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ERLANGER V. NEW SOMBRERO PHOSPHATE COMPANY FACTS Purchase of the Lease of Mines by the syndicate: Sombrero is a small island in the West Indies , which was the property of the Crown, but had been leased out by the Crown for twenty-one years from March, 1865, at a rent of PS1000 a year. The lease had been assigned to a company called "The Sombrero Company," the business of which was to work the beds of phosphate of lime with which the island abounded. The company got into difficulties, and was ordered to be wound up; and the lease, constituting the most valuable part of the assets, was ordered to be sold. Mr. Chatteris was the official liquidator, and he fixed the price of PS55,000 for it. The Appellants, together with one Thomas Westall, formed what was called a syndicate (in this instance meaning a special partnership), for the purpose of purchasing it. It was purchased at the price put on it by Mr. Chatteris , after the syndicate had offered, but in vain, a smaller price for it. Syndicate purchase the mine through a company: Appellants having thus become the purchasers of the lease desired to sell it again and obtain a profit on the resale; and with that view to get up a company to purchase it and work the mines. A memorandum of association was prepared, and articles and a prospectus were also issued. The memorandum stated, in the usual way, the objects of the company, which were to purchase the lease and work the mines. The articles (among other things), stated that, in the first instance, the number of directors should not be less than four, nor more than seven, but that number might be changed at any general meeting. Two directors were to "form a quorum for the transaction of business." The contract for the purchase by the company purported to be made between John Marsh Evans, as the vendor, and Francis Pavy , as the purchaser on behalf of the company. This contract recited the purchase by the syndicate of the 30th of August, but did not name the price then given. The price to the company was to be PS110,000, of which PS80,000 were to be paid down, and the remaining PS30,000 to be satisfied by fully paid-up shares in the new company. Claim against members of the Syndicate: New directors were accordingly appointed at a meeting of the 29th of August, 1872. A correspondence then ensued with Baron Erlanger and the other members of the syndicate. Baron Erlanger denied all legal liability, but offered to give the company the benefit of the full amount of profit which his firm derived in cash and shares from the transaction. The other members of the syndicate did not answer. On the 24th of December, 1872, the bill in this suit was filed against Erlanger, Evans, Dakin, Macdonald , and others (afterwards amended by the addition of all the members of the syndicate, and
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