DISTRICT COURT.—July 10th.

Mount Ida Chronicle, Volume IV, Issue 228, 18 July 1873, Page 3

DISTRICT COURT.—JuIy 10th.

IIIBANXRUPTCY. (Before his Honor, Judge Wilson Gray.) -Joseph Dyche Teague, Naseby, painter and glazj&r, came up for his final examination and discharge. Mr Kowlatt appeared for the bankrupt. The Trustee's report being favorable, and no creditor objecting, after a short examination, his Honor granted the bankrupt's discharge. IN THE MATTER OF JOSEPH PACKMAN, A BANKRUPT. ■ This, was an application by the bankrupt for hia discharge. The bankrupt was present, Mr Hertslet acting as agent for him.. Mr Eowlatt, solicitor, appeared for the trifstee, Mr Pearson; Mr Bailey acted for a Dunedin creditor, Mr Joseph Mills. Mr Bailey, for Mr Mills, opposed the .discharge, and asked that the proceedings be transferred to the Supreme Court, Dunedin, or, failing that, that the case be adjourned to next sitting. The bankrupt was examined at considerable length. Several witnesses were also examined. The case was commenced on Thursday, and was afterwards continued by adjournment on Friday afternoon. The character of the proceedings will be understood from the Judge's judgment, given on Friday, of which the following is a summary:— His Honor said that in this ca3e he was asked by the bankrupt for his discharge. He was asked by a Dunedin creditor to transfer the proceedings to the Supreme Court, Dunedin, that the creditors residing in that place might have an opportunity of opposing the , discharge there, without incurring the great expense of procuring counsel to attend from Dunedin at Naseby, where there was only one resident solicitor, and thi3 solicitor was . acting for the bankrupt. The Dunedin cre- ■ ditors were returned on the bankrupt's schedule as two only—one, the firm of Macassey, Chapman, and Holmes, for £233; and the other, a Mr Pritchard, for £324. But M r Joseph Mills, who now opposed, ciaimed to be also a creditor for a small sum of £6. This was claimed by Mr Mills for his attendance as a witness at a trial in Dunedin, in which Mr Pritchard . was plaintiff and the bankrupt wa3 defendant. Mr Mills' affidavit did not state by which party he had been subpoenaed, and the bankrupt, in his examination, stated that, if Mr Mills was subpeenacti at all, he thought it probable that he was subpoenaed not for him but for the plaintiff. It had been proved that a telegram had been received that day from Macassey, Chapman, and Holmes, stating that they did not wish to oppose the discharge, J and there remained only Mr Pritchard of the j Dunedin creditors. Mr Pritchard did not j appear at all on this occasion, nor did he join I in the application made to the Court, and he { had not even proved his debt. So the Dun- j edin creditors appeared to range themselves j thus: Macassey, Chapman, and Holmes acqui-1 escing in the discharge; Pritchard not actively acquiescing, but wholly quiescent; and Mills, only a doubtful creditor, and claiming but £6, asking that the proceedings be transferred to Dunedin. His Honor proceeded to show that, as regarded any facts that had to be investigated, all the necessary witnesses resided not in or nigh Dunedin, but in or immediately round Naseby. The question chiefly at issue wa3 whether the bankrupt, in disposing of certain property and using the proceeds to pay certain creditors, was fraudulently preferring these creditors; and, connected with this, might arise a question whether, in selling his property, the bankrupt had committed an act of bankruptcy to which the title of the assignee might date backwards by relation. Ail the witnesses who could speak to facts bearing on these questions were Naseby witnesses. Looking, then, to the proportion of the Dunedin creditors who joined, or even seemed, so far a3 appeared to this Court, to take any interest in the application for transfer (and Mr Pritchard might have been communicated with by telegram since the adjournment of the Court yesterday), and looking at the locality where all the evidence was to be found, he must decline granting the transfer to Dunedin. The application to adjourn to next sitting was more reasonable, but much of what he had said a3 to the application for a transfer applied also to this. Only one creditor for £6 asked for it, and unless some good reason appeared in what had been elicited in the examination, he did not think that he ought lightly to put off for two moofths the defendant's chance of entering into some industry for the support of himself and family. His Honor then proceeded to consider the facts so far as they had appeared before him. The bankrupt became unfortunately involved in a litigation concerning two horses, which had been left with him as a livery stable keeper, in which he claimed no property, but in respect of which he found himself placed between the tire of two adverse claimants. The result was a verdict against him for £7O, to be reduced to nothing on his delivering up the horses. He delivered up the horses. There remained the costs. The costs were not taxed and judgment was not signed for three months after the verdict. But immediately after the verdict the Naseby creditors of the bankrupt became alarmed for the safety of their debt 3, and began to press him. He sold all his property, which consisted of two houses in Naseby and the horses belonging to his livery stable. The sale produced about £4OO, which, as creditors pressed, he applied in discharging the debt 3 they pressed for; An accurate account had been riled of all the payments made, and the whole of the £4OO was accounted for; and it appeared, generally, that the creditors to whom payments had been made had most of them threatened legal proceedings, and he (the Judge) was disposed to infer from what had

occurred that all of them had applied for their debts in a manner that, in law, constituted such pressure as rebutted the charge of fraudulent preference. Thi3 charge, indeed, had not been strongly urged before him, and it was not supported by any evidence except such as might arise by iuferenee from ths fact that the bankrupt did sell and did make the payments, while the bankrupt produced four of the principal Haseby creditors, to which the chief payments had been made, to prove that they had actually threatened him with legal proceedings. Something might possibly have been urged as to the title of the assignee relating back to the sale, if the sale could itself be treated—and possibly it might—as an act of bankruptcy. But this had not been urged at all. If the sale wag not actually beyond the three months limitation it was very c 1033 upon the borders of it, and no exact dates had been furnished to him by which he could judge whether it was within them or without them. It was not pretended that the bankrupt had concealed or made away with any of his property—all appeared to have gone to bona fide creditors. It had occurred to him (the Judge) that the bankrupt might be blameable for not filing his declaration earlier, when the Naseby creditors began to press him, and thus saving his assets for general distribution, so that Mr Pritchard, who after the verdict was at: least very likely to become a creditor for '. heavy costs, might have had his dividend. | But it had been proved that in this respect j the bankrupt had acted on the opinion of counsel as to the legal effect of his riling his declaration before the judgment was signed. Counsel thought and advised the bankrupt that, in law, it was highly probable that if he filed his declaration before the judgment in favor of Pritchard was signed, a discharge would not release him from Pritchard's debt, which, of course, involved the farther proposition that Pritchard could get no dividend. Whether that opinion of counsel would ultimately have proved correct or not the bankrupt could not be blamed for acting on it. He was advised that the probable result of his filing his declaration before Pritchard had got his judgment signed would have been that Pritchard would have received no benefit, and that he (the bankrupt) would be sacrificing his own chance of a release from Pritchard's debt. On the whole, his Honor thought that no sufficient cause had been shown why he should suspend or delay for two months (the period of his next sitting) the discharge of the bankrupt. If Mr Pritchard -was disposed to more in the matter, the discharge of the bankrupt did not preclude him from any civil remedy founded ou either a fraudulent preference or a relation backward of the trustee's title to the sale of his property by the bankrupt. He would, therefore, grant the discharge. His Honor added that the transactions about these horses, and other horses subject to the same title, had become very notorious in the course of protracted trials in the Supreme Court. Possibly some facts had become widely known to the public that, if now shown to him, might have influenced hi 3 decision. He did not know whether there were such facts, but, even if he did know Gf them, he would not use such knowledge. He could only act upon what appeared before him here. Discharge granted.