FRANCIS ERNEST SWANN.
11th October 1910
Reference Numbert19101011-73
VerdictsGuilty > unknown; Guilty > unknown
SentencesImprisonment > penal servitude; Imprisonment > penal servitude; Imprisonment > penal servitude

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SWANN, Francis Ernest (46, solicitor) , being trustee of certain property, to wit, £4,500 in money, belonging to Howard William Mackinder and others, did unlawfully convert and appropriate part thereof to his own use and benefit and to the use and benefit of persons other than the said H. W. Mackinder and others, to wit, on January 3, 1907, £500, on March 9, 1907, £1,200, and on June 7, 1907, £1,400, in each case with intent to defraud.

Mr. Muir, Mr. Leycester, and Mr. Ingpen prosecuted; Mr. P. R. Simner defended.

GEORGE HARRY WILLIS , of Willis and Willis, solicitors, Chancery Lane. I have acted as solicitor for Howard William Mackinder and his children in an action in the Chancery Division against prisoner and Giles, his co-trustee. I have known prisoner as member of the firm of Swann, Bradley, and Co., of 6, East India Avenue, Leadenhall Street. I produce a sealed copy of the will and codical of Eliza Dawber and of the Act of Probate. Mrs. Dawber died on June 17, 1910, and probate was granted to prisoner and Giles, who were trustees and executors under the will, on July 16. The codicil to the will, after providing for certain annuities, directs that the residuary estate is to be invested and the interest paid in equal shares to Howard William Mackinder and his brother, George Henry Mackinder, during their lives, and upon their deaths their shares were to be divided among their children. They are both still alive. I produce a duplicate of the affidavit for the Inland Revenue handed to me by prisoner. It shows that the gross estate is £29,274 14s. 11d. The executors' account was also handed to me by prisoner. It shows receipts and payments made by the trustees on winding up the estate and a balance at the end, which would be the residue. £4,000 purports to be set aside for the annuity of Mrs. Carter, but as a fact it was not. On June 1, 1909, I received instructions from Howard William Mac-kinder in connection with the transfer of the mortgage upon his life interest and I communicated with prisoner's firm. I wanted to know what the investments were. On the 9th he called on me; I asked him to tell me what the trust funds of the residue of the estate consisted of and what Mr. Mackinder's interest was in them. He said that Mr. Mackinder has a life interest in a moiety of the income produced from the following investments: £292 6s. 1d. new Consols; £7,000 mortgage on 33 and 35, Endell Street; £700 4£ per cent mortgage on Dartmouth Park Road, which was a long leasehold; £1,200 5 per cent, mortgage on 348, King Street, Hammersmith, freehold; £250, 5 per cent, on freehold land at Pitsea; £700, 6 per cent., on a life interest and policies by Amphlett, and £400 on a similar investment. The total amount is £10,542 6s. 1d. He

informed me that the present trustees were Giles and himself, that the funds arose under the will of Mrs. Dawber, and that the income of the other moiety was payable to the brother in Australia. Before leaving I read over my note of the interview to him and he suggested no alteration in it; in fact, he was overlooking me as I was writing it. On July 7 I called at his office, taking with me Exhibit 3, a letter from F. E. Swann to H. W. Mackinder, and an extract from another letter, which I had received from H. W. Mackinder through his country solicitor. The latter contains a list of investments as at November, 1906, which corresponds with the list he had given me on June 9, except that it contains a mortgage of £4,500 on leasehold premises. Lot 7, Kingsway 4£ per cent, and the mortgages on Endell Street and on Amphlett's policies, appear in Exhibit 3 as £6,000 and £300 respectively, and in the list he gave me as £7,000 and £700. There is a net difference of £3,100—He produced the title deeds or Land Registry certificates for all the securities mentioned in the list of June 9, except the receipt for the Consols, which I took for granted. I asked him to produce the securities for the balance of the trust funds and added that, according to Exhibit 3, the trust estate consisted of £13,000 odd. He said they had been set aside as an appropriation for the annuity given to Mrs. Carter. I asked him to produce them and he said I was not entitled to see them. I asked him how the residue was invested and he said on deposit and share certificates. He stated that £7,000 was on a mortgage of Messrs. Mitchell's property in Endell Street and he produced a charge certificate by Mitchell, Bradley and prisoner to secure that amount, dated January 24, 1905. On July 19 he called on me and I again pressed him for particulars of the securities which he said had been set aside to meet the annuity of Mrs. Carter. He said that an appropriation was made within three months of the death in respect of the annuity; in 1907, when the list was sent in, the appropriated security was the mortgage for £4,500 on property in Kingsway; but the funds which were then the appropriated securities were invested: £1,000 with Mitchell's on leasehold premises at Westoe Hill, by deposit of title deeds; £500 invested on share certificates and transfers, which were deposited; and £1,400 in a similar security. The original appropriation, he said, was in Consols and he thought it was about £4,000; and that all the three deposits above-mentioned had been out for over a year. On my asking him he refused to produce the securities. I asked him for the names of the companies in which the £1,900 was invested and he said he had forgotten them, but they were all quoted securities. I read over to him my note of the interview (Exhibit 102) and he made no alteration. Nothing was said about the difference between the £2,900 and £3,100. On the next day I issued a writ against prisoner and his co-trustee, Giles. Appearance was entered for both by Swann, Bradley, and Co., their solicitors. The claim was, firstly, that they were liable to make good any loss incurred by the non-investment and improper investment of certain funds; secondly, damages for breach of trust; thirdly, for their removal as trustees and appointment of new trustees; and,

fourthly, execution of the trusts forthwith. On July 23 a motion was entered that they should be ordered to pay £2,900 into Court, and an order was made that they should do so on or before September 24. On September 23 prisoner called on me to ask for six weeks' further time. The note produced I made at the time of the interview and he could see me writing it. He said that part of the money was lent to two people, Messrs. Mitchell and Donett, or Donett, and he found that his late partner, Bradley, had returned the securities to them; he had since dissolved partnership with Bradley, and Mitchell and Donett were being sued; the rest of the money had been lent to Benoist, against whom judgment had been obtained Before the Chancery proceedings: Benoist had promised to get a friend to take up the securities, but had failed to keep his promise. This was the first time Benoist's name had been mentioned and he did not say how much had been lent to him. He said that there had been an execution on his own furniture 18 months ago. I said I would take my client's instructions. On October 16 I served a notice of motion for the attachment of the defendants and for the appointment of a receiver. Both actions came on for hearing on October 22. Prisoner appeared in person and Giles was represented by counsel. An order was made for their attachment, not to come into force against prisoner until November 22, and an order appointing H. W. Ellis receiver. On October 25 I called with the receiver at prisoner's office and asked him to hand over all the documents relating to the estate to the receiver. He then handed over deeds in respect of securities mentioned in the list he had given me on June 9. He refused to hand over any documents relating to the balances. I have, in fact, called in the Endell Street mortgage and recovered £7,000. On November 24, the money not having been paid into Court, I issued a writ for prisoner's attachment. On his asking me over the telephone on that day whether the writ had been issued I said yes. That was the last I heard of him. I was unable to serve the writ until he was arrested, I having reported the matter to the Director of Public Prosecutions. Prisoner told me that when the Kingsway mortgage was paid off the £4,500 was paid into the trust account, which was kept at the London Joint Stock Bank, Leadenhall Street. I am not sure at what interview he told me that. He delivered no defence to the civil action, which came on for trial on December 21 and 23, and he was not present in any way. No share certificates deposited by Benoist as securities for his advance were ever handed to me. Prisoner at no time suggested to me that the Endell Street mortgage was the security set aside to provide for Mrs. Carter's annuity.

(The cross-examination of this witness was postponed.)

CHARLES STANLEY HARBOR , cashier, J. and C. Simmons Company's Bank, King Street, Beading Vincent Brothers bank with us. The waste book (extract produced) shows that on March 11, 1907, their account was credited with £1,254 7s. 4d. in various items, including one of £1,100 consisting of two £500 Bank of England notes, Nos. 322289 and 33236, dated February 20, 1904, and one £100 note, No. 28251 and dated April 18, 1906.

HENRY ERNEST VINCENT , of Vincent Brothers, motor-car agents, Castle Street, Reading. On March 4, 1907, we advertised a motor-car for sale for £1,200. Prisoner wrote to us and called on the Saturday afternoon, tried the car and bought it for £1,100, paying for it in £100 bank notes, I believe, which I paid into our bank, Messrs. C. and J. Simmons, on the following Monday.

