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THE MONTGOMERYSHIRE BREWERY,…

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THE MONTGOMERYSHIRE BREWERY, CO., LTD. (Continued from page 3.) THURSDAY. Much interest was centred in to-day's proceedings, from the fact that the evidence was to be taken the first thing this morning of the alleged promoters of the Company-Overton and Avis, who appeared in custody of two warders from Holloway Gaol, they having arrived yesterday, hand- cuffed, with the Zulu," timed to arrive here at 8-35 o'clock p.m., and they became the centre of attrac- tion at the Court all day. Both men were very respectably attired, and did not seem to feel their position; throughout the day they were most profuse in their smiles to judge, examiners, and all, and they certainly did not lack any self-assurance, though in the early stage of his examination Overton was inclined to be nervous, but these signs toon passed off. SAMUEL CALEB OVERTON was then called, and he took his place in the witness box. Official Receiver: In 1890 yon weie in partner- ship with Mr. Avis ?—Before I answer any questions I should like to be informed of the circumstances under which we are brought here. You are here under an order of the Court.— What is the nature of this inquiry ? Into the promotion of the Montgomeryshire Brewery Company.—Are there any allegations of fraud in connection with it P In my report to the Court I say that fraud has been committed, but I do not say by whom.—They are general allegations ? I have mentioned thirteen people in my report, and they have been summoned to attend the Court. They are Mr. Laitwood, the other three London directors, Mr. Robinson, and Mr. Dawson, the three secretaries, and a director appointed long after you had anything to do with the Company.—I think it would be more straightforward for me to say at once that I am on remand at Holloway under a criminal prosecution. So long as that prosecution is sub judice, acting on the advice of my solicitor, I shall refuse to answer any questions. The Judge You are bound to answer questions under the Act.—While a criminal prosecution against me is sub judice I am advised that I need not answer any questions here, and that is the course I shall take. Official Receiver This has nothing to do with the criminal prosecution.—But I may be asked questions which may incriminate me. I am advised by my solicitor not to answer any ques- tions, and I shall follow his advice. Official Receiver: Your Honour, 1 shall ask this witness questions, and if he refuses to answer I shall ask that you commit him. He is in custody now, but that is the only course. Witness After the criminal prosecution is over, whether convicted or acquitted, I shall be prepared to give any information I can. Official Receiver: I scarcely see that any ques- tions. wbich may be asked here to-day can affect tha1 (Hfiminal prosecution. It has nothing to do ■wiirh. this Company. Tue Judge Questions can be put to witness, and ean say whether he objects to answer them. The Official Receiver Were you in partnership with Avis in 1890 ?—I was. Were you or your firm in any way engaged or employed in the promotion or formation of the Montgomeryshire Brewery Company ?—That I shall decline to answer. I submit it does not incriminate you. His Honour I must point out that the question does not incriminate you. Witness: I was connected with it. The Official Receiver Who was the first person who mentioned it to you or made any communica- tion as to these breweries P—I hardly remember. who it was. Was it Laitwood ?—I cannot say. Did you see Laitwood with reference to it in the early part of the proceedings ?—-Oh yes. Cannot you remember whether Laitwood was not the first person who mentioned the matter to you ?—I am not sure on that point. Were yon and your partner the promoters ?—No. Who were the promoters ?—The actual pro- moters were Dawson and Laitwood. Was there a syndicate formed ?—Yes, if two can iorm a syndicate. Was the syndicate originally intended to include more people ?—Yes, it was. Do you know the names of the other parties ?— Sir Pryce Pryce-Jones was one, and Mr. Thomas, of Newtown, I think, was another. How much money was the syndicate supposed to find ?—That I cannot say without reference. How much, as a matter of fact, did they find ?— I cannot tell without reference. If I read you what is stated on your public examination will that assist you ?—Have you the file here, sir ? Yes. You say here that Mr. Dawson and Mr. Laitwood were the members of the syndicate, and a sum of £4,000 is mentioned as being the amount which was to be found.—If I said so in my sworn information no doubt it is perfectly tru. Do you know how the money was found ?—That I cannot tell you. I will put into your hands original cash accounts furnished in your bankruptcy. You will there find an entry of a receipt for £2,000 on the 20th March. What does it mean ?—I suppose it would be in connection with the brewery. Would that be a payment to your firm ?—In what way. Did you receive that sum ?—Undoubtedly we did. And did you receive the £50 from Roberts ?— Yes. He was the owner of Aberystwyth brewery ?— That was so. I want you to be quite certain, because Mr. Daw- son seemed to think yesterday a guarantee only was gIven, and it was not paid ?—Undoubtedly it was paid. It is in the cash receipts and would not so appear unless we had received it. A man named Charles Henry Adams is the person mentioned in the prospectus as promoter; who is he ?—He was a nominee of the promoter. Who suggested him ?—Laitwood suggested him. Was he a clerk in Laitwood's employ ?—I don't know that he was a clerk. Was he in his employ ?—He was associated with Laitwu^J, whether a,6 a clerk or in what capacity I do not know. Was it it is usual to have a nominee. Sir Pryce Pryce-Jones and Adams saw Dawson, I presume, before the contracts were signed ?— Yes. And Issard ?—Yes. Who negotiated with the vendors for the pur- chase of the different properties ?—There were three. Take Newtown first; who negotiated on behalf of the promoters to the then owners?—I think Laitwood and Thomas negotiated with Dawson in the first instance. What I want to know is who closed the bargain so to speak?—Well; I think that Laitwood and Dawson arranged the price. Of course, I person- ally had discussion with Mr. Dawton over the matter, because we were employed as agents. Do you put it in this way, that you were agents for the syndicate ?—Y. 5 sir. And you yourselves were not the promoters ?