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Decisions of the Superior Courts of New South Wales, 1788-1899

R v Gregson (1830) NSW Sel Cas (Dowling) 378; [1830] NSWSupC 71

bill of exchange, embezzling

Supreme Court of New South Wales

Stephen J., 20 September 1830

Source: Sydney Gazette, 21 September 1830[1 ]

 

MONDAY, SEPTEMBER 20.

(Before Mr. Justice Stephen.)

Matthew Gregson stood charged with having, in the capacity of a broker, obtained possession of a certain promissory note for the sum of £350 1s., for the purpose of effecting a discount, from Mr. Daniel Cooper, of Sydney, and converting the same to his own use, contrary to the statute.  The information contained three counts.

Mr. Foster, with whom was Mr. Poole, stated the case for the prosecution, and called

Mr. Daniel Cooper - I am a merchant in Sydney, and one of the firm of Cooper and Levey; I know the defendant; he has often represented himself to me as a bill-broker, and has advertised in the public papers to that effect; this was before the month of January in the present year; I have entrusted him with certain bills and notes to get discounted, in consequence of such representation and advertisement; when I gave the defendant the bills, the understanding was that he was to get the cash from another person and hand it over to me, less the discount, and his own half-percent, as a broker; that was the understanding, although there was no specific directions, because the defendant had done similar business for me before, when he brought me the money, less the discount and his own brokerage, the phrase ``getting a bill discounted" means nothing more or less than what I have described; in January last, I entrusted the defendant with eight bills for the purpose of getting them discounted, one of which was a promisory note, the subject of this trial; it was a promisory note on Robert Campbell, jun. and Co, in our favour, at eighteen months; date, for £350 1 s., dated April 16th 1829, due the 19th October, 1830; it was not addressed to any one; it was a mere promise to pay; I do not remember the number of the note, and I have not taken it from the bill book; I think I endorsed it to the defendant, when I handed it to him; I never saw it since I gave it to him, and do not know where it is at present; I have applied either to Mr. Campbell or his partner, I can't say which, to know what had become of the bill, but I could obtain no information concerning it; I delivered seven other bills to the defendant at the same time, which he returned to me not discounted; at that time he told me that he could get the note in question, for £350 1s., discounted in a day or two, and would bring me the money; I waited a day or two before I made any enquiry of the defendant about the note; after that he called upon me every week, up to about a month of the time he was apprehended, about the note; during the month previous to his apprehension, I could not see him, but I wrote several notes to him about the bill, and also sent Mr. Poole to him; after putting me off for several weeks, he at last owned to me that he had discounted the note, and furnished me an account-current in which he included it, enclosed in a letter; he afterwards called upon me, and I told him I would not admit the account-current, as this bill had never been entered in our books, but I afterwards wrote him, seeing that my bill was gone, that I was willing to take another bill for it; when I delivered the eight bills to the defendant, I asked him to give me a memorandum for them, stating the purpose for which he received them; he gave me the paper now produced, at that time; it was written and signed by him in my presence; the paper is in these words:- ``Received of Messrs. Cooper and Levey, the undermentioned bills for discount, M. Gregson, broker."  I have never received either the bill in question or any portion of its proceeds since.

Cross-examined by Dr. Wardell. - I gave the defendant no authority in writing respecting the bills, but I considered his own receipt, written at my suggestion, to imply a direction; the defendant had not a beneficial interest in the bills, as a broker, until he handed me the money; I should consider the defendant would negociate [sic] the bill, as a broker, without putting his name on it; I might have said ``I wish to settle about he bill, if convenient," for I would have said any thing to get my money; I have written to him to this effect, ``if convenient, I will take good bills at reasonable dates," but there were also other matters between us; I was afraid at that time that I would never get any thing; this was more than a month after I delivered the bill to the defendant; he included it in what he called an account-current, but which I would not admit; we had a discount-account with the defendant, but this transaction formed no part of it; the bill for £350 was not entered on our books at all.

Re-examined. - What I call a discount-account was a bill for £750, drawn in the defendant's favour, at his request, part of the proceeds of which, unfortunately, I have never received; he said he could discount a bill to that amount, and as it was an accommodation to us at the time, we gave him a bill for that sum; we never gave him any credit for the bills of which the £350 1s. note was one; the only beneficial interest which the defendant had in the bills, consisted in his brokerage; when a party is employed to get a bill discounted, he has no authority to pass it in the way of business, or any more than a servant sent to the bank with a check to receive the amount; it is not at all likely that a party would put his name on a bill for the mere purpose of getting it discounted; the letters I wrote to the defendant were for the purpose of endeavouring to get my money as I could; they were written in consequence of what I considered his shuffling conduct; I never authorised him to apply the proceeds of the bill to his own use, and let at go in account; although I may have written to him in civil terms, it was from the mere wish to get my money if could, but never considering the transaction in the light of a debt; I did not think it was necessary that I should give the defendant a direction in writing how the bills were to be disposed of.

