DISTRICT COURT.

Temuka Leader, Issue 2397, 18 August 1892, Page 2

DISTRICT COURT.

TlMAßU— Tuesday, August 16 th. (Before His Honor Judge Ward.) bruoe’s milling company. Mr Knubley applied on behalf of the liquidators of Bruce’s Oatmeal and Milling Company, under section 173 of the Companies Act, for an order dissolving the company ; and under section 216 for an order for the destruction of the books of the company. Orders granted, there being no opposition. PROBATES. Probates of the wills of the following deceased persons or orders of adminstration were granted. W. F. Christie, farmer, Washdyke, Mr Raymond applying. F. J. Gaby, dairyman, Geraldine, Mr Raymond. D. Mcllwraith, hotelkeeper, Gearaldine letters of adminstration, Mr Hay. J. Higgs, farmer, Glen-iti, letters of adminstration, Mr C. T. H. Perry. Robert Wood, gentleman, Timaru, Mr 0. T. H. Perry. IN BANKRUPTCY. Lewis Grant, farmer, Pleasant Point, a bankrupt, was called for public examination. Mr White for the creditors, Mr Raymond for the bankrupt. Mr White examined the bankrupt at length, as to the contract work he had done in the last two years, and at the conclusion of the examination Mr White asked that proceedings be now adjourned for the purpose of formulating charges— That with intent to conceal the true state of his affairs he wilfully omitted to keep proper books or accounts; that he obtained credit by means of false pretences, obtaining £129 from Mr Rothwell by representing himself to be the owner of property that was not his ; that he, to defraud the body of his creditors, removed a reaper and binder, by giving it to Mr Gray. His Honour suggested that another charge might be the pledging of property not paid for. He would mark the public examination adjourned, and Mr White would take what proceedings he thought fit. The case of Ross, Sims and Co., was then called on. Mr C. Perry and Mr Kinnerney for the Deputy Assignee and Supervisors ; Mr Hay for D. M. Boss; Mr White for W. M. Sims. David Mitchell Ross to Mr Kinnerney: Commenced business with Mr Sims in September, 1887, as land brokers and commission agents. Sims was manager of Timaru Building Society and he (Ross) was a director. Subsequently he became Deputy Assignee in bankruptcy and agent for the Public Trustee. Besides the business of the firm carried on a large private business, acting as attorney and sometimes as trustee. Sims paid £7OO for a share in the business £SOO first and afterwards credited witness with £2OO in the books; the firm’s capital was £SOO, half given by each. The balance of the £7OO went to his private account. The usual books of account were kept: could not say when they were last balanced. There was a balance sheet last year; did not verify it; had no personal knowledge of it. Kept the firm’s account at the Bank of New Zealand all the time, and his private account to May, 1888, and then changed it to the Bank of New South Wales. What the average overdraft at the Bank of New Zealand the last six years was, he could not say. Could not say if it wag £llOO. Had leave to go up to £ISOO. Left a lot of deeds there, among them deeds of a Dunedin property transferred to him by Mrs Ross. Left these deeds about May 1885, Generally had an overdraft; sometimes at balancing time had none. It was •always secured. No trust account was kept ; everything was kept on one account. At the time of the bankruptcy there might have been £SOOO of clients’ money absorbed in the firm’s account besides the overdraft; could not say ; the balance-sheet made it three thousand. The firm guaranteed interest on money left for investment, from 7 to 10 pei cent; 7 was the lowest. Received some on deposit at 6 per cent; but the money received for investment was guaranteed 7 per cent at least. At the time of the bankruptcy his private account was in credit by money at Home ; but there was an actual overdraft of £Ol2. In the private account was a sum of £2550 oi Mrs Bower’s absorbed, on which the firm paid interest. There were investments against it. Was Mrs Bower’s attorney. Had £6OO of H. McKeown’s (Ireland), and £475 of S. Gunn’s in the private account. McKeown’s money had been in his hands 10 years. Paid 10 per cent on it at first, and it was reduced from time to time to 7 per cent latterly. McKeown left it to him, and knew what he had done with the money. Gunn had also £3OO in the firm’s hands. He was to get 7 per cent, on the £475. Gunn used to come for his cheque for interest to him or to Sinis. The interest was paid out of the firm’s account. Had found that his payments had been treated as drafts on the principal in the firm’s hands, and that Gunn was not credited with interest. He was to get interest the same as others. Had £159 of Mr Chamberlain’s in the private account left by him at interest. Did not remember telling him he would invest it on mortgage on a property in North Street. Would not deny telling him that. Had moneys of Robert Stansell in the private account; collected some bills for him. Was to keep the money till Stansell’s land was soldi; it was pot all sold yet. There was £4OO of A, J. H, Bower’s in the private account, and absorbed in the overdraft. That was moneys collected. Bower wrote for money as he wanted it ! and he agreed that the moneys should yemaiu with him; (His Honour ; Did fyo knqw your account was overdrawn ?) No. Gould not say if thp account was overdrawn when the moneys were pip'd in. There was also £SOO of Mr Morrison’s in this account, ond £65 7s held by him and Stansell as liquidators of the Collier Company ; drew this and paid it into the private account. Watson, the olaimanL wrote to him to forward the money, but he could not produce the scrip. It was on deposit at the Timaru Bird ling Society at inter3st when hi got it. It must hayc been taken out by mistake. That money had ne : ev been remitted. The firm pail inter st on Mrs Bower’s £2539 at 8 per cent, an ! witness was charged at that rate 1 iv the fi-m In July 189'9 had drawn £1129 more than his share—so his partner reported. Did not know it before ho was told, (Account in ledger allowin') The figures showed that. 11 was adjusted by sct’ng off against it £859 of Mrs Bower’s money received for investment which had been paid into the firm’s account. That was treated as his own credit. The balance was made up by £3BO 5s for office rent. The £BSO had been in their hands since 1886. That arrangemfept squarscl the account on that date. Attributed the bankruptcy both of the firm and himself to a sudden rush for money. His Honor : There should have been no difficulty if the money was properly invested. If I put money in the hands of sqUcipq? tor iifycsjJnqut; hq door; not

