LAW REPORTS.

Dominion, Volume 3, Issue 825, 25 May 1910, Page 9

LAW REPORTS.

CRIMINAL SESSIONS.

BANKRUPT AND HIS BOOKS. G 1 POINT FOR HIGHER COURT, f Tho trial of John Morris Schapiro, ® cabinetmaker and furniture importer, now* bankrupt, upon a charge of failing i to keep proper books of account ii\ coni hection with his business, wau proceeded with at 3.30 p.m. J Mr. \V. ]/. D. Bell conducted .the Crown c ease, and Mr. P. .Levi appeared for I Schapiro. s Mr. Bell, in opening the case, referred 3 to tho difficulty which had been experi- , enced in arriving at a definite statet ment of the accused's financial position, a Tho Official Assignee, Mr. A. Simpson, » stated in evidence that, when Schapiro became bankrupt on February 18, 1909, t on his own petition, great difficulty was a experienced in obtaining his books. These had not been kept systematically, J and no account appeared indicating liow _ the stock stood at different times. Wit- . ness was a registered accountant, and 9 he had gone through the books, but 0 could make nothing of them, and he hud ] then called in an expert accountant to j assist hiiu. Accused's bank pass book t (which-had little bearing on the case) jj had been lost, during tho removal of tho e contents of the', Official Assignee's office . to new premises recently. Accused hart not kept a stock book and no profit and loss account appeared in the ledger. Ale together the estate had been a very 0 difficult one to administer, the checking of proofs of debt .being almost impracticable. Further he was not sure even yet " that accused had given up all the books k of his business. lie (accused) had owned a leasehold property in Tory Street, which was ultimately sold at public auction, realising only .£lO over ' the r amount.of the mortgages. He also owned \ a brick building in Cuba Street, from Y which source and from the balanco of e stock about «£2OO would be obtained. 0 Witness further pointed out that in his 6wom statement Schapiro had put down £ his liabilities at ..£1506, whereas the total f liabilities were over .£2OOO. This fact indicated that even Schapiro himself had : not been able'to arrive at u corrtct a statement of his afFairs. © Henry Kember, public accountant, de--1 tailed in evidence the result of a thorough examination of Schapiro's books. Accused t it seemed had been in the habit of buying goods and sending them to auctioneers t round tho country. He also made up ! furniture and disposed of it in the same 4 way, doing, on the whole, little business q apart from the auctioneers. There was t no trace of a profit and loss account, no _ capital account, no building account, no t mortgage accounts, no stocK account, no 5 bills payable account, and no bills receivable adcount. Mr. Levi, at the close of the evidence j for the prosecution, remarked that • t Schapiro was a foreigner, and knew no- . thing of bookkeeping. Charles Grubb, accountant, stated that _ he bad entered up Schapiro's books from x December, 1907, till the time of his r bankruptcy. He spent about two hours 1 a week on the books, and the only book r from which he could glean particulars q of the business was a rough day book, kept by a girl in the shop. He (witness) had suggested to Schapiro that stock should be taken, and .that a new set of books should bo opened/ but this had not been done. Schapiro, in evidence, stated that he . was born in a Prussian province, and could not write good English. He knew nothing of bookkeeping, and he had consequently entrusted his books to a girl _ employed tin the shop. Ho paid all his receipts into the bank, and had been quite unaware of defects in -the bookkeeping. Had he not become bankrupt, he would not have known yet that his _ books were not kept properly. (Laugh- _ ter.) His stock was easily taken, he said, _ but he had desired to keep the prices of i. pictures secret. -~ :r:- [»* ' * "H' you can gel «£4O or'-ioO' for a pic--5 tun?, you don't want ,to tell thu cost," , added Schapiro. He went on to say that tho pictures. which he. referred • to were , oil paintings by William Baker. There jißve other pictures by a London artist. - Bookkeepers whom he employed kept the , books in "different ways, each man following his own system, and, in the end, "1m waS Srave doubt about the books. ■ The bank pass book, which ho had handed over to the Official Assignee, contained several memoranda by which he had been able to learn exactly how lie stood. His business was carried on nnder the style of "John Morris and Com- ® pany." ' Mr. Levi, addressing the jury, urged tliat it could not be said that Schapiro had any knowledge that the books of his busine.