SUPREME COURT—IN BANK RUPTCY.

Otago Daily Times, Issue 3282, 13 August 1872, Page 2

SUPREME COURT—IN BANK RUPTCY.

Monday, 12th Avtivxr. (Before His Honour Mr Justice Chapman.) FINAL ORDER. • Thomas Cbtiikie.—An order of discharge was granted. ADJOUKNMKXTS. Joiix Patekson:—This matter, a petition re Messrs Fleming and. Hedley's claim, was further adjourned until the 19th inst. Mathkw Curhie.—The time for applying for adjudication was adjourned, on the application of Mr Harris, until the I!)fch inafc. WAV OF EXAMINATION. ."' '" ' I David Heni>ek.sox.—Mr .Stewart applied that the final examination of the bankrupt might be fixed for the 2Gth inst. Ajiplication granted ;. . ";,*-. \ »KED. \ ■ John Chickuork.—Adjourned motion for complete execution of deed, of arrangement. Mr Stewart appeared 'to oppose. "Mr jHaggitt, on behalf of Mr Stoat,'.the arranging debtor's (solicitor,, stated that the, deed was not sufficiently executed. ' The proceedings consequently lapsed. " ... ' EXAMINATION OF WITXRSBES. ' ! John Maclkan.-^-Iu . this matter a'sum* mouß, requiring the attendance of witnesses, had been issued under the 287 th section ol the Bankruptcy Act. The section provrdes —" That if at any time or from time to time

after tho order pf discharge takes effoct, it appears to the" satisfaction of th 6 Supreme Court that there is good cause to believe that, after a reasonable allowance for the maintenance of the debtor and his family, and the payment of debt« ? claims, and demands not provable under, the bankruptcy, the debtor is able to pay any sum"towards the discharge of debts, claims, or demands provable untler the bankruptcy, and not fiiHy paid there under, the Court may, if it thinks tit, issue a summons requiring him to appear and be examined respecting his Ability to make such payment." The matter wan "first brought before the Court on the sth inaL Mr Barton, iustruct<»l by Mr Harris, appeared on behalf of Mr John Maclean ; and Mr Smith - represented the Bank of New South Wales, creditors, at \vho3u instance the summons was obtained. Questions were submitted by Mr Smith, and answered by'Mr Maclean as follows : — You were adjudged bankrupt on the Oth July of last year ? Yes. And ohtaiued your order of discharge on the 10th October of the same year? I ihink it was/about that time. ■ " In February of List year you commenced an action against Shennan and Others, in which you claimed a shate in a sheep station? Yes."' An equity ami, in which you claimed a .one-third share in the Pukctoi Station 'i Yes. That claim is not inserted as part of your assets in the schedule of bankruptcy ? No. ! Did it exist at the date of the bankruptcy? I The letter existed upon which I claimed that share. Hi* Honour : Your right existed, did it not, though not determinedby any Court of Justice ? I presume so, your Honour ; such as it was.

