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CLAIM BY AI LLANFAIRFECHAN…

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CLAIM BY A LLANFAIRFECHAN PAINTER. ACTION AGAINST A BIRMINGHAM ACCOUNTANT. SEVERE JUDGMENT BY JUDGE MOSS. 'At the Bangor County Court, on Monday, his Honour Judge Moss delivered judgment in an action brought by Edward Parry, carrying on business as a painter and decorator at Lianfair- fechan, against John Arthur Palmer, account- ant, carrying on business under the style of Palmer Co., Oolino r e-oha ra be rs; Newhall- Sfrcet, Birmingham. Plaintiff claimed an ac- count of all the moneys paid by defendant to his (piaint.irf's) creditors acd of all disbursements under a oerlain deed of arrangement, dated January 1st, 1903, and he asked for an order that defendant should be deprived of all remu- neration under the deed; that the deed should be delivered up to be cancelled, and that de- feaidant should refund to him the balance re- maining in his hands after deducting the sums actually paid to his creditors. In the alterna- tive plaintiff claimöcl that a receiver be ap- pointed to carry out the trusts of the deed of arrangement. Plaintiff further claimed j650 damages from defendant for sending auctioneers to take ]>cs60.->sk>n of plaintiff's effects. Mr R. A. Griffith (instructed by Messrs S. R. Dew and Co.) represented plaintiff, and Mr Darby (Messrs Snarpe and Darby, West Brom- wich) was for defendant. JUDGE'S DECISION. His Honour gave an exhaustive account of the case, which he described as one of considerable importance, and read the voluminous correspon- dence, concluding by saying that despite eon- tinuous applications plaintiff failed to obtain a satisfactory account from defendant, who also ignored the credited's demands. One of tho chief creditors who assented to the deed received only two- dividends, and there was still due to him £;13 126 He did not even get a reply from defendant in answer to his letter of complaint. The headings of the notepaper used by defen- dant descrilxxl the firm as "accountants and auditors." Then the members of the firm were given — 1, John Arthur Palmer, C.A.; 2, Charles E. Mas^ey. The letters after defendant s name would lead one to suppose, at any rate, he (the Judge) should h-ave been so led to sup- pose that the letters "C.A." meant chartered accountant. They usually did when attached to an accountant's name., "but in this case," pro- ceeded the Judge, "we find the defendant is not a churtered accountant at aU, but what he calls A CORPORATE ACCOUNTANT, whatever that may mea.n. At any rate, this is a very spccious headnote in my opinion, well calculated to deceive, and. no doubt, intention- aJly adopted to give an air of respectability to a firm which scarcely seems to deserve it. The gentleman who offers to assist this poor trades- man and who offers to protect his estate from execution, and who offers to put an end to his worry and trouble, was himself in financial diffi- culties many years ago, and came to an arrange- ment with his creditors. It also tran £ p:r<'d in evi- dence that so recently as 1897 he had to give a bill of sale, which was re-registered in 1902, and which is still operative, and about a month ago, by an order of the Birmingham County Court, 110 was removed from his position as trustee under another deed of arrangement. Proceeding, the Judge eaid he found from the evidence that five creditors did assent to the deed. to whom the debtor owed altogether JB92 Is 4d. The debtor's total indebtedness was £219 8s, duo to 15 creditors. the majority of creditors in numbro and value would have nothing to do with the doeOO. He found that plaintiff had paid defendant directly by £4 monthly instalments £124: through the auction- ears, February 21st, 13C6, JE12 13s Id. Altogether he had £287 0" 3d, or JE68 more than the amount of his original indebtedness. By his letter of August 26th. 1903, defendant tried to make out that the debtor owed him a balance of JB138 146 (xl. How had defendant dealt with the sum of JS116 13:3 jJ whioh he (the Judge) found he had received. According to the Board of Trade returns he had distributed in the year ending December 31ft. 1903, a total of J615 7e 2d: 1904, £14 16e 4d; for 1905, he paid nothing at all. His certificate for paying the dividends for had never been filed to the present day. It true he had made a rptu-m. sworn to in Ma tast, after trial of the present action which he lumped dividends paid at JE32 6s 1 which was obviously inaccurate, as some of the ▼ery creditors hie alleged lIe had. paid siied and recovered judgment against plaintiff in "he County Court. His Hcjiour gave ihe names several of these creditors. Proceeding, his Honour said the Board