New-York tribune., 1870-01-15

cecdngs in Chancery against the new Directors
| alleging that fraud had been committed by them IN
NOT disclosing the existence 0f this second deed, and
stating on the prospectus that the old business was
! Gouiishng. and seeking consequently, to fix them
with unlimited liability aud TO exhaust their eetates
before any call should be made on tho shareholders
Tho defendants tho new partners. demurred to THIS
Il and were beaten in the Court below. where the
Vicc-ChauCcor ovcrlulcd their demurrer, with somo
very strong remarks as 20 the obligation which rests
on Directors Of giving those they invite 10 take
shares in spcCula0us the fullest opportunity OF de-
Gliding for themselves as to the prospects Of the
undertaking. On appeal however the Lord Chan
cellor oycrruled this decision and allowed the de-
murrcr. In his opinion there had been nothing
amounting to fraud in tho technical sense which
that word bears in our Equity Courts, but only dis
astrous mismanagcmout. the results Of which lad
fallen 10 heavily On the defendants themselves as on
the shareholders
Thus it seemed likely that the men to whom the
great commercial crisis of lSCG. and the subsequent
stapnaton Of business in the city, was mainly due
woull escape altogether with tho pecunary loss
The constituency was for the most part composed of
men who were not inclined to throw good money
after bad They paid up their calls, grumbed, and
so left matters.
A year ago, however, one OF their body, DR., Thom,
whose indignation burned somewhat moro feTccly,
and whose public spirit was rather stronger than
those Of ordinary men. resolved that the case should
not fill through for want Of one man at least to fight
IT, 4 penal statute was passed here six years ago,
enacting tina any director or other officer of public
comqanywho should circulate or publish any written
statement or account which he knew TO be false In
any material particular, with intent TO defraud or
deceive shareholders, or TO induce any person 10 become
a shareholder, should be guilty Of a misdemeanor.
Under this statute DR.. Thorn summoned all the direc-
tors before the Lord Mayor, and after inquiry Of
many days they were committed for trial in January,
1SC9 1t is this trial which is just The delay
has been caused by the hesitation of the prose.
cutor Dr. Thom, who, having succeeded so
far as to have the case sent for trial, very
naturally demurrcd at incurring the great ex-
pensc Of the hearing, and thought that this should
be done by the country. Most people think agreed
with him, and felt that ever there
were cases which should have been taken
up by the Government this was one of them. How
ever so it could not be- and hence the unsatisfactory
end Of the whole business For the prosecution was
lame affair." hurried at the last moment, and neither
well conceived or executed DR.. Kenealy, the advo-
cate retained as leader, is clever and somewhat
eccentric literary man, not otherwise than able as
lawyer, but without leading practice hitherto in
criminal cases. And having chosen him the prosecu-
ton did not give him fair chance. as he only had
his brief two days before the trial oPened-a perfectly
inadequate time for tho preparation in such case.
The result was that the attack was pitched far too
high. The old partners and new directors were re-
presented rs men, perfectly conscious that the busi-
ness they wcre dealing with was utterly insolvent,
who nevertheless cOnspired deliberately to induce
persons to take a share in it under pretenscs which
u. TO-, 41a
first to all lawyers what the result must be. Tho
very facts that the new directors brought large
pecuniary stake into tho business, and that
the old partners risked every penny they
possessed in the world on tho success of
the old concern under now management,
wero sufficient to answer it for all the purposes Of
criminal prosecution. The Chief Justice summed
up for an acqutta and tho IL merchants of the City
of London, who composed the jury, did not take
quarter of an hour 10 consider their verdict Ihey
returned mot guilty. thus entirely acquitting all
the accused of having conspired to defiaud. The
crowded audience from change" Lombard-st., and
the other hauuts Of Mammon, were much affected,
shouted till tie Chief Justice threatened TO send
some Of them to prison, wept profusely ut is sadl
and fell on each others nccks outside the Court
certainly gave the defendants Tapurous reception
when they came out. One does not Grudge 1t them'
if they care for it. The Gurneys and their friends
have paid dearly both in purse and person. for cul
pable negligence to put the no higher against
them At the same time it is impossible not to feel
that there has been a miscarriage, and that we have
missed the opportunity of asceraining how far it is
possible to 20 in the direction Of putting plausible
case which is not the whole truth, before persons
whom you wish to induce to join you in an enter
prise without bringing yourself within the scope OF
the statute which was specially passed to render
such conduct criminal. One good result, however.
remains from the trial, mean. the emphatic protest
of the Chief Justice in favor Of the establishment OF
q Public Prosecutor THOMAS HUGHES