IN BANKRUPTCY

Southland Times, Issue 20171, 6 May 1927, Page 8

IN BANKRUPTCY

MEETING OF CREDITORS. ESTATE OF ISAAC BUTLER. INQUIRY INTO AFFAIRS. The adjourned meeting. of creditors in the estate of Isaac Butler, Riversdale, was held in the Gore Courthouse on Wednesday afternoon. Mr J. N. Adam, Deputy Official Assignee, presided. Mr E. C. Smith appeared for Messrs Shore and Grant, and Mr R. B. Bannerman appeared for the bankrupt and Mrs Butler.- Four creditors were present. The debtor’s statement showed that he owed £5069 13/8, less assets of stock-in-trade, book debts, etc., amounting to £143, leaving a nett debt of £4926 13/8. The only secured creditor, apart from the mortgagee, was the Southland Farmers’ Co-op. (£ll 14/5). In continuance of his statement given at a previous meeting, the debtor, in reply to the assignee, said he drew a cheque for £3 7/6 about a month ago. He was not earning any money at the time. In January, 1926, he made application for a loan from the Invercargill Savings Bank of £4500. It was in April, 1926, that he knew the Savings Bank would not advance the money. It was on November 10, 1925, that he agreed with Shore to built his house. It was a written contract and the work commenced in March, 1926. Shore did not know anything about the debtor’s financial arrangements. He told Shore he would be paid cash. He told Shore later the Savings Bank had turned him down, and he was trying to get the money elsewhere. Shore knew as soon as he did that he could not get the money. He did not owe the Co-op. anything at the time he gave it security. He gave it for current advances to carry on. The Co-op. had practically sold everything except a harrow and ploughs. The sale was a private one, and took place in February. All his farm accounts went through the agents. The Co-op. had the biggest share. The bank book (produced) contained only his personal items of expenditure. The money in the bank book was money advanced by the firms to him. The tractor was taken back from him by the Harvester Company. He paid £6OO, including interest on the machine. The money was paid to the International Harvester Company by Bowler and Bannerman. The first cheque of £lO5 was paid in February, 1925, and was paid through the bank. The others were paid by Bowler and Bannerman with money received from the agents. His motor car (a Dodge) was taken back by Gormack and Pettigrew in 1926. He had the motor for nearly four years. His mother had a rent charge on the land, but she postponed it at his request. His mother’s was the third mortgage. It was Mrs Grant who sold him up. She bad a mortgage of £5OO. He owed his mother two years’ interest next August, less £lO paid on account. She had asked for the money. To Mr Smith: He received 100 sheep from his father beside the farm. The altered arrangement to pay an annuity was made in October, 1925. The bank book and the firms’ accounts were the only records of his transactions. A statement of his transactions for the past few years could be made up. Since October, 1926, he had received advances amounting to £76 in cash from the Co-op. A good part of it was spent in paying small debts and the biggest part would be his own expenses. He had been in difficulties since last June. He was sued last June for £9O. He paid the £9O. Shore was also pressing for a settlement then, and witness told him he could not give any money just then. Ultimately he gave Shore a cheque for £BOO. He gave the cheque on the off chance he would be able to meet it at the end of the month. He knew he had no money at the time. He told Shore not to present the cheque until he told him to. He did not say “a few days.” Shore subsequently took proceedings to register a lien on the land. This was served on the speaker. The lien was served in July, and the case, was heard in August. He knew he could not pay just then. Proceedings were also taken in the Supreme Court to enforce the lien. He remembered being in Mr Smith’s office, but he did not think he discussed land matters on that visit. He remembered being in Mr Smith’s office with Shore, and he refused to sign the documents on the ground that he could not get the documents to take to his solicitor. He remembered receiving a writ for £BOO. That would be about October 4. 1926. The cheque for the £BOO was dated June 30, 1926. He was paying other accounts. He did not think he signed a security to the Co-op. the same day as the writ was served on him. He did not owe the Co-op. any money when he signed the security. He got no advances that day. The last stock sold off the place was* in May, 1926. He had had no stock of his own on the place since then. His brother still owed him for the grazing (£25). He did not buy a Chrysler car. After the property was sojd he had nothing to carry on with. It was in March, 1927, that he found out definitely that the farm was sold. Mrs Grant bought the farm. Mr Bannerman said it was most difficult to get the facts of the sale. It was passed in at auction. There was ample proof of that, but how it was sold and for what amount to Mrs Grant .was a story that had yet to be told. Mrs Grant had the title and she again sold to Turner, who was in possession.

Mr Smith: Yes, and out of that money Butler has been paying debts, one of £9O, one of £lO4 and others, and yet he never offered to pay Shore a penny. In addition to an explanation of the sale to Mrs Grant, there is also an explanation required of the giving of a security to the Co-op. the very day that he was served with a writ. Was that a proper thing? Continuing, Butler said he did not know in February that the place was sold. He had not been on the place since February 26 last. He knew in February that he owed £l5OO to £2OOO in debts beside the mortgages on the land. The reason he did not file then was because he thought he still had the property. He only knew then that Turner had taken possession of the property. The property was passed in at the sale, and he thought there was a chance of getting finance somewhere to tide him over his difficulty. He owed the Government £2500 in November last, which included about £2OO interest. There was no interest paid to the second mortgagee at all, neither were the rates paid. He could not stop the taking of the tractor as it was on the hire purchase system. He never told anyone he would put Shore to as much trouble as possible. He would not think of such a thing, but he could see now he had put him to a lot of trouble. He tried in February last to get enough money to pay off the second mortgage, and then arrange with Shore to take a mortgage, but he failed in his efforts to do so. He did not consider the price at which the farm was sold was fair value. He could not make any offer to his creditors. He was a single man and doing casual work at present. Mr Smith said the debtor should have filed last November, when he found himself in difficulties, but instead he went on putting off his creditors and getting deeper into trouble. He certainly paid a few, but the one he had treated most shamefully was Shore. He felt sorry for the debtor’s mother. He could see nothing for her. The matter of the security to the Co-op. on the day he was served with a writ also required looking into. There was no consideration given for the security. Mr Bannerman: Oh yes there was. It was to enable the debtor to carry on. Mr Smith: I repeat what I say, that when the security was given there was no consideration—and that apart from the circumstances which I have mentioned. No doubt the assignee would take the Crown solicitor’s advice on the subject, and would act as advised. It was decided that the matter be left in the hands of the assignee and the meeting adjourned.