SUPREME COURT.—IN BANKRUPTCY.

Clutha Leader, Volume IV, Issue 187, 8 February 1878, Page 6

SUPREME COURT.— IN BANKRUPTCY.

$ (Morning: Hei-ald). . MONDAY, FEBEUABY 4th. RE STEWART, GRIGOR, AND CO. This was a petition for adjudication; Mr Macas'^ey appeared, for the petitioning creditors Messrs Ho«g nnd Button), and Meesrs I-Toworth and Taylor for the debtors. The following evidence was taken :— Robert Grigor : I am one of the debtors, Stewart and Grigor, and have resided, for a number of years at Balclutha. I entered into co-partner-ship with Stewart in June last year. Shortly before that Stewart had been through the Bankruptcy Court. When T joined him I put nothing to the capital of the business. I had nothing of my own to contribute, and was a little in debt when I joined Stewart. I thought that Stewart was solvent when I joined him. I examined his bool<s. His bill-book showed a liability of from L2OOO to L3OOO. There was a secured overdraft ah the Bank of New South Wales for the amount of L4OO. As far as I knew these two items embraced the whole of Stewart's liabilities. He carried on the business of a general merchant and obtained hia supplies from Dunedin. About a month ago we acquired some sections in Balclutha. We merely paid the deposit money, and my commission, nearly came to the amount ot the deposit. About two months after-I was in business, I began to realise the fact that we were getting into deep water. I never got that idea out of my head. The firm still went on purchasing goods from firms in town. Our purchases was about LHOO a month. About four months ago, we commenced to dishonour bills. Then came writs ; the fksb one being about six weeks ago. I am speaking now about writs against the firm. It is Guthrie and Larnach's writ lam referring to. Byug, Harris, and Co. issued a writ on January Bth. I did not see one from Sew Hoy on January 11th. The total extent of our liability to Gurthrie and Larnach was LI 40. All these things happened before 1 gave a bill of sale, on January 10th, to John M'Neil and John Dunne. My opinion, when I executed that bill of sale, was that we were hopelessly involved, but Stewart was very sanguine. None of tho writs were satisfied when we executed the bill of sale. My undeistanding was that Dunne and M'Neil were to assist us still further, At the time of our execution of the

bill of sale, our total liabilities were over L6OOO. Dunne and M'Moil shorllv after the execution of the hill of sale, took possession. I left' Balclutha on the 3 1 th, and when T returned, ten days after. I found a man named Dillon in possession. I heard ttu»t the saav realised LIOOO, and that iv was conducted privately. Before the bill of sale no proposal was made to effect a composition with my creditors, but I heard that Htowart proposed that LI SOO .should be distributed amongsV them. Dillon, was in possession then, -and I suppose that Stewart intended that he should give up the stock, but I could never see how the proposal was to be carried out. M'Neil and Dunne's claim was Lll4O. The LISOO referred to by Stewart could not have been iv existence. The parties to tho bond were Dunne, Al'Neil, myself, and Dr Smith. The amount was increased in Stewart and Grigor's time. When I joined Stewart the bond was changed, and my name was

taken off. f became a principal with Stewart instead of beinsr surety. T did promise M.'N"eil and Dunne security for the second cash credit bond. When T joined Stewart the whole L4OO was exhausted. The liability to the bank was never increased ray knowledge. I signed this bill of sale becausoDun.no and M'Neil promised to assist us fnrther. The only present consideration we received from Dunue and M'Keil was a bill of L3OO, half of which went to our banker and tho other half to Hogg find Hutton. In January last, from what Stewart told me. I believer! thnb our assets were worth LSOOO. I think that estimate a fair one. "We made a good many bad debts. When 1 made the bill of sale I did not expect possession to be taken, and I was surprised when 1 heard of it. Dillon is still in possession. There is no understanding as far as 1 am concerned, that I am to bo put back into tho store when those difficulties are over. To Mr Howorth : To my knowledge T do not know that the stock was offered to anyone else before it was offered to Dillon. .Tames Dillon : T reside at Balclutha, and have done so for over 21 months. lam the tollkeeper there on the Ferry "Bridge. I never was in the drapery or grocery business, but; T recently bought out Stewart and Grigor. My lease of the toll expired on tho first of the New Year, but I took it for a month, and then for another month. The purchase money for the stock aud trade was LIOOO. The plnca was not advertised. I heard several parties speaking about the matter, and then I asked Dunne and M'N oil about it. I I gave a bill for the LIOOO. payable at three months. I got possession on the 2-tth January. There was a man named John Finn in it then. I heard that he was put there by Dunno and M'NTeil. I thought that there was value enough in the store for the money. Between the stock and book debts. I thought I would make L2OO or L3OO out of it. I know -Stewart well. I did not take an inventory of the goods.. I understand that I first spoke to Dunne and M'Xeil on tho matter. To Mr Howorth : I am quite able to pay the LI 000. To Mr Jlacassey : Since I have taken possession no goods have been, removed, except what I have sold. Alpxandpr Stewart : I passed through the Court in 187f>, as a member of th« firm of Stewart and Gow. When 1 commenced business later on, T was without capital. Mr G rigor joined me in 1877. I considered myself solvent then, and began first to have doubts about ib a month ago. When i made .the bill of sale on January the HHh. T wos not sure whether I was or not hopelessly insolvent. Jly liabilities then were about LSOOO. If this bill of pale hold p-ood, I suppose that Grigor's property would have to h« sold. T have a house mid « few sp.p.tirms. They wore acquired in August, JftTG. With the exception of Grigor's land, my house and sections, tiiera is nothing to pay the other creditors. After ths bill of sale, I made an offer by telegram, that we midit arrange to pay Ll soo to the other creditors. What I. telegraphed was, I think, that we could get endorsements. I expected to get them from Dunne and Al'JTeil. Whon this was refused, Dillon took possession. Dnnne and M'Neil took possession soon after the bill of sale, because there was a judgment about to be put in by the National Bank. It was to protect the property «<rsvinst that judgment- that possession was taken: When they caino in, I was turned out. T have always been friendly with AT 'Neil. I consider that the assets assigned by the bill of sale were worth between L2«00 and L3OOO. Shorfclv before all this happened, I wrote to Hogg and Hutton, sayino; that my assets were worth LIOOO. I thought so at the time. The storo in which these goods are belong to my sister, Mrs Gow. I have given a bill, of sale over some furniture to my partuei*'s brother. To His Honour ; My house is worth L7OO, but is mortct'gprl for L 390. My house and sections are worth L3OO more than there is upon them.

