The Express.
London, England, 1867-06-20 00:00:00

OVEREND, GURNEY, AND CO,

The following important circular has been ad-
dreamed by the Committee of the Defence As.,o-
ciation of Overen'l, Gurney, and Co. (LiMited) to
the " alleged" shareholders :
39, King-street, Cliespahle, June
We rejoice to be able to inform you that the decision of
Vice-Chancellor Malin' has been virtually ovemiled. He
held that the shareholders were entitled to be eerj„.ed
against the company, but that they were under a liability
to creditors, and had no right to be taken off the list of
contributories until the whole of the debts of the COOlptoy
were paid. He also held that the company was • partner-
ship in every sense of the word, and was incorporated
merely for convenience, and that there had been no Altera-
' tion in the principle of the law by the new zee..
In the recent case of the Reese River Silver Mining Cam.
pany, before the Lords Justices of Appeal, they removed
the name of Mr. Smith from the list of contributories OP
the ground that he had been induced to become a share,
holder by an untrue prospectus, and held that he was not
liable to creditors. That ease is precisely the woe as
ours, with the single exception that Mr. Smith had die.
covered the fraud before the winding up, and had filed
a bill against the company, whereas you felollilled
ignorant of the fraud until it was exposed by us,
Lord Justice Cairns drew the brotd distinction between as
ordinary partnership or unincorporated company and a
corporation such as Overend, Gurney, and Co. (Limited),
and said that with regard to such a corporation, there vu
no contract whatever between a creditor and a shareholder,
and that when the legislature introduced the principle of
liability it was absolutely necessary to give effect
to that principle by setting up the company, and the corm
pany alone? as that with which the creditors could contract.
His lordship also said that creditors must take the risk of
shareholders having the right to have their names taken
off the list if they can prove that they have been fraudu-
lent)y inserted, and that he therefore thought that the
fact that the interests of creditors were involved in the
winding-up did not alter the matter at all, and that Mr.
Smith was entitled to hrve his name removed from the
list. The Master of the Rolls lies since declared his entire
concurrence in those observations, and has moreover
stated that if the shareholder comes to be re
Hewed with the utmost promptitude after knee.
ledge of the fraud, he is entitled to relief notwith-
standing that the company may be in course of winding up.
We may now, therefore, speak with the utmost confidema
as to the result of the appeal pending before the House
Lords. Before Smith's case was decided, Vice-Chancelle
Malin directed a further call of 101. per share so be sisdr,
notwithstanding the able opposition of Mr. Linklater,
The great confidence often expressed by the Vice-Clii.
eellor in his own judgment (now judicially declared to 4
erroneous) induces us to doubt whether be would hre
been in any way influenced by Smith's case, or by the fel
that the committee of the House of Lords has, at our m
stance, refused to recognise Mr. Oppenheim (the winked
creditors' representative) as a party to the pending mall,
upon which he cannot therefore Amur. The order of die
Vice-Chancellor for the further call will be enforced, rai
less we can successfully oppose it on appeal to the basil
Justices. It is alleged by the liquidators, that the snits
are nearly if not quite sufficient to pay the remnant
debts of the company. Our solicitor has very phial])
shown that, assuming the correctness of the estimates el
the liquidators, no further call ought to be made, and we
shall not be guilty of impropriety if we express the min
vernal sense of the shareholders, that a further call 01
1,000,000 i., which is expected to realise about 800,000/.. is
an absolute and cruel injustice in the present position of
this ease. We have therefore been urged by large and
influential shareholders to oppose such call, and to ruse
the funds necessary for that purpose, and for the due
prosecution of the appeal, by a further contribution of
per share from all the members of the Defence Animation,
and from those who may now be willing to join it.
The confident expectation of success created by the recent
decisions has induced many to jointhe Defence Aseociatioa,
and we trust that all who are not mere largely interested
as creditors will see it to their interest to unite in this
common object. We have, therefore, to request that you
forthwith remit to our secretary, Mr. Oswald Howell, of
39, King-street, Cheapside, your contribution of as. per
share. We also earnestly entreat you to induce others
who have not joined the association to do so at once. We
have the honour to be, !e.,

ADAM THOM: LL.b., ChAiiIMAR,
THOMAS CLARK, }Committee.
FRIDERWK DIVHDAS,