IN BANKRUPTCY

Nelson Evening Mail, Volume LXIX, 29 January 1936, Page 9

IN BANKRUPTCY

MEETING OF CREDITORS EXAMINATION BY OFFICIAL ASSIGNEE A nioeling of creditors in the bankrupt estate of Eisio May Boyle was held yesterday when the Official Assignee, Mr A. L. Tresidcler, presided. Mr ,T. R. Kerr appeared for bankrupt, and Mr W. V. Rout for George T. Fisher and Mrs E. M. Fisher, the largest creditors. Mr G. Cotton was the only other creditor present. The statement of bankrupt showed unsecured creditors, £1042 7.s 6d, and assets, £3O furniture, leaving a deficit ot £lOl2 7s 6d. The largest creditors were Mr G. T. Fisher and Mrs E. M. Fisher, of Christchurch.

In a prepared statement bankrupt said in August 1934 she leased the Trafalgar Hotel in Nelson. It was the first experience of her husband and herself in a hotel, and it ended disastrously, as they could not meet claims of even the secured creditors. The lease was bought with her money. Prior to coming to Nelson she had been a heavy loser over the purchase and sale of a farm property in Canterbury. There were no assets and bankrupt could make no oftcr to creditors. ’Die Assignee commented that the dealings which brought about the bankruptcy occurred in Christchurch. Bankrupt had been in Nelson only nine months and had comparatively lew debts here. He added that the hooks kept by bankrupt were incomplete. The Assignee explained that the alfairs of Mr and Mrs Boyle were so interwoven that Mr IT. M. Boyle was present to assist, the examination.

PURCHASE AND SALE OF FARM

Mr Boyle said he purchased a Canterbury farm in February 1932 for £7000—262 acres at £27 an acre. There was a mortgage of £5900 to the Government Life, a second mortgage of £7OO to the Farmers’ Co-op, and lie paid £4OO from his own money. When lie bought the place it was represented that there was £4OO worth of wheat and peas on the property, but. they realised only £3O as the sheep had been allowed to run in the wheat before he took possession. He bought 30 cows for cash, the average price being £3, the purchases being spread. The first butterfat payout was Is per lb; the next, 10(!; the next, Bd, at monthly intervals, the next 7d; and with the ruination of the crop and the drop in butterfat he got into arrears on payments on the second mortgage. He wanted more stock and wished to borrow off Mrs Boyle who did not think it fail* as he had previously borrowed money for Boyle Bros. Ltd., contractors, and had not returned it. At (hat time she had about £6OO to £7OO. Some was in the P. 0.5.8. and she carried the remainder, of several hundreds, in cash. She ’usually had from about £2OO to £3OO. This was accumulated over a period when Boyle Bros, were operating as contractors. He used to give her up to £SO at a time. All the while the interest was accumulating on both mortgages. Then to give Mrs Boyle a stake in the farm he considered it fair to sell her the lease and so he gave her a 50 year lease of the farm and tiie stock. Mrs Boyle gave him £3OO. More stock, (20 cows) was purchased. On returning home one night in September, 1932, they found the house burnt down. The loss included about £ISOO worth of furniture in Airs Boyle's name. That was insured for £6OO and (.lie house for £6OO also. It was a ten. roomed house. The £6OO insurance for the furniture was paid to Airs Boyle who put it ill the P. 0.5.8. Arrangements were made for Air Boyle to build a house in concrete- estimated to cost £6OO, but it cost £IOSO and that was where £450 of Airs Boyle’s money went. Boyle Bros. Ltd. went into liquidation in 1933. Mr Jack Fisher had been out to Boyle’s place many times, with a view to purchasing the property. In July 1934 Fisher came to Boyle’s house when Boyle was getting ready to go to town. Fisher drove him to town and they discussed the sale of the farm. Fisher’s agents Inter arranged for the purchase of the farm at £3O per acre, the casli above the mortgage to he £IOOO. Meanwhile the lease of the Trafalgar Hotel in Nelson had been offered for 15 months at £ll per week. On the figures shown him it looked a good proposition. He signed his wife s name to the lease and she later agreed to it. Boyle accepted the agreement about the sale of the farm property. The £IOOO was to come on the following clay but he waited several daysfor it but it was not produced. Fisher’s agents then changed the agreement replacing the cash in the transaction with a first mortgage on one of Fisher’s securities —a freehold property in Christchurch. That was on 13th August 1934. As Boyle had gone so far with the arrangements for the hotel he accepted it and Mrs Boyle relied on him to act on her behalf. Fisher offered £350 for the stock on the property, but Boyle refused. Later an offer of £SOO for the stock, implements, etc., was made and accepted, that sum to be paid as additional to tiie farm sal?.

Boyle said an agreement was drawn up by his solicitor, the agreement stating that tlie sale of the stock would be collateral with the sale of the property. They did not know the meaning of collateral but they thought it was all right and Mrs Boyle signed it % Neither Mr or Mrs Boyle knew that the property was entailed in the signing of that agreement. They thought the £SOO would he an additional payment. They thought the agreement was to affect the stock and implements only. They knew novy that they had signed one agreemnt for the sale of the land and stock, at the price of»the land alone. The security for the mortgage on the Christchurch property was handed to them and lliey raised £7OO on it from the Commercial Bank. The £7OO was placed to the credit of Mrs Boyle at Christchurch branch of the hank. A sum of £350 was paid to Mr Aynsley, their solicitor, out of which he paid £IOO deposit on the hotel. The remainder was for the settling of accounts. Mr Boyle was then questioned regarding the accounts to he settled with that £350 and regarding the statement of account rendered hy Mr Aynsley. Special reference was made to a sum of £7B for stamp duty, and regarding other sums debited to Mrs Boyle’s account. The Assignee commented that it appeared there should he some investigation as there was no statement in regard to those matters. The money had been handed over for the payment of certain accounts.

Boyle said Mr Aynsley’s statement showed that £IBO hud been appropriated for costs and no statement regarding those costs h-'ul yet been obtained. With regard to the hotel Mr and Mrs Boyle signed for the transfer. The hotel was to lie Mrs Boyle’s business, hut Mr Boyle conducted it. However, Mrs Boyle was not consulted in the trans-

action. She took no part in the transactions.

Mr Rout said he considered Fisher was unfairly treated. They gave £IOSO security to allow Boyle to pay up land tax, arrears of interest, etc., on the farm. That security was used to finance the lease of the hotel. Boyle added that he considered the legal people he was dealing witli saw the point in the word “collateral” and they took advantage of it. The hotel books were those produced. No bar book was kept. Some cash payments were made from the bar takings and the remainder banked. Bankrupt said site knew noLliing about the business transacted, but she believed the statement made by her husband to be correct.

The Assignee said it was apparent that throughout bankrupt was in herhusband’s hands.

The meeting was then adjourned,