1930-01-24 — Page 6

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21880-

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21927-

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Olsen's Music

7-

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"

21964-

The Wedding of the Painted Doll "Broadway Melody

Charles King

491

++

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22043-

*22037-

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Orange Blossom Tire

22124-

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""

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J

"

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Pagan Love Song

22136 You want Lovin'-Fox Trot

21.

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HONG KONG

THE HONG KONG DAILY PRESS, FRIDAY, JANUARY 24, 1930.

BREWER GUILTY ON FIRST CHARGE.

VIGOROUS PROTESTATION OF INNOCENCE.

JUDGE AND "SERIES OF FINANCIAL GYMNASTICS.”

CROWN COUNSEL'S ADDRESS.

Mr. Somerset Fitzroy then ad- dressed the jury on behalf of the Crown.

The other advantage was that until the company demanded the money he liad the right to pay off his in-

He first read the 'charge debtedness at times most convenient to himself, instead of being forced preferred against Mr. Brewer, and explained that under the require- to wait for a call. It was a matterments of the Companies' Ordinance of experience that calls on shares it was necessary for a statutory report to be filed with the Regis always came at awkward moments.

trar of Companies. The object of The company's beucât was even

this provision was so that the more striking.

true that public should know how every com-

It was

CASE FOR THE DEFENCE. In addressing the jury Mr. Brewer said he was indebted to the fore. man of the jury for giving him the realisation of a fact that had, until then. escaped hint. When the fore man asked him how he persuaded the Directors to sign the fornis, he did not realise the degree of thought that had inspired the question. Although he answered it to the best the capital liability would be in-pany stood. Everyone who wanted to know anything at all about a of his ability in saying he believedcreased, but they had the right to particular company merely had to the security forthwith and go to the Registrar's Office, pay he had done it by personality, he sell

the usual fee, and see the docu- now realised that behind the ques could proceed to recover the balance

ments. The sole object was to see tion was a train of reasoning which due. It was far more valuable that everything clear and had uncovered a relevant fact which asset to have the right of forfeiture aboveboard, to protect the public, had escaped his attention. Until which extinguished the uncalled and to see that the requirements then he firmly believed he had done" it by personality, and persuaded the liability. The bank's right to pay- ment on demand was immediately more valuable than the right to make a call.

Directors for the sake of the firm. He knew the "arguments he used, but the question was whether he knew what motives actuated them.

Help "From Heaven." Mr. Brewer then referred to the evidence given the previous day by Mr. Udy, and said he was an e-

The arguments were that it would materially benefit the firm if the shares and loans were treated in that manner and he was unwilling to accept the responsibility of recountant, a man of standing and a ceiving the share capital in full without an efficient banking man- ager, and it was apparently in response to that argument that they signed. The query put to him, how ever. was deeper. The question was Am I sure they were con- vineed hy my arguments or were they actuated by other motives It was impossible for hins (Mr. Brewer) to say what motives actuat ed the Directors, but the thought must be considered whether they were actuated by the desire to 083c98 fully-paid shares, or whe- ther they were actuated by the desire merely to produce an increase of capital receipts.

of the Ordinance were being carried out.

Capital and Cask."

Mr. Fitzroy said that he proposed to use the word "cash" in the ordinary mercantile, business sense. If a man were going to put money into a bank, the first thing he would do would be to look up the report to see how much capital it possessed Going on Mr. Brewer's statement, he would think that he had some security in the form of the bank's big paid-up capital. He would have a perfect right to believe that the word "cash" was used in the common, mercantile sense. But did the fncte justify this? The statement read that the total amount was received in respect of cash. They found, however, that only 5 per cent. had been paid in cash, and that promissory-notes

man whose reputation must be of some. value. "I any that Mr. Udy was sent from Heaver. I am not saying that in a loose or cynical fashion. I am meaning it. When a person is up against things as I have been recently, he can say things like that and mean them I say Mr. Udy was sent from Heaven, probably to prevent a mis- carriage of justice."When a man of that standing and reputation will go so far as to say that he being in my position would have issued the statutory report as I did, I maintain that that should be His Lordship at this point inter- very strongly regarded.

rupted to say he was going to leave the matter of the definition of the word "cash to the jury.

Mr. Brewer pointed out that Mr. | Udy had said the transactions were properly treated as cash transact- tions. In view of that could ho Mr. Brewer) be held to have held wrongful intentions or to have acted dishonestly in doing something which an accountant had said he would have done t

Big Business, Referring to the tank business, Mr. Brewer said a trustee bank never required a big capital, but since it was part of the directors' plan to go in for barking proper they were quite justified in wishing

were held for another per cent. Promissory notes were clearly not cash.

THE SUMMING-UP. "Gentlemen of the Jury," said Mr. Justice Wood, when the Court resumed in the afternoon," I think

may not keep you very long, but before coming to the facts, I want to say one or two things, and, firstly, the very obvious thing that here you and I are not concerned with anything we may have heard outside this Court, us to the In- stone Bank. Your duty is merely to consider the evidence which has been laid before you here, and to to go in for largo kapital. He be guided by, that, and by that only. suggested that it was not unreason- The Crown and the defendant rely able of him to try and avoid the on that evidence so far as the responsibility of handling 82,800,000.charge is concerned.

A dividend on a He could carn capital of $150,000 but when they talked about millions it was going right out of his depth."

