DISTRICT COURT, REEFTON.

Inangahua Times, Volume III, Issue 89, 14 March 1877, Page 2

DISTRICT COURT, REEFTON.

Sat^bdat, March; 10, 1877. (Before His Honor Judge West on.) He Bm Jvuvs "VoGEt Cojjpans (in LIQUIDATION).

This was an adjourned application by B£r Newton, moving that the name of Jjames. Clinton be removed fr,qm the list of contributories of the above-named compiny. The case bad been partly gone into on. t,h,e previous, day, and, was adjourned to, enable the Liquidator, to. produce evidence 1,0 show that at the t^me appellant transferred he was aware that the company was. in an insolvent condition.

Mr Staite now objected to the admjssion of fresh evidence as being unfair to, his client. H,is Honor said t&at great latitude, was. giv,en to the Court in capes, of the kind then under hearing, and; the qase. being of so much importance, in a, district like this, the. Court was. anxious,, that np person should be allowed to get freed, from liability tjpless, the. law fully enjtitled him to dp so, The Court had no, doubt that the appellant had transferred his interest w,ith. a full knowledge of its nature, and ©are. would be taken that be was. not allowed to escape unless, the law fully warranted it.

T&e following additional evidence in the case was then taken.

Loui* Davies— l|was legal manager of the. Sir Julius Yogel Company. I recoj lect receiving the three letters produced from I;he Bank of New Zealand, or letters to. the same effect. The} refer to the repayment of the company's overdraft. The letters I suppose, w.ere laid before the directors. They might not- haye been laid before, the directors immediately. The letter from Mr Campbell stating that he would apply for a inding»up order was laid, bpfore the directors within a fortnight after its receipt. The letter is dated ßth April.

Cross-examined— l will not swear that Mr Cljnton w.as present at tjhe meeting, of directors, when that letter was. produced. Thftatatenjenjt of : the company, produced is made up to the 2nd of May. That statement was prepared in my office. As far as. I can say I believe the statement is correct. That statement shows that after all the liabilities of the company had been provided for there was a credit balance of £20. The asaeis. shown there include oas.h in hand, &c, without reference to the uncalled capital or calls. The nominal capital of, t,he company was £16,000. All the shares were subscribed for. About sd, or 6J per share had been calld up. The amount called up was under Is per

per share. The shares were 20s each. Subsequent to Clinton's tranfer I received about £80 or £100. Since the statement referred to wa,s made out a good deal of that sqm was paid in wages. About £60 Was puid in wages. There is another j#eng; tor prjntlngf &o> fat M 9d %tim Mr;Mtirfl4 iti n» 8 call Mcottnl was credited with AM amount. JRle tCWVint of casE receive^^ras about £2\. t heard Mr McLean ?fty thj*e : wip or £80 of unpaid calla. I have cast up the amount and find it to, he between £150 and £160. There are some substantial names oq the list of shareholders. I mow Doitt Pedro^Aqaerson* Since the liqqidation the Liquidator might hare recovered part of A ndersofl's contribution. 1 have heard that Anderson made about £100, out of the Anderson's Company. The amounts of Archer's judgments could hare been, received if distress warrants had been issued. I know Nasmytq. He is on the list. Have spoken to the Liqui* dator about recovering from him. He is a miner in constant employmeqt. Cqmings

paii up to the date when operations ceased. The other names on the register are C. Mirn> t W. B. Aucber, W- Coates, Staite, Bemaskey, Ramsay, Nasmyth, Callaghan, Cooney, Jollife, Bayfeild, ) Lynch, C. Mace, M'Shaiq, Robertson, Escott, and P. Kelly. Cross-examined— The books of the company are correct, and any information shown by them will be correct. The Htnount of unpaid cajls on the register is £150. The amounts, received subsequent to the lOjLh May were ail cash. Th.c company stopped working in May. Anderson's wages were credited to. him on account of his first cajl. I heard Anderson swear that the wages were credited against his first and second call, and I have since been to the Liquidator's office and find by the block of the call receipt that hjs stateI ment was incorrect. Don Pedro Anderson — I know the works of the Sir Julius Yogel Company. I was a direotpr of the eomp/iny. The mine stopped work on the 4th May. T ere was. no expense incurred in the mine after the 4th May. The mine, was

dosed up, William, M'Lean— l am Liquidator in the matter of- the. Sir Julius. Yogel Com* pany. I have audited tho books of the company to-day. On the KHh of May (the date of Clinton's transfer) the total amount of unpaid calls was £251 0* lOd. The liabilities had besjn incurred subsequent to tjh,e 3r.d of May. £126, 17s 7d is shown to haye been paid away by the manage? sjnce.the 3rd of ?>lay. The debts at present are £133,183 Id. All the debts proved were incurred prior to the 3;d of May. £112 \Bs lOd has been collected since the 3rd of May. Tuqje is £138 us still outstanding.