of TTKIO returns prior to the action brought showed only £3C 36 6d as being paid by defendant to creditors, eaving- a balance in hia hands to be accounted for of £106 9s 7d or, giving him credit for payments of a third dividend to threo creditor? his total payments came to £34" 13. txl, leaving unaccounted for balance of 19" 7d; 110* deducting for the present defendant's cœt and commission, with which he would pre- sently de-il. H:s Honour found that defendant had com- mitted eerious breaches of trust under this deed. Tn spite of the admitted fact that he had large sums of money in his hands he did not declare his first dividend until eight months after the date of the deed, and he only paid the dividend to scvon directors the second dividend was no paid until 21 months after the date of the deed, and only paid to five oreditore; and the third dividend was declared 26 months after the date of the deed, and only three creditors received their dividend. Defendant claimed to be entitled to deduct from the balance in his possession— rail and expenses £6 Os 6d; auctioneer's dirto, £3; solicitor's charges, JB3 3s; trustees' remunera- tion, £26 56-total. £38 8s 6d. These items his Honour disallowed for reasons to be given later. Defendant also claimed to deduct—registration fees, oaths, and forme, JE3 48: postage and cheque dues, 18a lid ad valorem, 15s. His Honour al- lowed £3 3s for one journey by Massey, the only one he travelled. This made a. total of JE7 17e lid, and deducting thAt sum from £101 19s 7d, there was left rn tihe hands of the trustees a balance of JS94 Is 8d trust money. "A BREACH OF TRUST." His Honour, therefore, found in conclusion that defendant had been guilty of a breach of trust hi not distributing the money received by him in accordance wit.h tihe provisions of the deed; he had made returns to the Board of Trade, which, to say the least of them, were not accurate—in no case was a single return made in time Instead of tho prescribed accounts being made in January each year the first was cniy sworn on 27th April, 1904, the second on the 1st August, 1D05, the third on 25th August, 1906, and tho fourth, although 'he present proceedings were pending, was only fI ,vom on the 26th March, 1907. Defendant had deliberately and persistent- ly refused to supply both the debtor and the creditors with accounts, and bad treated per- sistently and thioughout all the pitiful applica- tions of the otibtor and the demands of the cre- ditors either with a contemptuous silence or with evisive f.nd in some cases untruthful replies. Honour, therefore, came to the conclusion with regard to the plaintiff's claim:— (1) FoL- tn account. As he found from the figures and from the evidence that there was a sum of JE94 Is 8d in the defendant's possession, thero would be no receipts at this stage for an account, but he would order defendant forthwith to hand ovir this amount to the Registrar of that Court. And as this was trust money and was admittedly now lying to the credit of the defen- dant. firm's banking account, unless some security for the money was given or a solicitor's under- taking there would be an order upon the bankers not to part with that money except to the Regis- tiar of that Court. (2) He would make an order depriving the defendant of all remuneration. That he had dealt with in arriving at the figure of JS94 Is 8d. (3) He cüuJ-d not order the deed to be cancelled, but he ordered it to be handed over to the Re- gistrar and to remain in his custody until a receiver had been appointed to whom the Regis- trar would hand the sum c-f J694 Is 8d, when paid to him for the purpose to carry out the trust of the deed, and he must make an order removing the defendant from the trusteeship. (4) AB toO damages, he ,v01.lId not giw damages, although he thought the distresses were unjusti- fied, and defendant had been guilty of negligence a..<3 he had disallowed the trustee his remunera- tion. If he had not he would have given damages. He would appoint a. receiver as soon as the name of a fit and proper person, sufficiently re- sponsible, was submitted to him, if he approved of him and he would be directed to pay all un- paid creditors and make all proper returns to tho Board of Trade, and pay over the balance, if any, to the plaintiff. As this was an action of considerable impoj-tanoe he would certify and give costs on scale C. Mr Darby, who represented defendant, asked for a. stay of execution, but his Honour observed that it was hardly a case in which he could grant that. If the money had been. paid he would net object to granting a. stay.

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LLANRWST RURAL DISTRICT COUNCIL.

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