SUPREME COURT.—CIVIL SITTINGS.

Otago Daily Times, Issue 4740, 27 April 1877, Page 3

SUPREME COURT.—CIVIL SITTINGS.

THURSDAY, 26TH AbVLUi.

(Before His Honour Mr Justice Williams and a Special Jury.) TRDSTEE IN THE BANKKDPT ESTATE OF JOHN DiCKISONT.MUNRO AND OTHERS.: : This was an equity suit brought for the purpose of settirig'aside a. deed of settlement ex- ■ ecuted by John Dickison in favour of his wife and children. : ~ . ■ MrW.D.rStewart appeared for the plaintiff ; 'Mr E. Cook for the defendant, John Dickiaon; and Mr Stout for Munro (Trustee under the deed). :

i The plaintiff's declaration set forth: That John Dickis'ori, of Dunedin, in the Provincial District of Ofcago, for 'several years before the 12th day-of - July,- 1875, carried onbusiness in and about Duner'in as a contractor and carpenter, and on and for some time prior to such date he was owner vof the property assured ; by the deed of settlement set forth in paragraph 2 of the declaration, estimated to be worth about L7OO, and also of certain tools and household furniture of small value.. That on the 12th day of July, 1875, JohnDickison, voluntarily and without any.;ed,nsideration, made and executed a settlemenfcjwHich was attested as by. law required,1 :se ( tt]iii^f.on bin wife and children certain freehold property in Dundas and Forth streets, and in, the, township of Barrfield, on which house's we^ft erected. That the defendants caused the saidsettlement, to be registered against the'lands" thereby conveyed in the : books in the Eegistry of Deeds Office for the district of Ofcago, and the said settlement 3a not a, settlement exempted from or intended to be protected by the Debtors and Creditors Act, 1876. That John.Dickison made and executed the settlement'with intent to defeat, bindery and delay his creditors. That on or about the9th day of January, 1877, John Dickison, being unable to pay his debts, did, under and in pursuance of the Debtors and Creditors Act, 1876, file'at the office in'Dunedin of the Supreme Court of New Zealanc], Otago and Southland district, a declaration in writing in accordance with the provisions of the said Act, signed by him and duly attested, that he was unable to meet his. engagements, with. hie creditors;. and, all things necessary in that behalf having happened and been done the plaintiff was duly elected and became creditors' trustee of the property of the said John ■ Dickison under the [bankruptcy. That before and at the time of so filing the said declaration John Dickison. was, and still is, indebted to the plaintiff and his co -' partner, Eobert Dp\y, in the sum of LlO7 7a 11 i, and was arid is indebted to other persons in various sums of money; and the assets of the said? John Dickison are represented by him in his bankruptcy proceedings to be of the value of L 6. The plaintiff submits that the settlement is void as against him as trustee and., the creditors of John Dickison, and that the de- ! fendants, although/they claim the property settled thereby, are hot. entitled to the same or any part thereof.? The plaintiffy as such trustee, therefore prays: That" the settlement may bo j declared void, and that the property settled by < the settlement maybe declared to be the joroperty of the plaintiff as trustee aforesaid. That the defendants'may be decreed to convey and assure to the plaintiff-the property described mi and conveyed by the settlement to be adminii- I | tered by the: plaintiff as. put of the assets in the bankruptcy estate of John Dickison. That the defendants may. be restrained by the in--junction of this Honourable Court from selling, encumbering, pr otherwise dealing with the -property, or any part thereof. That, if necessary, a receiver pay be appointed of and in I respect of tfie said property. That the defend- I ants may pay the plaintiff's costs of this action. I That the plaintiff may have such further and .other relief as may be just. . ■ : The defendants denied all jthe material allegations set forth in the declaration. : '"--T i Mr Stewart, having stated the case for the .plaintiff., put in the declaration of insolvency, the appointment of trustee, and then submitted it lay on the other side to prove that Dickison was solvent when he executed the deed of settlement.' •'" "."''■ ""'■•■' ■•■ :" •■- ■'.;•_■ ■-■■ -^ . i His Honour said that was not all the plaintiffs case.- ;' ~.,;■;;;•-. .■..', .■:: ■ ■/•.; i Mr Stewart apprehended' that he would be entitled to prove the whole of his case afterwards. "At present," he proved a sufficient case to entitle him. to have the deed set aside. He would reserve his right to call rebutting evidence... .; .". . . ..' ;■ I ... j. ,- ;.'...-, ';,.. '\. ' His Honour said that by following this course, Mr Stewart; might prove hia case on one issue, but not on all the issues. Having provea the case on one issue, he thought Mr Stewart should go on to prove all his other issues/: He would take a note of the' point J raised,:; ' ..'• '"■;'■.'■'"■■..• :"-''''

