The Northern Daily Times.
Liverpool, Merseyside, England, 1857-05-08 00:00:00

BANKRUPTCY COURT.

(BEFORE MR. COMMISSIONER STEVENSON.),


In ra Semenazeoee.—Wednesday, the day appointed for
the cerfficate judgment, the Commissioner gave his
decision at three o'clock. There were present--Me. Bardr-
ley for the bankrupt, Mr. Aspinall, his counsel, Mr Evans,
for the trade assignees, Mr. Arkle, and several gentlemen
interested in the case. The -judgment was as folluws :
The certificate in this case is opposed on the part of Mr.
Arkle, a. partner in the banking firm of Leyland, Bullen,
and Co„ the principal creditors of the bankrupt; upon
several grounds, and which, it has been contended;
show such an amount of mercantile delinquency es to
disentitle the bankrupt to ;Illy certificate. The circum-
stances under which the charges made against the bank-
rupt arise are shortly these, in the month of October,
1855, thsbankrupt commenced business on his own sepa,
rate account as a commission egent, having for some
years previously been engaged in business in partnership
with another person, who was a foreigner, and who in
that year left Engl.nd, leaving hilt to carry on busi-ess
alone; and to enable hint to do so he applied to M.
Arkle, to whose firm he had been intro Need through his
connection with his foreign patron, to woke him the ad-
vinccs which should, from time to thin! bnorne itscesslry
to enable him to execute commission orders; and the
binkrupt, at his osn suggestion, proposed and drew out
the conditions upon which these ad" meets shocld be made.
These conditions were to the following effect :—That no
s;,ecillaticl was to be undertaken by him on his own ac-
count, nor for otbess, withdut proper security for the
probable loss or dSference, all advances mesa to him by
the bank to be exclusivelfused for tte. cerryieg cn of the
commis business, to be of short dartation—not to
exceed three months' credit—and such advances to be
returned to the bink in a week or a fortnight in cash
or foreign remittances, or his own drafts upon London
or continental houses of good standing and re-
spectablity ; and, la,tly, the bankrupt promised to
acquaint the bank, before anybody else, with the first loss
or bad debt, or any loss or bad debt. To this arrangement
Mr. Arkle acceded, and considerable advances were made
under-it, which, in the short period between the month of
November, 1855, and the 23rd of February, 1856, had
amounted to about £83,000. Had the conditions of this
arrangement been adhered to,: the bankrupt's business, it
is contended, would not; -as it bas done, have resulted
in considerable lose. But, instead of so doing, the bank-
,ritpt has, without the knowledge of the bank, engaged in
several speculations, upon some of which a heavy loss
has been sustained. These speculations are in cotton
and in- tallow; that in cotton appears to have commenced
in the month of November, 1856, and to have consisted
of purchases, partly on the joint account of the bank-
rupt and of Mr. Nevins, of the firm of Syhoodt and
Nevins, and partly on the joint account of the bankrupt
and of the firm of Messrs. Syhoodt and Nevins, but which
purchases ahcgether resulted in 'a profit to the bankrupt's
estate of about £1,151; thoughthe baekrupt admits that had
this transaction resulted in slogs he had no means of his own
to meet it. The other speculation, that in tallow, appears
to have commenced in the morph of July; 1856, and to
have- been entered into also on the joint-account of the
bankrupt and Mr. Nevins, upon which the bankrupt was,
in case of a profit, to have had a commission can-Mr.
.Nevins's share. Bat this speculation ended in a loss to
the bankrupt's estate of 13,562. There was another
transaction referred to in the aegnment as a speculation,
namely, one in rice, which appears to have commenced in
November, 1856, and to have also resulted in a lots to the
bankrupt's estate to the amount of about £1,12). But
this transaction is described to have been the taking of
goods by sample to be disposed of within a certain
period, at a certain price, which the bankrupt
terms " a firm offer," and under which some rice was
sold by the bankrupt, which resulted in a loss; but this
transaction the bankrupt asserts to be one in the regular
way of his commission business, though by reason of his
principal, the party to whom the sale was made being
abroad, he became liable for the price. The objection to
this transaction does not seem to have been much pre-
ferred ; and as it may be considered doubtful whether it
can be treated as a speculation within the prohibition of
the arrangement between the bankrupt and the bank, I
don't propose to refer to this as as established objection.
The advances under the arrangement were, from time
to time made to the bankrupt by the bank until, the 23rd
of February, 1856, when the bankrupt was indebted to
the bank in about the sum of £14,800. And also shortly
after that period, the bankrupt having a large number of
new foreign orders to execute, and which he submitted
to Mr. Arkle, and applied to him for the necessary ad-

