Papers Relating to the Foreign Relations of the United States, With the Annual Message of the President Transmitted to Congress December 5, 1905

Chargé Hutchinson to the Secretary of State.

American Legation,
Caracas, August 13, 1905.

No. 468.]

Sir: I have the honor to confirm my two cablegrams of the 8th instant. [Printed ante.]

Referring to the first cablegram, I have to report that the decision was known to me on the afternoon of the 7th, but I had not yet seen the printed copy of the decision in the Official Gazette—copy and translation inclosed—so did not cable the Department until the morning of the 8th.

The manager of the company, Captain Wright, asked me to have the company advised of the decision through the Department, and this was fortunate, as the cablegram which Captain Wright sent was stopped by the fiscal in La Guaira, although a translation of its contents was given him. This, as the Department knows, is not the first time that the company’s cablegrams have been stopped.

Referring to the second cablegram, I have to report that the company’s manager filed with me, on the morning of the 8th instant, two copies of a written protest, in the name of the company, protesting against the decision, as being an absolute denial of justice and as being contrary to the evidence, the facts, and the law. This protest is addressed to me as chargé d’affaires of the United States and is accompanied by various documents and translations sustaining it. The action of the Government of Venezuela, its attorney-general and his agent, and the actions of the lower and higher courts are protested against. The manager also protests against the stoppage of his cablegrams by the government fiscal. The said protest was signed and sworn to before me in the American legation on the 8th instant and bears my legal authentication. Copy of the said protest inclosed, with accompanying documents and translations.

As the Department has sent me no instructions in connection with the company’s protest, I have not made protest to the Venezuelan Government, as I conclude Mr. Russell and Mr. Calhoun will arrive at a proper time and with full instructions.

In conclusion, I beg to point out that it is now nine months since the Department instructed me by cablegram to use all my efforts in inducing this government to hasten the final decision in this case, which the federal and cassation court has just rendered.

I have, etc.,

Norman Hutchinson.

[Inclosure 1.—Translation.]

decision of the federal and cassation court.

The United States of Venezuela—in their name, the tribunal of the only and last instance of the federal and cassation court.

