MEETING OF CREDITORS.

New Zealand Herald, Volume XLII, Issue 13050, 15 December 1905, Page 6

MEETING OF CREDITORS.

QUESTION OF PREFERENCE > AGREEMENTS. ' ; . » LEGAL ADVICE TO BE TAKEN. '.. The first meeting of creditors in the bank- ; rupt estate of John Whitley Comber, Hob-son-street,Auckland, draper, was held before the official, assignee (Mr. E. Gerard) yesterday* afternoon. The total liabilities amounted to £185 19s lid, and the ; assets were set -down at furniture valued at, £5. In .bis', statement the? V"krupt ; attributed his. failure to being i) receipt of only asmall salary , owing to general slackness of. trade, to early closing, and increase in the cost of living, further expenses in .the' household, owing to gnawing children and to sickness of his wife. • In reply to questions, the bankrupt stated he was a. traveller for A. J. Booth and Co., who had iilect proof of debt against him for £1-14. • He had been receiving a fixed salary of 33s per week this had been increased now to £2 10s per week, but he received no commission. When receiving 33s a week lie. was also allowed rent, but now he had to pay rent out of the £2 10s. Ho had occupied apartments in the shop, and valued tho rent of them at 10s per week. Ho did not, in present circumstances, see any prospect of being able to pay his creditors.. Up to the end of Sep-. lumber he ran the business on his own account; at that time he owed Booth and Co; £572 6s 5d ; they came to the conclusion that the business was not paying, and stock .was taken. There was then a small amount of stock in the shop, supplied Jby firms other than Booth and Co. 'me stocksheets which Mr. Booth saw disclosed' the

existence of stock other than that purchased j: in Booth and Co./ He {the .bankrupt; Lad signed a security to Booth and Co. ; ;iz was an. agreement signed in 1903, for sale and purchase. He practically bought the Hobson-street business from Mr. Booth. He understood, when he took the stock over that he would have to return it to Mr. Booth if ho (the btinkytqit) could not make it pay. He gave up he whole thing to Booth and Co. voluntarily.-'' In. the agreement he undertook to give Booth aud Co.'*B accounts preference over all other accounts, in regard to payment. The books were taHn over with: the stock. Mr. Russell (of Jackson and Russell), who was representing a creditor, made a remark

about the agreement. The Assignee: There has been too much of this sort of thing going on in this town. We have had this sort of thing (Several

times lately; it has beeu occurring ever and over again. Someone in the know, who knows the actual position of the debtor, i haw tin Jtgreement, and "collar?" the lot. i He iuay we legally protected;. .1 don't'know I what it is legally, I suppose it- is protected.. ! " Mr. Russell;* The bankrupt was in the position of incurring other liabilities, while Mr. Booth had an agreement giving ■ him preference for 'payout., The bankrupt had a fair! decen' stock on. 'he-premises, and such.as'would justify :.,t.]>.r tradesmen in thinking he was sound financially, and m giving him credit, ard w,- ;-U« Mr. Booth '•held" ove. the *■■' no lot. Mr. Tewsley: A 60 "per center" would have got a registered bill of sale which would be .recorded in tho Gazette. Mr. Russell: We want ,to- absolutely stop secret bills of '»?ale; •:■■--;.; is far too much cvgrthmhuk( '//■it' ; sort of thin, ,/ : 'ng on, /•'•■ Mr, Is. fb: The appar";;'. iaxity.in, allowing the bankrupt the privilege or. buy/ ing elsewhere was done because we did hot want him to i.d that he was tied hand and foot, to us,. md if he did not succeed it could not ho said he was tied, and we were overcharging. '. ; The Assignee: lusse so-called isecuritiea ; .should be disal' osi. There is an '. ."iir j principle about t!'iin, for anyone sees-" : »he .goods in the ipl.up, unless tho bar/.-upb said to every tradesman he deal", with, "These goods' an? not mine," would nai.hraliy conclude it was safe enough to giv? credit. M.v. Rtisse)-': The othes creditors snot'-.. have been »;■*?.'• 1 with before the r '/< were taken ; -v->. , ' J The Assignee: I don't blame Mr.-"bo»/tn for prott trig himself, but when he knew there w*?e other creditors— _ ; - i

' Mr, $ oansi-on : <?'»Ud?ir for .Messrs. Booth and Co.): If the matter had been approached in a proper manner this would have been dealt with. \j r . 'fervsky: Tf Mr Boo : he 1 apj proach «1 as i«'A ( -oper manner, ami said M had lost p. It: of money, the thing might j have been fixe; '■-/ arrangement. '; Mr. Boot' : That's exactly 'what I did say, but whew A :jiw the spirit in which you took it 'iy, I wits not gok'g : s^rsher. _ ?/:'r.:Tows'•■■y: You told "us you had this agreement, and I raid. " Whan? do we come i 'in.": You shrugged yew samilders ■:■■ ."."id practically said, " WeiL you can look after yourselves, I'm all right.' Mr. Booth: 1 came to you and expected you to deal wit it in a moral sense.; I came to explain what a great loss I was at, and the small amount of your liability. Mr. Johnston : If there had been a prior meeting of creditors it would have been arranged. " • Mr. Tewsley: That's exactly what we wanted. -'..';., Mr. Russell: I saw Mr. Stewart, of your firm. Mr. Johnston, and he absolutely declined to give m? any information. Mr. Russell then went on 'o refer in strong terms to the agreement, ami said he did not blame the bankrupt, in the Piaster at all. . In answer to Mr. Johnston, the bankrupt said under the agreement he was bound to pay £5 a month oil* the principal, and he paid up to May, 1904 : after that. the payments were discontinued. At'.the; time the goods were taken over; in September, he (bankrupt) had no intention o£ filing. At this stage Air. Tewsley moved', "That the assignee be requested to take ietral advice, with a view to ascertaining whether the delivery of the stock to A. J. Booth and 00. constituted a preference," and remarked that he did not. know ii such a, preference was right in law or not, but if it was there should he ' legislative action to stop it. Mr. Shaw (Kompthorne and Prosser) seconded the motion, which was .carried, and the meeting adjourned sine die.