Mrs. Brewer's Position, Mr. Brewer said he had always been under the impression that Mrs. Brower was a trustee, but the letter written by the Directors did not use the word trustee and the letter did not accept the offer to refund, but instead the Directors made certain requests, to buy cer- tain shares, to sell certain shares and to hand the proceeds to the company na to the 10 per cent.

rs, Brewer received the $18,000 worth of shares from him (fr. Brewer). She used it in paying ten per cent. on 4,800 shares allotted to her personally and registered in her name. She, herself, was fully responsible as principal in company law for the payment of the entire uncalled capital. She applied for a loan of $432,000, in respect of which she was guaranteed by the Directors in their personal capacity. With that loan, Mrs. Brewer was

However, he did not wish to im- liable for unlied capital, subject pede the Company's business when only to the protection of the Direc. and if they appointed the manager. tors' guarantee which they both | No one was more anxious than he trusted. Subject to that she could was that the company should be have been required to pay the loan successful and one of good repute. in full and if she did not. then exe- cution could be levied and she could have been sent to prison.

Correction From the Bench. His Lordship: That is not so, although I did not disagree with it

before.

Mr. Brewer: I am sure there is imprisonment for debt,

His Lordship: You may take it from me that that is not so. -

Mr. Brewer replied that that was their belief, and under those cir- cumstances she would not have signed for the loan and he would not have permitted her to do so, had they not both been entirely confident that the Directors were substantial men and able to pay their guarantee.

very

A Curious Story.". We have listened to A curious financial story, the Judge proceeded. It may be described

EL. series of £nancial gym as naatics not without its humorous. and ridiculous sides, and though I may say something that might suggest that to you during my sum- ming up, I don't want you to think The Statutory Report.

that I am forgetting, or that you Dealing with the statutory report are forgetting, the question that Mr. Brewer said it was quite cas the defendant's reputation is in. tomary for such to be printed and volved. The second point is the published in Hong Kong and else- charge under the Perjury Ordin where. All the statutory reports ance, and it is charge of making were typewritten a number being a false statement, not under oath, produced to satisfy the require which is connected or akin to fraud. ments of the Ordinance. None of At the same time, I should say the statutory reports bore anything it is not alleged that the defendant in Chinese. If they had been solely has been guilty of any kind of for the purpose of boosting the fraud for his own personal interest, Company, there would certainly apart from his interest in commen have been Chinese on them. All with the other shareholders of the the directors were Chinese except Bank. Nothing has come out in the himself and Mrs. Brewer, and all | evidence to suggest any fraud on his their customers were Chinese. part.

To suggest that some of the cus toners might come around to the Court and look up the report on the files was to suggest a remote contingency.

Mr. Justice Wood went on to say that the charge was serious enough, and required very careful considera- tion from the Jury. The defendant was accused of making a certifiente Mr. Brewer pointed out that the dated August 9, and the question books were consistent throughout, was whether it was a right state. from the first entry to the balancement of the actani acecunt of the sheet.

Earnest Protestakon of Innocence,

03

Company as shown on that date.

The defendant was accused of making statements falsely, that is, they meant and what was stated making them knowing that what

was untrue.

Allegations of Jugglery, With regard to the transactions generally, were they actual trans actions or not? It had been sus gested by the prosecution they were mere jugglery, having no value and capable of being set naide. In two cases the letter applications had Concluding, he said:"If the been sued on, taken through to items are correct, I am clearly judgment and the defendant had, innocent. If I honestly believed in no case, alleged there was any them to be correctly treated I am ground for setting it aside. At the equally innocent. If there is a dis- "present moment" the Official Re agreement of experts and if my ex- ceiver was suing a man on one of planation is the same it was the application loans for the full seven months ago, how can it be amount, although the calls had not wrong? Can I be a criminal, or yet been made 100 per cent... to blame, for having produced a It had also been suggested that document which one expert admits by the scheme, the shares were cap- I might be correct if the transactions able of indefinite expansion, that were genuine aad another expert one could equally well, make the meintains that it is genuine and capital ten million dollars if desired. that the statutory report was pro- The answer to that was it was not perly prepared You have it in 'possible to do the transactions your power, gentlemen of the jury, at all unless there was a person by one word to make me a con- willing to accept the liability. They demned criminal, to make me a must realise that although actual pariah and an outenst, deprive me banknotes might not have been of my name, reputation, friends, taken out of pockets and paid in personal liberty and everything zespect of the shares, the mere fact that makes life worth living. Do of a person having to guarantee not come lightly to a decision which to pay cash on demand was auf- although it is a small matter to you ficient to prevent people going in means everything to me. I main for unlimited quantities of shares tain that I have been honest and in that manner.

conscientious, I have not enden Mr. Brower said the liabilities of voured to further my own interests both parties had suffered a very at the expense of another. I have material alteration. The share never defrauded: nor attempted to holder benefitted inasmuch na hedefraud in fling that report. I nia had the right to inform the world not a criminal and it is to you, these agreements to the Bank, and that he was the holder of fully and you alone, that I can look for | they agreed to pay_him $68,000. paid shares and was a Director. deliverance from this charge.'

(Continued on Page 10.)

irt

The Questioned Statement. The particular statement in the certificate which was concerned in. the charge was to the effect that. the Bank had received a total amount of cash in respect of shares only of $870,750. The Crown had endeavoured to show that this state- ment was untrue, and that the de féndant made it knowing it to be untrue. The history of the bank up to that date was an all relevant matter. It appeared that February, 1927, defendant was in possession of three contracts which he made with certain persons, with whom the Court was not concerned. Under these contracta be bad ac quired certain rights of selling certain bonds, and the region of Hong Kong formed one part and Singapore formed another part; where these rights could be exer. cised. Defendant and certain Chi- nese gentlemen decided that the Inatone Bank should take over the benefits of these agreements. Mr. Brewer assigned aux benefita from

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