The Sun.
London, England, 1858-08-27 00:00:00

ASSIZE INTELWENCE.

NORTHERN
(BeCfoRCUIT.—LITERP, AUG. 26.
Ire Mr. Baron Martin.)on
SCOTT AIID ANOTHER V. DIXON.—THE LIVERPOOL
BOROUGH DANE. ACTION • AGAINST THE EANAGING
DIRECTOR.
Tbis trial, on which a large amount of commercial in-
terest has concentrated, came on to-day, and the court was
crowded at an early hour.
The counsel for the plaintiffs were Mr. Wilde, Q.C., Mr.
Edward James, Q.C., and Mr. Brown; for the defendant,
Sir Fitzroy Kelly, Mr. Atherton, Q.C., and Mr. Melbuish.
Mr. Brown, in stating the case, said that John Scott and
Robert Robinson were the plaintiffs, and Joshua Dixon the
defendant. The declaration stated that the defendant was a

director of a barflaWcompany,-anitilntthe shares of the
company were transferable; that the defendant, intending to
deceive the plaintiffs, fraudulently represented that there
were profits of the company paid to and divided amongst the
shareholders; that a report was fraudulently contrived and
published whereby he represented that the financial condi-
tion of the company was souad, :and that the shares were
then of great value, whereby the plaintiffs were Induced to
purchase shares ; that there were no profits to be divided
amongst the shareholders ; that the financial condi ion of
the said company was not sound, whereby the plaintiffs lost
the value of their shares, and were forced to contribute to
make up the losses of the company. To this the defendant
pleaded not guilty, and that the plaintiffs were not induced
mated.
Mr. Edward James, in opening the case, said—May it please
your lordship and gentlemen of the jury, the defendant is
fued in this case by the plaintiffs, for the purpose of recover-
ing from him the amount of ten shares which were purchased
by the plaintiffs in August of last year, together with a fur-
ther sum that they have been called upon to pay, I think,
of £5 per share—a call made subsequently to the failure of
the Borough Bank; and the action is founded upon the well-

known rule of the law, that where a man has been induced
to alter his position for the worse by the misrepresentations j
of another individual, he is entitled to be indemnified against
any loss that be may have sustained by reason of such trans-
action so entered into through the misrepresentation of that
other person, and from him. It is a rule based on common
sense, and built up with the strictest principle of what is
j use and right. Now, gentlemen, having stated that as the
foundation of the claim in the present action, I will, as
shortly as I can, consistently with my duty, call your atten-
tion to the facts of this case. The Borough Bank of Liver-
pool, of which the defendant has been for some years a direc-
tor, was established in the year 1837, upon the remains of a
bank belonging to Messrs. Hope and Co. There was, as is
usual in such cases, a deed of arrangementamongst the pro-
prietors, whereby the management was vested in certain
gentlemen, called directors. I shall very shortly call your
ttention to two or three of the clauses, and not more. The
271 h section provides " that the entire management of all
the affairs and business concerns of the company shall be,
and is hereby vested in the directors of the company." Sec-
tion 44 provides that " the directors shall keep all necessary
and proper books of account; that they shall, half-yearly,
settle, adjust, and balance the said books, and make out and
(teelare a full, true, and explicit statement and balance-
sheet, exhibiting the debits and credits of the said company,
the amount and nature of the capital and property thereof,
and the then true-estimated value thereof, with the amount

4,f the company's negotiable securities then in circulation,
:Aid the profits and losses of the said company, and other
matters, fully and truly manifesting the state of the affairs
of the said company." Nothing can be more explicit and
c'ear than that. Clauses 55 and 57 provide for the general
annual meeting of the proprietors, and for what is to be
done with respect to the proprietors at such meetings.
There is to be a general meeting in July, provided for
and by section 67. The directors for the time being
" shall exhibit to the proprietors assembled a true and
e,rrect summary and balance-sheet and report of the
profits and accumulations or losses of the company from
the time of the commencement of the business, or from
the end of the business included in the last preceding
rcpart, and of the state and progress of the affairs of the
company up to and including the 30:h June last preceding
such annual general meeting, and also such further ac-
counts and statements as the said directors shall deem expe-
'lent for the interests of the company to be made public"—

