SUPREME COURT.

Evening Star, Volume IX, Issue 2679, 18 September 1871, Page 2

SUPREME COURT.

in’banco. Tins Day. (Before Mr Justice Chapman,) Mr Macassey mentioned the case of Regina v. M'Lcod, fixed for Wednesday, and said the defendant had made an ample apology by letter, which had been brought under the notice of the Court, lie had therefore to ask his Hono’s leave to abandon the prosecution on behalf of Mr Driv. r. His Honor remarked that, being a private prosecution his leave was not required. Mr Maccassey said that it had been thought desirable, at all events, to ask the permission of the Court to do so, and to bniK' under its notice the fact that the apology having been made, the prosecutor was willing to withdraw from the position he had taken up. The letter written by the defendant was witnessed by Mr McCtlashan, and was as follows ; Dnpedin, Jo December, IS7I. Henry Driver, Esq., Dunedin. Dear Sir,— Daring the recent contest for the Superintendency, I published a letter, dated 6th December, 18G7, and purported'to have been written by you to Mr John Treweek, late of the Bellamy Station, near Tuapeka. At the time of the publication of this letter I believed it to have been a ('euuine letter. From information that has s nee come to my knowledge, I have now to state that I do not believe that you ever wrote the letter referred to, I have therefore to express my sincere sorrow and regret for having published it, and beg you accept this as an apology for my having done so durini' the heat of an election contest.— lam,°&c. A. McLkou.

IN BANKRUPTCY. FINAL ORDERS. There being uo opposition in the following

cases the usual order of discharge Was granted :—J. W. Heaps, John B’ack, John Herbert, John Cleverly. The cases of Joseph White and John Algie were adjourned to next sitting day. ADJUDICATIONS. William Hamilton, James Duncan, and William Bain, were adjudged bankrupts; first meetings of creditors to take place on the 26th inst, MISCELLANEOUS. Fe Jeffrey Williams. —Mr Harris obtained an order for the suspension of proceedings, with a view to a composition being effected. He J. T. Chaplin. —Mr Smith obtained an order for the extension of time in which to value securities hold by the Bank of New Zealand, He J. H. Zirrck.—Air Turton instructed by Air Kenyon, obtained an order of complete declaration of a deed of arrangement. I’.k John Maclean. —Air Barton appeared for the bankrupt, Mr Smith for the Bank of New South Wales, and Mr Harris watched the proceedings on behalf of Mr Maclean. The bankrupt, examined by Mr Smith, stated : I believe the statement of the assets and liabilities of the firm of Driver, Maclean, and Co. on the 31st December last, showing a deficit of L 9737 Is lOd, to be correct. 1 did not know at that time that our firm was insolvent. We were required by the Bank of New South Wales some time in the early part of the year to file a decla ation of baukmptcy —I think it was in the latter end of March or April. We were first asked to make an assignment; and it was not until iVlay that we were asked to make a declaration of insolvency. I do not think we professed their willingness to file when first asked by the Bank to do so, and that we afterwards resisted the Bank’s endeavor to compel an assignment of our estate. I believe theßankwas obliged to obtain adjudication by the process of adebtor’s summons. The increase of the deficit from L9OOO in December, 1870, to L 15,000 in August last, was caused in a great measure by bad debts. In my statement of private assets and liabilities, Alexander Maclean appea-s as a creditor for L 350. He is secured by a second mortgage over Bellamy Station. Ho is my brother. The security must have been given in April or May. I received L3OO from him, and the arrangement was that when I could take it up I was to give him L 350. I had to get the money to pay my personal and family expens s. lam morally certain the security was given bef re 1 was adjudged bankrupt. I had no money, and was obliged, to get it. Air Beal would not advance more money on the station. The security was not given in order to defeat that of the Bank.

By Mr Barton : The Bank of New Zealand, which held a first mortgage, took possession of the station, so that my brother has no security. They offered to give over their security if the Bank of New South Wales paid their claim. An arrangement was made with the Bank by which I was to draw up to LlB a week during the time I was engaged in the liquidation of Driver, Alaclean, and Go., but I never drew anything like that amount. On the return of Air Hill, the inspector, from Invercargill, he said I must refund LI4S which I ha-1 drawn in terms of that arrangement, and I had to borrow tbe money on leasehold property' to enable me to do so.

Mr A. Maclean was briefly examine !, after which his Honor granted the bankrupt’s discharge. Henry Driver examined by Mr Smith, said : I was aware in December last that our firm was insolvent ; it was at about that time that I was aware of a deficit of about LBGOO odd, by the statements furnished by our firm to the Bank of ISew South Wales, who had complete copies of our books for two years past. The increase in the deficit from December, 1870, to August, 1871, was mainly owing to the forcing by the Bank of us into our present position. We had in consequence to write off several items, which, had a private arrangement been effected, would have been perfectly good. The acceptance of B. and A. M‘Donald for L 3500 would have been pci fectly good if a private assignment had been made ; but I do not consider it of any value. M‘Donald had twothirds of Bellamy Station ; but when the Bank of New Zealand took possession, they took it out of our power to carry on the arrangement with the M ‘Donalds. If the Bank choose to work out the station, it might become perfectly good. There was depreciation in the value of the High street property. The Bank did not take possession of the station, because of my inability to take up some promissory notes of mine which were a first charge against it. They never demanded payment of them. The notes had no connection whatever with Grant’s long dated bills. The six months accounts filed will show how the remainder of the deficiency of L 15,000 occurred. It occurs mainly through the difference in the estimated value of the assets in December 30, 1870, and August 7, 1871. The estimates were not exaggerated, because Mr Hill’s views of them coincided with my own in 1870. I did not file a declaration in December, because the Bank made a proposal for an assignment; and negociations with that view were continued for some months, when misunderstandings arose about various matters. [Still the ncgociations were debt up till the sequestration took place. I always believed that an arrangement would have been come to ; and never thought I would have been compelled to occupy my present position, seeing that no object could be gained by it, and on the contrary, the Bank would suffer a material loss by forcing us into the Court. After ten years profitable business with |the Bank, 1 did not suppose that they would do so. I was called upon by letter by the Bank sometime in April, May, and June, to file a declaration, but at the time I was called' upon to do so I was on terms of friendship with the manager, and its solicitors ; and I did not believe the Bank intended to force me into the Court, more especially as Mr Anderson had advised me to go to Christchurch to negotiate with the inspector. All along 1 thought it was done more as a threat than as in earnest; because to do so (unless it were simply a personal matter) it then appeared, as it has turned out to be the case, that it would be a loss to the Bank. (Correspondence was here read from the Bank’s solicitor —first asking Driver and Maclean to file, next requiring them to close; and, lastly, demanding to know whether they intended putting the Bank to the expense of compulsory sequestration). I always hoped and believed a private arrangement would be come to. The statement of my private estate from February to August last, shows an item of L 550, moneys drawn by me from