ISAAC NEWTON EDWARDS , cashier, Birkbeck Bank, High Holborn. I produce a correct copy of prisoner's account with us; it shows a credit of £80 under date March 15, 1907. The waste book (extract produced) shows that the £80 credit consisted of four £20 bank notes, Nos. 91010 to 91013, dated March 16, 1906. We changed at the same time another bank note, No-91009, of the same date. On June 8, 1907, the total credit was £70, which consisted in part of a bank note for £50, No. 54242, dated February 17; 1906. On February 25, 1908, there is a credit of £500, which consisted of a draft on the Capital and Counties Bank, Piccadilly.

GEORGE JOHN BUTLER , cashier, Capital and Counties Bank, Piccadilly branch. I produce an extract from the account of V. Benoist, Limited, showing that account was credited on June 7, 1907, with two bank notes of £100 each, dated April 18, 1906, Nos. 94450 and 92539; a £500 note, No. 39630, dated February 20, 1904; another £500 note, No. 38739, of the same date; and a £50 note, No. 54241, dated February 17,1906. Upon the same date we exchanged another £50 note, No. 58186, of the same date, for "V. Benoist" into £5 notes. I produce an extract from the ledger, which shows that on February 26, 1908, a cheque for £500 in favour of "Swann" was debited to V. Benoist's private account, cleared through the Union Bank, the bank through which the Birkbeck Bank clears theirs cheques.

Cross-examined. The account of V. Benoist, Limited, was wound up in March, 1909. I believe V. Benoist drew on the firm's account to meet the cheque for £500 on his private account.

HOWARD WILLIAM MACKINDER , proprietor of the Royal Hotel, Gloucester. I am one of the beneficiaries under the will of my mother, Eliza Dawber. Harriett Carter was her housekeeper and Giles her brother. I got this letter (Exhibit 3) from prisoner with the enclosed accounts. In June, 1909, I instructed Mr. Willis to act for me in connection with my life interest in the estate.

(Monday, October 17.)

AUSTIN F. W. MEEN , clerk at the Leadenhall Street Branch of the London Joint Stock Bank. Giles add prisoner had a joint deposit account at our bank. It was opened on November 19,1906, with a deposit of cash £4,500. Five cheques produced, drawn on that account are: December 10, 1906, to J. Mitchell and Co., £1,000; January 3, 1907, to J. Mitchell and Co., £500; another to Mrs. Ellen Friend, £1,200; another to R. F. Amphlett, £400; another to "selves," £1,4077s. 2d. The first four have been drawn on "order" form, but "order" has been altered to "bearer" (the alterations being initialled by Giles and

Swann), and they bear no endorsements. The body of the cheques is I think in prisoner's writing; the fifth cheque is endorsed by Giles and prisoner; the odd £7 7s. 2d. in this is for interest on the deposit. (The waste book produced showed that the £1,200 Friend cheque was paid in the two £500 notes and one £100 note spoken to by Harbor and Vincent, and the five £20 notes spoken to by Edwards. The cheque for £1,407 7s. 2d. was paid in the notes spoken to by Butler.) Swann, Bradley, and Co. also had an account at our bank. On December 10, 1906, there is a credit entry of £1,000, effected by a cheque drawn on the account of Giles and Swann. On January 3, 1907, there is a credit entry of £568 4s. 8d., effected partly by a cheque for £500 drawn on the account of Giles and Swann in favour of J. Mitchell and Co. (on January 2 Swann-Bradley's account was overdrawn £494 18s. 10d.; by January 5 the account was again overdrawn to the extent of £208 10s. 1d). The £4,500 with which the GilesSwann deposit account was opened was in the form of a cheque for that amount on the London and County Bank, Law Courts branch.

Cross-examined. The Swann-Bradley account ran into very large figures, about £50,000 or £60,000 a year. There was no permanent arrangement about overdraft, but we frequently allowed overdrafts; we do this to support the credit of our customers. And in this case we held securities for specific loans and the margins upon these would be regarded as security for temporary overdrafts. I am not prepared to say that there would never have been any trouble about our allowing an overdraft of £500 or £1,000. With reference to the Mitchell cheque for £1,000, December 10, 1906, there is a cross payment on the same day to "Martin"; the explanation is that cash was required to complete a purchase and we gave a bank draft in favour of Martin and Nicholson. I cannot say whether this was arranged by Swann or by Bradley.

Re-examined. I cannot say without the books whether we actually dishonoured any Swann-Bradley cheques. (Books to be produced.)

CECIL VANE DUNSTAN , senior clerk at the Bank of England, produced extracts from the Consols Ledger relating to the account of Giles and Swann as executors of Eliza Dawber. This started in 1905 with a credit of £13,296; various parcels of Consols were transferred from time to time; in May, 1906, the balance was £292, which in November, 1909, was transferred into the name of Ellis (Receiver in the Chancery proceedings).

GEORGE HARRY WILLIS , recalled, cross-examined. At the interview of July 7 prisoner took up the position that I was not entitled to see the securities for which I asked On July 19 he gave me certain particulars; I will not say that he gave me as "of grace." I had been pressing for them and he gave them. The orders in the Chancery action was made by consent. At the interview of September 23 prisoner informed me that he had dissolved partnership with Bradley at the end of July, matters between them having been brought to a head by prisoner discovering that Bradley had returned the Westoe Hill lease and the Donet securities to the clients. He also told me that proceedings were going on against Mitchells. I am sure that he told me that the

£4,500 had been placed on deposit account at the London Joint Stock Bank in the names of the trustees. Prisoner did at the police court cross-examine me and Mitchell. I do not admit that he then outlined his defence to this charge; he has never given me any intimation of his defence; he never replied to the affidavits filed in the Chancery proceedings.

JOHN MITCHELL . The firm of Mitchell Brothers, engineers, 10, Essex Street, Strand, consists of myself and five brothers; we have also the business of Sykes and Sons and J. Grindle and Co. Swann, Bradley and Co. were our solicitors and we had various financial transactions with them. We were the lessees of 33-35, Endell Street. On November 4, 1904, we gave a charge upon that property for £7,000 to Bradley and Swann. At that time Swann-Bradley were not advancing us money; Bradley owed us money. He had acted for us in obtaining the lease and the deeds were in his possession; we were pressing him to pay what he owed us; he suggested that if we gave this charge he could deposit the deeds with his bank and get money to pay us part of what he owed us. Swann-Bradley have brought an action against us in respect of these transactions and this is still pending. On December 13, 1905, the charge was transferred to Giles and Swann as trustees of the Dawber Estate and we paid interest as it fell due. Eventually the charge was called in and we paid the £7,000 to the Receiver of the Dawber Estate. As to the two bearer cheques to J. Mitchell and Co. for £1,000 and £500 (see Meen's evidence), I know nothing of either; they never came into the hands of my firm. We have property at Westoe Hill; we never pledged that property with Swann-Bradley or any client of theirs. We did give a charge on our Kingsway property for £4,500 to Giles and Swann as the Dawber trustees; that was in existence for six months only. No consideration passed for that £4,500; the charge was given to assist Bradley in (as he put it) temporary difficulties. We had to find the money to pay it off; the £4,500 with £96 3s. 9d. interest was paid on November 10, 1906.

Cross-examined. We are in a very considerable way of business and of good standing. Bradley had been our solicitor from the day he started practising; we had absolute trust in him. In every case in which Bradley attended to matters for us and came into possession of securities he kept them in his safe, and at some later date he always managed by some means or other to get charges upon them and to keep them there or with his friends. Bradley Was a very clever man and exceedingly plausible. I have no reason to think that prisoner knew anything of the £7,000 matter. None of our branches would ever have required to borrow money in a hurry and would not have instructed Bradley to borrow for them. If there are cheques from Bradley to Sykes and Sons or Grindle and Co., they would be for work done for him or on his instructions.

VENANT BENOIST , caterer. I have known prisoner as a solicitor for four or five years. About June, 1907, I borrowed £1,300 from him; he paid me in bank notes, which I paid into my bank, the Capital and Counties, Piccadilly branch. I gave him a bill and a transfer of

1,500 shares in the Monico Hotel and Restaurant Company, Limited; the transfer was signed by me, but the name of transferee was in blank. The interest was to be 6 per cent, and I paid him a year's interest in advance; the loan was reckoned at £1,400; he actually gave me £1,300, retaining £100 for interest and costs. £500 of the loan as repaid about two years ago. I never heard the name of the Dawber Estate or the name of Giles. No proceedings have been taken against me in respect of the loan. I was adjudicated bankrupt about ten years ago and have not had my discharge.

