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Colonial Cases

Re Treasure Jones, 1868

[bankruptcy - embezzlement]

Re Treasure Jones

R. v. Treasure Jones

Bankruptcy Court
16 January 1868
Source: The North-China Herald, 24 January 1868[1]

 

 

LAW REPORTS.

BANKRUPTCY COURT.

January 16th.

Before Sir E. HORNBY.

Re C. TREASURE JONES.

   Mr. WINCHESTER claimed $3,981.91, balance of moneys received by the bankruptcy on Government account and not accounted for.

   The bankrupt was not in a position to dispute this, but thought it probable that there were amounts due to him also.

   The meeting was adjourned till 22nd January, to allow the bankrupt to examine this claim.

Jan. 22nd.

   Mr. Myburgh appeared for the Crown, and applied to put the bankrupt on his oath to examine him.

   C. TREASURE JONES. - Until 8 or 9 months ago I was in Government employ, at a salary of £500 per annum.  I have only been away a short time. I also made £200 by extending protests, &c., and also got a proportion of Consul's commissions from intestate estates; had also a house found.  My annual income during that time was about $6000 per annum.  My household expenditure has been about Tls. 1,500 to 2000 a year.  I don't know whether I had capital on 31st December 1864, having kept no books.  I had some property in December 1864.  I then bought the Shanghai Recorder.  I paid Tls. 1000 in cash; entire purchase money wass Tls. 4000.  I was to have paid a half, but did not.  Messrs. Cope, Cheshire and Co. were the other owners.  In March or April 1866, I ceased having any connection with the Recorder.  I had purchased the balance in the meantime.  I paid portions of it; in all Tls. 3,000.  I should estimate my losses at Tls. 2,000.  My total liabilities are about $17,000, including Government claim.  I built a farm on the Soochow Creek at a cost of Tls. 6,500 (about.)  Of this I have paid Tls. 5,500.  I mortgaged it for Tls. 2,300, it was sold by the mortgagee.  It was sold for rather more than the mortgage.  In January 1864, I was not in debt.  All my debts have been incurred since then.  I had some running accounts then which I could have paid if necessary.

   Mr. MYBURGH. - How do you account for the difference between your liabilities $17,000, and the sum you have accounted for - say $7,000?

   THE BANKRUPT. - I don't know what has become of it.  I acknowledge receiving the $4000, but deny that it has ever entered my private accounts.  I am convinced that the Consulate is largely indebted to me now.  I have a policy of Insurance on my life.  It is a security for a debt in England.  I had no property in the Maloo.  The plot you mention is my wife's property.

   Examined by Mr. TAPP. - I have had another policy on my life but it has lapsed.  I have sent home about £200 since 1864.

   Mr. WINCHESTER said he was prepared to produce cheques drawn by the bankrupt on private account.

   Examination continued. - I had a pony named Cripple. I won $1,000 by him.  I have included that in my statement of income.

   THE JUDGE. - The question is. - What have you done with the $10,000 during the two years and a half?

   The BANKRUPT accounted for several amounts amounting to about $2,000 including a consular uniform which cost £47 in England and was sold in China for $5.

   THE JUDGE. - There is still a balance of $7400 against you, even supposing you did not touch a farthing of the Government money. - What did you do with it?

   The BANKRUPT. - I don't know, I may have estimated my income too high.  The $180, I owe Mr. Farr, is not all for house rent, a portion is for ginger beer and Soda water.  I don't know what I did with my salary in Feb. 1865.  The blankets I bought from Mr. Purkis.  I was paid for them by the Government.  I imported a pony, but it cost me nothing.  It was a present.

   Mr. TAPP said he wished to show that the bankrupt's expenditure at that time was excessive.  He had several carriages at that time.

   Examination continued. - I have not taken into account the wages paid at the farm.  I don't know how many carriages I had.

   Mr. MYBURGH said he was instructed by Her Majesty's Government to oppose the granting of a discharge to the bankrupt.  It would be idle to ignore the fact that his Lordship had presided at a recent trial, when the bankrupt was charged with embezzling two sums of money which formed part of the deficit for which Mr. Winchester had claimed against the estate.  What has been urged on the part of the prosecution then, might with equal effect be urged as regards the balance of the deficit.  Further criminal proceedings had been abandoned, but he (Mr. M.) thought it right to state that this step had been taken not from any conviction that these monies had not been fraudulently misapplied, as the Government still continued of the  same opinion as to the intent with which the bankrupt had appropriated them under the Act. 