— Absolutely not. I have an agreement to that effect. W:l" it in writing?—Yes. I wish I could see L ?—I will undertake to pro- duce it Honour Between whom is the agree- ment ?—My firm, and Laitwood and Dawson. The Official Receiver We will take it then you were to act as agents of these two gentlemen ?— Yes. Who instructed Argles to value the Crown Brewery and house contiectcd with it ?—Laitwood, with Dawson's consent. As far as you know, was the agreement of the purchase to be at Argles valuation ?—I hardly like to answer that question, because there is the docu- ment, which will speak for itself. Did Mr. Dawson agree to sell at the amount of Argles valuation ?—I think that was so—to the best of my recollection. That he agreed to sell his brewery at Argles valuation ?— Y es. And the contract was entered into between Issard and Co. aLe). Adams ?—Yes. The amount was £20,046-£18,046 amount of the valuation, and £2,000 good-will. That is how it is said to be made up ?—Yes. With regard to Roberts's brewery can you tell low that purchase money is arrived at ?—I cannot, without the documents. There is no separate valuation that I have been able to find. Do you know how the £13,000 pur- chase money was arrived at, as between Roberts and Adams ?—I think I personally settled the amount with Roberts himself. It was put in writing, and made a contract by the exchange of letters. With reference to Mytton and Galloway's busi- ness at Welshpool; did you negotiate with them personally ?—No I don't think I can say I did. Negotiations going roll were reported to me from time to time. I hardly remember the terms with reference to that. I think that Mr. Humphreys, who was then in the employ of Messrs. Issard and Co., had a deal to do with it there. Perhaps it will assist your memory if I tell you what it w*s. It was a contract to buy the good- will at £3,000 on the basis of a certain turnover. Then the contract went on to say that the stock- in-trade was to be bought with the book-debts at a valuation. Do you think Humphreys fixed the £3,000 with them ?—I should not like to say "fixed." I think that was the price agreed upon. It was principally negotiated through Mr. Hum- phreys ?—I think so, as far as I remember. How were you to be paid for what you were to do as agent ? Was any sum fixed as being the amount your firm was to be paid for the work of the syndicate ?—That I cannot answer without the confract before me. Having read a portion of witness's examination in bankruptcy, Mr. Bullock asked Is it a fact you were to have the difference between the price paid by the promoters to the vendor, and the price at which the promoters sold to the Company ?—If I gave figures there they ware correct. What service were you to render to the syndicate for this consideration ?—We were to do the whole, working incidental to forming the Company. The prospectus said the promoters would pay all expenses except brokerage. Was it any part of your agreement with the syndicate that you were to under-write or guarantee the subscription ?— There was no contract to that effect. Who fixed the price at which the Company were to purchase ? I may say, to aid your memory, that the contract was entered into between Adams and Law son Ben ham under which Adams sold to Benham as trustee all this property in one contract. There were four contracts; one between Adams and Issard and Co., Roberts and Adams, Mytton and Galloway and Adams, and one contract with Benham enbodying the whole three?-—-And in this contract the price paid for the properties. There was a schedule and the price was put opposite the properties. You are right to a certain extent. I will hand you up the contract and you will see. The con- tiact between Adams and Benham says the property comprised in the Newtown Brewery is £39,960, and there is a second schedule of houses said to have been secured, and as regards those prices they are set opposite each house. As regards Aberystwyth there is another schedule—that to be acquired for £17,000, and the fourth, Mytton and Galloway's, for £10,000; in the aggregate £79,854. Who fixed the price in the aggregate or separately at which the Company was to purchase ?—I cannot say now. I suppose it was decided between all parties—when I say all parties" I mean all parties, either as principals or as agents connected with the formation; that is to say, Laitwood, Dawson, and ourselves. Do you suggest that Mr. Dawson knew the amount at which the Company were going to acquire the property ?—I don't suggest it. I swear that he did. When ?—At the time the contracts were sub- mitted. Before the prospectus was issued ?—Certainly, sir. Was there any understanding between you and the vendors—Dawson or Issard—that they were to get any of the profit you were supposed to make ? —Yes. Will you tell us what the arrangement was ?— Yes. Issard had, I think, £1,300. And Dawson ?—He had, besides the return of his promotion expenses, £800, I think, but there was more beside that. Pardon me asking again about it, but there is a sum of JE801 paid to Mr. Dawson by the Company, on the completion of the purchase of the Crown Brewery part of the purchase money. You are not confusing that with the £800 you are speaking of now ?—It is a long time ago. I am only putting this to tell of the fact. He was entitled to the amount, it being part of the £20,000. I want you to consider that; before you said he had £ 800.—That was my recollection of it. Do yon consider Mr. Dawson had JE800 out of the promotion money ?—I cannot swear. I know he had a sum of JE800, but cannot say exactly what it was. Mr. Avis tells me that there was only JE800 paid him.—Then I take his word. No doubt his memory is better than mine. Was there any arrangement at the outset that Mr. Issard and Mr. Dawson were to have some- thing?—Yes there was. I forget the amount—a certain proportion, but I think it only fair to say Mr. Dawson forewent it. I am satisfied he did not get anything, but was he to have had something ? Yes, under the original arrangement. The directors' attendance book having been handed to witness, the Official Receiver said You see there was a meeting of subscribers (on the 21st March in London) to the articles of assignment. You were present ?—I may have been, but cannot swear. Mr. Robinson and Mr. Dawson both say you were. In whose writing is the heading ?—Avis's. I don't think I was present, as a matter of fact. The agenda book is all in Mr. Avis's hand-writ- ing ?