STOREKEEPER’S FAILURE.

Taranaki Daily News, 31 January 1922, Page 6

STOREKEEPER’S FAILURE.

EGMONT VILLAGE BUSINESS.

LARGE AMOUNT INVOLVED. MEETING OF CREDITORS. A meeting of creditors in the estate of Victor ,F. Hurlstone, storekeeper, of Egmont Village, who was adjudged bankrupt on January 21, was held at New Plymouth yesterday. The deputy official assignee (Mr. J. S. S. Medley) presided over an attendance of about fifteen. Mr. R. H. Quilliam watched the interests of bankrupt. Bankrupt’s statement showed unsecured creditors amounting to £1644 18s sd, secured creditors £507 (estimated value of security £650), making a total of £1644 18s sd. The stock in trade, as sold to A. O. Powell, was set down at £260 2s 3d; book debts were estimated at £650; furniture, £5O; contra from security, £143 Is; total, £llO3 2s 3d; deficiency, £541 16s 2d. The secured creditors were Harold H. Olson, New Plymouth, retired farmer, £257; J. McNeill, New Plymouth, storekeeper, £250. The estimated value of the securities was £650.

The list of unsecured creditors was: J. McNeill, New Plymouth (surplus over security), £5B; T. Borthwick and Sons, Waitara, £BO ss; Newton King, Ltd., New Plymouth, £2lB 14s 2d; Newton King, Ltd., Inglewood, £32 ss; Hodder and Tolley, Hawera, £113; Masters, Ltd., Stratford, £6O; Farmers’ Co-op., Stratford, £llB 12s 4d; Bond and Bond, Auckland, £ll2 7s 7d; Brisco.e and Co., Wellington, £l2l 6s 6d; Bellringer Bros., New Plymouth, £3O 18s 9d; A. B. Gamblin, Inglewood, £l2 Is; Warnock Bros., Auckland, £9 9s 6d; P. E. Chapman, Inglewood, £ll 14s 9d; C. M. Caldwell, Inglewood, £l5 19s 4d; S. Teed and Co., New Plymouth, £l4 0s 9d; J. Avery, Ltd., New Plymouth, £3O; McLeod and Slade, New Plymouth, £4 Ils; A. E. Surrey, Inglewood, £l9 14s 9d; K. Dan, Inglewood, £3l 12s 3d; E. WPidgeon and Co., Christchurch, £l5; Nestles Milk Co., Auckland, £lB 17s 9d; H. Wells, Inglewood, £5 19s 9d; A. S. Brooker, New Plymouth, £4 17s 6d; Goldwater Bros., New Plymouth, £1 8s; Boon Bros., New ’Plymouth, £2 15s; Queensland Insurance Co., £ll 12s 9d; New Zealand Wholesale Distributing Co., Palmerston North, £36 9s 9d; Taranaki Herald, £l3 17s 7d; P. and O. Manufacturing Co., Wellington, £l6 14s; Garlands, Ltd., Auckland, £27 10s 7d; Taranaki Agencies, New Plymouth, £8 ss; J. McLean, Inglewood, £8 12s 9d; Taranaki Daily News, £1 4s; Purity Products Co., £lo 17s; Moa Dairy Co., Inglewood, £l6; Lealand Bros., Inglewood, £29; M. Anstis, Wellington, £11; J. P. Larsen, Inglewood, £1 8s; Radley, Ltd., Pukekohe, £5 Ils 7d; Pacific'Manufacturing Co., Auckland, £2 14s 9d; Mrs. J. Hurlstone, New Plymouth, £300; total, £1644 18s sd. BANKRUPT’S STATEMENT. The personal statement of bankrupt was: “I commenced business at Egmont Village on August 1, 1919, having purchased the store from Mr. P. Burrows, to whom I paid £5O deposit, leaving a balance of £250 as first mortgage at six per cent. My father lent me £l2O at six per cent., payable on demand, this being practically the only money I had to commence with. I purchased stock and fittings from Mr. Burrows amounting to £l4O, of which I paid £BO as soon as stock sheet had been extended. The balance I paid as soon as I possibly co uld^./prob ably a month later. I also purchased £l3O worth of stock from Messrs. Burgess, Fraser and Co., to whom I paid £7O on account on September 20 following.

“My business increased considerably each month for the first twelve months, commencing at £l3O for August, 1919, to £9OO in August, 1920. About this time I commenced going in for big lines such as seeds, manures, benzine, etc. From then on my book debts seemed to be a drag on me, and the merchants would not wait for my money. Messrs. Newton King, Ltd., were my biggest creditors, as I owed them £3lB. My wife saw me out of the difficulty by lending me £3OO at six per cent., payable on demand. I seemed to be doing pretty well until about March, 1921, when I began to feel a pinch again, so I decided to sell if an opportunity came. About that time’ I happened to meet a Mr. Kitt from Dannevirke, who offered to purchase my business at £BOO stock, and fittings at valuation. I practically agreed to this. On balancing everything up I was showing a profit of £4OO, but Mr. Kitt and I did not come to terms, through some disagreement. Prior to this, in November; 1920, my wife paid my father the £l2O owing to him by me, making a total of £420 owing to my wife.

