A BANKRUPT PUBLICAN.

Taranaki Daily News, Volume LV, Issue 121, 9 October 1912, Page 6

A BANKRUPT PUBLICAN.

ALLEGED PREFERENTIAL PAYMENTS.

A LIVELY MEETING.

A mooting of creditors in the bankrupt ■estate of J. A. TutMll, until recently licensee of the Taranaki Hotel, New Plymouth, was held in the Deputy Official Assignee's office yesterday afternoon. The D.O.A. (Mr. J. S. S. Medley) presided, and those present included'several solicitors, representing various creditors. Proceedings were at times distinctly lively. Bankrupt was represented by Mr. At H. Johnstone. BANKRUPT'S STATEMENT.

In his statement, bankrupt set down his liabilities to unsecured creditors as £073 Us Sd. His assets comprised book debts estimated to produce £3 las, cash in band £lO 15s ad, and a surplus from securities in the hand* of secured creditors amounting to £2l>!) Ts 3d, making a total of £2BB 17s Bd. This left a deficiency of £384 14s. The liabilities owing to secured creditors totalled £4OO 12s 9d, which sum was t'\e estimated value of the stock-in-trade and furniture. The secured creditors are the executors of the late Jas. Paul, and the amount (£4OO 12s 9d) is made up of goods account £B3 12s (id, and loan account £317 0s 3d. The principal unsecured creditors are Goldwater Bros., The Public Trustee (as executor of Alex. Mcintosh, deceased), John Avery Limited, Hatrick and Co., Limited, Hawkins and Smith, A. D. Kennedy and Co., Limited, Wellington, Penman and Boswell, M. Barnitt, and a number of other creditors with amounts .less than £lo'.

COMPETITION OF PICTURE SHOWS. Bankrupt in Ms sworn statement said: "On September 9, 1909, I purchased the lease of the Taranaki Hotel, New Plymouth, from one George Bishop for | £2200. j In addition I had to pay £6O • 10s 8d 'for stock, solicitor's costs £O7. and other payments totalling in all £204 Is, so llhat the total sum duo when I took ovjer the Jiotel was £2404 Is. In I order to pay this sum I borrowed £I4OO ! from Paul's trustees, £SOO from Pearson 4 | and Dwan, which sum wa« secured bv mortgage of lease, and a, collateral bill of sale over furniture,. etc. I also borrowed £2OO frojm my wife and gave p.ns. for the balance Ito Bishop, and Govett and Quilliam. In addition to the above I spent r £2OO of |my own money in re-furnishing j the bouse and .putting it into order. For ; the first eighteen months business'was' i good, tile takings for that period averaging aliout £9O per week. Shortly after j the expjry ,of that time two picture j shows became established hew, and from j the seecjnd week of their establishment I my retuk-ns dropped by about half. Dur:1 ing the Jast six months they .have' aver-' I aged abaut £25 per week.' I' paid off j Pearson and DwairV 'mortgage' within j the first year, and also -outstanding I p.n.'s fo;' st'ockrand Jaw costs. I also. Ipaid' £35 per month"arid Interest in respect of the lbati"6f £I4OO from Paul's trust,- '.'his "loan Traduced by £ioßs j leaving i balance of' l £315: -Before .1 I took ovelr the' hotel I arranged with m'v j wife-to hay her'£3 a l 'week, which'was ) tp..go .iid reduction'of the. lon.ri of £3OO. and half as wages'to h'ov- ftir "Tier services as.housekeeper. "'Whe'ri \ Inuj'paid; her. £55,1. hi< uced lief To^rctnrn : -'the' : money.' to me,so as to save interest in coimee* l ' .tioii wit.l other loans... .In .August. I paid F# t'i Mrs. TutlfiH Hhi'etv'auinW ag--.gregatinj £159. .She had' Weted as. i cook, hoi semaid arid' 1 waitress* for a'period ojf abnit 12_months, and she brought J pressure? to /bear '/'-to 'compel '.payment' ijllie rent fell into arrearslieeause'of.the I low takings arid,'"tlveyh'eaVj\ .payments I' had' to'.rAake' to Paul's" trust" For th r e I 'same reason I h'ac("fo cease" payments'to'' I Goldwater Bros, I'hoped 'the business' .might'improve, but j.t did'jriot do. so.. I The had a very bad name, -and the I e&iss df (trade was "not good'.'" I found"' | myfcelf "inj difficulties' ft" nleet'ing- of 'crjeditors who resolved' to make "rrfe bankrupt.' "PaulV trustees" sold the furniture, stock, libense and'i'ease under bhe-powei of sale in the rri'oftgage. I had no voice :n fixino- the price, Which I con : sider is too low. '■' r ' ! '' !

