SUPREME COURT.

New Zealand Times, Volume XXX, Issue 4364, 16 March 1875, Page 2

SUPREME COURT.

BANKRUPTCY SITTINGS. Monday, March 15. (Before His Honor Mr. Justice Johnstone.) IN RE W3T. MOULD. Mr. Bell, who appeared for the bankrupt, ? applied for his final discharge, Mr. Travers opposed on behalf of Messrs. A. P. Stuart and I Co. ' The case had been ordered to stand over from the last sitting, in order that the trustee should have time to revise and rectify the bankrupt’s accounts, which wei’e not then regardecl as satisfactory. The trustee’s report now stated that the errors had been satisfactorily explained, and that the bankrupt had afforded him every assistance in making up the accounts presented to the Court. Bankrupt, under cross-examination by Mr. Travel's, stated that he had been in business three years and a quarter, during which time he kept a rough hook, a day-book, and a ledger. The ledger was posted once a month, and, as he did not take stock regularly, it merely showed the cash transactions. Took stock twice only during the whole time he was in business, the first time being about fifteen months after he started, when he found that he had made a loss of about £IOOO, the amount of his present deficiency. He would have taken stock at stated periods, but as he had to do the whole thing himself it was not an easy matter. He knew that subsequently to his first loss he was gaining, but had not had time to recover himself at the time of his adjudication. Was aware at the end of three years that there was i a slight deficiency, and told Mr. Stuart so ; in fact, gave him a statement showing roughly that his liabilities were £l5O in excess of his assets.

Mr. Travers : And in reality it turns out to be upwards of £IOOO. Bankrupt : During the last six months’ trade I bought heavily, and that is where the loss has accrued. Mr. Travers : And why did you buy heavily ? Bankrupt : Because my trade was increasing. Mr. Travers : And yet you filed a declaration of insolvency. Bankrupt : I did. Mr. Travers : Bor what reason ? Bankrupt : Simply because Mr. Stuart pressed me. I was not overdrawn at the bank, and when I told Mr. Stuart that my liabilities exceeded my assets by £l5O, that was an accurate statement.

Mr. Travers : Then, in the six months that intervened between that statement and the\ filing of your declaration of insolvency did you J make an entire loss ? Bankrupt: No ; not an entire loss. ■ Mr. Travers : You seem to have lost nearly £IOOO in six months.

Bankrupt: That is accounted for in this way : This , second statement of accounts now before the Court includes a disputed account of £2OO, which was not previously taken into account. Then there is the £l5O of which I had already informed Mr. Stuart. Next there is included an item of over £3OO for two years’ rent, Mr. Stuart being also my landlord. The loss caused by the forced sale of the stock accounts for fully £2OO more, and £IOO for interest at the rate of 10 per cent, charged by Mr. Stuart makes nearly the £IOOO. Between the last stocktaking and my bankruptcy, my purchases amounted to between £6OO and £7OO, a portion of which was paid in bills. Mr. Bell re-examined the bankrupt, and elicited the fact that, together with the want of time, and having to pay Messrs. Stuart and Co. 10 per cent, on his goods, he had never been able to recover himself. Mr. Bell further stated, that Messrs. Stuart and Co. had kept the bankrupt afloat, and if they were not aware of his position, the fault was their own.

Mr. Travers, in answer to his Honor, said the case was one in which it would be difficult to say whether or not there had been anything in the shape of fraudulent trading. There certainly must have been a degree of recklessness, when a man within fifteen months of starting a business of this sort found himself a loser to the extent of £IOOO.

His Honor : I do not sit here as a general denunciator of bankrupts. Unless there has been some manifest fraud, I do not see that I can interfere. In what respect do you suggest that the bankrupt’s conduct has been culpable ? Mr. Travers : In neglecting to ascertain his exact position at proper intervals. To omit taking stock for upwards of two years, after a person has ascertained at his first stock-talcing that he was a considerable loser, appears to me to be proceeding rather -recklessly. His Honor ; I quite agree with you that a trader who -wishes to conduct his business properly ought frequently to take stock, but the bankrupt suggests that he did not, take stock for two years, because he had to do the work himself, which means that he could not afford assistance. How, in what manner do you suggest that the Court should mark its disapproval of the bankrupt’s conduct ? Mr. Travers ; Perhaps it would be hard to ask that the bankrupt’s certificate should be suspended for any period, but this is not the first time the Court has been compelled to comment upon laxity of keeping accounts, and if persons will not take warning from these eases they certainly deserve reprobation, if not -m. punishment.

His Honor ; Here the bankrupt was kept afloat by the principal creditor. Mr. Stuart might have made it a condition that the bankrupt should produce an annual balance-sheet, with a statement of his stock. Then, if this had not been done, and the bankrupt was recklessly and quasi fraudulently forbearing to do it, the court might mark its sense of his conduct; but where the creditor knows as well as the bankrupt himself how he is carrying on, it is hardly fair to ask the court to interfere between them. Here there was nothing positively fradulent or secret. If it were a case where a person was deluding another, I should not merely reprobate his conduct : I should deem it my duty to punish him. *

Mr. Travers : We cannot say that there has been anything fraudulent. Ho doubt the system of indiscriminate credit lies at the root of the mischief in this case. That system is as much to be reprobated as reckless trading, fordt really induces reckless trading and encourages a class of trade which leads to bankruptcy. All I wish to do is to call your Honor’s attention-to this fact, as a warning to others, that they, must be careful to investigate, at proper periods, the condition of their affairs, so that their creditors may have an early intimation in case of failure, and so prevent more serious loss. His Honor : It was only proper that this investigation should take place ; but as I understand you do not intend to invoke the powers of the law, I think I shall be justified in granting the bankrupt’s discharge. I may say that I think it very undesirable that unlimited credit should be given in a business like this without periodical balancing. Discharge granted, costs of opposing creditor allowed. IN BE ALEX. PAILTHORPE. Bankrupt is a carpenter, and in addition to following his trade, kept a boarding-house at Featherston, which turned out to be an unprofitable business. There being no opposition, the final order was granted. The Court then adjourned.