The Express.
London, England, 1867-01-22 00:00:00

THE EXPRESS, TUESDAY EVENING,

way on Tuesday List. No complaint against this
practice ha. eve. been made to me. The inhabitants of
the atljoinilig niansiowi *saunas the privilege of breaking
the ice at the edges, and using the water, and I have serer
interfered to put a stop to it. They break the ice with
the same object that we do—that is, to prevent the people
front getting on to their grounds. The water is principally
supplied by land drainage. In the summer we have a
supply from the Middlesex Water-works, but there has
been no necessity to obtain any front this source during the
last eighteen months. lam not aware that there has been
any extra drawing off recently. The water, when the
sluices tue'open, escapes into a sewer.
• By the Jury—The pnvate gates were open as a pre-
caution, to prevent the railings mil fencing. of the park
from being damaged. I know no means of emptying the
lake except by the existing outlets, and it would require a
month to draw the water otf by that means. The steepest
part of the lake is about 12 feet, of which 2 feet at least is
composed of mad. In the shallow part the mud is
18 inches deep, and is of a very " sticky" nature. Formerly
the sewers of the adjoining residences emptied themselves
into the lake, hut that is not the case now, nor do any of
the houses obtain their water supply from this source.
The area of the water is about eighteen acres, and the ice
broke on six. A sewer passes antler the lake at a depth
of Ig or IS feet, and I believe a trench might be made to
get into it in the space of a day or two. If emptied in this
manner there would be difficulty in getting water to
811 it up again.
Mr. Charles Burrows, the acting superintendent of the
D division of police, before the court adjourned, asked
permission to snake a brief statement in reply to the ob-
servations that Mr. Young had nettle with reference to the
power possessed by the police. He said the police had
power to arrest any one on the ice who was guilty of tres•
passing, doing wilful damage, or committing any other
offence against the law. He iad done duty in and about
the Regent's-park for the last twenty years, and he had
never been applied to for assistance by any of the Humane
Society's men. •
. .

In reply•to questions from Mr. Young,
Mr. Burrows admitted that he had told that gentleman
he had no power to prevent the people going and remain-
ing on the ice where it was considered to be unsafe. He
did not understand that Mr. Young had made an applica-
tion to hint to interfere in any authoritative form.
The Coroner said be proposed now to adjourn until that
day week. In the meantime, though he hoped it would
not be the case, other bodies might be found. Five of the
persona whose names bad been published as missing had
turned up, and he trusted that the others would be
.dis•
covered to be still alive.

Lain inteilfgentt.

EQUITY COURTS.—JAN. 21.
(Before Vice-Chancellor Molina.)

RE OVERLND, GURNEY, AND CO. (1.1)117E14-OAKES' AND

14E01 CASEY.

Mr. Mellish, of the common law bar, following Sir it.
Palmer, for the official liquidator, stated in reply to ques-
tions from the Vice-Chancellor, that so far as he was
aware no change took place in the board of directors be-
tween the formation of the company and it. stoppage, and
that there was no dividend declared, the meetings being
annual and not half-yearly.
Mr. Glasse mentioned that the provisional liquidator
made a report, from which it appeared that the company
earned a grata profit of 2-,3,000f., and a net profit of
221,0001.
Mr. Melliab, in applying himself to the question of law,
assumed, for the sake of argument, that the Attorney-
General bad succeeded in making out that his clients
were induced to become members of the company by
fraudulent representation, though in his opinion that
was an allegation which could not be sustained. But the
question was really and truly a legal one. It was
true that the legislature had deprived creditors
of all remedy in a common-law court in the case of a com-
pany being wound up, and had confined their remedy to
the Court of Chancery. But that arrangement was made
simply for convenience of administration, because the
common-law courts had not the machinery which would
enable them to settle such complicated matters. The
simple question was whether Mr. Oakes was or was not
a member of this company within the meaning of the :18th
section of the Companies' Act of 1862, at the time of the
winding up. That section enacted, that in the event of a
company formed under the act being wound up, every
present and past member should be liable to contribute to
the assets to an amount sufficient for the payment of the
debts and liabilities; of the company, the costs of the
winding up, and such sums as might be required for the
adjustment of the rights of the contributories amongst
themselves, with the qualifications that past members
should not be liable, after one year from the date at which
their membership ceased, and that in limited companies
no contribution required from any shareholder should
exceed the amount unpaid upon his shares. He con-
tended that Mr. Oakes ought to bo liable in this cue,
because he held himself out to the creditors as a
member • but the point on which he relied was
that Kr. Oakes really was a member within
the literal meaning of the Stith section. It
was an established rale of law that • contract
procured by fraud was not a void contract, but was void-
able at the option of the party defrauded, and could only
be rescinded subject to the rights which innocent third
parties had acquired through the contract. The first ob-
ject of the original Winding-up Act was to enable share-
holders to obtain contributions inter se, in order that the
whole burden of the debts might not fall upon a few
selected members, and the substitution of winding up in
Chancery for proceedings by judgment, was a mere
change of machinery for greater convenience, and
was not intended in any way to alter the poai-
tion of creditors with regard to persons who were
members of the company. The learned counsel
cited, in support of his argument, that a contract tainted
by fraud was only voidable at the election of the party
defrauded, and could not be set aside to the prejudice of
third parties' the judgments of Lord Campbell
, in "The
Deposit Life Assurance Company r. Cryst, Henderson
ro. the Royal British Bank,,. and " Daniel r. the
Royal British Bank ;" and contended that the le-
gislature, in giving to companies the position of
a corporation, had no intention to alter the
principle upon which their decisions were founded.
But he submitted that all the authorities before 1862
might be set aside, and that there was no case under the
Act of 186?, to which they could refer upon this question
of whether a person induced by fraudulent representa-
tion, to take shares in a company, and who had not dim-
covered the fraud or repudiated his liability up to the
time that the winding-up order was made, was liable as a
contributor in the liquidation, and that therefore the Act
of 1862 had to be construed now for the first time.
In answer to the Vice-Chancellor,