Cross-examined. At the time of the loan I was perfectly solvent. Prior to this transaction prisoner was a stranger to me; he was introduced to me by Choate. I wanted the loan for my company, V. Benoist, Limited, which was at the time in a flourishing condition. I cannot remember whether prisoner investigated the company's books, but I gave him the balance-sheet. The loan was to the company and did not benefit me personally; I gave prisoner a bill for £1,000 and another for £400, drawn by me and accepted by the company. Prisoner actually handed me notes for the whole £1,400 and I returned him £50 for one year's interest and £10 10s. for costs. Choate was present. The £500 was repaid by the company's cheque; I cannot remember the date, but the cheque would be with the Dawber trustees.

Re-examined. I was managing director of Benoist, Limited; I held pretty well all the ordinary shares, but there were preference shares, of which I held none. Benoist, Limited, failed two years after this transaction.

HENRY WILLIAM ELLIS , auctioneer and surveyor, Chancery Lane, Receiver appointed by the Court in the Chancery proceedings, confirmed Mr. Willis's account of the interview of October 25, 1909.

Cross-examined. The balance in respect of which securities were not forthcoming was £2,900. I was not aware that at that time the Court had made an order directing prisoner to bring the £2,900 into Court. I suppose that if prisoner had paid the money into Court and also handed over the securities he would have been paying twice over; but he did not pay it into Court. I am certain that what prisoner told us was, not that he declined to hand over any more securities, but that he had not any more.

AUSTIN F. W. MEEN , recalled, produced the "Cheques Returned Book" of his bank. From June 19, 1906, to January 30, 1907, 48 cheques of Swann-Bradley were dishonoured, totaling £4,908; some of these were returned marked "Endorsement irregular," "Orders not to pay "; others were marked "R. D."

JOHN JAMES CHEESEWRIGHT , clerk at the London and County Bank, Law Courts branch, produced copy of Mitchell's account showing a debit to that account on November 20, 1906, of £4,500.

Detective-inspector JOHN COLLISON, City Police, proved arresting prisoner on July 2; on the warrant being read to him, prisoner said, "Had I have known I had been wanted I would have surrendered."

Cross-examined. I think there is no doubt that Bradley has committed suicide; his body was found on the French coast in March last.

(Defence)

HENRY WILLIAM CHOATE , mortgage broker, 7, Eusted Road, Lee. In June, 1907,1 introduced prisoner to Benoist. I was present when prisoner handed to Benoist £1,400 in notes; Benoist counted them; he then handed back to prisoner £50 for interest and £10 10s. costs and paid me about £20 commission.

Cross-examined. There was also present another agent, named Goffin, who had part of my £20; Goffin had introduced Benoist to me; neither of us took any commission from prisoner; I paid Goffin between £2 and £3. I don't know whether Goffin was paid anything else. No. 7, Eusted Road, is my private address; I use the office of a friend in the City. I decline to give his name or address. It is highly likely that I have a record of this transaction in my books; I do not keep thick ledgers; I mean a book worth "two-dee"; I have not got it here. The £20 was not paid into my banking account; I have no banking account.

FRANCIS ERNEST SWANN (prisoner, on oath). I am 45 years of Age and have six children. I was admitted a solicitor in 1887 and at first assisted my father, who was also a solicitor. I was then living next door to Bradley; he and I and our families got to be upon most intimate terms. He was managing clerk to Morten, Cutler and Co., and became a member of the firm. When my father retired in 1901 Bradley suggested that he and I should go into partnership, and this we did in September, 1901, the capital of the firm being £4,000, contributed in equal shares. We did a very large business, employing eleven clerks, with one articled clerk. Bradley, at his own wish, attended entirely to the financial side of the business. Mitchells were clients of Bradley at the time he joined me; I knew them to be very substantial people; from time to time we did very heavy financial business with them. I was a trustee with Giles of the Dawber Estate. On December 10, 1906, Giles called on me; while he was with me Bradley came into my room and said that Mitchells required a loan of £1,000 on the security of property they had recently purchased at Westoe Hill; that they were willing to deposit the deeds as security, and he would hold them on the trustees' behalf. He had in his hands a bundle of deeds with Mitchells' name on, leading me to believe that they were actually the deeds of the Westoe Hill property; he assured us that Mitchells had only recently paid for the property twice as much as they now required advanced. As the result of the conversation Giles and I agreed to make the advance. An order cheque was filled up and signed by Giles and me; Bradley thereupon said that Mitchells required the money immediately and he had to pay it away that evening and asked us to make the cheque open; we altered the cheque from "order" to "bearer," and it was handed to Bradley. I assumed that he would utilise it for Mitchells' purposes, for which it was obtained. I had absolute trust in Bradley and knew that Mitchells were quite good for the money. On January 3, 1907, while Giles and I were talking in my room, Bradley came in and said that Mitchells were wanting an immediate advance of £500 and he had arranged for a

client of his, the executrix of the late Mr. Donet, to make the advance, but in order to do so she would have to realise certain securities, and he had arranged with her to deposit the securities with Giles and myself as the Dawber trustees if we would make the loan. Bradley produced a letter already prepared setting out the transaction and giving a list of the securities to be held by Swann, Bradley and Co. to secure the repayment of the loan by Giles and Swann. After some discussion Giles and I agreed to make the advance; the cheque was made out (at Bradley's request) to J. Mitchell and Co., or bearer, and handed to Bradley. (Mr. Justice Scrutton: You and Giles as trustees got nothing from Mitchells, in these two transactions, acknowledging the loans?—No. I knew that Bradley had control of their financial affairs and I trusted him implicitly.) The first time I heard that that cheque had been paid into the Swann-Bradley banking account was at the police court last July. As to the £1,200 transaction of March 9,1907, I heard of a motor-car to he had cheap from Vincent, of Reading. After testing the car I obtained an option to purchase it. I saw Bradley and told him I should want to draw £1,000 or so from our firm. (At that time his drawings were £2,000 more than mine; I used only to draw for actual needs, letting my sums accumulate till I wanted some large amount for a special purpose such as this.) Bradley said it could not be managed just then, but he said, "There is that £1,000 due to us on the Endell Street mortgage; if you can get anybody to take it up you can have the declaration of trust." I tried two or three clients; but there was not time to complete matters (my option was only for a day). In the evening I went to Giles and asked him to lend me the money; he said he was locked up and did not want to realise securities. I was at this time investigating for the trust a security for £1,500 upon the life interest of Mrs. Friend. I suggested to Giles that he should let me have £1,000 until the completion of that matter, by which time I should have found someone to take up my own matter, and, if the Friend security fell through, the trustees could take over the declaration of trust (as to £1,000) and become entitled to the whole of the Endell Street mortgage, the balance of £200 to be advanced to Mitchells when they required it. Giles agreed to this. Next morning he and I signed a cheque for £1,200; this I cashed. I went to Reading and bought the car for £1,100. On returning to London I paid in to my bank £80 of the remaining £100. The Friend mortgage did fall through. On May 9, 1907, Bradley told me that Mitchells required the £200 and I gave him a cheque for that sum on my own bank. The trust, of course, became entitled to the full £7,000 on the Endell Street mortgage. This £1,200, in fact, was part of the £7,000 which the trust has actually received, yet I am charged with misappropriating the £1,200. As to the Benoist matter, Choate mentioned to me that Benoist, Limited, required a loan; I knew the company was then doing a flourishing business. I did not know Benoist; he was never a client of mine. I went to the place two or three times and investigated the books and balance-sheets and the loan of £1,400 was arranged, as Benoist has said. I obtained the approval of Giles to making the advance and the cheque on the trust banking account

was signed by both of us. I regarded the transaction as absolutely sound. I attended the completion and handed over the £1,400 in notes, just as I had got them from our bank. Benoist handed me £50 as a deposit for one year's interest and £10 10s. for costs. The interest has been paid away to the beneficiaries.

Mr. Justice Scrutton. The £50 was paid into his private account; are there any books to show that it was paid to the beneficiaries?

Mr. Simner. I will find out before the morning.

Prisoner. There is absolutely no truth in the suggestion that I misappropriated to my own use either the £1,200 or the £1,400.

(Tuesday, October 18.)

