PARTNER OR CREDITOR?

Taranaki Daily News, 20 December 1922, Page 2

PARTNER OR CREDITOR?

BANKRUPT PLUMBER’S AFFAIRS, (ESTATE TO BE SOLD. The right of a solicitor, representing a man who had put a considerable amount of money into the business but who denied a partnership, to crossexamine the bankrupt as to where this •noney had gone, formed a good part of the discussion at the meeting of the creditors in -the 'bankrupt estate of ■ (lodfry Donald Magnusson, plumber juf ! New Plymouth, which was held at tlie 1 ortiee of the D.O.A. (Mr. J. S. »S. Med- ■ icy) yesterday afternoon. Mr. A. R.. ! Standish, who appeared for J. Camp--1 bell, the man who had put the money i in, wished to examine Magnusson concerning how it had been spent, but, as J.ie Crown Solicitor (Mr. C. H. Weston) was considering the partnership question, also whether Campbell’s proof of debt could be accepted, Mr. R. H. Quilliam (for Magnusson) questioned Mr. Standish’s status at the meeting, which was finally adjourned sine die to await Mr. Weston’s opinion. The statement of assets and liabilities showed unsecured creditors totalling £675 4s 9d, and another liability of £25, making a total of £7OO 4s 9d. The assets were shown as stock-in-trade, £249 9s 8d; tools and plant, £ll7 2s Sd; book debts, £147 IBs 3d; cash in hand, £27 17s Id; and furniture £5O, making a total of £592 7s 8d and leaving a nett deficiency of £lO7 17s Id. The creditors were Ballinger and 'Company, Wellington, £6O 2s 8d; Plumbers, Ltd.., Wellington, £221 Us bd; Jenkins and Mack, Wellington, £26 1.2 s 3d; Smart Bros., New Plymouth, £BO 12s 7d; Jones and Company, Wellington, £lO 10s 6d; Bellringer Bros., New Plymouth, £49 9s 8d; Percy Douglass, New Plymouth, £lO 18s 3d; F. Sykes, New Plymouth, £lO 17s 9d; George and Julian, New Plymouth, £lB )3s (id; J. Abbott, New Plymouth, Ils •2d; L. T. Watkins, Wellington, £2O 12s 6d; New Zealand Acetylene and Hardware Company, Wellington, £9 19s 3d: New Plymouth Sash and Door Company, £2 3s 8d; J. Swinson and Company, Ltd., Wellington, £4 12s 6d; J. Nodder, New Plymouth, 14s 6d; Oliver and Fahey, New Plymouth, £5 12s; E. Lobb, New Plymouth, £1 ss; F. Lobb, New Plymouth, 2s 6d; J. B. McEwan and Company, New Plymouth, £l2 12s; Smith and Smith, Ltd., Wellington, £34 6s 6d; Boyce and Congreve, Christchurch, £l4 16s; National Hardware Company, £4O 12s 10d; Trade Auxiliary Company of New Zealand, Wellington, £3 16s 9d; Salvation Army, New Plymouth, £3 15s; Drs. Home and Wade, New Plymouth, £1 17s 6d; New Plymouth Gas Company, £23 Is; Provincial and Suburban Christmas Annuals, Christchurch, £6. The other liability was a loan from B. J. Hanlon, Gisborne, about July, 1921, of £25. BANKRUPT S STATEMENT. "I took over the business of Magnusson and Milne on November, 1921,” said bankrupt in a written statement, “when the assets, allowing for bad debts, exceeded the liabilities by £lOO, which Mr. Milne and I divided. My share, was taken out in stock and plant and Mr. Milne received cash. 1 saw all the creditors and put the position before them, and they were quite willing for me to carry on. The recovery of bad i debts and the sale of my house gave ! me a further £5O. Mr. Campbell startI ed to work with me on November 26, 1921, and, in December, 1921, put £lOO into the business as a loan to me. He lent me a further £5O on January 6 last, and at about this time he said he would start in business on his own account, when he had picked up colonial methods. Nothing had been said up till then about a partnership. On March 4, Campbell brought in a further £lOO, for which he had cabled Home. I told him I would not take any more from him on a note of hand, and it was arranged that we should form a partnership as from the date of the first loan. We drew up a small agreement, which both of us signed, and, on his suggestion, we arranged to carry on in my name. We carried, on under this arrangement until November 30, when, on discovering the financial position of the firm, Campbell demanded the return of his money. I explained to him that this could not be done owing to our partnership, and, on his threatening proceedings, I called a meeting of the creditors. This meeting was held on December 8. The meeting was in favor of an assignment being effected, but, as Campbell objected to this, a resolution was passed requiring me to file. / “I feel satisfied,” the statement concluded, “that an assignment would have been in the beat interests of the creditors, and very much regret that Mr. Campbell’s attitude has forced me into bankruptcy. The creditors at the meeting were Messrs. F. C. J. Bellringer (Bellringer Bros.), Warren (Plumbers Ltd), George (George and Julian), and A. Smart (Smart Bros.). CREDITORS’ INQUIRIES. Light on the position of affairs when Milne went opt of the business was thrown by Mr. Quilliam, who stated that bankrupt and Milne had not kept a proper schedule of unpaid accounts, and Magnusson had afterwards had to pay more accounts incurred during that partnership than he had thought at the time were owing, while he had also had to complete some work. ‘ Mr. Bellringer inquired what had become of the money which had been paid into the firm by Campbell, bankrupt replying that the bulk of it had gone in wages. Seme of it had also gone in nay”ing old accounts. He also said that quite a number of jobs had had to be done again. An attempt was made to ascertain the number of jobs bankrupt had had during the past twelve months on which he had loet money, Mr. Warren pointing out that he had received about £6OO worth of goods, and lie must have received some returns for these goods. However, they could not do much until they had examined bankrupt’s trading account. In answer to Mr. Standish, Magnusson swore that the whole of moneys shown in the household account in his books were his «ole drawings from the business. He had not drawn any other money whatever. Mr. Quilliam said that the position of Mr. Standish at the meeting was one for the other creditors to consider, as their interests were diametrically opposed. If Campbell was considered as | a partner that would materially alter the position as far as they were concerned. Mr. Standish said that if the Crown [ Solicitor’s opinion was against Camp-

