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Colonial Cases

R v. Hargreaves [1870]

fraud - obtaining money by false pretences

R. v. Hargreaves

Supreme Court of China and Japan
30 September 1870
Source: The North-China Herald, 4 October 1870

 

LAW REPORTS.

SUPREME COURT.

September 30th, 1870

Before G. JAMIESON, Esq.

R. v. W. HARGREAVES.

   The information was laid by Melville Mitchell Walker, of Shanghai, Agent for the Chartered Bank of India, Australia, and China, on respect that the above-mentioned William Hargreaves, having been entrusted by the Chartered Bank of India, Australia, and China, as agent or warehouseman of the said Bank, with certain goods and merchandise, forming the security for advances of money made to one R. F. Thorburn, for safe custody, did, in or about the months of July, August, September 1869, and January 1870, without any authority from the said Bank, and in violence of good faith, and contrary to the purpose for which such goods and merchandise were entrusted to him, convert the same, or the proceeds thereof, to his own use and benefit, or to the use and benefit or some person other than the said Bank.

   Mr. RENNIE said he appeared for the Chartered Bank of India, Australia, and China, in this case.  The Bank, unfortunately, was, for the time being, deprived of the services of Mr. Robinson, and he had been requested to bring before the Court a statement of the two charges to be brought against the defendant.  The Bank, in point of fact, charged the defendant with having committed very grievous frauds against them.  They alleged that these frauds were numerous, and extended over a considerable time, but they only proposed to bring forward two of them.  These were brought forward under two sections of the Act 24 and 25 Vic., c. 96.  The first was the 75th section, which was as follows:

Whosoever, having been intrusted, either solely, or jointly with any other person, as a banker, merchant, broker, attorney, or other agent, with any money or security for the payment of money, with any directions in writing to apply, pay, or deliver such money or security, for any purpose, or to any person specified in such directions, shall, in violation of good faith, and contrary to the terms of such direction, in anywise convert to his own use or benefit, or the use or benefit of any person other than the person by whom he shall have been so instructed, such money, security, or proceeds, or any part thereof respectively; - and whosoever, having been instructed, either solely, or jointly with any other person, as a banker, merchant, broker, attorney or other agent, with any chattel or valuable security, or any power of attorney for the sale or transfer of any shard or interest in any public stock or fund, whether of the United Kingdom, or of any part thereof, or of any foreign state, or in any stock or fund of any body corporate, company, or society, for safe custody, or for any special purpose, without any authority to sell, negotiate, transfer, pledge, or in any manner convert to his own use or benefit, or the use or benefit of any person by whom he shall have been so instructed, such chattel or security, or the proceeds of the same, or any part thereof, or the share or interest in the stock or fund to which such power of attorney shall relate, or any part thereof, - shall be guilty of a misdemeanour, and being convicted thereof shall be liable, at the discretion of the Court, to be kept in penal servitude for any term not exceeding two years, with or without hard labour, and with or without solitary confinement.

 

The 76th section read in this way:

Whosoever, being a banker, merchant, broker, attorney, or agent, and being intrusted, either solely, or jointly with any other person, with the property of any other person for safe custody, shall, with intent to defraud, sell, negotiate, transfer, pledge, or in any manner convert or appropriate the same, or any part thereof to his own use or benefit, or the use or benefit of any person other than the person by whom he was so intrusted, shall be guilty of a misdemeanour, and being convicted thereof, shall be liable, at the discretion of the Court, to any of the punishments which the Court may award as hereinbefore last mentioned.

  

    The charge was preferred under these two sections, and it was in fact a charge of embezzlement of the property of the Bank.  The defendant, he should state, had been, for about three years, managing the business of Mr. R. F. Thorburn, and had been signing his name under a power of attorney.  On the 7th August 1869 defendant obtained, from the Chartered Bank of India, Australia, and China, a loan of sixteen thousand taels to Mr. R. F. Thorburn.  To show how this loan was obtained, however, he must go further back.

