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Messrs Davies, George, and…

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Messrs Davies, George, and Davies' Affairs, I BANKRUPTCY PROCEEDINGS AT PEMBROKE DOCK. The adjourned application for the discharge of Mr W. Davies George and Mr Colin Rees Davies, the surviving partners of tbe bankrupt firm of Messrs Davies, George, and Davies, solicitors, Haverfordwest, came on before his Honour Judge Bishop at the Pembroke Dock County Court on Wednesday, Mr Ivor Bowen, barrister, appeared for the official receiver (Mr Thomas Thomas, Carmarthen) Mr S. T. Evans, M.P. (instructed by Messrs Eaton, Evans, and Williams, Haver. fordwest) for Mr W. Davies George and Mr Arthur Lewis for Mr Colin Rees Davies. Mr Bowen stated that the official receiver opposed the application. Before allowing the official receiver's report to be read, Mr Arthur Lewis said Mr S. T, Evans and himself had advised their clients what course to take, and they were now prepared tc make certain personal sacrifices in the form of consent to a judgment being entered against them for a sum to bo arranged, and, of course, regulated by their respectiye positions—not upon the basis of the official receiver's report. His Honour But such a sum as would be satisfactory to the official receiver, of course. Mr Ivor Bowen In fact, having cons:dered the question, the official receiver, in the exer- cise of his duty, cannot entertain any such proposition at the presenb momenb. An the flame time, if your Honour thinks, after his report has baen read that the justice in the case will be met by accepting such a suggestion, be will not opoose any further. His Honour said that under the circumstances he must have the report read. The official receiver's report dealt with all three estates and their financial relations— statistics which have been fully set out in theee column?. In the course of his observa- tions he said that, owing to his inability to realise the colliery shares, the trustee was unable to say what the dividend would be, but hs estimated that 58 in the £ I would be paid to the creditors. It would seem that the books of account,although systematically kept until 1892, were unreliable as regards the annual balances debit balances, which should have been written off as bad," bad been carried forward as assets year after year, thus making the balances erroneous and misleading, nothing having been allowed for depreciation of securities for some years, nor of book debts, amounting to £15,000, which had become irrecover- able. The books had not been balanced since 1892, when an adverse balance of nearly appeared against the firm. The firm's capital account had been gradually reduced during recent years. During the last 20 years the business of the firm developed into that of bankers as well as solicitors, owing no doubt to the influential position occupied by the senior partner in Pembrokeshire. There was now due for deposits made since January, 1890, £17,559 to 68 depositors. Complaints of negligence in regard to some of the investments were ma'e by creditors. The conduct of the bankrupts in the four following instances seemed to the Official Receiver Mrs Mary Eliza- beth Evans chimed £500 for "moneys received for my use and intertsb thereon" in October, 1894. This money was for a specific purpc.se, viz.,)jto purchasft house property. (2) Me3-irs Har- ris and Lewis had proved for £163 8J 7d in their capacity as trustees for money left with Davies, George, and Davies on January 24-th, 1895, to be invested," which was nob done, and for which the trustees had received no security. (3) The Rev. Thomas Thomas proved for £1,500 and mterest. In this case the £1,500 was in December, 1879, properly invested noon mortgage, which was paid off on March 7, 1885, and the money was received by the firm. In June of the same year Messrs Davies, George and Co,—Mr Colin Davies not being then a partner-wroto to Mr Thomas, saying that they had received this money and enclosing the deed of reconveyance, at the same time stating that they had at oncc re-invested it on excellenb security. In 1889 this amount again came into the hands of the firm, bus in consequence of itn then bemg only personal security there was no ueed of a reconveyance, and the fact of the receipt of this money by the firm was not bronghb to the knowledge of the creditor until shortly before the bankruptcy, when he applied for his securities and found there were none. The interest was paid regularly by the firm as if properly invested, and th" creditor was left under that impression. (4) In 1883 the company firm lent the late Mr Soth Evans £700 upon a mort- gage in favour of one of their clients. Subse- quently £350 repayments were made in four instalments from 1883 to 1887. This £350 had not, however, been paid to the mortgagee, but. had been used by the firm, and still appeared in their books as due from them to the late Mr Seth Evans, interest being paid to the firm upon the remaining £350, whilst the firm appeared to have regnlarly paid to the morlgasjoe the interest; on £700. The receipts given for three (£50, £20, and £80) of tbe mstalmaota did not aoafca that they were on account of the JB700 mortgage, but that for the £200 (the fourth instalment) con- firmed that assumption, because it said on further accouub of principal due on mortgage." Having regard to the entries in the books