A JPREUMINARY BOUT. , At, the j outset Mr. A,Jj©ldjyalet challenged thfe Tight of Mr. C. W. Oovett to be presen|t, seeing that the..creditors, he represented, the Paid trnVtiieV;.'had not proved inl the estate. This was disputed-by Mi'-. Govett, who said that any creditorJiad f i -riglit to. be present, jalthongh,' as''in Ms'"easeI,' 1 ,' no right it-Of ijote. If he interfered then the -Assignee Jiad thefright to o«lls||hi.m"'6itrt.' If.they"insisted"oh- his'retiring- there and then they! would' have! \& pffsh' 1 hi'iri out.' 'Are you a creditor? >•' Mr. Gojett: ''!>■ ah*: solicitor ; for :; a <jred-itfoiv'-W >■'■ •"•' ■"'■■■ ■' '■>■>■/. '■- ■ i •'■■ '■•-

Mr;-Medley: " Are : representing I'Sebuiredf.freditOrs?—l%." -' '.'"' ' ' ;• - 1 Mr.'-Medley: : llftvo 'you proved, or I'lia-va^yojul l ciients proved?— No. " I' "'M-jv Mridley: > Tlafe yoU valued your .sec^i-i:ityS-i-N'ot"ofl'fciklly.""' "' ' ' '

'-Mr..fy jlVilson: Anybho can come here' ,*ni|[sk\'lie is"a cradUer: ■'' '''' *"' ' ,'Mj.'.>le|dleyi Well, 'Mr. Goldtvater, if you, jkyjsli him'.removed'l' shall ■ remover him? . .. f .' '■ ■'■' i MV. G,ofd\vator 'rtill remained'adamant, ■remarkjji.i that lie" an'd 'the unsecured' creditors idid not' wish Mi': 'Govett to be they discussed"' the value, to the \stahdiligy of his client's I 'securities. i ■■.•;?;'■"''':: • • ' : Eveiit'liiilly ' oil'"whs- poured •'on the troubled jvuters 'by Mr. Govett giving an tih'ddl'takijng' to leave in -the- event of the' creditors discussing due' value of the 'Paul trustees''security..-: ■ ,i- - ' ■ " Mri'iQqvett's ease disposed of',; objection' Was next'raised to'cM-r; LI .11. VVes-

ton'* pfe-enee. ..,:...,...._- . .= ' He; claimed a right—to—be—p.w>s*nt as representative of the Public Trustee in respect - to certain rejiairs .which had beeii.-rioiiij to the hotel'during the bankrupt's, tpi ancy. A-.cred tor: AYhat is the amount of fyoui'..clai n?—l do not. know. Mr.. A, H. Johnstone: \ I suggest that thjS-o.la.iin is of such a nebulous nature .that jt.ean only be. deeidgd in a Court of law. " ' : , Mr.. W 'fiton rejoined that he had a right to! be present, but not to vote, aiyl thert the matter was allowed to i;cst... ' ! - AX INTERESTING STATEMENT. Mr. .Medley: The position is this: on :ji), Tuthill was adjudicated a bankrupt.j As soon as I got noiice I went do\v|i to the hotel and found bankrupt .then-, and also a bailiff. 1 took and then saw the bailiff, who refused to go out unless the amount of £].">£ which was owing to his client for rent was baid. I then saw my solicitor and on his advice I applied next day for a temporary transfer to my nominee. -My application was taken up by my solicitor lonly to be refused .1 the grounds that the application : been lodged ajready on behalf o, -a?. Q 4 I'hneny. I should like to say her,.' ihat the method of Licensing Committees in granting transfers is wrong. At present if a transfer is wanted'the solicitor to the applicant goes around and looks up one mepiber of the Committee in one part of the town, and then runs to another part: of the town to get hold of another member to sign. He then goes to the Magistrate as head of the Licensing Bench to get him to sign the transfer. Mr. Medley went on to urge that the proper course should be for the application to come before a meeting of the Committee, and then if there were two applications that body could decide. He was against, however, this hole, and corner -method. Reverting to the case

