W. Watson and Thorn

From Hotels of Ballarat
W. Watson and Thorn
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Town Ballarat
Known dates 1868
Other names Black Eagle Brewery

W. Watson and Thorn operated a brewery in Ballarat, <1868>.

Site[edit | edit source]

The brewery was in Ripon Street[1], although in 1889 it is described as being in Ascot Street.[2]

Background[edit | edit source]

The brewery had opened in 1859 as the Black Eagle Brewery and operated by W. and J. Martin, then J. Martin and Brooking, then J. Martin and W. Robertson, then W. Watson and Thorn. Watson operated the brewery and sold it to Upton. The brewery was described as "long gone" in 1889.[2]

History[edit | edit source]

In May 1868, there was a complex legal case involving an insolvency claim on Watson. It was proved that Watson had acted fraudulently in trying to sell the hotel to his brother-in-law in order to avoid paying other creditors:

CIRCUIT COURT. Civil Jurisdiction. Thursday, 30th April. (Before his Honor the Chief Justice.) Simson (official assignee in the estate of Watson, insolvent) v R. S. Mitchell—Mr Michie, Q.C., with Mr Fellows for the plaintiff; Mr Ireland, Q.C., with Mr Billing for the defendant. This case was now resumed. D'Urban Robertson, at one time traveller for the insolvent Watson, deposed that Upton and Co. now held the brewery, and had the same vats and a few other things, as casks, &c., that were there when Watson was in possession. At the sale by Mr Deeble, Messrs Magill and Coghlan bought a good many casks. The tun was made of pine, but witness could not estimate its value. Started on 6th June to collect the debts for the defendant, and by the 24th he had collected the sum of 248l 2s 6d. Witness explained that he, personally, collected only 191l 12s, Mr Mitchison adding the balance to the sum of collections. What witness collected he paid over to the defendant. The agreement of lease of a chaff-cutter to Clement Etter made Watson the lessor, but the defendant directed Watson to substitute another lease, in which he (Mitchell) would be the lessor. That was about a month or a little more before the sale. Joseph B. Naylor, late bookkeeper for Watson, deposed that he so acted from about the middle of March, 1867, till the 4th June, 1867. He could not remember the number of casks in stock when he was there, but it might be about 40. There were two vats and a mashing tub, the vats being worth 30l or 40l, and the casks, 7s 9d to 8s 6d each.

Joseph Southward (Southward and Sumpton) deposed—I know Watson. We had no bills from them, but we had two from Bamber, who lived in Bullarook. He bought for 800l our store and hotel there, and the first two bills in payment were to be his own and the others Watson and Thorne's. The bills were endorsed to us, and we sued on one. Mr Fellows—He (Watson) told us last night the bills were given for your accommodation —that you were hard pressed or something. Witness—Twelve or sixteen months' bills would be of very little use for us. In fact, the bills never went out of our possession. I estimate the brewing property at 500l or 600l. Cross-examined—I am responsible for the costs of this action. I was not asked to sign the paper with the other creditors. Bamber wanted terms, and we agreed to take bills, and that Watson and Thorne's bills should be accepted. It was one of those we sued upon. This was the plaintiff's case.

Mr Ireland submitted that no case of fraudulent preference had been made out. Where the transfer of chattels was not purely voluntary and in view of insolvency, fraudulent preference could not be charged. In this case Watson was threatened with being sold up for rent, and there was no evidence of insolvency having been at that time contemplated. Counsel cited a case in Fisher's Digest in support of his proposition, and contended that there was no evidence to support a case of fraud. Mr Billing cited Harris v Bank of Australasia, and Lord Westbury's dictum (Law Report, p. 34S) as bearing on the point submitted, the gist of which was that the transfer by the insolvent must be ex mero motu to make the preference fraudulent. Watson said he selected Mitchell because Mitchell threatened to sell him off, and because he thought if he satisfied Mitchell he might be allowed to go on. So there was neither a voluntary act nor a contemplation of insolvency to bring the case within the law of fraudulent preference. In the case Young v Billiter (House of Lords case) the judges gave a very elaborate judgment, in which it was held doubtful if the assignee had any action at all. Mr Michie held that it was purely a case for the jury, and said the case cited first was that the action by the bankrupt was not " necessarily" a fraudulent preference. The quality of the act was to be determined by all the accompanying circumstances, and the hocus-pocus work of handing a cheque by Mitchell and handing it back by Watson showed a previous arrangement. Watson admitted that Mitchell had found out he was being sued by Southward and Sumpton, and so, to save themselves, the two brothers-in-law entered into the arrangement, which was evidently fraudulent, for Watson had said "I was not to do as I liked with the money." The sale too was quite correspondent to the rest of the sham, an Mitchell prevented the auctioneer from selling at the best price, and caused the property to be sold to his tool at a merely nominal price. In fact the whole transaction was tainted with fraud from beginning to end. Mr Fellows, on the same side, remarked that the pressure alleged was a part of the concerted arrangement to give a color of bona fides to a really fraudulent transaction. The " pressure" in fact was no pressure for payment of the debt, but to secure the property from the other creditors.