   It appeared that earlier in the year certain drafts had been drawn on Mr. Thorburn, from England, and had been purchased by the Bank, part of the security being twenty cases of worsted crape lastings.  These drafts fell due on the 7th of August, and on the 5th of that month the defendant went to the Bank, and informed the Manager that he wanted to retire them, and gave a check against his own private account for that purpose.  This was immediately before the departure of the mail, but he said he should require a loan on the same goods, and said he would still leave with the Bank the godown orders for these goods.  He subsequently applied for and obtained a loan of Tls. 16,000, and on the 17th of August, he wrote a letter to the Bank, giving the terms on which he held the goods - as agent in trust for the Bank - which letter would be handed in.  On the 29th June, 1869, a correspondence has also passed between the defendant and the Bank, defining the terms on which he should hold goods for them, for advances. The 20 cases of goods were, amongst other securities, deposited with Mr. Hargreaves for safe keeping.  On the 24th of June, however, the defendant had sold, and given godown orders for the delivery of six of these cases; and on the 23rd of July, he sold the remaining fourteen cases.  This was done without the authority of the Bank, and the proceeds never came into their hands.

   The second charge was one which related to a loan obtainer by Mr. Hargreaves on the 29th of July 1869.  This loan, he should say, was obtained by Mr. Hargreaves on behalf of Mr. Thorburn.  It was for Tls. 5,877 or thereabouts, and was obtained upon the security of 90 bales of goods then on their way to Shanghai.  Of this, 50 bales were Shirtings and 40 T-cloths.  When the ship arrived, which she did about the 30th of August, the B. L. were given to the defendant to enable him to clear, land, and warehouse the goods.  In a letter dated the 30th September, the defendant wrote to the Bank that this had been done.  The goods were subsequently sold without the knowledge, and in opposition to the directions, of the Bank, and the proceeds were not accounted for.  These were the cases which he would now proceed to prove by the evidence of the Manager of the Bank, as w ell as by documents and letters.

   The following evidence was then heard:-

   M. M.  WALKER, sworn, said - I am Manager of the Chartered Bank of India, Australia, and China.  During the past year there have been business transactions between my Bank and Mr. Thorburn and Mr. Hargreaves.  In those transactions I have had to treat with Mr. Hargreaves.  The transactions have been the usual Banker's transactions, advancing money on goods, and collecting money which had been advanced on goods, in London.  When goods have been advanced on in London, I have taken and kept the documents until the goods arrived.  On the arrival of the ship, Mr. Hargreaves landed these goods, and stored them in his godowns, and gave us his godown order for our benefit.  In such matters I treated with Mr. Hargreaves as our warehouseman.  Up to the 29th June, my verbal instructions to Mr. Hargreaves were, that no goods were to leave his godown, until Sycee or approved Bank orders had been paid to the Bank; further, that no goods were to be transshipped until my authority had been obtained.

   On or about the 29th June, I wrote a letter to Mr. Hargreaves.  I received the following reply:-

 

Shanghai, 29th June, 1869.

 

M.M. WALKER, Esq.,

Manager of Chartd. Bank of India, Australia, and China.

   Dear Sir, - In acknowledging your note of this day, I assure you that I fully appreciate all you advance with reference to the position I hold as agent for your Bank, for the goods stored in my godowns on account of R. F. Thorburn, Esq.; and I shall strictly adhere to your request, as regards delivery and payment of same, in order to keep "the Bank's lien perfect at all points."

   Referring to our conversation on the subject, some two months since, you are aware that I addressed Mr. J. Jones in connection therewith, say on the 15th April last, and I shall be glad to hear, in course, that gentleman did not hesitate to place my views before your Directors, if the opportunity of so doing was afforded him.

I remain, &c., (Signed) WILLIAM HARGREAVES.