   The Government might have applied to have the bankrupt tried for a misdemeanor - but his instructions were merely to oppose under the 159th Sec. under which the Court has power either to refuse the discharge, to suspend it for a time, or to grant it subject to conditions making after acquired property liable, or to imprison the bankrupt for a year.  The principal ground of opposition was the mode in which the deficit arose, the circumstances of which had been deposed to by Mr. Winchester and were fully before the Court.  Upon these it was unnecessary for him to comment at length; but it appeared clear to him from the bankrupt's own showing and the accounts which had been filed, that being a salaried Government servant with an income fully adequate to meet his wants, he had lived extravagantly and far beyond his means; that he had not when he contracted his debts any reasonable ground or expectation of being able to pay them; and that he engaged in two speculations which his means did not justify. 

   To these his difficulties are in the main attributable, and constitute good grounds of opposition to the discharge.  For a person with a fixed income, his liabilities were unusually large, and must have been incurred in the full knowledge of his inability to satisfy them.  He (Mr. M.) would not venture to suggest what the order of the Court should be, as he felt satisfied that from the manner in which the debts were shown to have been incurred, the Court would hold that the bankrupt ought not to be permitted to escape scot free.

   Mer. KNIGHT for Hall & Holtz opposed the discharge of the bankrupt; and also Mr. TAPP, who said he felt sure the Bankrupt knew he was in difficulties when he borrowed that money of him (Mr. T.)

   THE BANKRUPT replied as follows: - On April 1st 1864 I assumed charge of the Consular accounts at Shanghai and so continued in full charge until March 1866.  During this period a very large amount of money, especially in that branch called Intestate Estates, passed through my hands for management.  In December 1864, I, conjointly with others purchased the Shanghai Recorder and commenced on 1st January 1864 to publish it.  A few months subsequently, I took over my partners'' shares and continued it until March 1866, on my own responsibility.  Finding it a losing speculation and being uncertain of what my liabilities exactly were, I then sold it and estimate my losses   during the fifteen months at about Tls. 2,000.

   While in charge of the Consular accounts I followed the example of my predecessors as to the custody of money in my hands.  I had the Consular chest, the Consular Compradore, the regular account for expenses of the consulate kept in the Consul's name in the Oriental Bank, and an account kept in my own name there also, in which I deposited money of Intestate Estates, and other sums outside the regular account, and in which I also deposited private money of my own.  This system had to my knowledge been previously adopted and not objected to, and I was always under the impression that as long as I could, when called on, produce the cash which should be in my charge, I was permitted to deposit it where I pleased.  During the greater part of this period I was exceedingly overworked, and for a considerable time suffered much from ill-health.

   I would refer to Sir Harry Parkes' despatch to the Foreign Office in January 1866, to show thr miscellaneous and incompatible duties that devolved upon me as Senior Assistant.  When he left Shanghai I had no idea that there were any errors in accounts rendered by me.  In fact he had examined all and signed them as correct.  One claim, that of Col. Tapp's estate now brought against me, is so signed by Sir Harry Parkes.  On Mr. Winchester's arrival he could easily have found out where all public money was deposited, by asking me.  I never concealed my system, not thinking there was anything to conceal in the matter.  He as well as his predecessors, were aware that I was engaged in a speculation which might lead to loss, and he, if not on his arrival, at any rate shortly afterwards, was aware that my public and private accounts were amalgamated in the Oriental Bank Accounts.  In March 1866, my accounts, owing to overwork, ill-health and anxiety of mind caused by responsibility resting on me through the Recorder, were in considerable confusion.

   No daily Cash Book had ever been kept in the Shanghai Consulate from its inauguration; and on my taking office I had allowed matters to go on in the same way.  When therefore confusion arose as I have before stated, I had no means of telling exactly my liability to the Government, but endeavoured from memory and loose memoranda to make up an account showing it.  This I did about the 12th March, 1866, and handed it to Mr. Winchester, and his astonishment was no greater than my own when I discovered that it showed a claim of nearly $6,000 against me.  I am confirmed in this belief because no such sum of money had entered into my private expenditure, my legitimate income and schedule of debts being more than sufficient to account for all my losses and expenses.  On this point, I am quite ready for the fullest and most searching examination the Court can subject me to; and if in the answers I have already made any discrepancies exist, I trust they will be laid to the difficulty of speaking from memory of accounts and events extending over several years, and not to any wish for evasion. 

   In conclusion, I can only urge on the Court that by the result of a criminal prosecution to which I have been subjected in this matter, it is on record that a Jury have been unable to agree in convicting me of intentional fraud in the matter of my acquiring the larger portion of the amount now claimed of me, and as the Crown has seen fit subsequently to drop this prosecution, it is but reasonable and fair to suppose that it feels cause to doubt the felonious intent also on my part.  That mistakes have arisen, I must fain admit; and that carelessness may have led to them I deeply regret, but for this I must submit that I have already suffered from the Government a severe punishment, even more than equal to the offence.

