New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-02-07
THE COURTS.
CHARGES OF FRAUD FROM BRAZIL.

NEGLIGENCE, sELF-INTKREsT AND FRAUD--AS
INVESTIGATION Asked FOR
Alexandra dc Castro, q British subject
Emanuel Ubelhart LengrnDcr and jose dAlmsida
soares dc Lima Bastos subjects OF the Emperor OF Brazil
have begun In the United States Circuit Court,
through Batchford, Seward, GriswoId aud Da
Costa, their attorneys, an action against Will
liam r. Garrison. Daniel B. Allen, Cornelius
X Garrison. James Motley, Mortimer Ward, ana John
NJ Carrere directors OF the Brazilian Navigation
Company. The action is by bill 10 equity and begins BY
setting forth the contract between the Postmasteren
era OF Brazil and M. Carrere and William r. Garr-
son for oOastwise line OF steam navigation 10 the
north The most important parts OF that contract were
as follows:
The steamers destined for the service OF that ue
shall be entirely and constructed with all the mod
ern improvements. They shall also be OF 100 English
TO the Brazilian law and shall be treated as national
war vessels The steamers shall be supplied with all
service OF passengers officers engineers, remen, and
crew, which shall be named IN the act receiving the
faithful Observance OF this clause The service shall
begin within twelve months after the signing Of
Inevitable accident before such time II the Company
shall be prepared and IN such shall give the Gov
eminent three months information previous 10 their
being prepared. There shall be two voyages per
month from RIO Jsnero TO Para and each round trip
jected following fines IL t does not effect any one
OF the stipulated voyages: "a hist OF fines followsJ In
shall receive 1900 for each round trip.
The bill then sets forth the approval OF the contract
by the Emperor Of Brazil aud alleges that after the exc
cuton OF the contract the defendants combined,
federated and conspred together defraud such
they might thereafter induce to become asso
cated with them in the execution OF the contract in
point OF fact they did thereafter induce
the compliments 30 to become associated with
them. Then follow the yolumnous articles
OF association Of the Brazilian Navigation
Company which provide that the capital Of the Com.
pany shall DO s2,Oo0,Ooo In United States currency,
divided into OF 500 EACH and may be raised
by twOthrds of the votes of the shareholders after
they shall DO legitmately registered. If it be judged
necessary the increase being divided the share
holders In proportion 70 the shares they hold. The
articles OF association also show the ownership OF shares
as follows:
william r. Garrison, per G. K Garrison, $500;
ID. b. Allen. 2O0O c. X. Garrison, 1000; James NJ Mot
Garrison, 1000
After setting forth the articles referred TO- the bill
alleges:
That after fling them the defendants issued to them
selves certificates OF shares IN said Company TO the
number specified In the articles OF assOeiaton but
that neither Of the defendants paid at the time Of the
Issuing OF the said certificates or at other time into
the treasury OF the Company, TO any one for the
beneht 0f the Company any sum whatsoever either az
at the time OK Issuing the said certificates TO
themselves, THAT any money should DO paid by
them tDereJOrt ana Tue amount OF sndres so Issued
by the said defendants to themselves was precisely
onehaf Of the whole number OF shares specified In the
oles and by the action OF the said Defendants the said
Carrere was at once appointed the Managing Director
other defendants frsuduenty neglected their legal du
tics and obligations IN the premises and failed 10 OK
hibt good faith IN that regard toward the" Company
and those who subsequently became interested in
II. "and Intentionally and nesigenty failed
S of any he SRs tue
the improper of its moneys; but the contrary,
confined their attention to creating market value ia
Rio JaDelro for the remaining 10000 shares In the said
Company, and In due time for the 10000 shares dis
tr6uted among themselyesn The defendants did |" not
call any meeting OF sharehoders did not appoint any
OF the employees OF the Company except the Secretary
and the Assistant Treasurer and did not supervise ts
expenditures" Carrere as 10 believed, was, at the
time Of signing the articles or association bankrupt
and without any ability TO oay Tor the' 1909 shares
allotted TO him."
After referring at considerable length the contract
and mentioning the chaFterng OF certain steamers to
enable it TO be fulfilled, the bill exhibits table showing
the met amount to credit of profit and loss" OF the
Company up TO April 1872 and then ale ges that the
10 to great extent untrue. Several minor agree
mens then set forth in the BILL which is very
youminOus consisting OF GO closely printed pages Then
the following allegations against Csrrere Who it
is alleged, has run away: 500.
Your orators caused to he examined the books and
accounts Kept by the said Carrere at Bio Janero and
illegal and unjustifable entries which, together with
the expenditures which they represent enade with
the knowledge OF all the defendenta, whose assent
thereto fraud OF the rights OF your orators and
for the amount Of such expenditures your orators pray
an account, and the repayment thereof. "a nst OF
entries folows)
The bill then alleges
The defendants have Issued. as your orators believe
instead OF 10000 shares. nominated in the original
articles OF association. 10000 shares and they have
ceved the moneys realized from the sale OF the excess
which was at par and for which they are justly
sbe. After the Surrender and flight Of Carrere there
came to the possession OF your orators, and
those associated with them, as the assets and
property OF the SAID Company. only launch and the
said three steamers Ceara, Para, aud Bahia and 1.-THE
same now employed by your orators and those
ciated with Them under new contract with the said
Government .and the said the Brazilian Navigation
Company is for all practical purposes terminated and
dissolved After Carreres surrender and hight there
notified to your orators and those associated With
them, alleged claims against the said Company the
amount Of sO0,0O0 reals. ..r
The prayer OF the bill ia that the defendants may DO
ordered to account TO the plaintiffs for is the moneys
which come into their hands directors OF the Com
pany referred and that they De required pay
them such amount 1t shall appear they are justly
entitled to receive account Of the alleged frauds and
mismanagement5. .........