 

This was written in answer to my letter of the 29th June.  The purport of that letter was to request Mr. Hargreaves, as the amount of Mr. Thorburn's goods in his godown, on which the Bank had advanced, was very large, and it was important that the Bank's lien on these should be perfect - that he would not allow any of the goods to leave his godown until he had sent sycee, or Banker's orders, for the proceeds; and that in case of transshipment he would previously obtain my consent.

   In the month of May, 1869, I held two acceptances of Mr. Thorburn, for drafts against goods, drawn in England.  I held goods as security for their payment.  As far as I can remember, amongst these goods were 20 cases of Crape Lastings.  I held a godown order for them.  I have it and produce it.  The two drafts were against one invoice, the contents of which were in one godown.  The B/L were attached to the draft.  They were received about six months previously.  The bills matured on the 7th August.  Application was made to me by Mr. Hargreaves to retire them, on the 5th August.  He did so by a cheque.  He said he would require a loan on the same security, after the mail had gone; the loan to be in Mr. Thorburn's name as usual.  Mr. Hargreaves did apply for the loan.  He obtained it on the 7th August.  The amount was Tls. 16,000.  It was obtained in Mr. Thorburn's name.  The security for the loan which I took included the 20 cases of goods before referred to.  I took a fresh letter of hypothecation.  I subsequently received from Mr. Hargreaves a letter in reference to goods deposited by us with him.  The letter bears date 17th August.

   Letter handed in and read:-

Shanghai, 17th August, 1869.

 

To the Chartered Bank of India, Australia, and China.

   Gentlemen, - With reference to the goods now in my godown, under lien to your Bank, I beg to hand you the following letter:-

   I hereby acknowledge that you have placed in my hands, for storage in my godowns, sundry goods, particulars of which, with marks and numbers, are set forth in the annexed schedules Nos. 1 to 9, and I undertake to keep the same safely and securely in my godowns, and in no way attempt to deal with them, but to hold them as trustee for you and entirely at your disposal; and I further agree to make good and to indemnify you from all loss, injury, or damage, which may arise to the said goods or any part thereof, whilst in my godowns.

   I further engage tom hold at your disposal, and assign to you, all interest in the Fire Insurance policies for £125,000, particulars of which are given below, as security for any loss or damage which may arise to the said goods from fire.

I am, &c. (Signed) WILLIAM HARGREAVES                  .

 

The 20 cases appear in sch. 9.  They appear as part of the security against the loan or Tls. 16,000.

   I first became aware that the goods were missing about April.  I became aware of the fact by inspecting the defendant's godown.  I found the 20 cases of crape lastings were not forthcoming.  I did not make application for them specially.  I applied for all thje goods belonging to the Bank.  I was in the godown and saw there was not a package left.  Defendant was acting as warehouseman on my behalf.  He never applied for leave to remove them.  Neither he not any one on his behalf ever paid into the bank anything on account of the proceeds of these 20 cases.  The removal of the goods from the godown before the 10th April, without previous communication with me, would have been in direct disobedience to my instructions.  I have since become aware of how the goods were disposed of.  I became aware by inspecting the books that represent the transactions carried on under the name of R. F. Thorburn.  By inspecting the stock-book I found that the goods had been contracted to be sold at a certain date.  I then traced the operation to the contract-book, and found corresponding entries in the cash-book.  The contract had been made to sell to a Chinaman, to arrive.  The Chinaman paid for some of the goods about the end of June, and some about the beginning of July.  About the end of July, 1869, my Bank made another advance to Mr. R. F. Thorburn.  The advance was on ninety bales or Grey Shirtings and T-cloths, to arrive per Shunlee.  I gave bills on London, on the security of the B/L of these goods.  I held the B/L up to end of August.  I gave them up to Mr. Hargreaves, to land and store the goods in his godown.  Without reference to the books I cannot swear whether the goods were ever entered the godown.  I received, as acknowledgment, a godown receipt and letter of acknowledgment, dated 30th September, 1869.

   Letter handed in and read:-

 

Shanghai, 30th September, 1869.

To the Chartered bank of India, Australia, and China.

