H.—2o

4

friends. It appears from Christie's books that his turnover for the year ending December, 1887, was £110,000 ; his overdraft (in December), £2,033; and his capital, £148—taking all debts and securities at the full values appearing in his books. Prom starting in business with the company in 1884 until his failure he lived at the rate of £1,200 a year. At the close of 1887 Christie applied to the company, on behalf of sundry of his clients, for advances for harvesting purposes amounting in the whole to £2,500. After being assured by him that there were no liabilities which would have to be paid from the proceeds of these harvests prior to the repayment of this £2,500, the directors agreed to make the advances required; and Christie subsequently drew, on account of the clients specified, £2,186, not one shilling of which has ever been repaid to the company, according to the evidence of Mr. Begg, director, and Mr. Bartleman, the present manager. By letter of the sth February, 1888, it was notified specially to Christie that no tampering with the securities would be allowed, but that the proceeds of all sales must be handed over to the company. About the Ist May the directors deemed it advisable to pay Christie a visit. They ascertained that large quantities of produce over which they had a lien had been disposed of and not accounted for to them. Mr. Begg calculated that between six and seven thousand pounds' worth of grain had been sold by Christie just before their interview. Christie stated to them that he had sold the wheat of Aitkenhead, whose grain was under lien then held by Hislop and Creagh on behalf of the company, and whose bills had been indorsed by him to the company, and that the proceeds were more than sufficient to pay such bills. He was requested to pay them, but refused to do so, alleging that he required the money to make up the deficiency on the bad securities of others. The directors said they should take legal proceedings ; Christie stated he should refuse to assign the securities under any circumstances ; and the meeting broke up. An injunction was forthwith obtained from the Supreme Court prohibiting Christie from dealing in any way with the securities in his possession. This was served on the 17th May. Shortly afterwards he assigned the securities to the company, and in June his business collapsed altogether, though he did not file until December. On the 27th April Christie sold to the Southland Milling Company 780 sacks of wheat—6o bags of Aitkenhead's, 385 Irvine's, 335 Simson's. The wheat of Aitkenhead and Irvine was under lien to Christie, and their bills under discount by the Colonial Investment Company, the lien being shown in the account furnished to the company by Christie in June, 1887. In payment for this wheat Christie received a promissory note from the Southland Milling Company for £234 17s. Id. He did not pass this note through his bank account, but retained it at his office until the 23rd May, when, being in Dunedin, he telegraphed to his clerk to send it—not to himself, but to Mr. Ritchie, by that time eliminated from the service of the Colonial Investment Company; and by his request Eitchie took it to Messrs. Mackerras and Hazlett, to whom he (Christie) owed £445 on a past-due promissory note. This I held to be a delivery by Christie of part of his estate—he being in utterly insolvent circumstances—with intent to defraud the Colonial Investment Company, to whom the proceeds of Aitkenhead's and Irvine's wheat were due. Of course it was also a fraud on Aitkenhead and Irvine, whose wheat was thus absorbed by Christie in payment of his own debts, in lieu of paying theirs to the company. At this date the amount due on bills by Christie to the company was £32,138, and the ultimate balance against him after realisation of securities, £15,715. When he filed in December, 1888, his total assets only amounted to £431, £245 of which was represented by furniture. Christie might also have been convicted on the ground of having embezzled the proceeds of Simpkinson's sheep as before mentioned, as it appears from my notes that there was sufficient evidence on this head, dehors his own confession. After sentence of four months' imprisonment with hard labour had been pronounced against the bankrupt, Mr. Newton, who appeared as one of his counsel, instructed by Hislop and Creagh, requested that he might be released on bail, pending an appeal. I said that it appeared to me doubtful whether an appeal lay in criminal cases, and that the framers of the rules under the Bankruptcy Act, and the Judges who approved those rules (Sir J. Prendergast and Mr. Justice Richmond), apparently considered that no such appeal lay, inasmuch as the rules touching appeals clearly applied to civil cases only. I also said that, in my opinion, the Act gave me no power to release a bankrupt on bail after conviction. Referring to your telegram, I may state that on the day after the order of committal was issued the Clerk of the Court wired to me that he was informed that by mistake it had been dated "March" instead of "April," and asked if he might correct it. This telegram reached me at Timaru, on my way to Christchurch. I replied then that, if this date was a mere clerical error, he might correct it. The recitals in the order clearly showed that it was made in April. Subsequently I wired that he had better issue a fresh order with the correct date, and serve it on the Gaoler, allowing him to retain both. This second telegram was delayed, and both were obeyed. In answer to a further communication from the Clerk touching the fact of Oamaru being a "police gaol" only, I wired directing him to issue another order substituting Dunedin as the prison; but this telegram arrived too late to be acted upon, the return to the writ of habeas corpus having been made. I may here point out that if the legal advisers of the bankrupt are correct in their contention that no committal under the Bankruptcy Act can be legally made to a police gaol, and if, as it is contended on clause 6 of that Act, a District Judge has no power to commit to any prison outside of his district, it will follow that in any district—such as Ashburton—where there is only a police gaol a bankrupt cannot be committed by the District Court at all. Referring to the petition, I may observe that clauses 9, 10, and 11, commencing, ""It was proved," should begin " It wa,s stated on oath by the bankrupt," for there appears to bo no other proof of the allegations they contain. Clause 9 alleges that the bankrupt was doing a large business independently of the company, and from this business derived £16,000 gross profit, and only £2,000 through his connection with the company. As Christie's whole business came at once to an end on the termination of his credit with the company, the above assertion must, on this ground, be held doubtful. Spencer, his book-.