ONLY ONE CREDITOR

Taranaki Daily News, 5 October 1929, Page 3

ONLY ONE CREDITOR

DEBT TO DAIRY COMPANY AUROA FARMER’S AFFAIRS. QUESTIONS CONCERNING PAYMENT The only creditor, of W. J. Sandford, an Auroa farmer,-who has' filed in bankruptcy, is the Kaupokonui Co-operative Dairy Company. This creditoi - was represented yesterday at the office of the deputy official assignee (Mr. R. S. Sage) at Hawera, when -the-bankrupt’s allairs were investigated. Mr. TJ Al Kinmont appeared with bankrupt. The debt owing to : tire company was shown as £340 avs Vd,. of which £231 15s lUd. was due under bill bi sale and I £lOO 0s lid on a. stores account. . In a signed statement bankrupt declared that he had been-indebted to the j Kaupokonui company and its associated company, the Manaia .Loan Company, I for 12 years, when lie borrowed approxi’’•inately £lOOO. /He .leased : a farm from [one Booth (Upper' Noiniahby Road) for [ five years, but had ,tb .leave at the end ;of four years, when the farm was sold. /He then went to a.-leasehold farm.of i Deacon in Lower Normanby Road) and was there for three years until it was sold. When he had to leave there the Manaia Loan Company forced him to go on to the Rawc.lilte Estate farm, which ihe leased for three years and ten years, : selling out last July to Arden. During his first year at that farm he lost 15 cows. He did not want to go on to the farm, but it seemed the only alternative to having his stock realised upon. During the time he had been indebted to the Kaupokonui Dairy Company he had never received a proper statement, of his position. He anticipated prior to his clearing j.ale in June last that suftii cient money would be realised to satisfy i all his claims, including that of the Kaupokonui company. The sale, however, was a poor one and the result was that there .was not sufficient money to pay the amount due to the comjiany.

PRESSURE FROM CREDITORS. The goodwill of his lease from the Rawclilie Estate was sold to Arden at £250 and the crops, etc., at £lOO. He' had hoped to be in a position to take up another leasehold, farm and had arranged with the Standard Trust Company to finance it. The secretary of that company had already guaranteed his account with the Commercial Bank, and, knowing of the sale to Arden, demanded an assignment of the moneys coming from the sale to protect him. This was executed in favour of the company on the understanding that the balance due after repayment of his overdraft with the bank would be used to assist him in the purchase of a leasehold farm. In the meantime, however, certain creditors (Bennett and Sutton and others) threatened him with legal proceedings and he was forced to pay their accounts. This was done by cancellation of his proposed purchase through the Standard Trust Company and by his obtaining a refund from it of the moneys held under the assignment. Certain payments were due to his wife and one of his sons, who had had no wages for working for him on the farm for over 12 months. These payments were also demanded and he was obliged to make them. He submitted a copy, of his solicitor’s .statement showing how the moneys were disposed of. He did not keep books as he relied on the Kaupokonui company’s statements, and all his money.passed through the company. Bankrupt attributed his failure to higli rental, high interest and 111-health of himself and family. His assets were nil and the Kaupokonui company was the only creditor. , A statement submitted, by Mr. Kinmont showed that on July 2 bankiupt had received £350, and a payment of £137 5s 7d from the Standard Trust Company had brought his receipts to £487 5s 7d. Disbursements were shown as follow: County rates £l2 ss, Opunake harbour rates £3l 5s 9d, commis- | sion £l7 10s 6d, H. H. Bramwell £l7 10s, Bennett and Sutton £29 3s Bd, A. F. Kruse £l’2 3s lid, G. Chuck £2 2s, bankrupt (Standard Trust Company) £lO, [Standard Trust Company £207 16s Bd, A. W. Sandford (wages) £7B, C. E. . Sandford (housekeeping allowance) £42, G. Walkley (refud loan) £5, cash £- 5s 7d, costs £2O 2s Cd. , Mr. B. Malone, who appeared for the Kaupokonui Dairy Company, asked, whether on July 2 at Manaia bankrupt was told by Mr. McCarthy that he was not to part with moneys received from Arden. , , , Bankrupt replied that he had never Seen Mr. McCarthy in the matter nor spoken to him within the past twelve months. OVERDRAFT AND GUARANTEE. The overdraft from the Commercial Bank was arranged perhaps a year ago, said bankrupt in reply to a further question. He could not fix the date. Ihe bank had no security. A guarantee was given to. the bank by Mr. Wa kley and had continued throughout, probably for two years or so. The assignment was made during the first half of June, was made out in favour of the Standaid Trust Company. Spratt and Kinmont held the proceeds of the sale. The assignment was made in order to prevent bankrupt’s loan being called up. On receipt of the. £350 the accounts we e paid out of that amount by Spratt a d Kinmont at bankrupt’s, desire. All the other accounts were paid after the set tlement with the Standard Trust ComPa W Kinmont stated that creditors had threatened to sue and therefore bankrupt had paid them. He’ P roduced letter from Bennett and Sutton, the date of which was not decipherable. Mr Malone suggested that. in Q should bo made as to the-date of the letter, which wasi July ,1929 The account was paid on July 2, so that

