DISTRICT COURT, REEFTON

Inangahua Times, Volume II, Issue II, 15 March 1880, Page 2

DISTRICT COURT, REEFTON

Fbidat, 12th Maech, 1880.^ (Before His Honor Judge Weston) In re Edmund Lawn, a bankrupt. Mr Mosa appeared on hehulf of the bankrupt, and moved for an ord<-r of discharge. Mr Lynch appeared to oppose, on be» half of Hamilton Bros., of Greymouth, and John Mitchell, carrier. Mr Moss having opened the ra**e, the bankrupt was examined as follows .— Edmund Lawn— At the time of my bankruptcy I owed £637 13s 4d. My assets were £358, consisting of book debts. I was in business nearly eighteen months. I bought the business from } Thomas Smith paying him £310 — giving two bills, one of £30, and one of £17, and the balance in cash. I had been mining previously. I thougbt it would have been arising business. Tbe takings were about £200 per month. The busi« ness improved for about three months after I took it, and then commenced falling off,' and reduced to £40 per month. I lost a good deal by bad debts. I borrowed £80 from my brother Thomas Lawn to go into the business. He is a creditor in my estate for £70. I also borrowed from my cousin James Lawn £50 at one time, and £120 at another. I gave him a bill of sale as security. I did not think at the time that I should require the accommodation for long, but after that tbe business continued to fall. He finally foreclosed under the bill, and sold all fche things, but did not realise the amount of his claim. I was then left with the book debts and about £15. Of the £60 I collected I paid £20 for rent to the Bank of Kew Zealand as they were the lessors of the building; they had threatened to destraioed. By Mr Lynch— The business flourished ■or three months after I bought it. In June my receipts were £257. and ex* penditure £261 ; in July, receipts were £230 12. lld, expenditure, £270 13« lld ; in August, receipts were £261 11 3d, expenditure, £239 125 ,3 d ;*iu September, receipts were £262 19s 51, expenditure, £263 6s 6d. I did not revalue the stock after purchasing ifc from Smith. I did not .find the estate as valuable as Smith represented it. It .was wrong of me relying upon Smith's representations. In June, 1879, I gave the bill of sale to James Lawn. It was given to secure £120 at the time. The £50 which I had previously borrowed from him was not covered by the bill of sale. I received the money 'by a cheque. The bill of sale was not registered. I did not like to let my creditors know that I was in diffi*. cullies, as l expected to be able to repay the money. I did not want anybody to know that I had given the bill of sale. I obtained a good deal of credit after giving - the bill of sale. I got goods to the value of £191 from Hamilton Bros., and also from others. Tbe bill of sale covered future acquired property. I cannot say whether Hamilton refused to supply me with goods. Tbey did at one time decline to open an account with me. I had dealt with them on three months' bills. Their reason was because Ihey were afraid the Bank of New" Zealand would seize tl>e place. There was an interval from January 21st, 1879. to August 29, 1879, dur ing which no goods* were supplied by Hamilton. After that I had an interview with Mr F. Hamilton concerning reopening an account. lim not aware that I then led him to believe that *he business was in. a flourishing condition, and Ihat I was solvent. He asked mo if \ shnu'd be able to meet the hills as they fell due, and I said 1 would. I did not tell him that I bad given a bill of sale over my property. He did not ask me. lam sure of this. In the face of this, I got goods from him fo the amount of £191, And the account closed when they retired from business. I did not give the creditors notice of 'he mortgage until the foreclosure. I met the first hill of £59 to Hamilton. I was unable to pay the remaining bills to them because my property was swept away. I could not say the total amount of go ds obtained subsequent to giving the bill of sale— it wonld be a very large proportion of the £613. Four or six months elapsed between the giving of the bill of Sale, and the taking possession by the mortgagee. By Mr Mow-When T gave the bill ot sale, I thought I should have been abb- tr. repay the debt by instalments, but tlie district fell off subsequently. At the time of giving the bill of sale registration was spoken of, and on going to do it I found that I was too late as the three weeks had elapsed. By the Court— l started with a capital of £180, and had to horrow the difference 1-etween that and £310. I gave tho b'll of saie in Junp. 1879. I gap* the hit) n f sale for ihe £120, only, the old debt n«t being in.-lu'led. I cannot state what I owed to other creditors when I gare the

