A
نال
A
99
doubt the accuracy of Mr. Bunje's information as the firm was
generally recognised as being one of good standing.
5.
The Liquidators had received notice from the
Hongkong and Shanghai Bank, very shortly after their appointment,
that the Bank claimed a lien on all Messrs. Gaupp and Company's goods, wares and merchandise in Hongkong as security for the firms indebtedness to them; but the only indebtedness to the Bank know
to the Liquidators on the 27th. November was the then existing
overdraft on the firm's current account. Subsequently the Liquida-
-tors were called upon by the Bank to honour drafts amounting to £2,000 which had been drawn by Mr. Carl Heermann at Cannstatt, Germany, between the 20th. and 31st. July, 1914, and had been negotiated by the Hamburg Branch of the Hongkong and Shanghai Bank. The Liquidators refused to pay this money, and the Bank then produced to them for the first time the deed of the 12th. August, 1914, under which Messrs. Gaupp and Company had pledged
their stock.
6.
The Liquidators were in the meantime proceed- -ing with their investigation of the firm's affairs, being much hampered by the entire absence of proper books of account. The firm apparently did not keep such books in Hongkong, or, if they did, the books had been removed by Mr. C. F. Heermann, the resident partner. It was found that stock, which should have been dealt with separately at Hongkong and Singapore respectively, had become mixed, and it was also ascertained that the Singapore unsecured liabilities, which had been put by the Singapore Manager at from £200 to £300, amounted actually to more than £6,700. The Singapore Manager had erroneously assumed that the bulk of the liabilities in that port were Hongkong liabilities.
It has been show that at the outset the Liquidators, having no proper books available, placed reliance upon statements made by persons thoroughly conversant of the business, which statements have proved to be misleading in certain essential
7.