invest in his own name; if he does he is struck off the rolls. Witness : Personally he was well to the goods, and he believed the firm was quite solvent. He had the assurance of his partner that it was ; did not know otherwise. His Honor : You have been paying all trust moneys into your private account, and investing money in your own name ? Mr Kinnerney ; Not investing it all. Witness : Part of Mrs Bower’s £2500 is secured ; it is all secured. His Honour ; Where are the mortgages? The reply was that there was £SOO on a first mortgage on Shears’ property in Southland, a mortgage from Bell of £IOO, a second mortgage of £BOO o a McClelland’s bakery (the first being £700,) and an agreement to mortgage any freehold properties to secure the balance. Mr Hay had this agreement; Mrs Bower was not aware that it had been signed. He had never told her of it; simply told she was well secured. The other persons mentioned— McKeowen, Gunn, Chamberlain, Stansell Bower and Watson—had no security whatever. The firm made large profits but there were heavy interest payments to come out of them. Could not say what the average profits the last six years were. Did not know what they were making, but they drew £4OO a year each. Should think they were making as much as that. The overdraft at the date of filing was about £ISOO, but there were bills discounted, reducing the amount. He could not tell exactly; his partner looked after the bank account. (Filed statement put in showing £1487 as the overdraft.)

James Shears’ case—Had some transactions with Mr James Shears. About December 1887 Shears left the colony. The firm advanced him £1723 7s, in two cheques, against a transfer of securities and properties to the value of the total; apparently so from a statement of accounts in the books. (Entry in journal shown, made by Sims). Provided for the payment of those cheques by paying into the bank a draft for £6OO of Mrs Bower’s and a cheque of £4OO of Mr Morrison’s. Sims paid them in Morrison’s cheque, paid in 29th December, had been left by Morrison at interest with him personally; he did not know when. (The cheque was dated 7th October.) Could not say how long he had held it, —two or three weeks. (Entry in boo •: showed its receipt on 7th Oct., 1887, “ £4OO at 7 per cent.”) That was paid in to meet the cheques given to Shears. Believed Shears cashed the cheques. They were debited to him in the firm’s books. The account was then closed, so that there was no debit balance left, by an entry “ Sundries,” to an equal amount. “ Sundries ” meant the securities. Made further payment on Shears’ account, and at the date of the bankruptcy he appeared to be indebted to the firm £IOBS 11s. When Shears cashed the cheques he brought back a roll of notes, £I2OO, and gave it to him, not the whole £I7OO. Did not credit Shears with the £I2OO anywhere. Held it for him. Did not tell Sims about it at the time ; told him there was something between them that would keep the accoout right. The £1723 was drawn out of the firm’s account, but it was secured. Kept the £I2OO in the safe until Shears should call for it. He did not call for it, but someone else did. Paid part of it into his private account and spent the rest as he required it. It was clandestine money, and he did not know what moment he might have to repay it. Showed Mr Bush a roll of £9OO he had in his safe. Spent it in various ways in public and private life. Did not think he spent any of it on buildings erected in the Arcade. Spent some in putting up additions at his private house and in employing labor. The credit of £I2OO did not appear in the firm’s books. The apparent debt of £IOBS would probably appear in the firm’s balance-sheet. Told Sims to charge him (Ross) with the Shears account. Could not say that Sims understood that it was not a genuine liability.

