AN OHAU BANKRUPT.

Dominion, Volume 4, Issue 1166, 29 June 1911, Page 2

AN OHAU BANKRUPT.

YOUNG MAN'S FAILURE. THE CREDITORS GROW POINTED. A mooting of creditors in (lie oslato of Stuart Drown M'Donahl, of Johnsonvillo, solder, was hold yesterday at Wellington, the Official Assignee (Mr. A. Simpson) presiding. The creditors represented vera the Wellington Publishing Company, A. S. Paterson and Co., Gold and Arcus, F. 0. Smith, and L. Freeh tling. Mr. Perry repvcsente/l the debtor. The secured creditors totalled .£2OOO, and tho estimated vaiuo ot sucumit-a was sho'.vn as .£2OOO. leaving a surplus oi <£510. Tho total secured and unsecured indebtedness was placed at <£105 3s. 8(1. Tho stock-iii-trado was valued at .£55 (is. Hit., and book debts at oLIUO, leaving the total assets at A'li',ls Gs. lid. A surplus existed on tho estate of J-'L'.'iU 3s. 3d. 'the principal unsecured creditors were A. S. Paterson and Co. (Wellington), ,£l3O (is. ad.; J. U. Smith (Levin), 35.; Commercial Agency Company, ,£l5O 12s. 9(1.; Kelson, Moate and Co., .£2l 3s. Id. The properties in tho estate consist .of sections in tho townsliip of Ohau, over wiiicli mortgages are held. Debtor's Statement. Debtor in his written statement mentioned that he had started business at Oliau as a storekeeper in January, 1008, with a cash capital o: ,£9O. lie purchased the business and farm lrom Mr. J. S. Watciiorn lor <£2005, of which sum <£1005 was to be repaid in five years by sixty monthly payments of <£2G 15s. Thirty-two payments, amounting to ,£856, had been made before the estate was assigned. Tho balance of <£1000 was a flat mortgage lor live years, i'3oo bearing interest at the rate ol G per cent., and ,£7OO at 5J per cent. On January 28, 1910, debtor was burned out, and nothing was saved. The buildings were insured for .£350, and the stock for <£300, ,£3OO of tho insurance money went to pay oil' the existing mortgage of .£3OO to Sir Walter Buller, and the remaining ,£SO was paid to llr. Arcus, who had built a new shop. The insurance moneys on the stock went to pay Messrs. A. S. Paterson and Co. .£SO, Bing, Harris, and Co. JMG Gs. 7d., J. S. Watchom 155., Arcus ,£IOO, and Buchanan and other mortgagees .£BO 15s. After (ho fire he built another shop, but the necessary lapse of five months rather eeriously affected trade. His creditors pressed him, and lie was compelled to assign his estate, and at a meeting of creditors held some weeks ago a resolution was passed that his affairs be placed in the hands of the Official Assignee. The Official Assignee said that the properties would have to be valued on behalf of the creditors. The price that the bankrupt seemed to have paid was outrageous. Examined on oath, bankrupt, who is a .vnung man, said that though he had purchased a horse ho had never had possession of the harness and trap. He hail sold tho horse to his brother for ,£ls 10s. He had owed his brother .£ls for wages, and tho horse went to pay that. Bankrupt was not aware that he was infringing the Act in not paving wages in cash. Previously he had always'paid his brother his wages in cash. Debtor could not show this as an entry, because he kept no cash book. He kept a bank book. This wages money he had paid out of cash.

The Assignee pointed out that debtor could not then balance his cash. The question was, had lie not committed a breach of the Bankruptcy Act in not having kept proper books? The facts suggested that he had.

Continuing under examination, witness eaid the trap and harness had been sold to his brother for .£3O.

■ Mr. Gold, of Gold and Arcus (Wellington), who had .acted as assignees in tho estate, said there was no. doubt that tho horse, trap, and harness were in the possession of the debtor at tho date of the assignment. They had warned him at the time not to let it ba removed off tho premises.! • Tho horse, trap, and harness would have to come into the estate, or at least tho creditors should, fight the posses- :■ sion..of,,thciu.... . Debtor's father said that he had provided the money for the horse, trap, and harness. ■. . . Thq Official Assignee said that ho would go through the book debts, and prepare a statement showing the details of tho receipts and expenditure for the tiir.o debtor had been in business, Papers Burned. Tho debtor said that all his papers up to January, 1910, had been burned in the fire which destroyed his place. A ,'ttier was put in by Mr. Shirtcliffe written to A. S. Paterson and' Co. on September, 1910. In this, debtor said:— "I am vcrj; pleased to inform you that I have received my mortgage money from Air. Buchanan,- and I have paid Bing, Harris, and Co, their account, also the contractor." Mr. Shirtcliffe desired to know if the debtor had paid off the contractor (Mr. Arcus) at the time the letter was written. After turning up his papers, debtor said that all tho money owing to the contractor had not been paid off." Tho. Assignee: Had you JC7OO worth of book debts at that time, as you also sav in this letter? Debtor said as far as ho knew he had. Mr. Gold referred to the manner in which the accounts had !)een kept, and the absence of a complete set of books. "The debtor," he said, "had started business with a cash capital of .£9O, and liabilities of .£2OOO, and he had no knowledge of elementary bookkeeping, yet wei.t on transacting business for some, years. It is a scandal to commercial morality." Tho Official Assignee: "That is the sort of thing wo find every month all over the Dominion."'

Mr. Gold: "And creditors are taken advantage of by misstatements of .the debtors as to their position." Tho Official Assignee 'said it would bo his duty to place the letter, to A. S. Pators:>n and Co. before the Crown Solicitors, as Pnterson and Co. -would not have given credit if they had known tho true state of affairs.

Debtor protested that he had told A. S. Paterson's representative when tho latter had called on him soon after that, letter was written that ho had not paid off tho contractor. Consequently his credit with tho firm had been stopped. lie had not obtained any goods from them after tho letter was written.

Further questioned, debtor said ho had received .£lO as insurance on his ! furniture at the time of his fire. This had gone to pay his creditors and tho contractor. Ho was married 011 June 8, 1910. His wife purchased fuTnituro valued at .£7O. It had been purchased under a lull of sale, which mado debtor responsible if his wife did not pay the money. It. had been paid out of his wife's money, but tho total was not yet wiped out. None of tho money had come out of his estate. His wife had received =£200 in cash as wedding presents from her relatives, including ,£"5 from debtor's father. His wife's furniture now was worth .£2OO, including her wedding presents.

It was derided to pay Messrs. Gold and Arcus J!" 7s. from the estate for their work in going into the affairs.