A LEVIN BANKRUPTCY.

Shannon News, 16 July 1929, Page 4

A LEVIN BANKRUPTCY.

PETITIONER ASKED TO EXPLAIN VARIOUS TRANSACTIONS.

CASE REFERRED TO CROWN PROSECUTOR.

For an hour and a half, on Tuesday afternoon, George Edward Simister, painter, of Levin, who has filed his petition in bankruptcy, was under a close verbal examination, at the Levin .Courthouse. Ag a result of the information elicited* it was decided to adhere to the agreement of the first meeting of creditors that the papers in tho JB&se be placed in the hands of the Ifeown Prosecutor. STATEMENT. ""The jjxovious meeting of creditors was held in Wellington. This was on June 26th, before the Official Assigues, Mr S. Tansley. The statement of accounts showed: Amount owing to unsecured creditors, £313 13s, lesj,' estimated value of securities, £140; stock in trade, estimated at £4O 3s; book debts, estimated to produce £57 4s 3d; deficiency, £206 17s lOd. The Official Assignee said that additional claims had since come to hand, making the deficiency over £3OO. The principal creditors were: Ford Sales and Service, £l3O 12s; J". Harvey, £56 8s 7d; Gunning and Co., Shannon, £l7; H. McMillan, Levin, £75; W. Falloon, Levin, £25; R. and E. Tingey, £B3 17s 4d; Smith and Smith, £26 12s 6d. In his sworn statement the bankrupt said he commenced business at Levin in September, 1928, after a period of nearly two and a-half years in hospital, suffering i from neurasthenia, following war wounds. All went well for a few months, but, money not coming in as the work was completed, his small fund became exhausted. After about four months, he began worrying, and his health broke down again. He was compelled to employ labour, and gradually fell back. Being pressed by creditors, he thought it better to/file his schedule in bankruptcy. If his health returned, he hoped to meet "his liabilities.

The bankrupt was questioned, at the first meeting, in regard to certain financial transactions, and it-, was agreed, on the motion of Mr Mcllraith, who appeared for R. and E. Tingey, that the" papers should be placed in the hands of -the Crown Prosecutor; and ..that the bankrupt's discharge shouid be opposed until he pays 10s in the £. Bankrupt said he hoped he might be able to pay off his debts at the rate of about £3 a month. The Official Assignee said the bankrupt's offer of £3 a month would be accepted. The meeting was then adjourned sine die. At the meeting in Levin the Official Assignee presided, and there were also present, besides the bankrupt: Mr N. M. Thomson, solicitor, appearing for Mr H. McMillan; Mr J. E. Mcllraith, manager of the Dominion Mercantile Agency, Ltd., representing Messrs E. and E. Tingey; and Mr J. Harvey, a ,local creditor, who was in attendance during the latter part of the proceedings. . ACCOUNTS INQUIRED INTO. Replying to questions by Mr Thomson, bankrupt said that he borrowed money from Mr McMillan in February, when he owed Tingey and Co. £SO odd. He did not think that he owed Mr Harvey anything in February, butthat Mr Harvey owed him money. Mr Thomson: How much do you owe him now?

Bankrupt: There is a contra account for trestles and things he made for me, and he owes me £4l now. What I owed him was very small. The Assignee: You did not* put Mr Harvey among your creditors at all. Bankrupt: No. He owes me £4l. My debt is £56.

The Assignee: That brings it down to £ls.

Mr Mcllraith: Where did you make up the statement? Bankrupt: It is a copy from my account book. I made it up when I came back from Wellington. Eeplying to the Assignee, bankrupt said he made up the statement from his invoice book.

The Assignee: Where is it? ' Bankrupt: The man did not ask me for it.

The Assignee: Why did you not bring all your books'? You were asked to. Mh Thomson: You owed £SO to Tin gey's and a questionable amount to Mr Harvey. Who else?

Bankrupt; Smith and Smith —about £26.

Mr Thomson: Did you owe anyone else any money? Bankrupt:. Not in the business, 1 think.

