The F. W. Richmond Bankruptcy

Taranaki Daily News, Volume XLVII, Issue 7908, 25 August 1905, Page 2

The F. W. Richmond Bankruptcy

Evitee of Mr Edgar Watt. In compliance with bis own request, Mr Edgar Watt was examined at. the oiiicc of the D.O.A. on Thursday morning, in order to throw some light on his property transactions with iMr K. W. Richmond, bankrupt. There were present the D.O.A. (Mr .J. S. S. Medley) and his solicitor, Mr Kerr; Mr R. C. Hughes, on behalf of Mr Darling ; Mr Fitzherbcrt on Jiehall of Mr Watt and certain creditors, and Mr Lennon, a partner in tho bankrupt's land dealings.

Edgar Watt, sworn, stated that he had never received any intimation of the creditors' meeting, either officially or from either of his partners, he had been away in Wellington for two months, and during that time received no advice as to Richmond being about to file. He wished to gave ths opportunity of refuting statements made at the meeting of creditors.

Dealing with the laud transactions, witness said he was in partnership with Mr Richmond in certain land i speculations. Towards the end of last year he was in partnership wiili Mr Lennon. Previous to this he had had an office in Auckland, working the Waikato in land dealings, and while there received information about tho Paengaroa 'block, containing 17,500 acres. He paid about £l7O at various times for options of purchase ior this block, out of his own pocket When his last option expired he went to Mr Richmond and said : "If you will pay tor an option on the block for three months I think the thing is good. We can certainly huy for 'ess money than it is worth." Witness had previously been told by the attorneys at Auckland for the absentees that they would not place the block under oiler at less than 15s per acre, but that if 12s 6d were offered by any purchaser the offer would be accepted. Witness distinctly warned Richmond only to offer 12s lid, but the latter closed at 15s, " thereby making a present to the owners oi 17,500 half-crowns, which nobody wanted." Witness went to Wellington and placed the property on the market, and through land agents there was able to find a purchaser at 2(ls per acre. After paying three agents commission and the costs, etc., witness and Richmond made £1425 on the deal. Richmond held a half share and witness and Lennon one-fourth each, Richmond being witness' trustee in tho matter for his share. The absolute throwing away of 2s Gd per acre on the purchase could in no' way he attributed to witness. In tho meantime, Richmond and Lennon, a partnership which really consisted of Richmond, Lennon and Watt, had purchased the Marahau estate at Wanganui. They entered on the purchase on the understanding that Richmond was to have one-fifth share, and Lennon and witness twofifths each. There was an agreement between the three subsequently signed. It was Mr Darling whom they had to thank for information about the Marahau estate, and also for more than three-parts of the sale of the estate, and it Was agreed that as recognition for his valuable services that lie should be given, in lieu of compensation, a subdivision of the estate totalling 117 acres, at any rate over 100 acres odd. The pur- ; chase price of the Marahau blcck was £3O-,000, and the first deposit of £3OO was paid by Lennon out of his own pocket.. The second payment of £I7OO, due three months after, was paid l:y the partnership, the £1425 profit from the Paengaroa sale going towards this amount, and the balance i being paid by Mr Richmond for the partnership. Witness went to Wanj ganui, having previously been over the land and valued it with Mr Darling. He placed the property in the hands, of several agents there, at prices which were fixed solely by himself. Immediately after this, witness' partners both proceeded to Wanganui and . sold one block of the estate, which . witness had put on the market at £IO,OOO, for £3OOO. Mr Kerr : Put it on the market at £3OOO ? Witness: Yes, and it is worth £IO,OOO to-day. Continuing, he said that when Lennon and Richmond returned to New Plymouth he proved to t-hpm that they had foolishly. Mr Richmond : Would you not like to correct yourself ? Lennon went to Wanganui alone on that occasion.