   Gentlemen, - I hereby acknowledge that you have this day placed in my hands, for storage in my godowns:-

HS over T in a  diamond, S A under.

1235 to 1284 - 50 B. G. Shirtings.  "Shun Lee."

1285 to 1324 - 40 B. T-Cloths.        "Shun Lee."

And I undertake to keep the same safely and securely in my godowns, and in no way attempt to deal with them, or any part thereof, but to hold them as trustee for you, and entirely at your disposal; and I further agree to make good and indemnify you from all loss, injury, or damage which may arise to the said goods, or any part thereof, whilst in my godowns.

   I further assign to you all interest in the Fire Insurance policies, already handed you, covering goods under lien to the bank, stored in my godowns, as security for any loss or damage from fire which may arise to the goods now deposited.

I am, &c.  (Sighed) WILLIAM HARGREAVES.

 

   I never saw those goods again.  I never gave my authority to sell them.  I became aware that they were missing, at the same time as the others.  I believe a portion were sent to auction, to be sold as damaged.  The remainder were sold to Chinaman, and were paid for.  I received no proceeds.  I discovered this by examining the godowns, and by inspecting the books of R. F. Thorburn.  In this case, as in the other, the goods passed out ort Mr. Hargreaves' possession entirely without my sanction or knowledge.  I was not aware, previous to that examination, that they had been sold.

   Mr. HARWOOD. - How did Mr. Hargreaves usually dispose of goods? What was the usual procedure?

   Witness. - I do not know Mr. Hargreaves' exact relations with Mr. Thorburn, I understood he was acting as Mr. Thorburn's attorney.  He was acting as my warehouseman.

   Mr. HARWOOD. - Did you know Mr. Hargreaves had an interest with Mr. Thorburn in these goods?

   Witness. - I did not know that he had an interest in these particular goods.  The inference I drew from conversation was that his interest was not always identical with that or Mr. Thorburn.

   To Mr. RENNIE. - As regards the Bank, Mr. Hargreaves simply acted as my warehouseman.

   To Mr. HARWOOD. - I mostly saw Mr. Hargreaves.  I knew he was managing Mr. Thorburn's business.

   EDWARD PRICE, sworn, said - I am acquainted with the defendant; and was in his employ as bookkeeper, from 1867 until he was declared bankrupt.  There was no one else in the office.  The business was carrier on under Mr. Thorburn's name, and Mr. Hargreaves always signed per pro.  When goods were sold to the Chinese, Mr. Hargreaves himself entered the transactions in the books.  He entered contracts in a contract book and specified marks and numbers.  When delivery of goods was taken, payment was made to me; and I gave the Chinaman a godown order.  The money was kept in the safe for some time, or paid to Mr. Hargreaves' Bank account.  I gave full particulars of these sums to Mr. Hargreaves, in writing, every week, and I believe he entered up the cash-book from these particulars.  I never paid money into the bank without Mr. Hargreaves orders; and it was always to his account that I did so, as it was in his name that the account was kept. There was a loan book kept in Mr. Hargreaves' handwriting.  I have no knowledge of what it contained.  I have gone over the books since the bankruptcy.  I have the cash-book now before me, and looking at date 24th June, I see an entry for six cases worsted crape lastings, with marks.  On 23rd July I had 14 cases of the same, bought by the same man, and the payments entered.  I should deliver the goods to the purchaser on receiving his Bank order.  Against 30th September 18969, I find an entry of 20 bales from two ships - 600 pieces from the "Shunlee" and 400 pieces from the "Mikado."  That was 12 bales and 8 bales.  The entry means that they were sold and paid for, and delivery order given to the purchaser, Teenlai.  By an entry of the 16th October, I find goods sold at auction by Messrs. Mclean, Thorburn & Co., amounting to Tls. 6,1991.68.  I January I find there are, on the 3rd 10 bales and 4 bales, and 10 bales on the 4th, 10 on the 5th, and on the 10th 5 bales; making in all 39 bales between the 3rd and the 10th January, from the "Shunlee."  For this the sum we received were Tls. 957.1.2 for 10 bales; Tls. 394 for 4 bales; Tls. 955.3.8 for 10 bales; Tls. 985.9.85 for 10 bales; and for 3 bales Tls. 394.4.7.  On 28th October I find 2 bales from the "Mikado."  I find none from the "Shunlee."  On the 26th there were 9,600 pieces sold, without ship's names given.  On the completion of all these contracts the money had been paid necessarily for godown orders.

