DISTRICT COURT.

Temuka Leader, Issue 2453, 19 January 1893, Page 2

DISTRICT COURT.

TlMAßU—Tuesday, January, 17th. [Before His Honor Judge Ward.] PROBATE. On the application of Mr C. Perry (for Mr Knubley) probate was granted of the wills of the late Dr B. S. Lawson, and Mr Alfred Douglass, stock inspector. IN BANKRUPTCY. In the case of T. E. E. Jeficoate, Mr White (for Mr Raymond) for debtor, who was called for further public examination, the examination was not proceeded with, and was declared closed. Joseph Maberly, of Waimate, bankrupt, was called up for public examination. Mr White, for the Assignee and creditors, examined the debtor, who stated he had been in business as a cabinet-maker at Waimate, and about three years ago went into storekeepiug with a capital of £SO. A year or so later he sold the business and stock to the Waimate Co-operative Society for £305. Was appointed manager, and resumed business as 'a cabinet-maker. The Cooperative Society subsequently went into liquidation. Mr White examined in detail respecting the incurring of certain debts, shortly before filing, at Christchurch and Timaru ; and as to what became of £46 he received from the liquidators of the company. The examination was then adjourned, Mr White stating that it was the intention of the Assignee and creditors to formulate charges. The case of Francis Drake, and claim of H. Brosnahan to have his claim treated as a preferential one, was adjourned, as the bankrupt was wanted, and he being away shearing, notice had not been served upon him. In re William Collins, Mr G. Perry moved for an order declaring plant found by the Assignee on the woolscouring works of bankrupt at Saltwater Creek to be the property of the executrix of the late Ebenezer Smith, and that the Official Assignee deliver up the goods to her. Mr Hay appeared to oppose the application on behalf of the Assignee. Collins, Smith, and Eason, had been in partnership in carrying on woolworks at Saltwater Creek. The lease of the premises was in Eason’s name and was never varied. Smith was the moneyed man of the firm and made many advances of money. During the partnership, and on account of advances made, the plant was transferred to Smith, sale notes passed and entries made in the books by Collins, recording the transaction. No reference was made to a steam engine used on the works, but Eason’s affidavit showed that this never belonged to the firm ; it belonged to Smith, who gave the firm the use of it. According to memoranda in Smith’s books the firm owed Mm about £I2OO for advances. The partnership was dissolved before Smith’s death, and (as it would seem on account of the firm’s debt to him) the amounts to come to hand for wool shipped Home were assigned to Smith. Eason duly made over his share in the partnership to Smith. After the death of Smith, Collins asserted that when the partnership was dissolved Smith took over thp moneys coming due for wool, and gavehiip, Collins, the plant. After hearing counsel’!) statement of facts and suggested explanations, His Honour said he was fully of opinion that the plant was the property of Smith. There were two probabilities to choose between, and ppptainly in order to entitle Cairns to the goqis he mus»t show something more iliatt aft affidavit sotting forth a most unlikely arangement between Smith and himself. The order would go. No order was made as to costs, After some discussion it was decided to adjourn the Ross cases until 10 a.m. on Wednesday. His Honour intimated that he must leave Timaru for Oaraaru by the express tjrain on Thursday,

Wednesday, d'-pHABJ 18the ROSS CASES.

Application by the Official Assignee to set aside a mortgage and memo of transfer D. M. Ross to Mary Elizabeth Ross. Mr W. D r Stewart with Mr Kinnerneyfor the Assignee; Mr T. I. Joynt with Mr Hay for Miss Ross. Mr Joynt asked that witnesses be ordered out of court.

Mr Stewart opened the case for the applicant. This was an application on behalf of the Official Assignee in the estate of D. M. Ross to have it declared that a transfer of a part of the property known the Arcade, which yas executed in favor

of the bankrupt’s mother, was given her in trust for the bankrupt; and to have it declared fraudulent and void; also to have a transfer of the same mortgage from bankrupts’ mother to her granddaughter, Mary B. Ross, declared bankrupt and void. The substance of the application was that the property known as the Arcade in Timaru, which is nominally encumbered with a mortgage for £3OO to Mary E. Ross, should be declared free from that mortgage, and to be the property of D. M. Ross, the bankrupt, for the benefit of his creditors. The history of the bankrupt if not instructive was interesting. It would be shown that from a very long period from 1876, at all events, the bankrupt had been carrying on a system of fraud and deception. Fortunately he had left traces of this where he little expected it.

