IN BANKRUPTCY.

Timaru Herald, Volume LXIV, Issue 3625, 23 August 1901, Page 3

IN BANKRUPTCY.

RE JOHN SULLIVAN, FARMER.

A first meeting of creditors of John Sullivan, Waitohi, was held at the Deputy Assignees' office yesterday morning. There were present:—The bankrupt,and his solicitor,. Mr S. G. Raymond; Mr M. J. Knubley, solicitor representing Mr Bruce Gillies; Mr Rolleston, solicitor for Booth, McDonald and Co., Reid and Gray, and. others; Mr W. Shaw, representing Messrs Welsh, Moore, and Greaney (wages claims); Mr W. J. Kent (Ballantyne and Co.), .Mr M. Redmayne (Reid' and Gray), Mr W. Priest (Priest and Holdgate, Hearn, and Lane arid Co.), Mr J. J. Grandi, Mr R. H. Bowie, Mr M. Scannell, Mr R. J. Whyte (Booth, McDonald and Co.), and Mr W. R. McLaren (N.M. and A. Co.). i The following were the debtor's filed statements: —

A.—Dr. Unsecured creditors as per list B, £834 15s 6d. Secured creditors, as per list C, £8523 ss. Estimated value of securities," £9BOO. Cr. Furniture, £25. Estimated surplus from securities, £1276 15s: . Less debts, £834 15s 6d. Balance, estimated surplus, £446 19s 6d. B.—Unsecured creditors :' Lane and Co., £7O, Booth, McDonald and Co. £ll2, Priest and Holdgate £B6, R. H. Bowie £lO, McGavin and Co. £2O, M. Scannell £lB, Reid and Gray £SB, J. Blyth £22 17s 2d, Hearn £6O, Welsh £3l 10s, M. Moore £25, J: Greaney £5, Bennett and Son £7, Ballantyne- and Co. £ll Us 2d, J. J. Grandi £4 19s 6d, "Temuka Leader" £5, J. and P. Stewart £l6, D.I.C. £4 15s 6d, Currie and North £4 6s 3d, W. C. Roulston £2 18s 2d, Ward and Co. £l2 12s, Cook and Son. £4. 10s, Powley and Keast £9 15s 3d, Kerr and Frayne £7 4s, Timaru Milling Company £2 10s, T. Gunnion £2O, J. Lee £1 3s, Laidlaw and Gray £4 3s 6d, C.F.C.A. £188; total, £834 15s 6d.

'. C.—List of secured creditors :S. 6. Raymand, first mortgage over Fairlie Hotel, estimated value' £2500/ amount of debt £550; J. Hole and Co., second mortgage over Fairlie Hotel, amount of debt £258; Guinness and LeCren, third mortgage over Fairlie Hotel, amount of -debt £1233; H. A. LeCreu and M. J. Knubley, first mortgage over 654 acres of land at Waitohi, estimated value £7300, amount of debt £4252 ss; 8.. Gillies, second mortgage do., collaterally secured by fourth mortgage over Fairlie Hotel, amount of debt, £2230. Total value of securities, £9BOO ; total amount of debt, £8523 ss.

The bankrupt, examined by the Deputy Assignee and Mr Raymond, stated that he had been farming at Waitohi about fifteen months. Was solvent when he began farming. At the time he purchased Mr Bruce Gillies! farm he, was proprietor of the Fairlie Hotel at Fairlie. This was his chief asset. It was mortgaged, for £9OO to Mr John Dore. Paid him off. It was also mortgaged to Hole and Co. to secure a balance owing to that firm on the Temuka Royal Hotel. Was to pay Mr Gillies £IOOO cash. This, and other charges.was found for him by Messrs Guinness and LeCren, and he gave them a mortgage over the Fairlie Hotel to secure £llOO and further advances. There are 665 acres in the farm, and the price was £ll per acre, equal to about £7300. This was made up by a first mortgage to Messrs M. J. Knnbley and H. A. LeCren, of £4100; a second mortgage of £2215 to Mr Gillies, and the balance was paid to Mr Gillies in cash, making £7300. After realising stock, furniture, and lease of the Royal Hotel, there was a balance due to Hole and Co. of about £250. This now amounts, with interest, to £276. The Fairlie Hotel had been and is paying a rental of £6 per week, the tenant being Mrs Fuchs. Her lease has five years to run. Mr Dore's mortgages were transferred to Mr Raymond, who receives the rent in reduction of them, so that the £9OO first mortgage had been reduced to about £550. The other mortgages on the Hotel are £276 to Hole and Co., £1270 to Guinness and LeCren, and it is also subject to a fourth charge to Mr Bruce Gillies to secure the balance due to him. Borrowed from C.F.C.A. to stock farm and carry on, and had to purchase goods on credit. In this way he became largely indebted to the C.F.C.A., but gave them no registered security, and so far as he could remember no security at all. They got the proceeds of all sales. Recently, and before the C.F.C.A. took possession, was sued by Mr Gillies for £155, interest due, and also owed Messrs Knubley and LeCren £92 5s for half-year's" interest, due 24th April. After being sued by Mr Gillies saw the C.F.C.A. about paying these, two claims.' Messrs Newman and Mundell promised to pay them both- if he gave them authority to sell his live and dead stock, and they sold on August sth. | He did not expect them to sell for some months. He believed they had paid both the claims for interest, until Mr Gillies told him, on the day of the sale,, that they had not paid Mr Knubley's £92 ss. Mr Gillies told him he had had to pay: it to protect his second mortgage: Heproduced account sales furnished by the C.F.G.A., and a statement of his general account. He did not think it a full account, and some parts of it he did not understand. The account sales showed that the clearing sale realised £1472 gross and £1344 9s 4d net, and after taking the whole of this sum they made him out to be in their debt £IBB 9s sd. He thought there should be a surplus from the hotel and farm after paying his debts, but being sued by various creditors, and being dissatisfied with his treatment by the C.F. C.A., and some of his creditors wishing to investigate his position with the C.F.C.A., he filed;in fact he was compelled to file. To Mr Priest: Gave the C.F.C.A. permission to sell, but that was. after they had sent men out to take possession. Mr Knubley said they told him they intended to seize under their authority. Mr Raymond said it appeared that they sent a man out to seize, and being doubtIful of their power to do so, they saw Mr Sullivan, and he gave them permission to j sell if they paid the two claims for in- ! terest. The bankrupt said he signed something i about the sale on Sunday, evening, July . 28th, at Dore's Club Hotel; TimaTu. MiNewman and Mi* Mundell came to see hiin i' therON Mr Newman wrote something r ',on