FRANCIS ERNEST SWANN , recalled (in response to a request by the Court for further information). I did not know of the existence of the £7,000 mortgage from Swann-Bradley to Mitchell till shortly before the actual transfer, when Bradley suggested to Giles and myself the transfer to the Dawber trustees. Bradley told me that part of the moneys had come from a client of his, a Mr. Wortley. That was early in December, 1905. The beneficiaries had complained about their money being retained in Consols, and I thought it a good opportunity to secure them a higher rate of interest. I arranged an appointment; Giles called; Bradley produced the security and gave us full particulars with regard to the property. It was a duly registered charge in favour of the firm. We ultimately agreed to advance. £6,000 or £7,000. A transfer of the security was to be made to the trustees of the whole amount, leaving £1,000 due to the firm. We instructed Giles's stockbrokers to sell Consols, and they were sold on December 11. The completion took place in my room and the proper instrument of transfer was handed to me in exchange for the £6,000. £7,000 was not paid to Swann and Bradley by the trustees; that part of the recital is wrong. It is not the fact that Swann and Bradley paid £1,000 to the trustees, who then paid £7,000 to Swann and Bradley. I did not prepare that document. Two or three days afterwards Bradley asked me to get a declaration of trust signed by Giles and myself. I demurred at first, but ultimately I gave way and got Giles to sign it. I also signed it and handed it to Bradley. It was a declaration against the £6,000. The trustees thought the security was not sufficient for £7,000, but was for £6,000. That was my stipulation. I insisted on a valuation being made before the advance of £6,000, and the valuer valued it in excess of £6,000 by £400. A copy was supplied to Willis early in the proceedings. The amount is £6,400, being two-thirds of the gross value, which shows it is a trustee's valuation. It is dated December 8, 1905. By March, 1907, the property had increased in value; Mitchell's had spent some £400 or £500 on the building. The trustees took the additional £1,000 on March 9, 1907. That is the date of the Friend cheque. There is no specific transaction which gives the trustees rights to the additional £1,000 security, except the giving of the Friend cheque and the obtaining of the declaration of trust from Bradley. That was before March 9. In my view those two things

transferred the £1,000 to the trustees. With regard to the £50 and the £500 there has never been a book containing the receipts and payments of the trust fund. The accounts were prepared from the bankers' passbook, the cheque book, and the paying-in book. They were entered by me. The firm had nothing to do with the Dawber trust income accounts. There is a separate trust account. I produce the passbook of the Dawber trust. The £50 interest was not paid into the bank account of the Dawber trust because the interest was deposited with me, as a solicitor and not as trustee, to secure repayment of that interest. I have paid interest on Benoist's loan, though Benoist did not. The £500 repayment was not paid to the Dawber trust account because it was paid to my firm pending the receipt of the balance. It was not paid to me as trustee. With reference to the interview, Mackinder had a mortgage on his interest and two life policies. Miss. Philliden had the mortgage called in and I tried to raise £1,200 on his instructions for him. Mr. Willis thought I was still acting for the mortgagee after I let the thing drop and I explained the position to him in the interview on June 9. The entry in the book (produced) shows £7 7s. 2d. was interest on the Dawber trust. As a fact £5 17s. 2d. was paid. Returning to the Willis interview, I promised him in June I would send him copies of the securities, and I did so. About the end of June a client of mine expressed his willingness to carry the matter through. I told Willis that, and that there were other funds set apart to provide the annuity, which would ultimately increase he residuary estate, but would not necessarily be included in the mortgage security, but there was ample security for the amount required Willis said his client had reconsidered the security and was now prepared to go on with it. I did not object, but left it in his hands, and arranged an appointment with him to inspect the trust securities on July 9. I produce the securities for the £10,000 odd, according to the list I had given him. He knew there was further property set apart to answer the annuity. I said he was not interested in those further securities, because I took it they were absolutely at the discretion of the trustees, and the beneficiaries had no right at all in respect to them. He wrote me on July 12 about the production of the remaining securities and I gave way and made an appointment with him to inspect them on July 13. That morning I told Bradley that, and that I required the deeds relating to Westoe Hill, and also the Donett securities. He said he had not got them—that Mitchell's had asked him for the deeds of Westoe Hill some time previously and he had given them up to them, knowing they were good for the money. He said he had sold the shares of the Donett security and accounted to his client for the proceeds. That was the first I had heard that Mitchell's owed the trustees the £500 as well as the £1,200. I was flabbergasted and went for him very strongly. He said the best thing was to keep quiet and for me to help him to put the matter right by postponing the appointment, which I did. I called on Giles on July 19, having had a discussion with Bradley, in which he suggested I should refuse to produce the securities. I told Giles and he said what a pity it was he had not known there was anything wrong, as he himself would

have advanced the £1,200 required for Mackinder's mortgage. He agreed it was best to enable Bradley to get in the money from Mitchell's. I then saw Willis and told him he was not entitled to the production of the securities. I told him there was a mortgage of £1,000 by equitable deposit of title deeds and securities, £500 on shares and securities, and £1,400 on similar securities. My recollection is I gave him the names. On July 22 proceedings were started. I at once admitted to him that they were not proper trust securities, and if he would give me a short time I would get the matter put right. When I left him I understood he was going to do that It was on Bradley's suggestion that Giles and I consented to the order, on his promise to get in the money. At the end of the month I insisted on a dissolution and Bradley agreed after a struggle. The notice appeared in the "Gazette." I then opened an office at 180, Fleet Street. I saw Mitchell on August 18 and served him with a notice with regard to the £7,000. He said he could not give me the Westoe Hill deeds and that he and his firm had never been financed by Bradley. He said he had not told me before because Bradley was my partner. He was perfectly friendly with me. On September 23 I told Willis everything. I arranged with him the terms of the orders. I was arrested in July of this year. I did not know there was a warrant. I knew there was a writ of attachment out and I admit I was keeping out of the way of the civil court. By consent there was an order against me to pay. £2,900. I was advised by counsel that the order would not have been made if I had disclosed the true facts to Mr. Justice Joyce. I was pressing Bradley to find the money. I was perfectly prepared to go on with my defence at the police court. A remand was granted without the alderman asking me whether I intended to call evidence.

Mr. Justice Scrutton. I cannot here ascertain what was the truth of the proceedings at the police court, but it is very unsatisfactory if it can be said that any prisoner has been stopped from disclosing his evidence. At the preliminary proceedings as well as these proceeding there ought to be every facility for the prisoner, however complicated his story. The more complicated the more necessary it is that it should not be stopped. Having said that, I am not going to comment hostilely on the prisoner through a misunderstanding not having taken a course which he would have been well advised to take, and insist on telling his story. That is substantially what I shall say to the jury.

Witness (continuing). When I came up on the formal remand I was asked for the first time whether I pleaded guilty or not guilty and whether I intended to call witnesses There was no one present representing the Treasury, so far as I am aware. I told the alderman that as he had prevented me cross-examining Mr. Willie it was useless for me to call witnesses there. It was only the second day that he allowed me to pursue my cross-examination at all in the case of Benoist. The first day he would not let me cross-examine unless I actually mentioned the figures. The depositions are most incomplete. They do not contain a lot of answers to my questions in cross-examination

of the witnesses, nor in some cases the answers in examination-in-chief. My defence is exactly the same as I outlined to Willis on December 23 last year. I was arrested on July 2. I did not know for over a week what the charge against me was. The books were not in my custody, and it is only up to last night that I have been able to trace some of these matters in the wreck. I had complete trust in Bradley. I took no part in the financial matters of the firm of Swann and Bradley. At times I used to inspect the passbook and the ledger. That was after a cashier left, in 1904 I think. I assisted Bradley to check the books, which he had at his house, on five or six occasions—It may have been more. I have never supervised the books. I never grasped these heavy financial transactions. I have never had it in my mind to defraud the trust fund or any part of it.