{the learned counsel called particular attention to the words
to be made public," and then proceeded]—" and every such
report as aforesaid, of the losses and profits and accounts of
the company, shall be binding and conclusive on all the
proprietors, their executors, administrators, and assigns,
unless some errors shall be discovered therein before the
next subsequent report shall have been produced, and,in that
case such errors shall be rectified." So that, besides the half-
-3 early account and balance sheet, there is to be an annual
_meeting of proprietors,before which meeting the directors are
to lay " a true and correct summary of all the accounts and
profits, and of the losses and all other matters relating to
111,ir concern which may be expedient for the knowledge of
the proprietors and for the public." That is what Is provided
o• by this clause. Clause 9:5, to which I will next call your
attention, provides that the directors shall from time to
time, either half-yearly or otherwise, during the continuance
of the company, as they 4tall seem fit, declare such a dividend
t of the clear profits of the company then actually accrue
aed received into possession, including the interest and pro-
ceeds of capital laid out and invested in pursuance of the
powers therein on their behalf contained, as theyshall think
fit, and so often as a dividend shall be declared they shall
cause it to be divided." So that the dividend is to be de-
clared out of the clear profits of the company " then actually
accrued or reduced into possession." The 98th section pro-
vides as to what shall be considered the net profits. The net
profits of the company made in and during the first year of
bi=iness ending on the 30th June, and so on, after making
deductions for bad and doubtful debts, and after setting apart
such portion as the directors think requisite for maintaining a
reserved surplus fund, shall be divided amongst the proprie-
tors in proportion to the number of shares which they shall
• hold. Therefore, they must first ascertain and set apart for
the bad and doubtful debts, and next lay aside such a sum as
• they think proper for the reserve fund. The 106th section
provides far the dissolution of the company only in certain
events. "Hat any time the losses of the said company shall
have exceeded all the said fund called the reserve surplus
find, and also one-fourth part of the capital of the company
which shall have been actually paid up without regard to
the amount of the subscribed capital, the managing board
fir the time being shall, so soon as possible after the above-
mentioned state of the company shall have become known
to the directors, it is imperative upon them to call a
meeting of the proprietors, and lay before them these
facts, when, upon the application of any two proprietors the
company shall be declared to be absolutely dissolved, unless
certain portions of the proprietors shall think proper to
carry it on under certain regulations." So that when the
reserve fund is gone, and when one-fourth of the paid-up
capital is also gone, the duty of the directors is, as soon as
possible
after ascertaining the fact, to take measures for the
• dissolution of the company. Now, gentlemen, as to the
state of things with regard to the bank. The defendant is a
gentleman, I believe, of high position in the commercial
circles of the town. Some few years ago he came to Liver-
pool from New Orleans, where he had acquired during seve-
ral years an intimate acquaintance with banking transac-
tions. Soon, probably, after his arrival here, the. firm with
which be was connected, having an account with the Bd.-
rough Bank, and be thinking that with the experience he
had acquired he might be enabled to benefit himself as well
a-. others (for I give him credit for that) it was not unde-
sirable on his part to become a shareholder and a director
in the Borough Bank. He accordingly examined the pub-
lished reports of the directors from time to time, and having
made up his mind as to the expediency of joining the com-
pany, he purchased shares solely that he might, accord-
ing to his own words, become a director, and a director he
did become, about three years ago. When he joined the
hank the affairs were not conducted exactly in a manner
provided by the deed to which I have drawn your attention.
It provides for the management being invested in directors.
The directors consisted for the most part of gentlemen of
eminence and standing in the town, high in the mercantile
world, but they delegated their powers to three gentlemen
who were selected from their body, and called managing
directors. These managing directors likewise appointed
another person called the manager, and it will probably turn
out that in the great multiplicity of instances for years gone
by, previous to the summeroflast year, the manager directed
the managing directors, and the managing directors ruled
the directors. That will probably be the state of things. All
that the directors contributed to the concern was the sanc-
tion of their high names, and the lustre which could be shed
about the bank by their undoubted respectability. Directors
they were in name, and name only—" Lucus a non lu-
cende"—they directed because they had nothing to direct.
There were accounts weekly or fortnightly placed before
them, which informed them, as I believe, of little or
nothing which transpired. They trusted to the managing
directors, and it is not at all unlikely that the managing
directors trusted too much to the manager himself. There
can be very little doubt that Mr. Dixon, with the experience
that he had acquired in New Orleans, and with the expects..
then be had formed of having some part and parcel in the
management and direction of the Borough Bank, when be
became a director, was not satisfied with the state of af-
fairs, nor with the course which matters were taking ; and I
telieve that from time to time he did utter certain mur-
murings of discontent, but that he never took any active
step to set matters right, which he suspected for some time
were going wrong. So matters went on until June last year,
when Mr. Dixon (defendant) havinzbeen informed that Mr.
Smith, who had been manager mine
time, was about to retire, was askedhaywinhyeetahresi.uphst.ewothuladt
become a managing director, thereby of
of course, ans
opportunity of investigating the true positionltrweodruiataetlyonfeeriormto.
asge 1 f
He acceded to the request,turnegtuhr
London to Liverpool, and se
asrertain the true position o f things; and I believe If he had
pursued the dictates of his own heart, and attendedeitiotphled
.earnings of his own conscience and common sense, h
have studiously pursued the course which in the be
he did unquestionably mark out for himself, and tghisnelng
ro a y
would not have been brought before you, because p b blas ii
e
not a thoroughly accurate statementtboaft thtbeeaeffeanieresronf
wthaes
bank, yet at all events one showing
ut forth—my clients
utterly insolvent, would have been p
would never have become purchasers of shares,aganaidnswtoumldr,.
consequently, never have had a rightt. of action
Dixon. It appears that he did inves igate, an
his own serious doubts as to whether thereodugthhtattobebheada
dividend. Mr. Smith laid before him a statement wlehaircnhe(li
have never seen, but which I shall call upon _ my_.x
friend to produce—a statement which satisfied Mr. on
beyond all question, that no dividend ought, under the cir-
cumstances, to be declared. He was overruled—I am now
giving you his own account—but he did not persist in the
views which he took. A report founded on that statement
of Mr. Smith was furnished to the directors, was acceded to
by them, was placed in the bands of a printer for the purpose
of being disseminated and sent forth to the proprietors and
the public, showing that there was to be no dividend at all
for that half-year; when all of a sudden that report was
revoked, and they published a report which shall be brought
before you in a few minutes, and upon which this action is
founded. Now, gentlemen, that report was placed before the
public. It was placed i>a the first 'Wool before the pro-

