The Express.
London, England, 1849-06-28 00:00:00

credit, and Mr. Howard's cap: tation at that time was that
be !Mould soon bo able, by me cow et this credit, to overcome
the &racemes under whim he Isboered, and to become a
prosperous man. He was a men known to the trade gene-
ruby, aed he stood well with them all. The iitcumstances
justified the remark that be was esteemed by them all, and
he must have been a clott r mad of busieese to do wee; he
bad duce, supposing it to have been done from no worse
motive than • desire to struggle through his difficulties.
Still, the circumstances were not such as to call for the
severe-t punishment the court was in the habit of inflicting.
During the 10 years h' had been in business on his awn ac-
count his general purchases were 20,0001. a year, and every
bill bad he. n paid up to the time of his failure. The exec/d-
-well ins showed that no had stated the truth and the whole
truth since the bankreptcy, and does all in his power to as
gist the investigation. In 1841 he was deficient 7,6411. ; and
then he ought to have called together his creditors and
stopped; but expecting a large reduction at the time in the
duties on brendy, ha was induced to go on, though that did
not place him in a batter position wita reference to the body
of has creditors. In 1815 various stoppages in the wine trade
took place' whereby he lost 4,0001. It was difficult to con-
ceive why he had no: then stopped ; but he was a man of
very sanguine temperament, and might have hoped where
others would have despaired. He had sines gone on borrowing
money, eo as to meet all his engagements. net applying
that money to purpows of b is own, but confining it etricily
to business purposes. Tee case would have been much more
serious bad be done otherwise ; still it must be admitted
that the tendency of such dealings was merely to shift the
lose from one set of creditors to another. He bad bee,, actu-
ated by no seriously bad motive, but had certainly been
guilty of what was called reckless trading. For this he now
expressed contrition, and regretted that be had not stopped
sooner.
Mr. Lawrence' for the assignees, proposed to read certain'
examinations of Mr. Godsell and Mr. Keeling, which bad
been taken in the course of the proceedings.
Mr. E. James, who appeared tor AI Godsell, submit-
P d that though there were properly only two puck s before
the ceurt, he was p:epared to show that the conduct of
Messrs. Godsell, who were charged with advancing money
to the bankrupt on certain wine-warrants had been strictly
in accordance with the rules of trade.
Mr. Cooke made the same statement on behalf of
Mr. Keeling.
His Honour said th ct, in judging of the haokrupt's con-
duct, he could not wholly avoid judging of the conduct of
with those whom he had been concerned in business. Those
parties might watch the 'emanation through their counsel,
but he could not allow tnem to appear and be heard by
counsel.
The examinations of the parties referred to were then toad.
They disclosed a system en the part of the bankrupt of pledg-
ing wine warrants, which he had pursued for several years
to a great extent ; this system, it was stated, was so common
in the wine trade as to excite no suspicion, nor was it cue-
tomaty to make inquiry from whom the wines so pledged
had been obtained, nor whether they were paid for.
Mr. Lowrance said the admissiens made by Mr. Ashurst
en behalf of the bankrupt, were by no means the whole of
the case. It was much more than reckless trading, it was
most dishonest and fraudulent trading. The general fea-
tures of the case were disclosed by the balance-sheet. The
bankrupt owed, at his failure in May, 1848, 19.5601. to unse•
cured creditor+, to thee holding sem ity upwards of 4,0001.,
with between 2,0001. and 3 0004 of liabilities. To meet teis
there were returned good debts, 1371., and property, SOl. So
that there was not a fraction fur the creditors, and their in-
vestigation for several months past had been conducted at
their own expense.
Mr. Stanfield, the official assignee, stated that there was
about 2001. in band.
Mr. Lawrence, after referring to the banktuet's examina-
tion, observed that he bad admittedly begun without capital,
and was insolvent at the commencement of the balance-
sheet, on Deeemeer 31, 1844, to the extent of 7,4511. 13s. Bd.
