REMARKABLE BANKRUPTCY CASE.

New Zealand Herald, Volume XXV, Issue 9142, 25 August 1888, Page 2 (Supplement)

REMARKABLE BANKRUPTCY CASE.

MARRYING A WIFE TO SAVE PRO-

PERTY. In* the Court of Bankruptcy, before Mr. Justice Cave, a motion was made on behalf of the trustee of the estate of Mr. C. P. Pennington, formerly of Buckingham Palace Road and other addresses, to set aside an antenuptial settlement dated October 26, 1886, upon the ground that the settlement was not executed bona Jide, and that the marriage which formed the consideration for the settlement was gone through merely for the purpose of defeating the claims of the bankrupt's creditors. The case was a somewhat remarkable one.

Mr. Tindal Atkinson, Q.C., who appeared (with Mr. S. Woolf) in support of the motion, said that the bankrupt was of good family, and was at one time possessed of a considerable amount of property, but lie appeared to have fully mortgaged it. He was formerly trustee of two settlements, and in that character he had, unfortunately for himself, allowed a considerable portion of the trust money to get into the hands of Messrs. Parkers, the notorious solicitors of Bedford Row, who absconded a few years since. The result was that the money was lost, and proceedings in Chancery had been instituted against Mr. Pennington by the beneficiaries under the deeds of settlements. The Vice-Chancellor' then ordered him to make good the trust money, amounting to about £7000, but he had not done so. Proceedings in bankruptcy followed, and a receiving order was obtained in March, ISS7, the debtor being subsequently adjudged bankrupt. It appeared that in October, 1886, he executed an ante-nuptial settlement covering all the property which he then possessed or might possess, and then married the present Mrs. Pennington. The evidence taken in the case showed that Mrs. Pennington had had experience in matrimony, this being her fifth marriage, and she admitted that she was well acquainted with the bankrupt's affairs before she married him. Air. Justice Cave : What is the age of the lady ? Mr. Atkinson : I don't think my friend Mr. Woolf has been bold enough to ask the question. (A laugh.) I am told it is 46 or 47. She said on being examined that the marriage did not recommend itself to her, and that she married him to save his property for him, so that lie might have something in his old age. Under the circumcutnstances it was contended that the settlement, although an ante-nuptial one, came within the decision of Vice-Chancellor Malins in " Buhner and Hunter," and other reported cases, and was clearly void as against creditors. Mr. E. C. Willis, Q.C., appeared (with Mr. Turner) for the respondents. Mrs. Pennington alleged that she was nervous and excited when she was examined before before the Register, and her evidence was subject to material qualifications. Air. Justice Cave, in delivering judgment, said this was an application to set aside an ante-nuptial settlement upon the ground that it was a fraud on the bankrupt's creditors within the meaning of the statute of Elizabeth. The facts were mainly to be gathered from the evidence of Mrs. Pennington, the bankrupt having declined to stand the test of cross-examination. The circumstances were certainly somewhat remarkable. In 1883 Mr. Pennington, who had for some three years been acquainted with Mrs. Pennington (at that time Mrs. Wingfield), and was aware that she had for some time had immoral relations with a man named Dell—by whom she had two illegitimate childrenentered into an engagement to marry her. Some time in September, ISS3, Mrs. Wingtield became bankrupt, and the trustee appointed under her bankruptcy was also trustee of the settlement, the validity of which was now impeached. Instead of themarriagte taking place, immoral relations were established between the parties, although Mrs. Pennington said that/ these were only of a casual nature. Judgments having been recovered and orders made against Air. Pennington for the payment of large sums of money, the marriage which had been so long delayed took place in October, 1886, an ante-nuptial settlement having been executed just previously over the relics of the bankrupt's property. The question which the court had to determine was whether the marriage was an honest or a dishonest one, and whether the settlement was not executed merely for the purpose of defrauding the creditors. Airs. Pennington had given no satisfactory reason for the delay in the marriage, anil he (the learned judge) said he could not help coming to the conclusion that the marriage was nob an honest one, and that the settlement was executed for the purpose of defeating the creditors. If a marriage was not entered into bona fide, and a settlement was executed in order to defraud creditors, it could not stand. There would, therefore, be an order declaring the settlement fraudulent and void, and ordering it to be set aside.