SUPREME COURT.

Lyttelton Times, Volume LXXX, Issue 10112, 10 August 1893, Page 3

SUPREME COURT.

Wednesday, August 9. (Before his Honor Mr Justice Denniston.) IK BANKKUPTC-Y. IN RE C.. W. TUB-NEK. This was a motion to sat aside a delivery of certain coals made in October last year by bankrupt to the Farmers’ Co-operative Association, Timaru, and to recover the value—.£l7l3 6s 4d. Mr Fisher for the application ; Mr : White, of Timaru, contra. ' Evidence had been heard on the previous day. i Mr Fisher submitted that tbetraasac-J tion was void under Section.37 of the? Bankruptcy Act of 1354, as amended by the Act of 1885, unless the creditor could prove that it had been completed in the ; ordinary course of business and without| notice of bankruptcy aud -without notice j that the bankrupt was in a stata-=e£_io4 solvency. This :had been held in quoted in vol. 8 of the New Zealand; Law Reports, page 234, and by Mr Justice Williams 5 decision in a case in 9/. New Zealand Law Eeporte, 193. The facta showed that Turner was most hopelessly insolvent at the time, and unable to pay Is Gd in the £. Mr Inglis had said that Turner bad always been regarded as shaky, and at last hia position had been seen to ba most critical. Mr Turner had not denied that his finances were involved. He had carried on transactions to the extent of several thousands at a time, and practically through the forbearance of his creditors. He had paid for one month’s coal from the proceeds of the nest month. Directly a little pressure had been applied he had collapsed. In this casa the transactions were of a most extraordinary nature. Mr Turner had evidently made up hia mind not to deliver the coals in the ordinary way of business. He had drawn up a special agreement and waited on Mr Inglis. Mr Inglis had consented to it, for reasons known to himself; had he not done so, tlie present difficulties would not have been presented. However, , the effect of the agreement had not struck Mr Inglis, and the extraordinary contract had been entered into. His Honor said probably Turner would have delivered the coals in the ordinary way had they belonged to him without restrictions. As it was, he had fall uneasy, and had endeavoured to limit the transactions, and pledged the coals only, as it were, against an antecedent debt. "Mr Fisher maintained that the arrangement in question could not claim the protection usually given to business transactions. In E. and M., 2G3, was a case in which it was held that a payment of a promissory note by instalments was not a payment in the ordinary way of business, and this delivery of coals in payment of an account (as was the fact) had been by instalments. This principle was further carried out in a case reported in 3, N.Z. Law Reports, page 316, which was somewhat synonymous to the prescatcase. Next, the Company had notice that Mr Turner was in a state of insolvency. Mr Inglis had admitted that Turner was known to be in an unsound financial position, and that in August last he had received information that Turner waa on the verge of bankruptcy. Turner had told him that he could not poy by any possible means, but that ha could deliver coals to the amount he owed the Association. This bad been arranged and negotiations entered into for phe delivery of coals. The correspondence before the Court led to the supposition

that Turner had endeavoured to gain time and lead the Association into the belief that he intended to go on delivering coals. It was not the correspondence of a business man offering wares at a price in a bond fide manner. Apart from any question of bankruptcy, the circumstances of tho delivery of the coals ware quite inconsistent with general dealings. . Cases bearing on the point were cited. Mr White submitted that the coal was delivered by Turner in pursuance of an agreement made more than three months pripr to his bankruptcy, and therefore it was a good one. If an agreement to pay was made more than three months before a bankruptcy, then even though the payment was made within three months of the bankruptcy it was protected. Ha could produce authorities in support of this contention. He narrated the facts of the case, at some length.

His Honor. said that no pricec being mentioned, if was pretty clear that there was no contract. It was nob intended to be a sale—the owner o£ the coal had simply said, “I have not the money to give you, so will give you coal.” ’Mr White cited a number of cases, and contended that in carrying out an agreement made before his bankruptcy. Turner bad nob dona so with the object of preventing the due disposition of his goods among hia creditors. The facta agreed with those of cases in which it had been held that the carrying out of agreements made prior to a bankruptcy did not show fraudulent preference. Mr Fisher, in reply, said that the facta showed that there was no direct agreement on tho part of Mr Turner to deliver specified quantities of coal. Moreover, the particular delivery in question was. not in pursuance of the first agreement, but was entirely a special arrangement. His Honor reserved his decision.