A BUILDER'S BANKRUPTCY.

Auckland Star, Volume XLIV, Issue 48, 25 February 1913, Page 8

A BUILDER'S BANKRUPTCY.

FARKOWS HXEGAIi DEBTS. ONE MONTH'S IMPRISCH^MENT. The hearing of the charges of breaches of the Bankruptcy Act against Oliver Edward Farrow, a bankrupt builder, was continued before his Honor Mr. Justice j Cooper at the Supreme Court yesterday afternoon. Mr. Selwyn Mays represented the Crown, and Messrs. J. R. Keed, K.C., and W. J. Endean the accused. Cross-examined by Mr. Beed, Frank E. Roy, who previously kept accused's books, stated that Farrow seemed to be hopeful that he would be able to get straight again. The rough balance-sheet witness prepared for Farrow was only approximate. Witness knew of contracts on which Farrow had made losses. Mr. Reed: Do you know of one case in which a wall fell down, and a heavy loss was incurred by Farrow? Witness: Yes, a !oss of about £100. Mr. Reed: Would you be surprised if the loss was £400? Witness: No. George Winstone, jun., of Winstone, Ltd., gave evidence that on the strengtli of a balance-sheet alleged to be false, he had given bankrupt a cheque for £243. In the course of cross-examination of witness by Mr. Reed, it was elicited that bankrupt had paid Winstone, Ltd., nearly £5000 in five years, and that the amount which accused was charged with having obtained by fraudulent purposes had subsequently been paid. Count 12, charging I accused with having on June 28, 1912, obtained goods from Winstone. Ltd., by means of a fraudulent balance-sheet, was thereupon withdrawn upon his Honor's instructions, without accused being called upon to defend it. The creditors with whom bankrupt had incurred the amounts mentioned in the counts gave evidence in proof of the debts, and this closed the evidence for the prosecution. No witnesses were called for the defence. Mr. Reed, in addressing the jury, held that when Farrow contracted the debts mentioned he had every anticipation of being able to pay them, as well as his other liabilities. Mr. Reed pointed out that most of the creditors were better off financially than they would have been if accused had filed at the end of June, 1910. He further contended that instead of becoming bankrupt when he found he was in debt accused struggled valiantly to make good his financial position by taking fresh contracts, hoping all the time that he would be able to pay off his debts. His Honor, in summing up, said the issues for the jury to determine were: — (1) Could the prisoner at the time he contracted the debts referred to in toe counts 1 to 10, inclusive, have had any reasonable or probable expectation of being able to pay the same as well as his other debts? (2) Has he brought about his bankruptcy by hazardous speculation? His Honor instructed the jury to bring in a verdict of "Xo" on the second count. He explained that the provisions of the Bankruptcy Act dealing with "rash and hazardous speculation' , referred to speculation outside of a man's business, such as speculating on the stock exchange and gambling.

The jury, after being out for four hours, could not agreed as to issue No. 2, but his Honor pointed out that he had instructed the jury- to find a verdict of not guilty on that charge. On the charge of having secured property by means of a false balance-sheet, accused' -was found not guilty, but on the first ten counts of having contracted debts when he had no reasonable prospect of paving them he was found guilty.

A sentence of one month's imprisonment on each of the ten counts was jmposed, the terms to be concurrent. His Honor, in passing sentence, explained that his leniency was due to the fact that nothing was known against the moral character of accused. His Honor added that as the offence was a statutory one, and did not involve moral turpitude, the sentence would be without hard labour.