—If in his hand-writing he was there. It was a meeting at which four gentlemen are reported to have been present; Messrs. Robinson, Newton, Mitchel, and LeGrand. Robinson we know, who were the other three ?—Mr. Dawson can tell you more about LeGrand than I can. I had been introduced to LeGrand by a mutual frien i as a manager of a brewery. At Lamberhurst P—That is so, and he was thought a suitable man. And who was Newton ?—The gentleman who had offices in Leadenhall Street—a general mer- chant he styled himself (laughter). And the other ?—I understood he was a gentle- man of private means, and no occupation. Who prepared the memorandum of articles of association ?—I have no doubt I settled it. You undertook that as part of the arrangement ? —Yes, no doubt. You seem to have witnessed the signatures of the seven who signed. Do you know whether you obtained the signatures altogether ?—No sir, I did not. At separate times ?—I obtained Sir Prvce-Jones' signature at his house in Newtown. No doubt Mr. Dawson's at the office of the company. J There was no meeting of the signatories ?— Xo. Do you remember on the same day (21st March) there was a meeting of directors, and were you present at that, held at Throgmorton Avenue ? —I don't think I was present at either. You have already said that Mr. Dawson knew at an earlier stage than this, the price the company was to pay for these properties. What I want to know is when the other gentlemen knew. Now at the meeting on the 2lst March all four contracts were said to be adopted?—Yes. You were not there when they were read ?—I might have been. I cannot remember. Can you tell us of your own knowledge when it was that these gentlemen knew the price they had to pay ?—I will swear all knew. Before the prospectus was issued ?—I swear it. They deny it ?—They are mistaken. The prospectus was adopted at this meeting ?— By the directors. Of course it is always known who is to act before they are appointed by the company. Did they sign the prospectus ?—Each one signed it as a mark of approval before it was sent out to the public. Excuse my pressing this point. We have had Robinson and Dawson, and your ptatemeut flatly contradicts theirs.—I undertake to produce the prospectus with Mr. Robinson's and all other direc- tors initials upon it. May I ask you to let me have it?—I will, sir. If I have not got it I know where it is. Do you know whether Mr. Talbot, solicitor, of Newtown, saw the prospectus before it was issued ? —Undoubtedly. When ?—On more than one occasion. He saw several proofs of it. Did Mr. Talbot make any alterations or sugges- tions upon it ?—I cannot swear to that. ] fancy he did. Our correspondence will prove that. I think he did. What do you consider was Mr. Talbot's position in the matter ? Do you consider he was interested in the promotion of the company ?-Certainly; in this way only, that he was solicitor representing the company while at the same time he w as represent- ing the vendors. Was there any arrangement whereby he was to get any thing out of the promotion money '!—There was. How much ?— £ 1,000. Did he get it ?—No, sir. He said he being in a fiduciary position he ought not to have it. How was it an anged ?—We gave him a lettcr to that effect. When was he appointed—prior to the meeting ?— Yes he consented to act before the prospectus was issued. I can prove that very conclusively. We also wanted a London solicitor on the prospectus, which he opposed, 'and wanted to be the sole solicitor, out as he represented two parties, and believing in the old proverb that a man cannot serve two masters, we thought it just as well to have an independent adviser and brought in Mr. Perry Godfrey. Now about the prospectus. It states the com- pany was formed to purchase the Crown Brewery, Aberystwyth Brewery, and Mytton and Galloway's business, and goes en to say what they are then this paragraph occurs In addition to the 48 tied houses already belonging to the brewery, 24 more valuable freehold and leasehold houses of a similar character have been secured." Can you remember in what wa) they had been secured?—By con- tract. With the owners ?—To each brewery there were attached houses properly tied, but as I remember there were a lot of other houses with whom the respective brewers and wine and spirit merchants weie dealing, but in those cages I do not think there was anything to prevent the transfer of custom elsewhere if they wished, and we suggested that if we could get them tied for some consideration we had better do so. As st ated in the prospectus they were absolutely secured in writing. A list of the houses was here handed to the witness. Those are the additional houses referred to in this paragraph and the price opposite house ?—I expect The first schedule is the Crown Brewery and its houses, the second Aberystwyth and its houses. I wish to call your attention to the schcdule with the sums of money opposite each house they are the 24 referred to as the 24 additional houses agreed.— I expect they aie, but does not the agreement say ? It says so, but I want to know whether they are the houses referred to in the paragraph (which Mr. Bullock read), At this time or a month before uone of these houses were tied to anybody.—They were anterior to the issue of the prospectus. But not included in any sale ? —N o it is a cor- rect list. Who was it entered into the agreements ?—Mr. Humphreys chiefly. He negotiated with these people ?—And Argles went over and valued them. That statement corroborates what we have heard from another quarter.—We, ot course, persoually knew nothing about the value. The Official Receiver continued to examine the witness upon a report relating to the Crown Brewery which had been issued. In the report it said the 6,849 barrels had been brewed, but witness said lie should think it ought to have read 6,849 barrels sold." Witness at this stage desired to know if it was intended to make any accusation against his firm in issuing the report, for if so he should decline to answer any more questions. The Official Receiver: I have asked the other witness questions of a far more serious kind than these. The witness said he was at the meeting when it was decided to go to allotment. At the meeting he thought the subscription was quite sufficient to go to allotment. Witness believed they would be able to prove that circulars calling the meeting were posted to all the directors. A cheque was signed in favour of Adams for JE785 8s. Adams had some of the money, although he asserted that he did not. He thought