BANKRUPT FARMER.

Hawera Star, Volume XLV, 7 May 1925, Page 5

BANKRUPT FARMER.

MONEYS ADVANCED BY MOTHER

WF3R.R THEY LOANS OR. GIFTS?

COURT' TO DECIDE.

The'■adjourned meeting of creditors in the bankrupt estate of Joint Ma»ters Cos, labourer, of Fitzroy, and formerly farmer of Opunake, was continued on Wednesday ait the office of the Depuity-O'Hicia! Assignee (Mr. J. 8. S. Medley), New Plymouth. In addition to the bankrupt, who was represented by bis solicitor, Mr. H. B. Gibson,, there were pre&snt Mr. H. McCann. (Mr. A. A. Bennett), and Mr. H. R.. Billing, representing Mrs Sarah Cox, the mother of bank nipt, whose proof of debt was opposed by Mr. Bennett. , , In, reply to Mr. Gibson, the bankrupt said lie had nothing to do with his partner’s action- iff regard to Angus and the sale of the £19.‘)0 mortgage. The first, he knew of it was what he saw in the paper, and he was completely surprised. Bankrupt further stated that his mother had about £2OOO in the Savings Bank, and. as she was talking of putting it out on loan on a long term, and nisi he knew he would want money to meet McCann’s mortgage in time, he thought he had better get it then if possible. He did not know what the position might 'be in a year or two. He had jmsit, been married and did nob know how his mother would get on with, his wile, or whether she would be inclined to. lend later on. He knew Mr., wanted some money for a term of about 2j- years, and if lie could get the money through liia mother it would be there when he wouiild want it. He got 71 per cent, from, McLeod for the money, and was to pay hist mother (5 per cent, tor the money. He knew of no other 1 reason why he should borrow 'the money then. Ait that time his -interest to McCann had been paid regularly. It was- on November 12, 192:!, that Mr. Gibson insisted that security should be given to Mrs. Cbx for the loan. That was because partner was endeavouring to borrow money from bis mother in order to pay his interest, and if he did not pay the interest McCann could have sold them up, as ho had, done, and lie would then probably have lost all that he had put in, or what his mother had put in tor him. Bankrupt’is share- of the interest had been paid, hut it was as much to lii.s interest as to Austin’s that Austin’s share of the interest should he paid. Bankrupt, wais us much involved as Austin. He repeated that the £2OOO was a loan and not a gift. Further questioned by hi® isolicitc r, the bankrupt said that previously Mr. ■Gibson had pressed him to give security to, hi® mother before it was, giver., but he had not done so, because ha never thought lie would get into such difficulty, and further it would have involved hini in legal costs: amounting to about £6O. A cheque for £466 12s to Lynskey and Evans was paid by liis mother for him as a deposit when ho went on to the farm. His mother also gave him a cheque for £2O at that time. In admitting to Mr. Bennett in crosis-examination lat the previous meeting that hi® mother did not pay to or for him a. sum of money at the time of signing the security to, her ho bad made a mistake, ancl he now -sal I tli at his mother paid some money t > him. but'< he Trad given a cheque back to her; he did not know how it was done. At the time a statement war drawn up by Mr. Gibson, who war satisfied the statement was correct. To Mr. Bennett: He could not give the date at which Mr. Gibson insisted upon security to his mother prior to November, 1926, but thought it would be probably -twelve months or more earlier than that. There had been several occasions on which Mr. Gib'-'r had suggested this course. Ho, had insisted upon it practically from the start. T ,: hi« eonc-l-uclod the oxo-minationand the D.O.A. said Mr. Billi ng was act-1 ing as proxy lor Mrs,. Cbx, who A' proof of debt, left, a balance tine of £1372. He proposed to admit the proof as to the £2090 and interest thereon. j Mr. Be li nett said he proposed to ask that,- the proof of debt- be rejected in to to, in order to have the whole question' deckled in hire Supreme Churt as to whether any of the amounts advanced by Mrs". Cbx to the bankrupt were loans or gifts. Mr. Billing submitted that, the o-nlv evidence given up to the present was to- the effect that the money advanced was a, loan, and before the proof of debit was rejected lie thought the D.O.A. ebon Id take advice on the matter.

The T>.o'.A. said that so far as lie. could isee laifc the -present, the £2OOO appeared to be a gift and nob a loan. In, any case he thought the best course would be to allow the court to decide. He therefore- took the course of rejecting Mrs. Cbx’is proof of debt. Mr. Bfennett isaid that his client wuold indemnify the D.O.A. against any cotshs involved in the event of the court’® decision being against him. The meeting then adjourned sine die.