'CAREER BLASTED'

Auckland Star, Volume LIX, Issue 92, 19 April 1928, Page 8

'CAREER BLASTED'

SOLICITOR IN TROUBLE.

MANSILL MEETS CREDITORS.

SERIOUS DEFALCATIONS. OVER £7000 MISAPPROPRIATED. DIVIDEND FROM ESTATE EXPECTED. "In March of thiß year I was faced ■with the payment of large sums which I had received on behalf of clients, and I then had no option but to make public my position. I cannot make any excuse for my present position. I had the opportunity early in my career to make good, but I think that my initial success imbued mo with an optimism which led to my downfall. . . . Had I the courage I would have made public my affairs two veari ago. Apart from my assets I have no offer to make. My career is blasted and 1 do not know to what I can now turn my liand, but I can only say that if given the opportunity I will do my utmost to make good in time any deficicncy which may arise out of the realisation of my interests."

These sentences were contained in the (worn statement of John Henry Victor Mans ill, solicitor, of Auckland, when he met his creditors in the Official Assignee's Office this morning. Standing room only was the order at this first meeting, over which Mr. G. N. Morris, Official Assignee, presided. Bankrupt was represented by Mr. L. P. Leary.

Mansill's schedule showed that £8182 6/5 was owing to unsecured and £3210 to secured creditors. The estimated value of securities was put down at £5400 and the total debts at the value of tho amount owing to unsecured creditors. On the assets side book debts were placed at £1533 15/8 (and estimated to produce £1200), cash in hand at £10 8/10, property £5084 15/, and surplus from securities in the hands of secured creditors £2190. The total assets were represented to be £9091 3/10 and bankrupt showed a surplus of £908 17/5.

Bankrupt's Filed Statement. In his filed statement, Mansill set out the reason for his failure as follows: — ; "In July, 1923, I commenced practice 1 on my own account as solicitor in the : National Bank Building, Shortland ; Street, Auckland. I had no capital, but a friend guaranteed me an overdraft of £300 with the National Bank. This overdraft was paid off within two years. From the commencement I improved my financial position, but in March, 1925, I found that I was behind to a very : small extent, but in view of my previous success I felt confident that I could 1 make up the deficiency. Within this B>riod I had purchased a property in evonport for my wife at a cost of £1450, subject to a first mortgage of £900, and I was making her a weekly allowance of £5, besides paying interest on the first mortgage and rates. During the ensuing twelve months business slackened off appreciably and I found at the end of the next financial year that I was further back than ever. Jn November, 1925,1 had at the instance of a client arranged to purchase a property of 1G acres at Birkenhead, and although the title was taken in my name the client and I were equal partners. I paid all rates and interest as well as survey fees until last year, when I could not keep up the payments any longer and the mortgagee exercised his power of sale. This property cost me about £300, but half of that amount is duo by the client. I considered this quite a safe investment as a valuation made for mortgage purposes placed the value at £5400. A sale was made of a portion, but the purchaser defaulted and instead of deriving any revenue from the property I was forced to meet heavy outgoings. Advances in His Own Name. "In the meantime," the statement continued, "I had been in the habit of making advances to clients in my own name, sometimes taking a mortgage as security and at others merely advancing as on a current account. In the latter class is included the money which I have advanced to my father, but in my dealings with him I treated him as I would any other client. Although I have not taken from him a mortgage to secure the amount due, ho has always expressed himself as willing to give security upon my preparing, a statement showing the montys payable by him. My lease of tlio premises in Shortland Street expired in July, 1926, and I remained on as a weekly tenant until September, 1927, when I moved into new offices in tho Dilworth Building at a rental of £5 per week. I sincerely hoped that this change would result in a large increase of business, but I was mistaken and the heavy rent, together with the cost of fittings and furniture, about £250, was not warranted. In March of this year I was faced with the payment of largo sums which I had received on behalf of clients and I then had no option but to make public my position. I cannot make any excuse for my present position. I had the opportunity early in my career to make pood, but ' think that my initial success imbued me with an optimism which led to my downfall. It is not now of much avail to say how sorry I am that the present position should have arisen, and had I the courage I would have made public my affair two years ago. Apart from my assets I have no offer to make. My carcer is blasted and I do not know to what I can now turn my hand, but I can only say that if given the opportunity I will do my utmost to make good in time any deficiency which may arise out of tho realisation of my interests." "Not Due to Personal Folly." Under examination by tho Official bankrupt stated that the sum *1® 8/10, shown as casli in hand on tho schedule, represented the whole of the trust funds now in his possession. It was impossible for him to identify that money. J Official Assignees That means you ha>e misappropriated some £7500? Bankrupt: Yes. Official Assignee During the past £7000?— Yes. U haVe USCd the Bankrupt said the loss on the Birkenhead deal was about £300 to £400 Official Assignee: Do you drink?' Bankrupt: I'm not a teetotaller W I don't spend more than ten to twelve shillings a week on liquor. Clients sometimes coine into the office, and ask me to have a drink. "What about gambling?" Bankrupt: I've been to the races nour and again, perhaps five or six times in t twelve months. I never bet more than on * r4c ®» I never play cards. None