Examination l>y Mr Smith cnntinaacl:— The claim you set up was ultimately compromised, was it m»t? So far, after .1 letter from you on behalf <»f tho Bank of New South Wales—at least I understood you \v«:re acting for the Bmk of Otago, and, at tho time, 1 received from you intimation that any money or property I should receive yon would claim. His Honour : Did you receive anythinganything to stop the suit? iNot a shilling, your Honour. Mr Smith : Not you, yourself? No. Mr Smith: Was anything paid for the benefit of your family in virtue of which you wire to discontinue the action? 2sot k«"a consideration for discontinuing tho action. His Honour: Did anybody pay anything on y« ur behalf; what was the consideration for discontinuing the action? I abandoned my cliim at the time, your Honour, altogether, and left it in the hands of my solicitor, as I was advised not to go on with the action. Hia Honour : Did .Shennau and Laruoch Say yon anything to discontinue the action * 10, I abandoned the claim, ami left it in the hands of my solicitor. Hih Honour: But what did the solicitor do for you; did anylwdy do anything? I believe the cum of £1000 was Mettled oil niy wife, which I was not aware of for ten days after it had taken place. Mr Smith : Did you not stipulate with Shennan, or through Mr Harm, that £1000 should he paid for the benefit of your wife and children ? I swear distinctly that I did not stipulate for any pueh thing. Mr Smith : Yon did not distract your solicitor in the matter 'i I did nofc instruct wy solicitor to do bo. Mr Smith : Did you know that he was to do it? I knew nothing until the whole thing waa settled. There had bctn £1000 offered before, which I positively declined. His Honour : And you left your solicitor to do the heat for you that ho could ? After the receipt of this letter, I abandoned the claim altogether. His Honour: I understood you to say that yon left tho matter entirely to your solicitor? Yes, I did. His Honour: Who was your solicitor? Mr Harm. Mr Smith : In order to fix your mind as to dates, I will read yon the Judge's order in that action. This is it:—" Ujmn the application of Mr Cook, solicitor for the defendant, Watson. Shennan, and upon hearing Mr Harris, solicitor for the plaintiff,' and by consent, I do order that upon payment by the defendant, Watson Shcnnau, to the pbintilf of the Bum of £100 in full satisfaction aud discharge of all claims and demands of the plaintiff in this action, including his costs of this action, and also upon payment by the said defendant to the plaintiff, of such sum as the.plaintiff may pay to the defendants, Wiiliam James Mndic Larnach, and the Bank, of Otago, Limited, for their taxed coat* in this action—AH further proceedings in this action l>e sfayed, and that the plaiutilf do discontinue the same, ami deliver up to defendant, Watson Bheuiian, all deeds and rutmiim-htH of -title in the "custody, possession, or power of tho plaintiff, relating to His alleged one-third share in the matters in dispute in this action. Dated this 19th day of April, 1872. H. S. Chapman." Well, did you know nothing of what was then taking place t t did'hot Then what authority hail Mr Harris to aign this? Simply that aftvr the receipt of this letter I referred to before, and hearing Mr Harris's opinion alwnt it—that it was useless to go on with th>> action—l left the casein Mi Harris's hands to settle in any way he liked. ■'Well, here is a letter from Messrs Smith and Anderson.* dated 17th Apri1. 1873,:~ " Jolm 'Maclean.—Sir—'Yourself against Shennan and Others. |Qn behnlf ol the B&uk of N«w South Wales, we have to give you notice that any property or. money which you may recover, in the above actioM, or receive from any of the defendants therein by way of comprftmfse, Trill l?c claimed as lawfolly l.tclonging to your tauitrupl estate, and that failing your handing ovt-r such proceeds to your Trustee in Bankruptcy, proceeding* will bo taken against ymi under tho Bankruptcy Act." You received that letter cm the day it 'bear* date ? Probably on that day or 0n... tiio day following. V . Did you answtr that letter ? I think not. On1 the receipt of that letter you Raid you took a certain course of action ? I took the letter straight to niy solicitor, and I was told that it would be useless my going on j with an action of that kisul; that if the Bank were going to claim anything, it might be recorered. Did. you give your solicitor instructions 1 No, I taid J could see that I was done in the matter, and that I would abandon it altogether. Was that the purport of the communication ? , Yes. J saw tliat between, the Bank of New South Wales and the Bank of Olago—for which you were acting—l saw It was no use my attempting to recover m'ouoy from the one to hand it over to the other. Is that all you aiid to your solicitor? I believe so. Will you swear that either you or Mr Harris did not then propose or that it was thoroughly undcrst<>od between you, that whatever cun-mlenitiqn .was to be paid by Shennau'for the discontinuance of the action should be settled upon your wife and children ? It was not arranged by me. Waa it mentioned to yon by Mr Harris ? I don't think so. I was perfectly ignorant of ' all the facts connected with it until about bin days or three weeks afterwards. Then if Mr HarrLu afterwards demanded fromSheniian, as accsniiUcratiouforhisgettL-ig tho action discontinued, that he should pay over £1000 on your behalf, to be settled on your wife awl •family, .did ho act without Instructions from you? Whoever did so, acted entirely without advice from me. If Messrs Harris aud Macassuy'have taken upon themselves to receive £1000 frotu Shenuan, notwithstanding the order states tho consideration was to be £100. they acted without your ioatructions ? I have no doubt fcliey will be able to explain themselves to your satisfaction when they get into the box. ' What did yon learn" in-ten* days-after-wards ? «lt,under«t<KKl;ihat: the;matter bad beeu settled ; that it "was stated \ ha«l no claim; but that l^arnach said, ho - would sottlo £1000 on Mrs Macleaa: ' / '"/ *~ '; His Honour-: Geuerbius 1 - V Mr Smith : Laruach or Shennan? Was Larnach the donor of the £1000 ? They were both jointly interested in it, 1 believe.

