MEETING OF CREDITORS

Otago Daily Times, Issue 21300, 2 April 1931, Page 2

MEETING OF CREDITORS

BUS PROPRIETOR’S ESTATE A meeting of creditors in the estate of Lionel Charles John Storey, of Brighton, bus proprietor, was held before the official assignee (Mr J. M. Adam) yesterday afternoon. There wore 10 creditors present or represented. Mr G. Murdoch appeaed for the bankrupt. The bankrupt’s statement showed: Unsecured creditors, £4BB 16s 4d; secured creditors, £4BO 15s 3d_ (value of securities, £700); other liabilities, £391 Os 7d; assets, £236 19s Bd, leaving a deficiency of £642 17s 3d. If a contingent liability under a hire-purchase agreement were not enforced, the deficiency would be £251 16s Bd. The secured creditors were; —John Edgar, £306 8s 7d; Mrs S. Lewis, £66 9s lOd; M’Callum and Co., Ltd., £ll6 16s lOd. The principal unsecured creditors were: W. D. and H. O. Wilis, Ltd., £6B 8s sd; Cossens and Black, £29 16s; John M'Lean (Green Island), £25; John W. H. Clarke, £25; Hogg and Co., Ltd., £2O 14s 9d; Lane’s, Ltd., £2O; Oswald M. Smith and Co., £l7 18s sd; J. Rattray and Co., £ls 13s 6d; Hudson and Co., Ltd., £ls; Alex. Boag, £l4 10s; Sargood, Son, and Ewen, £l2 11s; T. Jenkins, £l2; E. W. Pidgeon and Co., Ltd.. £lO 15s 6d; John M'Crae, £9 15s 6d. Other liabilities were shown as £391 0s 7d, including £SB 0s 7d, due to M'Cracken and Walls, an amount recoverable under a hire-purchase agreement to Cossens and Black, if the company enforced its full legal rights, being £316.

