An Account of a Creditors Meeting Held in Thomas Clarkson's Office

By 1869, Thomas Clarkson of Toronto had made his name as an official assignee. He had many clients, and one of particular interest was J.G. Beard & Sons, a long-time Toronto business that manufactured cast-iron stoves and also imported grain for distribution. The following is the summary published in The Globe newspaper of the creditors' meeting that took place in Thomas's office on May 11, 1869:¹

A meeting of the creditors of the estate of the late J.G. Beard was held yesterday in the office of Mr. Thos. Clarkson, Official Assignee.

Mr. Taylor occupied the chair, and Mr. Roaf, Q.C., appeared for Mr. Myles; Mr. Morphy for Mr. Leeming, of Montreal; Mr. Patterson for Mr. W.H. Taylor; Mr. E. Crombie for the Bank of Montreal; Mr. W. Beaty for Mr. Seese, of Montreal; Dr. Smith for the Bank of British North America; Mr. T. Ferguson for several creditors, and Dr. McMichael for the Insolvents.

Mr. CLARKSON stated that the liabilities of the late firm of J.G. Beard & Sons amounted, so far as ascertained, to $116,215, though there were other claims not yet put in, which would probably amount to $13,000. In his capacity as official assignee he had collected sums due to the estate to the amount of $675.

Dr. SMITH proceeded to examine.

GEO. BEARD was sworn and deposed—We never discussed the date of our insolvency; I don't know when we became insolvent; I don't remember that the case book was ever added up; this is my cash book; it does not appear to have ever been added up; the books were never balanced; we have taken stock of the stoves, but I do not remember when; we estimated our stock in 1865; the result of a general estimate made some time between 1865 and 1869, convinced me that I was solvent; don't remember making any representations to creditors concerning the state of affairs since 1865; I opened accounts with the City Bank and the Bank of British North America, but I do not remember making any representations to the Managers of these Banks; a mortgage for $4,000 was made by Robert Beard to J.G. Beard, my brother and myself, and assigned by us to Mr. Rutherford; I never went to Mr. Rutherford to give me a letter showing that the property was only encumbered by $6,000; he gave me a letter stating that he held $6,000 against the property.

The witness here explained that the mortgage for $4,000 was made by Robert Beard to Thos. Grimshaw, and assigned by him to J.G. Beard, and also that Mr. Rutherford held a mortgage against the property referred to for $6,000.

WITNESS resumed—The money for the payment of Rutherford's mortgage came from the old firm; my impression is that we contributed equal shares to this sum; my father advanced the money to build the elevator; there is no entry of that transaction in the books; he was not a partner at that time.

Mr. FRASER said that it was very strange that business men should expend $31,000 on an elevator without entering the receipt or expenditure of the money. He would like to ask why such an entry was not made.

WITNESS could not say why this was not done. The elevator property carries an encumbrance of $10,000, advanced by one Yates, of New York, a relative of witnesses' brother.

To Mr. SMITH—Mrs. Yates holds the mortgage; she lives in New York State; we had no account with her; the mortgage was made by my brothers and myself; I refuse to say if anyone else joined with us in the making of the mortgage; I refuse to say in what capacity I acted when making this mortgage; Mrs. Yates gave us the money at different times, and she gave part of it in promissory notes; she was in Toronto when she gave me the notes; I sent some of the notes to Montreal, but I used none of them in this city; these notes were payable three or four months after date; I do not know whether they are paid or not; I do not remember how much money Mrs. Yates advanced; when I received money from her I gave her acknowledgements therefor; I never paid her any interest; the elevator property is not leased at present; I don't remember when I saw Mrs. Yates last; I never enquired after the notes given by Mrs. Yates; the present foundry was built with the money arising from the insurance of the one consumed by fire; the insurance policy was held by J.G. Beard & Sons, who, I suppose, paid the premium; I do not know who the foundry belongs to; the foundry was insured for $4,000; I got the $4,000; I don't know that this sum is entered in the books; I think there is a foundry account in the books; the mortgage given to Mrs. Yates covers the foundry as well as the elevator; I have not given Mr. Clarkson all the warehouse receipts which I received for stoves sent to Milloy's wharf; I gave him all I had at the time of the assignment, the other were sold to Alderman Strachan and Mr. Milloy. Mr. Strachan keeps a grocery store; he paid me in bills in his own store; Don't remember that anyone was present when he paid me; he paid me as much as $800 or $900 at a time; I also sold receipts to Mr. Hugh Miller, druggist; cannot say that he is going into the stove business; he bought at the rate of 2 1/2 cents per pound; he bought over $1,000 worth from me and gave me promissory notes, some of which are paid, and others are still outstanding; he holds the receipts, and the stoves are still at the wharf; I heard there was a Sheriff's execution against me, but I did not tell Strachan or Miller this. The Assignee has the balance of the warehouse receipts. We had some of Strachan's accommodation paper at the time of this transfer of the receipts. We may have sent stoves to Brockville in December. We may have sent to the number of 40. I never heard of our stoves being sent to Brockville and brought back again.

To Mr. FRASER—There were not 1000 stoves formerly belonging to the firm of J.G. Beard & Sons sold by E.J. Beard & Co. to Messrs. Ives & Allan of Montreal. There is a mortgage for $12,000 on the coal yard. We owned the schooners J.G. Beard and Australia, but they were sold on credit. There is nothing in the books to show this transaction. There was no money paid on these vessels, but we took a mortgage for the full amount.

S.W. BEARD, being sworn, was examined by Mr. Fraser, said—I know nothing of a cargo of coal which was frozen in on the Chambly river last winter. As far as I am aware I have given up my estate to my creditors. At the time Mr. Kerr took possession of the books and papers, he took away all the books and papers belonging to the estate, and I have not seen them since; I have none of these papers or books now in my possession.

Mr. FRASER—I ask you, before Almighty God, did you not secrete any books or papers between Mr. Kerr's first and second visits.

WITNESS—I did not do so; neither did I instruct any one to do so; nor do I know of any one that did so.

Mr. Fraser read an affidavit made by one E.H. Butler, of Montreal, who deposed that he had been with Mr. Kerr at the time the books and papers were taken, and that to the best of his knowledge none of them were lost in transmission. Mr. Fraser also explained that several books were missing.

WITNESS resumed—I handed over all the cash balances that were in the bank to the Assignee; the sum of $1,800 was paid to one Mr. White, but no entry thereof was made in the cash book.

The meeting then adjourned with the understanding that an examination would take place before His Honour, Judge Duggan, today, at noon.

It should be no wonder to readers that Thomas and his son, E.R.C., who would succeed him in this business, would see the need to provide accounting services to Canadian businesses such as this one. E.R.C. would successfully take the official assignee business and make it into a firm that dealt in both bankruptcy and accounting.

Footnotes

¹"The Beard Estate", The Globe, May 12, 1869, p. 2.