Mr Thomson: You cannot dift'e: enliate between the business and your; cm. In answer to other questioaj by Air Thomson, bankrupt said he thought ho owed about £l5O in Februa y, a;>a.i. from his debt to Mr McMillan. TRANSACTIONS WITH MR MCMILLAN. Mr Thomson, showing bankrupt a document, asked, "Is that your handwriting?" , Bankrupt: Yes. Mr Thomson: That is a statement on February 26th, 1929, is it not? Did you make any mention in that of owing Tingey's £SO? Baiikrupt: I stated that to Mr McMillan. • , . Mn Thompson: He asked you to let' him have a statemhent of your position preparatory "to lending you money. Where, in this statement, have you shown that you owed Tingey's £SO? Or can you show me where you disclose that you owed £150? • The Assignee: Have you got Tingey's amount there? Bankrupt: No. ! The Assignee: Can you explain-why, in the statement, of your position, you show outstanding debts at £7l ss, when you have just told us that £l5O was owing at that date? Bankrupt: It was before I went to hospital. Mr Thomson: Why did you not show £150? You can give no explanation. ACCIDENT POLICY OFFERED AS SECURITY. Examination by Mr Thomson then proceeded relative to an insurance policy. "Did you tell Mr McMillan," he asked, "that you had a life insurance policy?" Bankrupt: Yes, for £750. I gave him the policy. It is written on the statement. Did you intend him to believe that it was a life insurance policy?—Yes. Well it is an accident insurance policy for £750 payable on death by accident. Had you 'ever paid a premium on it?—No.

, You took it out in January with Bull and Co. as agents for the Ocean? —I" have not 'been able to pay the premium.

You borrow money against it although you have not paid a penny of premium?—l thought it would be all right and that I would be able to pay it.

Did you tell Mr McMillan you had not paid the premium?—l think so.

ANOTHER INSURANCE MATTER Did you give him as part security a fire insurance policy of £4OO? —No. Why did you put it on your statement? Did you pay the premium on that?—Yes.

When?—lt was paid to Mr Smart. Mr Mcllraith: What was the £4OO insurance on?

Bankrupt: On furniture. Whose furniture? —Mrs Simister's,

Why did you not put it in as an asset of Mrs Simister's, if it was? — No answer.

■Mr Thomson: You must have been leading Mr McMillan to believe it was yours. The Assignee: What was the idea of mentioning it at all if it was not yours? Bankrupt: I did .wrong there. Mr Thomson: Do you admit that you told Mr McMillan that it was you,* furniture?

Bankrupt: No, I did not tell him that.

What do you admit ?—That I made a mistake in putting down this £4OO in the statement when it was Mrs Simister's. I don't know what made me do' it. LOAN OF £IBO. You borrowed £IBO from Mr McMillan. What did you do with it?—lt all went in material arid wages. When you borrowed that money, did

r ou tell him you wanted it for any specific purpose?—For my business. . Did you not tell 'him you wanted it to pay off debts in your business? — Yes.

Did ytou pay 'them off? —Some of them; some local oi.es. I paid BradIcy and Rankin and Mr Walker. I paid Bradley and Rankin about £9. Mr Mellraith: Did you pay that by cheque,?—Yes. * You only showed a payment of £6 18s 6d on April 24th Bradley and Rankin. —That is it. Did you bank the whole of the money you got from-Mr McMillan?—Yes. ' Replying to Mr Thomson, bankrupt said ne paid Mr Walker £l4 or £ls/ Mi- Mellraith: By cheque?

Laiikrupt: I don't think so. You received the money from Mr McMillan in the middle of February? —I received one payment then. I received the money in three different sums.

What amounts were they?—l receiv ed £IOO and paid Smith and Smith.

A few moments ago you said you banked all you got from him?—£so Is 8d was sent to Tingey's. Have you incurred the present debt of £BO odd with Tingey's since February?—Not all of it. The bank demand was £SO.

Have you a receipt for that £so? The bank demand I have got at home. Mr Mellraith: Why is there not a debit against your account at the bank for £SO? Do you think that, if a draft is presented, the bank will pay £SO and not show it on your account? Did you pay the demand in cash or after you opened your account? Bankrupt: I paid it out of Mr McMillan's £IOO.