The bankrupt, in a statement handed to the official assignee, said that in January, 1928, he gave a mortgage of £3OO over his freehold property to John Edgar, of Tapanui, to secure a balance of the purchase money of £3OO and interest, and a second mortgage to Mrs Sophia Lewis, of Dunedin, widow, to secure £125 and interest, being the cost of erection of the shop. He was employed by Mr G. P. Cuttriss at this time as a bus driver on the Brighton bus, run fay him from Brighton, at the weekly wage of £4 10s. As he had no money to stock the shop, his mother approached Mi J. W. H. Clarke, who agreed to guarantee his account at J. Rattray and Son to the extent of £25. Trade during Christmas, 1927, and the New Year, and during Easter, 1928, was fairly good, but these periods were the only brisk business periods during the year, and business at other times, and especially during the year 1928, was poor. During the whole of the time from December, 1927, up to the filing of his petition, his mother ran the shop for him, so he had no wages to pay. However, he steadily lost money on the shop in 1928. Although he was earning £4 10s per week, £2 of this sum he had to pay to the solicitor for Mr Edgar and Mrs Lewis, and the balance was applied in keeping his mother and himself and in paying some small accounts. In September, 1928, he was put off work by Mr Cuttriss for nearly three months. His payments on the two mortgages fell behind, and when he recommenced work in December, 1928, he had to make efforts to attempt- to reduce the arrears on the mortgages. By December, 1928, he knew he was losing money, but was advised and' believed that if he erected tea rooms on to the shop he would be able to carry on successfully. He built the tea rooms with timber supplied by M'Callum and Co. during his leisure time and while he was out of work, with the aid of two of his friends, who would not take anything for their work. The job was completed before Christmas, 1928. During the Christmas of 1928 he had to incur further debts in order to stock_ the shop for the Christmas period. This Christmas was a wet season, and business was poor. In January, 1929, he was taken into Cuttriss’s employ again at the wage of £4 10s. While pulling up the arrears on the first and second mortgages he found he could not pay very much off the business debts. In September, 1929, as he could not pay anything to M'Callum and Co., he gave them a third mortgage over the Brighton property to secure the sum of £lO5 5s 9d. Business during 1929 was very bad, and he found he had to incur fresh debts to carry on. It .was costing his mother and himself about £3 per week to live, and he found that they were making no profits out of the business. In December, 1929, Mr Cuttriss dispensed with his Shortly afterwards he suggested that witness should take the bus service over. Witness agreed to purchase the bus, which was a 20-seater, for £4OO, paying him £23 Is 6d per month to cover instalments of principal and interest. He did not know at this time that the reason why Cuttriss had to give up the service was that he could not make a profit on it. During Christmas and Easter times business was fairly good, but at other times business was poor. At any time he made a profit on the bus service he applied it in reduction of the first and second mortgages and the shop debts. Just before Easter, 1930, ho came to the conclusion that he could not make the bus pay, as he was not getting a sufficient number of passengers, and he returned it to Cuttriss. In the meantime he had paid £B3 to Cuttriss on account of the purchase money, and he received no refund. The running expenses on the bus were very heavy, but those of a seven-seater car were small, and he came to the conclusion that he would be able to profitably run a motor service to Brighton if he purchased a seven-seater car. He therefore approached Mr A. V. Bacon, of Mosgiel, in April of 1930, who offered to sell him a seven-seater Buick sedan car for £250. He paid £5 deposit and agreed to pay £2 per week in reduction of the balance. Later on he lost this car, and was glad to accept the loan of an old seven-seater Buick from Mr Noble, of Dunedin, who generously lent it to him. He ran this car on the Brighton service for a fortnight, but was unfortunate enough to have a collision with one of Hart’s cars on October 6, 1930. The Buick was uninsured, and ths accident put hm off the Brighton bus run for a month. Hoping that the Brighton run would improve and that he would be able to earn enough to reduce his liabilities in respect of the shop, he agreed with Messrs Cossens and Black in November to acquire two fivc-seater cars from them for £350. He paid no deposit, but was to npay instalments of £lB per month. The bus service during Christmas, 1930, was not up to expectations, and from the time that he purchased the cars till the time of filing his petition he was not able to pay anything in reduction of the debts incurred in respect of the shop. Business in the shop kept steadily falling back. A sum of £2s* which he took during Christmas, 1930, was stolen from his mother’s bedroom, and although he informed the police they were not able to trace the thieves. He was hopeful that the bus service would enable him to .pay off his debts in time, but he had only been able to pay three instalments, amounting to £34, on the two cars to Cossens and Black, so as to keep him on the road. The only money he could have paid his creditors was the £25 stolen from him. Finding that the run was not the success he had hoped it to be, and that the shop was going back all the time, he filed his petition. He did not drink or gamble, and he had tried to be economical in every way. He was not in a position to make an offer to the creditors. He attributed his bankruptcy to lack of capital, to the losses sustained in dealings with Cuttriss. to the poor seasons during 1929 and 1930, and also to the fact that the profits on the classes of goods sold by him in the shop were small and that unless he had considerably increased his turnover (which he had failed to do), he could not make the shop pay. Examined by the official assignee, the bankrupt said that his mother had authority to order goods on his behalf. He understood the creditors knew she was purchasing the goods for him. He expected his mother to advise the creditors accordingly. The assignee said that seven creditors knew nothing about the bankrupt, and did not recognise him in the business. Why did the bankrupt not notify the creditors that the orders were on his behalf? The bankrupt said he saw the accounts coming in in his mother’s name. fie asked her to see the creditors, but he knew she had not done so, and the accounts containued to arrive._ He knew nothing of a meeting of creditors in his | mother’s estate in Mr White’s office in 1927 or 1928. and he did not know that an arrangement had been made to pay 10s a week to the creditors. A creditor said that a few amounts had been paid in, and that was the finish of the matter. It was stated that the meeting would get little further until a statement had been obtained of Mrs Storey’s affairs, and it was decided to adjourn the meeting until April 17.