fmamrke hand
tanind
pt
or i eht oarnsd. Thethe
ys h aarreeslynntrheihs
absaenakzei
n
transferablethe s h ar e from -
Liverpool and
other places. What guides the minds of those
who are d
isposeel-se-4ecome- purchasers ? - Only the ports
published periodically by the authorities, of the company
whose shares are in the market. It is those which, and
which alone, guide the public as to whether they shall become
purchasers or not. The plaintiffs are hardworking
men, not._ speculators, each of them employed as
warehousemen_ in the service of respec' able houses
in this town. They had not means each-of • pa:-
chasing the requisite number ofshares, because, by the-con-
stitution ,of the company, less than ten are not transferab re
They saw this report, they took it home, they studiod It
and they found that taking it altogether—although the -
effect upon the share market had been to bring down
the shares in consequence, as you will see hereafter of
the reduction from the usual amount of dividend—yet ;hit
disclosed a state of things which they thought would
justify them in investing their money in the purchase of
shares. They accordingly, acting upon the faith of the
report, purchased ten shares In the month of August;and
they were registered, I think, on the 23d of Asigust. Now,
that is an outline of the transaction. It is for the misrepre-
sentation contained in the report, with respect to which I
shall show, beyond all question, that Mr. Dixon, the defen-
dant, is intimately connected. They purchased Upon the
faith of that, and they are entitled to be indemnified by him
against the loss to which they are liable. The bank stopped
payment on the 26th of October. They were called upon
afterwards with other unfortunate shareholders to pay ,a
call, I think, of £5. Now, the report to which I beg 'to
call your attention is this—" Twenty-first annual meeting
of the proprietors held on the 28th of July, 1857. Directors
for the year," &c. The learned counsel then quoted the for-
mal part of the document, and proceeded— ' According to
the last report, the paid-up capital of the bank was
£900,000, and the reserve fund £101,775 odd. Since that
date two calls of £1 per share have been made upon each of
the shares, making the capital £1,000,000." It is, there-
fore, clear from this report that the actual existing capital
of the company paid up as represented amounted to
£1,000,000. " The nett profits of the past year, after the
payment of all expenses of management, and after deduct-
ing £45,825 for loss by bad debts incurred during the same
period, amount to £69,318." Therefore the nett profits of
the year, after the expenses of management are provided
for, and after £45,000 of bad debts during the current year
have likewise been deducted, leaves £69,000 odd. There-
fore, according to this, there would be £115,000 profits;
after allowing for bad debts, current and the year's ex-
penses of management, would leave £69,000 to be divided
amongst the shareholders. They say, " appropriated as
follows :-31 per cent. divided upon £930,030 (that is, at
' the rate of 7 per cent. upon the former half-year) £33,x;
21 per cent., at the rate of 5 per centum per annum, upon a
million of paid-up capital, £25,000; property-tax, £3.000,;”
making altogether £61,879, leaving a balance of. £7,439
6s. 6d. stated to be carried to the reserved fund. Just let
us for a moment look at the figures. It is stated that there
is a million of paid-up capital, and upon the former balance-
sheet £101,700 of a reserve fund; £7,439 added to that will
give £109,000 of a reserve fund. They proceed—" Nearly the
whole of the losses above-mentioned have been caused by the
frauds of a customer." I believe that was so; one mighty
customer did, during the course of this current year, take
in the bank to the amount of £45,000. "In winding-

