BOOTMAKERS' BANKRUPTCY

Taranaki Daily News, Volume LIV, Issue 79, 23 September 1911, Page 7

BOOTMAKERS' BANKRUPTCY

ORDER FOR DISCHARGE SUSPENDED.

In the •Supreme Court yesterday morn ing,

James 11. Wood and Michael Zemba. bootmakers, of New Plymouth, applied', through Mr. A. R. Standisli, for their immediate discharge. Mr. J. B. Roy, on behalf of the Wellington creditors, opposed the application. The grounds of the opposition, he said, were that bankrupt 'had failed to keep proper books of account, so that they never knew their position themselves, or. if they did, they were able to conceal it. from their creditors.

James Henson Wood, one of the bankrupts, said he and Zemba kept a ledger and a daybook, which disclosed the majority of the partnership transactions. He thought they had satisfied the D.A.0., and Mr. Watkins, an accountant, had been able to draw out a statement from them.

.Mr. Roy asked why the assets had been shown a.t £1407, when they had realised only £82!). Not obtaining an answer, Mr. Roy repeated the question, and asked, "I suppose you made a guess at.it?—. Bankrupt: Yes. His Honor: I notice that the D.A.O. reports that the books were badly kept, and it was almost impossible to tell the position from them. In answer to Mr. Roy, Wood said lie was in partnership with Zemba for about three years. They had made out a Iml-ance-sheet about eighteen months ago. He could not remember whether he had shown this to the D.A.O. They had a girl to look after the books. They started in a small way, on about .t2f>. To His Honor: He believed the creditors got sometning out of the insurance at the Hawera fire. To Mr. Standish: He was able to understand the book, and give explanations of them. When making up his statement Mr. Watkins did not come to witness, although he had told Mr. Watkins that he would give any information the latter needed.

Jn reply to His Honor, Mr.- Standisli said the estate would probably pay about 7s in the £.

Mr. Standish examined bankrupt at some length regarding the bankruptcy. Witness said that at a meeting of creditors prior to the bankruptcy Zemba and he offered to guarantee the creditors 10s in the £, but this was not accepted. Their position was largely due to the fire at Hawera.

Addressing His Honor, Mr. Standisli submitted that there was no suggestion that the books were irregularly kept for purposes of fraud.

His Honor said the law required that books should be kept in such a way that anyone going to them could find out the position of the bankrupts without assistance.

Mr. Standish said that the books were as good as were usually kept by bootmakers.

His Honor: Any bootmaker can keep bad books, so long as he doesn't go bankrupt. If he does, he may get into trouble. His Honor said that there was no suggestion of fraud, but he did not think it was a case for an order for immediate discharge. The discharge ought to be suspended for some time. Mr. Roy pointed out that the D.O.A.'s statement regarding the books brought the bankrupts under Section 127 of the Bankruptcy Act. The question arose as to who benefited by suspension of the discharge. The creditors didn't. It might seem hard, but he submitted that discharge should be conditional upon bankrupts consenting to judgment for .some reasonable portion of the deficit. He did not suggest that it should lie for the whole of the debts, but for something substantia;. With diligence the bankrupts ought to be able to pay them oil'.

His Honor: I don't suppose that there is much probability of their being able to pay oil' such a heavy sum. Mr. Roy said it would be. bad for the mercantile community if men were to be allowed to go into business on slender capital, fail for a large amount, and get immediate discharge from lxmkruptcy when they had not kept proper books of account. His Honor rejoined that very often men were encouraged to go on" by the ready way in which credit was given to them. If the wholesale people were more careful in giving credit, and made fuller enquiries before selling on bills to people of slender means, they would not, have such heavy losses. His Honor added that he did not think it was a case fot- action under Section 127, but it, was not a case for immediate discharge. It was obvious that the books were badly kept. An order would be made suspending bankrupt's discharge for one year.