A BIG BANKRUPTCY

Otago Witness, Issue 3514, 19 July 1921, Page 21

A BIG BANKRUPTCY

AMATEUR RUNIIOLDKR’S FAILURE. A meeting of the creditors of Robert Martin, runholder. bankrupt, was held in the office of the Official Assignee on Friday morning. The first meeting of his creditors had been held iti Invercargill on Wednesday, June 15, and at that meeting it was decided to hold a further meeting of his Dunedin creditors. Mr C. B. Rout, Deputy Official Assignee at Invercargill, conducted the proceedings, and there were about 30 creditors or their legal representatives present. Mr W. L. Moore appeared with the bankrupt, acting on his behalf. The Deputy Official Assignee read, by request, the bankrupt’s sworn statement given to the previous meeting, showing the following figures:— 1 ’ nsecured creditors, £6892 14s 6d; secured creditors, £3280 12s 3d ; less estimated value of securities, £4125 ; surplus to contra, £844 7s 9d, leaving an apparent deficiency of £6033 os 9d. Since then other accounts had come in bringing the total claimed by unsecured creditors to £7542 12s 3d. The Assignee said that, since the last meeting the following additional claims had been made: —Robert Cairns, £33; G. F. Johnson (Lutnsden), £23 9s 7d; O. Balk (Dunedin), £54; Mi's Gibson (care of National Mortgage), £7O; Scoullar and Chisholm £6 2s: Smith and Smith, Ltd., £ll 11s 3d; L. < ITazlett, £429 7s 4d; E. Wraight, £lO 3s ; giving a total of unsecured creditors of £7542 12s 3d. The secured creditors were given as: —• David Wilson, retired farmer (Dunedin), £1300; Robert Brunton, retired farmer (Dunedin), £SBO 12s 3d; J. G. Neil, chemist (Dunedin), £I4OO. The Assignee stated that it. was resolved at the meeting at Invercargill that the sale by auction of the run, stock, and plant as a going concern by the trustees under deed of consignment to J. T. Hamilton for £4125 be confirmed, and that the acts done by the trustees up to the date of filing be also confirmed and other incidental expenses