up the affairs of 1854, a year which is well-known was
most disastrous to those customers of the bank who were in the

colonial shipping trade, a heavier loss had been sustained in
the realisation of the assets than could possibly be antici-
pated. The directors have thought it their duty at once to
reduce the dividend to the rate of five per cent. per annum,

on the ground that taking even a most favourable
_view co
the liquidation of those accounts, the . whole of the reserve
fund will be required to meet the loss sustained." The loss
now ascertained, after the realisation of the assets and the
liquidation of the debts, will amount to so much. They will
require something more to place the bank clear than will
be met by the reserve fund of £lOB,OOO to £109,000. "The
whole of the reserve fund will be required to meet the loss
incurred." Not a word is said about the capital being re-
quired, bat only the whole of the reserve fund will be re-
quired. They go on :—" And that, on the other hand,
taking the most unfavourable view consistent with proba-
bilities, the good current business of the bank will, in their
opinion, be sufficient to admit of the regular continuance of
the dividend, without encroaching upon the capital at the
same period in the coming year." Therefore, under tile
most unfavourable circumstances consistent with proba-
bility, the good current business of the bank will-enable
them, in the following period of the next year-s-theyear
1858, and the month of July—to divide 5 per cent. without
encroaching upon capital. Not one word said about the
capital except that. What is the meaning of it ? 'Thereis
the capital intact. The good business of the banleds,soch,
that the annual profits, after paying all expenses—the
prior losses of 1854 being all liquidated and accounted for
—the good genuine business of the bank will enable the
directors to pay. 5 per cent. per annttm, and not encroach
one iota upon the capital. The learned counsel ihen
proceeded to quote:—" In laying this statement hefdre
the shareholders, the directors desire strongly to inikOress
upon them that its unsatisfactory character—(tlloy shad
divided 7.. per cent. before this)—is to be attributed
-to the affairs of 1851, and that apart from this, the'Aotind
and legitituate• business of the, bank would have enibled7ist
to pay the ordinary dividend (that is, 7 per cent.), andialso
to add largely to the reserve flied, notwitbsttiodlog the
losses,
,4liat; baye, been incurred- subsequent' to net pee*.
They wish aho to state their• confident expectation Ahttethe
change they are making in thepolicy and regulatien.Orthe
bank will effectually-guard. against a recurrence ,of similar
events:" lioli what is. the lair result of the whole ofAhis
report,? It•Aelgesents a million4l Paid-up capital; it: 're;
presents All by;gune losses befoye the current year wain*:
provideO'for by the reserve ftind ; and that without- trends, ;
ing uprrtliii Capital, whieh is still intact, they are entilleet,
as fair. trader,*, to distribute among their shareholders a
portion of their profithmountitsgto 5 per cent. Nov what'
st,ould yow.etty, if it should turn out that the whole- of the
capital was actually gone—;thai that which is represOft:N as
existing capital of one-million was all swallowed,upErej
this, andahat upt tally the reserve fuud,.but toe cap') also;.
had titSappteyed? What should you think if, o.6efron4
ttie asets issang realised, or the debt liqUidated, neitifer,ente •
nor the other had then been done ; that no; aseetv isad,been
realised, or' at all events to a very small extent k'slott:',.tho `.
debts ikad -not been liquidated ; and that so far..froOk-thisl
residuumlund, with the supposed realisation of,:tite-asets,.
clearing the bank from all its former liabilities; thereskieere
liabilities far, far beyond what tie assets of the banli were
able to meet iti existence at that very time ? 'hat should
you say, then, as to represcntatins of this kind ? 'What
should you think of the prudence of men in business actually
dividing profits upon the current year without attending to
the requirements of the deed, and setting apart from
ime to time a portion of those profits against bad or
doubtful debts; saying, "We have lost in former years
tar more than we can pay, but in this particular ' year
we find that which we conveniently call profit, and not
setting it against the prior losses, we will divide amongst
our customers this amount ?" What should you say ? Why;
gentlemen, Fthink you would be inclined to say with me,
that-it was a gross misrepresentation. Now, I will show you
that it was eta, and that the defendant knew it..
.14 may be
said—well that may be so; it way be true that. thg,ccpital
may have been swallowed up; that these Easels haVe not
been realised, or debts liquidated, and yet Mr. Dixoti,may
know nothing upon the subject. But, I apprehend that the,•
law is clear upon this, that if a man undertakes to, rell'resent
as an existing fact that which he does not knode to be an
existing fact; whereby another is induced to althishis 'Condi-
tion for the worse, be is as much liable as if, he misrepre-
sented a fact which he knew not to be the case. , They are
just inahesame category. But what do you think of ' the
case where a roan is a managing director, tine access to the
books, is appointed a managing director for the very pur-
pose of overhauling the books and satisfying himself of the
existing`staie of things—what do you think if he should say
