FARMER’S BANKRUPTCY

Greymouth Evening Star, 11 July 1931, Page 5

FARMER’S BANKRUPTCY

“WORKED LIKE A SLAVE.” SYMPATHETIC CREDITORS "This bankruptcy was caused entirely by a man who is out of New Zealand at present. Bankrupt tried to shoulder that man’s debts, and to carry on, and he has paid off nearly £2OO of those debts. He has been working like a slave for ten years. His health broke down two years ago, and his doctor told him to give it up, or die. He struggled along until the other day, when he gave it up. It is only fair to bankrupt to state the .position.” The foregoing remarks were made at Greymouth yesterday afternoon by Mr. T. E. Coates, acting as legal representative of Herbert Vincent Mathias, farmer, of Punakaiki, who filed his petition in bankruptcy on July 1, and the first meeting of whose creditors was presided over by the DeputyOfficial Assignee (Mr. A. Naylor). The following creditors and their representatives were present:—Messrs A. Shannon (Shannon and Glen), W. Steer (Greymouth Motors, Ltd.), N. B. McCallum (Dalgety and Co.), M. B. James (W. Jeffries and Co.), and D. Ryall.

Bankrupt’s statement showed debts to unsecured creditors £519 10/10 and secured creditors £159 3/4, a total of £678 14/2. Assets were shown as stock-in-trade £lO3 14/-, book debts estimated to produce £55 12/-, furniture £3O, motor truck £3OO, total £489 6/-, leaving a deficiency of £lB9 8/2. The unsecured creditors are as follow:—W. Costello 19/6, W. Scott 15/-, Beck and Co. £2 6/2, Baillie and Neville £lB 13/-, G. Gilbert £6, Harley and Co. £1 7/6, Ashby, Bergh and Co. £4 7/9, J. McMullan £1 7/6, Dalgety and Co. £1 16/-, Dr. McKay £1 1/-, B. Dixon £2 1/10, W. Heinz 12/6, E. Airey £1 4/9, J. Cairney 12/6, Grey Motors, Ltd. £lO9, Armstrong and Douglas £23 15/4, Shannon and Glen £25, Dispatch Foundry Co., Ltd., £lB 11/-, Grey County (telephone) £l7 7/1, Grey Hospital £5 9/- (all of Greymouth); W. Jeffries and Co., Hokitika, £181; Dr. D. Anderson 10/6, Miss Gibsons £73 19/11, Christchurch Hospital £3 13/-, Mr. Ferris, Riccarton, £lB (all of Christchurch); total £519 10/10.

Au additional amount proved at the meeting was that of Mr. Ryall, of Barrytown, £9 8/9. OWNERSHIP OF SHEEP. The discussion mainly concerned the question of the ownership of the sheep located on bankrupt’s property. These were claimed by the D.0.A., on behalf of the creditors, and also by Jeffries and Co., on the ground that the ownership had never passed to bankrupt. This view was not endorsed by the D.O.A. and the creditors, and an interesting position exists. Mr. James stated that he had received instructions from Mr. Jeffries, of Hokitika, to the effect that he was not a creditor to the extent mentioned in the list supplied by bankrupt. That item had been mistakenly put in by Mathias. It was in respect to some stock which Jeffries consigned to bankrupt, and which Mathias held on account of Jeffries. The stock comprised a number of sheep, which bore the earmarks of Jeffries. From time to time, Jeffries had received the wool and lambs from the sheep. Bankrupt was instructed to dispose of the latter, on behalf of Jeffries. The D.O.A. said that he could not accept that statement, until he went into it thoroughly. Bankrupt, in reply to questions, said that the stock comprised ewes, wethers, and lambs. Jeffries sent a first consignment of 83 wethers to him two years ago, and they were fattened on the property, and sold. The next consignment comprised 103 ewes, the lambs and the wool from which were sent to Jeffries. Another consignment comprised 59 wethers, and they were still on the property. There were 130 sheep on the property at present, including the 5? wethers. Jeffries sent the stock to him in the ordinary course of business. He never paid anything for them. Jeffries got the proceeds. Mr. Steer: Did you purchase them in the ordinary way?—l suppose I did, really. In reply to Mr. Shannon, bankrupt said that the sheep were put in biJeffries at a price. Mr. Shannon stated that if a price were mentioned, there must have been a sale. Bankrupt had been doing the work, and one would naturally think that the stock belonged to him. Mr. James: The total proceeds from the sheep have been paid to Jeffries? “Yes,” replied bankrupt. You were dealing on behalf of Jeffries?—Yes.