the demand could not have been made more than a day earlier, and it was not on the face of it a very urgent demand. ' Bankrupt said the account from Bennett and Sutton and others went direct to Mr. Kinmont. . ' / Mr. Malone said the debt to the Kaupokonui Dairy Company was the only one bankrupt had not paid. He thought ( the payments should be closely investigated. A WAGES PAYMENT. Mr. Malone questioned the payment to bankrupt’s son, A. W. Sandford, and bankrupt said his son had worked for him for 12 years without wages, receiving only a pound occasionally. His reason for paying his son £7B was that it was the first time he had any money to pay with. Further questioning drew, a statement, that bankrupt- four or five years ago bought a motor-car for £lOO, which he paid in instalments. About 12 months ago he bought a car for £6O, but paid nothing, and his son took it over. Bankrupt said the car was a. necessity when he bought it. It was a means of keeping his son on the farm, and it was not bought out of the proceeds of the farming, bankrupt and his son splitting firewood in order, to pay for the car. The D.O.A. remarked that the son’sright to payment was- very questionable... If° he had not been paid wages and had proved as a creditor he would only have been entitled to four months’ wages. In reply- to another question said he was allowed £25 a month/by. the loan company and could, only just carry on. During the last. 12 months • he had had to pay wages .to two boys. His -son left him about a . year ago andreturned about six months ago. Three, years ago' die was Supposed to pay his son £2 a week, but did not pay him. He had to find money to pay the boys whom he employed. As he could not-pay his son, it was understood, the payment should be made out of the proceeds of the sale. • ’ ■. In. reply to Mr. /Malone bankrupt...said, lie would not have paid his sop in pre? fercnc-' to the other creditors whom; he had paid. He did. not, ..pay the. Kaupokonui company because it, had had all. his money. His furniture sold for aboiit £3O. Out of that ho paid £25 to the. Farmers’ Co-op, which had advanced him that sum before the sale. That, leftyonly about £5 for Kaupokonui. Mr. Malone said that security was given to Kaupokonui, which, had never, done more .than exercise its rights,. _ Bankrupt stated that: the sum of .£4'naid to his wife was for .housekeeping, and he. and his wife had been-living on it. The son who had received £7B was ill and his illness had left him with a liability of about' £9O. Before the sale bankrupt thought he would receive enough to clear off all his liabilities and enable him to take up a new lease.

STORE ACCOUNT AT AUROA. Mr F. Muggeridge, stores manager for the Kaupokonui Dairy Company, made a statement to the effect that He had, been misled in regard to the bankrupt s store account. At a time when he knew nothing of the sum of £44 18s lOd owing at the Auroa- branch he recommended the chairman of the company to take £3OO in payment of a debt which he believed to be £370.. On June .21 Mt he himself saw bankrupt and offered to take £285 in settlement. Bankrupt refused to give security over the amount he had to come from the sale of his lease. It was at the end of the financial year that the speaker learned that there *was an additional debt to the Auroa branch. Bankrupt’s credit had been stopped three or four years before and the speaker had not supposed that tlie branch manager had again given credit. The arrangement between the Auroa branch manager and bankrupt had been such that 'the company would have to ask the branch manager to pay tne amount due. When dealing with bankrupt regaidinn- the proposal to make a settlement, Mr. Muggeridge said, he told bankrupt that if the sale of his stock, etc., did not realise the £285 the company-would require security over the proceeds of the lease. Bankrupt refused to give security, saving, that if the proposal had been made eariier he would have given a cheque for £300; He asked where bankrupt could have found the Bankrupt stated that he could ha e borrowed the money from . fnend it the Kaupokonui company would, have o nen him a reasonable settlement. Mr. Malone said there was no explanation as to why every creditor °ther than the company had been paid, m fu . Mr. Kinmont said the Kaupokonui cempanv had been collecting 10 per cent, from bankrupt year by year,until two rears ago. when the rate had been ie-. duced to 8 per cent. The sum paid by bankrupt exceeded the amount now ow--111 Mr. Malone: What a ridiculous thing to sav! Surelv you do not suppose that if money is lent you do not have to pay stated that wlien Kaupokonui company took-over from the Manaia Loan Company a revaluation was made and bankrupt s habili y was reduced, while the store account was reduced bv 50 per cent. In reply to the D.O.A. bankrupt said he thought the reduction ■ in the valuation was about £2OO, but he , did not know definitely. This reduction was on the bill of sale he had given. The D.O.A. elicited the statement that the Kaupokonui company gave a 50 per cent, rebate on the store account of £KO “Very reasonable trc/itment indeed, remarked Mr. Sage. - ■ _ Mr stated that theie no charge° for interest on the store account He added that bankrupt had said he had not had correct statements of his position from the company, but correct statements wore regularly sent. . Mr. Sage said that in his opinion i bankrupt’s assertion was not reasonable. The meeting was adjourned sine die.