INSOLVENT DRAPERS.

Taranaki Daily News, Volume LVII, Issue 28, 23 June 1914, Page 7

INSOLVENT DRAPERS.

PUBLICLY EXAMINED.

MOIU3Y AND MOORE, OF NEW PLYMOUTH.

A public examination in bankruptcy of Awrey and Moore, of New Plymouth drapers, was opened in the Courtjhouiie yesterday before Mr. A. Oooke, S.M., as t'he Registrar of tho Supreme Court' in hanlonipscy. Mr. 0. H. Weston appeared for the District Official Assignee, Mr. A. H. Johnstone for the bankrupt, Jasj. 01iarle<3 Morey, and Mr. D. Hutdien for the bankrupt Francis Moore. MOORE'S EVIDENCE.

Francis Moore deposed that. the balI ance-Micet of the firm for 1911 produced i was 5n the bankrupt Morey's handwriting. He assisted his partner in stocktaking prior to making tihds up. I The firm took stock every year, in Sep- | teml>er, up to and inclusive of 1912. They made up a balance-sheet each year nt the stock-taking. He wou'd be cognisant of fchfl contents of each balancesheet, and would accept them as th» balance-sheet for the firai. He so 'accepted tlhe balance-sheet produced, but made some s'ight alterations in it. The statement juvporting to be an uncompleted balance-sheet in 1912 was in j Morey's handwriting, but the addition of the liabilities was made by ;witne*3s. The pencil figures "£163 debit" was in his handwriting 1 . When that sheet was made out be realised that the firm had gone to the bad to the extent mentioned. He took Btock ,on that oo casion when Morey was away, and went into the figures with' him when lie i returned when the debit mentioned was discovered. The business was conducted on practically cash lines. The firm had one account (with the Bank of Australasia.) until about three months before they were compelled to file, when, on (the suggestion of the bank teller, a I separate account was opened. The i books of the firm iwisre kept principally by Morey, except when the latter was away, when v>;tnesg kept them. During | the last five years witness did the j travelling for the firm, and opened , branches in Waveriey, Inglewood, Ha- ] wera, Kawaia andi Waitana. From j September, 1912, witness was travelling j for somo time doing business, in various tewna He was in New Plymouth when adjudicated. He cjose J the Haiwera business about ten days before the firm J was adjudicated bankrupt. When he I was managing the Hawera -branch he I came to Niv Plymouth about once a I fortnight. When he was last in I Hawera he fluent about sixteen months. It was in November, 1912 that he opened in Hawera. for the last time. The' [ purchase of the Davy-Richardson bottle shares was agreed to Iby witness on the suggestion of 'Morey. He was also consulted. with aegard to the purchase of a section at fitzroy, and this was paid for out of the business. This also applied to tfee purchase of the Building Society shares in about 1901. Tlhe subscriptions wer.: paid out of the business. The statement handed to the District Official Alsfiignee when the firm ■was adjudicated was in witness' handwriting, and was drawn up by him. He was not sure if Morey read it or not. Referring to a statement that Itlie turnover of the New Plymouth business had gone back £2OOO in twelve months, witness said t'li-it ir„ making that statement it was based- on the fact that the businesses at Hawera and New. Ply-mouth between them only turned over £4OOO in •the twelve mcntlie, and as the Hawera business turned over £2OOO of this and the New Plymouth business alone had previously turned over £4OOO, he therefore made a rough calculation that the New Plymouth business had gone back £2OOO in tlie twelve months. He made this calculation anywhere between six weeks or three months before the firm filed. He then told his partner what he had found, but could not nwnember what Morey said. Tliey did not decide on any dl'ange of policy in the business in view of what they had found. He had no suspicion that his partner was drinking to excess until just before he ltft Hawiera tnl came back to New Plymouth. Ref< rring again to the written statement, the witness said that the Bank used to givo them an overdraft of £OO or £BO, and this was stopped, but he could not say with certainty when this was stopped, nor who told hint it was stopped, lie thought [ it . was the teller of the Bank. 1 He waß fully conversant with the books of the firmi which correctly Showed that between September, 1911 and September, 1912, he had drawn £l3B 14s 5d in addition to £3 per week which he drew as well. From that date to the date when the firm filed, he drew £3 per weak from the business, and in addition, £213 2s lid. Except on periodical occasions, witness had no control over the New Plymouth cash after he opened the Hawera branch. On these occasions the entries in the books were in his own handwriting. "When the transaction with Mr Stanley Smith took place, witness was in New Plymouth, but had ■othing to do with it beyond signing a promissory note. The position was that Morey had overdrawn his account with the firm, and to enable him to rcr pay the money, he and Morey then made themselves liable to Smith. When he was in New Plymouth on one occasion, witness consented to Morey's using the firm's cheque for £43 to pay off his own personal loan to enable him to raise a fresh loan for the firm. Morey subsequently told him that negotiations had fallen through and he understood that the cheque would be destroyed. He eould not say what happened to the cheque. A cheque for a similar sum was subsequently found in Mr Williams' possession, but witness could not say if it was the same cheque. He did not loiotv; that Wiliams had been approached in the matter, although Morey had previously borrowed the money from him for the firm. He did not subsequently sign a cheque for Williams. If there I were any cash shortages during the time tie was in Hawera, he knew nothing 1 about them. When he kept the book, he generally showed any cash shortages. Witness was a bachelor, and had no one to support during the last 18 months except himself. When at Hawem, he stayed in an hotel paying 25s a week, and when he WS3 at New Plymouth, he stayed with his aistcr, but had his meals in town. He nad perhaps given his sister about £lO, perhaps not more. Four shillings a day would cover his expenses for meals, £4O to £SO a year for clothing. His life was not insured. During the time he was in Hawera, the (inn paid half his hotel expenses. Qualifying the statement as to what his hotel expenses were, he said they were. £2 10s per week for six or seven months, and for the re-/t of the time 25s per week. Some of the incidental expenses were clv.iTged to the. firm, and some he paid -himself. They cosit him about £1 10s or £1 15s per week. He could only explain tile fact that the cash balance appeared in the balance sheet as £2O 8» 2d and in the day book as £l6O 18s 2d by the fact of t'h-ere having been « number of 1.0.U.'s in the till. Tlie date he referred (<> was September 7, 1912. Some of tticse 1.0.U.'s might he his, and some his partner's. To Mr lluteheii: The amount of the r.O.U.'s in the till would be included iD the drawings of the partners. Of the