a slip of paper, to the effect that on their paying these sums he gave them permission to sell. They did not mention that they had sent out a man to take possession until after he had signed the paper, and he was about to go home, then they told him Mr Kennedy was on the way, and gave him a letter to give to Mr Kennedy. They, promised to pay the two debts, but he made one sum of it—£2sl. He did not imagine that they meant to sell at once, but in a few months, when his stock would have been worth a lot

more money. He met Mr Kennedy at Temuka, where he had been an hour or more before he (bankrupt) got there. Mr Kennedy had a whole detachment of assistants, with carts to remove grain. They came to the farm next morning. Said nothing to them, as he did not understand the position. They all came up, but went away again, leaving one man in charge: In reply to Mr Kent, Mr Raymond said he thought ib probable that the bankrupt had signed some security at some previous time, which he had forgotten having signed (they absolutely, refused to show any document), and then, fearing that it was insufficient, they got a written permission to sell. ' Mr Kent, who several times expressed sympathy with the bankrupt, said he

asked Mr Newman whether he had sold under securities, but he' got no answer—he did not expect one. The unfortunate thing was that Mr Sullivan gave them permission to sell. It would have been straighter if some other auctioneer had been employed. His own claim was a small affair, and he was not going to make a noise about it. But he thought it strange that they could sell under an unregistered document; it could not be done in England. The bankrupt: It would have been much better if they had left it a few months; lambs and everything would have been worth more.

The question was discussed whether the C.F.C.A. had a right to charge £133 as commission on the sale.

Mr Raymond said if they sold under a security it was doubtful if they could charge commission, but if they sold under a permission to sell, they could. Mr Rolleston said they advertised that they had taken possession under their security.

A suggestion being made that the proceedings of the C.F.C.A. should be investigated, Mr Raymond asked that as there was a probability of there being a surplus for the bankrupt from the hotel and farm after paying all debts, the creditors should not. go to any unnecessary expense in wasting the estate in litigation with the C.F.C.A. Mr Sullivan had filed to protect the interests of other creditors against the C.F.C.A., and if anything could be dona the Assignee's rights began from the date of filing. With regard to the farm, probably arrangements could be made with the mortgagees; and with regard to the hotel, his clients were willing to meet the creditors. Mr Whyte said it was a pity that Mr Sullivan did not file before the'sale took place} and the latter replied that he did not want to file at all.

It was unanimously resolved, on " motion of Mr Priest—" That Messrs Hay.; and Rolleston be appointed to act in con-i junction as solicitors for the estate, and', that the Deputy Assignee be authorisedto take such action on behalf of the credit tors .as the solicitors mav advise."'.

The Deputy Assignee said there were no funds in the estate, and he had strict orders in such cases to incur no expense without .a" guarantee from the creditors. Mr Raymond said this could be drawn up and signed at any time. •

' It was also Tesolved—" That the N.M. and A. Co. be instructed to sell the farm."

Mr Scannell asked if they were, to take no steps to investigate the claims of the C.F.C.A., and Mr Raymond said it was no use if the creditors got • 20s in the £ without it. Mr Sullivan would settle with the association.

The meeting was then adjourned sine die.