in point, Mr. Medley said lie could not | sell the lease as he could not get a | license granted to him. "Mr. Weston ) md his client," continued Mr. Medley, i "then came down and demanded pos-1 ■cssion, so not being able to sell I said:, T'o what you like.' I then took my m minee out of the bar. They then demanded the license which was in my •'■i*session. I told them that when hey liked to pay me £3O for the balance ■if the unexpired portion of the licens; they could have it. They agreed to pay this, but the next morning they broke their word and refused. They have now issued a summons against me to deliver up the license and to pay £2 damages. They base their claim under a mortgage which they say includes th'e whole of the assets—furniture, stock, value of the license, etc. If their claim is allowed it will mean that the whole of the unsecured creditors —the butcher, the baker, 'and the like —will have to go without anything, and everything will be seized by the trustees. It seems a wrong thing, but If they are entitled to it they must have it. However, it is a matter for the Court to decide, and will bo fought out next Tuesday. I have already claimed for the value of the stock, as my solicitor advises roe that the stock being a floating and fluctuating asset cannot be held under mortgage. We now come to the

PAYMENTS OF BANKRUPT TO Ills' WIFE. "They will have to be gone into. It is not quite clear. It seems*to me that it is a wrong payment. It is really a matter of law. I -don't think, pers-on-sonally, that tho payments will hold, but I cannot say outright whether they are legal or not."

A BREEZE. .. . . Bankrupt was then put under oath, and was plied with a series "of questions. '

The ball was set rolling by the "0.0.A. remarking: Regan-ding this .preferential payment: You say that your wife brought • pressure on you to compel payment. t* ■' '■ •

The Bankrupt: Yes,"through her solicitor, Mr. Robert'CooV of Wellington. Mr. Medley: What' was'the pressure. Have you any letters from himT-I' did get a letter, but I don't" fcnow-whether I can produce it now. At all events f there was an indirect threat. He saw me, and I told him that. I.could all, 1 but wojild pay a little of-itr Then I paid him £loß.' " " :■'.:.{ :./.

Mr. Hawk-ins: :Mr. eookaS'arfrfcnd of yours?—j-Nb.- -:.'.' .:.-, c] ■■-.'>■:.■•<'• K ■ Mr. Hawkins ■ persisted ini r "question, and the bankrupt exclaimed^'with feeling: | "He is no more than you are, Mr. Hawkins, ;If -yea'are";a' friend ot mine, their he'/ist""; ?':~:' -. ■• Mr. Goldwater: Were j'oip-ffot''Under any pressure from : m'e?-4l:riever received a solicitors letter from;, you iuumyllife. Mr. Joldwater: That is nofcvtfrs: point. Did you receive-a-letter from' my firm demanding' pagrffittirPMf ifliKdeiil count?—(Yes, but I cannot .raaenibcr the 1 date, j ■:y.\yr/J KO"! TiV<iißir<\ Mr. (floldwater: You lia-ve a very convenient inei&ftiifT .if&riy/how, was not my pressure moresi ifchtmrf tyour.-sivifefef-r, Your pressure Wa.si nothing a-ppTbaching her solic tor's-letteiv- : j •.',-:;( rut rfn/i-.' : Mr. .Goklwate?-:'-send MrJ Cook to:;mte to.JaskifWiifur-; ther ,timj>.—N.ftisi.r,(,; ir ,-., i VrlT .o''. iv:- : \y,ell..j3n-fliiistnhaiVio;:;bw«usE Ire '«? m*. to jne.— oir!Ms olvi account, i-.-i'.-;-;-. ;-r.;lv,v »ifi 9:'-i,n: - :--WAm.xbx FOR ' f -Wb6&Mr. Medley:', Did ymi sh>m,s# y/ni were ins6lveii,t. when v^^-Me^sure: was, brought to.bear.M.qa'niiot^f ¥ ljut; t was Jpp.e' would liiprove-, JM,-A^m9lM/wWlm-'boom. ,- '- ' , w t',,r. ." "•' Creditoh then, bogan abdutt-' the; rupt's *ijfe, was , Jpald fyij' j a't'her hdsbandVHjifcol. „; ! )1S ( ( ' ! |,' I ,;' -.,. j ' •B^knibt..ex.pJ:aiii«d 1 ' that' •!s f ,W'i'd jlierl 30s a' week for...her ser.vioes/ajm\. : if j ■had not (employed ; her.' he: n [ •Tiad''t6-pjay.!jt\vicc",infi v sum' yi,,i'^u^sittpf M P- I " ■■■■-; "DON'T! RUB trmmHi STllOiSGjU''-*