His Honor : How came he to become a debtor for £IOBS ? Witness : It was by advances on the Southland property. There was uo security. His Honor : What am I to understand ? You made an advance, and he cashes your cheque and brings you back £I2OO ; you spend that, and then how did you get any claim against him ? Witness : The firm paid £8 a month to his wife, children, and father, and insurance on his life, and these payments with interest made up the debt. It was understood that if he came back the payments made would be squared against the £I2OO. Sims frequently referred to the account. Never explained it to him: simply assured him it was all right. There was no interest allowed, but of c mrse there would be when ho came back and squai’ed up. Stansell’s case.—Had transactions with Mr Robert Stansell. About November, 1889, advanced him £SOO on the security of a second mortgage over a prqperty iq Wai-iti road. Burt qf it had bequ sold lately for £SOO. The property was mortgaged before to the Timaru Building Society for £750. Could not say whether the half share realised more than £2OO. The advance, £509, was made by a cheque of Mr James Hay’s, given on behalf of a client, to pay off a mortgage to Mr W, Bush, for whom ho (Ross) alqq acted as.attorney. j ’ ' ' His Honor : Was thq £SOO paid to Mr Bush ! Mr Kinnerney : Ross was attorney for Mr Bush, and reociyqj the money qq bis account, and invested the money again with Stansell on his account.

Bankrupt : Did not know that the second mortgigo was worthless. As a director knew that the Building Society refused to loud more than £750 ou th.e property, but personally lie thought ij; worth morel lt‘ was iiof a sham transaction, Stansell did nut give* him the I money back, not a penny of it. Would swear that positively, neither directly nor indirectly, or through any other person. (To His Honor ; Had two bills of Ballinger of Wellington to Stansell as security,'lodged fot; Collection.) IfM nqf squared up with' Staiiseli Vbt, as the property had not boon soidye|;. Regretted that it was suggested that the money jiad been handed ‘ back, at; it was without four! lationl '(His Honor : Buj, looking a{i the nhe-ute transaction'?)' He c'm{d assqro Flu-! Honor that was the only case of the kind. Bush was iu England at the time When lie returned he objected to the security. Did not toll him of the two bills. Told him ho could have l|ismoney or some other security. Transferred ib him 10Q Gris Company shares held in! trust in tho Bailey estate. Had had correspondence with Stansell about these transaction*, (portions or a long letter from Stansell to Ross, Feb. 24th, 1890, road. The concluding paragraph contained the words : “ Now as I had given you the £SOO, the amount of Bush’s mortgage.’;) iq spite oi that adhered tq the statement that ho did not get the £509 back; there must be some mistake about, it. (His Honor : No doubt there is.) It was not his; mistake. Did not think lie got it back. Had no recollection, of getting a penny of it buck. Did

believe it even after reading Stansell’s letter. Stansell had got mixed up in other transactions. Wrote to him several times, but could not recollect; what must have denied Stansell’s statement about the £SOO. (Another letter mentioned an “ attorney form,” and “both documents.”) Mr Kinnerney suggested that the second document was to be a discharge of the mortgage, but]bankrupt could not say. A third letter, from Melbourne, dated 7th March, 1892, suggested that Ross should buy the property mortgaged “ £750,” as “ that would leave me £250.”) Could not account for Stansell forgetting the second mortgage of £SOO. When Bush declined the nm.igago, witness took it over, and gave Bush the shares ; took a transfer of it.

