Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1902-10-27
CANAL TITLES
WITHOUT A
FLAW
EXHAUSTIVE REPORT is FILED
BY ATTORNEY GENERAL ON
LEGAL SIDE OF THE GREAT
WATERWAY.

on the title which tho new Panama Canal
company of France offers to the United
States OF all Its rights and property on
the Isthmus OF Panama. was made pub
lie tonight 1t is an unequivocable en-
dorsement of the construction by the
United States Of the Panama Canal. At
torney General Knox sums up in the
following terse and emphatic manner:
''For the reason have given. am
of the opinion that the United States
would receive a good. valid and unen-
numbered title"
The attorney generals opinion opens
with a history OF the concessions made
by Columbia IN 1878. 1880, etc, the forma-
ton Of the Delesseps Panama Canal COM
pany of France. the failure of this COM
pany in 1885, the transfer In 1894 OF all
its rights to the present Panama Canal
company of France by the liquidator ap-
pointed by the French court to wind up
the affairs of the old company, and of
the laws passed by France concerning the
liquidation of the old company.
The opinion then takes up the princi-
pal objections which have been made in
this country to the title proposed to be
given to the United States. These OBJ
jections, II says, resolve themselves into
reasons in support Of the Following prop
ositions: eM
Some Of the Objections.
1. That the new Panama Canal com
pany has not power to sell the canal and
railway property.
3 That the liouidator Of the old Pana-
ma Canal company has not power to con-
sent to such sale.
3. That the French courts have not
power TO authorize the hquidator and
the new company. or either OF them,
to enter into the sale; that at all events
the United States would take the prop
erty as a trust fund subject to the total
obligations Of the stockholders, the bond
holders and the other creditors Of both
companies. M
The history and the nature of the
French companies Of the kind in question
are explained IN length. They are said
to be altogether different from our cor
porations of the United States. to be
easily understood II looked upon as prt-
waite partnerships, which Is their essen
tial character.
The opinion says that they are In some
respects regulated b54 Ian. bat that these
regulations do not change the essential
Character of the government or any
obligations 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 law forbids and II he is
solvent and not under some particular
contract or other like obligation to re-
tain the property. The new Panama
company is quite solvent and there Is no
law forbiddlng It to sell.
Stockholders Can Sell.
The powers Of the general meetings Of
the stockholders OF that company are
discussed and IT is held to derive from
the partnership agreement ample power
to sell. as it is proposing to do.
The liquidator OF the old company, when
he turned over the assets to the new
company, stipulated for go per cent profits
of the canal when finished and hts power
to consent to the sale and give up hts
right to the go per cent is discussed in
the light OF French law concerning the
winding UP of such associations, and It
is held that the general law OF France
and fhe special act OF 1898 concerning the
liquidation OF his company, he has full
power to dispose of the assets of the
concern and consequently to consent
to the sale Of the Gu per cent, which is
part OF those assets. It is held that the
company is not in bankruptcy or what
is similar to bankruptcy under French
law, but is governed by the general law
or civil code which the special law Of
1888 already referred to partially modi-
fies. That law required the appeal Of the
civil tribunal of the Seine from all sales
and alteration OF the assets, but does
not prevent such alterations.
That tribunal has approved the consent
of the liquidator to the sale, and on APP
peal by a bondholder Of the old company
the court OF appeals OF Paris confirmed
the decision which held that under the
special law Of 1898, Segal representative
of the bondholders had beeR appointed
by the court to represent them all, and
that report would formally announce his
consent to the sale. was the only one
authorized by the special law to oppose
the judgment Of approval on behan OF
the bondholders.
Power Of the Court.
The opinion next discussed the power
of the French court to declare law OF
that kind void as unconstitutional and
holds no French court OF other authority
has the power to declare any French
court statute void. The opinion says,
however, that the French special act
ought not to be declared void and II II
is to be criticised at all, II is for being
too tender Of the private right and RENE
dies of those interested and not suffi-
GENTLY like a bankruptcy law.
AS to the proposition that the United
States would be subject to the debts and
claims of the stockholders and bondhold-
ers and other creditors Of both OF the
companies, the opinion says:
GAS a general proposition, it is not per-
ceived how there could be any law or
equity for subjecting a purchaser OF an
article sold as assets OF falling part
nership (such as the old company to
the debts of the partnership. If such
were the law, there would be no pur-
chasers of such assets and the creditors
would receive no payment Of their debts
out Of the proceeds, nor stockholders any
dividend of residue.
Nevertheless the opinion exhaustively
considers all possible mortgages and 9TH
err liens affecting the property itself. real
or personal under French or Colombian
law. It says there have been mortga-
ges and pledges of personal property and
shows in detail what became Of them.
Right Of Individual.
AS to the proposition that the United
States cannot take the title to the shares
of the stock of the Panama Railroad com
pany, a New York corporation which the
Panama company proposes to sell with
the canal property the opinion holds that
the government can take and hold any
kind of property 1t may have need of, in
the same manner as an individual can;
that it would hold the shares as an indi-
vidual would hold them. AS for the sug-
gestion that the United States at all
events could not destroy the railroad, 1t
IL pointed out that II was evidently not