The Sun.
London, England, 1869-01-27 00:00:00

TEE CHARGE AGAINST THE DIRECTORti
OF THE MERCHANTS COMPANY

At the London Mansion House, the Lord Mayor yester.
day proceeded with the adjourned inquiry into the alleged
fraud by:certain of the directors of the Merchants' Company
(Limited). The inquiry was opened last Monday week,
and was adjourned. The court was crowded to excess,
and considerable interest was manifested in the pro•
ceedings.
Mr. Metcalfe and Mr. Taylor appeared for the
defendant Mr. Chapman, Mr. Lewis for Mr. Lane, and
Mr. M. WillianiS for Mr. Helbert.
Several witnesses were called but did not answer to
their names, when it was discovered that the summonses
had been issued for 12, not 11 o'clock.
Mr. Capes, the official liquidator, residing at 8, Old
Jewry, said that he was the official liquidator of the City
Merchants' Company. He was appointed under the
order of the Court of Chancery, and it was either in
December 1866 or January 1867.
Mr. Humphrey : Can you tell me whether, on the Ist
May, 1866, Colonel Daubeny transferred any shares to
Mr. Lane ?

Witness: On that day Richard Stuart Lane trans-
ferred to Colonel Daubeny 250 shares, on which only
£l5 had been paid. Edwin Fox, 25, Lea,denhall-street,
applied for 50 shares, and 25 were allotted to him. This
was on the 7th October, 1865. Alexander Gordon,
Winchester-buildings, applied for 40, and 20 were
allotted to him, on December 10, 1865. On the 27th Sep-
tember, 1865, Henry Edmund Gurney applied for 500
shares, and 300 were allotted to him.
Mr. Lewis said that his lordship must know that this
was the case in all companies, and surely Mr. Humphrey
was not to waste the time by going through these details.
Mr. Humphreys said that he must proceed step by step
to show that there was a fraud in these transfers. He
would ask the question whether the shares of Mr.
Albert Grant were transferred.

The Lord Mayor said that he could not allow any
questions about these gentlemen to be asked.
Witness : They were transferred to Edward Chapman.
Mr. Lewis challenged Mr. Humphrey to shew the
tranfers, and they would shew the money that had been paid
for them. He was sure that his lordship would not allow
anything to go forth to the world against these gentlemen.
If they liked to increase their holding in the market, what
had that to do with anyone ?

'The Lord Mayor said that nothing relative to any other
person but the defendants could be asked about these
transfers unless it could be shewn that he had any connec-
tion with them.

Mr. Humphrey said that as the books were in evidence
he should say that everything contained in them was
evidence. He should shew that Mr. Heritage was solicitor
to the company.
Mr. Humphrey said that the best plan would be to see
whether the shares were transferred to the directors first.
The witness said that in October 1865 Mr. Heritage
applied for fifty shares, and had that number allotted to
him. On the 11th December they were transferred to
Mr. R. Stuart Lane, and approved on the 12th December,
the directors present being Lane, Chapman, Childs, Pem-
broke, and Gotheimer.

Mr. Humphr,y : Now, just tell me, and find the appli-
cation of Mr. R. Stuart Lane ; but I think that there is
one before that.

Witness : Mr. Lane's application is dated 28th Oct.,
1865, and it is for 500 shares ; 450 were allotted.
Mr. Lewis : Does it say there is anything paid on
them?

Witness : Yes ; there is £1 on application and £4 on
allotment.

Mr. Lewis : £5 paid altogether?
Witness : Another allotment was made of 250 shares
in May 1866 to Mr. Lane, and £lO was paid on
them. This transfer was made on the 22nd May, and the
approval of it took place on the same day. The directors
present were Lane, Daubeny, Chapman, and Pembroke.
The latter applied for 200 shares, and 200 were allotted ;
and he made a similar application afterwards, and it
was granted. On the Ist December, 1.86i1, the question
of advance on 600 shares bought in the market
was gone into, and it was agreed that a part purchase for
six months of them should be made on the guarantee of
Messrs. Lane, Hankey and Co. The particulars were in
the minute-book, folio 9. The proposal of Messrs. White
and Co. to advance at 6 per cent., taking 1,000 shares In
the Merchants Company, was considered and acceded to
by a minute of 9th October, 1865, as entered in folio 9.
Mr, Humphrey: Is there not a resolution as to a call
upon the shares?

