Untitled

Press, Volume LXII, Issue 12571, 14 August 1906, Page 8

tions until he began to ask him for the ' deeds. It was after witness had issurtl, the writ that ho saw Bruges about the deeds, and Goodman said, "You know as well as I do." The writ was served on April 27th, 1905. After that Bruges ; made several appointment's with . witno**i's solicitor, but witness did not think they were left. Mr Hanlon did not crofs-examine. THE EVIDENCE OF MR LAWRENCE. The next witness called was Basil Keith Senior Lawrence, teacher at tho Christchurch Boys' High School. Ho ; said he owned a'property on Boundary road, which ho purchased in 1896. In that year he gave a mortgage to one of Bruges's clients. .Samuel Goodman — I who was not accused. He did not give ! any fresh mortgage in 1901 : tho 18!>3 i mortgage still subsisted, £-G0 being due. Ho did not at any time in 1901 ask Goodman and Bruges to obtain a | loan. Ho did not know that Goodman j aud Tuck had been inspecting his property until tho time of Bruges's bankruptcy. Witness paid off the mort- j gape out of his own money in July, . 1902. He paid tho £200 into Bruges's office, and also the other moneys. Tho , mortgage was £000. ! MR C. If. MASON. I Chas. Henry Mason, painter, of i Timaru, said that in April, 1903, he. lived at Lin wood, and had a house and lan.l there. It was subject to a mort- : ' uage to the Murual Benefit Society. Goodman knew tho land was subject to a mortgage, witness having t'dd him. ! Witness asked him, if possible, to aianother mortgago of £300 at a I ; lower rate of interest, so as to pay off | the, original. He took Tuck to . sco the property, but alterwards witness ' sold his property, and told Goodman of his intention. He never received any ■ money from Bruges's office, nor signed < any .security. I LADY WITNESSES. | Mrs Ellen McDerniott, keeper ; of a boarding-house in Here- . ford street said she owned some rot- , i faces at St. Albans In February, j I 1901, she borrowed £GO, on the secu- l I rity of that property, giving a mort- | ! gage to a Mr Johnston. She borrowed i j tho money through Goodman and i I Bruges; sho only gave the one mort- ! j gage. Sho never borrowed anything ! i from Mr Tuck or anybody else, and ; did not ask them to borrow any inoro | than the ,£6O. i Crass-examined by Mr Russell, wit- ! ness said that when sho borrowed the | money she saw Goodman about tho matter and nobody else. • Mrs Jane Hornblow, Gloucester I street, was next called. She stated \ : that she bought her property three i 1 years ago, there being a mortgage to [ j Mr Tuck of £400. She paid it otf in j October, 1904; it was into Mr Bruges's office she paid, and she thought Good- ! man received it. She obtained a re- j ceipt for it. j Mrs Janet Campbell was called, but j sho had considerable difficulty in making her way to the witness-box. At the suggestion of the Crown Prosecutor ib was agreed to take the depositions of her evidence in the Lower Court, j i Sho said sho never gave a mortgago to Tuck, and never received any money from Brugess office. John Wesley Buddie, manager for Fletcher, Humphreys and Company, said tho plan produced represented tho cidor mill property. The title deeds of that property wero in his possession at his office. In 1898 there was not a regis- j tered mortgage on the property. There was no sum of £400 obtained by Flet- j j chor, Humphreys and Company on it • to his knowledge. He had searched | ' the books, but could find no trace of any such transaction. The Court then adjourned until two o'clock, the accused being allowed to leave the Court, on tho undertaking ol their counsel that they should appear at two. THE EX-ACCOUNTANT'S EVIDENCE. After the luncheon adjournment Henry Sheridan Bushell was called. , He stated that he was employed at Bruges's office until about twelve ( months ago. For about six years he was accountant. He used to receive j at tho office moneys received from ! clients. There were two accounts I kept, ono trust and the other general. I Capital moneys in estates of which j Bruges was trustee were paid into tho trust account; to the best of his recollection no other money was paid ! into the trust ( account. Money received from ordinary clients for in- i vestment went into tho general ac- I count. He found that that was tho prac- ' tico followed by his predecessor, and , ho was instructed to follow that cus- I torn. Goodman engaged him. Ho j used to pay some of the moneys into | tho general account; he prepared the slips. Goodman had banked also, paying clients' money into the general Account. Bruges used to operate solely on tho trust account, and either he or Goodman on the general. Bruges had access to the books; witness remember- ! od occasions on which