1915 court: Boarding house keeper faces financial ruin

144919'1915 paper copy 'Picture by Neil Silk'05/12/14
144919'1915 paper copy 'Picture by Neil Silk'05/12/14

A sitting of the Scarborough Bankruptcy Court was held before the Registrar (Mr F Bedwell) at the Court House, Castle Road.

The only case for hearing was that of Henry Summers, boarding-house keeper, The Crescent Private Hotel, 1, Belvoir Terrace, Scarborough, and the statement of affairs showed gross liabilities of £3,846 13s 4d.

In reply to Mr JL Poland (assistant official receiver), debtor said he commenced the business of the boarding-house in April, 1900, with a capital of £420. He had about £70 and he had the other money advanced by a friend, and he gave the latter, as security, property which he had in Trafalgar Road. He had saved the £70 as a clothier’s clerk, and the boarding-house was to be worked by his wife. He had dealt in mortgaged properties since 1878 when he bought two sites, and built two houses in Trafalgar Road, getting an advance from the Building Society which he was paying off by subscriptions. In December, 1902, he borrowed a further £250 from a friend, without security, to complete the purchase of the equity of the redemption of 1, Belvoir Terrace. He had paid 4 per cent to his friend for this, and the same subsequently to his widow. He attributed his failure to loss by depreciation on the mortgaged property, and loss on the boarding-house consequent upon the war. There was a mortgage on 1 Belvoir Terrace. He was also interested in four houses in Trafalgar Road (numbers 25, 27, 29 and 31). There was a first mortgage on these of £800, and a second mortgage of £350.

The assistant official receiver: Have claims been made against the estate of £500 unsecured as regarded the Belvoir Terrace mortgage, and £175 unsecured in regard to the Trafalgar Road Property.

Debtor: I have heard so.

This, it appeared, was in consequence of greater depreciation.

Proceeding, Mr Poland asked if that would not bring the unsecured liabilities to £828, and debtor said that would be right on that basis, at the present valuation of the property. The latter had decreased more in valuation recently.

Mr Poland: So that your real trouble has been this, has it not, that you have had a millstone round your neck for several years - borrowed capital all the way along, the boarding-house, and the heavy charge upon these properties which have depreciated?

Debtor: Yes, excepting that when I had my clerkship as well I felt no incubus.

Proceeding, debtor said that until the latter part of his time, as a clerk, he received £120 a year. He had kept accurate accounts in regard to the boarding-house. In the year ending September 22nd, 1913, the receipts amounted to £490 5s 7d, in the following year £468, and this last year simply £19. The interest on mortgages had amounted to £100 a year, and rates and taxes about £50. That was £150, out of £250 gross profit at the best times. Other expenses for wages and so on amounted to about £45 a year, so that he had about £50 net profit. The last year with only £19 receipts he had expenses amounting to about £223.

Mr Poland: The result was a clear loss of £213 - Yes. He added that, as he had said, the property had depreciated much more since a year ago.

Mr Poland: Supposing you had pulled up a year ago without carrying on this boarding-house, apparently you would have saved £213, wouldn’t you? You might have saved nearly £200? - Yes.

Those interested in the Belvoir Terrace property had later insisted on him insuring it against war risks, and this had cost him £25 at 1 per cent, the premiums at the time being high. That was the first thing which made it begin to dawn on him that he was not going to pull through. They had looked forward to the summer season as an asset, and thought they would be able to go on, but the damage done to property in Belvoir Terrace and the Crescent by the bombardment greatly affected the letting of apartments in that district. As a matter of fact, in better times, after paying the mortgage interest on the Trafalgar Road property he had sufficient to pay interest on all the borrowed money secured and unsecured. It was no charge upon either his salary or the boarding-house receipts. The sudden loss of his employment as a clerk, after 41 years’ clerkship, made him begin to look around to see what he could do.

The examination was closed.