Cross-examined—X did issue a, distress warrant against; Anderson. I dou'l know that Dairies threaded that if I did not issue a distress warrant agiinst Anderson, he would try and have ma compelled to. Dayies very often com,es into my office a,nd says and does things which ha ought not to do, and I do not take much notice of him. As an instance he wept into, my office yesterday while, I Tfcas. absen> at Court and overhauled the books <*f the Julius Yogel Company. I do npt know that he has the right as a contributory to enter my office without my permission. I am willing to give the fullest information tp, all pontributories, but i,t is. due to. me t,hat my permission should be asked. It, is certainly due as a matter of courtesy. Gulline appears to hare signed, the lost minuses of the Julius Togel directory. I considered that Mr Guiline had no right to.be placed on, the list of contributories. Mr Mir^u told me that he was not in a position to pay. I know that he is part proprietor of the Inangahua Herald, but as Charlea fylirfju I know that if I were to take out a, warrant to-morrow I would get nothing. He is on the tyst for 1000 shares. I lopk upon. Nasmylh, Cummings, Nasmylh (T.), Hallaghan, Cooney, Lynch, aqd many other of the contributors as virtually bad, H,e deemed Archer, Staite, J)avies, Demaskey, a,nd others good. for. the amount, of their con* tributions. The others I look; upon as bad.

His Honor said that in considering the solvency or insolvency of the company at the date of the transfer, tbera was one question as to whether the Court was was enabled to take into consideration, the, uncalled capital of the company as an asset At the. moment he was inclined to think that the capital uncalled must be regarded as an asset.

Mr Newton said that the. winding up petition had been granted upon the assumption that the company was. insolvent, ancL the Court could hardly gjo be«. hind the prayer of the petition.

His Honpr said, that it did not follow that because the company was insolvent as against, creditors that it should be so, against shareholders. Besides it might; probably be. afterwards, argued that the. Court had, erred in granting the petition* and two wrongs would, never make a right.

Mr Newton felt that the fact of the petition having, gone for liquidation was of itself sufficient evidence that the qompany was cot in a solvent condition.

His Honor did not desjre to deal with the case hastily, and therefore would reserve judgment in order that an, oppor* tunity might be afforded of looking up the authorities. The point was ope of

some importance, and it was therefore desirable that it should be definitely settled. Judgment reserved accordingly. Ijl r&TBE Nobtb Stab CoMPAinr (in UQUIXUTIOK.)

Ibis was a petitiou by Mr Pitt an be half of William Hugh Jones junr, pray» ing that the name of William Hugh Jones junr be removed from the register of tbe above company, and that tbe name of Frederick Franklyn he substituted in lieu thereof, and inserted on the list of con* tributors of tbe company,

Mr Staite appeared for tbe liquidators.

Mr Newton appeared for Frederick Franklyn, acd opposed the application.

Mr Pitt read the affidavit of William Hugh Jones senr, which set forth that in December, 1872, deponent, then living at Moonlight, Grey Valley, paid a visit to the Inangahua for the first time, and met Mr Franklyn, whom he had previously known. Mr Franklyn induced him to, accept on behalf of his (deponent's) infant son a transfer of certain interests in the North Star Company. The rea» sons alleged at the time by the said Frederick Franklyn being that a meeting of the company was about to take place to remodel the company, at which he did not desire to vote, but that upon tbe reformation of the company he (Franklyn) would take back the shares. Deponent then knowing nothing of the company's circumstances agreed to accept the shares in Ms son's name. Accordingly a transfer was made out by the said Frederick Frankly n of the mining shares in que>* tion, which was duly signed by deponent on behalf of his son. That no considera tion passed at the time, and that the transfer and other fees were paid by the said Frederick Franklyn^ and that the latter at the time promised that deponent should not be exposed to any subsequent loss in respect to the said shares. That the said Frederick Frank lyii had since frequently promised *o hold deponent free of any claim in respect to the shares referred to. That deponent always con* sidered the shares as belonging to the said Frederick Franklyn. That no demand had been made upon, deponent in. respect thereto. That the transfer was accepted, solely at the request of the said Frederick Franklyn ; and finally that the transaction, was not hona -fide.

His Honor mqii'rcd whether it was the. intention of the .other side to deny a'»y of the allegations sel forth in deponent's affidavit.

! Mr Newton said tlaat he would contend thai the transaction was thoroughly bcm, fide, and that there was no understanding tliat the shares, shoaid he. taken b,>ck at a i ful are tiiJio. ! His Honor— X^nless Mr Newton directly j negatived the. coatents of Mr Jones's i U;,e transaction, w;is of a discreditable character, nnd shoujd bo exposed.