Mr Smith: Well, one of these gonerons parties had given £1000 as « matter of grace; for what purpose 1 I don't know exactly. I only knew that a settlement hod been made. Mr Smith,: Aa a matter of grace? That was all I knew about it. Mr Smith: Was your own solicitor bo' sparing of his information to you that he 1 would merely say that cither Jjarnach or Shennan had given £1000 for the benefit of your wife and faintly ? What was done with, the money? Who received it? I believe Mx-Hsrs Harris and Maeassey received it. ■■>* Mr Smith: Mr Macassoy was acting as counsel, was lie not? No money, therefore, would touch his hands! I don't kuow; it did not touch mine, at any rate. What has become of the money since ? I believe it has been vested in trustees. What trustees ? I think that two of my brothers are trustees. Hw Honour: Dou't you kuow it * 1 only kuow it from hearsay. Mr Smith continued: What information, have you received on the subject * I believe" my brothers, consented to act. 1 was simply told they were acting as trustees. Who told you ? I was told by my brother Hugh. A partner in the firm of Driver, Stewart, and Uo. ? Yen ; I was told that they were actiug. Why did you say you believed ? I had ao fact* except my brother's statement. * His Honour? Did you doubt it? JS To, certainly not. Mr Smith continued: Then Hugh Maclean has got the money ? 1 think not. Who has it ? I think it has been lent out on mortgage. In his name ? T don't know. You don't know ? I don't. Did your brothers receive it to be vested for Mrs Maclean and her children ? 1 believe they did. . His Honour : Your partnership claim was not put into your schedule? Witness : In the Puketoi station * His Honour : Yes. Witness : J^o, it was not. Mr Smith continued : You spoke of aa offer of £1000 that had been made to yoa, Home time before the setttani'jnt of this action. Who mado that offer ?An offer was not made direct. My solicitor «aid lie thought that he could get £1000 from Shenimn and Lurnach, which I declined to accept. For what reason ? Because, you put a higher value on the third share ? Yes, 1 did. His Honour : And yet you kept it out ©f your schedule? That was long nftcr the rise in wool, your Honour. I had sold my interest sonic time before coming iuto Court. I had only sold the la ter His Honour : To get it back again * Witness : If at anytime 1 was in a position to buy. Mr Smith continued: You were entitled to re-purchase it at the name price aa you Bold, £50? Yes. • And eight months after your adjudication you valued it at £1000? Is the Court to understand that when yon were apprised by notice from Messrs Smith and Anderson that tlie-lkuik would hold you responsible to the Trustee in Bankruptcy for what you might receive, that on receiving that notice you wenfe to your solicitor, and said, " I abandon all claim "? My solicitor'n advice to me was that I could not go on with tho action. And there was not the slightest understanding between you and your solicitor that he should endeavour to get as much as; he could by way of compromise, and that whatever he obtained should bo vested for the benefit of your wife and children ? Distinctly ; there was notauy such arrangement. Then Mr Harris took upon himself to demand that £1000 from Shennan or Larnachc without your authority ? I dou't know whether he or Mr Mawmsey did. Well, either one or other, without authority from you, took ifc upon himself, or both, took it upon themselves to accept tte £1000? Yes, they tmifct have done.