   Mr. RENNIE said that was the evidence for the prosecution.

   The depositions having been read over, and the usual caution given to the defendant;

   Mr. HARWOOD intimated that the defence was reserved.

   His Honor then said the defendant would be committed for trial.

   Defendant was admitted to bail in two securities of £200 each, and his own recognizance for £400.

 

Supreme Court for China

Shanghai, 14th October 1870

Source: Supreme Court of China (Shanghai), Judges' Notebooks, The National Archives (U.K.), FO1092: 339, pp 10-24

Regina v. William Hargreaves

1st. Fraudulent disposal of goods; 2nd. Obtaining money under false pretences.

Clerk reads indictment - 3 counts.

Plea - Not Guilty.

Rennie for Crown

Bird for deft.

Bird asks whether an order has been obtained from the Court for the insertion of a 3rd Count - 22 & 23 Vict, cap. 17. - No such order has been obtained.

Bird objects to 2nd Count, as not corresponding with Sect. 75 of Act. [???????] of words - "without authority to sell."

Bird objects to 3rd Count on 22 & 23 Vict. Cap. 17.

Queen v. [Fingue] - 34 L. J. (M.C.) fo. 74 - No judges order having been obtained. Reg. v. Bray 8 Cox. He was committed only on a charge of fraudulent disposal of goods.

Demurs to 2nd Count.

Moves Court to quash the 3rd Count.

Rennie against - as to 3rd Count - No order necessary.

Court decided to quash 3rd Count & allows demurrer of 2nd.

Jury called: A.A. Taylor - challenged; S. C. Smith, [D?]. L. Hunter; Luke Warwick; F. G. Walsh - challenged; A. J. Duval; A. Mac[Ivor?].

Rennie for the prosecution.

M. M. Walker, sworn.

I am the manager of the Chartered Bank of India, &c. at Shanghai. I know deft. I know Thorburn. My Bank has never since 6th April last year had [????] dealings with Thorburn. We advanced money on goods to him - In the transaction we had to deal with deft. I dealt with deft. as manager of Thorburn's business. I understood him to be [acting] for Thorburn. I held [security] for drafts drawn by Thorburn. First bills of lading & then when the ship arrived the goods. On the arrival of ship Deft. applied to have bill of lading - he [saw] the goods for us & acted as my warehouseman. On storing the goods he gave me a godown receipt. That was before the month of June. Before that date I had many goods stored in the godown. On the 29th June I sent a letter to deft. This is the letter I wrote (Read - )

(NB mentions [????] [??????] with Thorburns instructions but begs him not to let goods clear godown until he had complied with certain conditions.)

I reced this answer (Read, date 29 June.) Before writing this letter I had your verbal instructions to deft. similar to those in the letter. To the effect that he was to [send] us the money before delivering the goods. Also as to [their] [???????]. In March I had complained to him of transhipping [some] goods without my order. I complained that certain goods had been shipped the first notice of which was through the bill of lading. They had been taken from the godown without my order. His reply was my [order] wd be attended to. After 29th June deft. continued to store my goods on the terms of that letter & no other. Afterwards I received instructions from my director & in consequence obtained from him a fresh letter dated 17 Aug. After that I took from deft. & deponent 4 distinct forms of [acknowledgement] for goods stored with him. On application of deft. 29 July 69 I made a loan to Thorburn of 5987 taels. The security was a bill of lading to arrive by June [???]. Fifty bales of [shirtings], 40 of T. Clothes. The bills were delivered to me at the time the advice was received. I [???????] handed the bills to deft. on 31 Aug. to have them landed & stored. Deft. gave me a godown receipt dated 30th Sepr. I put in receipt (Read).

