WOMAN BANKRUPT

Auckland Star, Volume LXVII, Issue 292, 10 December 1936, Page 8

WOMAN BANKRUPT

COURT PROSECUTION. PROPER BOOKS- NOT KEPT. MAGISTRATE'S COMMENTS. | A woman named Muriel Ann Mitchell, formerly in business in Auckland as a hosiery importer, who was adjudged a bankrupt on her own petition on July 20, 1935, appeared on summons in (.lie Police Court this morning, when she pleaded guilty to a charge of failing to keep usual and proper books. Mr. F. McCarthy, of the Crown Solicitor's oflice, prosecuted, and Mr. R. I'. Hunt represented the defendant. Mr. McCarthy said the liabilities were shown at £2773 and the assets at £»!) 0/1. but it was estimated that a further £30 would be added on the assets side. However, the result was obvious, that a small dividend, if any at all, would he available for creditors. Defendant commenced business as a hosiery importer in July, 1933, after acquiring a good agency. She built up a large business and had shops in Queen Street, Karangahape Road and Victoria Street. Large sums passed through her hands. She kept many books, but the books were not properly kept. There was no check as to how she dispersed tß'e various sums received, consequently it was impossible to obtain from tiie books her proper financial position. "She seems to have had some peculiar financial dealings, and it would appear that about £1200 lias not been accounted for during the two years of the business," said Mr. McCarthy. "We cannot make any allegations, as no proper records were kept. This case is an example of what can happen when a trader fails to keep a • proper set of books. Approximately, it is. estimated that defendant's purchases in the two years amounted to about £8000 and her sales totalled £10,000." Mr. Wyvern Wilson, S.M., said it was fairly clear that defendant had been buying and selling without a profit. Mr. McCarthy added that from time [to time Mrs. Mitchell resorted to the expediency of going to the till to make payments of accounts that were 4&ie. Counsel's Plea. i "This case is both unfortunate and pathetic," said Mr. Hunt. The creditors, lie said, could ha counted oil one hand, as £1355 was represented as being due to the English house which supplied her with goods. Mrs. Mitchell unfortunately started in business with insufficient capital. Owing to her great energy and capabilities the business grew too quickly. "If she had been left alone and had not been given certain advice, she would have been all right,". Mr. Hunt said. "She had every expectation of being able to pay. Owing to her lack of capital she postponed getting a proper accountant, with the result that the business got away with her. There has never been any suggestion or shade of dishonesty in this matter—" Mr. Wyvern Wilson remarked that defendant seemed to have got a large amount of goods which she had sold and for which she had not paid her creditors. Nothing Concealed. Mr. Hunt: My client was induced to go to moneylenders. This made things more difficult for her owing to the ex-, orbitant Practically on tho eve of licr bankruptcy there was a proposal to form a wholesale company, but tho project fell through. It was also projxiscd to form Mayfair Hosiery Limited into a private company with a capital of £3000, but this also fell through. My client has never made any attempt to cOnceal anything. The business became too much for her and although business was good she was always being pressed by the bank and moneylenders. In anticipation that the company would be formed, the stocks ordered from England were largely increased, and very heavy losses were made during the last six months owing to stock having to be sacrificed. The whole matter was subject to close .examination by the Official Assignee, to whom always my client gave the utmost assistance. She gave very full statements. I \yish to emphasise there is in this matter a complete absence of fraud or fraudulent intent. While I am not entitled to say she was given dishonest advice, she was certainly given bad advice which lias led her into this unfortunate position." , Speaking with regard to the question of penalty, Mr. Hjint said the charge brought was one in which fraud was not an element. The case was not one for imj.ii 'onment. Defendant had experience as an assistant buyer for a large Auckland house, but she had no experience on the accountancy side. "In the Proper Sphere." "You say she is a married woman with two children," said the magistrate. "Where is the husband? What does he do?" Mr. Hunt: She parted from him years ago. and has brought the children up from their infancy. Mr. Wilson: Well I think she should be in her own proper sphere, which is the house and not in a business. Mr. Hunt said that in similar previous cases justice had been met by extending probation to such offenders. Remand for Sentence. The magistrate said he was still .in the dark as to why the business did not pay. Defendant knew all about buying and selling, and she had the basis of a successful business. There must have been a great deal of money coming in but she was unable to say where it went to. "I will remand defendant for one week for sentence." said Mr. Wilson. "I would like the official assignee here to explain the result of his investigations. I take this course for the" reason that in all these cases brought utider the Bankruptcy Act it is intended to give relief for unfortunate traders, and to punish dishonest persons. Consequently when these cases are brought the magistrate has to be satisfied whether the bankruptcy was due to misfortune, recklessness, extravagance, or dishonesty."