IN BANKRUPTCY.

Stratford Evening Post, Volume XXXVI, Issue 47, 1 July 1913, Page 7

IN BANKRUPTCY.

CONTRACTOR TX DIFFICULTIES. A meeting of creditors in the estate of Charles McPhee, contractor, roko, was held yesterday afternoon. \ o-ood number of creditors were present or represented. The bankrupt ■.vns represented by Mr R. Spence, and Mr Thomson apoared for the petitioning creditor. STATEMENT OF ACCOUNTS". The total of unsecured creditors was io:i7 13s Sd. The chief credi-

tors were: Central Co-op. Store. Stratford, £ll L2s lOd; Chas. Lockwood, Strathmore, £43; T. Young, Douglas. £46; Griffiths and Beloe, Toko, £32; A. Ferguson, Toko, £l7 8s lOd ; Forsyth, Mangamahu, £SO: G. Syme, Elawera, £;tt>; W. Davies, Puniwhakau, £23; Lander Bios., Rongotea, £ls- J. \V. Gedge, Puniwhakau, £ls. The total owing to secured creditors was £1356 lis 9d—£l6o 4s 4d to the National Bank and £1196 7s 5d to Catherine McPhee. The securities held to cover these items were estimated to produce £99s—goodwill of land £OSB, bullocks and plant £337. I'he Bank's claim was secured by a first mortgage over the section at Whangamomona and Mrs McPhee's claim by a second mortgage on the land and a first bill of sale on the bullocks and plant. . ,

BAXKRE IT'S STATEMENT. In a written statement,. the bankrupt said: J am thirty years of age and single. 1 worked in a butchery business "for my mother until about five or six 1 years ago, when my mother gave up business: 1 had no money, but Mr NeWton King supplied me with working bullocks on credit, and I started contracting. My first contract

was on the Wingrove Road. I made a little out of this contract. Next season 1 worked with my team by the day for the Council for two months, and then took two small contracts. I a title more than held my own all this Lime. Then I went to Wanganui and took an earthwork job. With bad weather and slips I lost about £IOO. ! This was the beginning of my trouble. I came back to Stratford and took over a contract from Messrs Houlihan and Hennebry and through a cloud-burst at Puniwhakau I lost over £."500. The following season my bullocks were idlo and' then about March, 1912, I started the present contract.on the Mangaohu 'Road for the Stratford County Council, Through bad weather, I was unable 1 to do any carting until about December'of the

same year, and when the weather did clear I was unable to got men'. Through of men I coukl, noL much 1 as the Council Required, .ancj they took over thpi .contract on April 11th, 1913, to finish at my expense. I had to borrow the money io pay the men with. There will probably bo sufficient money over after the job iVfinished'£6 pay men with, who have, claims in en the contract,. ; bufc Ido not thinlk there will be any 0 surplus for, my ot'her ere-' ditto's! I U\ June* 1912, I/alsb' took a contract' in the same' road' (Mangaehu) : from the Whangamomoha County Council" which I "also, for the same reason, could not start till December. This contract I-finished

about the end of March, 1913, but did no good 011 it. When I started the Houlihan and Hennebry contract f got an overdraft from the National Bank guaranteed by Mr Joseph McCluggage. I started with a limit of £IOO, but ultimately had to increase it to £3OO. J gave Mr McChiggage to secure this a first mortgage of a Crown section at Whangamomona. 658 acres, which I drew in a ballot about three years ago. .1 also had to borrow money from my mother from lime to time to pay wages men with, etc. When I finished the Whangamomona County contract on the Mangaehu Road, the balance over ' was paid to the Bank, and my overdraft was reduced to £l6O. . I was. unable co pay my mother anything towards what I owed her. On being pressed by Mr Newton King some time ago (hiring my contract work, my mother again came to my rescue and guaranteed my account with Mr Newton King, and .1 gave her a bill of side

aver the bullocks. When I finished my contract on the Mangaehu Road [ could pay my mother nothing, J awed her in all (including Mr Newton King's account) £1196 "Ms sd, and recently gave her a second mortgage over the Whangamomona section, but even if ibis section realises its best price, my mother,will lose over £360. Lvo the Crown section at Whangamomona, I felled 50 acres of this about a year ago, for which my mother lent me the money. It is not grassed, ".'lie only books I have I have handed to you. About eighteen months ago my mother's house at Toko was burned down, and all the books I had wero destroyed. CB OSS-EXA M [NATION.. The !).().A. (.Mr A. Coleman) said that bankrupt had been declared bankrupt on a. creditor's petition. J'nero might bo some money to come to the estate from the County Council. The Council intended to complete the contract, and if the Council did the work at under the contract price they would hand over the differonce; but, this would probably lie used up in paying wages. The wages claims were not: included in the statement, as they would be paid from the contract money in the hands ol the County Council. In answer to the D.0.A., bankrupt said that his debt to Newton King was about £6-50, which was included in the statement in the amount, owing to his mother. By Mr i J , Thomson : Tie had given