Bruges had j taken the ledger into his own room. ' Witness believed he had looked at tho letter book. Tho business of the office consisted both of common law ! and conveyancing; there was a pretty j largo amount of the latter done, j Bruges used to sign tho land transfer I documents as correct. All cheques j and moneys relating to ordinary con- j veyancing, except thoso relating to the i estates, were paid into the general account. Witness had no personal | knowledge that certain moneys paid in j for specific purposes were applied to other uses. He had known sums paid as interest that ho did not at tho timo recognise. Cross-examined by Mr Russell, witness said that both Bruges and Goodman did money-lending business; that which Bruges personally did was connected* with trust estates. Goodman I conducted a large money-lending business on all classes of security. That formed a large portion of the work with which Goodman was concerned. In respect to those transactions Goodman saw the parties in nearly all cases. Witness was not able to" make up the books so as to reveal to Bruges his actual position. There were some old balances in tho books which required explanation. Counsel: Why did you not get somebody who was competent to put tho balances right .and discloso the position ? Witness: It was a very busy office, and there was not time io go into it. He had spoken torCrcodinan, but as he said there was no time. Re-examined, witness said that in connection with the money-lending carried on by Goodman the costs wont to Bruges, and Bruges signed all transfer documents. In witness's time there ' wore two or three other clerks. Bruges I showed him a balance-sheet taken be- j , fore witness's time, and witness j thought, but was not sure, that he took the balances out about four years | ago. But tho books were never balanced. ' Tho interest derived from the investment of tho trust funds was paid into ; the general account, with one or two , exceptions. In reply to Mr Russell, witness said i I that it was a fact that some of the peoplo entitled to interest on tho | trust funds obtained payment of interi crt month by month. He knew of one '. or two such cases. j To his Honour: The income from the trust estates which passed through , witness's hands would not lie more than ' £200 or £300 a year in. each case; ho could not say what the aggregate would . be. _ It was the practice as a rule to j pay income and interest into the gene- ' rat account. j BANK LEGER-KEEPEUS STATE- I MENT. j Francis Herbert i'olhiil, ledger- j keeper at the Union Bank, Christ- \ church, stated that Bruges kept the 1 two accounts at his bank—trust and general. .Before Bruges became bauk-

I rnpt cheques were returned dishonoured. , The lirst occurred on February, 1904; after that a good number were returned—for £400, £104, £50, and other substantial and small amounts. Notice : was given. The dishonouring of cheques went on up to the time of the bankruptcy. THE ACCOUNTANT'S EVIDENCE. Cecil Claude Morton Ollivier, accountant, stated that he had made an , investigation of the books, papers and documents relating to Brugess office, at tho request of assigned trustees and the Official Assignee. A ledger and cash receipt books were all tbat Wore kept. He also examined the bank pass books. He found an entry on I March 2nd, 1901, crediting H. Tuck 'with £260; H. Tuck was in Bushell's • writing. and "credit from you, £_uo,""iu Goodman's. This sum was included in a credit of £278 2s Od paid l into the general account on March 4th; :he had not tound any entry showing ! payment to Mr Tuck. On April 18th, 1903, there was an ontry in the cash ! receipt journal book, '"H. Tuck, credit • from you £200," in Goodman's writing. WitiiM« kid traced that into the bank, lin a credit of £211 8s Gd, paid in on ! the wine day. There was nothing to | show that any of that had been paid out on Tuck's behalf. The first £2GO ' was paid into tho bank by Bushell. On • February sth. 11)04, there was an item of £00, fo the credit of Tuck, in Goodman's writing. That was paid into the bank on the general account tho same , day by Bushell. There was no trace of any pavmout out on Bushell's behalf. , Oil October oth, 1901. there was an ! <']>tvy of i:U4 8-5 8d to the credit of Mrs Hornblow in Bushell's writing. It was banked the .