Evening star. [volume] (Washington, D.C.) 1854-1972, 1902-10-27
MAY GET G00b TITLE
Attorney Generals Opinion
on the Panama Canal.
SEARCHING INQUIRY
EXAMINATION OF FRENCH LAW
AND IT'S APPLICATION.
Right Upheld of the Liquidator to
Sell His Claim to 60 Per Cent
of the Proceeds. ~

| ing investigation of the legal status of the
| company was made by Attorney General
| Knox and his special assistant, Charles w.
| Russell. The report of the Attorney Gem
| eral covers about 800 pages.
History Of the Concession.
The opinion opens with a history of the
concessions made by Colombia in 1875 1880.
| ETC., the formation OF the De Lesseps Pan
of this company in 1883, the transfer in
| 1894 Of all its rights to the present Panama
| Canal Company of France by the liquidator
| appointed by the French court to wind up
| the affairs of the old company and of the
| laws passed by France concerning the liq-
| uidatfon Of the old company.
The opinion then takes up the principal
| objections which have been made In this
| country to the title proposed to be given to
| the United States. These objections, it
| says, resolve themselves into reasons in
support of the following propositions:
/. That the New Panama Canal Company
| has not power to sell the canal and rail-
way property.
2 That the liquidator of the old Panama
| Canal Company has not power to consent
| to such sale.
| g. That the French courts have not power
| to authorize the liquidator and the new
company or either of them, to enter into
! the sale.
4. That. at all events. the United States
| would take the property as a trust fund.
subject to the total obligations to the stock
companies
The history and nature of French compa-
MES of the kind In question explained
| at length. They are said to be altogether
| different from our corporations, but to be
| easily understood II looked upon as private
partnerships, which Is their essential char
| acter
| The opinion says that they are In some
| respects regulated by law, but that these
regulations do not change the essential
character of the concerns as partnerships.
IN OF hliSh tie hptwpaD them and
the government or any obligation from
| them to the government and do not forbid
| the exercise Of the liberty to dispose of
| their property as freely as an individual
| disposes Of his If no special iaW forbids and
| IL he is solvent and not underAsome partic-
| ular contractual or other like obligations to
retain the property. The NewIPanama Ca
nal Company is quite slovenian there is
| no law forbdding 1t to sell. is
The powers of the general meeting of
stockholders of that company are dis
cussed and 1t is held to have derived from
the partnership agreement ample power to
sell, as it is proposing to do.
Rights Of the Liq,1idator.
The nquidator of the old. company, when
he turned over the assets to the new COM
pany, stipulated for so per cent of the
profits of the canal when finished. and his
power to consent to the sale.l And give up
his right to the 80 per ceRt is discussed in
the light Of the French law Concerning the
winding up, of such associations. and it is
held that under the generaT law OF France
and the special act of 1893 concerning the
liquidation of his company he has full
power to dispose of the assets of the con-
Germ, and consequently to consent to the
sale of the 60 per cent which is part OF
those assets. 1t is held that the old COM
pany is not in bankruptcy, or in what Is
similar to bankruptcy under French law,
but is governed by the general law or civil
code, which the special law of 1898 already
referred to partially modified. That law
requires the approval of the civil tribunal
OF the Seine for all sales or alterations or
| the assets. but does not prevent such alien
atoms. The tribunal has approved the con-
| sent of the iquidator to the sale, and an ap-
peal by bondholder of the old company to
| the court of appeals of Paris confirmed the
| decision, which held that under the special
law of 1898 legal representative or the
bondholders had been appointed by the
court to represent them all, and that that
representative, who has formally announced
his consent to the sale. was the only one
authorized by the special law to oppose the
| judgment of approval on behalf Of the
The opinion next discusses the power of
| the French court to declare a law of that
| kind void unconstitutional and holds
that no French court or other authority
| has power to declare any French statute
| void. The opinion says. however that the
| French special act ought not to be declared
void, and If 1t Is to be criticised at All II
| is for being too tender of the private rights
and remedies of those interested, and not
| sufficiently like a bankruptcy law.
Responsibility for Claims.
"As general proposition. it is not per-
States would be subject to, the debts and
| claims of the stockholders and bondholders
and other creditors of both of the compa--
MES, the opinion says: II
"As a geenral proposition, 1t is not per-
ceived how there could be any law OF
equity for subjecting purchaser OF an arr
! ticie sold as assets of a failing partnership
lsuch as the old company to the debts OF
he N n oh
| there would be no purchasezof sucn assets,
and the creditors would receive 10 pay
| ment Of their debts out of the proceeds nor
| stockholders any dividend of a residue.
| Nevertheless the opinion exhaustive4y
| considers all possible mortgages Aid other
| liens affecting the property itself real or
personal. under French or Colombian law:
| 1t says there have been mortgages and
| pledges of personal property, and shows in
| detail what became of them.
| The Panama Railroad.
| AS to the proposition that the United
States cannot take title to- the shares Of
| stock of the Panama Railroad Company, a
| New YORK corporation, which the Panama
| company proposes to sell with the canal
property. the opinion holds that the govern
| ment can take and hold any kind of prop
| erty 1t may have need of. in the same ma n
| ner as an Individual cam That IL would hold
| its shares as an individual would hold them.
As for the suggestion that the United
i
| road, 1t Is pointed out that II VAS evidently
not the intention Of the sFref1ch. IL they
| built the canal to disnayysh 18th tha raii-
| road. FIDF Tf232 -.
As to the objection that gress has au-
thorized purchase from the new company
E ian and not from the lianfdator the epin-
Certainly. in view of the condition of the
title as hereinbefore explained. the pur--
chase will be from the new cBsnpany. and
the consent of the liqufdators will be at
most waiver Of rights ass Ito property
| transferred to the new compahy. But, if
this were otherwise. It w6ufd be unreason.
able to treat the act of CdpgreSs as forbid.
| ding purchase from the hew company in
| which 1t would be necessary for the old
company or the liquidator u Join as VEN
dor. This would be to defeat not to ascer-
tain, the win Of Congress- what 1t wants
is good title from the owner of certain
| specified property, the owner being cup
| posed to be, and being admittedly in part.
the new company; and it Is entirely justi-
fable to buy from the owner, although the
principal ownership should be found not to
be in the new company
/ whether we believe it is In the new COM
pany or the old company, so long as It is
not out of both. seems to me altogether
imnatsriai. since both joinsin the proposed
sale" --s- - -