Bankers show all entries through pass-books, and there is no entry in your passbook to show that £IOO was ever banked. —I had no bank account at the time. When Mr McMillan came to the bank, he wrote a cheque for £IOO. I handed that to Mr Morton, and he opened my account; I asked him to pay £SO out of that alnd open mv account with the balance, and he did that.

HOW MOTOR TRUCK WAS BOUGHT

A further personal statement was. handed in by the bankrupt, in which he said that, owing to his complaint, he could not stand and give a verbal statement. When he first commenced business he had considered that there was- an opening and that he could not go wrong. There was a house to paint and he tendered by contract for the job, and after he was living in it the agent gave him the job to do. After he got the work under way, the agent took him off it and told him to carry on with another job. The prices respectively were £4B 10s and £55, but he did not get a cash settlement, receiving £3B on the first job and £SO on the second. The statement went on to give particulars of various other jobs. It alleged that bankrupt allowed Mr Harvey to make him ladders and trestles because Mr Harvey owed him money. With regard to a contract at Shannon, bankrupt contended that he gave Mr Harvey the carpentering; that Mr Harvey 's price was £4.0, and that so far bankrupt had not had a statement from him. Bankrupt had appealed to a relation for money, and on the promise of the latter he went ahead and ordered a motor truck, paying £B2 and registration and insurance. The relative, .however, was unable to assist him, owing to having to advance £IOO in a matter of his oavu. Bankrupt had been depending on money owing to him, to meet his bills, but it had not come in. As soon as he was fit enough, he had work to go to, and would pay what he could to his creditors.

Mr Mcllraith: You got a considerable amount of goods from Tingey and Co. There is nearly £B4 owing to them at present. You admitted paying £SO in April. Bankrupt: Yes, and I have paid £lO since.

What happened to all that material? Have you sold any of it?—No. Are you sure? —Yes. I have only used it on jobs.

OMISSIONS FROM ORIGINAL STATEMENTS.

The Official Assignee remarked that

bankrupt had omitted eight creditors from his first statement. Bankrupt said he thought that he only had to show business accounts. Mr Mellraith: How much did you owe Moffatt Bros, when they took judgment against you? j Bankrupt: It was either £39 or £SO. You still owe them about £3o?—Yes.; Mr Thomson: What did you mean by going to the Official. Asignee, filing, and not disclosing Mr McMillan's account? ,

Bankrupt did not reply. APPEAL TO TINGEY'S,

Mr Mellraith: Some days before filing, you went with Mr Fear, of Wellington, to Tingey's to entreat that action be not enforced. Three days later, after they had agreed to stay action, you went along and filed. Bankrupt: Because Tingey's held it over while I got back to see if Mrs Simister would back four p.n. 's for me. She could not do it, and I thought that was the only way. You did not do it to prevent other creditors pushing you also?—No.

WAGES PAID THROUGH "CHANGE" CHEQUES.

Mr Thomson: What was your reason for drawing such large sums of moneys Avhich you call "Change," each month?

Bankrupt: It was all for wages and so on.

The Assignee: Where is your wages book?

Bankrupt: At home. Mr Thomson: You paid £37 in March and £45 in April for wages. Who got it?

Bankrupt: Two men were working for me. ,

You paid them by drawing cheques for change?—Yes. Mr Mcllraith: You tola us that youhad iio bank account when Tingey's draft for £SO was presented.—Yes, You had an account in February at the Bank of New Zealand, and one in April at the Bank of Australasia. Which did Tingey's draw on?—The Bank of New Zealand. *The bank me up and said the draft was there. Did you draw anything for yourself during the period you were working?— £2 and £4 in the whole time since I started. I have not been able to draw anything. CHEQUE ON DAY OF FILING. You cashed a cheque for £1 10s in Wellington the morning of your bankruptcy. How much benzine did you buy?—No answer. ] The Assignee: A couple of gallons, I think.

iMr Mcllraith: Why did you issue a cheque for £1 10s on the morning of your bankruptcy when you knew you had no control over your banking account?