His Honor : You, as trustee, had no right to do anything of the sort. Witness : Kept it until the estate should be realised. Took the transfer in blank —not with the idea of passing _it off on the first one who came along with money to invest. Did not propose to put it in as one of the securities in the Bailey trust; did not think so. (Entry in the list of Bailey’s es+ate “investments”— *• Stansell ” written in pencil and scored out; “McClelland £800” was also so treated.) That was a mere memorandum. His Honor : What has it to do there 1

Witness : It was merely a pencil memo, of what had been done. Mr Hay advised him not to put in any second mortgage. Was asked to file accounts, and merely put that down as a reminder of the transfer of those shares. The mortgage was now among the papers of the estate. He did not know what it was worth. It was not returned in the list as worth anything. Stansell was listed as a creditor for £l5O. That was for Ballinger’s two bills. Had said they were held as additional security for the £SOO. (Pressed for a reply to the question why Stansell was not made a debtor for £SOO, Boss could not give any.) [The first letter of Stansell’s quoted contained many curious allusions. If he understood a letter from him of January 30th, aright, Ross had not received several letters he had written ; that was strange, as another person in Christchurch had received letters and papers all right. He did not understand Ross’ suggestion that he should go to Vancouver; as that was another British colony what was to be gained by it I If it was necessary f®r him to lie low he could do it in Australia as well as in Vancouver. If it was necessary for him to be missing a telegram would let him know what to do. Any settlement ought to be made complete, and “ as you have over £2OO of assets you ought to succeed.” “ Another matter —When I signed the second mortgage to you as attorney for Bush, you promised to transfer it to Mrs Stansell and hand over the mortgage I signed. .Now over three months have passed and you have not done so. Now as I had given you the £SOO, the amount of Bush’s cheque for the mortgage, I cannot understand why you have not sent the papers as agreed. For as you said, in the event of anything happening to any of us, I should be in the position of having given a mortgage for no consideration ; will you remedy this matter at once ? ” The second letter quoted said “ I should feel easier if you sent me the discharge. If anything [happened I should be in an awkward fix.” Mrs Bower’s case—Acted as agent, and later as attorney for Mrs Josephine Bower, of Scotland. In July 1886 she sent him £9OO to invest with a letter asking him to do the best he could with it. The books weuld show what was done wit it. Had explained before the assignee that £SOO was lent to Shears, £IOO to Langdon, and £SO to Fowler. Mr Kinnerney : Shears’ loan was in December, 1887, and yon told us that it was a £6OO draft of Mrs Bower’s that went to Shears ?

Witness: His partner would bo able to explain that. Mr Kinnerney : But you say he knew nothing of the Shears arrangement ? Witness : The Lnigdou and Fowler loans were repaid and went into the firm’s accounts. His Honor : We are getting lessons on the investment of trust moneys. Witness : Received £BOO from Mrs Bower on 31st March 1887, and a power of attorney to invest it. Paid the money to his own account, and gave Sims his own cheque for £6OO out of it to reduce the firm’s overdraft. Supposed the other £2OO remained in his account. Got from Mrs Bower £llOO on the 2nd February, 1887, and paid that into his private account, Out of it paid off a mortgage to T. Cabot, £IO4O, on the Sophia street property. The property had remained clear ever since, except for the agreement to mortgage to Mrs Bower any unencumbered freeholds.

His Honor : Which was only in your pocket and might have been put in the fire any day ! Witness : Had not prepared the agreement since to prevent unpleasantness. His Honor : He receives £llOO to invest, pays off his own debts with it, and writes out an agreement fq invest it at some future date i Witness; The money was received on the 2nd February, and the £IO4O was paid to Cabot on the 18th. (Copy of “ agreement ” read, containing a promise to mortgage any freehold property he might have, to secure the moneys of Mrs Bower. This agreement was dated 31st March, 1887.) ' Had jots of properties 'unencumbered that she could have had at any time. His Honor; But she was not here. You were her attorney to do the best you could for fier, Made out the agreement and signed it on the date it bore. Did not tell her ho had paid off Cabot, or that he had made out that agreement. Everything was left to him. (The power of the attorney was asked for and Mr Hay undertook to produce it.) Did not think of ifiaid’ng out such ah agreement before, bat on paying off one |cf his own mortgages thought it right to make it. Did not give her a mortgage or transfer Cabot’s mortgage. Felt he could do so at any time, as the property was clear and al ways has been. Hlfj Honor ; But if pt'Yu had died there vpis hot a word to show where Mrs Bower’s money had gone tq. The reason for it is evident ; it was pimply to enable jtou to sfiow the bank that yon had a property unencumbered.