Cross-examined. I do not suggest that the prosecution have prevented me from developing my defence at the police court; they have assisted me in every way since my committal. It is admitted that the £4,500 paid into the joint account of myself and Giles at the London Joint Stock Bank was trust property. I have learned within the last month that £1,500 of that was paid into my firm's account. That is the £1,000 Mitchell, and the £500 Mitchell. The trust had security. £150 in notes of that account have gone into my pocket or into my account at the Birkbeck. Out of the money Benoist had from that London Joint Stock deposit account £500 was repaid, and that also has gone into my private account. £3,100 is lost to the estate of which I was trustee, but the Benoist matter will be put right. I have been trustee of two or three other estates besides this, and am well acquainted with the duties. Giles and I had a legacy of £500 for being trustees, and I was also entitled under the will to charge solicitors, costs for work done. I believe an income account was sent to Mackinder after April, 1907 in May or June, 1908. In the letter book handed to me, up to June 9, 1908, there is no trace of an account sent to the beneficiaries. There ought to have been one sent. Mackinder asked for one in 1909 certainly. He has not had it. Mr. Willis did not ask me in the name of the receiver for an income account. I find from the letter of November 22, 1909, that he did. That is a very late date. The receiver was not appointed till October. I refused on the ground that it was being taken in the action. I have not delivered an income account to anyone at any rate since June, 1908. Nobody but myself could have done so; probably there was no book in which anyone could have found what the income of the estate was, nor any book where a record was kept of how the money was invested. If I had dropped dead Giles would have been able to find out that. I do not know where Giles is and Bradley has committed suicide. If any misfortune had happened to me it would have been impossible to ascertain how the £3,100 was invested. I take it some of Benoist's securities would have been found. There are cheques which show the moneys went in a certain direction Benoist's securities were in my possession and could have been produced at any time. I do not know what the capital of my firm was.

The £7,000, so far as I knew, had nothing to do with the Cloughton estate. I believed it to be the property of Swann and Bradley, and that is still my belief. It was because of the valuation that only £6,000 was advanced on the £7,000 mortgage. By November, 1906, the declaration of trust was worth £1,000 to a trustee. The £4,500 was practically an income account. No valuation was taken of the Westoe Hill property. I took Bradley's word as to their value. I do not suggest that £1,000 paid on deposit of deeds without looking at them, without any documents recording the transaction, and the money paid by cheque to the borrower, altered to "bearer," is a regular transaction for a trustee's solicitor, but it is not a criminal transaction. Bradley was really acting as the trustee's solicitor in that. The deeds remained in his possession. I had no reason to doubt they were in safe custody. Mitchell never paid interest on the mortgage on Westoe Hill, but Dawber got interest, paid by Swann and Bradley. I assume it was debited to Mitchells. It was paid by transfers from their account to the Dawber account. I had nothing in writing showing what interest was payable. With regard to the cheque for £500, January 3, Giles was at my office and Bradley came in by chance, and the result was the transaction with reference to Donett. We were lending it to Mitchells through Donett. Mitchells were responsible for the repayment. Donetts gave the security because they were to make the loan when the securities had been realised. Then they would repay the money we had advanced Mitchells. That arrangement never came off. The agreement I made was, I think, an agreement with the Dawber trustees to lend Mitchell £500, and with the Donet trustees that if I would lend Mitchell that amount and transfer the security to Donetts, when Donetts had realised their securities and got the money Donetts would deposit with me certain shares as security for Mitchells paying the £500. There is a letter evidencing the loan signed by me in the name of the firm, but dictated by Bradley. I did not know it was paid into my firm's account instead of being sent to Mitchells. The shares were to be realised (and they were, in fact) and the loan repaid. We were to have 5 per cent, interest. We were satisfied with the investment. The letter is the only thing in writing which shows what reason was given to Giles for signing the cheque. Bradley apparently revised the letter. There are corrections on it in his writing. We did not want repayment. The ledger shows some of the shares were sold in February, 1907. I do not know when the rest were sold. The sole security I had was the deposit of the shares at Donetts. I did not ascertain from Bradley whether that security had been sold. There was no security, nor anything in writing from Mitchells. I do not suggest that was anything but a hopelessly irregular transaction. In Ledger No. 2, folio 152, I find on December 13, 1905, "By cash of you for advance on mortgage of 33 and 35, Endell Street, £6,000"; "Transferred to Sykes and Co., loan account, £6,000." It purports to be my firm's account, but I am not responsible for it. Until last year I did not know there was an account of the Dawber trustees in our books. The next entry is £1,500 received from the Dawber trustees. It shows.

how that was invested—£300 lent to Amphlett, £1,200 to a man named Cheshire. That was the King Street, Hammersmith, mortgage. There follows £4,500, invested by being lent to Sykes and Co. That is the Kingsway mortgage. The last entry is December 10 1906, "Received of you, £1,000." That is the £1,000 which went on mortgage on Westoe Hill. Ledger No. 3, folio 70, begins, "By transfer to Ledger No. 2, £1,000." That is the Westoe Hill. January 3, "Received of you, £500." That is the Donet. Apparently there is nothing to show what has become of those sums. Upon the face of the account simply Swann-Bradley have received them from the Dawber trustees. I cannot explain why in the case of the £6,000, the £1,500 Amphlett, and the £4,500, the account shows how the money was invested, but does not show how the £1,000 and the £500 were invested. I never knew they were in the firm's hands. These are not my entries. On January 3 I had invested, according to my idea, £1,000 on deposit of Westoe Hill deeds on loan to Mitchell and £500 on deposit of Donetts, securities, money lent to Mitchell. On January 31 I wrote saying the £4,500 was on deposit and inquiries were being made. I did not say £1,500 was invested because it was overlooked, I suppose. There were temporary advances and if a security had been found we should have called in the moneys and invested them on a proper trustees' security. Bradley and I drew amounts as we wanted them. Up to 1904 or 1905 I ticked my amounts in pencil. Summaries were made of the position of the firm. So far as I know they are in existence now. 1903 I think would be the last one. I have been buying and selling motor-cars since about 1896. I did not sell the one I bought at Reading. I had seen it advertised for £1,200. I got the amount in notes before I had seen the car. I got the £1,200 from the Dawber fund, under an arrangement as to security. I asked Giles first. The cheque was made payable to Friend in order to earmark the money. If the Friend matter went through, that money was to be utilised in the amount for the security, plus £300. If the security fell through, the £1,000 the firm had on the Endell Street mortgage was to go into the Dawber trust, and £200 was to be advanced to Mitchells by me. I was going to get it from my bankers. I spent £200 of the trust money, but as to the £1,000 the trust were secured to the extent of £1,000. There is nothing in writing to show it belongs to the Dawber trust beyond the fact that we have allowed them to receive the £1,000, and Bradley has never claimed it from them. I agree it was a hopelessly irregular transaction from a trustees' solicitor point of view. In the result I got a motor-car, which I wanted rather badly. There was nothing in writing to prevent Bradley and me setting up that declaration of trust as entitling us to £1,000 of the Endell Street mortgage. I never gave it to Willis. He never asked for it. It was not released; I was holding it with the trust papers. If Bradley thought there was £1,000 due on that declaration he would have claimed it before he went away.

HENRY JAMES NICHOLSON , solicitor, 29, Queen Street (whose evidence was interposed at this stage). In December, 1906, I was

acting for Mr. Jocelyn, who was the owner of Westoe Hill. I sold it for him to Messrs. Mitchell, the completion being on or about December 10. The draft for £1,000 handed to me bears my signature, I have no doubt by the date it is part of the consideration for the purchase of this property. This was paid on completion. My client received it personally in completion. I endorsed it and passed it on. I never saw Mr. Swann in the matter at all.

Cross-examined. I never heard of the Dawber trustees and did not know it was their money.

FRANCIS ERNEST SWANN , recalled (cross-examination continued). The £1,200 cheque to L. L. Friend was altered to a bearer cheque to obtain the cash. The bank has the record of the name and how it is paid. I do not know that after a certain time Bank of England notes are destroyed. If the notes had been destroyed it would have been impossible for anyone to trace this transaction. So it would have been if it had gone through my bank. I do not see any entry of £1,000 against me in my drawing account. There should have been. When I left the firm they were returned as owing the Dawber trustees £1,500. If the £1,000 was due to the firm they would have been returned as owing £500 only. A cheque for £5 I drew on the same day is down in my account. Anybody looking at the cheque book would find no information as to what had become of the £1,000 cheque, except that I had it. I reckoned to draw about £1,000 a year. Whatever the account shows, £1,500 or less, it is £1,000 short. Benoist was an absolute stranger to me till introduced by Mr. Stoat. I realised in advancing the money to Benoist that I was going beyond the powers of the trust. We got 6 per cent, interest on what we thought was very safe security and Giles was anxious to benefit his nephews to that extent. I have nothing in writing to show Giles knew of that advance. There is no record that the Dawber trustees had lent Benoist £1,400 on a deposit of shares, beyond having the security. The security is bills for £1,400, a certificate for shares in the Monico Hotel, and a blank transfer, undated. We never fill in the date in a blank transfer. Benoist was responsible for the interest, the interest being payable half-yearly from June 7, 1907. I did not sue him when it became payable because he had deposited £50 with me to secure the interest. I handed the amount to the Dawber trustees when the next cheques were sent. In December, 1907, £42 was due for interest, which left £8. In June, 1908, Benoist did not pay the next amount of £42. He had paid £500 on account; it was not principal only. That was in February, 1908. If there is nothing in the paying-in book there is nothing to show I paid the interest to the trustees' account. I had no idea the income account would have been involved in these proceedings. The beneficiaries received the interest. I should appropriate the whole £500 to interest as far as it would last. There was no interest due at the time the £500 was paid. I should say I paid the beneficiaries out of my own pocket, and not out of the £500. I felt they ought not to suffer. Whatever

