The F. W. Richmond Bankruptcy

Taranaki Daily News, Volume XLVII, Issue 7909, 26 August 1905, Page 2

The F. W. Richmond Bankruptcy

Messrs Pep# ind Darling Examined-

The Assignment Explained.

Some further evidence in connect ion | With the bankruptcy of Mr F. W. j Richmond was adduced on Friday a[- j tcrnoon, when Messrs Pope and Darling were examined at the office oi the Deputy Official Assignee. The D.O.A. (Mr J. S. S. Medley) presided, and there were also present Mr W. Kerr, his solicitor ;Mr R. C. Hughes, on behalf of Mr Darling ; Mr Fitzherbcrt, on behalf of Mr Edgar Watt; Mr Anderson for Mr Pope, and Mr Richmond. Spencer 'Jevenish l'ope, who described himself as . a farmer, of New Plymouth, put in a written statement, which, being duly sworn, was accepted as evidence.. This document, after explaining the items of witness' claim for £I2OO, set out that in July Richmond went to Wellington to arrange certain financing which had to be done before the Marahau and Mere Mere exchange could be-.carried through. On iiis return he told witness that he had been unable to raise the £2OOO required, and had no hope of the Marahau or Merc Mere deals going through. Efforts were then made locally to raise the £2OOO, but with very little hope of success. Tho next day, July 25, a meeting took place between Lennon, Darling and witness, at which the whole position was discussed. Lennon was very despondent about raising the £2OOO required, and Darling proposed that he should take over Mere Mere. Lennon expressed his agreement to this, and Darling and witness afterwards agreed to take over Mere Mere together. Before the agreement for £I2OO was. signed on July 2s, Richmond and' Lennon asked witnes how his claim was made up. He explained the items, which were : £420 on an order given by Watt, £llO owing by Watt and Lennon, £IOO due by Lennon, £450 estimated as coming to witness under a former agreement for 9 per cent, commission upon the nctt profits to arise from the re-sale of Merc Merc and Marahau, and £l2O was put down to cover personal expenses and , interest, which they did not have time then to calculate. Richmond (questioned witness' claim for commission, hut on working out the estimated profit he found that it came to more than £SOOO, and agreed that the £450 should be recognised, as witness was undertaking so much responsibility in financing the deal. It was also agreed that witness should subsequently substantiate his elaim as to £l2O. After the agreement was signed they had an interview on July 21) with Mr Reid at Stratford. Mr Reid then agreed, upon certain terms to complete with Darling and witness instead of with Richmond and Lennon. They arranged an extension of time for completion. On Aug. 1 witness and his solicitor left for Wellington to see Pharazyn's trustees, and ultimately agreed with them that they should complete with Reid according to the fresh arrangements. Witness applied also for a fortnight's extension of time. After negotiation this extension was refused definitely on Friday, Aug. 1, and witness was informed that completion would have to be made on the 7th, the date named in the agreement, between Richmond and Lennon and tile Pharazyn trustees. "This meant," witness continued, "that £9OOO had to be raised by Darling and myself on mortgage of Mere Mere. Fharazyn's trustees consented to advance £7OOO to tis on first mortgage, and by paying heavy tonuses we were able to have the money in Wei-, lington on the. 7th, when Pharazyn's trustees transferred Marahau to Reid, who transferred Mere Merc to Darling and myself. The position-now is that we hold Merc Mcro property, subject to mortgages amounting to £9422, and upon trust for the credit of Lennon, Richmond and Watt as to any sum up to £3OOO realised over and above £12,000. If the claims of cither Darling or myself were found to be not what Wc stated, and arc reduced, then such reduction will go to the credit ol Lennon, Richmond and Watt."

Mr Kerr ' Do you consider the assignment fair to the creditors ? Mr Pope : Decidedly ; for if Mr Darling and myself had not come forward at that time the wliofe thing would have iallen through. Mr Richmond had been endeavouring to obt*iß the £2OOO necessary to complete but without success. Mr Lennon lia<l also given it up as hopeless. The D.O.A. : Mr Watt said yesterday that he was willing to take It up. Did you consider that ho had any chance of doing that ? Witness: I heard nothing whatever with regard to Mr Watt's efforts in Wellington until the night this last agreement was signed. In Mr Anderson's office Mr Richmond remarked that an offer had come to him by wire from Mr Watt, Jtiut both Richmond and Lennon expressed themselves as dissatisfied with it, and in fact ridiculed any other idea. What do you consider the valuo of Mere Mere ?