Witness; No, this property was never in the bank. Expected Mr Bower out to settle up. Could have settled up everything. His Honor ; That you, could not. You were paying your way with other people’s money. '’Witness: Was quite able pay evoryqncu Was Syorth £fiooo or £OOOO, The ffipipdiu property had been sworn at more than that. Considered it a valuable and saleable property in spite of certain charges upon it. It ought to bo worth £SOOO, Had once pu|> it down at £3OOO, us its value for caslfi down ' oh the hail. (‘Entry ih‘ fist of properties' 'shows this Item at £3000.) That might be only part of it, or it might be put at that to be within the mark. Did not think Anderson’s Bay properties had gone down particularly, Could not say wfieu tlfii entry gai* made—gpnsfiderafilu time ago.

Received £6OO from Mrs Bower on the 29th December, 1886. That would be the £6OO which went to make up Shears' mortgage. Had £9OO of hers before that uninvested. Since 1887 the firm had been paying Mrs Bower interest at 8 per cent, on £2550; interest had been paid on a total of £3400. Sent her quarterly statements of principal and interest; not of securities. Told her her money was quite safe. There ought to be copies in the letter-book.

Mr Kinnerney ; We cannot find any letters to her. Why are there so many leaves—l76—cut out of this book ! Witness : That was an old waste book. He did not cut the leaves out. That was not his letter-book. He denied that there had been any of his letters of any consequence in it. He only copied estimates in it. Yes; there were one or two private letters. He did not cut the leaves out, and did not know who did. The book did not belons to him. The leaves cut out never had any reference to him or his business at all. Mr Kinnerney thought the leaves seemed freshly cut, and Mr Perry pointed out that there were only 45 letters indexed for 176 pages gone. Witness : It was an old book that had belonged to someone else, and the leaves gone belonged to their business. If the letters to Mrs Bower were not copied in the office book they were not copied anywhere. Could not find the new ledger. (Witness looked among a pile of books iu Court and could not find it.) Had not stowed it away. Would admit it was not a complete record of his transactions if it were found, but there was a good deal in it. Did not keep it himself ; it was kept by a clerk. That ledger contained his accounts since 1880. It should be in the office. Mrs Bonner’s case—Took a lease from Mr Bonner of 20 acres at Saltwater Creek in 1876, at £65 per annum, with purchasing clause. Bonner left money in his hands for investment. Transferred the lease to Mrs Ross about October, soon after the lease was given. Bonner signed an agreement to reduce the amount of purchase money from £BOO to £500; was not sure when. Later there was an agreement to still further reduce the purchase money, on account of Mrs Ross endorsing a promissory note for £167. That agreement was cancelled, as Mrs Ross refused to endose the note Mr Bonner took the agreements—all the papers—away and never brought them back. Booner took ill and died, and witness never get them back again. A fresh agreement was made with Bonner to pay Mrs Bonner £7O odd a year instead of £65. Was waiting to get rid of the lease.

His Honour : A queer way of getting rid of it to increase the rent ? Witness : A sub-tenant was paying £l2O a year for it, and was gaing to put up a brewery on it and make it more valuable. It was a friendly agreement. Wanted the sub-tenant to take it over at a premium. Bonner took away the agreement about the £7O a year. There tvex’e some papers about Bonner’s affairs. Mr Kinnerney: There is no trace of any such agreement. Witness: Lent Bonner the paper to consult his solicitor about them. Hid not try to get them back; did not think it important. At the date of the bankruptcy Mrs Bonner’s account was debited with and charged interest for payments she was entitled to. (Tho total debit came to over £100.) The firm should have debited him, and he was charged with it. Mr Kinnerney ; Only just before the bankruptcy. Witness : Told Sims that he (Boss) was responsible for that account. The payments should not have been dealt with as they were, as advances. Mr Kinnerney; She is an old infirm woman, is she not ! If she had died there would have been that debit against her, would there not ?

