Creditors Seeking Money That Passed From Husband to Wife

Manawatu Times, Volume LV, Issue 7297, 6 August 1930, Page 3

Creditors Seeking Money That Passed From Husband to Wife

SUPREME COURT ACTION. In the Palmerston North Supreme Court yesterday an application was made by the D.O.A. in tho bankrupt estate of-Edward Alexander, farmer, of Apiti, to set aside a mortgago for £1628 held by bankrupt’s wife over a 159 acres farm at Apiti which bankrupt sold to David William Hogan. The application was based upon the grounds that the, money for the mortgago was advanced by bankrupt to his wife at a time when he was really insolvent, although he was not declared bankrupt till March 15, 1929. Mr. H. R. Cooper with Mr. Mason, appeared for the D.0.A., and Mr. A. M. Onglcy for Mrs. Alexander. The position, as outlined by Mr. Cooper, was that prior to 1920 bankrupt owned a farm of 150 acids at’Apiti. On J une 11, 1920, bankrupt and his brother Samuel purchased 400 acres for £10,600. In October, 1920, the bankrupt sold the 150 acres farm to D. W. Hogan, taking some cash and a third mortgage of £863. In July, 1925, Hogan’s prior mortgage became duo and had to be refinanced. For that purpose he gave a seeond mortgage to Mrs. Alexander (bankrupt’s wife) for £1628 maturing on May 1, 1930. That sum was made up of £9OO (a gift from bankrupt to his wife) while the rest was found by Mrs. Alexander, £lO3 in. cash and a sub-mortgage for £625 secured by bill of salo over bankrupt’s stock. The submortgage and bill of sale were paid olf in May, 3928. Plaintiff alleged that in 1925 when the £9OO was given to his wife, bankrupt was insolent—he owed his brother Samuel £935. It was submitted that the conduct of bankrupt in keeping interests paid for three years, was testimony of dishonest intentions. Mr. Cooper contended that there was fraudulent intent throughout the transactions and that Alexander had set out to 'beat his creditors.

Mr. Onglcy stated that when married Mrs. Alexander had money of her own and put some of it into tile firstfarm. When it came to putting more money into the farming ventures, she wanted some protection. The £9OO was handed over to her and it fairly represented her interest in the farm. The intention was not to defeat or defraud the creditors, but simply to put her in a position she was justly entitled to be in. She agreed to go out and do a man’s work in the sheds so as to dispense with a labourer and so earn the £625. Counsel pointed out that this arrangement gave husband and wife who had started out together, an equal distribution of assets, his share being the stock £llsO and plant £2OO. It had boon suggested that at that time Alexander was not able to pay his debts, but he had rearranged his motgages and was putting improvements on the property in the shape of buildings, fences and working the place. That was not the action of a man trying to deceive his creditors. Tho brother Samuel had made no attempt to collect his interest and did not prove in the bankruptcy because he was told he was statute barred. He had sat on his claim for 4 years so how could it be said bankrupt had transferred the money to his wife to defraud him ? The whole transaction, counsel claimed, was one between man and wife to secure themselves when they had no debts. Mr. Cooper, in reply, referred to an affidavit by Mrs. Alexander in which she declared the £9OO was a gift. A'S regards tho £625 she claimed that it was wages earned on the farm, but counsel thought that not much Telianco could be placed upon that explanation. The statements of bankrupt and his wife were uncorroborated . Ilis Honour reserved decision.