| amount of £213 10s charged to him as drawings the sum of £47 19s' was actually drawn in the year previous to that in which it was charged up. Before lie went into business lie wis working on a salary of £2 5s per week, an.i while lie was in business he did not save any money. He suffered from ill-health and this cost lom much-money for tonics and health trips; The firm paid his rail way fares when travelling oil business. .

To Jlr Weston: In the last eighteen months he tool: no health trips, nor did he see a doctor. Other hca 1 "' wsimii, tive measures had cost him .about £lO per annum. MOREY'S EVIDENCE.

James Charles Morey deposed tli.it the balance sheet of September, 1011, was in his hand-writing. He considered it correct nt the time. The balancesheet of 1912 mils also in his writing, except the pencilled figures referred to

by Moore and the figures shewing the

liabilities'. Referring to the "£l(i.'l deficit," (he said that Moore had told him there was a deficit of about that amount on the year's working. Witness ■ accepted that statement. He knew nothing of the "sundries account," except that it was mentioned to him by his partner. There was only one account at the bank until within three months of the bankruptcy. The New Plymouth books were i:,ept by both partners. Neither one nor the other kept them exclusively. The bottle shares, the Fitzroy section, and the Building Society shares -were held as investments with the consent of botlh .partners, and the outgoings on each were paid out of the businessi. He read over the written statement made out by Moore just before tihe meeting, and found nothing in it that lie wished! to alter, nor was there anything now except the statement as to tihe shrinkage in turnover of £'2ooo, whic'h he thought was too high. After Moore went to Bawera, he told witness once or twice that the New Plymouth trade was going back. Witness knew this himself. At the timg wh;en Moore mentioned the amount of the shrinkage as he assessed it, witness took no steps to check his figures, nor did he disagree with them. While the H'awora business was open, Moore cam,e to N«w Plymouth on four or five days in every fortnight, as witness was frequently away from the shop. His absence was caused partly through illheal tihi and partly through excessive drinking. His partner must have known that he was drinking excessively at tinv» during the last eighteen months. Between October 1, 1911, and September 30, 1912, he drew out of the firm's money £340 including his salary of £3 per week, and from October onwards' £77 Is 9d, as shown in the ledger. He received £135 from Mr Stanley Smith as the proceeds of a on the firm's securities. Part of the money went in redemption of his own 1.0.U.'s to tfhie firm and part into the business. BRIS£ ALTERCATION.

