5th September 1911
Reference Numbert19110905-57
VerdictNot Guilty > unknown

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PATERSON, James (50, engineer) , having been adjudicated bankrupt unlawfully obtaining credit to the amount of £100 from John Pizzala without informing him that he was an undischarged bankrupt.

Mr. Turrell prosecuted; Mr. Cairns defended.

GEORGE INGLIS BOYLE , messenger, London Bankruptcy Court. I produce file of proceedings in the bankruptcy of James Paterson of 41, Newington Butts, and 53, Stockwell Road, Stockwell, rifle range proprietor; Receiving Order, March 6, 1907; adjudication, March 13, 1907; liabilities £1,000, assets £33, no dividend paid; undischarged. There has been no application for discharge.

Cross-examined. Petitioning creditor was the City of London Brewery Company, Limited.

JOHN PIZZALA , 18, Charles Street, Hatton Garden, optician. On February 12, 1910, Betts, a friend of mine, introduced prisoner to me. Prisoner produced certificates for 27 shares in the Cinematograph Target Company; Betts said prisoner had come for an advance of

£100; I then gave him an agreement (produced), dated February 12, which I had previously drawn up, he looked it over, and we both signed it. I then paid him £100 £50 by cheque (produced) signed by my father and myself, and £50 in gold which I took from my safe. I was told nothing about the prisoner being an undischarged bankrupt, On May 19, 1911, I wrote aletter (produced) to prisoner, "Should like to know when you will be calling on me, when I would arrange to be in; it would be to your interest to come to some arrangement." On June 17, 1911, 1 wrote threatening if matters did not come to a satisfactory arrangement next week to instruct my solicitors to issue a writ against him 'for the recovery of the money. On July 19, 1911, my solicitors wrote to prisoner seating that I had just heard he was an undischarged bankrupt, and saying, "As this is a most serious matter we should be glad to hear from you forthwith."The first 'time I heard prisoner was an undischarged bankrupt was when my brother-in-law told me, between June 21 and 26, 1911. In reply to my solicitors' letter prisoner wrote on July 21, "In reply to your letter I made no secret of the fact of my being an undischarged bankrupt at the time of my deal with Mr. Pizzala; Mr. Pizzala's colleague, Mr. Betts, was certainly aware of it, and I have every reason to believe so was Mr. Pizzala, but I fail to see what bearing that has upon me at all. The business consisted of a sale to Mr. Pizzala of certain shares, and an engagement whereby I was entitled to repurchase the same at a profit to Mr. Pizzala at the specified time, 12 months. Failing my doing so he, Mr. Pizzala, should become the absolute owner of the said shares without being accountable to me, James Paterson, or my heirs, executors, or assigns, for the sale or proceeds thereof. I shall be pleased to call on you any day after next Tuesday." On July 28 prisoner sent me a cheque for £20, and offered to pay the £100, and 10 per cent. interest by monthly instalments. My solicitors returned the £20 because these proceedings were commenced.

Cross-examined. At the time I had £70 of Mr. Bella's money in my safe; the £50 in gold was part of this. Betts told me prisoner Wanted the money to open a rifle range in Glasgow, that prisoner had 27 shares in a syndicate which would be Worth £2,000 if the Company were started, but he did not say we should advance money on the shares. On February 12 last yearprisoner said he Would probably be able to repay the money in six weeks or three months. I was to make no profit by lending my £50. By the agreement, after 12 months Betts and I were to become the owners of the shares, but we never thought of what we should do if they sold for more than £100. It is not true that I only advanced £50, and was to get £50 as profit. Betts gave me to understand that by my lending this money he would be taken into partnership in therifle range, and I lent it simply in his interest. Prisoner certainly did not say, "You understand my financial position." I did not say, "Never mind about that, let's get along with the business." I tried to find out the value of these shares, I did not try to sell them.

(Saturday, September 9.)

JOSEPH BETTS , gunmaker, 87, Sturgeon Road, Walworth. I have known the prisoner for 13 years. In February, 1910, he asked me if I could negotiate a loan for him for £100; I then persuaded Pizzala to lend £50 while I lent another £50. On February 11 I handed to Piztala, certificate for the 27 shares so that an agreement might be drawn up; I was present on February 12 when it was signed. I did not know prisoner was an undischarged bankrupt until the end of June of this year, when Pizzala told me; nothing was said about it at the time of the loan. Pizzala gave prisoner a cheque for £50 and £50 in gold which was mine.