Witness: Would be very much aurpi’ised to hear that Mr Fraser’s investigation showed that instead of a debit of £421 there should be a credit of over £4OO to Mrs Bonner. Would be very much surprised to hear it. The payments were usually £l6 5s per quarter, (£65 a year). Notwithstanding the agreement to pay £7O a year, she asked for £l6 5s a quarter, and brought a receipt for it. Paid also £lO 10s a year. That was equal to interest at 7 per cent, on £l5O originally left with him for investment. Had to pay the promissory note for £l7O before referred to, and that absorbed the £lf|o. The bank hook showed the p.n. paid, but the account book did not. Still paid the £lolos, but that was under the agreement, not as interest. The payments to Mrs Bonner should have been charged to him, not to her. Did not think the facts were that at Mr Bonner’s death there was £l6l left to Bonner’s credit, that Mrs Bonner drew £ll, and left £l5O at interest at 7 per cent.; that was not the explanation of the payment of £lO 10s a year. The rent was to be increased,

His Honor; 'What possible reason had you to give more rent '! Witness: The sub-tenant agreed to give more. His Honor ; What has that to do with it ! Witness : It was a friendly arrangement. His Honor ; Friendly arrangement! Nobody agrees to pay more rent out of friendship. Witness ; He was to reduce the purchasing value. Mr Kinnorney ; Tfien why did vop not set that out in the agreement ! l v his is a new explanation. First it was friendship; now it is a reduced purchasing clause. Witness : Did not register the new agreement, because Bonner took it away. It was arranged that ilonuer should receive the money, as Mr Bonner was an old inanV It yyas' not of tfie nature of a will; only dealt' with' tfie term of tin) lease, Did pot know where the papers were. Did not trouble about them as the property brought in as much as was going out. Could not say why the title was left by the last registration' fjo tyj to show only £33(l' dpt} the property from Mrs ; Ro.«a *

Mr Morrison’s case—Had been coutidental agent to Mr S. Wb MMrrfiam Had supplied half-yearly statements to Mr Morrison, and gone over them with him. These were prepared by Mr Sims. Could not say if he (Boss) saw them all before they were sent to Morrison. Movyison was a creditor fry o.v-er £2OOO. — £fi'Jo agvfiust hl» private estate, and £ISOO against the firm. ‘ Hid not know that tiie investigation of the books showed £3OO more in balances n,o,t, lu-cmgbt forward, llad r.of, been consulted about the investigation, nor asked for explanations. Deceived from Morrison on 11th March, 1880, £SOO, tfie yepeipt showing it “was to fie fen t as per advice:” (The U ticlyxcoyi’ gave names find amounts of loans): ' Paid the amount into his tho same day, ponding enquiries about Briscoe, one of the borrowers, £IBO. Mr Kiunerney : And it never- got out again. \V.itnoas : It fell through, (Bank boo,K showed that £IBO was paid into the account on the same day, earmarked

“ Briscoe.’’) Ledger showed Briscoe debited the amount on the one side and credited on the other. In August, received £IOO to advance on Baird s property, and paid that into his private bank account and it never came out. The property was mortgaged to the late Benjamin Bailey. There being no transmission noted on the mortgage there was some delay and Mr Morrison knew of it. A transmission could have been got in a few days. . His Honour : You kept the money and then invented that excuse to put Mr Morrison off. . Witness : Morrison was quite satisfied to leave the money with him. The investments would be named in the halfyearly statements, —the names of those for whom the money was intended. His Honour ; Were those statements lies then, only purporting to give names of investments '!■ Do you ask us to believe that Morrison was willing for you to hold his money at interest, and yet you gave him half-yearly statements showing how the money was invested I [Books were put in showing payment of £IOO into private account on August sth, 1891, in Morrison’s book on the 20th, and ofithe amount to lent to Baird. Witness: There was some difficulty about the transmission ; he had some surplus about the Bailey estate; and Baird went up to Morrison himself about it. Morrison knew the £IOO was not invested with Baird. Could not say anything about a mortgage on a property section 418, in Theodocia street. Sims obtained from Morrison £250 to advance on mortgage on it. Sims told him that went into the firm’s account. Ho mortgage was taken on that property. (An entry in Morrison’s book was “ Lent to Ross, Sims & C 0.,” but the receipt given by Sims read for mortgage on section 418.) Received £l5O to advance on a mortgage to Dierck, 12th Oct., 1891. Dierck had £l5O before. Dierck refused to take it. The negotiations fell through, and the amount was paid into the firm’s account on the 19th October. Gave Sims the cheque. Did not know if the £l5O was mentioned in the statements given to Morrison. Mr Kinnerney pointed out in the statement to Morrison of June, 1891, an entry debiting Dierck with interest on this £l5O.

