SUPERIOR COURT OF BANKRUPTCY.

Hawke's Bay Herald, Volume XXIV, Issue 8324, 29 March 1889, Page 3

SUPERIOR COURT OF BANKRUPTCY.

Thursday, March 28. (Before His Honor the Chief Justice.) RE DUNCAN M'KAY. Mr Comford for the debtor, Mr M'Lean for the Deputy Assignee. This was an application to declare the ' • bankruptcy closed, and for an order for the debtor's discharge. Bankruptcy declared closed, and the 13th of April fixed as the day tor hearing the application for discharge. RE EDWARD ASHTON. T Mr Dick for the debtor, Mr M'Lean for the Deputy Assignee. Mr Dick applied to his Honor to fix a day to bear an application for the debtor's discharge. His Honor fixed the 13th of April. RE GEORGE BEATTIE. Mr M'Lean for the Deputy Assignee. The debtor was not present, and was not represented. ' Mr M'Lean said that the debtor had been publicly examined, and had agreed to make over to the Assignee a deferred payment section, On this section he had spent more money than would suffice to ' pay all his creditors in full. Since agreeing to assign it he had repudiated the ' undertaking, and did not even trouble to attend the Court. His Honor suggested that the assignee should treat with the Land Board. The assignee decided to make the arrangement suggested, and in the meanwhile wait till the debtor applied for his discharge before taking farther action. EX PARTE OFFICIAL ASSIGNEE IN RE KINROSS AND RICHARDSON. Mr Bell for the assignee, Mr.Cotterill for Richardson. This was a motion by the assignee to show cause why payments made to Richardson by the debtor prior to his bankruptcy, amounting to £69, should not be refunded to ths assignee, 'on the M ground that they were preferential payments within the meaning of the Act. Mr Cotterill and Mr Bell concurred in an application that the evidence should be taken before the Registrar, and the argument heard at Wellington. An order that the evidence should be taken hetore the Registrar was made as prayed. EX PARTB OFFICIAL ASSIGNEE IN RE KINROSS AND ROBJOHNS. Mr Bell for the assignee, Mr Cotterill for Robjohno. This was a similar case to that given above, the moneys in dispute amounting altogether to £1500. An order was made that the evidence should be taken before the Registrar, and the argument heard at Wellington. EX PARTE KINROSS. This was an application by the debtor for the Conrt to order that an allowance for his maintenance should be paid out of the estate, the allowance to date from the bankruptcy. Mr Carlile appeared in support of the application. Mr Cotterill, representing Dalgety and Co,, creditors, and both the „.-- supervisors appointed in the estate, opposed application. Mr. Carlile said that the application was made under section 139 of the Bank- ' ■ ruptcy Act, 1883, the latter portion of .• which read as follows : — " Or, as the Court may, on the review of buch resolution'or in the absence of such resolution, direct".- ..=.,. . ' " Hi* HonoEi/Theclausereadsasfollows: — " The Assignee shall from time to time pay to the bankrupt such allowance (if any) out of his estate, until he has obtained or been refused his discharge, or. .had his discharge suspended, as the creditors in general meeting shall, by resolution, consider necessiiry for the support of the bankrupt and his family, or as the Court may, on review of such resolution, or in the absence of such resolution, direct." Was no resolution passed ? Mr Carlile said, that no resolution giving the debtor an allowance was passed i^j by the creditors. The debtor was quite ■ unable' to earn anything. It was quite true that the creditors gave the debtor his furniture, but that was under another section of the Act. People could not eat . - tables and chairs, and the debtor had not • been able to do anything for his support gince his bankruptcy. The estate was a very large one, and the application was , '-. ■ made as. a matter of right, for the Court :-;.•--."'- 'to^fix* an. allowance: He (Mr Carlile) '■'■ - ■--"' .thSngh'fbis/friena'Mr Cotterill wonld -'sv '-■">' Bdftww&£''it' }vonld be fair for the Court •P. •■'- 'to fte allowance. He(Mr.Cirlile) was t ;,;:£;« vfef pjpiojj'Jtba* ib b«d been decided in the W^&^^sMv ■• ' '■'■' ■' *

case of Waring Taylor that a debtor could apply for such an allowance as a matter of right. His Honor : Of course he can, if the debtor's sen ices are required. Mr Carlile said that the position was that tlio debtor was unable to support himself, and he wished to leave Napier for a time. His Honor : His wishing to leave Napier is no reason why the Court should order an allowance. Mr Uarlile said the Act provided that ' the application might be made as a matter of right. The reason the debtor had not applied for his discharge was because the bankruptcy was not yet ■closed. Mr Cotterill said he hid only received notice of the application within the last quarter of an hour. He was quite prepared to take it, however, because he felt thathis_ Honor would not entertain the application for a moment. There were two meetings of creditors in the estate held, at either of which the application could hare been made. At one of those meetings the creditors, praoticallv unanimously, agreed tq allow the debtor his furniture, and In so iioing clusv dealt exceedingly liberally with him. 