Cross-examined. Thirteen years ago I was in prisoner's employment; since then I have often had dealings with him, and been to his place at Newington Butts. Scudamore was not present when we had a discussion about this loan. Pizzala minds my money because I have no banking account. I never anticipated getting the £2,000 which the shares might become worth; the only money I could have got was in business with prisoner. I lent Pagose £40 to start a business, but he converted it to his own use. He gave me a paper charging prisoner and Musgrave to hold these shares and to secure me for the amount; he also told me a week ago that a Mr. Gordon was offering £10 each for these shares. I did not tell him that I had 27 shares which I wanted to sell. I know nothing about Pagose, employing prisoner early in 1907 to fit up the Franco British Exhibition, or that complaints were made because of the delays which were caused by prisoner not being able to get credit; I did not remind Pagose of prisoner's "financial position," and suggest thai he should guarantee prisoner's account with the merchants who were supplying material. Abou't August this year I met a friend named Macarthy; I showed him a summons and told him about these police-court proceedings, and told him I had got the summons because I could not get my money; he may have asked why is had become a criminal matter; but he did not say, "You knew all about that," nor did I answer, "But Pizzala did not." He offered to see prisoner and I gave him Pizzala's telephone number. Next day I met him again and said, "Paterson thinks more of a man like Hurry who has done him, than me who had done him a lot of good"; all I know about Hurry is that prisoner told me before this transaction that Hurry had gone to the Dublin Exhibition and got some sort influence to bear and done him oat of a concession there; I did not know that Hurry had made use of his knowledge of the prisoner's bankruptcy to prevent him from getting an order. I know Athol, a barman, I have not spoken to him of my sharing in the Leicester Square business with prisoner because prisoner could not sign cheques. I never mentioned to Scudamore that prisoner was an undischarged bankrupt. I have not offered prisoner's daughter to lend her father more money if I could get her 30 shares as security. Prisoner asked to have an extension of time over the

12 months so that he could get back his shares, but I did not refuse saying the shares belonged absolutely to us.


JAMES PATERSON (prisoner on oath). I am an engineer dealing in firearms and targets, and am the inventor of a living picture taget, for the promotion of which a syndicate has been formed in which I hold 27 shares and my daughter 30; if the company is formed my shares will be worth £2,700. I told Betts, whom I have known for some years, of my prospects, and that I wanted to raise a loan of £50. Next day I saw him and he said, "I have seen my friend who does a bit of money-lending, Mr. Pizzala, and he does not seem inclined to give you a loan of £50 owing to your financial position," but that he would advance £25 and that Betts would advance another £25 on condition that I sold them my shares; I agreed to that on condition that I had the right to repurchase them in one year. Betts understood my financial position and I was emphatic that he must let Pizzala know that I was an undischarged bankrupt. On February 12 we signed the agreement, Pizzala and Betts each lending £25, for which I was to repay £50 each; I said before the agreement was signed, "You understand, Mr. Pizzala, my financial position," and he (Pizzala) said, "That is all right, get on with the business." I then received an open cheque for £50, but no gold. I endorsed the cheque and a friend of Betts advanced £3 or £4, as it was after banking hours. Betts knew I was a bankrupt on the day I became a bankrupt; I also told him how Hurry had lost me an order by telling my employers I was an undischarged bankrupt.

Cross-examined. Although I only received £50 I acknowledged by the agreement having received £100; that was the arrangement. I received a letter from Pizzala's solicitors stating that I had received a loan of £100 from Pizzala; and although I did not repudiate that statement by post, I interviewed the solicitor and told him that I only received £50. I then sent a cheque to the solicitors for £20, but that was on conditions that I received my shares back. I told Pizzala distinctly, "I am an undischarged bankrupt."

JAMES ALBERT GEORGE SCUDAMORE , gunmaker. I am a subtenant of prisoner at Newington Butts. Betts introduced prisoner to me three or four years ago, and told me he was an uudischarged bankrupt. About October or November, 1910, Betts said he was having his own back on Paterson; that he did not expect he would have the money to redeem these shares, and he would have the shares which would be worth £2,000 or £3,000.

NICHOLAS PAGOSE , 48, Burlington Gardens, Kew Gardens, Stock Exchange commission agent. I have known prisoner since 1907. I was one of the managers at the Franco-British Exhibition and employed prisoner in fitting up. On several occasions he was late in doing the work because he could not get material without paying for it at once. Betts said, "You know very well why he cannot get

credit," and suggested that we should guarantee the merchants, which I did. Betts offered to sell me 27 shares in a Target Syndicate.

ALBERT EDWARD MACARTHY , traveller. I have known Betts 12 years and the prisoner 18 years. On August 21, 1911, Betts showed me a police court summons. He told me prisoner's telephone number, which I found to be wrong. He mentioned that Paterson was a bankrupt and I said to him, "Well, do you mean to say you did not know that Paterson is a bankrupt." He said, "Well, anyhow, the man who advanced the money did not know." Another time he said that Paterson thought more of a man like Hurry who went to the Dublin Exhibition and got the concession there after he (Hurry) had heard that Paterson was a bankrupt than of him.

MARIAN PATERSON , daughter of prisoner. I have helped my father in his business since I was 18; Betts has been a frequent visitor at Newington Butts; he offered to obtain a loan on my 30 shares in the Target Syndicate, but I refused.

Captain ERNEST TEMPLE YOUNG, R.E. I am a certified instructor in gunnery. I know the prisoner and his invention which is likely to be of great value.

Verdict, Not guilty.


(Friday, September 8.)

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