(Marks & Nos.

S A

Diamond shape mark

H S T vertically inside

Nos. 1235 to 1284 of 50 bales of shirtings ex Simla

Nos. 1285 to 1324 - 40 bales of T clothes ex Simla

Engages in no way to deal with them &c. - see rect.)

By the terms of this letter deft. is not empowered in any way to deal with the goods without my consent - he had no right to deliver goods without my consent. I knew nothing about these goods up to April 1870. I understood the goods were in the godown. In April 1870 I gave an order to Maclean Thorburn & Co. for delivery of [these] goods. I did not receive the whole of the goods. I did not obtain the 90 bales mentioned in the letter of Sepr 30th. I have since ascertained what became of the goods. I ascertained it by an examination of Mr. Thorbutrn's books. I am well ac quainted with deft's writing. I found in stock book in deft's writing - 29th Decr - 50 pieces - ex Simla [Marked as noted above] - pieces gray shirtings. Nos. 1235 - 1264 - 30 [??]; 1265 - 1284 - 20 [??], 50. The writing is in deft's handwriting.

In stock book, under head T Cloth ex [Simla]

Diagram as before: 1283 to 1304 and 1305 to 1324, 40 bales.

(Defts counsel admits identity of these goods & the sale - & the identity with goods referred to in the letter of Sep 30.)

In the [?????] book I found these entries

25 Sep 1869 sold [Shimla] 1285 to 1304 - 20 bales

28 1305 to 1324 - 12 bales

T clothes all same mark -

29th Decr by sold ex [Shimla] 1265 - 1284 - 20 bales gray shirtg

Do 1285 to 1264 - 19 bales do.

The stock book [opposite] saw [?????? & ??????] 8 bales sea damaged.

Grey shirtings 11 bales sea damaged.

Cash book.

30th Sep 69 Entry of [rect] for ex [Shimla] of money for 600 pieces &c. this was his.

26 Oct. [?????] rect for money - for [?????] other 20 bales.

3rd Jan 70 Money 10 bales shirtings - 950-10-

4th Jan 70 10 bales grey shirtings [Shimla]

5th Jan 10 bales grey shirtg [Shimla]

This makes 39 bales between 3rd & 10th Jany.

(Admitted deft. recd all these sums on days specified.)

I was never informed by deft. that these goods came into his possession, nor did he pay the proceeds to the Bank. They were sold without my consent or knowledge.

Deft. about April 70 called a meeting of his creditors. He rec[orded] a statement. He said that at end of last year (sep) finding himself in a jam with [??? ??????] goods he commenced using the proceeds of goods under lien to the Bank for purpose of paying his [????] godown-rent, [????????????????????] charges & general purpose of [business].

X Examd by Bird

I know that deft was interested in Thorburn's business. I was informed by deft their intentions were not identical. I believed he was interested in a portion of Thorburn's business. As to what portions I knew nothing. I was in the habit of going to Thorburn's place of business. I saw Hargreaves. I talked to him about advisability of selling or holding goods. I never gave Thorburn instructions verbally or in writing to sell goods before April 1870. My transactions with Thorburn's firm extend to this year, there were transactions before that time. [Maccah??] was manager before. I was introduced to Hargreaves. Thorburn was not in the [room] when I arrived. Goods have been sold by Thorburn's firm (on deft [instructions]) & money received by Bank during my management. [Jones?] has been [????] & negotiated between me & Hargreaves. When payments were made to the bank.

Mr Hargreaves kept an account. Money was paid to other accounts besides that of Hargreaves. Money was paid to Mr. H's private account (by an order produced). Mr. Thorburn had no account at the Bank. I do not remember receiving paper of Dragon?] as security for [???] draught on deft's current account. I do not remember in whose name the papers of that steamer stood.