•‘ I don't know-anytnieg about it ?" Why, you would per-
haps be inclined to reply, " Then you ought to know some-
thing about it:" The learned counsel, in support of,his at-
gument, quoted the opinion of the Master of the Roils in a
case lately decided under similar circumstances. It was
,ought Is niake-a man con tributary to an estate aviiiih was
being wound up, and the directors said they knew nothing
ttf it personally. " Whether (said the Mastetof 'the Rolls)
the directors personally knew that their statements were de-
lusive .tuad untrue, is, in my opinion, iminateriAl. They
were bound to know it. They were the vonchelv to the
public 'of the-accuracy of their statements. They were the
company- itself ; by its proper organs announcing_to the
public-the-state of the concern ; and the company can gain
no benefit by. such representations." So they were bound-
to know :it. But, gentlemen, I will go further' than-that'
and show yon that Mr. Dixon did actually kuow—not only
that he represented a fact which he ought to have known,
not only that. be might have known it, and was' -bound
to know it7,-but that he actually did know—if not to-the
entire extent, yet certainly sufficient to have induced him and
i he'other directors also to have adopted a diffsrent course.
After the.s.toppage of the bank, on the 26!h of October, liqui-
dators were appointed, and Mr. Dixon became tfie chairman
of the liquidators The liquidators employed Mr:Tanner, a
most respectable accountant, of this town,-to goxover the
affeirs'of the bank, and he prepared a statement, which was
produced at a meeting where Mr. Dixon was, and adopted
and ordered to be printed and circulated; ' At thifineeting,
after giving an account of what had been done since the
liquidators were appointed, Mr. Dixon made a-speech, to
which I invite your attention. He says :—"tl PrCoPos!, be-
fore proceeding any further, to make a few remarks'in my
individual capacity as a director. I cannot but feellbatahe
position
in which the directors are placed is one-of very great
discrecift."- 'I don't think anybody will differ from him in
that. ‘‘ And , I shall, as fully as I can, explain the part
which I have taken in the direction. About three-and-a-
half years since I became a director." [Thelearned counsel
said that he did not wish to go over the whole speech, called
attention'to the fact relative to Mr. Dixon's conduct hot,b,
before and after he became a managing director.]
" I also stead, after Mr. Doherty's matter—[the 'learned
counsel explained in 1856 and 1857]—came before the bank,
I placed on the books a record of my opinion that the
nature of the transactions by which this loss was incurred
was unbusiness-like, and ought not to have occurred." So that
then, although an outside director, he took an active part
in condemning the system adopted in this particular in-
stance. "I- also stated that, in m opinions the managing,
directors were as blameable as the manager for the loss.'
What, then, shall we say when he becomes a-managing
director himself? "It was then for the first time I be-
came' awtite • that the managing directors had actually
little control or knowledge of the affairs of the company
as outside directors." A pretty state of things ! "Towards
the end of *hue last Mr. Cress called upon me in 'London,
and told me Mr. Smith was going to resign, and -that Mr.
Seller was to take his place, and asked me if I would become
managing director. I assented ; and immediately on my re-
turn to Liverpool my first step was to inquire into the condi-
tion of the bank with respect to the declaration or non-decla-
ration of a dividend." Had his attention been called to it ?
Did he think they were in a ticklish state ? Did he think the
declaration of a dividend was a matter for serious considera-
tion ? Hear what he says :—" The statement of the affairs
of the bank laid before me by Mr. Smith, the manager, led
me to the conclusion that no dividend ought to be de-
clared. This view of the case was assented to at a meeting
of the directors; but at a meeting afterwards, suddenly coa-
vceinrudeeupdil,aattcheetieddainencdision was reversed." Now, that is a statement
upon whiCh, as I shall show you, a report was founded,
decision was retavhdeoPprtei ndtebry'st
hhands,e
meeting.fo r th eTphuenrpomser.ofwboeoindg.
Wood-
ward, who was
i reversed
d presentbyatthteh
we
hmoleee tbionagr,d a, sokre
anyd w hpeatrhte. r tmhart
.
motive Dixon r
beinge replied--« l i ed
—that iyt
the bank to run the I'
the board ; and to which I yielded, the
zofdangerous in the then position of
pro-
duced by the excitement that might be non-declarationpro-
oof dividend. It might have
t ptphaegeeffoef the bank." The resulted in a run and the stoppage
Whatc wthoantiyould have been
non-
declaration of dividend—fa
;vroduced on the !Atwell( lders.
effect upon the public, upon the customers ofhLeban been the
_
were not shareholders, the moment it should bruitedbecomek
who
abroad, as it inevitably would have been by public tepert—a
run upon the bank, stoppage, and ruin. This is what they
thought; the final winding up
lof the affairs of the bank,
the loss of all their shares,,,wou d have been utter ruin to
I acceded (said Mr. Dixon)
some of the shareholders. to it
f 11 and crrct discosure of the
only on the understanding that the statement to the share-
holders should contain eve
11
condition of the bank, even though ite shouldl disclose the
gentlemen (pursued the lea wed counreel),
fthcearpeitiasln.'o'tinN
tohiw
s,

