New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1879-08-16

A JUDGMENT FOR $1,000 600 IN FAVOR OF THE
ERIE RATLwAY-His CONNECTION WITH THE
COMPANY.
LONDON, Friday. Aug. Is. 1879.
The wellknOwn financial agent, James McHenry,
is unable to meet his liabilities. A tremendous
run exists at his Office in VictOria-st, Westminster
His Liabilities are estimated at $5.000,O00. The
assets are believed to be very poor.
The failure Of Mr.. McHenry was not wholly I'M
expected in this city by those familiar with his
affairs. 1t is thought, however to have been pre-
cipitated by the judgment against him, rendered
last month by the Master of the Rolls in the Court
Of Chancery. The judgment was for over
S2O00,000 and in favor of the Erie
Railway Company. Mr.. McHenry had APP
pealed from the decision of the court, but it Is
not known whether he had obtained, pending the
appeal stay of proceedings, is usual in this
country. One of the New-York counsel for Mr..
McHenry gave last evening the following account
Of the suit:
at grew ont of the purchase of large number
of shares of the stock of the Cleveland. Columbus
Cincinnati and indianapolis Road The control of
that road would have given to the Erie road an out
let to the West over the Atlantic and Great
Western Road. in which McHenry was
largely interested. When Mr.. Watson was
made president Of the Erie Company, he
and II. B. HurIbut. Of the Cleveland Company.
s. l.. NJ Barlow and McHenry entered into an agree
ment i'll 1872 70 buy controlling interest IN the
Cleveland road. McHenry returned TO London.
having gwen to Mr.. Barlow power of attorney TO
act for him. In fulhlment of the contract, nearly
$4,000 shares of stock bought. President
Watson sent Erie bonds TO London, which Me-
Henry sold there. He used q part OF the pro-
ceeds to pay for the stock About that time the
OHIO Legislature passed law that IN order Tor one
road to lease another the consent OF twO-thirds OF
the shareholders of the leased road must be obtained
The scheme consequently failed, but the
money had been used and some one
had to bear the responsibility The Erie Company
repudated the contract made by its president, and
claimed that McHenry had bought the shares on
his own personal account. suit was begun by the
company III 1877, and the decision was rendered
early last month. The Court held IN effect that
the contract was illegal and that corporation
could be bound only by sealed contract
" McHeDry's connection with the Ere Road
began in the early part of 1872. Through his
efforts some of the directors of the company re-
signed in favor of persons designated by INN and
Mr. Barlow. In this way McHenry gained pos
session of the Erie property, which he yirtually
controlled until recently He has held a
controlling interest in both the stock and
bonds of the Atlantic and Great Western
road and at one time had large share of the Erie
stock. Since his differences with Dir. Jewctt IN re-
gard TO the management of the road, ~ Is thought
that he has disposed of his stock in that company.
Mr. Watson and Mr.. Jewett were elect I'd on proxies
from London, by Mclienry and the London bank
eTs, BischOiisneim and GOldschmdt.
"McHenry was man OF gigantic schemes. He
was slightly visionary and saw things III "A rosy
light. He lived eXtravagantly, made money
rapidly, aud has failed magnifcently. He was
very liberal man"