Adams had £250. That sum was handed to Mr. Laitwood for Adams, who received the money and also some shares. There was another cheque drawn by the company on the same day for £50 for brokerage; but witness did know who received the money. In the original agreement between Issard & Co. and Adams the mortgage on the Crown Brewery was to be paid out of the purchase money. At the meeting on the 1st of May, 1890, when it was resolved to buy the Crown Brewery, Newtown, and other houses, witness did not know that as a fact some of those had not been acquired. On the 10th of May 1890, there was a further cheque of £3,014 12s. payable to Adams or bearer. That cheque went through witness's bank, but h did not know whether the cheque went to hia account. The Official Receiver There was a payment of about JE5 on the 28th of May to Mr. Robinson for expenses. Mr. Robinson said he never had any money at all ? Witness We paid all the directors' fees for the first three meetings, and their expenses up to town. There is no doubt the cheque was for that purpose. Witness further said that in April, 1890, Mr. Issard was paid £1,250 out of the profits. Laitwood was also paid £1,000 as his part of the property. There another cheque to Mr. Robinson for JE14 4s., but he could not say what it was for. Witness had an idea, but he might be wrong, so would rather not express it. Of the profit Mr. Talbot received his fees. Witness paid Mr. Talbot money altogether outside his costs; but his mind was mtherweak on that point. Witness and Avis never had the large sums which some people said they had received. He wished he had. (Laughter). He did not suggest any impropriety on the part of Mr. Talbot, who was certainly entitled to what he had received. He felt very much surprised that the company went into liquidation. It certainly would not have happened with proper handling. The litigation indulged in, was a very expensive amusement. (Laughter). The Official Receiver: What litigation?—Wit- ness All sorts of litigation. Wheua house is divided against itself it cannot stand. In further examination witness said there was not sufficient cash subscribed by the general public to pay for the Welshpool business. The Official Receiver: Do you know why the Aberystwyth contract was not completed ?—Wit- ness': It was suggested to Mr. Roberts that he should vary the terms of purchase. It is a fact there was not enough money to carry out the con- tract. The Official Receiver Did you ever hear of a Mrs. Fisher?—Witness I knew she was a shareholder. She was connected with Mr. Chandler Michell in some way, and the application was accompanied by a cheque for JE500 sent to Benham, who paid it into the bank, and the same day was drawn for Adams tor JE500. The result of the cheque transaction was that the Company did not get Mrs. Fisher's £500, but that Adams did, and Mrs. Fisher got some portion of Adams' shares. However, he did not recollect the transaction. He did not have any personal negotiations as regarded the stock-in- trade and book debts of the Company. He left that entirely to Argles and Watkins. The Official Receiver How long was it intended that you should remain in the service of the Com- pany ?—We should have been very happy to have remained up to the present time if we could have been of any service to the company (laughter). The witness said there was no undertaking that they should finance the company, nor was there any undertaking that they should attend the meet- ings and give the directors the benefit of their guidance. The directors may have been in- experienced in the capacity of directors, but they were all business men, and they certainly ought to have known what they were doing. They were quite able to look after themselves. They had their legal adviser with them at the meeting, and they ought not to have gone far wrong. The Official Receiver: Poor Mr. Talbot again (laughter). The witness said he and his partuer were looked to by the Company in times of trouble to help them with money. He (witness) was very anxious that there should be no disaster to the Company, so they lent them money when they could. When the shares were transferred to Mr. Robinson, £250 was mentioned in connection with the transaction but Mr. Robinson paid nothing, although cheques were changed. The Company owed money to himself and Avis—he should say it was £500 or £600. At one meeting he believed Mr. Robinson proposed a vote of thanks to Overton and Avis for their services (laughter). Witness and his partner attended the meetings of directors because it was a usual thing for the promoters to attend. They were invited to attend by the directors, but they were not the only active figures connected with the Company. He repudiated the idea that the directors were merely figure-heads. It was unfair to suggest that gentlemen of education, who had been in business for years, and had amassed fortunes, could he figure-heads on the Board. The London directors were not simply the representa- tives of his firm, and, with the exception of Mitchell, they voted dead against them. Mr. Talbot, on one occasion, threatened to wind up the Company and do all sorts of mad things. Mr. Thomas, of Newtown, received one hundred shares as commission. In answer to Mr. Graham, witness said he attended the meetings of directors as the represen- tatives of the promoters. It was usual for pro- moters to take profit for promotion. Mr. Dawson did not qualify as director by the transfer of stock, although the other directors did so. Mr. Dawson forewent his profit, but at his request witness and his partner advanced Mr. Issard £1,200. In reply to Mr. Williams, he said Mr. Talbot was solicitor in the matter from the first, and he had an intimate knowledge of the whole thing from beginning to end. Mr. Talbot certainly agreed to the declaration of an interim dividend. He could not say whether it was right for the directors to give £8,000 debenture stock for the loan of £3,000. At this stage the Official Receiver said he should ask for an order on Friday for the public examina- tion of Mr. Talbot, the solicitor, and the two auditors, Mr. J. Vine and Mr. Herbert Watkins. ALF NEVILLE AVIS was the next witness called. Official Receirer: I think your name is Alfred Neville Avis ?—That is so. And you are a partner of Mr. Overton's ?—I am. Do you adopt, generally, the answers that he has given ?—I do. I want to ask you, distinctly, one or two things, Mr. Overton says that this syndicate was to have consisted of several gentlemen, and that it ulti- mately resulted in two gentlemen being the pro- moters—Mr. Laitwood and Mr. Dawson ?