Mr Joynt objected to Mr Stewart’s line of opening. He should confine himself to matters relevant to this application. His Honor upheld Mr Stewart, that it was allowable to go over the bankrupt’s previous history to show the intention. Mr Stewart proceeded. He wished to place before the Court the actual state of things in 1876, to show why this property was put in the name of bankrupt’s mother in 1887. Mr Stewart then sketched D. M. Ross’s arrival, his career in Dunedin, and the lawsuit in which he was involved there with implications against his honesty, that action was commenced in 1876, and Mr Stewart wished to show that the bankrupt, in fear of the consequences of that action, transferred his properties to his mother, and at that time commenced a series of frauds which had been continued until the bankruptcy. In October, 1877, Ross bought a property in the Arcade from LeCren for £2soo—£Boo cash, £2OO in one year, and £ISOO in five years. The £BOO was paid, and the balance was secured by mortgage. It was an important point how that £BOO was paid. Ross had given various accounts of it. One of these was that his mother brought out £4OO from Home with her ; that this made half the £BOO, and she obtained the other £4OO by a bill, which was renewed from time to time until it was paid off by rents from properties which he had conveyed to her in 1876 (about the time the Dunedin action was commenced). In another account Ross stated his mother had £2OO in cash and £2OO more in the hands of Mr Ormsby, solicitor. This £2OO in Mr Ormsby’s had been traced, and it was found to be a sum of money borrowed by Mrs Ross or her son from a certain person. In another statement he repeated that his mother brought £4OO from Home—he thought so —he was sure of it. Usually, said Mr Stewart, Ross was vague and evasive, but on this point he fastened himself down more securely than usual. On this point valuable evidence had been obtained by the discovery of, in Ross’s own handwriting, a book which was supposed to be lost or destroyed, a memorandum showing an absolute falsity of all Ross’s versions of the source of that £BOO. There was a bill given on a subsequent date, in 1878, for a totally different purpose, having nothing to dio with this purchase from LeCren; and the £4OO brought from Home was a mere myth. The memorandum showed how the £BOO was obtained. It began “ Mary Ross to LeCren, to purchase of shops,” stated the terms of the purchase, and then gave a list of the names and sums of money making up £800; the whole showing that moneys of clients —Briscoe, Cornish, Filmer, Guscotfc, aud others—trust moneys, that is, made up a sum of £71114s lOd, for the payment of £7OO on the execution of the transfer (£IOO having been paid from these sources earlier). Those (clients’) moneys were paid into the bank in the name of Mary Ross, £7OO was paid out of them to Mr LeCren, and the balance, £ll 14s lOd, was drawn out and placed to D. M. Ross’s account. That memorandum gave a clear account of the source of the £800; but it was totally inconsistent with Ross’s statements before the Court and before the Assignee, and it was conclusive that Mrs Mary Ross had no beneficial interest in that property. In 1887, Ross wanted to raise £2OOO to buy the Timaru Herald office, and he asked his mother to re-transfer the property to him to enable him to raise money upon it, and apparently she did so, at the end of 1887. He then gave his mother a mortgage for £3OOO over the property, and of this transaction he gave three versions, each mutually destructive. In one of them he sought to connect the Dunedin property with this, but his mother had nothing whatever . to do with the Dunedin property, and the documents proved that his references to that property in his explanations were entirely untrue. The mortgage (dated 13th May, 1887) gave a reason for its execution that differed from all of Ross’s own versions. On the Ist November, 1889, a deed purporting to be a transfer of the mortgage from Mary Ross to Mary Elizabeth Eoss was executed, the consideration being a sum of 10s. That deed was not registered till the 7th of July, 1892, within five days of the present bankruptcy, and after the hearing of the Bailey case. It was to be noticed that the date on the document, Ist November, 1889, was the day on which Jane Ross, bankrupt’s wife, died. His mother died on the 30 th December following. The inference Mr Stewart asked His Honor to draw yras that this transfer, which was only registered in July 1892, was never signed by Mary Ross at all; that it was of more recent preparation, an after thought, and dated back to a point of time when both Ross’s wife and mother were alive. The only attesting witness outside the family was Mrs or Miss Britten, a nurse, and he understood that she denied that she ever saw Mrs Mary Ross sign any document whatever. It was an extraordinary thing that tips transfer, dated 1889, a?§s qqi registered till }§Q2, till a few days before Rqss’s bankruptcy, if 'it were bona fide. It was extremely suspicious, aud the suspicion was confirmed by the nurse Britten’s denial. The document could not have been in existence at the time she was supposed to have ipgneil it. His poiqt vyaa that this transfer,' aq important to, thq case, did noi exist until shortly before it was registered, Another document in the case Avas au extraordinary one. In case his mother should abuse his confidence in her, after placing his properties in her name Ross got her to sign a document, for a consideration of 10s, transferring all the properties direct to himself. That was dated 29th August, 1878, and he held it apparently to be used if his mother because “ rqsty ” Ayitfi hiiq, wlpn heqoqkl produce this document qnd get himself registered as proprietor. He (Mr Stewart) relied very strongly on this document as showing that Mrs Ross’s name was used as q. device or fraud for the purpose of defeating Ross’s creditors. This c]ocu- ; meut had been cancelled, but it was written out, signed, attested by a respectable shopkeeper in Timaru, and they need not doubt that the signature of Mary Ross was genuine. It Avas im 1 portant as it completely neutralised all dealings which made these properties

