The Colonial Bank.

Opunake Times, Volume IV, Issue 187, 19 June 1896, Page 3

The Colonial Bank.

HIS HONOR’S COMMENTS.

Dunedin, June 16.

Justice Williams has refused to sanction the sale of the Ward Association accounts, with costs.

In delivering judgment he said he did not think it had been shown that the result of the Association going into liquidation would indirectly affect the liquidation of the Colonial Bank on the whole. If the only alternative was either to carry out the proposed agreement or for the Association to go into liquidation, the former would be more beneficial pecuniarily to the Bank, but it was contended there were other aspects of the case which the Court was bound to consider. Then proceeding to criticise these, he said that in the Association balance-sheet of June 30th, 1895, there was an item of £6830, bills receivable, arrived at by deducting the undisclosed amount of bills under discount, from bills receivable. Any person with an elementary knowledge of accounts must see this process was illegitimate and was a falsification of the balance-sheet, and a practice obviously dishonest. Furthermore, it was almost certain that this process was foil wed in other items, namely, drafts against shipment, and advances against produce. The balance-sheet els) showed a liability to the Colonial Bank of £llßs only. Mr Yigers had told them how, immediately before the Association’s balancing day, the Bank, induced by a fraud, reduced the account by £BO,OOO.

After discussing Mr Ward’s private liabilities, the Judge remarked that he did not understand why the Bank accepted his promissory note for £55,150, as it could be of little or no value to the Bank. There was nothing to show Mr Ward had then any property not included in the present lists. His liabilities were all, with a trifling exception, incurred in connection with the Association. Here, then, is a Company or Association with a capital actually paid up in cash of £12,450, which, after three years’ business, has become hopelessly insolvent, and shows a deficiency of over £IOO,OOO. It was hardly too much to say that in substance Mr Ward and the Association must, for most business purposes, have been identical. Mr Ward is now hopelessly insolvent; a few pence in the pound is the utmost his estate can be expected to realise. That the career of the Association should be brought to an end and its proceedings investigated, and that those who were reponsible for its management should no longer be allowed to roam at large through the business of the world, is a result so obviously desirable in the interests of commercial morality that it ought, if possible, be attained now. It is with the avowed intention of preventing this result that the purchasers under the present agreement have come forward. Mr Woodhouse states it is not like a*i ordinary business transaction where purchasers expect to make a profit, but they were buying out of friendship for Mr Ward in the hope of being able to put the Association on its feet again ; that is to say, that an evil will deliberately be done so as to hide the past as far as possible, and that Mr Ward’s bankruptcy will be purposely prevented and things generally made pleasant. By the present agreement every debt of Mr Ward’s and every account is purchased and lumped iu one purchase with the debt of the Association, though Mr Sard’s debt will yield but an infinitesimal dividend. The whole action of the purchasers was taken, as Mr Woodhouse candidly admitted, out of friendship for Mr Ward, and in order to avert the necessity for his bankruptcy. It is thus an offer to buy off from bankruptcy and its consequences a man who ought not to escape them ; in fact, an offer of hush money. He could quite understand that the purchasers themselves were actuated only by honest motives. It comes, however, to the same thing, whether a debtor to a Bank offers a compromise for so much in the pound or gets a friend to come forward and buy it for the same amount. He had no hesitation, whatever, therefore, in refusing to sanction the agreement, though he did not for a moment mean to say the liquidators were wrong in bringing it before the Court, or entitled to anything but credit for doing so. The Judge concluded by remarking that some reference had been made to Mr Ward’s political position, but with that he had nothing to do. He looked on the case its commercial aspect only. The summons would therefore be c ismissed.