Author Topic: Bankruptcy fraud?  (Read 472 times)

Offline Timbottawa

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Bankruptcy fraud?
« on: Thursday 28 November 24 11:14 GMT (UK) »
Apologies for showing my ignorance of (early 20th century) bankruptcy procedures ...

John Robert Gough appeared before a bankruptcy court in Scarborough in November 1922.  He told a curious tale!

He had been in partnership with a certain "Samuel Lawrence", running the North Bay cinema in Scarborough.  In August, the two of them had a huge argument concerning Lawrence's work habits/drunkeness, which resulted in Gough leaving Scarborough for 6 weeks.  On his return in mid September, he discovered that Lawrence, who had been entrusted with total financial responsibility within the partnership, had absconded with all the money, leaving him (Gough) bankrupt.  Subsequently, Gough had tried but failed to learn of Lawrence's whereabouts.

I believe (for reasons I won't bore you with) that "Samuel Lawrence" was an alias, and that Gough's partner was actually my grandfather.  And furthermore, that in November 1922 Gough knew exactly where my grandfather was, as he was living in Gough's house in Scarborough.

So this sounds like a crude attempt at fraud - but I can't figure out who is being defrauded.  At the time, if a bankrupt turned up in court and said "Sorry, m'lud, but my partner ran off with all the money", ...

a) would the court/police make efforts to pursue the abscondee?
b) what would be the consequences for the bankrupt person, in this case, Gough?
Boyle, Butler, Yarborough, Baldwin, Midwood, McHale, Carter, Noble, Kay, Raper, Greenwood, Swift

Online Andy J2022

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Re: Bankruptcy fraud?
« Reply #1 on: Thursday 28 November 24 14:41 GMT (UK) »
Bankruptcy is a civil justice matter so the police would not be involved. I assume his hearing was to establish whether indeed he lacked the funds to meet his liabilities, so technically "a bankrupt turned up in court" does not describe the situation.

If the court was persuaded by his testimony that he was the victim of theft then it is possible that, although I suggest it is not that probable, the judge might stay an order for bankruptcy. If John Gough went to the police to report the alleged 'theft' then it is possible that they might have investigated. However if the story was merely that his business partner had been reckless with the money which belonged to the business. then at best John Gough would have had to sue Lawrence for the return of the money - again a civil claim. 

Assuming the court made a bankruptcy order, the order would have contained the details of the repayments, if any, Gough would have to make to his creditors. His affairs would then be managed an administrator appointed by the court. However if the court felt that Gough's story amounted to an attempted fraud then it is possible the bankruptcy court might have referred the matter to the police for investigation, with Gough as the suspect. The victim of the fraud - assuming that it was found to be one - would be the creditor who initiated the bankruptcy proceedings.

Offline Rena

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Re: Bankruptcy fraud?
« Reply #2 on: Thursday 28 November 24 16:21 GMT (UK) »
Charles Dickens wrote about the debtors prison with the character; Mr McCawber.

  Have you seen this?

https://www.thegazette.co.uk/all-notices/content/100938
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Offline Jomot

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Re: Bankruptcy fraud?
« Reply #3 on: Friday 29 November 24 03:56 GMT (UK) »
I had to study bankruptcy law many many years ago, and as the law has undergone a number of changes its fair to say I'm more than a little rusty on the 'historical' bits, however, debtors prison was long gone by the 1920's!

In this particular case, the London Gazette shows that it was a DEBTORS petition, ie John Robert Gough petitioned for his own bankruptcy, and as far as I can see, neither he nor anybody else petitioned for the bankruptcy of "Samuel Lawrence". 

https://www.thegazette.co.uk/London/issue/32765/page/7999

As partners they will have had joint & several liability, ie they were each equally liable for the entire debt, and so unless John pursued it as a civil matter then its unlikely that the police or courts would have made any attempt to pursue Samuel Lawrence.

The consequences of bankruptcy would normally be that John would have to pay his creditors so much in the pound, usually by turning his assets into cash, and have certain restrictions placed on him.  However, the trustee was released the following year so it all seems to have been over rather quickly!   
https://www.thegazette.co.uk/London/issue/32865/page/6485

If you want to really dig deep then have a read of the Bankruptcy Act 1914.... if nothing else it will help you sleep ;D    https://www.legislation.gov.uk/ukpga/1914/59/contents/enacted
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Offline Timbottawa

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Re: Bankruptcy fraud?
« Reply #4 on: Friday 29 November 24 11:48 GMT (UK) »
Thank you all for your explanations and clarifications.

I'm not sure I really understand the issue, still.  Many years ago, an elderly relative (it's where you're always told to begin!) commented that my grandfather had "got involved with a number of unscrupulous characters, especially Jack Gough".  Three elderly relatives independently claimed that he (my grandfather) had worked as manager of the North Bay cinema in 1922.  Jack Gough's argument with "Samuel Lawrence" was his poor performance managing the cinema and his drunkeness" - both attributes of my grandfather.  In the period 1920-23, my grandfather was living at an address that was described in at least one newspaper report as being Jack Gough's home address.  These are the reasons I believe my grandfather, actually Harold Boyle, was "Samuel Lawrence".

The previous year, my grandfather had been sentenced to 6 weeks in prison for defrauding the War Widows' Pension Fund after getting heavily in debt.  Before the war, he himself had been declared bankrupt in Bradford, so he had a long history of inept financial management.  So, to me, everything seems to point to an effort to avoid further punishment for (possibly) defrauding someone - but was it my grandfather defrauding Jack Gough?  Or he and Gough colluding to defraud someone else?  I just find it puzzling.

Boyle, Butler, Yarborough, Baldwin, Midwood, McHale, Carter, Noble, Kay, Raper, Greenwood, Swift

Offline Jomot

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Re: Bankruptcy fraud?
« Reply #5 on: Friday 29 November 24 13:10 GMT (UK) »
The report said he had liabilities (debts) of £1,073 and assets of £30, so if he'd really taken the money himself and was hiding it under the floorboards, then he was defrauding the creditors.
MORGAN: Glamorgan, Durham, Ohio. DAVIS/DAVIES/DAVID: Glamorgan, Ohio.  GIBSON: Leicestershire, Durham, North Yorkshire.  RAIN/RAINE: Cumberland.  TAYLOR: North Yorks. BOURDAS: North Yorks. JEFFREYS: Worcestershire & Northumberland. FORBES: Berwickshire, CHEESMOND: Durham/Northumberland. WINTER: Durham/Northumberland. SNOWBALL: Durham.