New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1880-01-26
CANADA SOUTHERN BONDS.
A DECISION FROM JUDGE WALLACE.
THE AUTHORITY UNDER WHICH THEY WERE is

A DECISION FROM JUDGE WALLACE.
THE AUTHORITY UNDER WHICH THEY WERE IS
SUD QUESTIONED.
Judge Wallace Saturday handed down decision
in the United States Circuit Court OF more than
usual general interest. Il was in the case of William
H. Gebhard against the Canada Southern
Railway COMPANY The suit was brought
TO recover several nstallmens of interest due jan
uary l. 1877, upon the iirst-mortgage bonds Oh the
company These bonds executed and issued
in Canada. but were made payable in the City Of
New York The company claims that 1t Is discharged
from the payment of the bonds by virtue of an act of
Parliament Of the Dominion. passed in Aprl. 1878.
whereby the company was authorized to issue new
bonds payable in thirty years in snbsti-
tuition OF IT'S first mortgage bonds and
hearing lower rate Of interest The act
declares that the assent of the holders Of the first
mortgage bonds shall be- deemed to have been given
IL the subscription of the bonds, but tho plain
tiff nm fact never gave his assent to the change.
Judge Wallace SAYS: On first impression the
defence seems an extraordinary ono; IL rests upon
the theory that the original bonds. having been
issued IN Canada, are contracts controlled, as
respects the obligation and its discharge.
by the law Of Canada. and that the Canadian Par
lament in the exercise OF IFS unlimited powers. has
discharged or modified the obligation Of the con-
tract and that even though thIs be an arbitrary OF
unjust act II is conclusive upon the rights OF the
parties.
THE act Of the Canadian Parliament is an attempt
10 impair and destroy the obligation of contract
Undoubtedly y was supposed IN view of the hnan-
cial embarrassment of the defendant, that
the new obligations, authorized By the
act would br acceptable To the hold
et- of the original bonds. and would be ol
cqual, n not OF greater. value. But the plant IN
was entitled to the money due by The terms OF ms
bond and any legislative net which attempts
10 deprive him OF IL by compelling him
to accent something different. violates Fundamental
principles justice, and is in effect an arbitrary
contiscatlOn OF the plaintiffs property. Although
ZION. Parliament is omnipoteut the Jnrsts
and statesmen of England have denied
ITS right to transcend the boundaries which
G mine fhc discretion OF Parliament within the
ancient landmarks. contract IL prop
rrry; 10 destroy It partially Is to take II, aud TO
do this by arbitrary legislative acton rs 10 90
# without due pieces, Of law II any Of our own
STATES had passed such an act rs the one under
consideration, IL would have been the duty OF the
courts of that State 10 treat " as an unlaW-
ful exercise OF power; and certainly II
cannot be expected that tins Court will tolerate
legislation by u foreign state which It would not
opcrate would seriously prejudice the rights
OF a citizen OF TINS state Comfy can
ask no recognition OF such unjust foreign legsla-
tiou and the case falls under the qualification Of
the general rule winch prc-crhes that when the
foreign law Is Tcpugnant 10 the fundamental pm
cples OF the lex tori II wlll be ignored. Judgment
Tor the plaintiff"