I was induced to deal with deft by power of attny from Thorburn. I did not see the power at the time, but it was handed to my branch with letter from Thorburn. I have seen it. I never saw it while deft. managed the business.

Re examd by [Robinson][Rennie]?

I never in any conversation with Hargreaves authorized either him or Thorburn to deliver any goods contrary to the note I held from him. [[emphasis "III" in margin]] I had no power to control the sale of goods.

As to payments into the bank - when made on account of loans they were made [on ?????] by [??????????????????] by bank order. A letter was sent to the bank directing us to apportion the sum to individual loans. When the Bank received these monies it did not know whether or not the goods had left defts godown. According to course of business when the Bank received money for goods, thse goods ought to have been in defts godown. When bank received money on acct of loans, I was on no occasion cognizant that the goods had previously left the defts godown.

(Adjourned for one hour.)

Prosecution continued.

Edward Price, sworn.

I have been in the employ of Thorburn & Hargreaves for 2 years preceding. I acted as assistant & book keeper. On invoice of goods coming from London particulars of goods were entered by Hargreaves and sold by him to different parties - on the goods being sold, those sold were marked off by Mr. H. in stock book & entered by him in contract book in his own writing - on the buyer taking delivery I gave the godown order & I received the money. I entered the amount reced from purchases in the contract book agst the sale. The entries of money recd are in my hand writing. On rect of money from putrchases I gave godown orders. These godown entries are in my hand writing. On 3rd Jany I gave You ku order for 4 bales shirtings per Simla.

Defts counsel admits that the orders relate to 90 bales mentd.)

They were of various dates. I recd purchase money before I gave orders. On receiving purchase money I either kept it or paid it away. I have paid sums into the C. M. Bank from their nos, sometimes from mos' recd. I cannot state what became of the Chinese bank orders recd [???????] particular goods in question. It was paid into the Bank on some account, or some was given to the shroff. I paid no money into the bank in reduction of a loan of 5987 taels obtained 29th July. I paid moneys to the drawing or private account generally under specific orders. If I knew that money recd belonged to a particular loan, I sometimes paid it without orders in reduction of that loan.

I recd from deft 28 Oct a [cheque] [??????????] for 110 bales of T. Clothes of which 20 were by [Shimla], [marked} S (HST) A. I paid that into the drawing account by instructions from deft.

On or about 30 Sep I recd from [Taylor?] 2060 taels for 20 bales of T. clothes. I gave that paper to Mr. H. I paid shroff 2894.788 & had in hand 7678.500 taels out of moneys recd. The proportion of the 20 bales wd be 12 bales by [Shimla] & 8 by Mikado. Of the proceeds of the 20 bales none was paid except to H's shroff - or the drawing acct or may be on acct of loans, but not the specific loan mentd. In my payments [sent] to deft weekly I always specified to what loan I had paid. When I paid them in for any specific loans, I got a rect from Bank, if I did not [get] that I sent them in to drawing acct. I inspected certain goods per [Shimla] & found them damaged, they were sent to [Lam & Crawfords] & sold. That was in Sep I think. It was before 30 Sept. L & C [rendered] acct sales to Mr. H. The [originals] were sent to London. The cheque was given to Mr. H. & I paid it into drawing acct. The cheque included the produce of 11 & 8 bales damaged.

# 11 bales of shirtings 1080 taels 65

8 bales T. clothes 778.47 taels

That was the amount included in the cheque to Hargreaves. He gave it to me & I sent it to the drawing acct. The date of the acct [sale] [??] Sepr 1869. I paid these moneys by direction of Mr. H. to drawing acct. I had direction to pay the whole cheque in from Mr. H. The amount is 6291.28 taels.