Witness : It was resolved on the 19th, 1865,
that there should be a call of £5 per share, payable 15th
January 1866. A letter was here read stating that the
Company was very flourishing, and that they did not
expect to make any further call at all events that year. It
also stated that this was done by the desire of some of the
shareholders. On 26th May 1866, a resolution was
passed that there should be another call of £5 per share on
all those shares that had not paid up £l5, payable on sth
June, 1566. On this occasion Lane, Daubeny, Helbert,
Childs, and Pembroke were present. (Another circular
was read, which stated that though there had been great
losses in the money market, that company had ma le
none. But for the security of the company it was thought
necessary to make another call.)
Mr. Humphrey : Where did you get those two cm
culars from ?

Witness : From the papers of the company when I
took possession of them.
Mr. Humphrey : How much did Horace Edward Chap-
man pay on his 450 shares which were allotted to him ?
Witness : £2,250.
Mr. Humphrey : I suppose neither of the two calls
were paid by him?
Witness : No ; when he had another 100 shares he
would be debited £lO on each. In folio 82 there was the
account of D. W. Chapman, and it appeared that he had
paid £1,250 on 250, and he had paid neither case. The
account of James Daubeny shewed that he had paid
£1,250 on 250 shares, and there was owing one call £1,250.
The other was transferred to Colonel Daubeny. He found,
on referring to Mr. Helbert's account, that £2,250 was
paid on the 450 shares ; that was deposited on the first
call, and he was debited with £9,250. It is deposit and
allotment on 450, the first call on 450, the second call on
700, and the transfer of 1,250 shares.
The Lord Mayor : Do I understand that when the
transfer took place that amount was owing by Daubeny?
Witness : Yes, my lord.

The Lord Mayor : Could that transfer be made
properly ?

Witness : Of course not.

Mr. Lewis said that the articles of association did not
prohibit it.

Mr. Humphrey said that they had proved that it could
not.

The Lord Mayor, on reading the articles, said that he
supposed they relied on the word " may."
Mr. Lewis said of course they could transfer, but the
directors had power to investigate each case. He thought
the articles said nothing of the matter, because Mr.
Humphrey said so. (Laughter.)
Mr. Humphrey : Now turn to Mr. Lane's account.
The witness did so, and said that it was folio 441.
On the debit side, October 1865, on 450 shares
there was £2,250. The second debit was on 750, and
amounted to £3,550, and, in June, interest £l5 12s. 6d.
His account was accredited by shares forfeited, bills re-
ceivable, and cash to the amount of £9,365 12s. 6d. The
cash, putting aside the forfeited shares, would amount to
£6,615.

After some further evidence, the court adjournea.

An arrest has been made in connection with the
murder of Mr. 43aker, at Bansha, county Tipperary. The
man taken into custody on suspicion is named Patrick 'yno.
The Church Association, who were the prosecutors
in the case of Martin v. Liackonochie, have determined on a
course of addresses in London, which will commence in a
few days, on the subject of Ritualism.
A Cabinet Council was held on Tuesday, at the
official residence of the First Lord of the Treasury, in
Downing-street. The Ministers present were—the Right
Hon. W. E. Gladstone, the Lord Chancellor, Earl De Grey
and Ripon, the Earl of Kimberley, the Right Hon. H. A.
Bruce, Earl Granville, the Right Hon. E. Cardwell, the
Duke of Argyll, the Chancellor of the Exchequer, the
Right Hon. Hugh Childers, the Right Hon. J. Bright,
the Right Hon. G. J. Goschen, and the Right Hon. C.
Fortescue.

PUGILISTIC LAWYERS.—The amenities of the
American bar are not always of the highest kind. The
defending attorney in a murder case at Nashville under-
stood the Attorney-General of Tennessee to say that he
lied, whereupon he struck him at the back of the head.
A hand-to-hand fight ensued, and the parties were finally
separated. The Attorney-C eneral then explained that
his learned friend had misunderstood him, and that he luol
intended no insult whatever. The judge smiled serenely,
related an anecdote appropriate to the occasion, and
trusted that the little incident would be forgotten.
A CLERGYMAN BECOMING LA.YMAN.—The Mel-
bourne Argus states that the Rev. 111 r. Macartney, of Rose
dale, has " left the Ministry of the Church of England
with a view of devoting himself to public life." In taking
leave of his congregation and friends at a farewell soirée he
stated that a clergyman in Australia is in a highly unsatis-
factory position, being chained down by popular or vulgar
prejudices, and regarded too much in the light of a gentee
mendicant or dependant. Ile was not in the necessity o
remaining in that position, intending to devote himself
politics and the bar, and hopes soon to procure a seat ire
•--
Parliament.