John Dunne : I am a hotelkeeper at Balclutha. I know Stewart and Grigor. Some time ago I entered into a cash credit liond at the Bunk for one of them, and subsequently for both of them. The lost bond was given about a year a;*o, When the bill of sale was executed the amount of the bond had not heen increased except by the inWest. M'Neil and I relieved I)r Smith in December last from his liability in regard to the bond. 1 advanced two fm-ther sums of LlftO each, and it was understood that we were to give fnvther advances. Since tho bill of sale was given I advanced L 29, and also Ll'2s for rent claimed in respect to the stove in which the goods were. This amount was also paid by bill. When the bill of sale was executed I did not intend to rpro into possession immediately. I was not aware that they were being sued right nnd loft when the hill of sale was executed. I. would not have signed the bond if tlipro had not heen a promise that a hill of sale would be given, Stewart promised me a bill of sale when I gave him an advan oof -LI SO to start him in business. Ido not think that Gn'gor ever promised me a bill of sale. Messrs fttoddart, of lOutar.ajata, and others, valued the property at LlfiOO. There wero LI4OO of book-debts, but 1 do not think that they were worth LI SO. I sold the whole to Dillon for LIOOO. He came into possession on the 24th January. If Stewart made overttires to distribute LISOO among his creditors in Dunedin. it was not with my knowledge. We told Messrs Graham and Hogpr that they could have the estate if they relieved us, as we only wanted our money. To Mr Taylor : The stock was offered to others, hub they would not give enough for it. Dillon came to me about the purchase.To Mr Macassey : I have paid M'lsTeil off., so he is not responsible for the bill. John M'Neil deposed that ho was a commission agent at Balclutha. .He had been promised security by Grietor find Stewart for tho advances made. The bill of sale was distinctly mentioned when he made the last advance in December. At the time of the execution, he did not know thab they were being sued or going to be sued. Tie was very rauch surprised that Dunne and- he had to take possession. He had received a certain amount of money, hut not sufficient to satisfy his claim. The promise of security was simply a verbal one. To Mr Taylor : Dillon's offer was the best. The acceptance has been discounted. There is no understanding or arrangement that Stewart

.and Gricjor shall bo restored to the business. There is not the slightest chance of their ever participating in the matter. James Ho™ : I am a member of the firm of Hogg and Hutton." petitioning creditors in the estate. The statements in the affidavit are true. At the time of filing the petition they wore indebted to us in over LSOO for goods supplied and cash advanced. This amount is due to us still. They o-.vo us nearly X.600, but this may be reduced by collateral security whiclv we hold to the amount of about L2OO. Robert Grisjor, re-called, said : T possess land and houses, but they are mortgaged for LuOO. If the property be realised on- carefully I think there "would be a surplus of 1/200. I have private liabilities to the extent of L7OO, s:> I am insolvent individually as well as a member of the firm of Grigor and Stewart. Some leaal objections as to the legality of the petition were raised by Messrs Howorth ■ and Taylor, and it was .decided to aigue' this in Chambers tlie nexfc day.

Tuesday, February 5. -

IN CHAMBERS. Argument was . heai'd by Mr . Justice Williams in tbe matter of the application • of Messrs Hogg and Hutton to have Messrs' Stewart, Grigor, and Co.,' of "Balclutha, adjudged bankrupts. His Honor reserved his decision uponthe points raised. * '