. jVIp. .-Gold water asked' 1 Bni' w.hl>tber' it •was usuajl for, a husband £b (1 ' .jjfaV'ifcfej wife-few doing. - Piqued thy tliis- ffld : tyafefcrirflt s replied.:. UE r y'ou.'rfre !r a''nfan aVall'Tnsrae you.know that'l , anT'ebMng; > lJii.t''b'f-fTiis 7 hotel witth on'ty : t,#6 ! dhitF' Don't yoti rub it 'iii 'loo 'strong . f) 'r'-''' ! At thisithere.\V ; e'r T e"'fui;'tnt i r s.a'llrfts', a'n'd 1 the bankrupt asked' Ma 1 . : -G-bl3\vale*'if' -lre : expected aim.to turn his. wife out of the hotel witji nothing. '. >: '• ' "•"■'■'Win; Mr. H4wlcins; 'Wha.t Wher people's' \ylves? .. ■ .' "■[ '■.-' ' '"' Mr. Johnstone' agltin'st' :tilie,^confitimt,:re<irimii]atio'ng.' r 'Tiiey 'had; had enough of that'. 7 r '■']■■'' _"-'■* *'' '- ' ; The' baiila;up,t/ > I'..d9n-t ; likJ'triese'Vih' siriuation-i. I cqu]d 'make.'Mf.'GbldwaW look a bit different' : if- .l' : SvisKe'd!' : - ;! iEf : if' were not jfor him and another firm that we're persecuting .jnje,,. business, t would'have 'done 'Getter;! ; -'■ - : A i PASSAGE AX ARMST ./■TOT, I ■/ f/j) , Jn the course of further cross-examina-tion bankrupt,alleged that,;tluj3ur,niturc and stock] the. purpose cjf'sale.-,. ..' ._.'. ..,,.,i\ ~'!„-.'..'.-...'',.. Mr. Johnstone',,also.c'QmpL|iuo'4,.that bankrupt Iliad.had no [means .o£lasc'er,tajn- ■ ing■ the 1 Vjilue placed;ojir the'stiJfJi.'..,!'.'He, had asked for-a list of .tlje. ?topk', .Jjiji had'. 'met with ;i' refusal..,'..' „y T '„., h i.,".., Mr.'Goljlwatqr::., : You.can. h.ax'o.# list.of the: sto'ckjnowiifyou like... ,'(.., ', '...■;•.; ' Mr. Johnstone: .But .why 4kl.ypu',iibt. give it to jine, before? •-... ~..-, ...r-.- ',. ... i Mr, G'oidwatcr rejoined. h,tt, could have got it had he asked fpj.it.',...'. % ... ; .. Mr. Johnstone.:,, Do..you- dany haying been askoid for the.-.e^qek.Sheets.? ,'.,•,. ■.. Mr. Go}dwater : :.. .1 .thoUglit.li,e, F wante,d.. the, value's only. .'. -. : . All '.tlve.-stock said .'to be there was not.onthe.,pn»mises,,anyhow. : . -. ....'...,,'.

fix this Crowd:" ■•■'•-■- ' Bankrupt: That-is what yOU rfay. Mr. Goldwater: Well', lily word oifglit to be taken before yours.—Possibly in this crow«l, but not amojigsf'Sny ojiheiiT,' Touching on a certain answer by the bankrupt; Mr. Hawkins exclaimed:* You don't want to tell us. Bankrupt (sarcasticsWl/); ''Tf&t'ia so. Put it your way .Mr. Hawkins._ It will not hurt me. ' ""'' " '''■ '':■■■■

In answer to a question; bankrupt said that.in all he paid £7 a week in wages. His wife would have walked out had she not got her £3 a week.

Mr. Goldwater: Can you tell us what amount of goods you purchased since we stopped your credit? —T cannot. Mr. Medley: Why did you incur a liability witl'i Messrs. Hawkins and. Smith a week before the first meeting- of your creditors?!—! knew I was a bit shaky, but did not, know hew much.

Mr. J. E. Wilson: Did you expect that you could pay 20s in the £. Bankrupt's solicitor strenuously objected to the question. No Court of law would, he said, make a man in bankrupt's position answer a question which might incriminate him.

Mr. Medlev: He might simply answer, No. Mr. ■ T ohnstone: But he is on his oath.