Witness : Did not make out the state meat.

His Honor : You are his confidential agent and you send him sham statements purporting to show him that his money had been duly invested, and that you have received intei’est from the parties to Avhom it was originally to be lent.

[Other loans of Mr Morrison were inquired into. One of £6O to W. Glue was not lent, yet the firm paid interest on it as if it were. Ross did not know who got that money. Sims had done that business. A loan of £2l to Puttick in March, 1890, repaid in October, was included in a statement of December, 1890, as still subsisting as a loan to Puttick, with interest duly paid. Never told Morrison the loan had been repaid. A 1 jan of £27 to Mrs Mahoney, repaid September 1890, appeared as subsisting in the statement of December, 1891. The money seemed to have gone into the firm’s account. A loan to A Campbell of £2O, April, 1890, repaid a year _ later, also appeared as a subsisting liability in the last December statement; also a loan of £ls to W, G. Cornish, April, 1890, repaid in February 1891. Morrison signed a release of a mortgage for £2OO for P. Rowe, and left the release with the firm to collect the money. The money was received and paid to the firm’s account in August, 1890.] At this stage (6 p.m.) the Court adjourned till 10.30 next morning.

Wednesday, August IT. The examination of D. M. Ross by Mr Kinnerney was resumed at 10.30. Morrison’s case continued, The amount of Howe’s mortgage £2OO repaid was not returned to Mr Morrison. A loan of £7O to Mrs Wadlow, Nov. 1883, on a bill. The bill was met in March 1884, and Morrison knew that and left the money in bis (Ross's) hands. (Entry of interest paid on the Wadlow loan in in March 1890, in Morrison’s book.) The interest was paid by the firm. (His Honor; You ought to have given Morrison the money back at once.) The £7O was never repaid to Morrison. The entry appeared in statement to Morrison, Dec. 1891, as a subsisting loam The Bailey estate—Was trustee of the Bailey estate. Received property to the value of £I7OO or £IBOO. Realised most of the property, all except a mortgage to Baird, £IOO, some money in the Post Office, £3OO, and a leasehold property, and obtained possession of it all, temporarily, and used it ; afterwards reinstated it under pressure of a Supreme Court action. Reinstated by putting in securities to the amount. (His Honour : Is there any deficit qn tips (j No, (Mr liinnewmy thought there would be.) Transferred £SOO of shares belonging to the estate to Mr Bush. Mr Bower’s case Was attorney for Mr Andrew Bower since 1887 or 1888. When he went away Bower transferred to him shares in the Gas Company to enab.jo him to become a fihectqr.. Had temporarily pledged these shares to the bank to cover a draft on the bank at Cupar. When that draft was met the shares would be released. (Mr Kiunevnoy crossexamined to. show tfiat the shares had nothing to dp. with the draft.) (His Honour ; You have pledged other people's property for your advances.) When the drafts were paid there would be a credit at his bank.

The witness was then examined as to, his transactions in Mrs Taylor’s estate, with Mr B. L. England, a hd with Mrs Mary Rosa, the Bailey estMOj in E. Parkersqn’s estate, &c. Mr Kinnerney sat down at 2.45. Mr Hay (for Ross), said he understood Mr Kinnerney would ask for an adjourn; ment, for the purpose of formulating chargee. Ho would therefore defer asking Mr Ross any questions until the charge?, had been made.

His Honour approved of the adjournment to a date feed, probably before the next ordinary sitting. His Honour alluded to a variety in the possible charges, some coming under the “ summary” clauses, others being; 1 iudifeahle. "W. M. Sims ire Vhmi put into the box ami cj;a,uiued by Mr Kianerney. \Va are obliged to hold oyer finb balance of the report.