CASES IN BANKRUPTCY

Star (Christchurch), Issue 3539, 14 August 1879, Page 3

CASES IN BANKRUPTCY

At the Resident Magistrate's Court yesterday, some cases were brought forward which involved points of considerable iuterest in connection with cases in bankruptcy; George Foster,' as trustee in the bankrupt estate of D.Foster, cabinet-maker, Bydenham, sued for the value of goods supplied before ttadatc i of bankruptcy, the several claims being _as 10l-I^ws--Mr Mason, £32 4s 6dj. ilr R. Staithw' halance, £61 189 6d } Mr W. LangdSS«7lo.5 a , 4s lid. . ■ '..'-'■ ■ : " •• • o It was arranged that . the CaS3 Of Tdyior" ¥. Struthers, claim £61 18s 6d, should ho first taken, Mr Garrick appearing on behalf of the tiTWfcee fa. bankruptcy, and Mr Wynn-Wil-liams (of the defendant. .

D. Foster deposed that he lately carried on business at Sydeliham, and that he supplied gooda to the defendant as per the account produced, showing balance duo, £61 18s 6d, cash to the amount of, £15 having been paid to witness by cheque. , To Mr Wynn Williams : Witness was not aware of any arrangement as to the nature of the credit he was to get from Mason, Strulhers and Co. There was no arrangement whatever that the goods were to be credited ' to his account, only itheitem.of £17 165, purchased at auction. The arrangement in connection with this item was for 50 per cent cash, the balance to be credited to his account. (Letter te arrangement identified.) Would swear he never, heard of any arrangement that the goods generally were to bo cfiargod to the firm of Mason, Struthers, and Co., .Got n letter to the effect of the one produced, stating that certain goods were specially bought to be charged against the firm, but was pertain there was no arrangement. Believed' he did not receive the two letters until after he filed on June 6 (one letter.was dated, June 5.) At the meeting of creditors witness believed lie said the accounts were private ones as against Messrs Mason and Strutnere, not as against the firm. The itemß of the account were correct ; there had been no excess charge, as alleged, on any of the goods. Did not hiiriself put the goods down at one?, but believed the items were entered on the day they were purchased by the man who was in the shop. In reply to Mr Garriok, witness gave evidence of having personally sold certain goods to Mr Struthers. There was no arrange, ment whatever for goods to be placed to open acoount, with the exception of the auction sale agreement. There was no such arrangement as that referred to in the letter written by Mr Struthers on June 5. Witness filed on the 6th, and at the meeting of oreditora he denied the statement.

George Taylor deposed that he was present at the meeting of creditors, when Mr Struthers was present, and remarked that there was a dispute over the accounts. Thought there was some mention made of an agreement, and in consequence witness examined Foster under oath. Believed he found the letter produced at the bankrupt's place of business. Was not Chairman at the meeting. This closed the case for the plaintiffs. For the dofonce Mr Struthers stated that about March 25 he called at Mr Foster's place, and made arrangements to have any goods he might purobase charged to the firm. Witness gavo evidence as to the prices at whioh he purchased various goods, to show that there had been general overcharges. He then detailed the verbal arrangement entered into, to the effect that Foster asked that one account should go against the other. Did not get the account from Foster until the evening of the 6th, and then wrote immediately in reply, to correct the mistake in tho way of charging the account. The letter was sent by post. Witness attended the meeting of creditors, and there mentioned the existing arrangement, Before buying the goods, which had been placed for sale at Mr Aikman's, witness confirmed the agreoment with Foster, and, at his request, paid him a certain proportion in oash, to enable him to meet his engagements on the 4th.

To Mr Garrick: Witness said that at the first interview with Foster he did notmako any purchases. Foster was drawn upon by two bills at three months, but prior to getting the goods. They fell due respectively on Juno 4 and 20. Would pledge his oath that Foster, in repudiating the agreement, had made a false statement in the winess box. Had the firm known of the bankruptcy in time, they would have stopped it. They were supplying goods to Foster up to the time ol his bankruptcy. . Mr Mason gave evidence, as to a conversation with defendant relative to an error in the mode of oharging the accounts, when the mistake was attributed by Foster to his Bhopman.

The contra acoount of Messrs Mason, Struthers and Co. against Foster was £97 2s. Mr Wynn Williams remarked that the first question arising was as to whether the Court was satisfied that the transaction was a bond fide one. If so, defendant would be entitled to judgment in his favour, for if the trustee adopted the praotico of suing he confirmed the arrangement made by the bankrupt. Mr Garrick intimated that he should not deny the principle which his learned friend was laying down. It was merely a question of facts. ;

Mr Wynn Williams proceeded tosubmit that the arrangement had been clearly proved, and that it was a perfectly bond fide one, so far as 'Mr Struthera was concerned, this being plain • even from what Mr Mason baa sworn that he knew of the arrangement. The Bankruptcy Act itself provided for aack circumstances, provided the other side could not show fraud. (Sec. 76). Mr Struthers stated at the meeting of creditors that he was not certain whether he would be a creditor in the estate or not, and gave his reasons for po saying, the accounts not, having then been mado up. With reference to the bills given -by-Foster, there 1 was clearly

roporta, that paymenHyTRHWHW^B absence of fraud— just as valid m payment in money, the goods having been purchased from Foster within the meaning of the clause of the statute.

Mr Garrick would not dispute the principle of law which had been laid down, nor the fairness and straightforwardness of the mode of purchasing the goods ; but the trustee had a legal status, and the facts of the case must be carefully applied to the issue, since a very important principle was inrolred. The defendant said he was riot liable, because there was a sot-off in excess of Foster's account. But, suppose there was no such contract as had been specified, the contra account could not be the subject of a set-off, for the dead set-off must be a legal and not a mere equitable debt. It was a question of which was to be believed, and he (Mr Garrick) would make no comment.

His Worship said that, so far, he thought the circumstances detailed fully bore out Mr Strutter's statement. The existence of the agreement was shown, for instance, by the letter written by Mr Struthera when he had no knowledge that the man was even likely to file.

Mr Garrick would assume that Mr Struthers made an agreement that the goods he got were to be a set-off against the goods got by Foster. The question arjse, what set-off he wa» entitled to. With regard to the goods bought at Aikman'B sale, there was a distinct and substantive agreement made, half being cash and half the subject matter of a set-off. With regard to one of the two bills, that for £21 15s 4d, it did not become due until after the bankruptcy, and how could a debt payable in fuluro be set off against a debt payable inpretenti. That Bill was not due until June 20, and between June 6 and June 20 Messrs Mason, Struthers and Co. were not the holders of it. The Bank of coarse could prove, bat Mason, Struthers and Co. were not the holders, the Bank having given value, and they could not have sued on it at the time. There could be no eventuality until June 20, when the bill matured, and 4'oster could then have been sued by the firm. After some conversation, Mr Garrick agreed that if the bill for £21 16s 4d was struok out, the yerdiot must be for the defendant with regard to the alleged overcharges. His Worahip intimated that he should accept Mr Struthers 1 statement.