bill of ia'lff to my cousin. At that lime I owed the two Lawns, £120; H. Smith, £10; T. Smith, £17 ; Fletcher, £4,4; J. Mitchell. £28, and others, amounting in all to MM. The property I had consisted of household furniture, £1.00 ; stock a'.otit £300, and book debts about €400, Between the purchas** from Smith, mid giving the bill of sale I had purchased a good deal of stock. During that time J purchased goo*!*, to the amount of about £193 l—the £.7 to Smithtere ail included in that amount. I had disbursed' in goods n bills during that time £2828. The business was ehi«fly carried on credit. I disbursed £728 Is 41 in cash during the same period ; this included store and home accounts. At the time I gave the bill of sale I hail £48 10s- cash in hand, and I had also £21 8s besides. Tlfi*mnney, £189, went as 'ollows : — £96 *o retire bills, and- the balance went a ■.'■inst niv ***vepfli*i_ft.ito the Batik, which was £83 16<. On the evening or June 7. I had a credit balance of £74 12*!, which was exhausted on the following day. Between June and September, I just managed to keep my account with the Bank straight. In June I owed £-134, and but for the £120 loan from my brother, I would have been compelled- to stop. My expenses were heavy. I was paying higher prices than others on account of buying on bills, and I was sell* ing at a fery sma'l percentage just about sufficient to clear my way, and upon the assumption that all my, debtors would pay. I had arrived at the conclusion then that the business would not pay at tbe expense then running. I reduced my expenses by £3 per week. At the lime I gave the mortgage, £235 was ot/erdue, made up as follows : Lawn brothers, £130; H. Smith,*£lO ; T. Smith, £17 ; Glenn Bros , £34 ; Brown and Holder, £34, and Fletcher, £44. The total amount of my cash receipts, up to the time of »iving the bill of sale were £322 3s 3d The goods booked during the same period were £2053, in all £2375 or about oneseventh of the whole business was cash. My customers were miners dependent on their weekly . wage*« v jSome £350 is all that is |t|WiOntst|ndyig. I \ \ ' ' At "this stajre'of tlie examination, his Honor required a statement of certain transactions in the estate, and as the bankrupt was unable to furnish it without reference to his hooks, the case was adjoifrned" nntil the. fallowing day.

Upon the case being resumed on thp following day, Mr Mosß submitted the statement required. . _. Examination continued-. I owed £810 when I gave the bill of sale, and my assels at that lime were: Cash in hand, £75 ; stock, £300, and book debts, £3SO. At the time I gave the mortgage to ray cousin "T w_s hopelessly --insolvent, but I thougbjt thatjbj^Ve-diigi.ng Px|enses ? .ond the district looking up I might recover myself. His Honor— Why you were not fit to be entrusted. You were not fit to be at large in business matters. , . Mr MostS "said it j was merely ignorance of business mntters and want of thought, that had iuvolved the bankrupt. By His Honor— My first bill to Hamilton fell due in November. I did not overdraw to meet that bill- I had other accounts overdue at that time. I had re* ceived Hamilton's goods before the bill became due. Willi the proceeds of Hamilton's goods and others I paid off some of the old debts. Did not tell any* one of the bflt of 1 sale. Afc the; time I got Hamilton's gorids the business was barely paying. It was my duty to tell my creditors at that time that I was insolyent, and that the business was not paying, but I did not do so. I was summoned by Glenn of Groymouth 'or £30, for goods oht-'iued, partly before and partly after giving the bill of sale. Upon telling my brother that I had been summoned lie went to a solicitor, I cannot siy what I told my brother at the time. He knew pretly well how I was situated. I wanted to keep on, and pay Glenn and others. My brother was put out at the time with me, and told me he should see his lawyer about the matter, and when I again saw hira be said be would seize, and! told bioi he could dp so, as it w- s nothing to me. I did not see a lawyer with the view of setting the bill of sale aside. I was not aware at the time that my business' wns as bad as it afterwards turned out. The Bank frequently spoke to me in reference to my overdraft. I did not take stock to ascertain my posilion. Patterson's debt or" £S was contracted not long before I closed. I never paid any cash to him. I received goods from Glenn to the amount of £617, and his balance is £34. Hamilton's first amount of £107 I paid. This other account for about £240 T paid £50, leaving a debit balance of £190. My brother sold everything I had, and the sale realised £117. I could not have carried on.fbe bu<ines<* even if my brother had ..nt seized. I thought I would be • bl. 'o carry on when I snuke lo Hamilton abou* uor>d», but should not have been aide lo carry on but for the goods and term< uiven me by H a mi I ton. His Honor— lt wouid have been mo <• respectable if you had gone iuto the street, and put your hand into a imiu's pocket, and taken his money. What can I do with you. . Suspension is positively no punishment for y-'flr case. Examination continued — Of the £.■"• I collected subsequent fo the seizure, I paid £25 to my soiiritor, _nd also wem to Grey'iauuth to hold a meeting of my