qt.

report the shadow of a shade of an intimation that the divi-
dend has been declared out o ital, because it is distinctly
stated that the net proffteleVhfpast go are £ll ~out
of which net profits of the year the dividend is pain, the
expenses of iqpnagement auterthrl7e--debts of the-current
year being provided for. Not one woritaboutits being paid
out of capital. Well, now,--gentleraen, when the account
was published it was found tliatlheir" liabilities, after de-
ducting those which might be made available, amounted to
£1,466,000, and that their assets were £1,488,000. So that,
supposing the assets when re iced did produce that, under
the most favourable state orthhagg, it showed a surplus of
£22,000, and that was all. - Mit-that was. not so. Their
liabilities were far beyond what their assets were : calls bad
to be made, .
.and the whole Was- one complete mass of ruin
and:desolation. Can it be saidthat all this capital has been
lost. since July? Gentlemen, so 'far from there being a
million of capital paid up upoutewhfch they had actually
declared a dividend, and divided the profits, there were only
£936;000 odd. That was all the capital which they then
bad. Was it lost in July? It was or was not. Mr. Dixon,
from the early part of June to the stoppage of the bank,
was himself the sole managing director. Will he say it
was all lost after July ? What reckless trading ! What
management there must have been,- in such a case ! Mr.
Dixon was alone responsible. He cannot, therefore, say
it was lost since then ; it would be monstrous ; it must have
been lost before. But let me call your attention to what be
knows, and actually states. -Mr. Banner was employed by
the bank to investigate the accounts, and upon the 12th of
November there was a meeting at'which he produced a state-
ment, to a certain extent, of what he had made out. " Into
the ' accounts,", Mr. Banner said in this report, "upon which
the losses have occurred, I have not had time to enter closely.
They have most of them been current on the books of the
bank for some years, and I see that,rarge amounts have been
written off from time to time to, the debit of profit and loss
£371,000 odd having been written of between June, 1854
(the year in which Mr. Oliver stopped), and the same period
of 1857, covering a period of four years only." So that you
have the fact, arrived at by the inspection of the books, as
stated by Mr. Banner before a meeting, at which Mr. Dixon
was present, that £371,000 odd had actually been written off'
as losses, and if that is not 'a loss of Capital to that extent I
am at a loss to know what is. This is before June,lBs7, the
report being upon the 28th of next month (July). Mr.
Smith's statement is to the same effect, Mr. Smith's state-
ment to Mr. Dixon being in tbe.month ofJune. Mr. Dixon
referred to this statement as showing the expediency of
dividing the profits; 'and I find likewise, in the report pre-
sented to the meeting upon flip 17th February, in this year,
by Mr. Banner, and adopted by that meeting, he says this :
—" ' We mention in our report of the 12th of November that
the principal accounts upon which the losses have accrued,
now contained in our statement, have been current on the
books of the bank for some years; and scarcely any of these
heavy amounts have been written off." That is totally at
variance with Mr. Banner's statement of the 12th Novem-
ber. He says that before that -£371,000 had actually been
written off, and that " before the issue of the directors' re-
port in July last, an estimate was made of the probable loss,
amounting in the aggregate to. £370,000." Therefore there
could be no donbt that there was this loss of £370,000 re-
ferred to in Mr. Smith's report to Mr. Dixon, in the month
of June, stated by Mr. Banner, who had examined the
books on the 12th of Noverither, to have been written
off before June in that yearihnd afterwards stated by
Mr. Banner not to have been written off. Now, what does
this state of things show ? That in the month of June,
according to the directors' own account, the whole of the
reserve fund was swallowed up. £IOB,OJO, to their know-
- ledge, was necessary to cover losses sustained in former years,
in 1854 principally, and two or three years succeeding, and
taking that from the admitted loss'of £370,000 so written off,
it will leave somewhere about £270,000 of capital actually
gone. They were bound by that clause and their deed to
which I have referred, upon ascertaining that all the reserved
fund was gone, and a fourth part of the paid-up capital, to
summon their subscribers before them, and to take measures
for a dissolution of the company. There was gone at that
time far more than one-fourth of the capital, because one-
fourth of the paid-up capital of £040,000 would only be
£235,000, and they had in fact lost nearly £300,000 besides
the reserve; then I say that the defendant is liable for
the amount claimed by the plaintiff—because I shall
show you, beyond all question, that-that plaintifildid actuary
receive these reports, and acted upon them alone, and that
they were not, as may perhaps be contended on the
other side, intended solely for the inspection of the proprie-
tors. They are, and always haveheen' considered and acted
upon in the open market as furnished for the guidance of the
public, to show the public whether they will be justified in
investing their money in the purchase of shares. The next
question is, are the misrepresentations such as to impose a
liability upon the defendade I think when I have laid before
you proofs of these facts; you will sec beyond all question
that the plaintiffs, who have invested their whole property,
or nearly so, in the purchase of shares in this bank, are en-
titled; in ju,stice, in law,•and in good sense, to call upoa Mr.
Dixon to reCofupense them fat' the loss they have sustained.
"The twapletintiffs were called and examined in corrobora-
lion of the facts stated by their &tinsel, after which
' ' Sir: Fitzroy Kelly addressed the jury for the defence, con-
tending that there had - heep3ao- Misrepresentation on the
part of Mr. Dixon; •that te-had been connected with the
bank since 1854, and that,:itetften that year and 1857 he
had pnrchas'ed 100 sharesLthe winotint thus invested being
£15,001). That until-a -five: monthg before the failure, be
.
bad not tin.sgportnnity'Ofsienowing what took place with
regard to the actual transaViana Oahe bank, and that when
thoroughly- apprised of itkeonchtion, he acted only as an
hotiest and honottrallie 'infan,:ivoutd have acted. Evidence
was then calledlori,the date ti
The jury returned a ve'rillotaisir, the plaintiffs for the
amount claimed. . ..-"''-` ~.. .'
'The Judge said.be•hottelkbis'etiawavould be a warning to
whole country. '-'1 -' .'

