DISTRICT COURT, GREYMOUTH.

Inangahua Times, Volume IV, Issue 41, 13 July 1877, Page 2

DISTRICT COURT, GREYMOUTH.

I Tuesday,, July 10, 1877. ■ I I A |U | l j (Before His Honor Judge Weston. His Honor delivered judgment in the following cases :-— RAINY CREEK GOLD MINING COMPANY, IN LIQUIDATION. . Mr Button for the liquidator, Mr Staite for. certain contributories. . Upon the application to settle the list of contributories iii this matter, Mr Staite 'in limine denied the power of the Conrt to fix special and intermediate sittings for the transaction of business under the. Mining Companies Act, 1872. Mr Button, however, maintained that the proclaimed sessions of the District Court are analagous to the Circuit sittings of the Supreme Court, and that the former is competent to take business other than criminal and civil cases at all times. I think, yet with some diffidence, that the answer must prevail. To enable a District Judge to exercise the various powers conferred by the District Court Act, 1858— -not the least important of .which are indicated in the, 26V 26, 27, and the 31st of its sections—frequent and irregular sittings ar& essential, and it there* fore. seems to me that the legislature contemplated the holding of Courts at irregular intervals for the transaction of ordinary business as distinguished from the trial of criminal and civil causes. If, however, such an interpretation be erroneous, it can bo successfully argued, I think, that jurisdiction in bankruptcy, and in all matters under the Mining Companies Act, being specially accorded to the District Court, and sittings both in and out of session being necessary for tho due and proper administration of those branches of tbo law. the right to hold such sittings becomes au incident by intendment to that grant. Certain it is, however, that without the power claimed for it, the utility of the Court would be seriously affected, at all events iv a district whore its sittings aro necessarily infrequent. In reference to another objection •. — the filing of a document previous to its reception by tho Court is, in

the absence of an express value attached to it by statute, a mere matter of practice instituted for the convenience of tho Court and suitors. As then the Act of 1872 makes no allusion to the filing of a " petition for winding up," in my opinion it is, although filed, inoperative prior to its formal pre« sentation to the Court or a Judge. Again—as a transfer of sham after the presentation of a petition is prohibited, and as a transfer is ineffectual without registration, it must happen, I think, that the "presentation " operates as a sealing of the 1 register (vide sections 26 and 27 of tbe Act) ; and that position is not affected by leave to amend the petition being granted rightly or wrongly by the Court. As then this case at present stands the transfers of Messrs Nichol, Rowley, Glenn, Blakey, Buckley, Eissen- . bardt, M'Donald, Dorian, and Hickson were, I conceive, improperly registered after the presentation, and hence they are abortive. In connection with the 35th section of the Act, it may not be out of placo to refer learned counsel to the exhaustive judgments in Warde and Henry's I case, 2 eh., app-^S. . GEORGE MASON. I The ease 1 upon its merits was disposed of at Reeftoh. The name must be removed from the list. LAPHAM AND HUNGERFOR-'s CASES. Mr Button, for liquidator ; Mr Staite , for National Bank (creditors) ; Mr Pitt ; for Mr Lapham and Mr Hungerford. j It was also sought to make these parties liable as contributories. It appeared that the gentlemen named being dissatisfied with the "management of the company, transferred their respective shares to Goss, •at threepence per share— three months be • fore the presentation of the petition. Goss was in Hungerford's service, arid was by the latter introduced to Mr Lapham as a person wbo would purchase their respective shares. Now whether the price paid was adequate or not, the Court possesses no means of knowing, and in the absence at the bearing of all reference to the paidup capital, it is incapable of drawing an inference if it otherwise could or would do so. In default of evidence to the contrary it is to be assumed that the company was at tho date of the transfer engaged in its ordinary operations.and although Mr Lapham's knowledge of the company's indebtedness to its bankers to the extent of £500 was admitted, the solvency or insolvency of the company at that time was not riiade manifest, or even touched iipon at this enquiry. That a shareholder in the ordinary course of business -,can transfer his shares at pleasure, for value or as a gift, although with the especial object of avoiding further liability, was conceded by all, at tho 'same time tbe validity of a transfer " hangs," as Mr Button very properly mentiond. '* npon the bona fides connected with it" The bonaovmal'afides can alonebegatheredfio a the surroundings of the case, not the least mnterial of which being the condition of •the company at the date of tho instrument. The uncontradicted and unquestioned evidence of Mr Lapham, tho payment ol the consideration out of the purchaser's funds, evinces, a» was contended by Mr Pttt, and intention to complete "an out and out," a substantial aud unconditional sale and purchase. Can, however, the transaction be impugned upon either of the circumstances detailed? The case, when fniriy stripped, leaves Mr Staite with but two points upon which to ground his strenuous opposition — the introduc--tion of tbe purchaser by Hungerford, and the absence of the former at the enquiry. Considered alone they would not invalid date a transfer ; when weighed with the other facts they do no more than prove a desire to dispose of shares, not however in an insolvent company — in a company whose operations had' ceased, whose mine had been abandoned, for upon those points no evidence was adduced,but in a going yet an ill-managed and doubtful conoern ; not to a. person upon a secret trust withan indemniby, or one over whom Mr Lapham had control, or could exercise influence, but to a stranger for actual and may be for full and substantial value. In the circumstances the Court mast pronounce the bona -fides proved, and decide against Mr Lapham's liability. ,This, and. .other cases point, I think, to' the necessity wnich exists for a rule or Regulation whereby directors might be enabled to regard the position of a proposed tran* feree # before accepting a trahsfer and releasing the transferor. • Itis remarkable in the absence of so salutary a provision that capitalists can be induced to subscribe to companies when the effect of the subscription is too frequently to accept great and unfair riakfl, on the other hand and above sll that bankers, merchants, and others can. be prevailed .upon to grant credit when at any moment their position and security may he .impaired through -numerous transfers of shares from solvent to insolvent men. ■ A judicious and hence a legal enforcement of such a rule would help to insqire confidence in a mining district, it would ensure the application to companies of the just and sound princiciples, which govern ordinary partnerships, and in many cases it would prevent liquidation proceedings, and the ruinous costs which such invariably entail upon a section of shareholders. No order is madein Hungerford's case ; he can mention the matter again, and submit himself to an examination.