; Evidencq having been called, , .'. ~'.'... ■ His.'Hoiib.ur proceeded to sum up, sayiDg the1 only issues the Jury could be called upon to decide were the 4th and -sth, as the others were admitted. ■•. Xhe 4th issue was founded- on' a statute passed in the reign of Queen Elisabeth; The sth issue, was founded on the 63rd section of the Debtors and Creditors Act, 1876. Taking the sth issue first, His Honour pointed out that the 63rd section of the Debtors and' Creditors Act provided that any settlement of property made by a debtor, or settlement made on or for the wife or children of. the settlor of the properly, shall, if the settlor become bankrupt within three years after the date of the said settlement, be. void as against the trustee. The settlement in this case "was ciad<j ou the. 12thJuly", 1875, and Dickison's bankruptcy took place in February, 1877, so that it was within three years; j- The settlement was, therefore, void, unless the parties claiming under, such settlement could prove that the settlor • wfcs, at the time of making the settlement, able to pay all his debts without the aid of the property comprised in such settlement. Therefore,. the burden of proving that he was able to pay all his debts at the time of making the settlement lay on' tha. defendant Diekison. The fourth issue was: Did Diekison make the settlement with intent to defeat, hinder, or delay his creditors? He might explain at once that " creditors " in this case did not simply mean creditors existing at the time of the execution of the deed, but any future creditors. There might be an intent in law, although riot an intent in fact. That was to say, a man might not have meant to defeat his creditors or put his property out of the way of his creditors, but if the necessary effect of the deed was to' defeat, hinder,; or delay his creditors, the law would infer the intention. Therefore, if the Jury.! thought that the necessary effect of the deed was. ! to defeat, hinder, or delay either creditors existing. at the time of. the deed being executed or any subsequent creditors, then there was no need to enter into what passed in defendant's mind at the time of signing the deed. If the necessary: effect.of the deed was to defeat, binder, or delay the creditors, the Jury would find that he executedthe deed with that intent. If the Jury fouud that, exclusive of the property which was the subject of this settlement, sufficient assets were not left for the payment of such debts as defendant owed at the time he executed the deed, then the law would infer that it-was executed with an intention to defeat, hinder, and delay the creditors, while a settlement might be perfectly good in itself, and might otherwise be perfectly good against subsequent creditors. Yet, if the person, at the time he made the settlement, was in. a solvent position, but had it in contemplation to enter into transactions which might lead him into difficulties, even at some remote period, the intention to defeat, hinder, and delay his creditors would be inferred, because that would be <the necessary effect of the settlement. The burden of proving the sth issue lay on the defendant, and the burden of proving the 4th issue lay on the plaintff. The Jury brought in the following replies to the issues submitted to them:—

(1.) Was the John Dickison, owner of the parcel of land in the declaration mentioned at the.time of the execution of the deed of settlement in the declaration mentioned? —(Admitted.)— Yes.. ' • : ;. • (2.) Did the said John Dickison voluntarily and without any consideration other than in the deed expressed, make and execute the deed"of settlement referred to in the second paragraph of the declaration as therein alleged ?—Yes. (3.) Was the said deed of' settlement registered as in the declaration alleged ?—(Admitted.) —Yes. ■• '"■'■■'- " '■'" ■■ ■. •■•' ■ '

(4.) Did the said John Dickison make, and execute' the said deed-of settlement with in tent to defeat, hinder, and delay his creditors ? —Yes/-"'- ''■ '■■'■ ■'"' > ' '■-" ■- "/:"/■' : ;-. '■•

; (5.) Was the defendant, John Dickison, at the time pf the making of the said deed able to pay- all his debts without ihe.aid of the property comprised in such deed ?—No.' : ; (6.) Did the said John Dickison file a declaration under "The Debtors'and Creditors Act, 1876," that he was unable to pay his debts, and ■did. all proceedings in that behalf take place, ;apd i$ the;plaintiff the:creditors'trustee of his property under such bankruptcy, as in the ideclaration alleged ?—(Admitted. )—Yes.

1(7.) Was the said John Dictison at the time of filing the aaid declaration indebted to Messrs Bennett and Dow in a sum of about LlO7 7s lid, and to; other persons in yariouH- Bums of money?— Yes. , :

1 : (8.) What is the value of the assets of the said John Dickisbn in the said bankruptcy ? — Ll6, if the furniture and the debts can be sold for the ;benefit of the creditors; otherwise, nothing. ' The Court then adjourned. , .--. -. -, :

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