and the numerous payments of interests since 1883 in connection with this matter it was difficult to understand how the junior partners could have remained ignorant of the misappropriation of this money. The surviving partners had maintained through- out the bankruptcy proceedings that they were not aware of these irregulari ties and of the insol- vency of the firm until a local firm of solicitors was called in by the senior partner to investigate their affairs in June of last year. The Official Receiver, proceeding, said it was almost impossible to reconcile this contention with the facb that they were in daily attendance at the office, and of necessity taking an active share in its management, which devolved upon them when the late Sir William attended to his Parliamentary duties. The Official Recaiver concluded by reporting that (1) the bankrupts' assets were not of a value equal to 10-i in the £ on the amount of their unsecured liabilities; (2) that the bankrupts had omitted to keep proper books of account; and (3) that, the bank- rupts had been guilty of fraudulent breach of trust. The Official Receiver, however, added that he had nothing to report against the bank-opts' conduct dnring the bankruptcy proceedings, both of the surviving partners having evinced every desire to assist the official receiver and trustee in very complicated matters arising out of the bank- ruptcy. Mr Taylor then gave evidence to tho effect that Mr Colin Rees Davies's separate estate would certainly yield 20s in the and he thought Mr George's separate estate would also do so if no other proofs came in in regard to trusb matters. As to the joint partnership estate of the late Sir Wm. Davies and the i applicants, he had no idea what the dividend would amount to. It depended very largely upon the realisation of the colliery shares. In any case he did not think it would come to 5s in the JEL His Honour: The only certainty about it was that I II., partnership estate will not give 5 in the £ ?—Yes. Mr S. T. Evans then addressed the Court on behalf of plaintiffs. Mr W. Davies George then entered the witness box, and referred in detail to the cases and offences enumerated in the report, with a view to proviing that he was nob responsible as mere salaried partner for the money transactions and investments of the thm, which were entirely looked after by the late SIr Wm. Davies. Mr Arthur Lewis addressed the court on behalf of his client, stating that his case for discharge W:>8 even stronger than Mr George's. Mr Colin Rees Davies wenb into the box and denied that there were any grounds for charging him with fraudulent breach of trust. His Honour said tbe case was a very important one, and he would like to have sufficient time to consider it before arriving at a decision. He did not think the terms offered were quite satisfac- tory, and he had privately suggested an addition to them which counsel could discuss with the applicants. Learned counsel requested a private consultation with his honour, which was granted, and after an absence of about fifteen minutes Mr S. T. Evans said that, as was stated at the outsat, Mr George felt, particularly as he had been appointed to public offices, that it would not be righb of him to ask for his discharge without showing that he was prepared to make a personal sacrifice, which would go to some extent to help the creditors. He now therefore consented to submit to judgment against him in the sum of £100 per annum for five years, or, if he could possibly manage ib, to pay £450 down before the 31st of December nexb. Mr Arthur Lewis said he should like to say on hebalf of Mr Colin Davies thab although he was not a holder of appointments, he entertained to the fullest extent the desire to make a further personal sacrifice in favour of tbe creditors, and he now offered to consent to a judgment against him to bo paid in five annual sums of £25 each, or of £120 if he could pay it before December 31st next. His Honour said that under these oiroum- siancas, considering the position of the parties and how their interests would be affected in the future, and looking at their prospective incomes, the offers they now proposed to make were such as the Court might very well accept. Of course the official" receiver and trustee were simply powerless in the matter, and had to accept what the Court thoughb right, He did not think the applicants were entirely free from blame, although they might be considered free from any charge of fraud. So far aa thai was concerned, therefore, the duties of the court were considerably lightened, and could deal with the matter with a greater amount of leniency. The payment of the money whioh was proposed to be paid seemed to him ridiculous as far as it nffeoted the realisation of the estate, but it was a desire to do till in theie$ower to show that they were willing to accept a certain amountof punishment—if thejr called itpuoishment —for what he might call their negligence in the matter. Under tbe circumstances, therefore, be felt justified in discharging them upon the terms mentioned by learned counsel. In answer to the Official Receiver, his Honour said that the technical offonces, in so far as ths dividend did not amount to 10a in the and in regard to incomplete book-keeping, had been borne out by the evidence. j The hearing lasted about four and a-half hottrs.

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