THE ROSS, SIMS, & CO. BANKRUPTCY.

Temuka Leader, Issue 2395, 6 September 1892, Page 4

THE ROSS, SIMS, & CO. BANKRUPTCY.

JUDGMENT OP THE COURT. The following is the full text of His Honor Judge Ward's judgment at Timaru on Friday last in the charges of fraud, &c.» preferred against D. M. Ross : His Honor in giving judgment said that in respect to the first charges under aection 171, that Ross had carried on trade by means of fictitious capital, he was not prepared to" say that the contention of Mr Hay was not correct, that the fictitious capital must be capital not available to creditors, and that the capital in question was not unavailable to creditors, however fraudulent the means might have been by which it was obtained. With respect to the second and third charges, however—of having wilfully omitted to keep proper books or accounts, and of having within three years of the bankruptcy failed to keep proper books and accounts there could be no doubt whatever. The books of the firm had been most disgracefully kept. An investigation by an accountant had shown quite clearly that in order to realise the true position of the business an enormous amount of labor would be requisite. The books had not been balanced for many years, and no doubt they had been kept purposely ill in order to conceal the wonderful amount of embezzlement that had taken place during many years. With respect to Ross's private affairs there was not even a pretence of books having been kept, and the state of his affairs had to be traced back to a series of memoranda. When they considered the nature of the matters to which those memoranda referred, the innumerable cases in which funds entrusted to him for investment had been applied to his own private purposes, there could be no question but that he wilfully omitted to keep books in order to conceal the state of his private affairs, and that they were so concealed for the purpose of concealing his frauds. In the case of Shears the firm gave cheques to Shears for £I7OO, and Ross received back £llOO, and instead of placing that to Shears' credit in the books be began a debit account, charging the unfortunate wife and family heavy interest, and other payments, until he made them debtors for £IO4O, he having £llOO in hand at the outset. Practically he had defrauded the unfortunate family out of £I4OO, and he left the wife and children destitute. In Mrs Bonner's case he would pass over the first transactions. She had been debited year by year with heavy interest upon payments due to her by Ross ; these payments being evidently debited with a view of defrauding her or her representatives after her. She appeared to owe about £4OO when really her account should be £4OO the other way. With respect to incurring liabilities through obtaining credit by means of false pretences, and by means of other frauds, here again the case as far as concerned " other frauds " at all events was very clear. With respect to Mrs Josephine Bower, the contention of learned counsel for the defence might be fairly allowed, though there could be no doubt of the gross frauds that had been committed. Mrs Bower sent out £3OOO with special direction for its investment on freehold security, and every shilling, or a very large portion of it, was absorbed by Ross himself. It was true he made some sort of memorandum, and kept it in his pocket, stating that he agreed to mortgage certain properties to Mrs Bower if she required them. But, as a matter of course, she knew nothing about it. She believed that her money was duly invested, and never made any inquiry into the matter. There was no doubt as to the breaeh of trust, but it was subsequent to the credit being obtained; it was not a fraud by means of which money was obtained. As to Durand's matter, it was not very clear. Durand himself was not very clear. Ho said that th<* receipt was given by Ross for £714 to be invested on Goldie's mortgage. It was not invested, but was absorbed by Ross, who repaid the greater part of it. Morrison's matters were clearer. The first charge was that of Briscoe. Morrison swore that £IBO was given to Ross under a false pretence or assertion that he had arranged to lend it on mortgage to Nelson or Briscoe, when it had not been so arranged. It was not advanced to either, but was misappropriated by Ross. Morrison's evidence in this case was very clear. He gave a cheque for £SOO to Ross to be lent " as per advice," and a memorandum was given of the securities on which it wa3 to be lent. This included £IOO to Briscoe. That amount was not lent, but was absorbed by Ross; yet it appeared in the books afterwards as having been lent, and as if interest had been paid upon it. The case of Baird's was equally clear, and Dierck's case also. It was unnecessary for him to go through the whole of the various embezzlements of which Ross had been guilty. There could be no question that for the last twelve or thirteen years the bankrupt had been a perfect pest in the district. His Honor could not understand how any human being could be so reckless as to trust a man who had come from Dunedin with the record which Ross had come with. They had trusted him because .he had promised to pay high interest. If they had only recognised that high interest is synonymous with bad security, they would have saved themselves a great deal of trouble and loss. It wag not requisite for him to go into all the charges in entering judgment. In respect to the two charges under section 163 [omitting liabilities from statement and delivering property to Durand] he did not think the evidence before him was sufficient to warrant him, for the present, in giving any direction. If further evidence was found thereafter it would fo* for the creditors to take such steps before the Magistrate as they might deem fitting. In respect of charges 2 [wilfully omitting] and 3 [failing] to keep books, and the charge of obtaining money bj means of false pretences, it was to be adwiced to Baird and to Briscoe (although there were others ou which he had no doubt), convictions would be recorded. On those charges David Mitchell Ross was convicted, and ordered to be imprisoned with hard labor for nine calendar months in each case, the sentences, however, to be {y ._ <•:; e ... ~li ■ t.'jrm to count from that ~ ',, ■•;.,, I,;- /vpeated that he had .. |..\-: doubt as to some of the ■liiier h.nges. '■ i ■ ejily .o Mr Hay, His Honor said uii..:. i lie rest of the charges were dis- ■ iii .-:-ed; no other steps would be taken mpoti them. Later on ttis Honor said that he should direct the Clerk of the Court to bring the case before the notice of the Registrarrtveral, to see whether it was lit and proper th.it th>j license of Ross and Sims, as land-brokers, should be revoked. He said that Ross hud obtained his license as «, laud broker just after his expose at Uunedin. A great part of the mischief might have been avoided if ho had not been a land broker. Mr Hay : Timaru's experience of land brokers has not been a happy one—for t&e clients.

His Honor : No. There is a long list of them in Hall, Tate, Moody, Ziesler, Ross, and Sims. The public examination of W. M. Sims was further adjourned till the next sitting of the Court in October, His Honor making some strong observations on the conduct of this partner of the firm. The order of commitment was made ou t—and D. M. Ross was removed in custody and lodged in prison.