Mr. Roxburgh said the directors of this company were
not elected by the shareholders, but were appointed by
the articles of amociation.

Mr. Mellish proceeded to argue that there was not in
this case such legal fraud as would make the contract
voidable at law. To constitute a legal fraud at common
law, them must be moral fraud, and it wax a misfortune
that the word had been applied to transactions which did
not involve any moral fraud at all. To make this pros-
pectus fradnlent at law there must be either some
representation of what the directors knew to be
untrue, or a reckless representation as to which they did
not know whether it was true or false. No one could read
this prospectus without noticing that it contained no state-
ment of assets and liabilities, no mention of the profit which
hid been made of late years, and in fact no information
whatever with respect to the affairs of Overend,Gurney,and
Company, and the natural inference would be that it was
purposely silent upon these points. No man of sense could
fail to see that from some cause or other the state of affairs
was purposely concealed, and if the assets and liabilities
and the profits had been truly stated by the members of
the old firm to the directors of the limited company, and
they came to the conclusion that the terms were such as
could not fail to ensure a remunerative return, their judg-
ment might be a mistaken one ; but the statement of it in
the prospectus oould not be •fraud. It was admitted that
• full revelation of the affairs of the firm was made to
the incoming directors, and it was idle to say that they
did not bona fide believe in the success of the concern, for
they proved their confidence by the large amount of their
own money which they invested in it.
Mr. Roxburgh, on the Rams side, bad nothing to add to
the arguments of his leaders.
Mr. Cole, who appears for Mr. Oppenheini and other
creditors of the company, observed that nearly 3,000,000/.
of the amount of the creditors claims were at present
unpaid, and it was proposed by these motions that they
should look for their money to seven or eight gentlemen
whose liability was limited by the act of parliament to
1140,0001. originally. This company was in operation only
nine months and ten days. and in that time the cash re-
ceived amounted to 197,327,7961., and the cash paid to
197,661,365/., bringing the total of the transactions up to the
enormous sum of 3941 millions. He was surprised that
696 persons should be found to give countenance to an
application of this kind, which he was confident would not
be accorded to by the court.
Replying to the Vice-Chancellor,
Mr. Roxburgh stated that Mr. Peek bought 1,000 shares
in October, 1865, at 7 3-16 and 7i premium, and another
1,000 shares at 6f premium, in December.
Mr. L. Webb, who was with Mr. Cole, drew attention to
the distinctions between Ship's case and the present.
Mr. C. Barber appeared for Mr. John Stephenson, •
private gentleman, who deposited 12,000/. with the com-
pany • few days before it stopped payment and who ob-
tained from 'Vice-Chancellor Kindersley leave to attend
these proceedings at his own expense. He contended that
there was nothing of • false or fraudulent character in the
statements of the prospectus, and that the names of Mr.
(lakes and Mr. Peek must remain upon the list of con-
tributories.

The Vice-Chancellor did not wish an imputation to rest
for a moment where it was not deserved, and he believed
that there was no intention to charge the direction with
anything in the nature of a fraud. There was no doubt
whatever that all that was done was done in good faith,
grave and lamentable as was the mistake they committed.
The point which the Attorney-General pressed was, that
if these gentlemen had told the public all they knvw, they
would in all probability have been unwilling to embark in
an undertaking which had contracted so large an amount
of bad debts.

Mr. Bristow° opposed the application on behalf of two
persons representing shareholders who admitted their lia-
bility. His clients were Mr. Bowker and Mr. Peek, soli-
citors of Gray's-inn, who held eighty shares each as origi-
nal &Rotten, and who had paid their calls ; and be sub-
mitted that it would be a very hard cue if those who
acknowledged their just debts were to have their liability
increased the success of such applications as these,
to say nothing of the gre►t delay and expense which at-
tended such proceedings.
Mr. Muse, with whom was Mr. Foots, addressed the
court for Means. thirdon end Rennie, two of the directors
of the limited company who were not connected with the
old firm, arguing that the prospectus was drawn up in per-
fect good faith, and that the directors had good reason for
the view they took, that upon the terms stated the busi-
ness could not fail to beprofitable to the shareholders. Mr.
Rennie in his affidavit stated that the legitimate busine,
was very extensive and lucrative, and that be still believed
the good-will to have been worth 500,000/., and there was
nothing in Mr. Gurney's examination which in any way
contradicted that statement.

At the conclusion of the learned counsel's address the
further hearing of the case was adjourned till tainorrow
(this day).

COURT OF QUEEN'S BENCH.—JAs. 21.

Sittinp in Banco.—(Before the Lord Chief Justice and
Justices Blackburn, Mellor, and Lush.)