SUPREME COURT—IN BANKRUPTCY.

New Zealand Times, Volume XXXIII, Issue 5322, 17 April 1878, Page 2

SUPREME COURT—IN BANKRUPTCY.

Tuesday, April 16. (Before His Honor the Chief Justice.) r Certificates of discharge were granted to Thomas Upton, James Sawyer, and Frederick W. Hodder. The matter of an application for a certificate of discharge by George Rees Carrington, was' adjourned to Thursday at half-past ten b clock. Mr. Edwards appeared tor the applicant in each case. - CIRCUIT COURtTcivil SITTINGS. (Before His Honor Judge Richmond ) His Honor : The Circuit Court stands adjourned until to-day, but I apprehend there is no object in further adjourning it. How say you, Mr. Barton ? It was adjourned solely in reference to the case of Peters v. Joseph, and I understand the arrangement between the parties was that that case should not be tried immediately; in fact, it is not possible to try that case immediately, J Mr. Barton : As I understood the an* angement that Mr. Travers agreed to, your Honor, it was that both matters should stand over until the next sittings. His Honor : So I understood. I think that the Circuit Court may now be allowed to drop. There will be no further adjournment. IN BANCO. His Honor Mr. Justice Richmond delivered the following judgment in re Gillon v. Macdonald and Others:—

This is an ap lioation by the plaintiff for an attachment against some of the defendants in a suit for dissolution of partnership. The subject of the copartnership is, or was. a newspaper iateiv published in Wellington under the name of the Evening Argus. The ground, of application is twofold. In the first place, it is shown on affidavit that on Ist March last the defendant McKhdy, one of the copartners, who is also mortgagee of the shares of the plaintiff in the copartnership, caused those shares to be put up to auction and sold in spile of the plaintiff’s protest Secondly, an affidavit of the plaintiff contains statements to the effect that he is’infonaed and believes that on the 30th March, the defendants sold the entire plant and goodwill of the Argus, and that from that day its issue has ceased, and a paper called the Evening Chronicle lias appeared in its stead. In order to understand the position of the plaintiff in making the present application, it is necessary briefly to refer to the nature and circumstances of the suit in which it is made.

The declaration prays an immediate sale (of course under the direction of the Court), of the good-will, plant, and material; that the partnership may be dissolved, the accounts taken, and the damages done to the plaintiff through his exclusion from his partnership rights, and otherwise through the misconduct of the defendants, assessed. The defence consisted mainly in the objection that the plaintiff had wholly transferred his shares to McKirdy by an assignment purporting on the face of it to be absolute, of which no _ mention _ was made in the declaration. The plaintiff replied that the assignment was in fact by way of mortgage only. This has been hitherto the only contested question of fact between the parties. On a first trial of the case the jury were unable to agree. <’n the second trial the jury found, on parol evidence, winch was admitted for the purpose, that the trans ction was a mortgage. The second’ trial took place on the 15th January, 187 S. Since that time plaintiff has taken no step in the action except a motion on the 30th January, of which the purpose was to reinstate the plaintiff as managing partner and editor until final decree. This was mfused on several grounds, to which it is unnecessary to refer. There is no allegation on the record, nor any finding of the jury respecting the state ot what must now be considered the'mortgage account between McKirdy and the plaintiff. The declaration simply ignores the existence ot any charge on the shares of the plaintiff, and there is, of course, no nrayer that the mortgage account may be taken, and no offer to redeem On the 21st January, McKirdy demanded payment ot the sura ot £250 as due on the foot of the mortj gage. During the course of the second trial the plaintiff admitted that McKirdy had lent him £l9O to enable him to take up the shares in the concern. The transfer of his shares was, according to his own evidence, as a security for Ids loan. It is not asserted that this loan has over been directly repaid. But by by an affidavit filed in support of the present motion, the plaintiff states that he claims to be allowed in account with his co-partners,. “ amongst other claims, the payment of my salary as editor for a period considerably exceeding three years, at the rate of £312 per annum, assessed at the trial of this action." I understand that this demand is based on an admission agreed to at the first trial, respecting the amount ol the allowances to be made to the three managing partners as editor accountant and printer respectively; a matter respecting which the declaration is silent, on the strength ot which admission the plaintiff now claims to be paid salary as editor during the whole of the still unexpired residue ot the partnership term of five years. It is unnecessary, indeed impossible at present to examine the validity of bis claim. I have only to remark that it is an entire misstatement to say that its amount was ascertained at tbo trial of the action, if that is what the plaintiff’s affidavit means. As a result of his own calculation of what ought to be eventually found due to him, the plaintiff now avers that ha believes it will appear ihat he is not indebted to McKirdy, but that McKirdy and the other defendants are indebted to him.

Upon the whole, however, it is obvious that I cannot take it as a presently ascertained fact that, the mortgage debt to MoKirdy is satisfied.

This alone, perhaps, is ground tor refusing the present application. The mortgagee may or may not have been entitled to put up to sale the shares of the plaintiff : but I could not decide that point against him upon a motion to attach him for contempt in pretending to realise his security. But it the sale by MoKirdy, stands good, it seems to cut away the plaintiff’s ground for complaining of the subsequent sale of the whole concern.

I think, however, that there is plainer ground than this for the conclusion at which I have arrived. It is indeed impossible not to see that the pretended sale of the whole subject matter of the suit, if it could be considered as valid as against the plaintiff, might greatly prejudice his interests. He has asked for a sale under the direction of the Court, and the defendants take upon themselves to anticipate its action, and to sell without its supervision or consent. Moreover, the subject matter'of sale, including the good-will of a newspaper, is of so ephemeral a nature, and so dependent upon good and steady management, that the damage done by the transfer to a stranger may bo irreparable. It is a case in which the plaintiff (apart from his position as mortgagor) might well have asked for and obtained an injunction restraining any sale of the property pending the ascertainment of the rights ot tire parties. On the terms of bringing into Court what was claimed to be due on the mortgage, I think it is clear he would have got such an injunction. On the same terms he might perhaps have obtained tire appointment of a receiver until a sale under tire direction of the Court could be made. But he has never obtained or applied for either injunction or receiver. He has never moved for a’ decree in the. suit. In the absence ot any infringement of an express order of the Court, I am of opinion that there is no case of contempt. I have : asked for a precedent for treating a sale pendente fife as in itself a contempt of Court. STo such precedent Ins been produced, nor. I thinkj can be. Such transactions are not infrequent in the case ot real property which is the subject of protracted litigation, and the plaintiff in a suit is not ordinarily damnified, heo .use the purchaser takes subject to his rights. Here the purchaser is said to have bought with full notice of the pending suit. If so, he takes subject to all the rights of the plaintiff under any decree which the latter may obtain. A re sale may be ordered, and the defendants may be decreed to make good any loss which may be shown with tile smallest degree ot likelihood to have been occasioned by their act. Kven if notice is not proved against the pure user the Court can degree the defendants to make full pecuniary; compensation to the plaintiff. But iu my opinion the process of contempt is not under the circumstances available Eule refused.

(Before their Honors the Chief Justice and Mr. Justice Richmond.)

THE LIQUIDATORS OP THE .HALCYON QUARTZ MINIMI COMPANY (LIMITED) V. SEATON. An appeal by the defendant against a decision of the District Judge at Westport, by which the defendant was held to he liable for calls on certain shares in the, company. Mr, Haselden, with whom was Mr. Fitzgerald, for the appellant; Mr. Chapman for the respondent. After lengthy argument as to the bearing of various clauses in the Mining Companies Act their Honors reserved judgment. 1 The Court then adjourned.