-samo day by Bushell. There was a journal entry on October 20th, debiting Mrs Hornblow with '.CllO life 2d; and an entry crediting j Tuck w&i £400 principal, and interest £10 13s 2d. There was no trace of the £100 being paid or invested on Tuck's • behaif. On iLarch 9th, 1898, there was an entry crediting Tuck with £4-50; it I was paid into the general account, | with a credit of £490, by Wm. Roxj burgh. On March Bth, 1898, the bank acc--iiur.it; was overdrawn £oS l(ss Id. j Tho two cheques produced, both dated ! March 10th, 1898, signed by Bruges, i were for £220 and £000. On March | 10th, £2_o was received from a lady ; client, and was banked that day in ; the general account. Bruges then drew a j cheque on the same day to pay anoI ther cliont, in the usual way; there was no complaint about that. As to the cheque for £500 there was net enough to meet the cheque without Tucks £450. On March llth,_ 1898, i the account was overdrawn £274 15s i llkl. From the books he could | trace the items of £200, £200, ! £60, £400. and £450; they I were used to meet other liabilities. I They were Bruges's liabilities. The j books showed that Goodman was a I .salaried clerk, and witness had found Ino trace of commission, or sharing of | profits. As tbe resu-t of his investigation, witnos said tliat approximately £10,000 to £12,000 had been paid into the office without being invested. That : had commenced about 1899, gradually lat first. It had since become aggravated, more especially during 1904. There must have been a »hortag-3 in 1904, but if they wero dealing with large amounts it would,.be very easy to cover it up. On Bruges's trust account £4869 13s 4d was paid in for the six months ended August lilfit, 1901, and £3280 14s Gd j for the half-year ended August 31st, 1902. They were not large amounts. and there was more in the general i account. If all cheques had been met jon March 2nd, before the £260 was I paid in, the overdraft would have been £740 14s lid. There was a cheque for £207 12s Gd paid a Mr Thompson on March 4th. Cheques wore drawn which practically absorbed the ,£2OO paid in in April, 1903. On February sth, 1904, tho bank account would have been overdrawn £30 12s od, but for the deposit of the £GO. On October 6th, 1904, after paying cheques presented up to that date, the bank passbook showed a credit of £211 13s. "When ! Tuck's money was banked in tho credit lof £427 10s"2d on the Gtli, there was a credit of £G35 3s 2d. On September 114 th Goodman received £806 from Gre--1 gory Elliiott, and paid it into the i general account on that day. Goodman also received £100, less exchange, ! from Elliott, on September sth, and banked it to general account. A porI tion of Elliott's and tho whole of Tuck's I money was paid to persons to whom, aoj cording to the books, Bruges was indebted. Tuck's money was apparently I paid away to make good Elliott's. That i was an instance of what was going on for a considerable period. | To his Honour, witness said there was £351 8s 9d in the trust account ' and £G8 4s lOd in the general account when the trustees took over the estate in bankruptcy. There was no money to satisfy creditors. Cross-examined by Mr Russell: All tho cheques ho produced on tho general 1 account bore Goodman's signature, with 1 the exception of tho two put in. The j cheque for £2GO was signed by Good- \ man. Generally, the books wero such that it would be impoisiblo to ascertain the l-eal position. Ho found that i considerable sums had been paid into '. the bank of which there was no trace jat all; they wero very large sums. He ! thought some of the amounts belonged to estates of which Bruges was trustee. From his books Bruges could not have ascertained whether he owed I money to people, or they owed it to I him. The boolm only served to mis- ' load. When making out the balance--1 sheet, witness looked' to Goodman for information because Goodman knew about everything, and had an explanation for almost everything. The first statement witness got out, after going through with Goodman, showed- assets £9031 and liabilities £8269. Witness liad a statement made by Bushell as to assets and liabilities put into his hand*, and he went through every item with Goodman. Witness discounted tho figures considerably when going through them with Goodman. He got very little information indeed from Goodman in regard to the moneylondin<*- transactions. Bruges knew about one or two, but tlw proportion was very small. Bruges knew nothing about Tuck's account. It took witness and another accountant three days to thrash out Tuck's account. Re-examined, witness said he found in the fight of after events that he could placo very littile reliance on Good-man's statements; there was perhaps a smattering of truth. Ho found that the assets mentioned by Goodman wero not all in existence. To one trained in accounts the books would certainly havo aroused suspicion. With few exceptions tho interest on- capital trust moneys was paid into tho general account. . I To his Honour: The total liabilities ■ were about £12.000, and witness estii mated the assets at about £3000. | This concluded the caso for the Crown.