of the money has gone through personal folly. The bulk of the trust funds have gone into various private assets. Official Assignee: But, surely, that is a most unusual thing to do over a number of years. You say you did it to increase your business; is that it?

Bankrupt: Yes.

Official Assignee: Your statement shows a surplus, but there is not going to be any surplus.

Bankrupt said that all sums advanced to his father had been repaid. There were no assets other than those described.

To Mr. McKenzie (for one of the creditors): All sums for interest have passed through the trust accout.

Other solicitors examined bankrupt concerning various details of business transacted on behalf of their respective clients.

Mr. Morris said the estate was very involved, and he would require some assistance. A committee consisting of Messrs. Hogben, Jacob, and White had been appointed before the bankruptcy, and had done most useful work in supplying details as to values.

Messrs. Hogben, White, and McKenzie were appointed a committee to assist the Official Assignee in realising the assets. Mr. Hogben said he represented the biggest creditor, the sum involved being about £1085.

Mr. Thorne: It looks to me as if the wife will be the biggest creditor. "Brought Shame on Profession."

"The position is quite plain," said Mr. Morris. "Bankrupt has made a clean breast of everything. Some thirty to forty clients have suffered to the extent of £7000 to £8000, that being the amount involved in the trust account. I know that some of those clients could not afford such losses. Xot only has bankrupt brought shame upon himself, but he has brought shame on an honourable profession, and has raised doubts in the minds of many people. Not only has he damaged his clients—he has also damaged his profession. That being the case, it is my duty to bring the matter before the proper authorities."

Mr. Terry, on behalf of & trainer who tends bankrupt's racehorse, reminded the Official Assignee that there was a claim for training fees prior to the bankruptcy, and in the meantime expenses for feeding were mounting up. "I don't know the value of this horse. I believe it is a third cousin of Beau Cavalier, or something like that." (Laughter.) "He values the horse at £40," said Mr. Morris. "We shall go into the matter." ♦•No Hope of 20/ in the £." Mr. Hogben said it would be of interest to know that the committee had investigated all the assets of which they had knowledge, and without going to any great expense had made full inquiries and had arrived at a valuation. There were certain assets which could not be valued, and those assets might yield £300 to £400. Assets capable of being valued were worth £3025. The total would not exceed £3500.

"My conclusion is that there should bo a good dividend from this estate, but there is no possibility of paying 20/ in the £," said Mr. Morris, just as the meeting adjourned. The schedule showed that £8182 tras owing to unsecured creditors, £3210 to secured creditors. Book debts, £1533, were estimated to produce £1200, cash in hand amounted to £10 8/10,- property was valued at £5084. The surplus from securities in the hands of secured creditors was placed at £2190. The total assets were set down at £0091, and total debts at £$182, leaving a surplus of £008.