ot4lC&'
•.:
X‘Ir.;,E;TatIGENCE.

• .. ~,, • ,‘,.,, ; , ___
,„,
_. • , .
..
MA;ll.olSTLFlrotiSg.,4Prancis, Duffey, who appeared
'to he about 17; but said Itein4S,2o years of age, was charged.
with liav4ig,rObbed -an elderly-t ian named Roby. Smith.
' -offiarittns, 660, 'said—l' *bet the.‘- prisoner, about whom. I
kbadrtdeivakill6rue--fliforfriitiiiati„ at half-past six' last even-
',. tog itt Ilislitipsuate.Lak.rier.* a%e". moment he sew me he ran
,into a publia-liouse called Abe Catherine Wheel. I followed
and told Mtn he vas charged with. stealing a watch and a
bag'of clothes: He said, • J Not me," and I then took him
to the station-house, where I fiund in his possessisn the
thimble rig, implements I produce.
The prosecutor said•—_-.1 rcsielatu.Backchurch-lane, White;
chapel, and on the 11th Ihstarft I went into Petticoat-lane
to sell a bag of clothes; but-I was not able to get a satisfac-
tory price tbr them, and I walked into a public house in
lloundsdilcti to get someihing, and the prisoner and two
other persons followed mesaqd endeavoured to knock up a
bargain about playing at sk,i4les. They said to me, " Coun-
tryman, you may as, well:go 'arid see it fair," so I accom-
panied them to a-public-housein Hnundsditch, and I went
into the...skittle•gtonnd witiOny,bag of clothes, and after
one or two games were 41-16eitilte.we,,t into the house to
have somewhat to drink. - f felt stupified, although I did
not drink much; but I believe-it was from something they
put into the- dtink, and,l missed my bag of clothes, and
.could not upon inquiry hear anything about it. I then left ,
the house; and the prisotier cattle after me, and, putting his
,arrtx,round me, took from pl.y,gOcket a silver watch, the chain
of which he broke in4chgging it away. The watch
was worth 30 shillings; and the clothes were worth £2.
I did not see him again till" he was in custody, but I am
quite sure he was one of the three persons who were with
toe in the skittle-ground' and that it was he that stole my
watch. ...:
The Lord Mayor—Prisoner, do you wish to ask the com-
plainant any questions? ..- .
• Prisoner—Yes, certainly I do. Pray now (to the pro-
secutor), hadn't you been drinking be. bre ?
Prosecutor—l bad only-part of two quarterns of gin. I ,
was not intoxicated, I was stupid. (Laughter.)
-Prisoner—Now you ,see,Jety lord be said that at the time
he lost his bag he became stupified. I should like to know
bow he could know that•l was the party that stole his watch
'' if he was stupified at the time.? Let him answer that.
The Lord Mayor—He swears that you are the person.
Prisoner—l should fancy that a man who was stupified
or intoxicated could not swear to any man.
The Lord Mayor—But•yon see he was so far recovered
from his stupefaction, after-he lost his bag, as to be able to
distinguish you as the person who stole his watch. Was
there nobody at the public-house at the time who can identify
the prisoner ? , • .
Watkins—Sly lord, I, went there, but they would not
know anything about the matter. The house is a very bad
one, frequented by none but thieves and card and skittle
sharpers.
The Loa Mayor—l thought. the license had been taken
• away. . . . ,
lord.
Watkins—So it has, my .It is now only licensed as
''
a beer,shop, and it is worse than it was when licensed as a
public-hOuse'. x ,
PifsOner—Now, any lind;• I'd be glad. to know why This