balance was necessary to provide the total I should transfer to the trustees' account, by cash or cheque. There was no investment of the £500 at all, but I paid interest on it to the beneficiaries. My firm got the benefit of that £500 because payments were made against that which should have been made by the firm. Altogether for loans and interest due from me to the Birkbeck £303 15s. 6d. was consumed out of Benoist's £500 from February 27. The firm got the benefit of the £500 because otherwise I should have drawn it out of the firm. The first time I met Willis was on June 9. I told him the securities in which Mackinder was interested, and he jotted them down. He did not read the note out to me, but it is a correct record of the investments I enumerated. I mentioned there were other investments, but not to what amount. I said they need not be taken into account for the purpose of the mortgage, as there was ample security without them. On July 7 I produced to him the securities for the £10,542. He did not say he was instructed the estate was some £3,000 more than I had represented. I told him the balance had been set aside to meet the annuity to Mrs. Carter. £169 was the interest on the £3,100, and Mrs. Carter's annuity was £100. The £69 was divided between the beneficiaries. The £69 would form part of the capital in which Mackinder was interested. I told Willis Mackinder had no interest in the appropriation because I did not think he had. I did refuse to produce the securities on July 7. He pressed me in letters of July 12, 13, and 16. I refused again on the 19th because I knew that some had been disposed of. I told him the appropriation in respect of the annuity was originally Consols. They were treated as appropriated by the trustees. The £4,500 was the appropriated security. I think I said when the £4,500 was paid off the £6,000 charge upon Endell Street was an appropriated security. I take it it is true that in January, 1909, the £6,000 was set apart to provide for Mrs. Carter's annuity. I assume so from the letter of January 29, 1909, written to a solicitor who was making inquiries on behalf of Mrs. Carter's son. The change had been made in consequence of Willis's inquiry. The reason for saying they were appropriated when Willis asked was that they were not trustee investments. We were anxious that Willis should not see the securities because they were trustee investments. My recollection is that an income account was sent to Mackinder, but if you tell me you have seen the letters and there is no income account I will accept that. As to the civil action I got terms given me on the interim motions. The amended statement of claim was not delivered until after I had given up my office. The attachment prevented me from defending the civil action because I should have been arrested. I did not think I might be suspected of having misappropriated the trust funds. After I had seen Willis I gathered he had accepted my statement. I thought it was only a civil liability. When discussing matters with Willis we practically arranged that a motion for judgment should be made in default of defence for accounts. He said he would give me minutes of the proposed order; in fact, on one occasion I believe he did have minutes prepared, which I could

not accept in that form. As far as the civil liability is concerned there was absolutely no question.

Re-examined. Willis knew where I was up to the end of November—in my office in Fleet Street. As to what I told him in connection with the Carter part of the trust I did not want him to know the securities were not trust securities. With regard to the income appropriated being more than the sum required, whatever the surplus be the income has in fact been paid, or contra account. I sued Benoist and the company as well. It was a trustee action, as appears from the endorsement of the writ. The account at the Birkbeck was in the name of Giles and Swann. Giles was 60 years of age, hale and hearty, an uncle of the beneficiary, and brother of the deceased. He was very largely interested in the will, personally, and also in the property being properly looked after. The Benoist cheque, £1,407, is drawn to Sells and is endorsed by Giles and myself. Giles knew about that cheque and the whole matter. We discussed the matter on several occasions. The counterfoil of the £1,200 cheque has "F. E. S." against it, for all the world to see. The Amphlett cheque was also drawn in notes. They are all "bearer" cheques except the last. I handed over the Endell Street mortgage to Willis as security for the whole sum, £7,000. The property had appreciated in value in 1907 and was well let when the further advance was made. In Ledger No. 2, folio 152, in the account headed "Dawber Trustees," I find "Transferred to Ledger 3, £1,000"; "1906, December 10, received of you, £1,000." I find entries in the cash journal under that date, "Received of you, the Dawber Trustees, £1,000," a cross reference to folio 152, and on the other side, "Paid Martin and Nicholson." Then the next one is, "On account of purchase money, Jocelyn, Mitchell Brothers, £1,000." Then the cheque for £500 is E/A 73911. January 3, 1907, deposit account, Dawber Trustees, J. Mitchell and Co., £500. That is in the cashier's handwriting. The bank passbook is in and shows the amount £568, which includes the £500. The paying-in book has been lost between the trustee in bankruptcy and the official receiver. In the cash journal I find on January 3, 1907, "By received of you by order of the trustees, folio 70, £500." In Ledger No. 3, January 3, 1907, there is in the account of the Dawber trustees, "Received of you, £500." In the cash journal, page 169, "May 9, 1907, By C. (Query, F. E. S.) £200." £438 14s. 2d. is the total amount paid into the bank, made up of four amounts. The £200 is what I handed Bradley in order to lend to Mitchell. I am bankrupt. Since July I have been in prison, this attachment for £2,900 being over me. There are two attachments. I could probably arrange one.

The Jury now left the Court by request of the Judge.

Mr. Justice Scrutton (addressing counsel). The offence for which prisoner is indicted is unlawfully converting and appropriating property to his own use with intent thereby to defraud. Both of you know there are cases in connection with false pretences where it has been held that an honest intention ultimately to return the property is no defence. If you present a forged signature with intent to defraud, an honest intention to restore the money does not stop the intent to defraud. In larceny there are a series of decisions to the effect that

you must permanently appropriate, otherwise it is not larceny. Assuming the jury should think there was conversion for the prisoner's own use, with honest intention to restore or return, are there any cases under this or other statutes which would throw light on the question? Of course, conversion, as one known it in civil courts, is dealing with an article, and even if consistent with the rights of the true owner it would not matter; if you intended subsequently to return it, you would still he converting it for the time being. Is there anything to show whether this ought to follow the larceny statute or the law in forgery cases? I am not asking you to answer now.

Mr. Leycester. I cannot think of any reported cases at the moment. It is a question which arises at every trial of this kind.

Mr. Justice Scrutton. A man might honestly think, "I am going to pay this, back. I will use it now, but my mother is going to die and leave me a legacy."

Mr. Leycester. It is always laid down that that is no defence; it follows embezzlement. Every clerk who embezzles says that; every solicitor says he hoped to repay—probably with truth.

Mr. Justice Scrutton. If you think there is anything which helps you on the larceny cases, Mr. Simner, perhaps you will send me a note of what it is. I was thinking more particularly of the motor-car transaction in this case.

In summing up Mr. Justice Scrutton directed that it was no excuse that prisoner honestly intended to repay trust funds which he had misappropriated.

(Wednesday, October 19.)

Detective-sergeant ARTHUR THORP, City. I have looked through office papers and find no trace of any income account being sent to the beneficiaries since April, 1907.

Verdict, Guilty on first and second counts as to the £500 and £1,200; Not guilty on third, fourth, and fifth counts.

The following indictment was then proceeded with (before another jury): Being the trustee on an express trust created by the will of William Joseph Cloughton, deceased, of certain property for the use and benefit of Emily Cloughton and another, did unlawfully convert to his own use and benefit and to the use and benefit of William James Bradley on July 27, 1904, £958 8s. 5d., on August 26, 1904, £3,500, on September 20, 1904, £1,250 and £3,539 1s. 9d., on November 4, 1904, £3,000, and on January 9, 1905, £1,250, in each case with intent to defraud-; one William James Bradley being trustee as afore-said, did unlawfully convert the before-mentioned property to his own use and benefit and to the use and benefit of the said F. E. Swann, and the said F. E. Swann aiding and procuring the said W. J. Bradley to commit the said misdemeanours.

Mr. Simner submitted that the counts for aiding and abetting Bradley were, in the absence of Bradley, bad: the offence alleged being a misdemeanour and not a felony, and there being no provision for a charge of aiding and abetting under the Accessories Act of 1861, section 8. (Du Cros v. Lambourne (1907), 1 K.B., p. 40; Archbold, p. 1,455; R. v. Burton, 13 Cox, p. 71; R. v. Bedford and Sims, 19 Q.B.D.; R. v. Taylor, L.R., 2 C.C.R., p. 147, referred to.)

