THEFT CHARGE FAILS.

New Zealand Herald, Volume LXV, Issue 20098, 8 November 1928, Page 12

THEFT CHARGE FAILS.

BUILDING SOCIETY FUNDS.

ACQUITTAL OF SECRETARY.

"VERY SLIPSHOD METHODS."

COMMENT ON THE AUDITING

A verdict of not guilty was returned in the Supreme Court yesterday by the jury in the case of Frederick William Webster (Mr. A. H. Johnstone and Mr. Trimmer), charged with the theft of £1493 fiom the Whnngarci Co-operative Building Society. The trial, which lasted three days, was conducted by Mr. Justice Blair, and Mr. V. It. Meredith, Crown solicitor, prosecuted. Both the Judge and Mr. Johnstone commented at some length on the lax manner in which the building society's affairs had been conducted.

James lleid, accountant, explained the effect of an error of £4OO which had been found in the addition of the 1926 period of loans. It decreased by £.400 the amount alleged to be cash-in-hand. His Honor said the error was not made by accused, but by Mr. Rust, in tho preparation of that balance-sheet.

Witness said the correction of the. £4OO error was made in a peculiar way. When occasion aioso to make a £4OO loan it was called a cash transfer and not a loan.

Grace Eleanor Brown, clerk in accused's office, said that just before a building society ballot she used to help to enter the cash-book into tho share register. Don Webster did most of th« work in connection with the building society. Helping Unfinancial Members. In cross-examination witness said she remembered the practice of a member of the building society being made financial on the day of the ballot when he was not really financial. A voucher was put through, but there was no cash taken. There were about a dozen of such entries at each ballot. Unfinancial members were rung up, iwd then entries were put through as if had been paid. The share register Vas always up-to-dato before every ballot. Subscribers often lost their books and a fresh book was then made up from the share register Francis Phillips Uniacke, secretary of the Whakapara Sawmills, said he had given accused clerical assistance at various times, but be had never handled any of the funds of the building society. Accused could not draw a balance-sheet. Detective James Robertson said ae. cuscd told him ho was willing to make a statement, but that his solicitor had advised him not to do so, and accordingly he would say nothing.

Mr. Johnstone called no evidence. Addressing the jury he suggested tho Crown had undertaken a hopeless task in asking the jury to convict on the evidence brought forward, In ail cases of theft there must always be present the intention to steal. No carelessness, however great, no negligence, however gross, could of itself amount to theft. The Crown had to provo first that accused had received the money, and then that his failure to account for it was fraudulent, all other explanations, such as of .error or muddling, being excluded. Auditor's "Solemn Farce." The evidonco showed accused was dilatory in his business methods and of exceedingly unmethodical habits. The rules of tho building society seemed to have been early abandoned in favour of those known as "rafferty rules." The auditor kept the books, and cash and moneys banked were lumped together. The auditor made up bis own books and balance-sheet, and went through the solemn farce of auditing and finding them correct. As a matter of fact the very first balance-sheet was not correct. Tho admission by Rust that lie had not counted the cash balance was one of the most extraordinary that it was possible for anyone holding the responsible position of auditor to make. Every one of the balance-sheets mado up by the auditor had proved to be, as a matter of fact, incorrect. The words used by accused when questioned about the shortage contained 110 admission that any theft had been committed at all. The system of making people financial when they were not. as a matter of fact, financial, was a fruitful source of error. Accused had never denied' civil .liability. None of tho usual concomitants of theft, such as extravagance, gambling, drinking, or falsification of books had been found in this case. Judge's Summing-up. His Honor said tho offence charged was the one t l iat used to bo known as em. bezzlement- It was necessary for the Crown to show that accused received tho money, that he appropriated it and that that appropriation was fraudulent. As far as the Crown case was concerned thero were some elements of doubt as to tho precise sum that could be shown to have been received by accused. At certain stages the books did not show the actual amount received.

There had been very slipshod methods of carrying on the society's business, and so it was very difficult for (lie jury to say what amounts had been received. The confusion that- bud arisen was not of accused's making When (ho auditor, Rust, was asked why lie. had himself purchased a ledgor nnri journal his answor was "bocuuse it pleased me to do so." Bust had not been so frank cither with the directors or with (lie Oouit as one would expect He apparently connived at the method adopted by accused of failing to synchronise the bank payments and receipts. He had put down (he balance in a way that amounted to blinding tho directors to tin, position. He allowed the books (0 be prepared in a way that would make it impossible lor anybody to check (lie receipts with ihe bankings. The jury's verdict was returned after an absence >t two hours.