Bankrupt did not offer any explana tion. I

Mr Thompson: He' certainly drew it without there being any money there. EQUIPMENT AND MATEEIAL.

"How much equipment have you shown?" Mr Thomson asked.

'The Assignee said that £4O 3s Avas shown on the statement.

Mr Thomson (to bankrupt): You bought £B4 worth from Tingey's; you have £lB worth now.

During, the proceedings, Mr Harvey, who had been delayed by sickness, arrived and later made a statement explaining liis jpd,sition in relation, to that of the bankrupt. In the meantime the examination proceeded, the bankrupt giving particulars of work he had carried out since February. He stated that he had used the proceeds partly to pay off a debt, but mostly to pay wages. Mr Thompson: It seems marvellous that, out of £l5O worth of work that you Avere paid for, you only banked £SO in both accounts, apart from Mr McMillan's money.

ORDERS EXCEED VALUE OF JOB.

Bankrupt was asked by Mr Thorn son Avhy he had given orders on a job done for Mrs Kersey at Shannon. He replied that, at that time, he Avas expecting money. Mr Thompson: From Mrs Kersey? Bankrupt: No. Mr Thonfeon: Yet you gave orders on her job, and for a greater amount than Avhat it was worth. One order is Avhat the job was worth. You represented to both men that the orders

would be met by moneys coming out of that contract.

Bankrupt did not reply.

Mr Mellraith: You have no excuse? It is absolutely deliberately mislead' ing people. The Assignee: Do you pay all wages in cash? t .

Bankrupt: Yes; except where I have a cheque to change from people. Mr Mellraith referred to bankrupt's statement that he gave Mr McMillan an order for £79 on Mr Moynihan, of Shannon, and an order.for £2B on Mr Gardner, of Shannon, and that he had done this in anticipation of getting £IOO from relatives.

Mr Thomson: That is ridiculous, of course. (To bankrupt) Mr Gardner's was a £26 10s job. Did he pay you? Bankrupt: He paid me two sums of £ls. The rest was for extras. MONEY ACCEPTED IN FACE OF ORDER.

Mr Thompson: You have given this order in favour of Mr McMillan for £26 10s, yet you accepted the money from Mr Gardner yourself. Is that so?

Bankrupt: Yes. I asked ,Mr Gardner to pay it, so as to, pay wages. Mr Thompson: Did it not occur to you that that was an extremely dishonest thing to do? Bankrupt: Not at the time. A HALF-PRICE JOB.

Mr Harvey gave some information relative to a certain unfinished job. Bankrupt used to call at times on Mr Harvey, who would help'him in making up a price. In this particular case, bankrupt, without the speaker's know-; ledge, gave a price of £l7 10s for the job. The next lowest price submitted was £25, which in itself was a cheap one. Bankrupt was given to believe that a- price of £l2 had been put in against him, and he accepted the work at that price. „, The Assignee: You have been doing the work,for anything as long as you got your hand on a bit of cash. Bankrupt: Don't say that.

Mr Thomson asked bankrupt why he gave (Mr McMillan a cheque dated May 24th, for £35 10s, when he had no funds in the bank to meet it.

Bankrupt: It was a post-dated cheque.

Mr Thomson: It was 'dated May 24th. That is all we have got to go on. •■'■-''■■}:-■-■ PLAIN SPEAKING.

Mr Mcllraith: Do you consider you have treated your creditors fairly? Bankrupt: It looks as if I have been a fool. Mr Thomson: You have beeu dishonest.

Bankrupt: I have tried not to be. The Assignee: You cannot tell me'it is honest to give tAvo orders on one job when either of them' will Avipe 'out the job! The statement you put in showed a deficiency of £206; it is more like £4OO.

Replying to questions by the Official Assignee, bankrupt .said that the only books that he had were a Avages book, an invoice book, and a receipt book.