Debts then owiug to him, amounting to 4,3301, had become
bad within the neat six months ; thereby augmenting his
deficiency to 11,7301. In his periodical stock-takings, he
had inserted a debt of 1,194/. from his former partner, Mr
Beullois, though he admitted that he knew this to be a fic-
titious balance. It was not till after his failure that he had
written off the above bad debts. Messrs. Go 'sell had been
leers creditors in 1845, to the amount of 11,1711., of whieh
7,5191. was secured; the debt had barn progressively de-
creased till the time of the failure, when the Leek-
rupt only owed them Gill en the open &cement, and
on the deposit account 1,8231., which was more
than covered—the balance leing applicable to the general
sec -unt. He admitted that he had pledged goods with
Messrs. 11;1411 from 1842: in one year between August,
181 G, and August, 1847, tho amount 10 pledged was about
6,000!.; and about 8,7031. between August, 1847, end the
failure in May tollowieg. In the same period he had pur-
chatted theta 15,0001. worth of goode ab tut foucfilths of
which had been pledged. Sometimes only a week elapsed
between his receiving goods and pledging them. This was
thane to met his forthcoming acceptancss. Feom Jan. 1,
1618, to the stoppage in May, ha bad b nag!:' to the extent of
9,4001. at six months' •redit, and none of these goods hod
been paid for—they were all pledged to meet acceptence s
due iu respect of former transactions He admitted that his
deficiency on Jan. 1, 1843, was about 18,0001. His gross
profits, from 1844 to his stoppage, had been only 1,1801., a
sum of 240d1. being deducted, which he had received
through the reduction of the duties en brandy. While his
gross pre fi s we re only 3,7391., he had paid for merest and
discounts, 3,6801: for trade expenses, 19,2201. ; and for
domestic expenses, 2,5001. Not only had his trade been
I thus reckless, but there were specific cases of fraud.
By his system of pledging he bad m waged to meet his ac-
ceptances, and thus keep up a lase credit; seal It was re-
markable that a large proportion of the debts he now owed
bad been contracted between January and May 1818. In
that period he had purchased to the extent of between
9,0001. and 10,0001., for the sole purpose of pledging, not
one filth of the goods having been disposed of in theregular
course of business. If this was not fredulent tradieg, it was
difficult to conceive what was. For the goads S 3 purcemeed
he found a ready vent; of those bought since January, 1818,
Messrs. Oodsell had taken 1.8 01. worih, his former partner,
Mr. Houiloie, 1,0001. worth, and Mr. Keeling about NU
worth. It was sail he had kept regular books; i: so the charge
against him was aggravated. Confidence was the yen
' essence of the trade amongst these I rgs henses ; and when
the bankrupt presented these warreets on which to obtain
tele dtees, one of the witnesses, Mr. Geese% had steed that
he eh r d not ask how the 'relents were obtained,
Or whither they were paid for. This matt have
meant that they were afraid of breakieg up a
system by which they were benefiting and y rogressively
" a4tting out," to usa a mercantile phrase. It was incre-
dible that such men as Mr. Keeling and M. Godsell
I would make thew large advance, without some intimation
as to whose were the wines, and what they had cos'. Of the
3,6501. paid by the bankrupt I r di.counts, no 1: ss than
1,6001. had been paid to Misers. Guesell.
Mr. E. James—All at five per cent.
Mr. Lawrence said he did not object to the rate, but the
accord amount. It appeared that the bankrupt in De-
cember, 1847, had pledged with Mr. Keeling 70 du. of
port, purchased from Menu. Dar, at 325. per dere, for
28s. Gd. per dux ; this was transferred front Messrs. Day's
cellars to those of Mr. Keeling; end the bankrupt admitted
that he had purchased it solely to raise money on it. He
had made other large purchases in January, 1843, at 32e.