-That is so. And that Adams was simply nominee?—Quite so. As far as you know was the price paid for the Crown Brewery the amount of Argles' valuation, plus the amount of the good-will ?-I believe so. Mr. Overton says that Mr. Dawson and Mr. Robinson knew at the very outset the large profit that was going to be made on this purchase ?-All the documents were placed before them. Mr. Overton also said that they knew before the prospectus was issued, or before they went to allot- ment, and that there was an understanding that certain people should participate in the profit. I want to know whether yon are quite sure that this arrangement was made before the prospectus was issued ?—Before, naturally. Both Mr. Dawson and Laitwood knew that they were going to have a certain amount of your pro- fit at the outset ?-They thought so. But Mr. Dawson did not have it ?--He was a party to the arrangement. Did Mr. Robinson see the prospectus before it was issued ?—Yes, and Mr. Talbot also saw it. Do you know whether Talbot made any altera- tions ?-He did, and I believe he made several alterations to the first. What about the contracts ?—He did not prepare them, but approved them, and knew at the outset the money Adams was going to pay, and what the Company was going to pay Issard. What, did Mr. Talbot have £ 1,000 ?—He had some of it. Can you tell us how much he really had ?— £ 150, or something like thnt. With reference to going to allotment. Do you remember being at the meeting ?-I was. Did Mr. Talbot consent to the allotment ?-He did not object. I think Mr. Overton went so far as to say they were all anxious to go to allotment?—They did not want it to be a, failure. Mr. Overton could not explain the question of the transfers to Peter Allen ?—Our firm had no connection with Peter Allen in any way or form. Who negotiated the sale with Power and Clegg ? —Outside I had some conversation with Mr. Power when he was in London. With reference to Don Gillies' transaction. Can you give us any light on the matter ?—The Com- pany wanted the money, and it was probably dis- cussed by the directors. The local directors said they knew nothing of it? —But they did. They were not present when the mortgage deed was executed, but it was confirmed by them before. I believe at this time the Company was very hard up ?-It was. Were you present at the meeting when it was decided to declare an interim dividend ?-I was. And it was unanimous that the dividend should be declared ?—Yes; they all thought they had practically made profits. Mr. Graham: You say the Newtown directors were aware of the transaction, and that you were authorised to raise the loan ?-I am not sure whether there is anything on the agenda book to that effect; but it was within their knowledge all through. The meeting which you allude to was held on the 12th March, 189lt and the minute book says the 12th March, 1891, and the minute book says The report of Messrs. Overton aud Avis having been received, it was resolved that Overton and Avis be instructed to wire to Power and Clegg and see what they can do." That, I take it to be, you were authorised to do ?- Quite so. That resolution having been passed, I presume that you made enquiries in Manchester ?—We com- municated with Power and Clegg. On the 25th March, it was resolved that the offer of Messrs. Power and Clegg, share brokers, Man- chester, to loan X,3,000 upon security of LS,000 of debenture be accepted, the loan to be advanced for six months at 5! per cent, and the debentures to be alloted to Mr. W. D. Gillies, the nominee of the lenders. That is the acceptance of it ?—Yes. I take it that at that meeting you reported to the directors the terms by which the money was raised? —I cannot say I think so. I have no doubt that letters were written to Talbot and Dawson acquaint- ing them of it. Can you swear the letters were written ?-I have no doubt. Can you swear it ?—I cannot; it is so long ago. Tell us the history of the indemnity contract. With regard to the j6700 and Adams.—I think the explanation is After the figures were gone into by Mr. Watkins, Mr. Is3ard's salary seemed sush an amount that it was suggested some arrangement should be made as to relieving the company of a portion of that amount. That is all. Under the advice of the solicitors to the company the directors were advised that they could do so. I think it was a fact was it not that this 9,700 should be paid to the company for loss of services through Mr. Issard's ill-health ?—Yes. Mr. F. W. Williams You have heard what Mr. Overton has said as to the position of Mr. Talbot in connection with the company, and WLl at he said about Herbert Watkins and Company. Do you con- firm that ?- I do, sir. The evidence of JOHN LAITWOOD was next heard. The Official Receiver In 1890 you were carrying on business as advertising agent in the Haymarket? —Yes. Was Charles Henry Adams in your employ at that time ?-He was. He is the gentleman referred to in the prospectus? -Yes, sir, and a very honourable young fellow. You weie the gentleman that introduced Mr. Dawson to Overton and Avis ?-I forget whether it was myself or Mr. W. F- Thomas. It was through Mr. Thomas that the matter was mentioned to you ?—-I believe it was. Was a syndicate formed for the purpose of getting this business at Newtown and other breweries ?-I don't think it was. I never heard of it. Overton and Avis say they were the agents of the syndicate.—They were the promoters. You say then that you were not a promoter ?—I was not a promoter. Who do you say were the promoters?—I say Overton and Avis. When did you first see the prospectus ?—I am at a loss to say. Perhaps I can help your memory. There appeared in one of the local parers on January 24th, 1890, a paragraph headed Another Great Brewery Becomes a Limited Company." That, I am informed at the office of the paper, came from you ?—Very likely it would. Did you see the prospectus when you wrote that ? —I saw the prospectus, in all probability, a fortnight after. Early in February ?-I fancy it was. Was that before it was issued ?—Yes. Do you know the amount of the profits that were going to be made by the promoters ?-No, I did not; neither do I know now. Twenty-seven thousand pounds the company paid to them ?-Oh indeed. I understood £4,000 (laughter). You were the advertising agent in the matter ?— Yes. And all the advertisements were issued through you ?