And to settle it in favour of Mrs Maclean and her children? I believe that ha.l) been done.

You, in the meantime, knowing nothing at all about the matter? Nothing about it.

Had you no conversation with Sheunan on the subject Before the action was commenced, I had several conversations witk Sheunan, but not after.

Had you no emivernation with Shennan on the xuhject of the amount he was to give, either directly tc you)self, or to pay to others for tho benefit of your wife and children, nftur.j'ou received the letter from Smith and Anderson? Not ono word; 1 had not spoken to Shcniiim' for months beto»e then. Was not there an; understanding.established between yon and Air Harm that you should keep aloof altogether from the matter, and leave him io iiiukc the best arrangement he could on behalf of your wife and children in settling with Shennan? No; when I left his riJJice I did ho rather in a huff, and I said I would abandon tile ease entirely ; I woultl not have anything more to do with it, because I found. that I was "had" by the Hank of Otago on the one hand, and by the Uank of New South. Wales on the other..

You have received: hoiuo inonoy from th« Otago Meat, Preserving Company since the date of your discharge ? Yes, I hare.

Wliat waii tlieaum? I think the pound* were 158.

When was thni received ? I really conftf not tell the data.

Mr Smith produced o cheque, remarking to witness, " You can tell perhaps by looking at that ehwjue ?"' Witness: Yes1, that i* the date ; and the amount i» £lf)8 10s 6d. s That w the' actual cheque hy which yoa were paid, is it not ? Yes.

And dated the 27th March, 1572 ? Yes. On what account was that inoncy received? On account of services rendered to the Company in connection with the purchase o£ stock.

During what period? Extending over~ Well, I wa3 buyiug fttock for a long time for the Company while I was a director of the Company. During the pendency of these proceedings: in Bankruptcy these proceedings were going; on? ...Ye*.,. -~. , . : , iU And this vra*> the balance of the claim yoa made upon the Company? Yea. It was juet what the Compiuy likod to give*. Was that an act of grace ? I don't knowThey looked npon it as a sort of gratuity. Did not you make a distinct claim npam. the Company ? / did; That is your MM (handing document far witness), is it not? Yea. '

That is the day you obtained your discharge ? Thjs claim, which you made on. the day you got your discharge had been ac-ruing; for Home mouths previously, had it not* Ye«_ His Honour : Aud that was not pufc into your schedule? No. . Mr Smith continued : By this account it appears that you received £i>o i'or which yott gave credit, the balance being afterwards settled by tin's cheque for £158 lGs Gd, dated the 27th March, 1872 ? Yes. You now say that it was paid to you as a. gratuity? The directors iguored that WII altogether; they would not have anything: to do with it; they said I luul no legaT claim.

His Honour: But whin you render services, you can claim what they arc reasonably worth. It was a claim that should have been put in your schedule- for the benefit of all your creditors. Mr Smith coutinned: Well, you recdvedt the sum of £ir>B 10* Gd ; what Uavc yoa done with it? I have expeuded it for living—in the necessaries of lite.

Where are you now living? My establishment w let at present. I a*n hying at the Criterion-

Are you in the rccuipfc of any salary- or iucome? lam not. "'•' ";- •[.."' You rcftide, except temporarily duriegthi*. business, at your brother* station; Ha ytm. not?- Well; tny wife'ami:child are there, bat I cannot go there for souse time.' : 11 aye you no in tercat in. that atatiou ? Not. I hay© lieun sn^rintcmling my' brother 1* business at times for him j uotliiug more Do you rtctiivo no rcumncrattoa for UutS: No fixed rciuunoration ; merely a trifio.

Wave you no fixed interest in that atation ~»t Tuapeka 7 No. - ■••■'"- ' .

