The Savannah morning news., 1902-10-26
GIVES HIS OPINION
ATTORNEY GENERAL KNOX ON
PANAMA CANAL TITLE.
BELIEVES 1T is ALL RIGHT.
MAKES REPORT AFTER A STUDY
OF FRENCH LAW.

That There Is No Law FOrbiddIng
Ii to seII-DOes Not Believe That
United states Would BE Subject to
ers OF BondhoIders.
Washington, Oct 25.-Attorney Cen
eral Knox has decided that IL the
United States should accept the offer
of the new Panama Canal Company
submitted last spring. for the sale OF
the canal for 100000, 1t would re-
ceive through the parties in interest a
valid and unencumbered title to the
property. This decision was arrived
at after thorough and exhaustive In
vestigation of the situation in Paris,
first by Special Attorney Charles w.
Russell and later by the Attorney Cen
eral himself. The Attorney General
formally submitted the opinion to Pres
ident Roosevelt to-day. 1t makes
about 800 pages.
The history and nature of French
ete uonssno Ut pup sul 10 ssJuBdmoo
explained at length in the opinion.
They are said to be altogether differ
ent from our corporations. but to be
easily understood II looked u2on as
private partnerships which is their es-
| sential character.
The opinion says they are In some re-
spects regulated by law. but that these
regulations do not change the essential
character of the concerns as partner
ships, do not establish any tie between
them and the government, or any obli-
cations 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 IL he is
solvent and not under some particular
contractual or other like obligations to
retain the property. The New Panama
Company is quite solvent and there is
no law forbldding II TO sell.
The powers of the general meeting
of the stockholders OF that company
are discussed and 1t is held to have
derived from the partnership agree
ment ample power to sell as 1t is pro-
| posing to do.
| The liquidator of the old company
| when he turned over the assets TO the
new company stipulated for so per cent.
of the profits of the canal when fin
ished and his power-to consent to the
| sale and gave up his right to the 60
| per cent, Is discussed in the light OF
| the French law defining the winding
| up of such associations, and 1t is held
| that under the general law of France
| and the special act of 1898
concerning the liquidation of his COM
pany he has full power to dispose of
the assets Of the concern and conse-
1 rsaae. L. a.. =
60 per cent. which Is a part OF those
assets. 1t is held that the old COM
pany is not in bankruptcy, or in what
is similar to bankruptcy under the
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
of the assets, but does not prevent
such alterations. The tribunal has
approved the consent Of the liquidator
to the sale, and on appeal by a bond
holder of the old company the Court
of Appeals of Paris confirmed the de-
cision, which held that under the
special law Of 1893 legal representa-
tive of the bondholders had been APP
pointed 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 judg-
ment Of approval on behalf of the
bondholders.
AS to the proposition that the United
States would be subject to the debt
and claims of the stockholders and
bondholders and other creditors of both
of the companies, the opinion says:
AS 8 general proposition, it is not
perceived how there could be any law
or equity for subjecting a purchaser
of an article sold as assets of a fall
ing partnership (such as the old COM
pany) to the debts of the partnership.
II such were the law there would be no
purchasers of such assets, and the
creditors would receive no payment of
their debts out of the proceeds nor
stockholders any dividend Of a res
idue"
Nevertheless the opinion exhaustive-
ly considers all possible mortgages and
other liens affecting the property it.
self, real or personal, under French or
Colombian laws. 1t saaE there have
been mortgages and pledges Of personal
property, and shows In detail what be-
came Of them. AS to the proposition
that the United States cannot take
title to the shares of stock of the Pan
anna Railroad Company, New York
corporation, which the Panama Com
pany 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 1t would hold its shares
as an individual would hold them.
AS to the objection that Congress has
authorized a purchase from the new
company only and not from the liqui-
dator, the opinion saws:
Certainly, in view of the condition
of the title as hereinbefore explained.
the purchase will be from the nav
company and the consent of the liqui-
dator will be at most a waiver of
rights as to the property transferred to
the new company. But If this were
otherwise, 1t would be unreasonable to
treat the act of Congress as forbidding
a purchase from the new company. in
which 1t would be necessary for the
old company or the liquidator to Join
as vendor. This would be to defeat, not
to ascertain, the will Of Congress. What
1t wants is a good title from the own
err of certain specified property, the
owner being supposed to be, and being
admittedly in part, the new company:
and 1t is entirely justifiable to buy
from the owner. although the principal
ownership should be found not to be
In the new company"
The opinion closes as follows:
For the reasons have given, I am
OF opinion that the United States would
receive a good, valid and unNncunber-