X examd

I was the only assistant employed by deft. There were a great deal of [work] Chinamen paid generally in bank orders - they have 5 days to run before falling due. It is the practice of the trade to decline before the 5 days are elapsed. I kept the Bk order in a case. Sometimes I paid them into the Bk - giving Mr. H. a memo - on the same day. At the end of the week I gave him a memo of rects & payts which he copied into the Cash Book. This was all except the amount I paid to the drawing acct. This he copied himself. The drawing acct was kept in the name of Will. Hargreaves. In the [????] given to me I find large balance to W. Hargreaves name 30Sep 1869. I had a general knowledge that nearly all goods in Mr. H's possession were under lien to some one bank or other.

It was part of my duty to make [??????????????????????????????????] of goods from England. I had the general management of thre godown, as far as giving the orders out. I retract a statement made before the magistrates as to any knowledge of the loan book - I had knowledge of the loan book. Mr. Thorburn did not interfere in the management of the business. I am not aware of goods disposed of belonging to the firm not entered in the cash book. Mr. H. never took any money out of the business but what appears in the cash book. I mean took to his own personal use. The cash book shows that the a portion of the monies realised by sales was applied in payment of charges of various kinds. The cash book shows that certain sums have been applied in that way. The 1 Oct 69 to 31 Mar 70, the total of 67.795 taels.

Re examd by [Robinson]

When I paid money to defts drawing acct I gave him an acct the same or next day. I did not at the time know what was the credit of Mr. H. The state of his acct was practically unknown to me.

[Emphasis in margin] I had no knowledge of the purpose to which the cheques on the private acct were applied.

[James?] Francis Wallis, exd

I am a partner in Maclean & Thorburn & Co. I received order (produced) from [Walter] of Chartered M. Bank. In pursuance of that I demanded the goods mentd in it from deft. The 90 bales ex [Shimla] were not among the goods delivered to me nor any part of them.

[Double emphasis in margin] We sold some of the goods ex [Shimla] 8 bales of T cloth & 11 bales of T cloth [of the marks??]. I received them 28 Sep 1869. The proceeds were paid by my firm to deft about 16 Oct, 6291.28 taels.

James Maclean, sworn.

I am manager of Sh'ai & Hong Koing Bank Shanghai. I know deft. We are creditors on his estate. I was present at the meeting of his creditors. I remember a statement made by deft about goods - he said that being pressed he had sold goods belonging to different banks for purpose of paying Storage &c.

X exd

He said he was aware in the end of September that the money was thus applied. I am sure he said in September.

Re exd by [Robinson]

He said in Sept he had begun to apply goods for this purpose.

Robert Forester Thorburn, sworn

Deft has managed my business in Shanghai for two or three years. In consequence of that business I have had occasion to examine the books carefully. From that examn I have discovered a great number of cheques drawn by deft which do not appear in the cash book. I made out a note of the amount, about 300,000 taels - which do not appear in the cash book. These cheques do not appear to be drawn for his private account. It was an irregularity in account keeping.

X exd

I mean to say not that there was a deficit of 300,000 but that these cheques had not been entered in the cash book.

Deft's counsel does not call witnesses nor put in written evidence.

Court decides against Rennie's general right to reply.

Rennie summing up

Charge - goods entrusted to deft for safe custody - appropriated by him & proceeds appropriated. Not denied that goods were sold & proceeds paid into Bank on private acct deft. - drew large amounts.

Facts - bills of lading.

Bird in defence

The legal construction - for safe custody only [underlined twice] - this word should be [??????] in the act.

Evidence.

[?????] at the time of giving receipt - deft had already sold the goods.

Indictment says other [persons] [???] behind deft.

Court sums up.

Verdict - Guilty.

Sentence - Imprisonment for one year.

[Margin note by CW Goodwin, Depty Chief Judge: This of course does not mean with hard labour. CWG.]

15th Oct. 1870

Upon the application of prisoner's counsel; ordered that W. Hargreaves be admitted among the prisoners of the first division of those convicted of misdemeanours, under the Act 3 & 4 Vict. Chap. , sect. 2. C. W. Goodwin.

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