BREACHES OF ACT

Gisborne Times, Volume LXX, Issue 11126, 8 February 1930, Page 2

BREACHES OF ACT

BANKRUPT SHARE-MILKER IN COURT. CONVICTED ON TWO COUNTS. MAGISTRATE’S WARNING TO PUBLIC. F’our breaehe s of the Bankruptcy Act were ai.egeci against Richard uraiyer, share-milker, ot Manutuke. a bankrupt, in a longtny action hoard before Mr. P. H. Harper. S.iVl., in the Magistrate’s Court yesterday. Following the hearing, two ot the informations were dismissed, defendant was convicted and ordered to come tip for sentence within three monrtis on a . third charge and a conviction without penalty was entered in respect 01 the fourth. In delivering hi s judgnient rojrarcling the latter two chargos, contracting debts without reasonable or probable ‘expectation ol being able to pay thorn, Ibe Magistrate commented that there was too much of this sort of thing going on in New Zealand. "it seems to me a pity.” he added, “that more informations wpre not laid, lor the public would then realise that the Act has to ho observed and that they must, not indulge in reckless expenditure when hopelessly insolvent-” The charges against Galyer were that, within three years preceding tjie filing of a petition m bankruptcy, he did dispose of. other Ilian by sale in tiie ordinary way ot trade, a milking plant obtained by him <>n credo from Charles Earle -ami not pain for; further, with obtaining credit for Lllid from Charles Earle without disclosing that lie wa.s ail undischarged bankrupt.; with cunt net ins a debt ot CL 15s with the Poverty Bay Garage when lie could not have had any reasonable expectations o', being able to pay the same a, s well as other debts; and that, between October ] and 31. lie did contract a debt of C2 Us Ski with Walter Findlay when he. could have no reasonable or probable expectation ol being able to pay it. Mr. F. W. Nolan appeared 011 behalf of the Cilicia l Assignee. Mr. J. N. N’alder, and Mr L. 3. Riirnard, w ifli him Mr. A. A W hitehead, appeared for defendant, who elected (o be dealt with -summarily am, pleaded not guilty The two charges in respect of Charles Earle's milking plaid were taken together lirsl. C'iiarle s ' Earle stated that in U»2h he iv as working as a share-milker for Walter S. Black a( ManuLnbe. He left thal employment in May of that year. At that, time he possessed a milking plant and compleu equipment, (his being liis own prom er Iv. On leaving lie arranged with .Mr. Black for the machine to he sold to witness's .successor, a Mr. Devcry. The price was fixed at ,L'l3o After being There only a week, Mr Dovery left, witness releasing him Ird'ii Ins contnicl. Later .Mr. Black informed witness that, lie had arranged for the plant to he sold jo Devery’s successor, the accused in (lie present case. Air. Black made out mi agreement for him to sign. Later, when money for the maeiiine failed |.o come to hand, witness went te Black and later to Galyer, hut could get nothing. At 110 time did Galyer dispute the transaction or inform witness that he was an undischarged bankrupt. When did you learn this?—ln November, Black told me and threw it up to me, to show how smart he was.

Did Galyer tell you lie had sold the plant to Black?—Yes. he sa'd Black tied him up so that ho had to sell or walk off.

AVliat did Black allow on the nutchine?—About .£BO, f think. From beginning lo end of this transaction have you received any money for the machine -— Only . the deposit °f £2O. Mr. Whitehead submitted that the hrst charge. that of obtaining credit for £IOO should he dismissed without calling defendant. Mr. Earle ’•ad stated definitely that, date in September the plant did not belong In him, but to Mr. Devery. The charge said that the plant was sold to defendant on June 1. but Earle admitted that he purposed to lure it, to Gol.ver in September Even should, the charge be amended tp September later, it, must still fa l r or it had been shown that Earle then knew defendant to ho an undischarged bankrupt. Regarding .the . second chaigo. counsel stated that the Crown must prove there wa« a sale and that this was not in the ordinary' course o| business, .It Would lk>.. submitted that the milking, plant was attached to the freehold bein'* the; oronert" of the. third partv •Waller S.'.Black Moreover the goods must ho 1 11 . A deliverable . condition, m fact, nothiUg was done to put them in that position i.e. bv severing them from the freehold. Thus .tlier® was never a sale, but simply- a»» agreement to sell. . Dealing with the aiiestioris ot law. involved. Mr. Burnard stated that n recent decision pf Ml*. Justice Blair established that : f said, to a. partnership did not come within the section. The agreement showed a sale to Mr. and Mrs. Galyer jointly They .constituted a partnership, and the accused obtained credit for the partnership,, and not for himself;, .therefore hp had not committed the offence of obtaining credit for hint self without disclosing his prior bankruptcy. \on the second head there could bo; no disposition under the section, uriloss' a fraudulent. intention ,intis' present. Here tho ac-, ftused’s -motive was cleai*. ' It :-was

not fraud, but a desire to obtain the plant, which would enable him to carry out a lucrative milking contract

