AN IMPORTANT BANKRUPTCY CASE.

Oamaru Mail, Volume IV, Issue 1083, 9 October 1879, Page 2

AN IMPORTANT BANKRUPTCY CASE.

Gkeymouth, October 8. At the District Court to-day, application was made for the discharge of David Thomas Falconer, a bankrupt. This was opposed by Mr. Perkins on behalf of the creditor's trustee, who intimated his intention of proceeding against the bankrupt for fraudulent insolvency. Mr. Warner, the bankrupt's solicitor, threw up his brief, and the case was about to be adjourned till the following day, in order that the bankrupt might obtain other legal advice, when the question arose of the validity of the trustee's appointment. His Honor Judge Weston said the point had been decided recently in Dunedin, and his Honor the Chief Justice had directed his attention to it. It was the case of the creditors' trustees in the estate of J. Black, A. Watt, and others. His Honor then proceeded to read the judgment of the Supreme Court in the'case, and in which it was laid down that the appointment of five creditors' trustees was illegal as tho st"ew Zealand ' Act provided for one trustee, and therefore they would have to hand over all the moneys they had collected to the Clerk of the Bench, as they had acted illegally. The law only contemplated the appointment of one trustee. Under the circumstances thero were no proceedings before the Court. The only way out_ of the difficulty ho could see was the passing of a special Act of Parliament in the matter. In reply to Mr. Perkins, his Honor said he could not allow the trustees then- expenses. The bankrupt immediately withdrew his application for discharge. and left the Court, The effect of this judgment simply is that all proceedings 111 bankruptcy, not deeds of arrangement, in which two trustees have been appointed are illegal, and all sales, transfers, &c., effected by said trustees are illegal; and it is questionable, whether lawyers who advise such proceedings are not liable xov damages for wrongful advice to their clients. There have been several cases of a similar nature on the coast, notably the protracted one of Kilgour's insolvency.