ostensibly belong to Mrs Mary Ross; Ross secretly held possession of them under that document : Mrs Ross paid no rates, all expenditures were charged to D. M. Ross, and receipts for rents were made out in his name simply, or “as agent.” On the whole of the series of transactions Mr Stewart remarked that Ross, being afraid, of the results of the action in Dunedin, began to use his mother’s name, and continued to do so in a large number of similar transactions; he knew that his affairs were so involved that at any moment his clients or constituents might demand their money from him ; he knew he could not pay; and this device of using his mothers’s name was used to save something from the wreck that constantly threatened. Mr Stewart concluded by making some reference to the general principles of law concerning such cases, where the rights of creditors are endangered by transfers either not bona fide or without good consideration. Mr Stewart’s opening occupied an hour and a half.

Certain papers were then put in by consent, records of the bankrupt’s examinations before the judge and before the Assignee. The first witness was Mr J. M. Batham District Land Registrar, Christchurch, who was called to produce a bundle of mortgages, releases, transfers, etc., in which D. M. Ross, Mrs Mary Ross, or his sister (Miss J. B. Ross,) had been concerned. There were in all about 50 of these documents produced, and the recognition of each and listing of them occupied an honr and a-half. C. H. Franks, solicitor, Christchurch, was called to give evidence that he had made a “ general search ” in the Laud Transfer Office, Christchurch, for all transactions in the name of Mary Ross, and a separate search respecting the Arcade property, and produced records of the results. [lt was on these results that Mr Batham’s bundle of documents was called for.] The Court then adjourned for lunch. Mrs Jane Russell deposed that she knew Ross and his mother in Cowpar, Scotland. Mrs Ross appeared poor, and said there was a struggle in bringing up a family. Never visited Mrs Ross in New Zealand. Was not on such terms with Mrs Ross as to expect her confidence. Adam Mclntosh stated that in 1877 he lent Ross £2OO on a property in William street.

A. P. Waugh, fellow-passenger with Mrs Ross to New Zealand, said she was matron of the girls. She was respectably dressed, but said she was coming out to her son to keep her. Her daughter went to service.

David Caird said he had a conversation with Miss Ross —daughter of D. M. Ross —and she said she did not know that the property had been vested in her. This was at the time of the Bailey case. She said she did not want the property. F. LeOren said he sold the Arcade to Ross, and never saw his mother in the negotiations, but he said he was going to put it in his mother’s name. Said something about her cheque, but he would be responsible. Ross paid all except a £2OO cheque Mrs Ross paid. Nothing was said about Mrs Ross until £IOO had been paid on the property. Witness then detailed the way in which he was paid. H. Durand stated that Ross told him he had bought the property in his mother’s name so that he would not offend McKeown, who asked him to buy the property. Ross told him afterwards McKeown had made an offer for it. W. Mo Keown stated he had asked Ross to buy the property, but Ross bought it for himself. Witness offered him £IOOO on his bargain. The original cost was £2500. Ross said he had bought it for his mother, but Tait said his mother had no money to invest. Ross offered to lower witness’s rent from 25s to 20s per week in consideration of getting witness’ business. Never heard anyone say that Mrs Ross had money. [Left sitting.]