'it was very valuable furniture, put down in the debtors own statement as worth £600, and probably worth more. Mr Carlile • No, it was valued by the assignee at £450. Mr Cotterill supposed the assignee valued it at what he thought it would retch at a forced sain. The creditors (or at all events his clients) thought great liberality fta3 displayed in allowing the debtor his furniture. He (Mr Cotteiill) felt quite certain that if the application made to the Court had been made to the meeting of creditors, no resolution granting an allowance would have been passed. He also felt certain that the Court would not entertain an application of this kind without the creditors being first asked for information about it. He apprehended that these allowances were intended to apply to cases of extreme poverty, where tiie services of the debtor were required by the Assignee. The Assignee could speak for himself, buthe (Mr Cotterill) was instructed by both super- J visors in the estate that neither of them required the debtor's services ac all. He might also say on behalf of Dalgety and Co. that the debtor, since his bankruptcy, had been in occupation of his residence, which was practically the property of Dalgety and Co., ap it was mortgaged to them. Wilh regard to that, so far as the debtor's occupation of the house was concerned, they liad no intention of making a claim until notice was given that the house was required, and there was no immediate intention to do that. Under those circumstances he considered that his Honor would not entertain the appli- , cation. _ ' ! Mr Carlile said it was quite true that the creditois granted the debtor furniture supposed to be worth £600, but that was subsequently valued by the assignee at £450. It might be said that application should have been made to the creditois for an allowance, but the debtor could not set the creditors in motion. His Honor : But you are not able to say that you applied to the creditors to pas? such a^ resolution. Mr Carlile admitted that no such application was made. la the case or Waring Taylor, which was one of proved frand, it had been decided that an allowance must be granted, and the only question was one of amount. The creditor* had no jurisdiction, but only the Court itself. His Honor: Suppose a debtor had a rery ricli wife, and she was good enough to support him (we don't often find that, unless the wife has had a nice settlement upon her prior to bankruptcy), why should he have an allowance from the estate ? Mr Carlile : No such thing is shown in this case. • His Honor: Suppose the debtor were to turn his furniture into money ? Mr Carlile did not think the creditors thought of that. They gave the fumi ture under an entirely different section of the Act. No doubt they had dealt liberally with Mr Kinross, but he (Mr Cnrlile) did not consider that if such a resolution for an allowance had been proposed that it would have been thrown out. The resolution was no doubt omitted to be passed by inadvertence. There was no reason for incurring the cost of calling another meeting of creditors now, seeing tliat the Court could grant an allowance. He assumed that_ the only question was one of amount, and that the Court would grant an allowance ot some sort. Mr Cotterill: We have Mr Carlile's own statement that the bankrupt wishes to leave the place for a time. Mr Carlile said tuat the creditors had had the debtor's assistance for three months, and he had been detained that time unable to support himself. With reference to going away the debtor's wish was really to go to Australia, in the hope of getting offers made to the Assignee fpr the runs in the estate. His Honor : My opinion is that the Courtought to be very careful in making an order' in these cases. The creditors have not been asked to entertain a proposal for an allowance, aud that in itself is almost a reason for refusal. The debtor did nut apparently feel the necessity for such an application until he had allowed more than one meeting of creditors to go by. The creditors appear to have behaved very liberally with regard to furniture, haTing made a grant ot at least the value of £450, aud that represents £4 a week tor over two years. I am not disposed to urant the., application. Mr Carlile asked if some arrangements could be made for calling a meeting of creditors, so that an application could be made to them. The Assignee undertook to call a general meeting of creditors. IN EE KINROSS'S BANKRUPTCY, EX PARTE OFFICIAL ASSIGNEE, IN KE KINROSS WHITE. Mr Bell, with him Mr Williams, for the Assignee ; Mr Carlile for Kinross White. ■ This was a motion by the Assignee to set aside and declare void as against the Assignee a mortgage on the s.s. Ahuriri for £800, executed by J. 6. Kinross in' favor of W. Kinross White, on the ground that such mortgage was an illegal preferance within the meaning of the Ait. In addition to the general plea of illegal preference, it was pleided that the mortgage was not properly executed, not having been sealed, and having been altered after registration. Edward Patten, Collector of Customs and Registrar of Ships for the port ot Napier, examined by Mr Carlile, deposed that the registry of the ship Ahuriri was transferred to Napier on the 10th of October, 1888. She had been registered prior to that in Wel'.ington. The document produced was a copy of the mortgage over the Ahuriri, executed in witness's presence on the 11th of October, 1888. Mr Kinross and Mr Kinross Wliite were present at the time. Mr Kinross signed the instrument, but