ALLEGED CONVERSION.

New Zealand Herald, Volume LX, Issue 18396, 11 May 1923, Page 9

ALLEGED CONVERSION.

BANKRUPT AUCTIONEER.

P. W. DOUGLAS ON" f TRIAL.

CASE FOR THE DEFENCE.

A bankrupt auctioneer, Percy William | Douglas (Mr. Seymour), pleaded not guilty to nine charges of having fraudu- ; lently converted to his own use sums of j money totalling j £408 12s 3d, The proceedings were taken as a result- of a resolu- j tion passed by bankrupt's creditors. The charges' were that the accused; fraudulently - converted to his own use | amounts being balances of P*f «« of property sold by him on behalf of those mentioned ;-(l) On or about August 24, 1922 £200, New Zealand Government; (2) 'on or about October 31. £50 12s 6d, Bert Toomer; (3) on or about December 19 £47 10s 6d, Thomas Armstrong; (4) on January 5, 1923, £28 13s 6d, Cruickshank, Miller. Ltd.; (5) on January 9 £22 Is, Pullan and Armitage, Ltd. ; (b) j on' January 11, £17 Bs.\ .Collins Bros., Ltd.; on December 16, £16, T.S. Adams; (8) on January 15, £13 12s 3d H. Banger; (9) on. December 20, £12 14* «, Emanuel Kissin. . . - j Mr. Paterson, who appeared tor tne Crown, said that Douglas commenced business about four years ago on borrowed capital. He became bankrupt mi January. His books showed that the | goods referred to in the charges had been sold and the moneys received by him. dm schedule in bankruptcy showed ra total deficiency of amounts that should ba%a been trust- moneys of £1471 2s 6i Counsel read a statement by the accused admitting having received the moneys and not_ Having paid them to his various -clients. Accused had kept no trust account, and admitted having used the money of one client to pay another. Position of the Estate. Wilfred Laurence Roberts, clerk in the official assignee's office, stated that bankrupt's schedule showed liabilities amounting to £2812 6s 9d, and assets £1710 Is 6d. Proved claims totalled £3696 3s 6d. The tssets had realised about £500, and the dividend would be about Is 6d to 2s in the £. ~ -■'~. ■■■■'■- , Cross-examined, witness said there nan been no effort- to conceal assets or falsity the books. He did not take out the annual turnover of the business from the j books. A balance-sheet among the books ; showed a profit to September 30, 1922, oi £1669 14s. - , , , Re-examined, witness said the balancesheet showed that accused had drawn for his own use £634 13s Bd. Counsel for the defence said that accused would give evidence that- the bal-ance-sheet was for a term of about. 18 months. Witness, continuing, said the balancefcheet showed a bank overdraft of £615 16s lid. j . Senior-Detective Hammond i stated that he had obtained a signed statement from the accused as outlined by counsel for the prosecution. Ignorance of Responsibilities Pleaded. At the close of the case for the prosecution, counsel for the defence submitted that there was no case to answer. Fraudulent action was the essence of the charge, and he contended that no evidence of intent to defraud had been adduced. . . His Honor said that accused had admitted fraudulent action in his signed statement. He obtained goods to sell by public auction, and used the money of one customer to pay another. There was a' clear case'of fraud to answer. Mr. Seymour said the defence broadly was that accused was entirely ignorant of the responsibilities thrown upon him by the Auctioneers' Act. It was; an unfortunate case of a man who had lost, not only his all, but had to find £1500 .of. trust money. The position was largely due to faulty office methods, for which the accused was not altogether responsible. No evidence of intent to defraud had been adduced. . .' • '.. P. Hansen, farmer, stated that just before last Christmas he offered accused £1200 for the .business. The latter said he would not take £20,000. Witness understood that accused had heavy liabilities to meetapproximately £3000. ; William Griffiths, '* who had been manager of the land department for accused, corroborated the previous witness' evidence regarding the offer for the business. He understood that accused had subsequently offered Mr. Hansen a partnership, but did not know on what- terms. Throughout the negotiations with Mr. Hansen accused gave witness the impression that he was acting queerly, and was not- capable of conducting the business. Accused Gives Evidence. The accused stated in evidence that prior to starting business for himself he was employed by an auctioneering firm for about seven years. Till June last he had employed a qualified accountant. He kept a trust- account in his land department, but not in his general business. The accountant was dismissed as accused desired to reduce expenses. He then employed a man to audit the books. That man drew out a balance-sheet for a period of 15 or 16 months. He told accused that his position was good. Accused submitted the balance-sheet to several people in November, with the object of forming a company. The only obstacle to the formation of the company was that accused was unable to obtain a lease of the premises he was in. The prospectus was drawn up from the balance-sheet. The capital required was £4000. About June. 1922. accused realised that matters were becoming difficult, and he cut down expenses as much as possible. He drew from the business from £350 to £400 a year. Accused obtained a divorce from his first wife and paid her £2 10s a week. He also supported his father and had to employ a housekeeper. Explanation of his Statement. To His Honor, accused said he would require to earn more than 10 per cent, on his turnover, which was about £31.000 the second year. His overhead expenses ! were from £70 to £80 a week. He aimed \ zt making from 12£ per cent, to 15 peri cent, on his turnover. Accused employed I an auctioneer, and paid him £8 10s a; week. Accused had to meet losses in ! breakages and in goods being sold under ' reserves. His position became acute early ] in January, and he called his creditors to- ! gether on January 17. As to the statement; made to Detective Hammond, that he had : us-ed money of one client to pay another, accused ''aid he meant that be kept one general bank account and paid everything in connection with the business from that account-. Cross-examined, accused said he was not dismissed by a former employer for dishonesty. He started business with £330 borrowed cacital, seme of which had been repaid. The proceeds of the sale of a house owned by his father was put into the business. Altogether, his father lost about £2000 in the business. His first cheque was refused payment by the bank about two years ago. During the months previous to his bankruncty he had a larpe number dishonoured. They were met within a dav or two from proceeds of sales in the mart. Accused further stated that at the time "re thought his asset* would meet nil his liabilities. He had drawn about £300 a rear from the" bturoess. He admitted having nrevionslv stated that he had drawn shout £500 a year. Accused's wife. Ivy Thornton Douplrs. rave evidence that she assisted in- the hn*ir*3s. She did not work full time, and had d»-2wn wages for nearly a year. She b?rked the money—£2 10* a week—and tint the money into tfte business. She at the bus*****.* till t>aou on the weddins- dav last Ortnb*?. c "->->» and Doadas bad taVen no holiday. Her husband spent very little money on personal and devoted ail hi- time to business. Cross-ex*m ; ned. witness stated that a pi-ifse had been hoopM in her nam? before -*bp was r~!"rri?d. F~>rr:!*nre valued **< ?A?ifJ had been given to her bv accused's father. The hops? *nd > ; ''"re had been so'd for the .benefit of creditors.. . : »- : .- - The hearing was adjourned till to-day.