Objection overruled.

The Attorney-General's fiat was put in.

(Thursday, October 20)

CHARLES POTHECARY , clerk, Union of London and Smiths Bank, Chancery Lane. J. F. Swann, prisoner's father, had an account at

my bank. In May, 1904, he deposited with us 208 shares of $100, six debentures of $5,000 each, one debenture of $1,000, and one of $200, making in all $31,200, in the Tanjong Pagar Dock Company, of Singapore, a certificate of the death of William Cloughton, and power of attorney to the Chartered Bank of India, Australia, and China from the executors of William Cloughton, deceased. We instructed the Chartered Bank of Singapore and on July 2, 1904, we received a cheque from that bank for £2,526 10s. 7d., which wag credited to J. F. Swann's account. That account showed a debit on July 27,1904, of £958 8s. 5d., the proceeds of the debentures only. On August 8 we wrote letter (produced) to Swann and Bradley which is marked in the handwriting of defendant "Ansd. F. E. S.," asking for receipt and received receipt (produced) signed by W. J. Bradley and F. E. Swann, executors of W. J. Cloughton, deceased; that was enclosed in letter signed by prisoner. We afterwards received from the Chartered Bank £1,250 in part payment of 208 shares of $100 each, which was paid to Swann and Bradley.

THOMAS JOHN MITCHELL HUME . I was clerk to Swann and Bradley from October 31, 1904, to the dissolution of partnership in August, 1909, after which I remained in Bradley's service until he disappeared. I am acquainted with prisoner's handwriting and produce schedule of documents showing which are in the handwriting of the prisoner.

JOHN MITCHELL . On November 4, 1904, I executed a charge on property in Endell Street for £7,000 to W. J. Bradley and F. E. Swann which in December, 1905, was transferred to F. E. Swann and E. F. Giles, trustees of the Dawber Estate. I had then no knowledge whatever of the Cloughton estate.

ROBERT NESBIT MCINTOSH , clerk, Chartered Bank of India, Australia, and China, Bishopsgate Street. On May 21, 1904, my bank paid to Swann and Bradley £2,526 10s.7d., proceeds of debentures in the Tanjong Pagar Dock Company; on September 13,1904, £1,250, and on September 23, 1904, £3,539 1s. 9d. in respect of shares. On June 2, 1904, we received 12 debentures for $5,000 each, and on July 7, 1904, paid £5,814 6s. 9d. to prisoner's bank. I produce letter from Swann and Bradley instructing us to sell the shares and debentures; letters from my bank are marked "Ansd. F. E. S." Transfers produced were received by W. J. Bradley and F. E. Swann as executors of W. J. Cloughton. (Witness produced a number of cheques and receipts showing that a total of £10,522 18s.5d. was paid to Bradley and Swann as the executors of W. J. Cloughton, deceased representing the proceeds of sale of 400 shares in the Tanjong Pagar Dock Company.)

GEORGE HAMWORTH HOYLE , 4, Arundale Terrace, Brighton, retired solicitor. On September 30, 1890, I advanced to W. J. Cloughton £1,200 on security of 200 shares of $100 each in the Harbour Dock Company of Singapore; on March 11, 1891, I advanced a further £200. In August, 1893, my interest in that advance was assigned to John Abbott and other trustees of my marriage settlement. Those shares were afterwards converted into $6,000 debentures and some shares of the Tanjong Pagar Dock Company. On June 30, 1904, the

debentures were paid off. On the instructions of Swann and Bradley I forwarded the certificates to them for collection and received the amount of my advance—£1,400—from them. The debentures realized £5,814 6s. 9d.

FRANCIS AUGUSTUS SMART , clerk, London and Joint Stock Bank, Limited, produced copy account of John Abbott showing payment of £5,814 6s. 9d.

AUSTIN FREDERICK WILLIAM MEAD , chief clerk, London and Joint Stock Bank, Leadenhall Street. I produce copy account of Swann Bradley and Company with my bank showing a credit on July 27 for £3 5s. 5d. On that day there is a payment in of £958 8s.5d. On August 25 the credit balance was £225 2s. 3d. On August 26, 1904, there is a credit of £4,414 6s. 8d. to Swann and Bradley made up of transfers from the account of Hoyle and Bradley on July 23 £3,500 and August 26 £914 6s. 8d. On September 12 Swann and Bradley's account was in credit £421 0s. 3d. I have calculated that out of the £3,500 paid in on August 26 £3,103 7s. 2d. was used by September 12. On October 24 £914 6s. 8d. was paid in of which £462 2s. 9d. was paid out by October 31. On September 22, 1904, the account was overdrawn £125 2s.: on September 22 £1,250, and on September 23 £3,539 1s. 9d. are paid in; on October 22 the credit balance was £916 11s. 3d. On November 4 there is a payment in of £3,000, in addition to a credit balance of £620 19s. 5d.; on November 15 there is an overdraft of £59 8s. 4d. On that day there is paid in £50017s.; on November 22 a payment in of £1,000; December 13, £1,000; January 9, 1905, £1.250; January 13, £1,700; January 31, £1,500; February 3, £540 3s. 6d. All these sums were used to meet the current liabilities of the firm of Swann and Bradley.

EMILY WALTON , Brighton Lodge, East Molesey. On October 3, 1906, I married my present husband, Walter Walton. I was the wife of W. J. Cloughton, who died on March 6, 1902, at Madeira. Bradley was his solicitor before the partnership. Prisoner went to Madeira to fetch the body. There were no children of the marriage. I received £10 weekly from Bradley. In July and August 2 I saw prisoner and he paid me £30. For the last four years I have had difficulty in getting my payments. I never instructed the sale of my securities. I never received any account showing the income coming to me.

THOMAS JOHN MITCHELL HUME , recalled. From October 31, 1904, I kept Swann and Bradley's books. Prisoner went through the payments with the ledger and ticked them. Several of the cheques are in prisoner's writing. £1,250 and £3,539 Is. 9d. on September 22 and 23, 1904, are credited in the Cloughton Trust account in prisoner's writing. (Witness went through a large number of entries and explained the manner in which the books were kept and the way they had been dealt with by the prisoner.)

JULIUS W. H. BYRNE , 81, Gracechurch Street, chartered accountant. I was the trustee of the joint and separate estates in the bankruptcy of W. J. Bradley and F. E. Swann and have since appointed receiver. I produce documents handed me by prisoner.

JOHN WILLIAM ROBERTS , Senior Examiner, Official Receiver's Department. I have investigated the affairs of prisoner and W. J. Bradley. The articles of partnership of Swann and Bradley, dated August 31, 1901, arranged that £4,000 be contributed by the partners in equal shares, that any sums received for clients be kept in a separate banking account, and that the partners draw monthly £25. Letters of administration of W. J. Cloughton, 27, 1904, give the gross value of the estate abroad at $231,129; within the United Kingdom, £1,516 1s. 9d. The will appoints Bradley and the prisoner as trustees and, excepting some small legacies, leaves the income to the wife without power of anticipation; then to the children of the marriage, and in the event of their being no children, to the testator's stepson, Albert Budden. The ledger shows the account of the executors of W. J. Cloughton, income received £2,497 4s. 3d. On the other side are debit payments made to Mrs. Cloughton for income after the sale of the shares and debentures. The amounts received by the sale of debentures are £9,870 6s. 2d. The amounts have not been posted into the ledger. The various payments for sale of shares also appear in the cash book. There is no record in the books of any reinvestment of those sums. There is no indication that the loan granted by Swann and Bradley to Mitchell and Sons or Sykes is on account of the Cloughton estate. On November 21, 1902, there is an entry showing that £1,500 had been borrowed by Swann and Bradley from F. L. Swann. That was repaid out of money received out of the sale of the Cloughton shares. (Witness explained from the books the receipt of the proceeds of the Tanjong Pagar Dock Company securities, amounting to £22,000, and how such had been in all cases used for the purposes of Swann and Bradley.)

(Friday, October 21.)