In reply to Mr. McCallum, Mathias stated that the grazing had not been free. To Mr. James: He had never been able to exercise his option and purchase the stock.

"STRAIGHT-OUT SALE.” Mr. Steer: I think, under such circumstances, it is a straight-out sale. The fact that you have not paid for the stock makes Jeffries just the same as any ordinary creditor. The wool is only part payment for the sheep. Mr. James: Oh, no. Bankrupt has stated that he could not find cash to buy the sheep. He had no option over them, but was unable to exercise it. “In that case,” said Mr. Steer, “there should be something in writing.” Mr. James: Not necessarily. They are only chattels.

The D.O.A. said he thought Mr. McCallum could tell them all about the circumstances, but that gentleman said ho could not give them any .information. He knew nothing about it. Mr. Steer pointed out that Jeffries had not paid grazing fees. Mr. Janies: Neither has he been paid anything for the sheep. The ownership never passed to Mathias, consequently Jeffries was entitled to the wool and any profit from the sheep. Mr. Shannon: Why was the account put in, in the first place, if, as Mr. James says, they did not belong to bankrupt? Mr. James said that the statement had been put in by bankrupt by mistake. It was not put in by Jeffries. Mr. Shannon: He would not have put in the account ii he did not own them.

Mr. McCallum: It looks to me as if it is an ordinary stand-over account, to be paid by the proceeds from the natural increase in the sheep, and the wool. I should say it was a sale. The D.O.A. said that a registered mortgage was necessary, to get a claim over the dhattels. Mr. James said it was not claimed that there was a registered mortgage in existence. It was claimed that Jeffries never parted with the ownership of tho stock.

In reply to further questions, bankrupt stated that the sheep were on Olney’s property at Punakaiki, at the time of the bankruptcy. He was acting as the manager of that property. He had had the sheep for about eighteen months, and they were earmarked before he received them. They did not all come from Jeffries’ property in Westland, some coming over from Canterbury. He (bankrupt) had a registered earmark of his own, but he did not put his mark on the sheep. The D.0.A.: Well, Mr. James, I want to let you know that I am claiming the sheep, so far. You will have to take proceedings pretty quickly, otherwise I shall be selling them. Mr. James said that it would take sotno time before the total assets were realised.

"I am pretty quick at this work,” said the D.0.A., smilingly. “You can see the feeling of the meeting. They think it is just an ordinary transaction. It is most unusual for a man to come claiming things, after a bankruptcy. We don’t get many cases like that.” Mr. Shannon: Who is forcing the bankruptcy?

VOLUNTARY PETITION.

“It is voluntary,” said the D.O.A. “Bankrupt filed his own petition.” There was only £3O worth of furniture, said Mr. Naylor, and that would, of course, go to bankrupt, who was allowed to retain up to £5O worth. Bankrupt said that there were only two or three of the book debts that were doubtful.

Mr. Steqr said it was a bad time to sell a motor lorry, and it was not likely to realise a great deal. It might be worth £3OO, at the outside. Bankrupt stated that the lorry was insured for £4OO. The discussion reverted to the sheep, and the D.O.A. said that he did not want to sell them, if legal action were pending concerning their ownership. However, Jeffries would have to bring evidence to satisfy the speaker that the sheep were his property. The D.O.A. said that he claimed them meanwhile, on the evidence of Mathias, which seemed quite clear. He had no doubt whatever, so far. It was only in the ordinary course of business that Mathias got ths sheep. Jeffries had been geting the lambs and the wool, and ho (Mr. Naylor) presumed that would be credited against the purchase price. Bankrupt said that Jeffries sent him account sales for the wool and the lambs. He took it that those amounts wero credited against his account, but he had no written evidence of that. Personally ho had always looked upon tho sheep as Jeffries’ property. In reply to Mr. Shannon, he said that ho had never had an account rendered to show his position with Jeffries. He thought he owed Jeffries £lBl. Ho did not know that he was making a mistake, as he always thought the sheep belonged to Jeffries.