bell’s proof of debt, and he said that Campbell was a partner, he wanted the right to examine Magnusson, and, if he could not do "that at a later date, he wanted the right to do so that afternoon. Mr. Medley said that he had not rejected the claim in the meantime, as he wished to see what the position was. He -thought it undesirable to go further into that matter until Mr. Weston’s opinion had been received. Mr. Bellringer said that Mr. Standish’s attitude was one of “Heads I win; tails you lose,” but Mr. Standish said that if his proof of debt were admitted everything would-be all right; If, however, the proof was rejected hi wished to examine Magnusson on oath with a view to further action. Bankrupt, he said, had got money from Campbell, a young innocent man from the Old Country. Mr. Standish again asked, if Campbell’s debt was rejected, would he be given the opportunity of examining bankrupt? If not, he wanted the right to do so that afternoon. Mr. Quilliam said that if the proof was rejected, Mr. Standish had the right to bring his case before the .Supreme Court and apply for the admission of his debt. Mr. Waning questioned Mr. Standish’s right to be there, saying that he had encountered similar positions before, and he considered Campbell a partner. Mr. Quilliam said that the position was that there were two parties at arms length and on the verge of litigation. It was not the thing for parties abo,ut to go to litigation to attempt to procure evidence against each other in a place like that. Mr. Standish merely wanted to obtain evidence to establish his proof of debt. Mr. Standish said he was there as a creditor. His proof had not been rejected. The discussidn was here cut short by i Mr. Bellringer moving that the meeting be adjourned sine die pending the receipt of Mr. Weston’s opinion. This was carried, Mr. Standish asking that his vote be recorded against the motion. It was decided to sell the stock, plant and tools, Mr. Smart being appointed supervisor in the estate.