By Dr. Wardell. - I did not know that a direction in writing was necessary under the Act of Parliament, but even if I had known it, I should have been perfectly satisfied that the paper given to me by the defendant would have fully borne me out in law; I do not consider it merely as a receipt; the purpose for which the bills were given is expressly stated in it; I refused to blend the bill for £350 with the £750 bill; I do not think I ever offered to settle the two transactions in a particular way; I may have written something to that effect, but I do not recollect; I did not offer to take one bill which would blend both transactions.

Mr. David Poole, solicitor, said, in July last I applied, on the part of Mr. Cooper, to the defendant for the bill in question, or the amount; he said he had passed the bill, and could not then pay the amount as he was in embarrassed circumstances; I told him that he had subjected himself to a criminal prosecution, and he replied, ``What use would it be to Mr. Cooper to send me to an iron-gang?"

Cross-examined. - I think, when I spoke to the defendant, that he showed me a letter on the subject from Mr. Cooper; I do not think he pointed out any particular passage in it to me.

This was the case for the prosecution.

Dr. Wardell contended, on several grounds, that there was no case to go to the Jury, and that the defendant was entitled to his acquittal: - first, because the 49 section of the Act of Parliament (9 Geo. 4) under which he was indicted, provides that a direction in writing specifying the purpose for which any security for the payment of money is entrusted to any banker, broker, attorney, or other agent, and how the proceeds are to be appled [sic], must be given by the party entrusting; whereas, in the present case, there was no such direction given, the only evidence relied on being that of a receipt from the defendant for certain bills, and from it the purpose for which he received them was sought to be inferred.  A third count, also, in the information, framed on the latter part of the same clause, he contended, was equally unsupported.  That portion of the clause enacts, that if any chattel, or valuable security, or any power of attorney for the sale or transfer of any share or interest in any public stock or fund, shall be entrusted to any banker, merchant, broker, attorney, or other gent, for safe custody, or for any special purpose, without any authority to sell, negotiate, transfer, or pledge, the same and that he, in violation of good faith, and contrary to the object or purpose for which such chattel or security might be entrusted to him, should convert it to his own use, or the whole or any part of the proceeds, every such offender shall be guilty of a misdemeanor.  The present case, therefore, did not come within that portion of the Act, inasmuch as the note in question was not only not entrusted to the defendant for safe custody, but, according to all the evidence, was given to him for a specific purpose, and to which purpose he applied it.  The learned counsel also took several technical objections to the pleadings.

Mr. Foster replied.

Mr. Justice Stephen said, that this being the first case of the kind tried here, under the Act of Parliament on which the information was founded - as the points raised were of very great importance, and as some doubts existed in his mind with respect to some of them - he would put the case to the jury on the facts, and allow the defendant the benefit of having the points of law argued at another stage of the proceedings, should it become necessary.

Dr. Wardell then addressed the jury for the defence, and read several letters referred to in the testimony of Mr. Cooper, one of which he put in evidence, and contended that the particular transaction which had been made the subject of this prosecution, was part of a running account between the defendant and Cooper and Levey, and had been so considered by Mr. Cooper.

Counsel for the Crown replied.

The Learned Judge summed up the evidence, and the jury, after retiring for a short time, found the defendant - Guilty.  Remanded.

 

Forbes C.J., Stephen and Dowling JJ, 30 September 1830

Source: Dowling, Select Cases, Archives Office of New South Wales, 2/3466[2 ]

[p. 31]

Where a bill broker received Bills of Exchange for the purpose of discounting but without any written directions from his principals upon the subject and afterwards gave a receipt acknowledging that he was possessed of the bills, but converted the proceeds to his own use  Held that this was not a case within in the 7 & 8 G 4.c 29 s.49.  Where the Broker had authority to discount [p. 32] bills and he was charged with embezzling a bill, but not the proceeds.  Held not within the second branch of the same clause.