Mr. Steer: Supposing you purchase a tyre from mo, for instance. Although it is not paid for, it is a sale, and is charged up to you. I could not take tho tyro back again. Mr. James pointed out that Mathias said ho thought the sheep still belonged to Jeffries. It was a different thing altogether. Mr. Shannon said that a price had been mentioned as the sale price of the sheep. The D.O.A. (to bankrupt): What

profit were you getting out of the sheep? Were you doing it for the benefit of your health? Bankrupt said that he was hoping to be able to buy the sheep, but the slump came, and he could not do so. Hesaw the point now, and he had been “sort of misled.” The D.0.A.: I want you to state a clear case for your creditors. We want something definite. Bankrupt: As regards the sheep, the position is this. lam sorry you have misunderstood me. Jeffries advanced the sheep ,and put a price on them. I was in the hope of being able to pay for them, and thought they would eventually become my property. The D.0.A.: Were not the wool and the lambs to go towards the purchase of the sheep ,as part payment?—Certainly. Well, then, would you not call those sheep yours?—Yes, quite right. I would be part-owner. The D.O.A. said he took it that the value of the wool and the lambs was being credited to bankrupt’s account by Jeffries. Mr. James: Did you enter into such an arrangement with Jeffries when the sheep were put on the place? Did Jeffries say to you that the natural increase of the sheep and tho wool were to be applied to the purchase of the sheep?—He asked me if I would take sheep, and I said yes. He said, “I can supply you with a truck of ewes.” I asked him what was the price. He told me, and I said I would take them. As time went on, he had the lambs and the wool off those sheep. No actual money passed between us at all. Mr. James: What actually did you arrange with Jeffries?—He credited my account, I take it, and eventually the sheep would become my property. Mr. James: You stated that you were of the opinion that Jeffries owned the sheep? What made you change your mind?

Mr. Coates: What you meant was that Jeffries owned the sheep until you paid for them?—Yes, that is the position.

Tho D.O.A. said that it was just an ordinary account. Mr. James knew the position, too.

CARRY-OVER ACCOUNT.

Mr. McCallum said that there were plenty of similar carry-over accounts, but they were not very satisfactory, as a certain amount of risk had to be taken. It seemed to him that the present was such a case. In reply to the D.0.A., bankrupt said that he did not receive any accounts from Jeffries.

The D.0.A.: I don’t think there is anything much to worry about. It seems to me that it is just an ordinary transaction. He gets the value of the lambs and the wool, anil that is credited. I don’t say that it has been a profitable transaction to Jeffries, but there are others here as well. “Yes,” agreed Mr. Steer. We have been carrying the baby for a long while!” The D.O.A. said that he would get on to the collection of the book debts. He hoped that they were as good as bankrupt said they were, for the sake of the creditors. He would get advice as to the best way in which to sell the sheep, and tho motor lorry would be put up to public auction. Mr. McCallum: I think we are all sorry to see Mr. Mathias in this position. I know I am. I have known him as a straight chap for many years. He has been unfortunate. Mr Steer agreed with these remarks. The D.O.A. said it was very pleasing when creditors could speak like that. At this stage. Mr. Coates made the remarks previously quoted, as to the real cause of the bankruptcy, and added that he would appreciate it if the creditors would pass a resolution. «--Mr. Shannon: I think we are fairly unanimous. Mr. McCallum said he was prepared to move a resolution, but his firm was only a small creditor. Mr. Steer moved that, as soon as the estate was cleared up, every assistance be given to Mathias to obtain liis discharge. They were, said Mr. Steer, all very sorry for bankrupt.

The resolution was seconded by Mr. Shannon, and approved. Tho D.O.A. (to bankrupt): It is not often you get a resolution like this. Bankrupt said he was very pleased, indeed, and thanked the creditors. Mr. Coates (to the D.0.A.): This is one of the pleasantest bankruptcies you have had. “Yes,” agreed Mr. Naylor. “I like to have this feeling.”