—Yes. Did you ever receive any of the profit out of the promotion money ?—I received some shares. My arrangement nrhend took the risk to do the adver- tising was that I should receive a proportion. I told them the usual arrangement was two to one- i.e„ if 1 took the lisk of doing £ 1,000 worth of advertising I should want £ 2,000. That is the usual arrangement with advertising agents, and very often considerably more. I was therefore liable for zel,000 worth of advertising and in return was to get zE2,000 worth of the profits. Did Overton and Avis pay you all the advertis- ing ?—Yes. ,A nd what did tkey pay you besides ?-There was some cash and some shares; there was never a settling up, and I never had all that was due to me by a long way. The balance sheet shows that the sums of £ 333 6s. 8d. and £1,000 were paid to you ?—That would be what I arranged for as the proportion of their money. I have got here your own profit and loss ledger, and in it is the amount you have stated here in the balance sheet as the amount of your profit. This brewery concern was very largely advertised ?-I think I spent zCl,600 or £ 1,700 over it. The amount stated in your ledger is £ 1,771. Were you not surprised, having regard to the large number of prospectuses issued, and the large amount of advertising, that the amount of sub- scriptions should be so small ?-I did not know the amount, even to this day. The amount was under £ 16,000. Later on, Adams transferred to you X2,000 debenture stock ? -I never saw it. To my knowledge I never saw any debenture stock. I remember executing a blank transfer in a hurry for Mr. Avis, who told me that it was all right, but as to having seen deben- tures I never saw them. There is the certificate and there is the transfer (produced and passed to witness) and it is witnessed by Avis ?-That is my signature. I never knew what it was for. I never heard of Peter Allen before. Did your man Adams receive anything from Overton and Avis ?-Adams in the first place, I think, arranged during my absence from the office one day with Overton and Avis to be-tlieir nominee as vendor of this Company. I objected to it, when he told me, at first, he being in my employ and I having a contract with Overton and Avis, so I talked it over with Adams, and he said they had offered him R25 in cash and 925 in shares. I did not like the idea of it, but Adams being a very trustworthy fellow and suggested to me that it would be of use to him. I discussed the matter with him. He said as you have a £ 1,000 stock in this, I think it would be well for me to; be the nominee," and I thought ib over and came to the conclusion that it was a very sensible remark, and after that agreed that be should be the nominee. Did he get anything P—About £ 4 That is practically what he told us. Mr. Overton says that he had more. You adhere to the state- ment that you were not a promoter of the Com- pany r-I never was, and was only at a meeting once, and that was when I called at the office, and I was asked to go in; the meeting was over. I mean in the preliminary stage when the Com- pany was being floated. Did you ever attend any meeting at Newtown on the business ?—I was down with Overton and Avis and Mr. Thomas. What were you doing there ?—Well sir, in the first place Mr. Thomas was introduced to me through. Sir Pryce Pryce-Jones, who I knew very well, and who used to come and see me, and at that time I wanted a partner- my other partner having gone out and taken zCl,400, leaving me rather short of capital-and Sir Pryce said he might know a man who would suit me. Consequently, Mr Thomas came and saw me, but we could not come to terms. I happened to tell him that I was doing one or two companies, and we afterwards talked about breweries going very well at the time. He said there was a nice little brewery in Newtown which could be floated into a company. I got a letter from Mr. Thomas to go to Newtown, and I spoke of it to Overton and Avis, knowmg that they were quite capable of bringing a company out, and we went down together. Did you see Sir Pryce at this interview ?-I be- lieved I dined with Sir Pryce that day. I am not quite sure whether it was that time or another. Did you attend any othel preliminary meeting ? —I don't think so. And you say you did not know at that time what the profits were going to be ?-I did not. Do you know whether anything more was said about anyone else getting anything out of it ?- Something was said about Mr Dawson. I cannot remember exactly what was said. Was Mr. Thomas to have something ?—Yes he was to have something for the introduction. And you say you never knew what the profits were going to be ?-I did not that I swear. I am glad you are here, because Mr. Overton said you were a promoter with Mr. Dawson ?-l am very pleased to be here. By Overton You say that you had no recollec- tion of forming a syndicate with Mr. Dawson ?-I have no recollection. You swear it ?—To the best of my recollection and belief. Do you not know that it was your suggestion that Sir Pryce-Jones should join the syndicate ?— Never. I knew Sir Prvco would not in the first place. Was it not your suggestion that Mr. Thomas should join?—No because I knew he would not. Is it not a fact that Mr. Thomas did agree to join the syndicate ?-Not that I am aware of. Do you remember an interview at Mr. Powell's office, between Dawson, Thomas, Sir Pryce, your- self, Avis and myself. We asked Thomas to join, don't you remember ?—I don't remember. Your recollection has been so very good do you remember that meeting '-I remember going to Mr. Powell's office well. Who was there ?-That I can't tell you. Don't you remember Mr. Thomas being there ? -I don't remember. Well he was there. Do you remember where we adjourned to ?- Y es; I remember we went to an hotel opposite. I will refresh your memory—it was the Bear Hotel. Do you remember I drew up two docu- ments there, both of which you signed ?-I remember signing one, which I never read. Will you tell us what that document was ? Was it not between you and Dawson, resolving your- selves into a syndicate Dawson to find X3,000, and you to find RI,000, in addition to the other £ 1,000 ?—I could not. I did not read it. You swear you don't remember what it was. I have the document to prove. Don't commit perjury. You swear you don't remember the con- tents?-No. You handed it over to me, and said Sign that Mr. Laitwood, It is all right," and I did. I remember that I was to be responsible for £ 1,000 for the advertising. In answer to His Honour, witness said the docu- ment was a piece of foolscap paper. Overton When did you sign the second document, whereby you, as a syndicate, engaged the services of Avis and myself ?