HYNDMAND-JONES CJ

Our view of the question of rigorous imprisonment is that this should be sparingly applied, because on the one hand the case may involve a mere piece of commercial immorality and on the other hand it may involve a case of actual fraud. But it seems to us that it is not in all cases that rigorous imprisonment should be imposed, in fact the power to impose it should be exercised sparingly. So far as s. 107A is concerned it came from a Jamaica Act and was introduced into this Colony upon my suggestion to the Official Assignee that it was desirable that something similar should be enacted here. But whereas in Jamaica it is only provided that simple imprisonment should be inflicted, here a Judge may, if he thinks fit, order imprisonment of either description.

In the present case it seems to me that both the infringements alleged have been proved. The bankrupt was first charged that in making this note in November 1908, he had no reasonable ground of expectation of being able to pay the debt, and the Official Assignee has established on the evidence of the debtor himself that at that time the debtor was clearly insolvent, and it seems to me that in doing that the Official Assignee has established a prima facie case, the presumption being that if the debtor knew that he was insolvent at the time he signed that note he had no reasonable ground of being able to pay it, and I think that it lay on him to show that he had. This he has not done, and it is for this reason that I think this case differs from Ex parte Bayley re Ainsworth [1867] LR 3 Ch. 244 because there it did not appear that the people in that case knew that they were insolvent, nor did this appear in the case of In re Marks [1866] LR I Ch. 334.

It was also said in regard to this promissory note that it was a note given for an antecedent debt - for a debt contracted probably in 1906 or it may be earlier, and that it was very possible that this note was only renewing a note which began to run in 1907, and it was said that one ought to go back to the time when these debts were originally contracted. It seems to me however that in signing the note in 1908 this was contracting a debt, and in incurring this liability the debtor contracted a new debt. The result of signing such a note was that it might be discounted, and this was immoral if the debtor knew that he was insolvent. On this ground therefore I think the first case has been established.

Then we come to the other point as to whether the shipment of timber under the circumstances of this case was a rash and hazardous speculation. We have had the position of the debtor explained to us and at the time when he made this venture it was one which would make or mar him. His whole capital and also borrowed money was engaged in this transaction, so much so that after sending off the timber he ceased his business. Having regard to all the circumstances it appears to me that this must be regarded as a rash speculation.

The appeal must therefore be dismissed but the imprisonment will be reduced from rigorous to simple.

THORNTON J

The learned Chief Justice has gone so fully into this case that I do not feel that I can usefully add much, but as we are altering the sentence of the learned Judge in the Court below I should like to say a few words to justify our action in doing so, because although we agree with his conclusions we are altering the punishment. The reason is that a somewhat different feature has been put on the case by Mr. Fort, because the case was first put before the Court as a promissory note for value and the case now is that it was a renewal note and therefore the case was before the Court on a different footing. A renewal note may be given perfectly innocently, as for instance for an old debt or one barred by the Statute of Limitations, and in that case it would be a matter of honour, on the other hand a renewal note may be given for other purposes and it is for the Court to see as