Mr Lennon : Yes ; I was alone. Mr Richmond :We both went to Wanganui once, but not when the sale tpok place,

Mr Watt went on to state that he said to his partners : "You have made a beastly mess of things, and more than probably have spoilt any profit there may be for us in the Marahau estate by tlvis sfilp. You have either got IP give me your irrevocable power of attorney to work this business" up on behalf of the partnership, cr I am out of it for good and all." Tire deeds of power of attorney were duly signed, and with them in his pocket witness went to Wanganui. By the aid of £2O in cash and sundry other things lie was enabled to obtain tho cancellation of the contract for tho sale of this land. But the very fact th»t this subdivision was reported all over the West Coast to have changed hands at £3OOO, even thougl) it may Itavp bficti worth £IS,OOO, prevented the partnership from putting a much larger price on the land thau it had first been sold for. Subsequently they refused an ofipr of £6500, which came through Messrs Baddeloy and Furlong, of Wanganui. Witness believed then that, the partnership might "pull out" with £7OOO or £800(1 for the sa'd block. As a matter of fact, it. was eventually purchased by Mr W. H. Reid, of Manaia, at £SOOO. They afterwards agreed (o sell the whole at the balance of the Marahau (o Mr Reid for a consideration in cash and

a conveyance, lrcc from encumberWc, of )iis propprty aj, Mprc Mere near Hawei:a. "The situation resolves into this," continued Mt Watt ''that in order to complete the purchase piade of thp Marahau from the Pharazyn trustees, and the Merc Mere property from Mr Rei<l, i(. was nec;s-> sary to secure an advance 011 mortgage on the Mere Merc property of £BOOO, and when the meeting of creditors sat the partnership was equitably entitled, to call for a conveyance of this property, provided that £BOOO was paid to Mr Rcid. When the piecting H f crpdjtjirs pa|. was the legal position of tlm paiincLiship,"

I Mr Kerr : Why should you pay the I money to Reitl when you really owed it to the Pharazyn trustees ?■ Mr Walt ' He would pay it to them, ilt was a "swop;" He look over the liability when he bought us out. Thfi tfustees agreed to this course. 1 '

Continuing, Mr Watt said ; "I have since learned that two flays prior to the meeting of creditors the assignment, of all the interests of the partnership in the Maraliau and Mere Mere estates was made in favour of Messrs Pope and Darling. At the meeting of creditors it was sworn by Mf KiGlinionjl, backc;] up by Mr Govett, that tlic Mere Mere property had been under offer : ( hat the Marahau had been agreid to be bought; that a deposit of .12000 had been paid on the purphase of the 'Maraliau : tfrat there wap po chnpee whatever of completing for eitier of these properties, and with this knowledge -the ! partnership had made all due attempts to I'eeover the deposit without success. Whereas the fact ts that by virtue of the said deed of asi Sl gnmcnt Mr Reid, on the same nWit on which the meeting was held, was aWc to take conveyance of Maraliau from the Pharazyn trustees and , feiw a transfer of the Mere Mere to the assignees, Messrs Popp and D»t- ---[ ling. I have the test authority for I this in the person of one of the assignees himself, Mr Darling. I have sjatefl, and admit, that Mr Richmond I was my trustee in the (natter of my [share of these estates, hut bo was not

