The Northern Daily Times.
Liverpool, Merseyside, England, 1857-04-24 00:00:00

MANCHESTER BANKRUPTCY COURT.

unuel
Ia re JOSEPH WREGHT.-01 Wednesday, Mr. S
Leach, of the firm of Leach and C was exemined by
Mr. Atkinson, and mad: the following itatli
in partnership with my brother, Mr. J nen!). Leach, under
the firm of a Joseph Leach and Ca," In pursuance of
the summons served upon Mr. Joseph Leach, on the 21st
instant, I produce books and papers as follow ledger,
journal, cash book, contract book, account sales book,
latter book, and several copying books of letters and
accopnts. Ido not produce any letters from Nunns. We
first commenced transacting business with Mr. John
Numus about July, 1850. The nature of our dealings with
him since that period have been that we have made
advances to him upon cotton. We have made cotton
sales on his account. The dale of the first business with
Nunns was July 24, 1850. We bought for Mr. Nunns 50
bales of cotton, amounting to £662 18s, and paid for it,
and credited him with the net sales when it was sold.
We sold it in January, 1852. it having been held
a year awl a hair. We re-sold it for £338
14s 91, and credited Mr. Nunns with that amount.
The first strictly called advance upon cotton made by
us to Mr. Nunns was in 1852, in the month of August.
There were 108 bales, upon which we advanced £1,002.
That would leave a small margin against any depreciation
that might arise by a fall in the market. That cotton
was placed in our possession, and I believe we received it
from Mr. Minns. We had DO means of ascertaining. from
:narks or otherwise upon the bales, where Mr. !limns
obtained that cotton. From the period I have mentioned,
viz., August, 1852, up to the bankruptcy of Joseph
Wright, in July, 1856, we have m•tele about 220 or 230
advances linen cotton to Mr. John Nunns. The total
amount of such advances would be between £400.,000 and
£500,600. The whole of the cotton upon which we so
advanced was afterwards resold by us on account of John
Nunns. About the middle. of September, 1855, we had
transactions with Mr. Nunns, On the 17th we
advanced on 116 bales £1,204 10s, and on the •19th on 328
bales we advanced £3,385 Bs. On the 24th of September
we advanced on 309 bales -£3,191 123. Between the 14th
of September •and the 14th of October, 1855, I cannot say
positively whether Mr. Nunns made sales of cotton to us,
because I only have the cotton book from the Ist of
October. Between the Ist of October and the 14th
of October, Mr. Nunes did not make any such sates
of cotton to us. I cannot tell, from recollection, if he
made any sales to us from the 14th of September to
the 14th of October. I find by another book that he
did not make any sales to us from the 14th of September
1855, to the 14th Of October, 1855. As to the nature of
the:arrangement between ourselves and John Nunns, as
to the terms on which those re-sales and advances were
made, I am not aware that any arrangement existed. A
charge was made by us for the accommodation. Only one
charge was made, which was on the amount of advance,
and was for commission, which included the charge for
selling. The amount of that commission was the charge
usually made for an advance in the Liverpool market. No
doubt, originally, the inquiry would be ma le by Mr. John
Nunns, as to the amount ofconamission we should charge
for an advance. That is all that took place ; though I

cannot possibly tell all the conversations that took place
five years ago with Mr. Nunn,. The same rate of com-
mission was charged throughout the whole period. It
never came to our knowledge from whom the cotton
deposited with us by John Nunns was obtained. We
were not on any particular o..:easion aware that be was
acting as a broker for a third party ; but we supposed
that he was generally, of course. We were not aware that
on many of these occasions he was acting as the broker
for Joseph Wright, the bankrupt. We knew that he was
acting as broker for Wright. We never made enquiry
from Mr. Nunns to whom the cotton pledged with us
belonged. We have sold cotton to Joseph Weight some
time ago, through Mr. Nunns; as his broker; but never
directly. The cotton was always placed in our actual
po3session by Nunns, and nothing was said as to the time
or terms of sale. It was left to our discretion to sell when
and how we liked. I never remember any memorandum
in writing passing between us and Nunns on the occasion
of an advance being made. Receipts were given for the
money. Invoices of the cotton were handed to us by.
Nunns, but Ido not produce any of those invoices. The
invoices were handed to us as if a sale had been made, and
alcuntract noe passed between us. Those contract notes
treated the transactions as sales by Nunns to us of the
cotton upon which we made the advances at the price at
which we advanced. The price was something below
the market price of the day. We took the market
price of the day, and advanced a certain amount
less than the market price. The amount advanced was
not in any given prope.rtion to the value of the cot; on, but
so as to leave a reasonable margin as a protection to our-
selves against a fall in the market. I produce a letter-
press copy of oae of such contract notes, which is as
follows :