the firm of Driver, Stewart, and Co. I have been advised by my solicitors not to set down my interest in that firm, and the trustee told me it was not necessary. I took no capital into the firm of Driver, Stewart, and Co. ; and my interest in it is valueless. The firm has made profits ; but it has not become dissolved by reason of my insolvency.

Mr Macassey : But, as a matter of law, I tell you it has. Examination continued. Besides enabling the three partners to obtain a living out of the profits—a hard matter in these times — a LIOOO has gone towards payment of Driver, Maclean and Co.’s debts. My interest in the firm is that of two-thirds A balance-sheet has been made up by Mr Stewart, who keeps the books. L 550 may be taken as my share of the profits up to the time of dissolution. The Bank of New South Wales was perfectly cognisant of the terms on which the partnership was founded, and of the terms on which • the firm of Driver, Maclean, and Co. dissolved. Maclean got L2OOO for his interest in the business ; had L the slightest idea then that we were insolvent, I would never have recommended my partners to give him any such sum. Maclean is to remain out of the business for three years. By Mr Macassey : One of the securities which depreciated by reason of the Bank’s action was the Oreti Bailway contract. Driver, Maclean, and Co. advanced between L2OOO and L3OOO on account of it. I looked upon that item as a perfectly good asset; it stood in our books to the debit of the railway contractors. ; n 1871 it had ceased to become of any value. The Bank of New Zealand, which had advanced moneys, and had obtained from us an absolute assignment of the contract, carried out their threat to take possession if the Bank of New South Wales took proceedings against us. T hen there was the security over property adjoining the Grange, which the Bank sent back to our office, refusing to value it. 1 looked upon it as worth L2OOO, but it will not be worth so much now, as it has to be wound up. All my creditors excepting the Bank signed an absolute icl ■ -se, as the deed said, “ with a view of e;i bling us to arrange with the Bank.” Tim release extended to an amount of L 2700, leaving the Bank our only creditor. The trustee’s statement—“ debts, L 63.318 15s lOd; estimated assets, L 47.751; sole creditor, Bank of New South Wales, which holds securities to the amount of L45,500”—is correct. At this stage of the proceedings some correspondence was read : —On July 17 Messrs Macassey and Holmes wrote to Messrs Smith and Anderson, intimating that as the creditors of the late firm of Driver, Maclean, and Co., with the exception of the Bank of New South Wales, had released the fir n from all further liability in respect of the debts due by them, “without any promise or consideration -whatever,” the Bank was constituted their sole creditor. They went on to state they were directed to say that Mr Driver was willing to execute in favor of Mr Aliller an absolute assignment of all bis estate and effects in trust for the sole benefit of the Bank, which proceeding, so far as Mr Driver was concerned, would secure to the Bank all the advantages of an adjudication in bankruptcy without its costs and charges, besides enabling the Bank to realise its securities as and when it pleased. After setting forth that adjudication against Mr Driver nrght entail ruinous consequences to him, and seriously affect the credit of the linn of Driver, Stewart, aud Co., by causing the withdrawal from that firm of a considerable portion of its large connection, and probably occasion a dissolution of that partnership, the letter went on to say that Air Driver was aware that it was the intention of the bank to challenge the validity of a post nuptal settlement executed some years before. C pon this point intimation was made that Mr Driver was willing that in the release the Bank should, if it thought necessary, .reserve to itself the fullest right to call the deed in question. On July 19 the Bank’s solicitors replied that the i-'ank disbelieved that it was the sole remaining creditor, and that the manager, if he were disposed to entertain the proposal, could not do so unless it were jointly made.” But as regarded the proposal itself, the solicitors were instructed to say “ that although, under ordinary circumstances, the manager would not hesitate to accept it, yet under the vevy special circumstances of this case, considering that both Mr Driver and Air. Maclean have for mouths past made frequent promises to give the Bank the securities to which it was legally or equitably entitled, and having failed upon various pretences to perform these promises, having in effect completely set the Bank at defiance, it could not be acceded to

Messrs Macassey and Holmes replied, answering the Bank’s objections. Examination continued : Apart from the action of the Bank, the cause of the deficiency is attributable to bad debts and depreciation. in station property, notably in the Highlay station, on which we lost some LGOOO. Bince 1865, the Bank’s profits from us have averaged L9OOO a year. Mr Smith intimated he offered no opposition.

His Honor: The only point would have been the delay in making application to the Court, and that has been sufficiently accounted for, so far as Mr Oliver is concerned. A final order will be granted.