witness could not remember whether Mr Kinross said " I deliver tliis as my act and deed." By Mr Bell : The document was not in the same state as when it was executed. About a week after the execution witness discovered errors in the document. The words "eight hundred shares" were written in instead of "eight hundred pounds." Mr Kinross did not make the correction until the following January, but witness discovered the error a week after the execution. Witness registered the deed as fuLugh the words had been " eight hundred pounds." After finding out the mistake witness mentioned it to Mr While. Subsequently witness met Mr Kinross in the street, and asked him to come into the office and make the necessary correction. Believed that this was after Mr Kinross's bankruptcy. There wus never any seal placed upon the document. Believed that Mr Kinross said " 1 deliver this as wy act and deed," but could not. say positively. Had seen other mortgages over ships without seals, and had never called attention to this fact I4v his Honor : To the best of witness s belief Mr Kinross pnt his finger on the paper and said, " I deliver this as ray act and deed." By Mr Bell : It did not strike witness ' as remarkable that there was no seal upon the mortgage, Mr Kinross had frequently signed deeds before witness, autt had always put his linger on the deed and said the necessary words, therefore witness believed that he must have done bo on this occasion. By his Honor: Then you have no real recollection of this instance ? Witness : No, your Honor. John Gibson Kinross, examined by Mr Bell, deposed that he had been in business in Napier for many years under the firm of Kinross and Co. He balanced his books in 1886. It was not an absolute balance. There was a sheet written out showing the balances. The books did not balance absolutely. The books were not regularly balanced. Sheets had been written out from time to time showing all the accounts. The balance in 1886 was such as would enable one to ascertain one's position. Did not endeavor to get a balance of the books in 1886. Could not say whether such an attempt was made in" 1885 without referring to books. In 1885 the statement of balances was written out. Did not try to get the books to balance. Did not ascertain whether they would balance. Did not try to balance the books in 1884 except in the manner already indicated. It was not always the custom for merchants to make an annual balance. It was a "eneral custom, but he did not do it. It was not the invariable custom for merchants to balance their books every year. He gave that as his opinion. Had not properly balanced the books ot the firm since the year 1881. During the lnst six months . of 1888 witness believed that his assets if realised would amount to more than his liabilities. ( HisHmoraskedMrßell if he did not Hiink the point at issue conld be settled by Mr Carlile admitting that his client believed it was. probable he could not meet all his debts, but that he hoped and

believed he would be able by the sale of bis properties to meet all obligations? Mr Carlile said it might be admitted that he knew he could uot meet his debts if everybody pressed him at once, but he j firmly believed that by the Sale of his. I properties hp. would gradually be able to meet all obligations. Mr Bell could not agree to that statement 6f tfte cnse. His Honor (to Mr Carlile) : Should it not be that if lie got time he could avert bankruptcy, and that if he did not get time he could not avert it ? ■ Examination of witness continued: The I valuations made ot witness's properties by responsible valuers showed that his assets exceeded his liabilities. Considered himself solvent in September and October, 1888, although his paper was being dishonored. Was of that opinion although in addition to papet for large amonnts, a ehpqne for the small sum of £20 11s 6d was dishonored on the 2nd of October. His Honor, to Mr Belli Was it not that he considered himself solvent at this time Owing to Uie valuations of his lauds ? Mr Bell only wished to get at the facts. He did not wish to make Mr Kinross's position unpleasant, nor did he wish his own position to be made unpleasant. He was trying very hard to shorten the examination of Mr Kinross, but tlifi manner in which he answered left him (Mr Bell) no option but to get at tee facts in the best way he could. He would put in 13 writs extending over September and October, ISBB. [Documents put in.] j Examination of witness continued : At about that time several summonses were issued in the Supreme Court and in the Magistrate's Court. Conld not give the number of executions put in in 1888. Could not give a rough idea. There would be at least half a dozen. When an execution whs put in it was prtitl out. He managed to settle with those \\ lio put in the bailiffs. Settled in all cases except witli those who consented to renew. Creditors were not allowed to help themselves to goods out of the store in payment of debts. Believed that invoices were rendered in all cases where goods were delivered from the store, and did not k'low of any case to the contrary. In 1888 witness partly paid debts with goods from the store. Goods were both bought and sold. The sales amounted to £5000 a month. In one case, that of Rohjohns, he renewed, and witness gave him security over goods in the store. Did not have to do that prior to 1888. At various times prior