-I swear I don't remember signing any other document ? You signed both. How much of the profit did you receive from us ?-I have told the official receiver. How much promotion money did you receive as your share of the profits ? Do you deny you received an exclusive third of the advertising ?-I should think I did not receive anything like a third. Mr. Laitwood, did you receive a third or not of the net profits made ?-I have never known until now what the profits were. I could not say I re- ceived a third. How much did you receive? The Official Receiver quoted an entry in witness's cash book dated 28th February, 1890, when he re- ceived -6133 6s. 8d., Mr. Bullock also intimating that it was fair to the witness to say than the book could not have been made up purposely for examination. Overton You had open cheques from us. Is that amount exclusive of advertising ?-I believe it is. I put it to you, does not that represent very nearly a third after paying commissions ?-I don't know what the commissions were. I cannot say the amount. You admit that is exclusive ?—Yes. Your memory is fiulty about documents. Did you sign a document in our office at Beaufort Mansions, and exchange receipts with us, settling up the division of profits ?-I did. Why was that ?—Because I thought the thing was closed, and that it was what was due to me. R. E. BEDDOW stated, in reply to the Official Re- ceiver, that he was cashier at the Newtown Brewery at the time the Company was formed, and acted as secretary for the Company at Newtown. With regard to the transaction with Power and Clegg, he said that if the C3,000 loan had not been forth- coming a few writs would no doubt have come in. They were very severely pressed for money at that time. Some laughter was caused by a re- mark of the witness to the effect that for the one share he had in the Company he actually paid money. John HAMER, who succeeded the preceding witness as secretary at Newtown, gave evidence of a formal character. The inquiry was adjourned till to morrow. ♦ FRIDAY. The examination for the present concluded this morning, Mr. DAWSON, chairman of the directors, whose examination was not finished at the rising of the Court on Wednesday, being the only witness examined. The Official Receiver With reference to the first balance-sheet issued. Is it not a fact that several large items which should have been charged in that balance-sheet were omitted ?-It has since been discovered. Would you explain why you did not discover it at the time ?-I can't. There is no pretence to show that the books did not show ?—Possibly not. Unfortunately there are 52 books: one set at Welsbpool, one at Newtown, and the other in London, and I believe the balance- sheet was made out from the London office. Did you see Messrs. Watkins and Company's report, issued prior to the prospectus, sayiug that your gross profits were £ 3615. Had you any reason to doubt the accuracy of that statement ?— No. Witness afterwards replied to the Official Receiver that it was a fact that he was in negotia- tion for the purchase of the company's business, with the exception of Mytton and Galloway's busi- ness, who bought theirs back. Mr. Dawson said he could not explain how it came to be stated that the profit of the Newtown business had jumped up from C3,615 to £ 8,476. He did not go through the books himself and had to take the word of the accountants for it. He was equally unable to give particulars to explain how, whilst the statement of sales prior to the formation of the company was X12,000, for the first year of the company's trading they were given as £ 20,500. He only had a generi 1 knowledge of the Welshpool trading and affects. Mr. Bullock Do you think, as a business man, this increase I am a bad business man, and never attended to business, or I should never have been landed in this fix (laughter). If Adams's indemnity had not been included in the balance sheet it would, of course, have reduced the assets by the amount of X700. Witness, in reply, said he began to feel anxious about the report in July, 1891, and wired to Over- ton and Avis on the 7th, to hurry Watkin up with the balauce sheet, that was about June. Was it not a fact that an asset having been got at you could not declare the profit you did ?-It was X700 less certainly. Can you tell me why no mention was made of Mr. Robinson's resignation ?-It was an omission; that is all I can account for it. It was decided not to elect Mr. Newton ?-Yes, on his suggestion that there was a sufficient uum- ber of directors on the Board. At the same meeting it was decided that Mr. Vine be appointed auditor in lieu of Mr. Watkin?— Yes. That meeting was on the 7th July. Why was it that the dividend was not commenced to be paid until September 29th ?-The usual complaint. Short of funds ?—Yes. Who instructed Beddow to issue some dividends in priority to others ?—You will find it in the minute book that I was to take the management, and therefore I probably requested him to issue the small ones first. And you did not pay yourself your dividend ?- No, I did not. The minute book says, After consideration it was resolved that the Company take no proceedings against the Financial Netcs and other papurs." For libels on whom ?—Personally on myself and the company. His Honour: We have heard very little of litigation, except a casual mention that there had been a good deal. In answer to further questions, witness said that Don Gillies did commence an action against the Company that was one of the cases in litigation. Who was the first person to speak to you about Mr. Robinson getting his shares cancelled ?-I can't tell. Did Mr. Robinson tell you what it was about?— I think he must have taken Linklater's advice on the matter. Why did he want to get rid of them ?-I can't tell, except that Linklater told him he should not hold promoters' shares. Witness later on, replying to a question, said he never acted without Mr. Talbot's advice on any point whatsoever. Who invited Robinson to attend the directors meetings ?—Most probably, Mr. Talbot did. You heard what Robinson said about the amount which Overton and Avis owed his firm ? Why did the Company pay it ?