vances to enable him to perform thee]. ; bat Mr. Arkle
then refaced to mice any farther advance upon new
with htm m paying on tliVFeVou'r actitiri gs according
to their arrangement, and no further advances were
afterwards made by the bank on new transactions. This
refusal the bankrupt alleges c mepelled him to send these
orders back unexecured, by which he lost his expected
commission npon them, and became incapacitated fr
carrying on his business. In the month of Sep-
tember. 1856, Mr. Arkle being dissatisfied with th 3
state of the bankrupt's account with the bank, which,
however, at that time had been reduced to the sum of
£7,493, required the bankrupt to have his books exa-
mined by Mr. Batyler, to which the bankrupt consented,
after making some objection upin the ground that his
doing so might injure him in his business, but which he
gave up on Mr. Arkle's insisting upon it. Upon this exa-
mination Mr. Banner made a report on the state of the
bankrupt's affeirs, which showed that he was then insol-
vent to the extent of £5,465, which report the bankrupt
had not shown to be incorrect ; but, on the contrary, has
adopted it as a correct account. The bankrupt, however,
as Mr. Arkle asserts, had represented to him, when he
proposed thet his books should be examined, that he was
perfectly solvent. But the bankrupt denies having made
such a representation, stating that be told Mr. Arkle that
he was insolvent to the extent of £BOO to £l,OOO, accord-

. .
ing to a rough calculation he had made. The transaction
relating to Ihe speculation in tallow is, as the bankrupt
admits, so entered in his books previous to his bank-
ruptcy as to represent it as a commission business, and
net as a speculation on his own account, either alone or
jointly with another ; and on the investigation of his
books he ,stated, both to Mr. Banner and Mr. Arkle,
that it was a commission business, and that there would
be a brokerage commission of £1,900 payable to him
upon it ; upon which representatiqn Mr. Banner's report
was founded; and this rerort, the bankrupt frequently
stated to Mr. Arkle, c ntained a true statement of his
affairs ; and the true nature of this transaction was
never made known to either Mr. Arkle or his part-

ners in the banking until after this bankruptcy.
Under the foregoing circumstances, the bankrupt is
charged with a gross breach of faith, in having, contrary
to the express stipnlatione entered into b•tween hint and
the bank, engaged in the before mentioned speculation
in tallow, and also that in cotton, which, although it resulted
in a profit, was equally, it was contended, a breach of
faith to be complained of; and with gross misconduct,
in having wilfully also misrepresented the true character
of the transaction in tallow, as well as to Mr. Arkle and
Mr. Benne*, as also by the entries in his books, And
these entree are also contended to fall within the 2nd
and 9 h divisions of the 56:h section of the bankrupt
Act, as having been male falsely, and with in ent to con-
ceal the true state of his affairs. Now first, with regard
to the breach of faith in respect to these speculations, it
is urged, on the part of the bank-upt, that as they were
entered into after the 23rd of February, 1856, the period
when the bank refused and discontinued to make 11;m the
necessary advances to enable him to carry on his
husine,e, and as no further advances ware made to him
after that period for new orders, he was no longer under
any obligation to abide by the arrangements ha had en-
tered into with the bank, the same having been so entered
into on the faith of his having such advances made ; that
in fact the bank had, by such refusal, repudiated such
arrangement ; and the bankrupt, in his examination, so
represents this to be the view he took of the effect .of this
refusal. Now it appeared to me that, although the bask-
rapt would have corarnit'e.l a m ,re serioni breach of his
en;agatuent, if he had entered inn thus: specula ions,,whilst
the advances were coatieued to be made to him, f r the
purpose of his execu ins rew ord,irs, yet I appteliend that
❑ot only whilst the bank conieued to mike him advaiters
in respect to pad transactions, entered into with their
suicsion, which they appear to have done, but a's) w:dis;
any portion of the debt incurred by the b uikrupt from
their last transactions remained unsatisfied, hit obligation,
under this arrengereent, to abstain from entering into any
speculation on his own account or for oters, Frill continued,
for such engagement, of cause, tended to endanger the
means he had of repaying the rrevions adv totes
ma ,e on the faith of such sp-cu'ations not being
entered into, aed on the faith of which, also, it was con-
sidered that, in some measure, these subsequent advances
in respect to past trensaciions were also made. It has
been observed by counsel on behalf of the bankrupt, that
the stipulation requiring him to warn the hank before any
one else of the first loss or bad debt was a most improper
one, as intending to secure to them a most unfair prefer-
ence If this were so, it would not be for the bankrupt to
complain of it, as the whole arrangement was made at his
owa suggestion, evidently to inouce the bank to place
confidence in him, and to give them some assurance of
their safety in making these advances. But I do not think
the stipulation is at all open to any such cha-ge, for it
seems to me very natural and fair of the bank, even of
their own accord, to make such a stipulation, by which
they might be the better able to judge whether they
would be safe in continuing the advances, and I
cannot, therefore, see anything improper in their even