His Honor reserved the points raised, and Mr Ireland then addressed the jury for the defence, pointing out that the action was not really the assignee's, but Southward and Sumpton's. Mitchell had put his half brother, Watson, into business, and the bill of sale was not to pass property belonging to the insolvent, but to secure Mitchell's own property, as between landlord and tenant. It was said to be a sham cheque for 800l, and that the whole affair was a fraud between Mitchell and Watson in view of a contemplated insolvency. That was what the jury were invited to believe, but it was incontrovertible that the 800 cheque and bill of sale represented an actual debt due from Watson to Mitchell. Such a transaction then, and one carried out under legal advice, could not be considered as a fraudulent one, for Mitchell was bound to do as he did to protect himself, and the pressure therefore was bona fide and Watson's action was not voluntary.

Richard Septimus Mitchell, the defendant, deposed that when Watson gave the bill of sale he owed witness 800l. There were 280l due for rent, besides the cheques and bills put in. Watson and Co. had the brewery at 2l a week rent and the right of purchase at 400l. Witness heard a bill had been dishonored by the firm, so he went and told Watson he must give security for the debt or be sold off. Watson begged for time, and eventually the bill of sale was given for the 800l debt, the cheque for 500l being given by witness to his attorney and Watson having back most of the money next day. Cross-examined by Mr Michie—I gave all these cheques at the dates they bear. I could not get any rent from him and had to advance him money too. I was aware he was incurring other liabilities, some of which I paid, and some of which I have not paid. The plant belonged to myself. Mr Michie—But why sell your own property? Witness—No brewing was going on at that time. Watson had closed. Not at my instance. Upton is now in, and paying 2l 10s rent. I got back 791l of the 800l cheque. Watson landed here in 1863, and I advanced him money. J. Cadden, clerk to Mr Harris, and late clerk to Messrs Woolley and Harwood, was called to prove a signature to a notice in the proceedings. A document, purporting to be a notice of claim by the plaintiff, was tendered, but his Honor ruled that it was inadmissible.

This was the defendant's case, and counsel having replied, his Honor charged the jury, telling them that insolvency was no disgrace if it were honest insolvency; but the question here was had the insolvent Watson given to the defendant a fraudulent preference? A feeling of gratitude to Mitchell might be laudable, but not if it were exercised at the expense of the insolvent's other creditors. It should be shown by a man doing all he could after insolvency to pay his debts due to the friend whose kindness evoked the feeling of gratitude. If a man in trade denuded himself of all he possessed, he naturally did what made him insolvent if other debts were owing. Mitchell said he acted under advice, but his Honor regretted he ever should have got such advice. If Mitchell's aim were honest such a juggle as that was not necessary, and the professional man who gave the advice must have forgotten himself at the time. And what was the pressure alleged on the insolvent's part? Not such a one as would ordinarily be understood by the term, for the point was not what Watson considered he owed in honor to Mitchell, but what as between creditor and creditor he was really indebted to Mitchell. The passing of a cheque to be returned was no honest purchase, and if the alleged pressure were real why should Watson seek to conceal the transaction? Watson bluntly admitted his reasons for concealment, and that act of Watson really required more of the jury's attention than Mitchell's own act. The jury would then find whether or not Watson did really act from pressure or to favor Mitchell over the other creditors. The jury retired and found for the plaintiff for 120l on the first count, and for 232l on the second count.[3]

The People[edit | edit source]

See also[edit | edit source]

References[edit | edit source]

  1. Cite error: Invalid <ref> tag; no text was provided for refs named star70
  2. 2.0 2.1 1889 'BALLARAT CHRONICLES AND PICTURES.', The Ballarat Star (Vic. : 1865 - 1924), 28 September, p. 2. (Ballarat Star (Vic. : 1865 - 1924)), viewed 15 Apr 2018, http://nla.gov.au/nla.news-article209458669
  3. 1868 'CIRCUIT COURT.', The Ballarat Star (Vic. : 1865 - 1924), 1 May, p. 4. , viewed 02 Jan 2020, http://nla.gov.au/nla.news-article113603011

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