paid out of the estate. It was further resolved that the action of the trustees in recognising Neil’s bill of sale as valid in accordance with the decision at a private meeting be confirmed, and that no action be taken by the Assignee in the matter. the Assignee read tire bankrupt's original statement in which he stated that oil medical advice he left the staff of the National Bank of New Zealand for health reasons, and took up a run of 4850 acres at Athol early in 1917. lie further described how alterations to the house and grounds unexpectedly cost him £IOOO, how iri November, IS-9, lie leased a further 900 acres that had proved only a loss to him all the time he held it. how he had lost heavily in stock during the severe winter of 1918, ami hove in July, 1919, he had failed to market his sheep through tile railway restrictions. At the end of 1920, he was offered £BOOO for his run. which would have enabled him to clear all his creditors, but as the outlook was so promising he decided to hold on. Then the slump came, and realising that ho could not meet his obligations, he called his creditors together and had trustees put in. They sold the farm for £4125, or ..about half what lie would have got for it six months earlier. He attributed his failure to lack of original capital, to insufficient experience, and the unprecedented slump in sheep and wool. He had no prospects either of money or employment. A further brief statement referred to dealings with M r Neil and Mr It, S. Black. 'The Assignee then read the following further sworn statement which he took from the bankrupt on Thursday last : “My books were kept by Mr C. (J. Webb, of Winton. I gave him particulars from my rough diary and from my bank pass book. I ran an overdraft with the lank, limited to £425 and guaranteed. The £ISOO borrowed from Sievwright, James, and Niche>l was on a bill ot sale. This was repaid later by a loan of £SOO from mv wife, and a further loan of £2OOO under a*bill of sab from R. S. Blade. The balance, of the money from Black went to pay the accounts and £2lO to Dr Campbell. There was no credit on the run wlrcrr I bought, and I cot a loan of £7250 from Air Bridge;-. 'ibis was repaid last year by a loan tor a small amount from Wilson. I paid £2289 on 1 Inland and stock altogether, j was financed by the National Mortgage Company at. first". Then in 1918 (April) Wright, Stephenson, and Company took the accounts over. 1 drew on Wright, Stephenson, and Company as I required money, chiefly lor wages and current expenses. My cash book shows money paid away through the firms (National Mortgage and Wright, .Stephenson) , but it does not show there accounts as having been received. The accounts shown as paid out to Air Sidey are for repayment of temporary loans and interest I still owo him £SOO in addition to the amount guaranteed by him. All the money I borrowed from my friends was got before tile slump occurred, and when I had every prospect ot being able to soil out at a o-ood price, with the exception of on. amount of £SO, which I got in April to help me because 1 was in difficulties I luiiy ex- toot to be able to pay everybody in full So Dr as I know Neil still holds the bill of sale"” After considerable discussion, it was resolved 1 hat, tile act of the committee appointed by creditors in signing the letter 1° ?doi ssr l Dunc ® ll aiKl MacGregor on April o, 1 1 % be conin'mod.” wir Bayne armed the date of the bill of Mr Moore: About February. Air W. J. Love: If another bill of sale was given in .February, would that be held good ? The Assignee said it would depend which came first. Mr Love was inclined to think the bill of sale fraudulent, and he was inclined to think so too. Air Love asked if bankrupt had made up his books. J he Assignee said that the books seemed to be in fair order,. Bankrupt had kept a cash book and ledger. He had put through his cash 011 the debit side £I:P and only showed receipts of £15,000. The bankrupt had explained that, however, when his attention was drawn to it. Air Todd: Were they made up as soon as the trouble first began? Bankrupt: Mr Webb came up occasionally to my place and made up the books. Mr Todd: When did he start, making up tho books? Bankrupt: In 1918 They were completed after the bankruptcy. Air Ramsay inquired if bankrupt sold a line of cattle in December which was not paid for till January. The Assignee said the last sale of cattle shown was in October for £166. Bankrupt, referring to his nooks, said he sold cattle for £7B in January and February. This was shown in his books as October, his explanation being that, his bookkeeper made a mistake in entering it up. Air Ramsay: There seem to have been a lot of mistakes like that. Air Todd: I am afraid the books have been written up since Alartin became bankrupt. Bankrupt: That is not so. lie said he sold the cattle referred to to Ales-rs Kit to. Garthwaite, Buddicombe, and Cassidy. The Assignee said he would write to these men and make inquiries. The Assignee asked if creditors wished to ask any further questions about, the books. Air Todd: I think it is useless. 1 have my own opinion as to when the books were prepared. According to the statement made by Air Alartin, he received £19,000 during tho four years. Are yutt satisfied that it has all gone in the way it should in the ordinary course of business? The Assignee: I never had a run, but 1 will tell you how it was spent. Air Todd: Are you satisfied it has been spent in tho proper way? Is there no “nest Air Moore said that, certainly there was no “nest egg.” No one would suggest that ho would go round to his friends and treat them in that way. The Assignee pointed out that only some £14.000 had been handled by bankrupt, and lie proceeded to give items comprising this expenditure. These included £2289 for the property, £2577 for wages, £2714 for private account, £2700 for feed, £779 for live stock, and £655 for buildings. Mr Ramsay: Air Payne told hint not to go to his friends for money. Air Payne: 1 told him not. to go to his friends but to his enemies, and f told him so straight that 1 ceased to be his solicitor after that. Air Balk asked why an advance ns far back as July last year was not fir-linled in the first list of creditors. Jf bankrupt's

books had been properly kept these amounts must have been shown. Air F. \Y. Mitchell: There are many instances like that. The Assignee said he understood bankrupt had not at first included gome creditors, because he did not think they were going to prove against him. When he pointed out to bankrupt that his payments greatly exceeded his receipts, bankrupt said the amount was made up of money borrowed from friends. From friends £2715 was borrowed. j Mr Balk: It- seems that the whole tiling has been l ooked. Mr Todd: Is Air Alartin prepared to swear on oath that the books were not recently purchased and made np? Bank nor replied that he would swear tliit the books were partlv prepared in 4918. Mr Duncan: I have come to the conclusion that Air Alartin does not know anything about am-thing at all. Continuing, he said that- Air Mari in bad come and taken them all down. He had told tho same story to everyone, and because he was known 10 everyone they thought it was j aI i right. He (Mr Duncan) really did not think Air Alartin bad an'- intention of taking down his friends. Air Ala-in was not half i lie -lever man he thought he was before. lie kept, on borrowing and modal ng uni l l 11° d-d lira know where he v\ ns_ “1 do in,t think be appreciates the seriousness rf hi> j o'ition to-day” concluded Air 1 imican. Air F. W. Alitcliell sad that the most, reasonable interpretation to put on the whole of these proceedings was simply that I All- Ma rin was not in his right senses. “ [ { have known hint from boyhood.” said Mr j A! it'hell, “and he deliberately swindled me, i offering me security that was pledged eT‘>. I where, hut T do not hear him any animosity, j He took on gotnetliiim that was far too big f-.r him and meddled himself ini.) a. hope. | less position. The best- thing we can do j is to leave the matter in the hands of tho assignee ami c!o.~o it up.” At this stage the meeting broke up.