Witness : I should say it would be worth £15,000. Continuing, witness stated that in the first place he understood Watt and Lennon had each a one-fifth interest in Marahau, and Richmond onefifth. Afterwards, he believed, this arrangement was altered, making if on»-third.

Mr Kerr, referring to the £12(10 agreement, said Watt was not a party to that agreement, and said all that was owing to witness was £(1.90, and in this Lennon and Richmond acquiesced. Witness handed in a detailed statement, showing how the amount was made up. Mr Kerr : Do you claim commission as upon £SOOO in respect of the sale which you effected, or which you thought you were clTecting, to yourf selves under that agreement of assignment 7 Witness : Messrs Richmond and Lennon were present at the meeting. They worked this very thing out themselves, and tlrey agreed that thd profit that would have bean made was £SOOO. They agreed that 9 per cent commission on the £SOOO was due to me and signed the agreement, accordingly. : For the purpose of saving the £I2OO claimed by yon, and £IBOO claimed by Darling, you got Richmond and Lennon to assign their inamii cbal £ cd 8 Per cent, on TO- "■ ' Witness : I don't know exactly whetliet it. could be put in that way. if it had not been for my efforts there £r , ,' c been no Profits whatever. Mr Anderson pointed out that if the creditors were prepared to let the transaction, which really saved the situation, go on, Messrs Pope and

Darling wore prepared to go on. Thcv C t S ° mg t0 wait t0 SM wh *t the wc - re s /? ine t0 do - The y wer o to g.vc the D.O.A. and JVI, Km e\erv assistance in tlielr power from Mr S Rv! Ir K ? rr j 1 ™fcr*toSd Richmond that he contemfao t If n" h" P J' As a matter of ho l'l-,1,? ? "I"' had not mcrt when hlmse f hv fh- P° 3S i''ly have saved y r a ß rce 'nont going through. I did not represent tliis to Robert D&iling deposed to foil t/ Z l uTl the iy, ana tliat it was a bis t/hinir if ho could finance it. The outcome was the venture was taken up. Watt went to .Napier and Wellington to see the trustees about, the purchase Watt SEwV'Wr tlut witness was Inn,. 7 0u " »ve too much for tir«^°i P ® y ' Wlt,lcss had been inVcafs ofon. an TO >? R t r ° f £4B '°° o im <- accenlwM , ; , h . Wou!d havc b ec n accepted but for being a day too late He therefore warned Wait (hat the amMhiU I, o "''' b ? ,lonßht for £SO - fl,,n art that l e must not on any account so mn than #55,000 without tele- <

graphing to the others. Watt promis- , ed to keep witness' instructions, but | he did not telegraph, and on his re- j turn witness learned that Watt had purchased for £60,000. Witness then determined to "get out of It." He was at variance with his partners as to the mode of re-selling, and a 'written agreement (produced) was entered into to pay him £ISOO to drop out of the partnership. He was also offered 2j per cent, commission on any property lie could sell. Witness saw that a gross mistake had been m*d; ■when the £3OGO sale was made at Wanganui, as the land was worth at least £7OOO .or £BOOO, and told Wat! the sale must be cancelled or It would ruin selling prices. His advice was taken. Witness tlren got Mr Henry lteid to inspect the property, and goi his offer to purchase the greater portion, including all the good land, for £57,000, making witness' commission £1450. He reckoned they would get £6OOO for the inferior land. As witness' commission was likely to be more than the profits secured by the others he agreed to take £3OO, making his total claim £IBOO. Witness also advised Richmond to accept Mr Reid's offer to take over tho balance of Marahau, and to accept Mere Mere for portion of the purchase money. Richmond told witness he was not in a position to make the deal as ha was on the verge of bankruptcy, adding, "If you can <lo anything in tho matter the chance is yours ; otherwise you may bo left out In tho cold." Witness decided to take over the property, as he believed Mero Merc to be a safe investment. He consented to take Pope in with him and they carried the transaction through together. He endorsed the evidence given by Pope. Witness' claim now was £ISOO, as the other £3OO was included in McKcnna's mortgage. In conclusion, witness said he considered Watt had "thrown up the thing altogether six weeks before the bankruptcy, and it was absolutely necessary for him (witness) to step in aad save the situation. '• Mr Kerr agreed that the whole of the Marahau transaction would ft«ve been worthless if Darling had not so acted.

Mr Hughes pointed out, that Darling, as an old friend of Reid, had been able to work the deal when others would have failed. Pope also worked like a Trojan. Mr Darling had practically arranged the original purchase, then the large sale, and finally came in at. the critical moment, and the consideration for all this was the £IBOO mentioned. The examination then terminated.