—Because Mr. Robinson deliberately stated that as it was through the Com- pany that he was introduced to Overton and Avis, and it was very hard for him to be at a loss to the amount of X35, and he considered that as he got a judgment summons against them, and he had re- ceived nothing for his services as director that it was only fair that they should pay his firm X35. He also said that if he could recover from the judgment summons he got against them that he would refund the Company. Witness said that Mr. Mytton, Welshpool, who was willing to become a director in place of Mr. Newton, resigned, never did become one. He (witness) brought an action against the Manchester Observer, and got a verdict for zC900, and at his ex- amination in that case he said that he did not see the prospectus before it was issued, and he also understood when the Company was being formed that his position was not that of promoter but vendor. I am taking the assets and liabilities. You have said the assets were a third more than the liabili. ties. You say the assets were zC5,819 short of pay- ing the liabilities. Did not anyone suggest the winding-up of the Company ?—I am very sorry to turn back upon the legal adviser. I don't want to put all the blame on his shoulders, but we were advised otherwise. Witness said he qualified Mr. Edmund Buckley to the posi of director, and no arrangements were made whereby he was to indemnify. There is an agreement, whereby you agree to transfer so many shares to him, upon payment by him of the consideration money, £ 500 ?—I wished you bad read it first and asked if I signed it after. I remember it now. Witness said it was a fact that Argles sued for the cost of his valuation, which the Company defended and lost. The Company at one time was very much pressed for money, and he lent them X300, upon two securities of zC8,000 debenture stock. Within a few months after he had lent the Company the £300, it had all gone except £ 40. The Company sued Laitwood for payment of his spirit account. The shareholders were not called together at the end of 1892, and on the following February 6th the. company decided not to take any further action against Adams. In April Le Grand resigned, leaving only him and Buckley on the Board. The third balance-sheet was not issued, and something was said to him by Mr. Vine about the valuation, to the effect that his figures did not concur with those in the previous balance-sheet. It was impossible for Mr. Vine to adopt anything in the matter of depreciating the value of the property. Tne contract with Blower was for the furnishing of the Bull Hotel, Welsh- pool, and they were being paid on the 3 years' system, and the contract with Robinson and Wells was in respect of the hire of plate. It was after the third balance-sheet was issued in draft that he had some conversation with Robinson about the latter taking any action on behalf of the debenture holders. After the writ was issued he was appointed a kind of dummy trustee, but never acted. There is a resolution in the minute book to the effect that in consequence of Mr. Talbot's hostile position it was resolved to instruct Mr. Clarke. What was that hostile position ?—H e seemed to think there was something going on, and he came to me and said he wanted to know, but I would not tell him. Then he said You will let me know very soon," and he commenced the action to forego his moitgages. Mr. Parfitt examined the witness regarding the statement he made on Wednesday respecting the profits of his firm for five years-from 1882 to 1887 —prior to the formation of the Company. During 1887 to 1890 was the firm making a profit ?-I don't know. Witness further said that, properly managed, he could say that he believed the business he was selling to Adams was a profitable business, but he was not in a position to say in fact that a profit had been made for three years before the Com- pany was started. Overton and Avis, on behalf of Adams, who was their nominee, did not ask him any questions about profit; they left it all to Argles.. Mr. Graham: You sold your business, which was valued by Argles, at a sum ? Yes. You were, as you stated in the affidavit, the real proprietor of that business Yes. His Honour: How long has Mr. Dawson been in the business ?—Since 1882. Mr. Graham Is it not a fact that your partner had drawn out all his capital, and that there was constant friction between you and him ?—There was. There was in consequence of this some difficulty in selling the business, because Mr. Issard had been collecting the debts of the Brewery, and not accounted for them ?—Very often. He was your manager, drawing a salary, and interested in the profits ?—Yes. Your brewery was valued by independent men, exclusive of the good-will, at zCl8,046 ?—Yes. As a matter of fact, what have you received from the sale of that brewery ?-"Ol in cash. There were also Y,900 book debts, for which I re- ceived debenture stock. And what debentures and shares do you hold ?— All the balance, pound for pound. In addition to that you had advanced a sum of £ 1,500, and for that you received four bills of exchange, which have never been met, and second mortgages of two sums of zC8,000 ?—Yes. Have you received any dividend ?-No, I don't think I have. I believe some part of the dividend was written off against my account in the book. And you have paid an overdraft at the bank and a sum due to the Cambrian Railways Company, to the amount of z6623 ?—Yes. At the time Mr. Issard was appointed managing director, he was to receive 2800, and at his death you acted as manager for nothing, until it was con- venient to appoint another manager ?—Yes. Throughout the whole unfortunate career of this Company, you used your profits really to bring it into a successful concern ?-I believed the Com- pany would have pulled round, and that was why I advanced the money. As regards the actual negotiations for the pur- chase of the property to be taken oyer by the Com- pany you had nothing to do with the exception of introducing Mr. Robinson ?-No. Did you in the course ef your correspondence with Roberts of Aberystwyth, ever get an offer to sell at a price ?—Yes. He gave me the figures. Did your negotiations extend further than that ?—No. Did you see Argles' valuation of the property before the issue of the prospectus?—I do not remember that I did, but I think I must have done. I put it to you in another way. Did you know at the time the prospectus was issued the amount of the various contracts for the different properties in the agreement between Adams and Benham on behalf of the company ?—I did not appreciate them if I saw them. t

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