   The actual receipt of the amounts specified and my personal liability for them I do not deny, and in extenuation only urge that the mixture of public and private accounts was sanctioned by my superior and the fact of my being engaged in speculation was not unknown to them.  The result has led to the confusion which now prevents me from clearing up these accounts sufficiently to see how I really stand with regard to the Government; and though I feel I have not enjoyed the amount claimed of me, I am forced to admit my liability for it and cannot afford the expense of professional accountants and Legal advisers to sift the matter to its foundation.

   Further, I have already offered my best endeavours to compromise any claim the government may have on me, and my offer when submitted to Mr. Winchester was, to the best of my knowledge and belief, if not in the first instance accepted, at any rate stated by him to be a fair and reasonable one.  Instructions he received to commence a prosecution caused the negotiations to fall through; but I am ready now to renew it, believing it the best thing that can be done for the entire body of creditors.  In reply to Mr. Tapp's objection to my discharge, on the ground that when I borrowed money of him, I must have known of my indebtedness to the Crown, and had no reasonable prospects of paying him I must deny the former statement; I had no such knowledge and as to the latter Mr. Tapp knew when he lent it me what my prospects of paying were as well as myself.  The bulk of his loan was for a specific object, to enable me to buy the balance of the Recorder business in which I only had a part share.  It was to be employed by me, and Mr. Tapp had the same opinion as I held at the time, that as a speculation it would prove successful.

   As to the discrepancies that may exist in my statement of receipts and expenditure, I think I have stated my income at too high a figure when I said $6,000 per annum from all sources, and sums which I may under special circumstances have paid out, I may have forgotten to state.  My personal expenditure has not I am convinced been of an extravagant nature.  I regretted exceedingly being compelled to commence these proceedings in Bankruptcy; but I had no other means of arranging matters to the satisfaction of all my creditors, and my present wish is as it always has been to pay all as far as lies in my power to do so.  Any condition the Court may think fit to impose upon me as to future property will therefore be cheerfully adopted by me, for after retaining sufficient for the support of myself and family, it would be my desire to devote its reduction of my present liabilities.

   THE CHIEF JUDGE said he was placed in a difficult position.  He had to administer justice and at the same time study what was best for the creditors.

   Mr. MYBURGH said it was in the power of the Court either to withhold the bankrupt's discharge or to give it conditionally, or imprison him.

   THE CHIEF JUDGE remarked that the Crown were in a different position to the other creditors.  It might be all very well for them to make an example; but the other creditors would suffer.  He would therefore take time to consider his judgment.

 

Source: The North-China Herald, 24 April 1868

We give, elsewhere, Sir Edmund Hornby's judgment in C. T. Jones' bankruptcy.  The bankrupt, it will be seen, is granted his discharge, subject to the following conditions - one third of his future earnings or income, and the whole of any after-acquired property, to be set aside for the discharge of his debts.

 

Source: The North-China Herald, 24 April 1868

IN BANKRUPTCY.

April 18th, 1868.

Before Sir EDMUND HORNBY, Chief Judge.

In re C. TREASURE JONES.

   I have delayed giving judgment in this matter as the bankrupt expressed a wish to go through his accounts, with a view of correcting some errors into which he thought he had fallen on the occasion of his last examination.  These errors, if they were errors, have not been corrected, and I understand that the bankrupt is not desirous of any further delay.  I shall, therefore, proceed to deliver my judgment in the matter of the Bankruptcy.

   The Bankrupt in this case applied for his discharge.  He is opposed by his creditors, amongst whom appears the British Consul, representing H.M.'s Government, and he opposes the discharge prayed for, on the ground that during the time the Bankrupt occupied an important official position in the Consulate he appropriated divers sums, which in his official capacity he had received on Government account, to his own use.  I have carefully gone over the evidence in support of the proof tendered and admitted of this debt due to H.M.'s Government, and I have reluctantly, but without the slightest doubt, come to the conclusion that the bankrupt did receive the monies of which the debt consists on account of the Government, and that he did appropriate them to his own use, and that in doing so he has made himself liable to all the consequences of the Act 24-25 Vic., Cap. 96.

