SUPREME COURT.

Otago Daily Times, Issue 11200, 24 August 1898, Page 4

SUPREME COURT.

. ■ , IN CHAMBERS. / ,; i Tuesday, August 23. . . ' (Before fiis Honor Mr Justice J?ennefather, Council v. the Colonial Bank of New Zea land (in liquidation).—Summons to ciitnus action.—Mr Hosking, ' who had (for M Brent) appeared for the defendants in sap port of the summons, said that the draft' judg ment had been served, and he know asked fo coet3.—His Honor: No doubt it was :i prope case to bring.—Mr'Hoaking said there hadbeei an intentional delay on the part of the plain tiffs. Mr Cook, who appeared for. the plain tiffs, said the difficulty had arisen througl one joint judgment being given in two cases The court had brought the plaintiffs into tha position.—His Honor made no order as to th , summons, and granted £2 2s costs to the defen dant. ■■■■■' Brooks v. the Colonial Bank (in liquida tion).—Summons to/dismiss action (Mr Hosk ing for Mr Brent).—Mr .Chapman appeared oi bebalf of the plaintiffs.—This case was in : similar, position to the preceding one.—N< order; costs.£2 2s to the defendants. Ec the City Sawmilling Company (Limited) Motion to settle list" of contributories.—M: Chapman appeared fof the liquidator -of tin company; Mr.'Woodllouse for the liquidate: of •Walter Guthrie and Co. (Limited); MrHos king for the Bank, of' New Zealand; and Mj Solomon for a creditor:—The court was askec to decide whose name should be placed on th< list in! respect of 300 shares issued to the Gon Timber" and Hardware Company co nomine oi the 28th May, 1894, which had been paid \i\ to 7s, and as it appeared that "Walter Guthrii and Co. (Limited] became purchasers of th< company under, an agreement in August, 1893 as. from the 31st March, 1893, it was settlec that Walter. Guthrie and Co. (Limited) shoulc be put. on the list in respect of the 300 sharei in addition to 5000 fully paid-up shares. ; Ec The Dunedin Timber and Hardware Com pany (Limited).—Motion to settle list of con trilnitories.—Mr Chapman appeared, in sup port of the motion, and Mr W. C. Ma.cGregoi appeared on . behalf- of John Arrnitage, whe objected to his name being retained on thi list.. It appeared that 60 shares were allotbec to-the: objector.by minute of the 10th February 1893, • and notice was ■ sent to him on the 13ti March, but the liquidator was unable to pro .duco the application for shares, and it ap pearcd that the objector's name was not on thi register of shareholders. His Honor orderec the removal of the name of the objector fron . the ..list, and allowed Him £2 2s costs.—Thi list* of contributories was settled except as \( shares in the name of George O'Driscoll, thi to have the right of adding the nami 'of O'Driscoll's representative, should represen tation 'in New Zealand be obtained. Ec the City Sawmitting Company (Limited) '—Motion to settle debts and claims.—Mi Chapman appeared; fof the official liquidator Mr Sim appeared on behalf of C. M. Howison, who claimed £149 ss' for dismissal fronhi's employment, but it was stated that tht claim had been settled through the: employment of' the claimant by the liquidator to the end of the term of the claimant's engagement, and the claim was consequently disallowed, but Howison was allowed £2 7s costs as :a claim. — The Bank of New Zealand .claimed upon the estate for £3231 4s 9d in respect of four bills.1 Mr Chapman appeared for the liquidator, Mr Hosking for the bank, Mi Solomon on behalf of a creditor to object, and Mr' Woodhouse on behalf of another creditoi (the New Zealand Pine Company)-to object.— Mr Hosking said^the proof that was required was by. affidavit... He had filed that affidavit and he produced the bills, and he submitted that that proved the1 claims, and that it was for the other "side to displace the prima facie case now made.—Mr Chapman said the. liqui- ■ dator was not, satisfied with the claim. The circumstance's were very peculiar. The bills ■were held by the bank,' not as a purchaser under discount, but because the bank, holding them for collection for Walter < Guthrie and Co., had a lien on them in respect of a large indebtedness on overdraft by Walter Guthrie Co. The bills seemed to have been given to the Pine Company as. accommodation acceptances.—Mr Hosking:, Is there any evidence of > that, 'and that they were not given in"anticipation-of goods to be delivered? —Mr Woodhouse: Not in the case of the Sawmilling Company.—Mr .Chapman said the bills were, endorsed from the Pine Company and hpnded to Walter Guthrie and Co. (Limited), and Walter Gutlirie and Co. (Limited) endorsed .them" and handed- them to the bank for collection.. The bilie seemed to be the end of a'series. There were a number of bills in the series of .the same amounts, and the course of dealing with: these bills seemed to b.ave been peculiar arid somewhat irregular, for the original bills were, renewed from .time to time, arid as the renewals paid the older, bills the older bills were not taken up. He understood that.the bank held the whole series, but in the end -"the City' Sawmilling Company virtually paid those bills to Walter Guthrie and Co.—• that was to say, they gave Walter Guthrie and Co.. credit for the1 .amount of them.