% .were not being kept properly. . He was entirely in tho hands of tho bookkeepers whom he employed. In part 13 of the Bankruptcy Act, Section 133. Subsection D made it an offenco for anyone who, within three years of tho commencement of his bankfuptoy, failed to keep such books of account as were a usual and proper in the business carried 0 on by him, and sueli as would disclose >- his transactions and financial position. 1 Counsel argued that it was necessary for e tho Crown to show that the accused had i. a "guilty knowledge" of his failure to i keep books. s His Honour, in^ summing up, said that il the question whether Schapiro understood r bookkeeping or not did not enter into the t case. If the jury decided that the books did not show his financial position and his financial transactions, then the verdict must be one of guilty. -The three accountants, Kember, Grubb, and Simpson, all agreed that the books wero not the proper "and usual books to be kept in such a business. As for the point raised by Mr. Levi, that it was necessary to prove "guilty knowledge" on the part of i, an accused, his Honour did not agree a with counsel's contention. In his Honi t our's opinion, the statute did not require that there should bo'evidence of "guilty knowledge," # and the mere fact of the accused having allowed his books to bo so kept as not to satisfy the law was sufficient. The jury retired at 6.2-i p.m., and returned to court at 8.42 with u verdict of guilty. A rider was added by the jury to the effect that the books had not been properly kept, but that if the bank pass book and the memoranda which -Schapiro , asserted were contained therein had been ' produced, an estimate of Schapiro's finan- ® cial position could have been arrived at. The jury considered that the Official Asj signeo was blameworthy in not having produced the banlc book and the documents enclosed in it. His Honour agreed to state a case for the opinion of the Court of Appeal in regard to the point raised by Mr. Levi as to whether "guilty knowledge" was necessary. Schapiro was allowpd bail, and ordered to appear before the Court on August 15. if CHARGE OF BURGLARY AT e GREYTOWN. ACQUITTED ON SECOND TRIAL. A young man, John Henry Ireson, came up lor trial yesterday in the Supremo Court before the Chief Justice (Sir Robert Stout) and a jury of twelve, fie was charged with that on last New Year's Day htf broke into the house of Thomas * Shaw, at Greytown, and stole «£1 4s. Tho case had been tried at the last Wellington criminal sittings on February 8. and £ on that occasion the jury had not'been t able to agree upon a verdict. Mr. W. H. D. Bell appeared • for the " Crown, and Mr. 11. F. O'Leary for acQ - cused. The evidenco tendered by tho prosecu--10 tion was to the effect that Ireson, whoso •• relations lived in the district, had known the Shaw family for some years, and had visited them. Un the afternoon of Janua* ary 1 Mrs. Shaw had gone out on her °* bicycle, and Mr. Shaw was working ~ among the tomatoes behind tho house. * Shaw saw Ireson near the premises, but did not see him enter, although when Mrs. Shnw returned it was noticed that the kitchen window, which had been left '* open a few inches, had been thrown up, ' the doors were standing open, and 245. in b ' silver wore missing from a purse. A good many people passed that day on their way to the Tauhcrinikau races, so l t| that anyone entering the house by a [ front window must have been seen by

passers-by. Tho witnesses for the Crown wore Thomas Shaw (farmer), Clara Shaw (his wife), Clarence Wenden (a lad), and Constable Larkin. The defence was an alibi, tho witnesses being Kdwarci Ireson (accused's brother), I'Vumy Hastings, and Ellen Stockdale. It was stuted that the accused had spent the afternoon at his brother's house, photographing the children. Tho jury retired at 12.12 p.m. and returned to court at 3.30 p.m. with a verdict of not guilty. Accused was then discharged.