CONTRACTOR’S FAILURE.

Waikato Times, Volume 100, Issue 16800, 19 May 1926, Page 8

CONTRACTOR’S FAILURE.

CRIPPLED BY INSTALMENTS. DEFICIENCY OF £BOG 17s 9d. A deficiency qr £SOG 17s 9d owing lo unsecured creditors is shown in ilie schedule of Fred Eshnlby, cartage contractor, of Hamilton, who tins filed his petition in bankruptcy. Bis only assets were lools valued at £3ofi, his trucks having been seized under lfills-of-sale. Be considers iiis position lo he due lo Bio purchase of secondhand trucks, which involved him in heavy maintenance costs in addition to the payment of periodic instalments. In a written stalcmcnt submitted by bankrupt lie staled that ho was a contractor and had been carrying on business in Hamilton and Ilie surrounding districts since llm middle of 1919. Bis work had been almost entircly on local body conlracls. When lie commenced lie had one motor truck, wliic.li lie bought for £823, and 'on which lie paid £3OO cash. Of that amount his wife lent him £2OO. Be carried on until 1923. The first year ho cleared about £3OO and did well lini il 1921. Heavy Obligations to Meet.. In 1921 and .1922 Ilie summers made road work almost impossible and broken lime and payments for labour during periods of wailing resulted in very heavy losses. In consequence he made an agreement wi I h his creditors about July, J 02.'!, and continued in business. From August, 1923, to September, 1923. lie did wtTK. One of in's embarrassments throughout had been Ilie payment of Ilie balance of Ilie purchase price, and cost of upkeep and running on motor trucks roil Hired for Ilie business. Besides Ilie truck which lie bought in 1919, lie bought early in 192 1. a second two and a-half Inn truck for £1023, paying £3OO cash and £3OO in inslalmcnls, leaving a balance due of £223. In October, 1921, lie exchanged the two trucks for one three and a-half ton vehicle, agreeing lo pay £330 for equably of exchange. This amount was secured to Puilan and Armilage under a hire and purchase agreement. After li is compromise willi iiis creditors in 1933 Puilan and Armilage allowed him Lo carry on with the truck. Further Trucks Bought. In February, 192-1, lie bought a second truck of two and a-half lons from tlie same firm for .£3OO, which tic paid in casti in one month. Be had taken over the firsL truck again at valuation under a verbal agreement with Ihc manager of Puilan and Armitage for about £7OO, ttic exact amount to fie fixed by valuation, which was never made, and lie continued to make periodical payments lo them. Be acquired a Daimler truck in October, 192 j,, from tiie Raglan County Council for £330. on which lie paid £IOO cash and Bin balance by instalments. In April, 1923, lid purchased a two and a-lialf Republic truck from A. Dent for £173, l'or which tie paid cash. In June, 1923, lie bought' a Leyland from Scabrook, Fowls and Co', for £-100, or which lie paid £IOO in cash and £.IOO later. In October, 1921, he bought a car for £2GO, on which tic paid £SS, borrowed from Ills wife and Ilie balance bv monthly instalments of £IG las. Be repaid iiis wife £O3. In September, 1923, lie included that car with ihc Daimler and Don’t Republic in a bill-of-sale. securing £212 to Mr Cate. Second-hand Trucks a Failure. Be appeared to he prospering till September, 1923, and then found Ihc. disadvantage of second-hand trucks, especially as the weather was had up to the end of November. The repair bills were heavy and in addition tiie big truck ran off at the rim eleven tvres between March and October. At the beginning of ibis year he was pressed by sundry creditors, though lie was in a position lo make very good -money if his trucks were in order, lie could not, however, keep (hem in good condition, and Ihcy were constantly breaking down. To add lo Ids misfortunes the best of Ilie I rucks, the Leyland, broke through a bridge in February and was off for a month. In January lie returned, the two Republic trucks to the firm who were pressing him, as tic could not meet liis payments. On March 10, Mr Gate took possession of the Republic and Daimler trucks and the ear under IBs bill-of-sale. Tiie only truck left, the Leyland, had damaged the gear-box in the bridge accident and he could not afford repairs. Scabrook and Fowlds took the truck hack under their litre and purchase agreement, leaving him without a truck to carry on business. In reviewing his position lie realised that lie should not have bought Bio last two trucks, despite the fact that (hey were bargains. Be could not afford Bio cash, as the payments lie already had to met were ns great a drain as lie was capable of bearing. Be failed to appreciate when buying, Hie crippling effect the payments, combined with upkeep and repairs, would have on iiis position. Be had entertained hopes of pulling through, hut uiiforso-cn circumstances and the pressure of creditors had caused him to file iiis petition in bankruptcy.