A PUBLICAN'S FAILURE.

Dominion, Volume 5, Issue 1442, 17 May 1912, Page 5

A PUBLICAN'S FAILURE.

MORTGAGES AND MISFORTUNE,

OTAKI BANKRUPTCY

A meeting of the creditors of James Woods, formerly hotclkecpcr at Otaki, was held at the oflico of the Official Assignee yesterday morning, Mr. A. Simpson (Official Assignee) presiding. The bankrupt was represented by Jlr. Luckle.

In his sworn statement the bankrupt said his lather was licensee and lessee liom Maples nml Co., at about £i pelweek ol the Telegraph Hotel, Otaki, up ,?,A, the !! mc of llis tl(,llt ». in October, 1..01. Me„i-,. Staples and Co. and Messrs. Dwan Bros, claimed that at Hie time ot the lather's death lie (Iho father) owed them about XSOO or JI9OJ. Aft«r his father's death tho license was transerred to bankrupt, who continued as tenant on the same terms as his father up to June, lOOti, when the Licensing Committee condemned the hotel, and ordered it to be rebuilt. Tho building was pulled down and the hotel closed for twelve months, during which time bankrupt was without occupation, but had money sufficient for his support. It was then agreed that he should P. u l"S hase iho freehold of the property for .£llOO, repayable by 180 calendar monthly payments of .£9 15s. each, including interest. Messrs. Staples and Co. advanced him .£SOO to rebuild, and that wuh ,£IOO supplied by himself, enabled him to re-erect the hotel at a cost of about ,£9OO or .£IOOO. He ]uircha<=ed from Messrs. Sconllar and Co. Turn it lire to the value of .£250, all of winch he paid tor, and gave Staples and Co. a mortgage over tho hotel, land, and furniture, to secure his total indebtedness to them of .£I6OO, .£llOO of it being repayable with interest at the rate of .£9 los. per month, and the ,£SOO on a flat mortgage bearing interest at 7 per cent., payable on October 1, 1900. These payments were punctually made until August, 1910, and. in all he repaid Staples and Co. J8382, together with a sum of *-300 in reduction of tho .£SOO. In January, 1908, he executed a second mortgage in favour of Messrs. T. and W. Young and Dwan Bros, over the hotel property vp secure a total sum of .£1159 lis. 7d„ the total amount of some bills these firms held. Two of them amounted to .£IOB, having been given to secure the balance of two accounts incurred in connection.with the re-erection of the hotel, two bills for .£lO each, held by Dwan Bros., for moneys which he owed them, and a bill for .£lO7, l>oing an amount which they had advanced to him, ami which he repaid by instalments of X'lo per month, until it was fully paid oil'. The remainder of the mortgage moneys were represented bv two bills for JM2O 16s. 6d., and .£413" 15s. 3d., which had been given to, and were held by, Messrs. T. and W. Young, and represented the amount which his father owed them at the time of his death. Bankrupt was thus making himself liable for his father's debts, tlwigh he had received no assets from him whatever, nor had, prior to that time the firms in question any security for what his father owed them. He had the misfortune to break his leg about September, 1910, and was obliged to emplov a manageress. The business of the Jiotel, about this time, went back to such an extent, as to make him unable to keep up his payments. The mortgagees finally filtered into possession, and he left the hotel in August, 1910. Bankrupt had no money wherewith to institute an action for an account, and tho amount of the balance due him.' In the meantime, his creditors were pressing him for settlement. He had, therefore, no other course open but to file.

It was suggested by Mr. Luekie that the Official Assignee should request an account from the mortgagees. No account had been given on a sale of =£2500 which had been effected.

In Iris experience, said the Official Assignee, most of the hotel sales were effected in bills. Mr. Luekie agreed, but held that an account should be. rendered.

The Official Assignee said the Court would not, nor would he, take want of knowledge of bookkeeping as 1 an excuse for not. "keeping books. A statement of accounts certainly should bo supplied, and such a statement would bo demanded. 'Mr. Sladden, representing the second mortgagees (Messrs. Dwan Bros, and T. and \Y. Young), said that, as far as their account was concerned, it would have been forthcoming at any time it was asked for. A satisfactory sale, as a matter of fact, had been effected. -- The second creditors were. Staples and Co. (.£3oo}, and T. and W. Young (41(100), and the estimated value of the security for these sums was .£2500.

Unsecured creditors, according to the statement of the bankrupt,- amounted to ,£4ll 3s. 10d., secured creditors .£ISOO (less estimated value of securities £2500), leaving a surplus to credit of ,£IOOO. The assets were: Surplus from securities in hands of secured creditors, .£1000; property, .£1500; book debts, .£IOO (estimated to produce A'so). Mrs. Woods (manageress), JC110; A. Smith,- .£74; Burton Brewery, .£4B; Commercial Agency, .£39, were included in tho list of unsecured creditors. A number of smaller amounts were also included in the statement, totallinrf in all. .£414 3s. lOd.

The meeting was adjourned to May 28 to enable the Official Assignee to obtain accounts from the mortgagees.