Mr Mcllraith: You slioav a receipt for £22 10s from Mr Moynihan; then you got it cancelled. —Why? Bankrupt: I did not get it. Who got the receipt?—That was £22 10s that I borrowed from Mr Moynihan, and then I gave it back again to him. He gave me' a receipt. DISPUTE ABOUT TIMBER. Further examined, bankrupt said he had nothing to do with the timber for Mr Gardner's job. He had ordered some timber for Mr Gardner from Mr Harvev.

Mr Harvey said he did not knoAV Mr Gardner in the matter.

Mr Thomson: When you gave a contract price of £26 10s for that Avork, you must have meant it to include the timber.

Bankrupt: No. He was building a house and I went as far as I could till he got his architraves and' skirting. Then he asked me if I would get the timber for him from Mr Harvey.

Mr Harvey: I did not knoAV Mr Gardner in the matter till after this had occurred.

Mr Thomson: What do you mean by "equipment £l2O and materials, oils and papers £97" in your statement't» Mr McMillan.

Mr Simister: I considered I had over £IOO worth of equipment. Mr Harvey: I supplied most of it. Mr Thomson: Why did you put down separately £97 for materials? Bankrupt: The material is included, in the equipment. It was not put down there to mislead Mr McMillan. Mr Harvey:' You have been in positions where you knew something about book-keeping. -'■'.'"■ A DISCONCERTING DISCOVERY. .

Mr Harvey stated that he took, a lien over Mr Moynihan's job, butMr Moynihan signed away a job in which bankrupt's equity was very small. The position was that Mr Harvey saw bankrupt after the latter got the new lorry. Simister"!said, "I paid £IOO down on it, and it will be very easy for me to pay the balance." Mr Harvey then wondered where the £IOO had cornel from. He went to Shannon with bankrupt three or four days after the'purchase of the lorry, saw the job, anC did the work on the promise that casli was to be paid as soon as the job was done. Three times in the week fol lowing the completion of the job hi caw bankrupt, who, on the Friday, sai< he would get the money the same nigh for certain. The speaker was too bus to see him that hight, so went nex morning, but could not find met Mr McMillan, who snowed hi the two orders given by bankrupt, ft Harvey said "They are all right, but Mr McMillan replied, "They a not. This one was paid yestei day Mr Harvey said, "Fifty pounds that and £7 and £8 of the other 1 longed to me." Mr McMillan wH very wroth. Mr ' Harvey saw ... baw rupt about 12.15 on Saturday, and ■ said, "I have been up "to Shannons get that money, and could' not get ifl Mr Harvey told bankrupt what he IwM found out. and advised him to fixlH up with Mr McMillan, because.he C/H put the law on, to'him if he WslflH Bankrupt said he would. Mr Harß said, "I only did the job strength that you would pay that nflH ey." Simister answered, "I willlM it up for you'next Tuesday." Thfll day came and Mr Harvey took a on the job, telling Mr was not his intention to money twice from him, but Moynihan should bring pressure MM bankrupt to pay the'money. Mr !■■ nihan had made the mistake of ing an order and paying the fore the job was completed. ' Mr vey added that he could claim 2 cent, of £75; HH

The Assignee asked- the bankru he had not 'paid one instalment' o; £3 a month promised to his credi Bankrupt: No; it will be the Tuesday in this month. I am in ing it to £5 a month. The Assignee: The amount is £450.

Mr Mcllraith stated that he yn prepared to Avithdraw his previoi tion, under the circumstances, i A BAD FIX. ,Mr Harvey: If that goes th this man will lose his pension might think it over again. It do us no good, and I Avould b sorry to see a man lose his ] noAV through the case being ta the Grown Prosecutor.

Mr Mcllraith responded thai Avholesalers of the country wen ing this sort of Hhing, and it : be stopped; they felt that if na was taken, there Avould be no it. In the last twelve month mercharits of Wellington; had thousands. It Avas seldom th could get creditors to put a-OJ Avas prepared to go on with i The Assignee: Where there i it may stop others from doing 1 thing. Mr Harvey Avas requested t< such of bankrupt's property be saleable and ascertain.if could be obtained for it. ■

The meeting Avas adjourn die.