Regarding the first charge, the Magistrate stated that. . the Crown, to succeed, must show beyond question that Mr. Earle was aware Galyer was an undischarged bankrupt. The only evidence in this connection was that in the agreement, which he must hold was not finally signed until October 4. Before which date. Earle had admitted, he was •informed that Galyer was an undischarged bankrupt. Hence that charge would bo dismissed; Dealing with the second charge, that of disposing of the plant within three years of his bankruptcy, the Magistrate stated that- it was clear a sale had been made. It was suhmtted the plant was a fixture, hut the only evidence of this was that it wa s attached with screws, which was insufficient to establish if. as a fixture. It was for the defendant. then, to prove there, had been no fraud in the sale. There was no doubt defendant had acted under great coercion, but that wa - no excuse. It would he necessary to call the accused. Richard Galyer, the defendant, ill tin l witness-box. stated that the transaction with Black was on October 4. It took place in Black's house at MatiuVukc. . Witness, Ins wife, a witness and Black were pre sent at the time. Black had calk'd them together to settle up about the plant. There were a number ol documents produced h.v Black at that time.

Did Mi. Black tell you definitely you must sign the agreement ol sab or get ou t ?- Vos. Mr. Black prepared a share-milk ing agreement.?—Yes. And he withheld it from you -

Acs. Euless you sold him the machine, he would not give you the agree ment 1.0 . sign ?—No. Did he use any threat to your'- - Yes. lie said 1 would ' have to sell (he plant or get out.

Would he have carried it out - - Of course ho would. Had you any otlmr source m incomer'—No aval l wouk.l have lost the money [ had already earned, had I had to gel out. Bid you attempt to prevent hark* getting his inctio.y ? You carried the i raiisaetioii through because ui your financal dillieuities and to support your will ami ten children?—Vos.

Suppose you had defied Mr. Blue! would you have lost your job?Certaiuly.

And had you lesl the job would there. have been any hope ol paying Earle -None.

To Mr. Nolan. defendant denied that lie bad entered into Hie deal vilh Mr. Black to gel money lor uj her plant. He could not remember .Mr. Karte asking him lor the first- instalment, and being pel oh with a promise of payment later. No hi repurchase agreement was ever entered into, because Mr. Black would not show any paper s to defendant. Mr. Black also warned him that, if lie signed a hire-purchase agreement, he would have io get out. The price of his first car was £325. off which he paid £126 between November and May. He believed that liis job would -support ,i car. In June, he exchanged the ear for a cheaper one. Mr. Whitehead: Who handled all your moneyP—AYaltei; Stuart Black. Were yon satisfied with the- statements he handed you?—No never. Black was accountant, financier, and the man who handled all the money?—Yes.

He knew what yon could afford?— Y cs.

You were trying to cut down expenses?—Yes. You 'exoected to quit, the ear to Black?-—-Yes.

When did this arrangement break down?—A few days before the bankruptcy. Had the arrangement been carried out. could you have carried on?— Yes my idea was .to get square and then leave the place. : .

When Mr. .Black said lie would not carry out tne 'transaction.' did it have any influence on your bankruptcy?—Yes, it was the whole cause of it .. .

The Magistrate staled that'ho was satisfied there was' a sale from accused to. Walter 8, Black and that this sale was not made in tho ordinary' course of business. This clause was included in the Act to protect grocers and other similar dealers who obtained goods from wholesalers and sold them in the ordinary course of business. It then rested with the accused to show that ho did hot intend '.to delraiitl Earle by the sale ortho plant to Black. Ju tho first place, tho. position ot the defendant at that time must be considered. It was known that ho was engaged in share-milking * with Black, who, However, ' would not aliov tlio" written agreement - to be, signed. Black,’ in fact,’ kept defendant oil a string, its it ' were, and kept hiiii • liangihg on until October ,| when lie called the defendant and his ,wifo to a, meeting at liis hpU'S.e and infpriped. defendant that, before lie' would sigh, the agreement, Galver. must vself him the lpiJkUig plant for £BO. .'"Galyer was thus faced with tho choice of Telling tlip milking plant or getting out. Tt should bo "remembered'.that, defendant ..was a man with, a family of ten to provide for and . he had no assets at the time. “There was no doubt; at that time,” added the Magistrate, “that defendant was acting under very* , strong coercion from Black. Of course, that, was no oxcuso for a criminal net, hut. from the defendant’s explanation, it is apparent

