BASED ON EXPECTATIONS

Taranaki Daily News, 2 December 1926, Page 11

BASED ON EXPECTATIONS

LOAN COMPANY’S ACTION BANKRUPT’S DISCHARGE OPPOSED. POSSIBLE BENEFIT UNDER WILL. '■Where there’s a will there’s a way.” So it seemed to a certain enterprising loan and finance company in Taranaki which ingeniously conceived the idea ot recovering a debt by the application of this precept to its business transactions. The whole scheme hinged on the provisions of an old lady’s will. To whom was she going to bequeath her worldly possessions? Traffic in futures is a common practice in tee commercial circles of the larger cities of the world, so moulding their actions on the same principle, the loan company decided to trade in expectations —in this ease the expectations under the old lady’s will. Thus the beginning of a strange story told to the Chief Justice (Hon. t. P. Skerrett) in the Supreme Court at New Ply mouth yesterday afternoon. It was explained to His Honour that a certain lady engaged in dairy farming near Hawera. The lady required some money, so as the farm was already encumbered with three mortgages she applied to the loan company for a fourth mortgage, which was granted. The security for this mortgage was, of course, the farm, and in addition the lady’s interest under her parent,’s will. The slump followed the boom, and hard times eame for Taranaki. The second and third mortgagees pressed, and to protect itself and the fourth mortgage it held, the loan company paid off the second and third mortgages. Then the blow eame. The lady went bankrupt. WHAT ARE THE TERMS’ After investigation and adjustment the loan company came to the conclusion that it had a sum of approximately £l3OO owing to it by the lady, and its security was the expectation of what the lady would receive under her parent’s will. The whole question was: -What was the terms of the will’ Would the lady benefit under it? The company reviewed the position. Bankrupt, over 60 years of age, was one of the two sisters still living, and their mother, on whom so much (to the loan company) depended, had reached the very ripe age of years. It was known that she had niade a will, and that slie had an estimated sum of about £2OOO to dispose of. Were there not good chances that the old lady would very soon go to her Valhalla? So was born the rather ghoulish scheme which was thought might liquidate the company s debt. APPLICATION FOR DISCHARGE. Thus yesterday, when the bankrupt applied to the Supreme Court at New Plymouth for her discharge from bankruptcy, she found that the application was opposed by the loan company. The circumstances were explained in full to His Honour by both counsel, though the views they took of the matter were rather different. Counsel for the company considered that it was a right and proper thing that the discharge should not be granted until —well until such an event occurred that would necessitate the disclosure of the terms of the will and the apportionment - x the estate according to those terms. Counsel for the bankrupt looked with abhorrence on such an infamous proposal. The old lady might live another ten or twenty years, he said, and, anyway, it was not at all certain that the bankrupt would actually benefit under the will. Who could tell? “You certainly take a sporting chance,” he remarked rather sarcastically to his learned friend. “More than a sporting chance,” replied the other with conviction. It was explained to His Honour that the c-.se was not by any means a new one. It had come before Mr. Justice Reed at the February session, and had been adjourned for three months. Mi. Justice MacGregor heard it again at the August session, and adjourned it until the November session. "We hope you will settle it this time; we don’t want another adjournment,” said counsel for the bankrupt hopefully to the Chief Justice. - „ TWO ASPECTS OF CASK There were two aspects of the matter that needed consideration, said His Honour. It was right that a man or woman should pay his or her debts if possible, and in the case before him it seemed that some dependence could be place! on bankrupt's expectation under the will. On the other hand, the bankruptcy legislation was framed so that the Court could, if it thought proper, make an order for discharge and thus free the bankrupt.-allowing him or her to lesume trade and business on the ordinary terms.

The view that he held at the moment was that the creditor was entitled to some remedy, but he thought at the same time that the Court was bound to d 6 a fair thing by the bankrupt. In a sense, counsel for the loan company was applying for the indulgence of the Court. He thought that he was entitled tn know how much of the debt said t J be owing at the present time to the loan company was on account of interest, and how much was in the way of an advance. The lady was no doubt under an obligation to pay her debts, but he did not like the idea of entering a judgment. Opposing counsel, at His Honour's B?!ggestion. withdrew to consider the matter, and after a brief period returned to announce that a settlement had been reached. It was agreed that bankrupt be granted her discharge on condition that she make an assignment to the Official Assignee of any interest not exceeding £930 that she might receive vnder the will of her mother.