get a notice of any call being made previous to a writ being issued against him in the Supreme Court. It was that writ on which he was made bankrupt. He was never aware that any call had been made on the shares untU he received that writ, for the amount of which he confessed judgment. It was under Mr Bathgate's advice that he confessed judgment. He was not sure whether he showed the writ to Mr Nicol. He showed it to Mr Bathgate. He was almost sure he did not take it to Hogg, Howison, Nicol, and Go's, office. He received notice of two dividends being payable. Mr Nirol told him about them, but he did not goi

them; he supposed Mr Nicol must have received them. It was agreed at first that Mr Nicol was to get the dividends, but he never asked Mr Nicol if he had received them. Witness was not surprised to learn that he held 2,750 shares in the company. When he took the shores up he had no idea of what his liability was. He hardly understood what "the liability " meant, and he was not aware when he invested in the shares that there was no limit to his liability. Ho did not remember that Mr Nicol explained the matter to him. According to the agreement witness was to hold a fourth of the 2,750 shares, and Mr Nicol was to hold threefourths. Mr Nicol dictated the agreement, and witness wrote it out. Witness did not remember getting any statement of accounts from Nicol between the years 1883 and 1890. The number of shares in witness's name had never been altered. He thought that the document dated 24th April, 1884, which Mr Nicol dictated to him, was a transfer of three-fourths of his shares in tho company. So far as he knew, the number of shares,' if that agreement was not a transfer, was still intact. Witness never sold any shares. He had never heard of a sale of shares to a man named Gunn or to any wan at all. lie never gave Mr Nicol fourteen days' notice of his intention to dispose of any shares, and if Mr Nicol sold 200 of witness's shares he never accounted to witness for the money. He could not say whether the price of Equitable shares roso or fell between the first and tho second purchases—the first being in 1884- and the second in 1885. Ho did not know whether the same broker bought the shares on lx>th occasions. If Mr Nicol paid a portion of a call (£56 ss) on these shares witness was not surprised at it. If he did so lie never mentioned it to witness. The agreement Mi Nicol dictated to him was the one produced.

The agreement referred to was as under : Duncdin, October 25, 1884. L. I>. Nicol, Dunediu,- In consideration of you advancing me up to £2OO for the puriwse of purchasing Equitable Insurance shares I agree that you shall have the right to demand three-fourths of the shares so purchased at cost, so long as you give me seven days" notice of your intention to do so, and 1 undertake to give fourteen days' notice before disposing of them otherwise-, meantime you to hold the scrip ; and 1 further agree that all proceeds from any sales that may be effected, also all dividends accruing from the said shares, shall go in liquidation of your advances, which shall hear interest at the rate of 8 per cent, per annum. -Yours, etc., .Jas. Grant.

Further examined by Mr Gallaway, witness said that he was not aware that after he bought the shares they had risen in value. He was not surprised to learn that they did. He never thought of trying to sell out his shares and reduce his liability to Mr Nicol. He left the management of his shares entirely in Mr Nicol's hands. He had no idea when he bought the shares that Mr Nicol had ever before bought shares. He did not think Mr Nicol had any special means of knowing about the transactions of the Equitable Company. By Mr AV'oodhouse; Witness thought the transaction was going to be a profitable transaction when he entered into it. He was to get one-fourth of the profits. Mr Gallaway : If you thought it was to be profitable, why did you continue to buy shares in a falling market '!

Bankrupt: I cannot explain that. Mr Callaway : If you expected to make a profit, why did you not take trouble to inquire if you could make that profit when the shares were rising ''. ■

"Witness : I cannot explain that. Mr Callaway : I suppose you ore a little surprised to find your liability on these shares mounts up to £1,534 2s 9d.

AVitness : Yes, I am a little surprised nt that. L. D. Xicol, examined by Mr Uallaway, said he admitted that the agreement referred to wus dictated by him to the bankrupt. He employed several brokers to purchase the shares, but he did not remember their names. He thought he had some of the contract notes left. The actual selling prices charged were the prices mentioned iu the transfer, as far as he recollected. If the prices making up the totals in the transfers amounted to about £l4 less than the £l7O lie charged bankrupt ha could not account for it. He advanced the £l7O to liaiikrupt in the hope he (bankrupt) would make a profit out of it, and that lie (witness) would also make a profit. If 500 shares were bought from Ford, Tipping, and Co. six weeks before the agreement was written he maintained that the agreement applied to those 500 shares, Bankrupt was to take the whole risk of the shares going had, but if there was a profit witness had a right to three-fourths of it. He had several conversations with bankrupt between 1884 and the present day. He explained to him the position of alfairs. He did not recollect bankrupt bringing to liiin a writ served on him by the company. He knew a writ had been issued against him. He had some conversations with Mr Hogg about the writ. He did not recollect explaining to Air Hogg the position in which he (witness) stood to bankrupt when the speculation was entered into. He did not recollect ever telling Air Hogg that bankrupt was a man of means, and he did not recollect Air Hogg asking him in 1884 or 1885 about bankrupt's financial position. The transfers of the 1,600 shares in 1884 and the 1,150 in 1885 werp deposited cither by witness or by someone else. He could not suggest anyone else but a clerk from .Messrs Hogg, Howison, Xicol, and Co.'s. In course of conversation he told bankrupt when calls were made. He did not recollect bankrupt giving him authority to pay any call on his behalf; but he (witness) paid the part of a call (£56 ss) in self-defence—that was, to protect his security. He could not explain why he did not pay the other £7 10s. He supposed it would he debited to him in Messrs Hogg, Howison, Xicol, and Co.'s books. He thought it was carried into his own account. Bankrupt was wrong in saying he did not know anything about the sale to" Air ({mm. He did not recollect if he mentioned this specific sale of 200 shares to the bankrupt. Ho got the money from Air ({unit's brother, and he thought the proceeds were paid into his account at Messrs Hogg, Howison, Xicol, and Co.'s, but he was not quite sure. He did not know who Air Cimiii wus, or where he was. The dividends also went to witness's account. As a matter of fact, witness did hold shares in the company in another person's name. He could give no explanation why the shares purchased were not Presented for registration earlier. The meeting was then adjourned xinr rfir.