Mr Jiones d> sired, that the Court Ttould give him, an oppor unity, of explaining that at the time he accepted the transfer he was. a complete stranger in the district, knowing nothing whatever about the company, its prospects or circumstances. He had known Mr frankjy,n previously, and it was purely at his re* quest and upon, the assurance that aasoon. as the company was remodelled the shares would be taken back tbajt he agreed to, accept the transfer. He had been, led into the transaction by Eranklyn's representations nod acted, in perfectly good faith.

His Honor said he. was prepared to believe that the witness was culpable only in so far that he had, lent hjs name to the transaction. It might be that he acted innocently and in good, faith, but the fact Remained that he allowed himself to be made a tool of in the name of his infant son, and the transaction as appeared on the affidavit was a most contemptible one, and he. hoped for the reputation of the parties that the case coujd be settled withput the further intervention of the Court.

Mr Newton said that his client wanted an opportunity of explaining the transaction, and called

Frederick I'Vanklyn, who said — I recollect making, the transfer produced. Tbe transfer was oqjt and oat. Iw.asnotto retain the slightest c/tntrol of the shares transferred. Never informed Mr Jones to my recollection that in a few w,eeks the company would be remodelled oad that I would take back the shares. I will state positively that I did not make such, a, promise. I held the shares for two months. I took the contributing shares because I thought J, could remodel the company, and when I found I could not, X transferred them.

Cross-examined — I never told, Jones that I did not wish my name for business considerations to remain on. the share list. I bare other interests in, the, same com* pany. I could not say whether any bona, jftfe consideration passed. Believe that a cheque passed, but it only wenjt through the form. Never considered that X would resume the control of the shares. Was not aware that tbe company were in debt when I transferred. 1 had no opportunity of learning the state of tbe company. I did not pay any transfer fees. I did tell Jones that I would not like to see him lose anything by the shares.

His Honor— What I hase jast heard further confirms me. in the opinion ex* tressed. It is the. qlqarest case of duinmyism I hare ever met with. What did Mr Frauklyn say when pressed as to.

whether he did not promise Mr Jones that he would take tho shades backP— • "Not to bis recollection/ Is it >con« ceivable that a nun eouli dflUbt in «oeh % matter. In all cases of tBJt kind tie Court has be d that rherero wfojid* existed in relation to traasfot that **uld be sufficient to nptet them, and hero, they were clearly proved. The expldjl&on made only Mrved to make mattert'fofw, and evince the real nature of t&fc trana^ action.

Mr Franklyn proceeded to say that he cou.ld not have said that he did not wish his name to appear on the register of the company, as be held other shares in the same undertaking— that is paid up abafti. His Honor— rYo'j go to, a complete, stranger— one not living in the district, and therefore not likely to be found— and dispose of your shares lo his child. The age of the child is concealed, the. father signs its name to the transfer which is taken to the company, who, in their Ignorance, accept it, and remove your name from the register—a clever fraud, design* edly made, and you then betray the matt who was weak enough to endeavor to befriend you.

Cross-examination continued— l am, not prepared to fhtly contradict paragraph 4 of Mr Jones' affidavit. I can't saj nhe-. tber Jonea heard anything about the com-, pany's position ; he might hare for all I know. Ido not know that he had only just armed in the district. He did no* tell me that be had only just arrived. I believe he may have arrived on the day previous to the transfer. % don t deny his affidavit. That portion of it referring to the shares being transferred at my request is true,

His Honot— Franklju practically ai'.« mua the transaction. There is bat one way of dealing with, shad; transactions of this nature, and if possible this man's name shall be placed on the list of con« ributories. Tbere 19 indeed fear lot A district when we find a so-called respcU a,')le man lending himself to such a device. For an illiterate man of straw there might be argued some small excuse, bat when a man of Franklyn's position— one. who, feas lire 4 upon the success of the. field, nhose ajj has possibly been, made in, it, descends to, such a trick, for the good of the field the Court should at once step, in and openly denounce it. Such practices, if permitted, will destroy confidence in, the field; capital will be withdrawn, and) the result can be easily imagined.

Mr iNewtoa thought that the circumstances of the c:ise hardly warranted the. remarks of the Court,

His Ronpr — Unless I <ud to discredit; the sworn testimony of Junes' afiHarit and that I cnnnot Wo after Franklyn's.ad"-. mission* I cat?no. come to any other con,* clusinn. Mr N.ewtoti, HEgrcl that the lift of contributories. Imping been already settled* t,lie Court had no. powes to mry, or am. n4; tb* lis,t.

His Honor said that hating already.expressed such a decided opinion upon, the facta of the case, it was not necessary to again, refer to. them. He would say that for that reason, the Court w»uld be* more careful in considering the legal, point, and with that object he would reserve his decision, and refer to. the eases, where, the lists had been resettled in. England under the Act of. 1862*

Mr Franklyn then left the witness-box*, his Honor saying that if he regarded-biS; imputation he w,ou)d.at,once. discharge the. debt. Judgment reserved^