J. S. Webb;. Secretary to the OUgo Meat Preserving Company, said that tbe i«tt wtfc- -»««'■ (Mr. Madoan) acted-&«. buyer for the ■ Company throughout the iw«w«m of 1871. He made all tins jniirchajjcsj that were to Smj rondoHe wav JMatjagiag Director of the Company up to a certain date/ While filling that capacity ho a)««> Jwught stock for the Company as » .Director,, .nob as,» remuueratecl Dtiycr.

Mr Smith : Do you distinguish the perio*!» during' Which ha acted a* ..buyer and && managing director ? Yea.

Mr Smith {handing a document to witness) ; That is Maclean's account. What period (lows that embrace ? I understand it to embrace nearly the whole period ; the n&mm we wen; working; during which he acted aa buy*r to the company.

His Honour : Including the period he was managing director'? Including that.

Mr .Smith, having called witness's attention to the various items in the bill, said : Did Maclean demand, payment of the balance? Witness: IU: demanded or claimed that a payment jibould be made. But this wan framcij by request, to show Uow far he thought the'com pan v wax indebted to him. It w,'t» claimed .i-j .-I dvbt by Maclean His Ffonnur : Ymi paid him £ir,C> Ifis in fall ? Wilncaa : Ye», m full of this and Kub"SWKjtient co:iiiiii»«ionH, Ilia Honour : Disallowing part of his demand 'i Witness : Yes, the major part. Air Smith : Was it not recognised a« for services when acting purely as buyer, disregarding tlu'Ka as managing director? Witness : Jt was ]>aid to him to get rid of a claim that wi'H in the first instance disputed.

Mr Smith : W<;l], that was the final settlement of bin claim ? Witness: Van.

Witness v.ut; cross-examined by Mr Barton as follows :■■-■

Is it it-it a fact that after you got this claim from Maclean, that the directors repudiated it as a liability ? They did. I doVfc know that they all considered that nothing was due to Sir Maclean; but they repudiated it an a legal claim. Then, in it a fair way to put it, that what the directors gave him afterwards was given merely as a matter of favour in consideration •of the unfortunate position he has Ikjgii in lately, and not because lie had any right to it? Witiv.HH : With the exception of what ■was paid on commission of shares, i don't think Maclean would have been paid anything had i<> not been considered that be was in circui)i.<-!an':ca that made money a great object to him. If the trustee of his estate had sent in any claim to yr.ur company would they have repudiated it? I think the whole of it would Jiave been repudiated except the comm ssion on shares.

Mr Smith : Have the directors been generous at tint i^xpense of the shareholder*1, in regard to Maclean's circumstances ? That mitdit be the impn-^fion of sonic.

His Honour : Perhaps they were an unusually hcTiovob-nt body of shareholders, and would mil ol»j.;ct to anything of thp sort. Air Smith a*ked that the matter might bo 'Adjourned to enable Khcnnau, who wan an imjiorbuit witness, to attend. Sherman had received notice, but owitig to the Hooded state of the rivers he had been unable to come to town. He wan supposed to be now - on his way.

Mr .Burton said the matter had been bo ' long oji the li»t that the other side might surely have taken steps before to secure the attendance of Shcnnnn.

His Honour : Will it be an inconvenience to you ? Mr Barton: We have witnesses on our side. His Honour : Well, I will hear them now. Mr Barton : But we want to hear what case we have got to answer. His Honour : Yes, you are t/umi defendants.

Mr B.u-fcon : We want to hear tho case = agninpt tisyyonr Honour ; but I submit that ".the other side ought to have had the witness >liore now.

His Honour : Well, if the roads are so bad, things of thin sort cannot be avoided.

Mr Barton : The hardship following an ■adjournment in that only a partial statement of the cr.Ho goes before the public, the whole ...matter not having been elicited. Iff is Honour then requested, at the suggestion of counsel, that-a report of the case should not be published, pending its rehearing. [We consequently held over the above srefwrt from the Jith inst. Additional evidence was taken yesterday ; but in consequence of its extreme length, we are unable to publish it in this issue]