Mr Newton King a p.n. for £450 at the end of March on account of previous advances. The p.n. was endorsed by his mother, to whom he gave a bill of sale over his. plant, in Consideration of the ' endorsement. After that 'his mother gave, Mi' Newton King n bill of sale for £220 over the plant'.

Bv the AsigneeV'He could.not say if his motlier was claiming' against the. estate. ' lie owed his molhe)£520 for money 'lent at various 'times to pay wages' on the'Puniwhakau jobj 'Fpto March''3lst; sire' hel.d'ho sepiu;ity for ' The guarantee at the Bafnk was originally for £IOO, and was made when he took the Puniwhakau job. Mr McCluggage got no consideration for guaranteeing his account. Mr R. Spence said a mortgage was given to- Mr M l a furfchef £2jDo,guarantee was demanded,by bankrupt.. ~ t .-.: . ~.■:;■, i:-i J3yi; Mr Thomson : ,At the end, of March last, he.thought he would;,be able to get through the Mangaejni 'toad job, though he never bad any -:pare cash. There was twenty-five per cent, on work done due from, the County Council, but this would not be paid until the contract was. finish-

■d. The Countviook the job over on April 11th hist and he had no notion they intended to do so. The job had then been going on for a year. To the Asisgnee: The contract price was about £I2OO. He had received C's2o. The total length of the job i metalling), was 126 chains, and he had done about 90 chains. The County completed a further stretch and had since stopped work. The wages claims totalled £2OO, and the wages men had orders against, the Council.

Mr Rutherford questioned whether the whole of the money due from the County should not be paid into tli3 general estate.

Mr R. Spence said that the Council was compelled to keep twenty-five per cent, of all contract money earned for the benefit of the wages men. Mr Rutherford said that the County was not compelled to pay the order for grazing for bullocks and for royalty on metal.

Bankrupt said he had to give an order lor the grazing and royalty before being allowed in the paddocks.

THE CREDITORS' POSITION. The Assignee said, so far as he could see it seemed that bankrupt had been hopelessly insolvent for some time. Even if he bad finished the contract and had made L'M) as In expected, he would still be a good way behind. An extraordinary feature was the big credit given by tinstorekeepers. Mr Young: If the storekeepers gave him no credit he would have Lo work for a day's wages like another man. Mr Lockwood: 1 thought he Was a millionaire. The Assignee said it seemed that bankrupt had ben insolvent ever since his return from YVanganui, at which time he started borrowing from his mother. Bankrupt, told Mr Rutherford that he had not paid any large sums to creditors during tin- past two months. He drew no s r> t sum for himself weekly. Mosl of the cheques due to him were paid direct to the National Bank. The Asisgnee said there was no cash in the estate, and he could not move unless the creditors reasonable expenses. ii was desirable to ascertain if the bankrupt had transgressed against the penal sections of the Act. Also it would' be well to see what could be raised from

the securities and from the County Council. ~ i< Mr McAllister moved that tha meeting bo adjourned sine die in order that the Assignee might prepare a statement pi what could be expected from tho,County. ~: ;.. : : . .. • Thd motion was carried. ' The Asignee said that if, the. eredit'ors desired to have the bankrupt publicly examined as ; ,to; whether he Imd'tontraqted debts, illegally it would be/nocesr-ary for them to guarantee ex-: penses, ..•- ■. ; ! >• ■>■ ■-, , v: •,-.■''.•• '.' ■ Mr ; Spenee . said he 'could: not :see. wfoai 'ground there could bo for. such :i 'course.. >dAt presentrlall that appeared on the face of things was that bankrupt was totally incapable of doing business and for four years had been living on creditors' money. Tho Asignee: All we can say now is that bankrupt has been grossly negligent. ■ -■ - '"Mr Spenco: That is not criminal,. The mooting was ndjo.urne.d without anyfurther steps Being' decided on.