DISTRICT COURT.—In Bankruptcy.

Taranaki Herald, Volume XXXVI, Issue 8005, 25 October 1887, Page 2

DISTRICT COURT.— In Bankruptcy.

Monday, October 24.— Before His Honor Mr. District Judge Rawson. A MOTION TO REFUND. \jContinv£d from Town Edition yesterday.] On the Court resuming at 2 o'clock, Mr. Hugheß called , • , , j James Bellringer, who said: I am the creditor named in the proceedings. In December, 1885, Wallath was indebted to me' to > the "amount i of f £lB4 13s 4d for goods sold (glass mostly), that were used in the Convent. It was part of tho agreement with Wallath that I should be paid on delivery. I saw Wallath the night ho cdme back from Wnnganui after seeing Mr. Hutchison,' but I could get nothing out of him. Next day I saw him passing tlje shop, and he told mo that ho had received something like £300 odd from Mr. Hutchison. Mr.'Humphriescarne'into uiy shop some time after to see about a compromise, which I only agreed, to after other creditors had been seen.. It came out' afterward s that he had lost £100, "and I; then told Wallath I would wash -my hands clean of the matter, and the best thing he could do was to hand the matter over to Mr. Humphries. I spoke to Mr. Humphries, whom I knew to be a bondsmanj before I delivered the goods, and he' told me that he considered that I should - get my money.' It ■-is usual' to see the bondsman in Buch matters, and as I knew that?' Mr, Humphries had been acting "for Wallath, I was 'not surprised to see Win iriteresfhimsel'f inWallath's affairs. 'Aftefajlist of Wallath's creditors had been submitted to me; imd on"; niy rsifggestipn a meeting of creditors was held,%hen"it was agreed that we should accept 5s in the £, f ocwhich I gave a full release. 'I .enquired about other assets, and Wallath told me that he expected somothing, like £25 .or £30 from Mr. Hutchison. I considered the composition of 5s in tho £ was a good one, as Wallath's affairs had been in litiga- j tion for a couple of years, and the befat thing that Cpuld be done waa to wind the matter up in this way, as it was the cheapest and quickest. In this I acted on the opinion ot tho other chief creditors. In April last I received a noto from Mr. Samuel disputing the nrrangement ; that was the first intimation! received of the matter. I had nothing to do with the estate, and therefore I had no opportunity of controlling anything that took place at the meetings of creditors. I believe a dividend was "paid, but I could not toll what amount. Wallath's svorkshop — two little places — would have been worth about £20 or £25 two years ago. ■ By Mr. Sanuue): I don't know if this was an asset in the estate. Francis Peacock Corkill stated : I am the Deputy Official Assignee-in Wallath's estate. He filed on December 24th, 1885. Proceedings were not commenced in this actioa, as there were negotiations, and the bill of costs of Mr. Hutchison c.aused.some litigation. I could not call a meeting of creditors until I had- something tangible to place before them. This was done in March last, and they then passed a resolution instructing me to recover this composition ,ot' 5s in the £. . Mr. Bellringer w,as called on to pay the money in ApriPlast. [Air. Hughes asked the witness here who were the creditors at tho meeting, when Mr. Samuel siid the questions were irrelevant, lie would ask His Honor's ruliag on tho point as to whether the questioning was relevant ? His Honor suid it was totally irrelevant.] The witness said that if. ho had the papers in Court he could let Mr. Hughes know, but he could- not be expected to carry things in his head for ever. After tint meeting I placed the matter in the hands of Mr- Samuel,- my^ adviser. The estate has paid -a dividenJof ,2s t 61 in the JE, which has beeh-pnid to the creditors who proved. I cannot tell on what amount the dividend wus paid from memory. All those who accepted the composition were of course excluded, as they had not proved. After paying,- expenses now there wouKK be nothing to; pay a further. divilend. - I have in hand £9 Is 4d, and theie ia a liability for law costs of £9 to £10, so that we are about square. I got £80 odd from the Bank, the balarico of the £171. I drew a ehequo on tho Bank for the amount. [Mr. Samuel said the Bank had been notified of tho matter, and after they had taken advice they decided "to '■pay tho money over.] Evidrneo continued : I think it highly probable that all ihose who were entitled to prove had proved. Proceedings were taken for the taxation of Mr. Hutchison's bill of costs in Wallath's estate. After :paying the expenses of these proceedings the condition of tho estate was worse than before. The creditors would hivo been better off if they had all accepted the composition. ' By Mr. Samuel : Of the scheduled list of assets 9d 3d derived from a watch, aro the whole of the proo eds. By Mr. Hughes : I demanded from Mr. Hutchison a detailed statement of wh.it he had received frum Wallath, anrl after some delay he sent me £35 16a 6 J, what he termed "-restitution." By Mr. Samuel : The proceedings, I tliink, about cleared themselves, as Mr. Hutchison had to refund about tho cost of the action against him. There was no legal notion taken against Mr. Hutchison, as a matter of fact, but 1 don't know the reason why now. This closed the case for the defence. Mr. Hughes contended that the real issue of the case was this : " Was tho act fraudulent, and, if ho", was it an act of bankruptcy ?" In this case ho'eaid tho arrangement was a fair and equitable one, that would benefit the creditors. To support his contention, ho quote.! in re S uith from the April, 1886, number of tho Law Reports — a decision on what Mr. Hughes contended was a like case, involving tho Bamn Bection of the Act as the present ode. Mr. Samuel contended that the act was against the spirit of the Bankruptcy Act, and was therefore void, His Honor said, iv giving judgment, that ono objection was that tho Court shoul 1 look at tho lupso of time between tho act iin 1 the proceedings. This lapse did look hard for tho defendant, certainly, but he had no discretionary powers, nor had any section of tho Act been shown in which he had. That point was therefore out of his control. Tho sole question was, should the Assignee got the money on the ground that Wallath committed an act of bankruptcy under sub-section 2, section 41 of the Act of 1883- It had boon said that it would be a bad precedent to upset suoh an equitable arrangement, insomuch as the creditors would httFO received more money by the compromise than otherwise. Bui the act waß against tho spirit of the Bankruptcy Act, uud could not bo held good, oven if

one creditor only objected. Tho points on which ho base<i his decision were, (1), that the act wns aKfnin<:t the policy 0? th^ Bankruptcy Act/ (2) that 'it was voil under sections 27 and 28 of the Act o£ 1884. The money would have to ba returned by Mr. Bellringer. On M.\ Sitruel's application, costs were allowed. —Mr. " Hughes save notice of: appeal, which it was agroed should bo heard at the approaching session. The Court rose.