officer, if I am.the thief, aid not take me long a•go ? I've
been up and down the Minoriea• four or five times a-day for
a fortnight, and the police never meddled with me.
Watkins—l had information, en the 12th inst., the clay
. after the robbery, and I have been looking for you ever
sinee; but could never. see you till last night, and then you
ran away the moment yen saw me.
..The Lord Mayor—lt is my intention to commit you for
trial. Do you wish to say anything ?
Prisoner—No.
Conimitted. _••• :.-•:.,
, Dennis. Leary, whq aPpeared.to be -about 14 years old,-
was.brought up on remand; charged with having stolen a
purse, containing 21s. ad: "Oliver, and a small key, from a
lady unknown, on Fresh-Whkrf,London-bridge, on Monday
last. .
The boy was seen, at about pie o'clock in the evening, to
take something from the poeket-ef a lady dressed in a black
cape and black silk dress;-who was not subsequently dis-
covered ; but the thief was- caught, after having thrown
away the purse described in his flight.
The Lord. Mayor hoped. that the lady, who would in all
probability be informed of the detection of the thief, would
come forward on Tuesdnynextlo identify her property.
BENEVOLENCE.—The- Lord Mayor requested that the
press would acknowledge'his receipt of 10s. (postage stamps)
' from "A. E. 8.," and £2 from "W. P.," for Mrs. Soden.

WESTMINSTER.!—T4E SMOKE NUISANCE AT THE
BATHS AND WASHHOUSES, GREAT SMITH-STREETE
WESTMINSTER. WU/jail& , Urquhart, superinten-
dent of the above establishthent, appeared before Mr.
Poynter, to a summons' taken out by Mr. Gihb, super-
intendent of the B division of police, the charge in which
was that he did negligently use a certain furnace so that the
smoke arising therefrom was Hot fully consumed or burnt.
Mr. Bodkin, with Mr. Sandeson, civil engineer, at-
tended in support of the shmmons ; and Mr. Rogers,
clerk to the managers ofthe baths and washhouses, attended
for them.
Mr. Bodkin having stated the ground of complaint,
called the following witnesses t--
Mr. Sandeson stat d that in the month of January, 1855,
he paid a visit to the establishment and suggested some
alterations in the construction of the chimney connected
with the furnace, which were attended to. In the month
of March last he again went to the establishment and found
that they were burning siftings of coals, which were not
adapted to that furnace. He saw defendant, who said that
he would lay his (Mr. Sandeson's) representations before
the board. In consequence of the alteration he had sug-
gested not being carried out, and as the smoke continued,
he went there and found the same sort of fuel burning on
July 6.
Mr. Paynter—Did you point out the fact that the fuel
was not proper to the defendant?
Witness—l did.
By Mr. Rogers—You burnt a great quantity of coke in
1855. I cautioned the stoker that, if the proper fuel was
not used, I should be compelled to summon the superin-
tendent.corn
Policeman King, 249 B, proved having seen, on the sth
Gregory, 264 B,
of July, dense black smoke, on three several occasions,
coming out of the chimney fur about 10 minutes.
_ Sergeant Hill, 11 B, corroborated some portions of the
same on the 17th of n
officer's evidence.
several • occasions, for two,
volume of smoke issuing
on the 12th of June, also saw, on three
from the same chimney, and the
three, and five minutes, a dense
Mr. Bodkin (to Kru. June.
Andeson)~}low long, if A furnace