IN BANKRUPTCY.

Hawera Star, Volume XLVIII, 12 August 1924, Page 3

IN BANKRUPTCY.

FAILURE OF MAIL CONTRACTOR. 'LARGE DEFICIENCY. PUBLIC EXAMI N ATION LATER. Unsecured debts amounting, according to bamUMpt's estimate, to approximately *,964 ius cu, a.iiti, according to uis u.editors, to nearer £I6OU, witli total assets amounting to only £'A), were the- cause of Joe Martin, mail contractor, or Opunake, appearing before the D.O.A. in baiiKiuptey (air J. ,3. ,z. dieuieyj amt several creditors at iNe.v Plymouth yesterday. The other partner (_Hoko Karatau) in the ba.nkmpt firm of J. Martin and Co., was unable to be present owing to tbe recent death of one of his cmldreii. As a result of a resolution passed at the meeting, bankiupt is to be subjected to j. public examination into the conduct of the firm’s business.

According to bankrupt’s written schedule, which he stated was only approximate, the amounts owing to unsecured creditors were: Maling and CM., motor importers, Christchurch, £3O; Dunlop Rubber Co., Wellington, £24 10s; Ratrick and Co., motor importers, Wanganui, £121; Harman and Co., motor importers, Wanganui, £33; Para Rubber Co., Rawtra, £6O; R. H. J-eece and Go., garage, proprietors, Haweira, £SO; Ocean Accident Insurance Co., Stratford, —; Hughson’s Ltd., merchants, Rahotn. and Opunake, £7O; U S. Hickey, newspaper proprietor, Upunake, £o ; Lyttle and Loesc-h, cai proprietors, Opunake, £2O; J. W. Bishop, New Plymouth, £SO; Newton King, Ltd., New Plymouth, £56; Bruce and Feakin, New Plymouth, £6; H. i. Simson, farmer, Hastings, —; G. TV. Rogers, insurance agent, Opunake, £l6; Lawson, painter, New Plymouth, £ls; Tamuiaki Daily News, £3O; .Julian, car proprietor. New Plymouth, £10; B. E. Stainton, New Plymouth. £6(>; Vacuum Oil Co., £llß 11s 7d; Jenkins and Hancock, £ls 19s Id.

The only assets were tools valued at £5 and furniture valued at £ls. Bankrupt, in his written statement, said he had started business with Hoko Karata.ii as mail contractors and motor-car proprietors on January 1, 1922, and a deed of partnership had been duly entered into. He had one car when he started, and this was under bill of sale to Newton King, Ltd., for £6OO. Finch of the partners agreed to put; £IOOO into the business. He bad no property of his own, save a 9acre section in Auckland, and could not have raised any money on this, as it was native bush. His wife came to his assistance and lent him £IOOO, while Hoko got his £I(XX) a year later. He understood that Air Horace lan Simson, of Hastings, , paid off the mortgage to Newton King, Ltd., on his car. The' £IOOO lent him. by his wife was paid over to Air Simson, who had also supplied a Cadillac car to the firm. Mr Simson supplied the firm with anothet* car, a Winton, and took away the Cadillac, replacing it by a second and bigger Cadillac. About this time Hoko paid oveir his £IOOO tc Air Simson, who took security cvei all the cars for what was owing to him. The price of cars had come down nearly half in value, and competition on the several routes became 1 een. Business fell back considerably, and the firm began to have difficulty in paying wages to> the drivers. Things went from bad to worse, and finally Air Simson had to exercise his powers under his bills of sale and seize all the

cars. The Aotea Native Land Board, to whom the firm had been compelled to give a mortgage over two of its cars, also called up their security, and the cars had been sold at auction at Hawera and New Plymouth. The proceeds of the Government mail contract were assigned soon after the firm started to Air Simson to reduce his liability to him. He had never been to school in his life, and had no knowledge of bookkeeping, but books, were kept fairly regularly. Examined under oath by the D.0.A., bankrupt corroborated the statements made in the written schedule. Cross-examined by Air Bennett, on behalf of the Commercial Agency, Wellington, bankrupt stated that he went into the business with about £825, which was lent by his wife. At the instance of the Actea. Land Board, she took security over some of his assets. It was quite true that some of the money received did not- go through the books. About £33 was the average monthly return .front the business, the mail contract being paid quarterly. Some of the money was received personally, but most of it afterwards went througii the books. . At this stage of the proceedings the D.O.A. made the suggestion that the meeting could possibly be adjourned until such time as the other member of the firm, Hoko Karatau, could be present, as he was more conversant with the keeping of the books. The creditors, however, considered that it was

no use postponing the proceedings. 1 Further questioned by Mr Bennett, bankrupt stated that the partnership was formed on January 1, 1922. He would swear that only one payment of £IOO for the mail contract did not go into the books- It was paid to Jellyman and Forbes. He did not know until February last- that the •firm was in a bad position. He was not in a position to give a statement of receipts and expenditure from the start of the

pairtnership. At times lus had received moneys from his wife to pay accounts, but these moneys had not been paid back, except for one sum of £25. He had probably borrowed money from bis wife half a dozen times to put into the linn’s business. In reference to t-lie linn's books, bankrupt stated that there was another day book (not produced at the meeting) as well as several other books kept by the drivers. He was prepared to swear that the assets mentioned in the schedule were correct. The books were not kept by him. Mr Bennqtt then moved : “That in view of the unsatisfactory position of the partnership bodies, and the admitted ignorance of the partnership position at most periods of its existence, it' is desirable that the bankrupts should submit to a public examination, and that the necessary stops be taken to ensure such examination being duly held.”—The resolution was seconded by Air C. H. Wvnyard and carried News.