LAW AND POLICE.

New Zealand Herald, Volume XXV, Issue 9186, 16 October 1888, Page 3

LAW AND POLICE.

SUPREME COURT.— Bankruptcy. Monday. [Before His Honor Mr. Justice Gillies.] Release of Assignee.—Mr. Cave moved for the release of the Assignee from office in regard to the bankruptcy of Robert Henry Holman. The order was granted. Close of Bankruptcy.—Mr. Cave, for the Official Assignee, moved that the bankruptcy of James Hosie be declared closed. The assets had realised £139 9s 9d. The order was made. Public Examinations.—Mr. Cave moved that a day be fixed for the public examination of Robert Stevenson, a bankrupt. In this case an affidavit had been tiled by the Official Assignee containing a resolution of the creditors desiring that the bankrupt should be brought up for public examination, and specific charges had been made, of which notice had been given to the bankrupt. His Honor fixed the 17bh December as the date of the public examination. Mr. Cave made a similar application in respect of John Roberts, a bankrupt, and the same date was fixed. Annulling Bankruptcy.—Mr. Buckland moved that the bankruptcy of Henry Jackson be annulled. The application was under bhe 190 th Section. A composition had been accepted by tho creditors, and paid and satistiod, and the Official Assignee had no objection, and the order annulling the bankruptcy was granted. Orders of Discharge.-—Mr. Hesketh moved that an order of discharge be granted to John Morrison, a bankrupt. Mr. Clayton appeared in support of the application. There was no objection on behalf of the creditors or the Official Assignee, and the order was granbed. He made a similar application in regard bo Oliver Mason Creagh. The application was unopposed, and the order was granted. The Land Syndicate: Creditors' Securities.—Mr. Cave moved that a deed of assignment from Graves Aickin to Kempbhorno, Prosser, and Co., bhe New Zealand Drug Company, dated 16th June, 1888, be declared fraudulent and void, as against bhe Official Assignoe. Mr. Theo. Cooper appeared for the Official Assignee, Mr. H. Campbell for the bankrupt and the company. Mr. Cooper said this was a motion by the Official Assignee bo seb aside a deed of assignment of book debts made by Graves Aickin to Kempthorne, Prosser, and Co. Affidavits were tiled on both sides, which seb out the facts, and on these facts the Official Assignee relied for the judgment of bhe Court The debbor filed his ocbibion of bankruptcy on the 7th of Jtaly, three weeks after the deed was executed. There had been a prior deed of January 28, assigning bhe book debts by way of mortgage to the company. He referred bo the Official Assignee's affidavit, especially paragraph 9, contained in the second examination of the bankrupt, in which it was set out beforo giving this security the bankrupt had assigned the whole of his stock to tho Bank of New Zealand for money duo, and for future advances. He also, on the 28th of January, assigned to tho Drug Uompanyj by way of mortgage, book deobs as security for money clue. The position of Aickin therefore in' June was that ho had assigned his stock to the Bank of New Zealand, and his book debts to the Drug Co. On June 15 the Bank of New Now Zealand demanded payment, and Mr. Aickin wenb to Mr, J. B. Russell, who at that time was acting in the dual capacity of Mr. Aickin's solicitor and solicitor for the. Drug Company, and that gave rise to tho'deed of the 16th of June, which was an absolute assignment of the book debts bo the company. He read the affidavit of Mr. J. B. Russell, who said that ou being made acquainted with the facts by Mr. Aickiu, and a consultation' with Mr. Henton, manager of bho Drug Company, ho deemed ib best to have an absolute assignment of the book debts made to the company. Mr. Aickin agreed to this course, and agreed to make out a schedule eqtia to the mortgage in the deed of the ■28th of January, and the deed of the 16th of January was made not with a view of giving the Drug Company any preference over other creditors, but only with a view of facilitating the collection of the book debts, by enabling the company to sue in their own name. Mr. Henton and Mr. Aickin mado a joint affidavit corroborating that of Mr. Russell, and Mr. Aickin said the assignmenb only included such book debts as were mentioned in the deed of the 28th of January. There was an nthdavit from Mr. Cave, however, which showed thab a sum of £80 was composed of enbiroly new debts, contracbed after the 28th of January. Mr. Cooper proceeded bo say bhab bhe application was made under section 27 of the Act of ISS4, and section 13 of the Act of 1885, and they would have to substantiate in order bo ask the Court to give a decision in his favour. The first was there must be a transfer of property ; second, that tho transfer was made by a person who was unable to pay his debts out of his own money; third, by giving a preference to cerbain credibors ; and fourbh, bhab bhe assighmenb was made withm three months of the time of bankruptcy. He proceeded to argue that each of these points was amply proved by the evidence, contending, so far as the transfer of the property was concerned, bhab, while bho dood of the 28th of January, a secret deed, which had never been actod upon, was a mortgage, and gave Mr. Aickin the right of redemption ; that of the 16th of June was an absolute assignment to the company. Mr. Campbell said that as to the main facts there was no dispute, but he contended that if there was no evidence of a wish to give a preference to one creditor above another, there should be some evidence to show an inference of preference. He quoted a number of ca-ses to show thab subsequenb choses in action may be included in an assignment His Honor poinbed oub bliab bins did nob refer to creditors. Mr. Campbell, however, contended bhab the Official Assignee would be in no bebber position bhan bhe Drug Company, and bhey were cntibled, under tho deed of 28th of January, to any future debts, and the deed of the Ib'bh of June wenb no furbher than to give the company the right to sue in their own names, and no property passed. His Honor. ([noting from the latter deed, pointed out that tho deed deliberately set out bhab bhe deed of the 28bh of January was set aside. Mr. Campbell contended that it by no means gave a preference, as the creditor had a right to recover under his first deed, and the facts showed thab ib was nob the inbenbion of bhe parbies to give a preferonce. Mr. Cooper replied to the arguments and cases quoted by Mr. Campbell, and contended thab the deed of tho lb'th of ■June was entirely distinct, and all they asked was bhat ib be sob aside, as it showed fraudulent preference 011 the face of it. His Honor said there could be scarcely any doubt in the mind of anyone reading the deed of the 16th J une thab ib had been made with bhe ctfecb of giving a preference. There mighb be obher views, bub ib had bhab effect. With the deed of the 28th of January lie had here nothing to do, more especially as the deed of the Kith June declared bhab ib was done away with, and bhat this was a sale of tho book debts bo bhe company to wipe oub the debt due by Aickin. There was no doubt the latter parb of the dectl was inconsistent, but ib gave a strong indication of preference. The first part of the deed discharged the assignor from all liability, and yet this last clause provides bhab if bhe book debts did not provide suflicienb bo pay the debt, ho should still be liable. No obher inference could be drawn than thab bhe deed intended bhab a preference should be shown bo bho company over bhe other creditors. His Honor quoted a decision of the Court of Appeal in a similar case. He said bhat in the present case this transfer was intended to give a preference to the company; and bo set aside the mortgage, bhey boughb the book-debts at the price of their debb. The inference was unavoidable that the transfer was in fact and intended to act as preferential, and it must bo set aside. Costs, £5 ss, were allowed.