“During last winter, 1921, seemed to be my downfall. I had already spent about £4OO on necessary improvements on property, and purchased a motor lorry from Messrs. Newton King, Ltd., at £2BO, paying £l5O deposit, balance for one year at 8 per cent. I afterwards sold the lorry to my brother at £230, of which he paid me £lOO deposit, balance to be reduced by doing my carting, which now leaves a balance of £6O. In July, 1921, I was being badly pressed by merchants, who would not extend me any further credit. In desperation I went to Mr. J. McNeill, who allowed me c xlit, with a security on property. I now began to realise my best proposition was to sell out, so I placed the property in the agents’ hands. In December last I had several offers which were considerably below that which I was asking, but finally accepted Mr. Powell’s offer of £650. I estimated my stock at about £250. I then discovered I would not be able to pay 20s in the £, so I at once consulted Mr. Quilliam.” TWO PAYMENTS. It was stated that after bankrupt consulted his solicitor a meeting of creditors was called, and he was then asked to file his petition. The bankrupt was put on oath and questioned by the deputy official assignee. Regarding the deposit of £2OO which h» received from Mr. Powell (purchaser of the business), bankrupt said he disposed of this sum by paying £5O to Newton King, Ltd., and £l5O to his wife. Both payments were made on December 24, but the cheque his wife received was not payable till December 27. Mr. R C. Bellringer: “Why didn’t you put the cheque for £l5O through your own account ?”•—“I did not think it was necessary.” “It wasn’t for the reason that there were too many bad cheques floating around?”— “No.” “Were there none of your dishonored cheques in existence then?”—“Not that I was aware of.” “Has your wife a banking account ?” “A Post Office account.” “And the money was paid into that?”— “Yes.” “How did you come to pay Newton King, Ltd., and not the other creditors?” “I was in the office and Mr. King asked me if I had any money. I told him I had £5O, and he asked me to give him a cheque for it, which I did.” “Mr. King did not force you to pay this?”—“No, I thought I could pay all my creditors.” “At thf time you made

you did not know you were insolvent?”— “You know w>w, do you, that you should not have made that payment to your w jf e ?”—“I thought she was entitled to “But she was not secured?”—-“No.” “When did you first find out you were insolvent?”—“On January 16.” The D.0.A.: “It seems to me that these two payments to Newton King and to his wife were preferential payments. At anyrate, the £l5O received by his wife will have to be repayed.”

NO OFFER TO MAKE. The D.O.A. (to bankrupt): “Has your wife spent that money?”—“Portion of it.” “What sized portion of it?”—“I can’t say.” “When did your cheques first get dishonored?” —“Four months ago.” Mr. Lealand: “Were any of your cheques dishonored in 1920?”—“Not that I am aware of.”

The D.O.A. was proceeding with further questions regarding bankrupt’s payment to his wife when Mr. Quilliam interposed that if Mrs. Hurlstone had to. repay the money he had no doubt the position would be all right.

There was a general discussion concerning the realisation of the estate. Book debts, it was stated, could be written down to £350, and the total assets were estimated at £7OO. The D.O.A. said he expected that the bankrupt’s debts would probably be £l7OO when everything was cleared up. Asked if he could make any offer, bankrupt said he could not, except what was in the estate.

Mr. Healy (Newton King, Ltd.): “How do you account for losing all this money when you were doing such a big business?” —“Expense in delivery, interest on book debts, and having so much money in the business.”

“Were you selling stuff at less than cost?”—“Certainly not.” “Well, where were your losses?”—“On the delivery. I found it out after I was delivering it out too far and not taking enough stuff.” “Why did we stop your credit?” —“That should be best known to yourselves.” Mr. Healy explained that his firm agreed to continue to supply bankrupt with goods at a certain period if he would close his books and go in for cash trade. At that time Hurlstone only had about £4OO on his books. He did not take the step advised.

Creditors were of opinion that the es tate Would not return more than 6s to 7: in the £.

Mr. Quilliam: “The usual thing in the case of a young man in a business that he could not manage.” Going into the question of the security given to Mr. McNeill by bankrupt, Mr. Bellringer expressed the opinion that Mr. McNeill had been given preference. Mr. McNeill: “He owed me nothing then to give preference for. The security was given for goods supplied. We credit, like you.”

Replying to further questions, bankrupt said he had disclosed all his assets. He did not think his father was in a position to help him. PERSONAL EXPENSES. Mr. H. R. Billing (representing several creditors) : “What moneys did your wife get?”—“l allowed her £3 per week, out of which she paid for goods received from the shop.” “Were there any other payments?”— “Once I paid her a half year’s interest.” “Did you ever provide her with money for the races?”—“No.” “As a matter of fact you were not paying your debts as they became due?” —“I was not in a position to do so.” “Were you often away from the business?” —Probably once a week.” “How did you come to pay a cheque to King’s?”—“They rang me up and told me to come in.” “You told them you had a cheque for £5O ?”—“Yes.” “Did z you tell them about the other cheque for £150?”—“No.” “Did you have that on you at the time?”—“Yes.” z A creditor: “Have you ever played billiards ?”—“Yes.” “Have you backed yourse l *?”—“Yes.” “I expect you lost sometimes?”—“Yes.” “How did you pay those debts?”—“By cash.” “Did you ever back yourself for £1 a game?”—“No.” z “Did you make any heavy losses at the races during Christmas?”—“The three days cost me about £4, expenses and everything.” A creditor: “He got off lightly.” It was eventually decided, on the motion of Mr. Bellringer, that the meeting be adjourned to a date to be fixed by the deputy official assignee, and that in the meantime a thorough investigation of the books he The mover said it seemed that Hurlstdne had itackled something he knew very little abojjt. The D.0.A.: “There is no doubt about that.”

The meeting also gave the D.O.A. power to take legal advice as to the question of whether payments made by the bankrupt just prior to the filing were preferential, and also expressed the opinion that the sale of the business to Mr. Powell should be completed.