to that witness's paper had been dishonored. In September he really believed that he could pay all bis j creditors in full. There were liabilities other than mortgages and mercantile debts. Had moneys in hand held on account of others. Those moneys were received on account ot others. In Septe.nber, 1888, those moneys were owing, and witness's account at the bank was overdrawn. The bank held security for the overdraft. Did uot think the ageregate of those moneys was £10,000. Held XMOO received from Messrs Duff, of \Vairoa. That money was connected with witness's trade. The amount originally received from , them was very much larger. Messrs Duff had a large sum of money lying with witness on call at interest. The instructions received with the money were that it was to pay orders on Dnffs' account. It was to be held at the disposal of the Messrs Duffs. Practically witness was Messrs Duffs' banker. Mr Balfour was a manager for witness. The moneys held f»r him were due to accumulated salary left in witness's hands. Witness held £2000 for Mr Condie. That money had been in witness's hands for a long time. He was attorney for Mr Condie. The aggregate of the moneys held upon call might be about £5000. Mr Condie was secured to the extent of about £1000. The seenrity was the lease of some 5000 acres of land, about 10Q0 sheep, and abont 300 head of cattle. The property was valued at £1000 by its former owner, Mr Cartwrigbt Brown. He owed witness money, more than £1000, and witness took over the property referred to for £1000 nud wrote off the" balance. Witness's lands and stock were valued for the statement in bankruptcy as follows : — Raukawa was valued by Mr Well wood at £50,000, exclusive of stock. Mr Douglas M'Leau put the same valno upon it. The Gleuross run was valued by Mr Wollwood at £42,000, including the stock, and Messrs WaterhousAand Fitzherbert agreed with that valuation.' A run at Poverty Bay was valued liy Major Westrupp at £12,000. Te Aroha run was valued by Mr Woodbine Johnson at £23,000, and by Major Westrupp at £20,000. The telegram produced was sent to Dalgety and Co. in December^ast. The telegram contained an offer to assign witness's estate. Did not remember whether he wrote or wired prior to that making a similar offer to Dalgety. That firm were quite willing to wait. They had proved in the estate for £16,000 over and above their securities. By Mr Carlile : Witness had received an offer for the land purchased from Mr Cartwright Brown. There was an offer of £1100 and another of £1500. Witness remembered the execution of the mortgage on the 11th of October, 1888. There had been a previous arrangement with Mr Kinross White about that mortgage. The circumstances under which the arrangement was made arose after the wreck of the Sir Donald. Mr White received money from the insurance company in connection with the Sir Donald, and witness asked him if he would put that money into another steamer if he (witness) bought' one. The Sir Donald was wrecked in- May, 1887, and Mr White received the money for the insurance in June or July. Witness entered into the arrangement for purchasing the Ahuriii in July, 1887. The actual agreement was executed on the 31st of August. The nereement provided for the delivery of the steamer in December, 1887, and the vessel was actually delivered in January, 1888. Mr White agreed to advance £800. Of that £500 was paid by him in one sum, mid a biU drawn upon witness by the builder of the vessel was also paid by Mr White. Mr White bad paid the £SOO by October, 18S7, but the security was not given to him till October, 18SS. The reason was that it was agreed in the specifications that the vessel should be classed 100 at Lloyds. There was a dispute about that, and the matter was referred to Captain Babot, of Wellington, who decided in witness's favor, and witness preferred to wait until the registry of the Ahuriri came up from Wellington before executing the mortgage. The price of the steamer was £3200. Of that onethird was paid, and a mortgage for £2100 was given to the Colonial Insurance Company by arrangement with the builder. This was about January, 1888. The registry was at that time in Wellington, and witness thought it better not to give Mr White his mortgage until the registry was removed to Napier. The Ahuriri was insured in Mr White's name in September, 1888. After the bankruptcy the Official Assignee paid off £700 of the mortgage to the Colonial Insurance Company, leaving a liability of £1400. The vessel was sold the other day subject to that liability. By Mr Bell : Mr White was witness's nephew. He was in charge of the town office ot the firm, where the insurance agencies' business was transacted. Mr Gondy was also wituess's nephew. He was a clerk in witness's office. During last year some accounts due by Kinross and Co. were paid by cheques drawn by Mr Goudy in his own name, and by Mr White in his own name. The cheques were upon the drawers' own j nking accounts. Messrs Goudy and White discounted bills for witness, and he got the proceeds. Witness owed Mr White moneys other than the £800 the subject of the mortgage, and also owed money to Mr Goudy. Mr Kinross's examination was concluded at this stage, and the further bearing of the application was postponed till after the conclusion of the action in the Supreme Court, " Bank of New South Wales v. Graham," which is set down for this day.