THE BANKRUPTCY ACT.

Evening Star, Issue 10391, 12 August 1897, Page 1

THE BANKRUPTCY ACT.

STRONG REMARKS BY 5 JDGE KETTLE.

At Palmerston North on the 6th inst. an application came before District Judge Kettle for an order of discharge for J. C. R. Isherwood, a bankrupt. In his examination the debtor stated that during January and February he had received £1,995 from Home. On March 31 he had a credit balance of £1,351 when he started business as a brewer. Had filed on account of a judgment being obtained by one Jessop, an employe", who had £4O due to him. Jessop had taken out a distress warrant, and the •assistant bailiff at Pahiatua had sold the stock-in-trade at the brewery, valued at about £l5O, for £6O after the bankruptcy had been notified.

His Honor made some very stroDg remarks on the action of the bailiff, whose conduct he described as scandalous, and he thought he-should be brought before the Court for contempt. Thing 3 were coming to a pretty pass when a man could go aud sell goods in defiance of the Court, and His Honor thought Mr Scott, the deputy official assignee, should certainly consult his solicitor on the matter, with a view of having the bailiff brought before the Court. Something certainly should be done. It was scandalous to think a man ■ could sacrifice goods belonging to the estate and vested in the assignee, and steps should be taken in the matter.

Mr Scott said that he would be very pleased to receive any instruction from the Court on the matter. He had already taken action against the bailiff, and would be pleased to prosecute the case still further.

Counsel having addressed the Court, His Honor said that the transactions in connection with the brewery business had satisfied him that the bankrupt, if ever there was a man absolutely unfit to carry on a mercantile business, "was the man. He had displayed the utmost incapacity to carry on the brewery, and had attended to his business in a most careless and indifferent manner. He had received money from Home, and having no previous mercantile experience had foolishly and recklessly invested it in the business, placing in charge there his sons, who were equally incapable to manage and conduct the business, consequently in about nine months the £1,530, the balance left in March, had all gone, and not only that, creditors to whom was owed a further sum of £460 were left lamenting. His Honor said he did not think the bankrupt had been guilty of intentional fraud, but of cowse the law treated a man who carries on business in this reckless and indifferent manner as fraudulent. The bailiff in the Pdhiatua district in defiance of the notice received from the deputy-assigoee, and in defiance of all right, had sold the plant, which had rightly bscn termed the eye of the property, at a sacrifice. What his responsibility waa in the matter remained to be seen, His Honor stating that he intended to take steps to see that his conduct was reported to the proper authorities. If a bailiff could, in defiiince of the deputy assignee, sell property belonging to an estate aud vested in the assignee, then it was time the law was amended with a view of preventing a repetition. The result had been that a property which had cost £1,500 had been sold for a very small sum, hardly sufficient to pay preferentiid claims. The chief objection in the whole of the proceedings was tho failure to keep proper books. It was no excuse to say that the failure was ou3 to the-sons; the bankrupt could not shift the responsibilities on to someone else's shoulders. It was absolutely necessary that proper books of accounts should have been kept disclosing the business and setting forth the financial position of the bankrupt. It was the duty of the deputy assignee to lay the case before the Crown Prosecutor, and that the application for discharge should be adjourned in order that this course might be pursued. His Honor accordingly adjourned further adjudication on the application until an opinion was obtained from the Crown Prosecutor as to the state of the books.

Mr-Scott (th 9 deputy assignee) pointed out that there was no question of fraud in connection with the proceedings, and he detailed hia experiences in connection with a similar case which he had taken to the Supreme Court on the certificate of the Crown Prosecutor, and which had been thrown out by the Grand Jury. He_ suggested that under the circumstances the Court should punish the bankrupt if it thought fit in the direction of suspending his discharge rather than sending the case to the Supreme Court.

His Honor, however, declined to adopt this course, saying that he objected to the Court merely dealing with the matter and allowing the criminal clauses to slide, as' he was of opinion that this course was calculated to weaken the administration of the bankruptcy laws.