eieditors. I also paid the Bank for rent. I had sickness in mv family. The capital I put into the business at the outset was my earnings as a miner for several years. I paid the rent to save the goods. His Honor— -You paid tbe rent with the money nf your cr dtlors to save your cousin's goods. Bankrup' — N ■•>, 1 paid the rent <o prevent the bailiff from selling everything belonging to my family. His tinner! It is a very deplora le case. It is th** case of an inxper-eneed person with a iittie money rushing into business of which he knew nothing what* ever, and purchasing a siitlcug trad' 1 with partly borrowed capital. That would he bad enough, but he goes on, obtains credit from a number of persons and eventually finds himself in extremis, rerplexed, and not Knowing « h.si to do He _oes to a sympathising cousin and give--him a bill of. sale, A/ter a time a •discussion seems to have taken place between the parties as to the proprie-y of regis' ering 'he bill of sale, but bankrupt thought it better not to do so. and upon tlie cousin demanding it, it was found ♦ hat the time within which registration has to be effected had expired, and that essential could not, therefore, be complied with, and I have therefore to deal with the case as it is before me. Can anything be more atrocious, more un just, or anything more completely subversive of commercial security tban the wretched state of things disclosed in this ease P If such documents as these are imported into business operations what possible safety can there befor traders? Their very existence opens the door to the vilest kind of fraud, and must in the end be the death of all commercial confidence and credit. What more flagrant instance of tbe mischievous power of unregistered bills of sale could be adduced than that supplied in tbe present case P The man finds himself irretrievably involyed, he gives a secret mortgage over his stock (0 his cousin, and then plunges into further credit, and it was urged hat he was not responsible because he was ignorant of the business in which he had embarked. Why, when he knew that he had to go to his cousin to bonow £120. was it not his duty to explain his posi'ion before he went to those wbo had trusted and put confidence in him. as well as to those whose further confidence he was about to solicit P Thi**, however, he does not do, but haying secretly swept away his present and future estate; incurs new obligations, and this with a full knowledge that nothing short of a miracle could extricate him from his difficulties. It was idle to say that ignorance led him into such a position. He became aware ihat without further credit he could not carry on. He thereupon s :cre*fy makes over his s f ock for an advance sufficient fo quiet only a fnctional part of the claims upon him, aud then goes to Hamiltons for goods, and with the certain knowledge that, unless he obtained those foods he would be unable to carry on. His posiMon he carefu'ly conceals from them, and his trading became more reckless than before, for prior to the mortgage his cash receipts monthly were one seven h of the whole, takings, while afterward*; 'hey were but one fourteenth, and the remainder of ,the goods go to satisfy "the holder of the . unregistered J)! 1 1 of. sale. Fn the face pf such n revelation as this how am Ito deal with the casp p Tf I allowed myself to he led away hy any feeling of sympathy the result would be ihat 1 *di uld be only offering a premium for dishonesty, and under i he cloak of ignorance the darkest rascali'y might he perpetrated. This is one of 'hose cases in which a afferent diss of punishment to that which is in my power to bestow is merited. To wi'hohi the bankrupt's discharge for the whole term would probably lie to pre- , vent bim irom making any effort on behalf either of himself or hit family. The discharge would be suspended for a term of eighteen months. Ec Robert Evans Gulline, a bankrupt. Mr Moss appeared to move fop an order of discharge. No creditors had proved in the es'ate, aiid there was no opposition. The Bank of .New Zialand was the largest creditor. L 530, for which a coal mine was held as security. The bankrupt was at one time a fortunate I speculator, but fortune deserted him and ! compelled him to seek the protection ot the Court. He had heen a large shareholder in the Victory Company, which unfortunate undertaking had cost abou* LBQ.QO, and was worse than useless. The bankrupts cottage and section was mort** gaged to Adams and Kingdon. Discharge granted and order made for payment of Ll7 eo9ts out of tho estate. In re James Charters Anderson. Mr Moss appeared for the bankrupt, and moved for an order of discharge. The debts were LlO7, the National Bank being the largest creditor, L3l. Order granted.