The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1867-06-18
THE PANAMA RAILROAD.
Mail Contracts and Revenue Of the Com
pany-An English Suit Against the Corpora
ton. and a Cross Suit.

Mail Contracts and Revenue Of the Cam
pany-An English Suit Against the Corpora.
tion. and Gross Suit.
CouRr or QUEEN's BEScn, LONDON Nav 3l-sitt,ngs In
Banco before the Lord Chief Justice Mr. Justice
Blackburn Mr.. Justice MelIor and Mr. Justice Shee
Lo,s Gilbert Kennedy yc re pan @.. Nso Zealand
Zealand and Ausfralian Royal Nail Company rs. Lord
Gilbert Kennedy-These were cross actions raising ques-
tons OF great magnitude between Lord Gilbert Kennedy
and the company the questions In both actions being
substantially the The first was an action by him
10 recover the sum OF 200 paid by him in respec, OF
1900 shares allotted 10 him in the company. The Soc
ond was action by the company against Lord g. Ken
nedy to the OF "a 500 in respect Of call OF
co share, the payment of which he resisted on the
ground which he brought his action In the COM
panys action he pleaded fraud-that H. he defined IT,
fraud in statement made by the company In their
prospectus-vz. that the object enable them TO
perform contract entered into with the OF
New Zealand for monthly mail service between sgd
ney New Zealand and Panama, IN correspondence with
the Royal West India Mail Company's steamers between
Southampton and Aspnwall, and that the New Zealand
company agreed to give the company the refusal Of any
other services they might establish maintain during
the continuance of the contract But he also sued
and responded on the ground OF failure Of
The questions between the parties raised - special
case, and when It was mentioned that the special
case and documents occupied more than seventy
large "bref, sheets Of paper besides several
lengthy printed documents and would probably tase up
ten dozen Of columns II will be obvious that in
order to condense into reasonable space the substance
only can be given; and condne ourselves
far as possible to the facts which appear be To- ally
material The substance Of the appeared TO be that
Lord Kennedy resisted the CALL and claimed OF
his money upon the ground that he had joined the COM
pany on the faith Of its having contract with the gov
eminent OF New Zealand which In fact 1t had not the
real truth being that there had been such contract
entered into with one administration, but that It was
dssvowed by their SUCCESSORS not duly authorized
and contract substituted
Mr. Mellish and Mr. H. James we're for Lord Kennedy;
Mr.. Manisty, the Hon. G. Denman. and Ar Murphy ap-
M Meilish with him Mr.. H. James nrgaed the case
for Lord Gilbert Kennedy. The question: he sd raised
was substantially tho same IN both actions-whether
paid and TO resist recovery OF the money which de-
manded And the question came to this-whether he
ponts:-1. Had Mr. Ward authority 10 enter into
the contracts Assuming that he had not, was
shares that the contract actually exist
ing? .. II not, not there false and fraudulent
On the first point he argued (a) that the New Zealand
government could not legally confer such an authority
under the statutes el That even if the government
could do 1t had not done and that no such autho
rty had legally been conferred. He contcnded that II
there authority the company could not shelter
themselves under the representations or belief Of Mr..
Ward Tor they knew all that he did las they bad the
Colonial before them) and admitting tnat up 70
the time OF their taking counsels opinion they might
believed that he had the necessary authority they
could scarcely haye believed 1t afterwards How could
the first act be supposed to give the authority when IL
applied only 10 inteIcoonal mailsY And hon could the
second, when the authority to the GOVERNOR IL
limited to $40 900 year, and IT was conditional on
instructions to be given by the Governor The only IN
structons received by Mr.. Ward conveyed in the
''mnuten enclosed In the Governors despatch were
under that second act-the Gct OF lh6Z-imlt,d 70
go 600 The important and difficult question ID
the caso however the nextwhether the statemenL
in prospectus to the contract WAS condition OF
the undertaking the basis Of that prospectus 10 Ke
shares-that Is, q condition that there was vand
subssting contract with the New Zealand government,
SO that il there not the undertaking TO the
company defeated; or was II mere representa-
ton, Ia which view would not defeat tue contract
fraudulentY He contcnded that the former was
case aud that II absolute condition 81 war
ranty valid subsistng contract with Inc
New Zealand government Asto this he contended That
the rule or law that any representation emDoed IN
the contract, and the subject matter OF the
contract, and connected. with and material 70 its
ranty for the effect OF the failure Of the con-
diton was that the object OF the contract failed.
And here II was 30, for tho prospectus represented
That the new shhres were 70 90 issued ~ oIoer 70
shares In order to carry out. which was stated 70 %
ssbeneGcai" and consequently the object failed Tor
there such CONTRACT NO such contract uno.
Ing and withdrawing him the profits IN which ne was
TO share Upon this point he cited "Snps casot 40.
cided Ia 1895, and reported n 2, De Gex and Jones
Chancery Reports which he said the recording case
on the subject and the effect Of which was that
shareholder took shares the bass OF prospectus
stating certain objects Of the enterprise and then they
were substantially sercd without his Knowledge and as
sent he relieved That decision OF VceChancelior
Wood affirmed the Lords Justices aud no case was
better ssaoshed in equity and the principle applied 70
There the objects enlarged or extended,
here they diminished; but the principle was the
same the objects substantially altered or departed
from Tho ground Of tho decision that the appl.
cation for must have reference 70 the terms OF
the prospectus. That obviously applied here Lord
Gilbert shareholder He was attracted ~ ths
prospectus and came In under the now undertaking.
The shares issued 10 carry out the contract
and the did not exist Then he was entitled TO
not exist akf
The arguments were not concluded