Tuthii! then said that acting on his solicitor's advice he now refused to answer the quest'on. Mr. Goldwater: According to his statement he paid £157 to his wife. According to the figures he gave to us at the meeting of creditors he paid her £217. Mr. Johnstone: That statement is a rough thing. "We are not bound by that. You obtained that from my office the other day. AN INTERCHANGE OF AMENITIES. Mr. Goldwater was proceeding to rais«

a further point, when bankrupt inter-f jected: lam not telling lies. I am not in the habit of telling them, even though I am not a Jew, Mr. Goldwater asked him to whom the remark replied, whereat the bankrupt remarked: ''To you or Jimmy Hawkins! You are always very honorable!"

Further legal argument ensued as to whether the bankrupt should answer a certain question, and later on in reply to a question the bankrupt said that <ho could not produce his cheque book and another book, as he had packed them away.

In replv to Mr. lirookman (Ilatrick and C 0.)," Tuthill staled that he only made one payment to his wife after and 'betwee nthc time of the last meeting of his creditors.

A statement put in showed the following payments to have been made by bankrupt to his wife: —August 13, £IOB, 20th, .£2O, August 28th, £4l os and September 3 £4B.

Mr. Brook-man: It seems a very peculiar thing to me that bankrupt stated that his average takings were £25 a week, and yet within a short time, was able to make all these payments to his wife.

"I DECLINE TO ANSWER." The Assignee: You gave Mr. Smith a cheque for £ls. Did you know at the time that it would be dishonored ?

Bankrupt: I decline to answer. This refusal led to a prolonged argument as to whether Tuthill was within his rights in refusing. In order to bring matters to a head,' Mr. Goldwater remarked: The only thing is to have a public examination. It is only wasting our time here. I will move n resolution in that direction.

Mr. Johnstone: To avoid that, if you put the questions to Mr. Tuthill .he will answer them. Put the questions again. Mr. Medley then questioned the bankrupt about the cheque. Tuthill replied that he gave the cheque to Smith, on the understanding chat it was not to be presented until there was money in the bank to meet it. Mr. Medley then asked him if he knew that he could not pay his creditors in full when he ordered the goods from Hawkins and Smith.

The bankrupt replied that he did not. Mr. J. E. Wilson stated that his books should have disclosed his position. Another question. to .which- objection had been previously raised was- next put by the Assignee.. If his takings were only £25 per week, how could he,-asked Mr. Medley, expect to be able, to meet fresh liaibilities? .. ,- -. .■— -

Tlie Bankrupt: .-For the reason that there was a small balance of my lease to go with:the possibility of. a fresh lease, and alsOithat I had to ,-keep. the. hotel- going or liwould lose my license. It may ; be sneeried at, but so far as my knowledge it |is a most satisfactory. answer. On behalf of th,o Public- Trustee, Mr. Weston Explained tluit finding that there was £l5O rent owing, the only course open to the. office .was to put-in the bailiff, j ... .-;.',.'-. ... LEFT IN THE .LURCH.,

' Mr. Mbdley .then said -that '■■ it seemed that the 1 unsecured creditors were going to be leftj in the lurch, to which Mr. Weston- rejoined that eVen 5f the assets had ! realised Hvhat Tuthill ;"said he valued '.. them, at there would'liaVe still been 110.thing left for the unsecured' Creditors. [^.. ; Accordmg to Mr. Johnstone, security ,was taken over the'stock: arid the license,-|-and;-if tlfcso wcref eVcluded'"thure would |-be something left for the Unsecured creditors; " ■ I '':■■■!'! *.'.•-''-:■' •'■-.

- '■ Argument then took -pßico" ai to whether the ifurniture 'had- fetched it's ' full worth.' ! ' • !-: •'•■■,:■■■ "I think," said Miv Hawkins! that we got a" gobd ; pi'ice-i (£2&0) 'for tlie -furniture. ' ' !■ ' ■'."(-. -'•-.-. ,- 'j >' !' The Bahkriipt; differed;' ' -

\- Mr. Hawkins: T.AviQuld" .not' like to give £2oo| for it mow. ■. ;, • ?. Bankrupt: But then you are always •looking for bargains.- : V ■<> '■' .. : ; ;1 ' o ". .TJVVO" RESOLUTIONS. ... The-meeting then, decidedon, the mo- ■ tlou of Mr. Goldwator, seoojnded by Mr. Br.ookman, that the, Assignee k em.powered to take legal advice as ,to whe-j.-tlicr the .preference payments "made to Mrs. Tuthill would legally hold.,' , fA, further 1 motion 7 .Was' carried'on the ;',inotian. of Mr.; seconded by Mr. Smith, that the" Assignee" seek arl,.viee. as regards the stock, the unexpired portion ,of the license, and the value of vtho insurance premiums. >' -The.'meeting then adjourned sine die.