that the position, as described to him by Black, was a very lucrative one and ho honestly believed that, by -taking up the work, he could ■maintain the payments. T. believe lie dionestly thought this was his only chance of paying off the amount owing to Earle. There is certainly doubt and. since there is, the information .in the case will be dispnissod.” REMAINING CHARGES. The two remaining charges were 'then .dealt with, defendant", electing to lie dealt with summarily and .•pleading not guilty. Walter Findlay gave evidence that 'between October 2 and >‘ll he supplied Galyer with bread to a total lvalue of £2 11s fid. .Defendant had promised that, when the “off’ season iwas over, lie would pay the full amount of .C 1.7 then owing. Witness received notice ol the bankruptcy on ■.October fiO and had not since ' recoiv•ed payment of the account. Harold George Jamieson gavo formal evidence as to Galver’s petition of bankruptcy, adding that the am■ounl of £431. 2s 4d was owing to unsecured creditors. Tempest Stanley Harper, proprietor of the Poverty Bay Garage, stair ; ci('that defendant incurred a debt, ol Ids oil- October 11. In addition, otiier amounts previously owing brought- the total to £2l 5 S fid. Mr. Whitehead submitted that the charge.s were of such a nature that any liaiikru.pt in the country' could .In; made subject to them. They were not specific, against Galyer and, in the ease of the bread, lie hud mete !y obtained what was absolutely necessary for his wife and children. The repairs to the ear. too, were essential in that, without them, defendant ran the risk of prosecution lor by-law breaches. Moreover, at the time, Black had arranged m take over the ear. plus all liabilities in respect thereol. and to pay Galyer .£75 in cash. About three days before the crash came, Black withdrew ihis an aiigoment. Defendant, in the winures box, stated that Black agreed, to. take over his car. ulfoiiug £./ 5 ior st and also to take over-all liabilities. Just after the show, a h’g storm came on and Black lest about. «>0 sheep. Black lost his temper over this .and blamed witness for the loss of the sheep, eventually refusing to have anything more to do with the deal over the

Did von expect more than £O9 tor your share ui the, October sharemilking?- .Mr. Black’s figures often take a lot. of working out. 1 thought, 'it would ho more. Did you expect any share ol sales of valves and pigs?—Yes, 40 per cent. Hon much did you expect from the calves?- About- £ 10. And from I lie pigs.-'—£7)o or more On Oeloher 1, did you contemplate going lo the Bankruptcy Court ? No. AYliii h are the best months?—.November and December. And what did you expect 10. make from dairy produce in that period ?~ £l5O approximately. You are still employed by Mr Black ?—Yes. Under a different arrangement though?- Yes. Had the old arrangement lasted and van not having gone through the Bankruptcy Court what would von have received m those two mouths? —At .143 per lh for butterfat. T would have received £143. When you incurred these two debts did you think you could pay them 9 -—Yes.

And all your other debts m a reasonable t' me ?—Ye s. Mr. Nolan: What is your present arrangement with Mr. Black?-—lt is rather complicated. Mr. Black insisted that the contract- lor sharomilking was broken and that 1 hail ui go on wages. ,Tiie rate was not definitely fixed upon. 1 have been working 62 days and now, according m n statement produced by. MrBlack. 1 appear to owe him £7. lie has deducted, amounts tor neces-sii-ies about my place and yet, as a farm manager, the wages should ho £6 a- week. . ■ About the £6!) you received. M here did you spend- it?—|on necessities. Ai which of your, creditor’s? —Defendant did not answer. “Neither in the present case nor at the creditors’ meeting could you. mention any one creditor with whom you s|>euC a penny of that £69. commented Mr. Nolan. Chas. Blackburn, public accountant, gave corroborative evidence concerning the proposed sale of the car from defendant to Mr. Black

Tho Magistrate stated that, in spile' of ’ nil (dial had beensaid foi ,11)0 do ton 00, lip foil sure that, when 'defendant incurred these two debts, 1,0 must have known his position was hopeless and that be Had, ho real expectation of being. able to pay them. Evidence had been given to isliow tliat. on October I, defendant was £24,9. iii,.debt.. A great deal had' been said about the £7O bxnecfv'd from the sale. of Hie ear a.iid also about the £69 actually received. It seemed very, suspicious that,when nlcfeiidalit obtained that amount, lie did pot spend any of it with liis creditors. '‘‘‘Thorp ip too, llpieh of, this sort of thing going on all qyer New Zealand,” added! Mr. Harper, “a'nd. peopTo get hopelessly inlp. debt xyip.h little or no expectation qf ever being able to pay. jCgunsel for the defence lias remarked'that any bankrupt in tho Dominion could he siniilarly charged as ha s been the present defendant. It seems to mo a pity .that more informations are not laid; for the public would then realise that' the Act has Ho be observed

and that they .must not indulge in reckless expenditure when hopelessly insolvent. I take it that these eases are brought as a warning and, therefore, on the first charge, defendant will be convicted and orderoil to come up for sentence within three months if called upon, while on the second he will be convicted and discharged.”