Punch (51.1866)

October 27, 1866.] PUNCH, OR THE LONDON CHARIVARI.

175

CASE (FOR THE OPINION OF MR. PUNCH).

CASE.

Before the Legislature gives its sanction to any Railway Bill,
involving the construction of New Works, it requires that such Bill
shall enact:—•

1. The amount of the Share Capital to be subscribed.

2. That the whole of this Share Capital has been subscribed for, and !
that one-half of the amount has been paid up, and that a Justice of]
the Peace (not interested) has certified to the above state of things,
before any of their borrowing powers can be exercised by the Company.

3. No Railway Act confers any borrowing powers beyond one-third
of the declared amount of the Share Capital of the Company.

The object of these enactments is evident.

No issue of debentures being legal, except against a share capital
of three times the amount, one-half actually paid and certified,
on a statutory declaration, to be so paid by a Justice of the
Peace, and the other half at call, debenture-holders are secured
against loss by ample and bond tide security.

4. The London, Cheatem and Clover Railway (in April, 1864) being
in want of money for their Eastern Extension, entered into an agreement
with an eminent firm of Contractors, Sleekowe, Getts, & Vampem,
of Great Lupus Street, Westminster.

5. Under this agreement, the Company gave a receipt to the Con-
tractors in the terms and form annexed: —

(Copy) LONDON, CHEATHEM and CLOVER RAILWAY.

Secretary’s Office, Queer Street, Pimlico, S. W.

April 1, 1864.

Received of Messrs. Sleekowe, Getts, A Co., the sum of Four Hundred and
Twenty-nine Thousand Seven Hundred Pounds for Deposit, and in anticipation of
Calls on 85,000 Metropolitan Extension (Eastern Section) “ A—Z” Shares.

£429,700. (Signed) W. E. Strawman, Secretary.

6. The Contractors, at the same date, gave a receipt to the Company
in these terms :—

(Copy) 9, Great Lupus Street, Westminster, S.W.,

April 1, 1864.

METROPOLITAN EXTENSION (EASTERN SECTION).

Received of the London, Cheatem and Clover Railway Company the sum
of Four Hundred and Twenty-nine Thousand Seven Hundred Pounds in respect of
our Contract for the Construction of the above-named Section.

Per pro. Sleekowe, Getts, and Vampem,

£429,700. Abraham Oily.

7. These receipts of the Contractors to the Company, and the Com-
pany to the Contractors, were then entered as payments on the
Company’s books.

8. The declaration required by statute, of the fact of these pay-
ments, was then made before a Justice of the Peace, who duly issued
his certificate, and thereupon the full amouut of debentures authorised
by the statute (£356,300) were issued, aud are still outstanding.

9. Our client, Mr. Sap Green, holds £40,000 of these debentures,
on which a year’s interest is in arrear, and which the Company are
bound to redeem at two months’ notice.

10. The Company is now in Chancery and insolvent; and is equally
unable to redeem the principal or to pay up the interest on these
debentures.

11. On an official investigation into the affairs of the Company, it
appears that both the receipts above given were illusory.

12. No such payment on account of works was ever made by the
Company to the Contractors. No such payment on account of shares
was ever made by the Contractor to the Company, and in consequence
our unfortunate client is left without any available security for his
advances.

You are requested to advise on the above facts.

OPINION.

1. Whether a criminal charge 1. 1 am of opinion that a cri-
can be sustained against either the minal charge can be sustained on
representatives of the Company, the facts as submitted. I am at a
or the Contractors. loss to distinguish the case from

the many well-known reported
cases in which criminal proceed-
ings have been taken successfully
against persons obtaining ad-
vances on fictitious title-deeds,
dock-warrants, or deposits fraud-
ulently represented to be of value,
the depositor knowing them to be
worthless. See, inter alia, Smug’s
Case (2 Y. & H. 180) in which Smug
obtained an advance of £10,000
on certain stones, certifying them
to be Indian diamonds of the first

2. Whether, if such charge can
be supported, proceedings should
be taken against both the Com-
pany and the Contractors ; or one
of them, and if against one only,
against which.

water, they being proved to be, to
his knowledge at the time, certain
imitations of diamonds, of little or
no value, commonly called “ Bristol
Stones.” He was thereupon found
guilty of obtaining money on
false pretences and sentenced, Mr
Justice Garrow observing that
“ such proceedings are calculated
to undermine all confidence in
commercial dealings between man
aud man, and that they seemed to
him of a higher degree of turpi-
tude than petty larceny, burglary,
or any of the coarser forms of cri-
minal inroad upon property.” See
also Cole Sg Windle’s Case (4 Crimi-
nal Reports, p. 674.)

2. I am of opinion that an in-
dictment would lie against either
the Company or the Contractors,
singly, or against both jointly.

3. If the _ indictment be _ laid
against both jointly, I am of opinion
that it should be for conspiracy to
obtain money on false pretences.
If it be laid against eitner Com-
pany or Contractor singly, I am
of opinion it should be for obtain-
ing money on false pretences.

4. In advising generally on the
case I think it would be well that
the prosecution should bear in mind
that the Conspiracy, or the False
Pretences, in this case having for
object the raising of enormous sums
of money, great difficulty is likely
to be experienced in procuring a
conviction; and that it must not
be supposed that either the evi-
dence, or the reasoning, that would
support an ordinary indictment of
the kind in a Criminal Court will
satisfy a jury where the sum raised
amounts to nearly fifteen millions,
and where the accused are such
eminently respectable persons.

It is not in accordance with my experience that a jury can be readily
brought to regard the fraudulent operator who works for millions in the
same light as the petty offender who cheats for pence or pounds.
Finance has its own morality; and such transactions as those stated in
this case may be within its limits. I do not think, however, that this
could be pleaded in bar of an indictment. It is true that the Court
will recognise the customs of trade in interpreting contracts ; but I
am npt aware of any case in which such custom has been held to justify
an utterly false representation of the valne of a security, proved to be
made with knowledge, on the strength of which large sums have been
advanced; particularly where the representation is one required by
statute, and supported by the certificate of a Justice of the Peace.

I observe no question is submitted as to the legal effect of making
the statutory declaration falsely. By many statutes the making of such
declarations falsely is made punishable as perjury, though they are not
on oath. This point should be considered.

Altogether, I think this eminently a case for raising the question
whether there is such a crime known to English law as raising money
on false pretences, where the money raised amounts to millions. It
may also do much to fix the limit (as yet undetermined) at which
“financing” ends and “swindling” begins.

3, Laurel Court, Inner Temple.

3. How the indictment should
be framed : Whether for conspi-
racy to defraud, or for obtaining
money on false pretences, or if
neither, how otherwise.

4. You are requested to advise
generally on the case.

Mr. Walpole’s Resignation.

We regret to announce the resignation of the Right Hon. Spencer
Walpole, Home Secretary, though we cannot say that we are sur-
prised at the course the Right Hon. gentleman has adopted. He felt
so strongly that as Hydraulic Minister he was entitled to be present at
the opening of the Aberdeen Water-works by Her Majesty, that on
failing to receive a summons to the North, he wrote to Lord Derby,
resigning office. We hear that while penning the dispatch Mr.
Walpole was affected to tears.

I