Morning herald., 1839-08-27

for mistaken or fraudulent valuation than in the real
estate Of this country. The evident object ef the
charter was To insure clear ndep .ndeRt payment in
cash, or security, the market value of which could
not well be mistaken without gross careessness. In
the promotion Of such object, every body con-
cerned, who became bona hde intere in the pros
perity of the company. The public are above all
in enforcing the strict observance OF such
regulations, because Relation opens the door to
gligence and fraud With all the guards imposed
upon moned corporations, complaints against the
abuses in their management have become so Numerous
and loud that many enlightened political economists
despair of reform, and have expressed strong desire
fur their gradual discontinuance.
In tie case at bar, the checks Of various indvdu-
ais, (and perceive the president of this company Is
among the number) to the extent of about one fifth
sfthe whole capital, admitted to have been cou
sive. 1t is not pretended that the drawers were in
fsnds; the contrary was known Instead of holding
surplus capital, the investment of which they were
desirous to improve, they come in the character Of
borrowers, the president taking a leading part in
transacting the loan with himself 1t out that
Howard 's-another borrswers-property was hea-
vily incumbered; and the company are perhaps pur-
chasers OF 1t at sacrifice. There is more than
mere formal difference between such proceeding,
and that Of first demanding cash, good stocks, at
the hands of independent capitalists and then loan
ing to strangers upon such strong personal and real
security as can generally be obtained by adverse
examination of title and value.
On the whole, / think have only to enquire,
whether there be probable ground for believing that
their charter in the particulars charged by Mr.
Motifs affidavit, and whether the transgression Is
legally available ground Of forfeiture. My con-
cusion both these questions is in the Affirmative
l am not disposed to deny that the offence may In
this instance, have been yenial one; that the mis-
take in taking bonds and mortgages may have been
an honest one. The charters Of several insurance
companies in this state have been furnished to me,
wherein they authorised to take security from
subscribers by bonds and mortgages on unincumber-
ed real estate. Seme of these charters passed be
fore, and since the date of the charter in ques
tion. 1t is drawback, however, upon the charta-
BILE construction which might be otherwise due
that mortgage like Howards on property seriously
incumbered should have been treated as equivalent
to cash. and that this and others to the amount of
$40 900 should have been colored over by checks
which clearly fraudulent 1t is to be regretted
that cons derable investments by innocent persons
should be jeoparded or impaired. But were such a
danger to Le received as bar, there would be an
end to the vsitoral power of the law Corporations
might always shield themselves from the conseGuen-
Of abuse. There was, perhaps, never case Of
suffering from corporate fraud, or misconduct,
wherein the greatest if not the exclusive share did
not fall upon the innocent. Such the generality
Of stockhoders persons insured, bill holders, and
depositors in monied corporations The Legislature,
of the evil, have endeavorcd to mitigate its
extent by directing the court Of chancery to seque
trate aRd administer the effects Of forfeited corpora
tions. 2R. S. 4Sj, j,S5I, End edit. 3S2.