JOHN WILLIAM ROBERTS , recalled. Witness produced a large number of letters, cheques, and receipts, etc., initialed or signed by the prisoner. The partnership of prisoner. and Bradley commenced in September, 1901. Their drawings to December 31, 1901, were, prisoner £75 10s., Bradley £75 16s.; during 1902, prisoner 5882 12s. 10d., Bradley £1,932 13s. 7d.; 1903, prisoner £923 1s. 3d., Bradley £1,623 2s. 10d.; 1904, prisoner £1,982 1s. 6d., Bradley £1,340 9s. 8d.; 1905, prisoner £1,330 11s., Bradley £1,722 8s. 5d.; 1906, prisoner, £1,307, Bradley £1,108 14s. 6d.; 1907, prisoner £1,515 3s. 10d., Bradley £1,807 15s. 10d.; 1908, prisoner £776 9s. 10d., Bradley £804 15s. 8d; 1909, January to August (dissolution of partnership), prisoner £440 2s. Id., Bradley £66 10s. 11d.—total, prisoner £9,233, Bradley £10,482.

Cross-examined. Bradley undoubtedly took the greater part in the financial arrangements of the firm. From the end of 1903 to October 31, 1904, there are hundreds of entries in prisoner's handwriting—many of them may be omissions. The accounts are incomplete. Payment to Sykes of £400 on July 29, 1904, could not have been made without £958 8s. 5d. received from the Cloughton Trust on July 27,

1904, unless an overdraft had been given by the bank. There are no costs debited against the Cloughton Trust; there may be some due on the draft costs sheets, which I have now examined.

(Defence.)

FRANCIS ERNEST SWANN (prisoner, on oath). n I am a solicitor, and was first on the Rolls in 1887. I was with my father in Chancery Lane. I first knew Bradley in 1890 or 1891, when he was managing clerk for Morten, Cutler and Company. In 1901 my father retired from ill health. Bradley was then a partner with Morten, Cutler and Company. Bradley and I became on very friendly terms, and joined in partnership in September, 1901. He was a great hand at figures, and had a considerable number of clients. My business was principally agency. We had offices at 27, Leadenhall Street; business increased largely and we took larger offices at 6, East India Avenue, where we had 11 clerks besides myself, Bradley, and his son. Bradley took entire charge of the financial part of the business; I had nothing to do with the financial arrangements; I never went to the bank except on one occasion when Bradley asked me to arrange about a cheque he had issued; I saw the assistant manager of the bank, but the manager of the bank being away they refused to meet the cheque. I first met the late W. J. Cloughton in October, 1901. Bradley introduced me to Mr. and Mrs. Cloughton at the "Ship and Turtle" Restaurant. After having lunch there, Bradley told me that Cloughton was leaving the next day for a long sea trip, and was making a new will; his trustees had been Bradley and Bradley's late partner, Mr. Morten. I was desired to be trustee in the place of Mr. Morten. Cloughton said, "I have tried to get someone to act with Bradley but have not succeeded. I have full confidence in Bradley. I know he will look after my affairs when I am gone, and I am asking you so as to save trouble if anything happens to Bradley." I agreed to become trustee. In March, 1902, I heard that Cloughton was very ill; he afterwards died at Madeira. Mrs. Cloughton cabled to Bradley to come out at once. He was unable to go; I arranged to go out, and brought the body to England. Mrs. Cloughton had expected to see Bradley instead of me. From that time I had nothing whatever to do with the estate except that on one or two occasions I signed cheques for Mrs. Cloughton, not drawn by my instructions, but brought to me to sign in Bradley's absence. Mrs. Cloughton was on very friendly terms with Bradley and stayed at his house for a considerable time. I have seen her at the office on many occasions and asked if things were going on all right, and she told me they were. Her business would be done by Wilde or Warren under the instructions of Bradley. Any letters I had signed would be brought in by the clerks, who had written them on the instructions of Bradley. I have marked letters "Ansd. F. E. S." to show that the letter had been answered in Bradley's absence. A loan of £1,000 was arranged by Bradley from my father, J. F. Swann. Letter acknowledging the receipt of £958 8s. 5d. is signed by me, and the receipt for that sum was also

signed by me as executor. The account showing the balance of £958 8s. 5d. was prepared by my father. It is not true that I appropriated that cheque to my use, or to the use of Bradley and myself. There was £50,000 to £60,000 passing through the bank in a year. I had nothing to do with the books, and I assumed that Bradley was doing what was right with regard to the re-investment of that sum. (To the Judge.) I took no steps to see that trust monies were not being used for firm's purposes; I never looked at the pass-books, and trusted Bradley entirely. If I wanted to draw a large cheque I should tell the cashier; and if there was not money Bradley would stop the cheque being issued. (To Mr. Simner.) I should not know what cheques had been paid in. On August 26, 1904, Bradley received £3,500 which was paid into the bank; on August 27 I drew a cheque to Benson to pay for a motor-car. It was drawn without reference to the £3,500 being paid in. (To the Judge.) Bradley was away from August 26 to September 5. I was not in financial charge. I do not think I looked at the bank account. It was a mere accident that the £525 was drawn the day after the £3,500 was paid in. The bank would have met the cheque by giving us an overdraft. (To Mr. Simner.) There is no truth in the suggestion that I aided Bradley to misappropriate £207 14s. 8d. payable to Ryland, Martineau and Company. I had nothing to do with the transaction. I know nothing about two cheques for £1,250 and £3,539 being misappropriated; they were paid in while I was away on my vacation between September 6 and October 3, as was also cheque for £393 drawn to Robert Lowther. I signed a cheque for £25 on October 10 for office purposes, payable to Hume without any reference to trust money. Cheque of January 9, 1905, for £1,000 payable to J. F. Swann, being repayment of the loan, was not drawn by my instructions. I did not know that it was paid out of trust money paid in the day before. Between August 15 and September 8 thirty cheques are signed by me. Seventeen, amounting to £1,065 10s. 9d., are for Bradley's clients; nine cheques, amounting to £100 8s. 6d., are for office purposes; and four cheques, amounting to £215 5s., are for myself and my own clients. Between September 22 and October 22, 1904, I signed 20 cheques. Treating the Cloughton matter as Bradley's business there were seven cheques, amounting to £214 19s. 5d., for Bradley; three, amounting to £40, for office; and 10 cheques for my own clients, amounting to £442 4s. 2d., including £319 which had just been received on my clients' account. I never examined the books as an accountant, but I assisted to check entries with Bradley and under his instructions. I made entries which he dictated to me, which had been omitted. (To the Judge. I signed letters and cheques drafted by others without reading them.) All the receipts from the sale of shares and debentures of the Tanjong Pagar Dock Company were the property of the Cloughton estate. I did not know of their being turned into money at the time. The $31,200 debentures on which J. F. Swann had a charge were sent to Singapore to be collected under a letter of instructions, which I signed, and a power of attorney which I drew

and signed. I knew they were being sent out to be collected but I did not know the money had been collected until these proceedings. I know now that 400 shares were sold between November, 1904, and March, 1905, and the proceeds received by my firm; I did not know it at the time—I trusted Bradley as the acting trustee. I signed a blank transfer, which I understood was going out to Singapore, in readiness for the sale when a certain price was obtainable. When I entered the amounts in the ledger I must have known they had been been received. I have been a solicitor for 23 years in London. I do not represent myself to be a fool—I may have been fooled. I know that apart from criminality there is a serious responsibility on a trustee if trust funds are not properly invested. I trusted Bradley to deal with the trust fund, amounting to £20,000, as a man I had known 20 years. In June, 1909, when parting with Bradley, I asked him how the Cloughton Trust had been invested; he said it had been advanced to clients on mortgage and he would furnish me with a list. I said, "Now I am leaving you, Bradley, I must retire from the trusteeship," and he promised to get a deed of retirement executed. He never gave me the list or the deed. (To the Judge.) I made entries in the books by which I knew £18,000 had been received from the Cloughton Trust. In signing a cheque to Harvey's trustees for £1,800 I made no inquiry to see whether the money was in the bank or whether it belonged to the Cloughton Trust. I knew there was £1,000 owing to my father in 1902, which was re-paid in 1905 by a cheque signed by me on the same day that £1,250 had been paid in from the Cloughton Trust out of which the £1,000 was paid. It was a mere accident. The draft schedule of the Cloughton property is in my handwriting; I drew the document for the probate.

Verdict, Guilty on counts 2, 5, 6, 13, 16, 17, Not guilty on other counts (i.e., guilty of aiding and abetting Bradley to convert £958 8s. 5d., £3,500, and £1,250; of converting £525 and £1,000). Sentence, on first indictment, count 1, Three years' penal servitude, count 2, Five years, penal servitude. On second indictment, on each of the six counts, Five years, penal servitude—all sentences to run concurrently.


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