   In his explanation of this conduct or rather misconduct, the Bankrupt urges that it is not himself that is to blame, but thr system which he found established, and which he only followed.  I cannot, however, see the slightest pretence for assuming that the system, whatever it was, which he found to exist at the Consulate of keeping the public monies, is to blame for his appropriation of them.  That system was, as every other system must be, based on the belief that the officer entrusted with the keeping of public money, was honest and trustworthy, and although it is possible that additional checks might have been provided which would render such conduct as the Bankrupt has been clearly guilty of, more easy of speedy detection, yet it is a most dangerous doctrine to hold, that because great confidence was reposed in him, and fewer checks against misconduct were imposed than might have been, that therefore the system is to blame and not the party who had betrayed the trust reposed in him, and found means to evade the slight checks which may have hardly been thought necessary in the position which the Bankrupt stood to his employers.

   The misappropriation of the public monies has already formed the subject of a criminal trial when the jury were discharged, not being able to agree on a verdict, and a nolle prosequi has since been entered by H.M.'s Government, who have thus abandoned the intention of prosecuting the Bankrupt again at the bar of a criminal court.

   I conceive, therefore, that I am relieved from the necessity of ordering a trial under the 159th section of the Act, since had it been desirable in the interests of public justice, it was open to the Government to have taken this course, and to have a second time sent the Bankrupt before a jury; but because this leniency has been shown to the Bankrupt I am not, in my character and position of Commissioner in Bankruptcy, the less bound to enquire into the conduct if the Bankrupt, and to determine whether he has been guilty of any of the offences mentioned in the 159th section, and I find that he has improperly appropriated money that did not belong to him, but was on the contrary entrusted to his care as a public officer.  I wish I could have come to any other conclusion; but the evidence given at the trial, as well as on his examination before this Court on hjis application for his discharge, has conclusively satisfied my mind not only that he has converted to his own use such monies, but that he has wilfully or from sheer inability been unable to account for large sums of money which have unquestionably passed through his hands, and which he has obtained, as in the case of the public monies, improperly, and in the case of loans, such as that from his fellow clerk Mr. Tapp without the slightest heed of how he was to repay them.  I cannot look upon such conduct as the simple result of misfortune or carelessness.

   Beyond the purchase of the "Recorder" newspaper, and the building of a small farm, I cannot find that he has been engaged in any speculation, rash or imprudent; and after making full allowance for the losses (if any) incurred by those two liabilities, there still remains a large balance of money entirely unaccounted for.  Whether the balance has been spent in riotous living, or whether it has been concealed, there is not evidence before me; but the fact remains the same that it is unaccounted for in the slightest degree.

   The wording of the section prevents my attaching such conditions as I should feel it my duty to attach if I were able, to the grant of the discharge.  If I punish the Bankrupt by withholding it from him altogether, or prevent him from engaging in any occupation in which, by the industrious use of his abilities, he may eventually attain the means of discharging the debts which he owes to his creditors.  If I imprison him, I sent him forth after his punishment is undergone a free man, it is true, but not the better fitted or the better able to win back the position in the world he has lost by his folly or his carelessness.  If I charge his after acquired property or earnings, I must grant him his discharge; nor can I withhold from him such protection as this Court is then bound to afford.

   I cannot conceive that the Legislature intended a man guilty of the misconduct of which the bankrupt has been unquestionably guilty, should be enabled to come to this Court and get a discharge from his liabilities.  I have also to consider the interests of his creditors.  I shall, therefore, grant the Bankrupt his discharge, subject to the condition that one-thitrd of his future earnings or income be set aside for the discharge of his debts and that any after acquired property be also rendered available for the same purpose.  So long as these conditions are observed, so long will he be free from arrest; but of he fails to observe them the grant of discharge is ipso facto rescinded; his protection from arrest ceases, and he is liable to each of his creditors in the same way as a judgment debtor is liable, and as against him they will possess all the rights over his person and property which judgment creditors possess over that of their debtors.


Note

[1]               See also Tapp v. Jones, 1870; Marshall v. Morphew, 1871.

Treasure Jones was also prosecuted for embezzlement.

 

Source: The North-China Herald, 9 November 1867

SUMMARY OF NEWS.

From a paragraph in another column, it will be seen that a criminal prosecution has been commenced against Mr. C. Treasure Jones, late assistant in H.M. Consulate, for embezzlement of monies entrusted to his charge.  The charge is laid, we believe, under instructions from Lord Stanley.

 

Source: The North-China Herald, 16 November 1867

SUMMARY OF THE NEWS.

A preliminary examination has been held into the charge of embezzlement laid against Mr. C. Treasure Jones, who has been committed for trial.

 

Source: The North-China Herald, 24 December 1867

SUMMARY OF NEWS.

The trial Regina v. C. Treasure Jones, for embezzlement of money while in H.B.M. Consular service, has ended in the dismissal of the Jury - they having been unable to agree on a verdict.

 

Published by Centre for Comparative Law, History and Governance at Macquarie Law School