a dcz. receiving from Mr. Keeling advances of 28s. Gd. a
dee. 'These also he admitted he bad purchased in order to
obtain a loan of 5001. from Mr. Keeling. It was importarn
to observe that but for the facilities aflurded the bankrupt by
Mr. Keeling and Messrs. Godsell, the debts he now owed
would never have existed ; they had enabled him to
meet his me. piece, s ; and Messrs G.alsell's ac-
count against him bad been reduced in the course
of a few years from several thousands to a few hun-
dred pounds. It was impossible, therefore, to resist the con-
clusion that Messrs. Godsell had been supporting this man in
business for the sake of getting themseives out. They had
certainly the satisfaction of having got payment of their
debt, but it had been done by the sacrifice of every mercan-
tile principle. It would have been a better defence for the
bankrupt bad hie advocate alleged that he had been for years
• tool in the hands of Messrs. Godsell, and had continued in
trade against his own wish solely for their advantage. Such
• course of conduct was utterly subversive of all the princi-
ples of trade, and could not be persisted in without the most
ruinous consequence'. The wines purchased and pledged by
the bankrupt were generally high-priced wines; and the in-
ference was that Menu. Goebel' would not have made such
great advances on them, unless they had been apprised
beforehand of the quality and price of the wines. After
again reading at great length from the examinations, Mr.
Lawraace observed, that so recently as three or four months
before his stoppage the bankrupt had opened sew credits,
all at six or nine months, on cone of which hal any payment
been made. The wines so obtained went to Godeens
and other!. These were the leading facts of the
case ; he regretted that it presented no redeeming feature,
except the stogie one that the bankrupt had made the fullest
disclosure of his transactions, without, however, producing
any benefit to his estate. He must long have known that
ruin was inevitable ; be had not even the chance of the
gamester, of a lucky turn in his favour; he had not even any
securities unrealised. He had no excuse as a speculator in
corn or railway shares; he had not been affected by the mer-
cantile panic of 1846; the only apology that could be ima-
easel fur him was that he was utterly out of his seases.
Even after he had been compelled to dishonour an accept-
ance he had purchased goods to the amount of between
2,0001. and 3,0001. The case was precisely oae in which, as
as a warning and protection to the mercantile community,
the extreme cause of refusing the certificate altogether
ought to be adopted, and the bankrupt left without pro-
tection.
Mr. Ashuret submitted that all that Mr. Lowrance bad
said was merely an amplification of what he had admitted in
the outset, in avowing that the am was one of extremely
reckless trading. Had there been any fraudulent pur-
pose in the mind of the bankrupt, it would have been
evidenced by some attempt at concealment in his books.
The cue was not one calling for an extreme sentence;
it had been nine months before the court, and had been fully
investigated.
The Commissioner said : though this case has occupied a
very considerable time, owing to the reading of a great por-
tion of the evidence, I do not feel any such doubt as would
induce me tee postpone my judgment. lam relieved from a
great portion of the anxiety which usually affects me by the
bankrnpt having virtually pleaded guilty. Whether he
should be perm:Ped to plead guilty of the minor offence, or
to be found guilty to the full extent urged against him b his
creditors, is now for me to determine. The case devetopea
a most mischievous, unwholesome, and vicious state of
trading. I have before me circumstances which show
that badness has been carried on, at the very
least from the beginning of 1845, not for the legitimate pur-
poses of trade, but for the purpose of covering praexistbsg
deficiencies—not for obtaining goods to be disposed of in the
market at the usual rata of profit, but where almost each
parcel et goods has been obtained on credit, in order to pay
a provisos debt mot of the goods pledged at los than their

2nd inn.
4

value ; and where goods were sold, wild at shout the same
price they were b.ught at—the goods sold in the ordinar)
course of business, and at the ordinal, profit. forming a very
mall pr..pori 'lt indeed of the whole. The only doubt in
my mind is whether I should go to the extremity of entirely
refusing the certificate. Mr. Lawranc^, who hos much ce-
lrienc- it. this court, has stated that it is with great re-
uctance I ever come to this conclusion. 'have not yet come
to the conclusion. I cannot make up my mind to say, This
is • case in which the nary ought not to have the oppor-
tunity, at some teture period, of retrieving himself in the
commercial world." I hope from nne symptom that it is his
intention to do so whenever he can—that is, the fraokness,
the sincerity, the straightforwt rdness with which he has ad-
mitted his off nee. I shall therefore give protec-
tion. I cannot omit to add that L give the
opposing creditors great praise for their diligence
in a rue where they are not likely to receive any
pecu..iery remuneration ; but I ant not without hope that
they may receive some remuneration in conducing to a more
healthy at to of t tarty, when it is known that this court is
determ ned to punish all cases where it is shown that there
is a delusive trading.

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