BACKED WRONG HORSE?

NZ Truth, Issue 1181, 19 July 1928, Page 8

BACKED WRONG HORSE?

Mention of Stout Gentleman and Bundle of' Fivers

1 (From "N.Z. Truth's" Rotorua Representative.) ; There are hot thing, m Rotorua other than springs Some of the people who contract debts allegedly with no prospect or intention of paying them (and there are a few of these about) come within the category of thermal activity. .

ONE, or rather two such cases, are said to be those of Louise and Hoy McDermott, who for some time have been running "Sonoma," one of the hundred-odd boarding establishments which, with plopping mud, smooth-tongued guides and honeymoon couples, are Rotorua's chief characteristics. The seasons at Rotorua during the past few years have not been brisk m the tourist line and more than one boarding-house keeper has been on the verge of tipping In everything for the benefit of his creditors; "Sonoma" has been one of the establishments upon which fair fortune has not looked too kindly-^r so it would appear from the fact that its proprietors, Louise and Roy McDermott, recently filed m bankruptcy. Whether one can satisfactorily or profitably run a boarding-house and be flying about the country to races m hired motor-cars is a -, " matter of some doubt. At least one of the McDermotts' creditors doubts the feasibility of such procedure, while the official assignee is by no means satisfied with the conduct of bankrupts. In fact; one creditor >at the meeting, at which ah official inquiry was made

into the McDer- 1 motts' affairs, made no bones about his opinion of them. The schedule of the couple showed

£ 711 owing to unsecured creditors and £593 to secured, with an apparent surplus on securities of £882. This apparent surplus, together with, £2/17/3 cash, were the only assets. * . ... Bankrupts attributed their position to working on limited capital, through which they gradually contracted debts j owing to improvements effected- at "Sonoma"— and also to a very. bad Christmas and Easter. The assignee pointed out, however, i that merely a casual glance at the bboks showed that In one month the takings were £250 and that only £161 had been banked, showing a leakage of j £90 for this one month alone. Louise McDermott, examined on oath, . said that on occasion she had considerable sums of money about the house. She had no safe and kept £he money m different places. In January last, she was considerably behind with her accounts, to, the extent, she thought, of about £400. Despite her financial position, she admitted that she went about to race meetings m a car, although she did not spend much money .m actual betting. She could not say what her various jaunts had cost her. She had also since been for trips to Te Aroha, Paeroa, Opotiki and Tauranga for shorj holidays, travelling by car m each case. One of the creditors, C. E. Flower, declared that McDermott had kept | "mum" about his wife's position when he ran up a bill for groceries. Apparently the : McDermotte had done the round of other grocery eatab-

Creditors 9 Views

ilishments and had gone •to Flower I when they could obtain credit notvherfc ! else. ! The husband, Roy McDermott, whose '. status m the establishment was apparently that of handy man, said his '. wife kept the books. Whenever he ' took any money, he handed, it over to his better-half. t He did not know whether all moneys were entered up or not. Money was I kept aft over the house. His wife did the banking, but he did not know how often she banked. He admitted attending races at Hamilton, Te Aroha, Matamata, Botorua, Tirau and Paeroa. . ; ;'. ■ His biggest bet at any of these places was, however, £3. His wife's trip to Opotiki cost only £10. In answer to the assignee, bankrupt said he borrowed £200 from F. Foster. He also leased a racehorse for two years with the right of purchase for £250 at the end of 'that time. - McDermott admitted that he did some—^but not very much— betting at different race meetings and also had "an occasional bit on" with the bookies. He did not think, however, that his total investments on the gee-geea for twelve months had amounted to more than £20. ' ' He did not remember having: handed

a bundle or 4So notes to a stout person at the Rotorua meeting. Asked if he had any assets oJtside .

tnose aisciosea m his statement, bankrupt declared that he had nqt; but promised to make an offer of ten shillings m the £1 to his creditors before applying for his discharge. A creditor, W. Hooker, said that whenever he had applied for payment of his debt, McDermott had, always assured him that it would be quite all right. According to Hooker, bankrupt was insolvent when he arrived m Rotorua and had since been* running around to race meetings at the • expense of his creditors. ."He deserves to be gaoled!" Assignee J. H. Robertson described the case as a very bad one. It was 'usual, he said, for a bankrupt to give some explanation of the cause of his insolvency. This, bankrupts had not done. . It was an; elementary principle of business to pay all the receipts into the bank and bills by cheque. This had not been dbne m the present case, while the books were m a very unsatisfactory state. There seemed to be a good deal of evasion m the financial statement. From a casual examination of the books. It -was apparent that at least .£'2so 'wan taken during the month of December, yet only £161. had b«©n paid Into the bank. There was thus a leakage of £60 for thla.ono month alone. ; It was unanimously decided to request the assignee to place the faotß before the Crown Solicitor with a view to prosecuting bankrupts.