 

Source: Dowling, Proceedings of the Supreme Court, Vol. 48, Archives Office of New South Wales, 2/3231

 

[p. 14]

This was in indictment against the Deft. on the Statute 7 & 8 G 4. c. 29 s. 49 by which it is enacted in substance, "That if any security for the payment of money shall be intrusted to any broker with any direction in writing to apply the proceeds for any purpose specified in such direction, and he shall in violation of good faith, & contrary to the purpose so specified, in anywise convert to his own use or benefit such proceeds, he shall be guilty of a misdemeanor, and being convicted thereof shall be liable to be transported &c.  And if any valuable security shall be intrusted to any broker &c for safe custody, or for any special purpose without any authority to negotiate shall in violation of good faith, and contrary to the object or purpose for which such security shall have when entrusted to him, negotiate or in any manner convert to his own use or benefit such security or proceeds of the same every such offender shall be [p. 15] guilty of a misdemeanour, and being convicted thereof shall be liable &c."  The indictment contained three counts.  The first & second charged him with embezzling a bill of exchange val £350. 1 belonging to Messrs Cooper & Levy, which had been entrusted to him with a special direction in writing &c & that he had contrary to good faith converted the same to his own use; & the third charged that the same bill had been entrusted to the Deft. upon & for a certain special purpose, to wit, for the special purpose that he the s.d M G. should cause & procure the said note to be discounted for, & pay the proceeds thereof to them the s.d Cooper & Levy, but that contrary to good faith &c he had converted the same note (not the proceeds) to his own use.  At the trial before Stephen J it appeared in evidence that the defendant carried on the business of a bill broker & general agent.  The prosecutors Messrs Cooper & Levy [p. 16] were merchants in Sydney.  They had employed the deft to get several bills drawn in their favour discounted and pay the proceeds to them, and he to have his commission thereon as broker. This direction was not in writing, but after the bills were delivered to the Deft. he gave the prosecutors a written receipt acknowledging that he held the bills for their account, and amongst others the bill in question.  The Deft applied this bill to his own use, & the prosecutors could not obtain any of the proceeds from him.  The prosectors had offered to take other bills with responsible names to them in lieu of the bills in question, but finding that the deft could not comply with the offer, the present prosecution was instituted.  The Deft, under the directions of the learned Judge was found guilty, but the case was reserved for the consideration of the Court.

Wardell for the Deft, now contended that there was no evidence to support the indictment.  The first & second counts failed in proof, because there was no special direction in writing to the deft as to what he sh.d do with the bill.  The receipt given by him afterwards could not be considered a special direction in writing.  It was merely an acknowledgment [p. 17] that he held the bills for the account of the prosecutors.  Then as to the third count, which was founded on the second branch of the clause, it was proved that he had authority to negociate, that is, to discount the bill; & he was charged with embezzling, not the proceeds, but the bill itself, &, therefore he had committed no offence within the act.

Foster contra, contended that all the counts were supported by the evidence.  1st The receipt must be considered to all intents & purposes as a direction in writing; & second, the act of converting the bill, to the Defts own use, though he had authority to discount, was sufficient to bring him within the scope of the second branch of the section.

Per Totam Curiam.  We are clearly of opinion that this was a wrong conviction.  Having regard to the language of the first branch of the section in which the indictment is founded, it is quite [p. 18] clear that the receipt in the defts own handwriting cannot by any intendment whatever be considered as a direction in writing  proceeding from the prosecutor , & therefore the first & second counts have wholly failed in proof.  As to the third count, it being proved that the deft had authority to discount the bill, can we consider it in any other light, than as an authority to negotiate the bill?  If not, then this is the very  coupled [?] case put in the second branch of the section, which contemplates the trusting a broker with a security for safe custody or any special purpose ``without any authority to negotiate" &c  Beside the third count charges the deft with converting the bill to his own use, & not the proceeds.  Whether he may be liable in another indictment at common law for converting the proceeds to his own use, is another matter; but it is clear that this is not a case within the statute.  The deft must be discharged from this indictment, & we shall recommend [a] pardon.

See Rex v Briggs 1 Stra & Ramsbottom v Carter 2 Starke. 

 

Notes

[1 ] See also Australian, 24 September 1830.

[2 ] See also Sydney Gazette, 2 October 1830, reporting that the prisoner's arguments in objection to the conviction were upheld, and that he was discharged from the jury's conviction.  See also Australian, 1 October, 19 and 26 November 1830; Sydney Gazette, 16 November 1830.

Published by the Division of Law, Macquarie University