IN RE THE PANAMA, NEW ZEALAND. AND AUSTRALIAN ROYAL MAIL COMPANY.—COURT OF APPEAL.

Auckland Star, Volume I, Issue 91, 25 April 1870, Page 3

IN RE THE PANAMA, NEW ZEALAND. AND AUSTRALIAN ROYAL MAIL COMPANY.—COURT OF APPEAL.

Lord Justice Giffard, on February 14, heard this appeal from a decision of Vice-Chancellor Malms. The question raised by the case was, whether, in the liquidation of this company, debenture holders had a charge in priority over the general creditors upon the assets of the company. It appeared that in 1866 the company, being desirous of borrowing £100,000 on debentures over and above the sum of £50,000 which they had already borrowed on debentures, issued a prospectus stating that their fleet had cost upwards of £525,000, and that the company possessed other assets, valued'at about £50,000, and that therefore the takers of the debentures which they proposed to issue would have ample security. Mr. Nay lor, of Liverpool, applied on behalf of himself and another gentleman for five debentures of £100 each, and paid the company for five debentures. The company's " undertaking and all sums of money arising therefrom" were by the debentures charged with the amount paid for them. The property of the company had been realised under the winding up. The Vice-Chancellor held that the debenture-holders were entitled to a priority over the general creditors, and the official liquidator appealed. Mr. Cole and Mr. Wesfclake were for the appellant. The Lord Justice, without calling on Mr. J. Pearson and Mr. Hastings, who appeared for the respondents, dismissed the appeal.