Bankruptcy Assignment Contested:
Page 29
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"No Right to Extra Profit" THE reassignment of the goodwill and vehicles of a bankrupt haulage A business at a profit after it failed by public auction was contested by the Trustee in Bankruptcy, at Stockton on Monday. Mr. C. C. M. Hamer, the Trustee, contended that the failure of the original purchaser to apply immediately for the transfer of the licence rendered the agreement void, and he had no right to make an additional profit.
Messrs. L. and F. Preston, Yarrn-onTees, had applied for a B licence for the two vehicles, which were originally sold to a Mr. Sanderson at public auction on February 11.
For the applicant, Mr. T. H. Campbell Wardlaw said that the B licence was originally held by Messrs. Maynard and Fawcett, whose haulage business was made bankrupt. Mr. Sanderson purchased the goodwill and two Bedford vehicles for £325, and later assigned them to Preston for £400. The Trustee in Bankruptcy claimed that Preston should pay the £400 directly to him and enter into a fresh contract, but in law a "chose in action" could be assigned and Sanderson was legally entitled to a profit.
Mr. Hamer replied that Sanderson had purchased the vehicles in the name of Arthur Grey (Transport), Ltd., who took immediate possession but did not apply for licences. As a result the sale was void; he should lose his deposit and be responsible for garaging expenses. Sanderson had delayed matters nearly seven months. • Mr. J. A. T. Hanlon, Northern Licensing Authority, said that the purchaser was required by the agreement to make application for licences forthwith, and this had not been done. Any right to the licence had lapsed and vehicles not used for reasons other than fluctuation of trade could be struck off.
Short-sighted Policy Mr. Campbell Wardlaw said that he was in agreement on the use of the vehicles; the Trustee in Bankruptcy had adopted a short-sighted policy and done his best to kill the business by insisting on appropriating another £75.
If a haulage business went bankrupt, said Mr. Hanlon, it could be through undercutting and operating uneconomically. There might be no business at all to transfer. Mr. Hamer replied that the reason for insolvency was excessive drawings by the partners. The actual business was healthy, he maintained. In the interests of the creditors he could not permit anyone to make a private profit.
After Mr. Hanlon had ruled that Mr. Sanderson had violated the sale agreement, Mr. Campbell Wardlaw asked for an adjournment to consult the Trustee in Bankruptcy. It was agreed that Mr. Hamer should pay the £31 garage charges incurred on the vehicles by Mr. Sanderson, whose deposit of £32 10s. would be returned. The applicant agreed to pay the £400 to the Trustee and, the licence was granted,