- Very naturally the. liquidator did not want to pay them twice over." If the claim by the Bank of: New Zealand, was allowed, the City Sawmilling Company would have the privilege of claiming against Walter Guthrie and Co. for the amount, but h.e -,wa's afraid that was not a very valuable privilege. The City Sawjfeilling Company- was already in this position that it was a' creditor, of Walter Guthrie and Co. for about. £600, and the effect •of this would be merely to give it a claim of £3000 odd instead of £600.—Mr Woodhouse: Walter. Guthrie and ..Co. (Limited), has nothing. —Mr Chapman.: .Walter Guthrie , and Co. (Limited) . was not merely insolvent, but hai nothing, and .a claim against it was valueless. The first circumstance that struck the eye in looking Into the. matter, was that the bills were not dealt with in the ordinary way, but were dealt with in a peculiar way by the companies, and when a bill was paid'the bank-did not take a renewal and hand back the one that was paid off, but it was apparently in the same position in.regard to these bills as in regard to .prior bills. The h,ank; did nbt-say that it was entitled to claim on all the bills, and admitted, practically, ..that the prior" ones were paid-by the process of hajiding in these later ones, but that process had gone a stop further, and, so far as the liquidator could see, apparently the last bills claimed'on by the bank had been paid by dealings between the companies in the same way in which the prior bills . were paid. • The circumstances were not ordinary . circumstances, ' and - seemed to call on: the bank to' give some, more specific proof that 'it; was entitled to claim on these bills than- merely to file an affidavit and bring them into court, it being always borne in mind that the banker jdid'not buy the bills but received theta as agent for Walter Guthrie and Company.—Mr Hosking: That is not our position. Our legal position is that-we hold the bills for value.—Mr Chapman: No doubt, in a sense. In the first instance, they did not actually become,the property of the bank. The bank takes as agent, an* holds under lien, but it is not like an ordinary case of a banker having bought a bill.—His iiorior: 1 ao not nee that you have disproved Mr Hosking's statement so far. The bank holds these bills, you admit, in a certain sense, for value. It may be doing business in a very extraordinary way; I know, but I do not see that these companies are not liable for these bills.—Mr Woodhouse: The company has paid to the real owner.—Mr Chapman said the bills' passed into the hands of Walter Guthrie and Company, and the amount had actually been paid into the account of Walter Guthrie and Company.—Mr Woodhousj: And after making' those payments, Walter Guthrie and Company still owes the saw-mill-, ing company money. That is the position.— Mr Chapman said in the whole course of the history of the bills the bills were never got back. They went on piling up in the bant. Ihese bills-were really on no different footing from the previous bills in the same long series. —Mr Hosking maintained that the bills; were on a ..very different footing a3 regards the facts. ■ All the ' previous bills were bills accruing periodically every three months. They were actually discounted and the proceeds paid into Walter Guthrie and Co.'a account, and at the end of three months they, were paid:by a further bill and written off as paid. But these bills had never been written off as paid. They remained in the bank's own books as due.—Mr Solomon said the present ■ bills were the end of a series 'of bills. They were lodged in the bank for collection at. maturity. They were originally given by .the Sawmilling Company to the Pine Company. The latter company was largely indebted to the former company, but in accordance with a peculiar method of finance the Sawmilling Company proceeded to make the Pine Company owe them more money by giving them some, bills. The result of that was that these-'bills were filtered, into the hands of the inevitable Walter Guthrie and Co., and they were lodged with the bank by Walter Guthrie and Co. as bills for collection. He (Mr. Solomon) submitted that were the bank held bills for collection they had merely a lien upon those bills, and a right to sue upon them. Their title was no higher than the title of the person who handed the bills to the bank for collection. He was instructed that the bills were nothing but accommodation bills, the

solo object of giving them being a question of finance. It was not a question in this case as to who should sue upon the bills, but as to whether the creditors of the Sawmilling Com-' pany should be deprived of their remedy against the Sawmilling Company. He contended that the Sawmilling Company never owed the money to anybody, and if they ( did so they subsequently paid Walter Guthrie and Co.—A. J. C. Brown, official liquidator of the company, explained, at Mr Solomon's request, tho position of the accounts as between the. City Sawmilling Company and the New Zealand Pine Company at tho times at which the bills were given.—His Honor remarked that lie did not think it could be argued that these bills were purely accommodation bills.—The law on the subject was discussed at considerable length by counsel, after which his llonor said he was inclined to Mr Hosking's side, but as he had cases to refer to he would put his remarks in writing, and give his judgment as soon as he possibly could. Re William Grant Forbes (deceased).—Probate of the will of this testator was granted on tho motion of Mr Thornton. He Michael Rochford (der.er,Sed).—Probate of j'tha will was granted on the motion of Mr Gal' I laway. _____o______«