IMPORTANT JUDGMENTS IN BANKRUPTCY.

Wairarapa Daily Times, Volume IX, Issue 2566, 6 April 1887, Page 2

IMPORTANT JUDGMENTS IN BANKRUPTCY.

In the Masterton R.M. Court yester-, day aftertnoon, Mr J. J. Freeth, ", Clerbof the Court, read the following '■■' Judgments by request of his Honor Judge Davy, in the-'cftaed- where his decisions were the recent-.? District Court ■ ' :'. : Official Assignee Oftpy -Roberts ■'••'. and Company. .', **' _ The important point for congidera* tion in.this case.appeafs to be whether ■ j the; mortgage, of 2nd July 1884, under ;; which the defendant's claim is a' good and valid security under section 4 of , "TheChattelSecurity Act, 1888;;'—; Except as to such questions as under this section, my opinionfcn. several points raised is entirelwfetvor '■• of the defendants. It must, Mrink,:'.; be admitted that mortgages of stock (although for certain purposes sepaK.;. ately classified) como within the gen- • era! term of "Bills of sale," in tho'. Chattels Security Act ■ 1880, and aro as subjeot to the general provisions of parts 1 and 5 of. that Act with whioli ■ the Amendments Act is incorporated. .■'■ It-appears in evidence .that.-tho. mortgago in question was given to' secure prior advances only and thatiq ' money passed at the time of executbq of the instrument, Can : this v-be " gatherod from the terms of the ih6fcru> ment? ' It is true tho consideration is expressed to beasmn already-advaneejl. But an advance.'might' bo' niad&'-.iiai- - mediately prior to'.the execution of th« instrument -and .would,''be. to all - intents and purposes "a "eontemporaneous ,r advance, it is such an : ambuguity of expression, as might employ .who desired to leave the date hideiin'ite. It maj^e.-con-tended that the recital esttraflpies a, • distinction in point of time between'. the date of the advance and Ihe'giviug of the security, inasmuch as the one is stated in the past tense, whilst the , other is expressed to be in agreement. To persons accustomed to the convent fional phraseology of legal documents "" this may perhaps suggest.a distinction, but I tkink it is too subtle to be.a sufficient compliance with the requirements of the Act. Alpreovei; it is not, uncommon in legal instruments to express the consideration in the past tense, even though the payment may ". be a present payment. (See..form of .transfer in schedule to Land Transfer Act.) In mortgages under tho Act the common form is, "This day lent" where . .a; contemporaneous . advance'is intended. In mortgages not under the Act I find the words used are .various. More .often than not I .'find ftheVindefbiite; paßt.tsnso used, indiscriminately, "but there is no statutory obb'gatjLf to piecisenee's. in ■•'any" of'. tbeapMes.' On the Ihe6itato''to wf that, thy requirements of the Act have been ,comphed with.'.in the'present-iristance. " Looking.:at the,,presumable objects of the proviso, I_ am of opinion that there has not been a' sufflcieut com- - pHauce, and .that the, mortgage of, . ,2ndvJuly, 188i,,i6, onthat' : account; of-no- legal 'force and; effect. The -' order-of' the Court therefore is that the defendantsi'. named "in the sum-mons-pay, to.the Official Assignee the ' amount claimed',' vIz)MUS, -also that the defendants; pay. the costs of or incidentt to jhese;proc'oedings. Official Assigtiee.vCaste'ridylje and Fooke; I am of opinibijiliat ths arrauge* ment-. with-the. debtor, which the defendants seek to retain >s against the Official Assignee, -the sum of £277, part of the proceeds of thVsale of the Victoria Hotel is not such an arrangement as. the Court can': sttstain. -At the date when the transaction in.quos-

tion was conducted, it; is evident even from the loose and .unreliable stAnent of affairs putjbeforq the Cou ifipS.he debtor herself that she was piJraLiy insolvent, and the sale of the bote! at that date (so far as profits were-con-cerned) wound up the business.' Under these not very complicated conditions it must have been.evident to the debtor that her duty was..fb 'her'creditors generally, and that'a)iy arrangement for payment of debts in which all would not share oquiilly must of necessity be an unduo preference.' If the view of the debtor upon the matter was distinct, I don't think'it matters much what her object was. Many cases might be suggested .in. which it would be to the advantage of a debtor for some selfish end to prefer ono creditor to another. If the.preferenco is wilful (as opposed to a preference per- ■ mitted unwittingly, in ■• ignorance of circumstances, or, /.which has only become a' preference through the unforseen courpe of affajrs) the policy of the law is infringed and the-'object of the debtor is in suoh cases imp? terial. That the debtor well uni||ood her. affairs is evident from the ilpphat almost immediately after th6 i settlement with the defendants she offered herremainingcreditors'.gs in,the £;, and on their declining the composition ;she sought' of the' Banh , uptcy'Gouil''«As to alleged pressure, it is tho debtor was under 'afiy /obligation to - dispose of the Hotel m ■ the way she did. The objection jjr the Licensing Bench was to hersejf. personally, anq* would not- necessary, have effected the value of the a,ssei/j}ad it been (as 1J ought to have b/en) in the hands of the Official Assignee.': The question . as to the,statu's of;the debtor as m.

™ ■" vuo,uuuii;ud e cutrix of bet late husband's estate 6 cannot, I think,:..be imported into these proceedings*-it is a question j between-the Official Assignee and the t husbands creditors. It is enough for . the purpose of Hhs proceedings that • -the esMo was dealt with by the debtor ; v ftsMr, own property. The oisarj of ; the .Court is that the defendants jgfcq} . in' the summons paj' tq the Official [ Assignee" the arnpunt retained, by tHara. ;■■ is foresaid, viz,; $77 &> gfethaj 1 r'the: defendants 'pay the GOpts of q? ? Incidental to these proceedings.;' - ■ Official Assignee v I do not think it is competent for the .Court in the present form of proceeding to .make ony order other than for the delivery of the goods wrongfully detained, Valuo or damages .must bo speoially sued for,,: The order is that the defendant forthwith deliver to the Official Assignee the goods specified in the summons as' wrongfully detained, and that he pay the costs' of and incidental to this proceeding; costs of bankrupt's attendance to give evidence fixed at 80s: V • j;