BANKRUPTCY COURT.

New Zealand Times, Volume XXXIV, Issue 5565, 29 January 1879, Page 3

BANKRUPTCY COURT.

Tuesday, January 28. (Before his Honor the Chief Justice) IN RE JOSEPH JOHN 'I YE.

Mr. Fitzherbert moved for an order declaring completely executed a deed of assignment made by bankrupt. The property of the bankrupt was conveyed to N. J. Isaacs, conditionally that he should pay the creditors 3s. in tho pound ten days after the complete execution of tho deed, and the deed had been assented to by the requisite number of creditors, representing three-fourths in value. Mr. Travers, on behalf of Mr. Duncan, a dissenting creditor, submitted that the deed did not come within the moaning of tho Act, and was of such a character that the Court would not recognise it. It was by which Tys disposed of all his property to Isacs, Isaacs covenanting with Tyo, and also by way of separate covenants with all parties, to pay 3s. in the pound. A release was given to Tye at once, but tho creditors are merely left to their right of action. That was not such a composition as was intended by the Act. The creditors, if this deed were completely exocutod, released their claims upon and upon his property. . His Honor : It aoema to provide for payment. Mr. Travers ; It gives a right of action, but it docs not provide for payment of composition. It provides that 3s. in the pound should be paid out of bankrupt’s property, “ or otherwise.”

His Honor : It may ho an advantage to creditors to have sucli a covenant, instead of depending upon the property of bankrupts. Mr, Travers : It may bo the reverse. Here we merely have an undertaking on the part of Mr. Isaacs, which may not ho worth a rush. It appears also that tho assets more than cover the liabilities. There is no security that tho creditors will receive a Gd. of tho 3s. in tho pound. _ , The Deputy-Registrar drew his Honor s attention to the fact that debtor was_ a resident of Napier, and should have filed his schedule and made this application in Napier. His Honor said that seemed to be so. It was very inconvenient, the more so because of the multiplicity of gazettes. In most other countries it was the practice to appoint but one newspaper as a gazette. Hero any paper might be a gazette, so that if a person wanted to know what was going on in bankruptcy he must look over every newspaper iu the district, and there were a large number. That was extremely inconvenient. Mr. Fitzberbert said he had come to Mr. Allan, the registrar, for information, and he told him proceedings must bo taken hero. Mr. Travel's drew attention to the fact that the resolution passed by the creditors was to the effect that Mr. Isaacs should pay Is. Bd. in the pound cash, and Is. Cd. by bills at three months, with intorestjadded. Tho deed made an entirely different provision. True, it appeared that tho deed as_ prepared was read over, but it was antagonistic to the resolution, The creditors might well have said they were taken by surprise, and now they wore at the mercy of Isaacs, Ho submitted the Court would look at the equities of such a deed. His Honor thought the course taken in this case was not unusual.

Mr. Travers thought it a very unusual proceeding. lie had never heard of such a case in the whole course of his practice—no security to the creditors being given. The substantial property of tho debtor was exchanged for the personal security of Mr. Isaacs, and while Mr. Isaacs took over the responsibility, no doubt for his own benefit, he gave the creditors not the slightest guarantee that he would properly meet his responsibility. His Honor asked Mr, I'itzherbert what ho had to say about the other point. He was afraid that Hawke’s Bay creditors' interests might bo prejudiced. Mr. Ktzherbert observed that his Honor would see he had heeu misled.

His Honor said it was no part of the Registrar's duty to instruct solicitors. He apprehended that if officers of the Court were asked their opinion, they gave thorn to the best of their ability, but the solicitors, not the officers of the Court, were responsible. Mr. Bitzhcrbert said that the Registrar was sitting in Chambers in the absence of a Judge. His Honor ; Then it was an extra-judicial opinion. It was found that a necessary affidavit setting out the performance of certain conditions precedent had not been filed, and his Honor said that it must be filed before anything further was done. He should require as one condition that it must be shown proceedings had been properly taken in this district. Tho matter was ordered to stand over till Tuesday next. IN HE WVLLIE AND UInDLBSTONE. This was a case stated under the 111th section in order to get tho advice of tho Court as to management of an estate. The facts were as follows On 20th July, 1878, Messrs. Wyllie and Girdlestone filed a declaration of insolvency. At that time they held under lease (which contained the ordinary implied covenants, including one for repairs) a parcel of land at Masterton, with a store and buildings thereon, _ which they used for the purpose of their business. Before filing the declaration of insolvency they had submitted proposals to an insurance office in Wellington for insuring the buildings, which, however, had not been accepted, and no insurance existed at the date of tho fire, the landlord not having availed himself of the power to insure, in default, contained in the lease. Two days after tho declaration of insolvency had been filed, the buildings were accidentally destroyed by fire. The first meeting of creditors took place an tho 25th July, 1878, when Mr. W. Berry was duly appointed creditors' trustee, and he has since duly elected not to take the leasehold property. The landlords claim that tho estate is liable to rebuild, and have called upon the trustee to do so at the cost of the estate, butj he has refused. Tho question for tho opinion of the Court is, have the landlords a right to compel the trustee to rebuild the buildings destroyed by the fire, out of the moneys of the bankrupt’s estate ? If the answer be in the affirmative, the trustee is to be ordered to pay tho costs of this case and incidental thereto, and to rebuild so far as the monies of the estate will extend. If in the negative, the landlords are to pay costs. Mr. Travers appeared for the landlords, and Mr. Bell for the debtors.

His Honor reserved his decision, remarking it was a difficult point.

IN RE ENOCH WALKER. Mr. Travers applied for an order declaring completely executed a deed of assignment, It appeared that an affidavit setting fortli that the proceedings had been commenced in the right district had not been filed. The matter was adjourned to allow of such an affidavit being tiled. The Court then rose.