Liverpool, 1:/th Clay, 1856.
Dear sir,—We have this day bought on y nr account from Mt.
John Nunns, 70 Orleans, ex Sir H. Smith. 511 per lb 57 ditto,
5/1 50 ditto, at 61 per lb; 29 Al,,bites. 5 I per ib; 50 Orleans,
5 13-16 per lb, usual terms.—We are yours faithfully,
Jno. Nunns' lEsq. Josuen Lace & co.
The mode of
doing business, as shown by the above e in-
tract note, was the means by which we were enabled to
advance to within a small margin of the value of the
cotton. Doubtlecs this mode of doing business was at
the wish of Mr. Norms, as it could not be of the slightest
possible advantage to ourselves. The contract note
above referred to was written by one of our clerks, but
signed by myself. I cannot remember how this mode of
doing busine s oriinated, but I believe it was at the
request of Mr. Nouns. We should not pass contract
notes treating the purchase in the mode in which it is.
expressed above, except at the request of our client In
all cases where these contract notes would appear to lead
to the belief that these were actual sales; they were simply
advances to Mr. Nunns. (Mr. Atkinson caked the
witness if the copy contract now prodneed did not treat
the tran,aetiou as a purch,se made by him on account of
Mr. John Nunns ? Mr. Blair, on b ,half of the witness,
objected, on the ground that the contract note spoke for
itself, and the question was not pressed.) Witness
continued : Tce mode of accust keeping with Jrhn
Nunns was as follows. T_Tntl,,r date 19th of May, 185 ti, I
find in my ledger the following entries having reference
to the transactions comprised in the before copied con-
tract note :

Dr.-1856. Mayl9 :To invoice, 255 bates.-- .2,810 16 0
c;:argoil on di-to
Cr.-1856. W.,y 31 :By net 851,, 235 bt e 3 dnc Sept 5 £2,857 9 4
There would oe some slOel t ad litioeal cuargo fur aheut
ten days' interest upon et e settling of the acceunt, amount-
ing to about £3. This, in trosnd numbers, shone i an
excess over the advance to Nuntis of about £4O, and a
commission to us of about the same aitount. I can find a
copy of two advice notes of a save having been made by
us of the cotton upon which we so advanced. They are
dated 21st and 22nd of May, 1856, and relate to
cotton comprised in the above mentioned transaction.
They commence as f —" John Nunns, Erq
Dear sir,—We have this day add on year account,"
&c , and the names of the purchasers are specified,
and- the prier's at which the cotton was sold. I have no
doubt Mr. N was consulted about the price at which
the cotton was sold. There was no agreement in writing
between us as to our right•te effect sales of the cotton ad=
vauced upon at such time and at such prices as we thought
proper; but we had discretionary power to sell the cotton
as we thought best. Very generally the cotton sent to us
upon which we made advances was eent fur sate. We
have frequently advanced on bills of lading. We always
sold all the cotton on which We advanced. 'We never
made any advances to Nunns upon c tton which we were
not to sell afterwards, When we advanced upon bills
of lading, we either sold to arrive, or after arrival,
When Mr. Nunns sent the cotton to us, we sold it at
our discretion, just the same as if the cotton was ours and
no advance had been made The cotton was sent to us for
sale, and we advanced upon it; This was the c,s,l in every
instance. In no case was the cotton which had been sent
to us redeemed by Nunns. I know no means of identify-
ing cotton as having passed through the hands of a
particular Liverpool broker, unless ii,formution was given
at the time. We were never aware of i s having done
so. We advanced the money on the cotton to Mr.
Nunes, and we had no objet': in seeking further
information about it. Wo had throughout these
transactions perfect confidence in Mr. Nunn's integrity
of purpose, and never, until July, 1856, (lid we make such
enquiries, and when we ascertained that cotton had 13-en
bought by Nunns in the Liverpool market, and brought
to us for an advance, we at once stopped doing business
with him. We heard a rumour in Liverpool as to Mr.
Nunn's stability, and as we were doing this large business
for him, we enquired from him as to the truth of this
rumour, when he, for the first time, disclosed to us how
this cotton he had bought in our market had been ob-
tained by him. This was immediately before Mr. Nunns
stopped. Our last transaction with Nunns was on the
4th of July, and it would be about the 6th of July
that the above disclosure was made by Nunns. Nunns
stopped immediately after this enquiry. John Nunns mode
of doing business did not excite our suspicions. That
mole of doing business was the exception, and not the
rule, but, it was not so unusual as to excite obr suspicions.
Possibly it is not the custom of the Liverpool brokers to
sell cotton through another bcpker on the terms which
existed between us and John Nunns. I believe it is not
the custom. The consequence of the information obtained
by us from Nunn!, on the 6th July last, was that we dis-
cbe tinned transacting business with him. I cannot tell how
long he continued transacting business with other persons
aster that, hutitwasbuta very few days. I cannotsay whether
hestopped payment before the Bth July, but it would be about
that time. We assisted Nunns in arranging with his credi-
tors, after we had obtained the information- I have
spoken of, and we did so for the rcasoa we gave to Mr.
Nunns' creditors at the time the composition was made.
A. considerable amount of the money that made the
dividend came from us—a great poition of the money.
The reasons why we assisted in the arrangement
were embodied in a letter to the Chairman of Mr.
Nunns' creditors. When Mr. Nunes stopped payment,
the state of the account between us was that we owed him
a considerable sum of money, accumulated from short
advances—about £5,000 in round numbers. This was
paid over by us to the creditors of Nouns. It was not until