Mr Weston then closely questioned the witness as to what became of 'the £133, and could get no satisfactory answer.

Witness remarked that he was endeavoring to think "vhat had become of the money. Mr Weston: Now, Mr Morcv, I havo allowed you every leniency, but I must insist on you giving me a frank answer. Can you point to a single entry in the books which indicates that-this'amount was paid into the business?—lt was paid into the bank. Then 'ensued a consultation over the books between the solicitor.-i, the D.O.A. and Mr Hugh Baily. Mr Orooke, S.M.: What was the money borrowed for?—To'pay some 1.0.U.'5.

Mr Weston: Whose were they?—Min,e. Are there any entries in the books to support your contention that part of the money nvas paid into the firm's account? —As, far a-s I remember, it was.

Now, Mr Morey, be frank, and say that you had the -money. —I cannot sfiy just at the moment what became of it. But you must be able to say so.— Well, I will say I had it, under protest. You can't do that, Mr Morey.—Then I can't say so at all. Very well, then, I will leave it at that. Further argument ensued as to the 1.0.U.'s 1 , and Mr Weston warned tlio witness against prevarication. Witness finally admitted 1.0.U.'s to the firm amounting to £lsl 2s, which were not included in the ledger balance of £77 Is 9d.

Referring to the cheques for £43 held •by Williams he siiid that on March 4 he borrowed £4O from Williams, which had never been repaid. The proceeds went to pay a 'Warehouse bill.

MORE CONFUSION. Mr Weston (after lengthy cross-ques-tioning) : It is hardly to remind you, Mr Morey, that these things can be traced, and by actin« as you sure, you are wasting time and doing yourself no good. This cheque was givien to Mr Williams in November. Now, didn't you get the cash then? —STes. What did you do with it?—As far as I remember, we banked £lO. then £-29, and then £6.

Have you made any attempt to preI'ire yourself for these enquiries, Mr Mjorey?—No. Did you go to Mr Williams for the firm or yourself?—l can't .say, Partly fo r the firm.

Oan you show any entries in the books about it? —Not unless I go through them a,t home. Mr Wieston intimated that lie wttuld ask for an adjournment on this point, eo that witness couldi go into it. After the witness had been further questioned on other points, Mr Crooke asked why the witness had not prepared himself, pointing out that the case had been adjourned once already. Mr Johnstone explained that the notice served on .bankrupt merely generalised, and did not refer to the matters now under review.

Continuing, witness said lie was living with his wife and son. lie had two 80ns, both earning their own living, and making "contributions to the household expensesl—he could not nay how much. The IK-use Wongjed to his wife. During the last eighteen muutlis lie had been contributing £3 10s iper week to the household expenses, Tlvj insurance and rates were paid by his wife, who had another property besides the house. He paid for his own clothes, which -would cost about £•'>.. per suimnn. 11' had a life insurance policy, which cost him £l7 (is Sd per annum. lie had no private banking account or books.

AN ADJOURNMENT. Mr Weston: Oan you show finy justifiable expenditure other than tho'se'mcutioned? —Not unless T have time to go into the matter with Mr Bnily, At tiliis ipoint an adjournment was granted for a week, to enable bankrupt to bring information on Smith's loan, Williams' cheque, audi cash shortages.