my attorney, a::;I therefore had no right to assign --v.'.y ;-ny portion to anybody at any p:i;j without niy [knowledge or authority. As I said before, 1 was in Wellington, and reIceived no word' from either of my | partners as to Mr Richmond filing, lln the meantime, two mortgages in I favour of the partnership, mortgages 'amounting to £6OOO given by two assignees over the Mere Merc estate, [were drawn for signature on the day I prior to Richmond's meeting of creditors. I havei. the authority, of Mr Darling for stating they were signed that night. Richmond's creditors [were not told of this at the meeting." Mr Fitzherbert: According to the deed of assignment £3OOO went to Pope and Darling ? Witness : Messrs Pope and Darling arranged for an advance of £9400 odd on the Merc Mere estate. The total I amount of cash required to complete with Pharazyn's trustees and Reio was £BOOO, not £9OOO, and I learned these last few days that the odd thousand is to be distributed as follows Izard, law costs, £2OO odd ; Corrie and Holdship, Wanganui, law costs, £2OO odd; Dix, Wanganui, £225 Mr Kerr : But this hearsay evidence Is hardly admissible. Witness : Well, where is the £IOOO ? Who has got it, and where is my share ? My authority is Mr Darling. Continuing, witness said that, about £2OO was "held as part of the spoils" by Messes Pope and Darling individually. Furthermore, by a mortgage given by Pope and Darling over the Mere Mere estate the claims of Pope and Darling against the estate, amounting to £3OOO, will have been discharged in full. "If these, large amounts are being paid out and these large liabilities being discharged tby the partnership," continued Mr Watt, "it must be patent that the partnership is either paying out of pocket at a loss or out of profits made. I swear the partnership is not paying out of pocket, but on the contrary out of profits made by me for the partnership. In view of these facts, I say it was a most infernal piece of injustice to refer to me in the manner reported." Mr Kerr asked the witness to confine his remarks to evidence, which would speak for itself.

Mr Fitzherbtert asked whether the item shown "Darling £1800" was owed against the estate. Witness : Yes ; Darling arranged to take one section of the Slock. A bargain was subsequently made and signed that he should get £ISOO, and subsequently £3OO more, which he honestly earned. The D.O.A. : That is out ol the profits No, it is a liability. The D.O.A. : You swear that Darling was to get £IBOO whether Marahau was completed or not ?—I swear according to my lights that such was the intention. I am one of the partners liable lor the amount. Even il the words "out of profits" were put in the agreement that was not the in* tcntion. He might have made any sum up to £4OOO if we had not stipulated the amount.

With regard to a £I2OO set down as due to Pope, witness explained that £OOO was personally owed by himself to Pope over various land dealings, for which he gave an order on Richmond, as trustee, to be paid out of his share of the property. The lalance was a bonus promised to him by the partnership out of the profits oa the Marahau anil Mere Mere properties. The question then arose as to the exact amount owing, and a certain claim of 9 per cent. Witness explained that on the dealings Pope was only entitled to 9 peT cent, on £3OOO profits, making the total indebtedness £B7O, instead of £I2OO, which the agreement purported to show asi due. The agreement would not hold water.

It was pointed out that Pope had no interest in Paengaroa, and it was then calculated that the profits in which Pope lvad an interest would bt reduced by £ISOO, consequently his claim would be further reduced by £IBO, making the actual sum due to him £"699.

This calculation was agreed to. Mr Kerr remarked on the fact that bo Ih Messrs Richmond ami Lennon hail signed an agreement without fully investigating the account presented, in which they admitted Pope's claim of £I2OO,

Witness, ip. the course of further

•[uest inning, said ho would Rive the D.O.A. f.500 cash for a share in the estate, which Richmond said he did not possess. He honsstly believed lie could Ret £16,500 cash (or the Mere Side property.

To Rir Kerr : Darling was in a different position from Pope. Immediately after the purchase of the Marahau, Darling was a partner. We thought we made a bad bargain with him, and said he would give him a lump sum to drop out, . If I could prove Darling was still a partner it would be a good thing for me. Mr Fitzherbert thought that on the evidence adduced Mr Crovett had reason to withdraw the statements he ha<l made at the creditors' meeting. ii° l . 11 a ' ,t lllc cause of he bankruptcy, Mr Richmond must have been placed in a better position than he was before. At the request of the D.0.A., counsel agreed to reserve his remarks until the examination of the witness was concluded. witness

Mr Lennon wanted to make a statement. He said that $ pertain statehfwiS < g0 >, fortl l a6ainst him ami -, 0 c thc opportunity of :■ as llc ha<i a satisfacthai hoto" 3 ;'!°! L Hc was assurrwt " aVT t!Sy iUiioUl ' ne<l 10