With the pleadings of the parties the trial concluded. In virtue of the appeal lodged by the New York and Bermudez Company against the judgment of the 20th of May of the present year, pronounced by the tribunal of the first instance of the federal and cassation court, the records have come to this tribunal. On the 20th of the month of July of the preceding year the attorney-general of the nation sued the New York and Bermudez Company in the person of its representative, Robert Kemp Wright, that it should agree to the cancellation of the contract that the ministry of fomento of Venezuela, by order and authority of the President, concluded On the 15th of September, 1883, with Mr. Horatius R. Hamilton, to which contract additions were made on the 19th of October of the same year and on the 30th of May, 1884, approved by the National Congress on the 6th of June, 1884, and of which the above-mentioned company is the cessionary. The attorney-general also sued for the payment of damages caused by the nonexecution of said contract according to a just estimation by experts, calculated in accordance with the terms established by the first additional article, and for the expenses occasioned by the judicial suit. The plaintiff alleged in his bill that a lease was the question, the matter of which is the enjoyment of all the natural products existing in the public lands of the former state of Bermudez. In virtue hereof, and resting on the voucher and telegram which he inclosed in order to prove that the leaseholder had failed to perform improvements to which it was bound, such as the canalization of the rivers of said state, he petitioned in conformity with case 7, article 373 of the code of civil procedure, for the sequestration of the mine which the defendant company exploits at Guanoco, with all the exploitation apparatus and accessories, to answer for the consequences of the suit. By writ of 21st of July, 1904, the New York and Bermudez Company was summoned in the person of its legal representative to answer to the petition, and on the same date the tribunal of the first instance decreed the sequestration sued for, which was performed by the civil judge of the first instance of the section of Cumaná and ratified after the legal procedure on the 4th of October, 1904. The tribunal of appeal confirmed in its turn, on the 15th of February of the present year, the last-mentoined decision. When the opportunity to answer to the petition arrived, it was proceeded thereto in the sittings of the 5th of August of the year 1904 at the hour previously pointed out. The parties being present, after the reading of what was convenient, the managing director of the company presented the answer in writing authorized by him and Dr. Juan Bautista Bance. He contradicted the action both as to facts and right and based his opposition on the following grounds: That the Hamilton contract is not a lease; that the contracting parties never intended to conclude a lease when they executed that contract; that neither of the contracting parties has considered or held it as a lease; that the stipulations of said convention can not be adapted to the rules and consequences of the lease, either in virtue of their form or of their meaning; that all rights granted to Hamilton, excepting that of exploration, are of doubtful and hypothetical exercise on account of their being conditional; that the results of the contract were aleatory and that it was not the only specimen of analogous concessions; that all the so-called advantages of the company, in case they existed, which is denied, would not vitiate the juridical force of the convention, since the profits obtained are the fruit of prevision and effort; that the obligations contracted have been carefully and most completely complied with both by the assignor Hamilton and the company, and that such compliance therewith is fully proved by an official and express declaration of the federal executive power of Venezuela; that the obligations said not to have been complied with by the company are not subject to any fixed time and could only be considered as due and demandable after the judicial authority should have fixed a time and this should have expired; that respecting these same obligations he formally opposes the prescription established by article 1909 of the civil code then in force and by article 1964 of the present civil code; that the supposed obligation of canalizing one or more rivers never existed legally for Hamilton or for the company; that if it had existed it would be found that it was an alternative condition and that it was complied with: that, even supposing it to have existed as a simple obligation, it would be found that it was complied with as far as possible; that the company has other titles in virtue of which the asphalt lake, lands, and other appurtenances at Guanoco pertain to it; that the effects of the rescissory condition have not the extent attributed to them by the plaintiff; that the action proposed in the bill, even supposing all the facts adduced to be certain, is held by the company to be contrary to right; that neither Mr. Hamilton when he contracted nor the company when the government accepted it as the cessionary of the contract depended (by far) [sic] on enormous capitals that would further certain illusions and purposes now said to have vanished. The defendant company vouched Mr. Horatius R. Hamilton, petitioned for the suspension of the course of the suit, and also applied for the extraordinary term granted for the obtaining [obtention] of evidence, owing to the fact that the New York and Bermudez Company has its direction and general office in the city of Philadelphia. He finally petitioned the action to be declared ungrounded, the company expressly reserving its actions for the damages caused to it by the sequestration. The parties having been invited to conciliation, this was not obtained. It was declared that the petition for the extraordinary term of evidence had been made in due time and the tribunal reserved to itself the legal term to decide as to the voucher and the suspension of the course of the suit, after the decision of which, in virtue of the provisions of article 281 of the code of civil procedure, the cause remained in suspense until Doctor Bance having withdrawn the voucher it was declared to be withdrawn, and the suit continued its legal course. The latter being opened to evidence, Dr. Juan Bautista Bance proposed his in two writings of the 4th of October, 1904, and the attorney-general those he thought fit in his writing of the 5th of said month, the respective decisions of the 13th of October, 1904, concerning both the first two writings and the last one being pronounced, Respecting the evidence proposed by Dr. Juan Bautista Bance the result was that Andres J. Vigas and Ambrose II. Carner declared in Caracas; José Vicente Solis, Juan Bosch, and Andres Campos, in Guiria; José Maria Aristimimo, in Maturin; Antonio Servoni and Laureano Villalba, in Guariquen; Charles Arno in Port of Spain; that No. 7986 of the Official Gazette, of the 25th of July, 1900, in which is inserted a certification issued by the minister of fomento, on the 23d of July of the same year was annexed to the records; that at the ministry of fomento it was certified that from the year 1883 up to the 29th of November, 1904, there have been issued thirty definitive titles to mines of different kinds situated in the jurisdiction of the former state of Bermudez and several property titles to public lands pertaining to the same state of Bermudez; that the favorable merits of the records, including that of the file of the sequestration, and all the favorable merits shown by the file of the New York and Bermudez Company existing in the archives of said ministry of fomento were reproduced; that certified copies were obtained from the same ministry of the official communications 374 and 375 addressed to the civil and military chiefs of the former states of Cumaná and Maturin, in which official communications the resolution printed in No. 7986 of the Official Gazette was transcribed to those authorities; that the contract concluded on the 12th of February, 1886, with Mr. Cornelio F. O’Brien concerning the supply of wood, which appears on sheets 4, 5, and 6 of the file, was produced; that the collation of the report appearing on sheets 93 and 103 of records No. 3, marked No. 2, undated and signed by Mr. Horatius R. Hamilton, the general manager, was made in Philadelphia, State of Pennsylvania, by the interpreter Gustavo Navarrette y Romay; which report was produced in a copy before the tribunal to the effects of said collation: that there was produced a pamphlet entitled “The New York and Bermudez Company. The allegation of its rights against an illegal executive resolution issued in January, 1898. The ratification of its titles and concessions by the executive power and the high federal court of the United States of Venezuela,” [see protest 7/6] for the purpose of obtaining the declaration of Messrs. Ambrose H. Carner and Dr. Andres J. Vigas concerning the particulars inserted on sheet 3 of the file.

With regard to the evidence of the attorney-general, there appear in the records the declarations of Generals Manuel Guzman Alvarez, Santiago Briceno, A. and Rafael Velasquez, who at several times have been presidents of the states into which the former state of Bermudez was subdivided, and those of the witnesses enumerated in an attestation proposed by Gen. Luciano Rodriguez before the civil judge of the first instance of the section of Maturin, the last-mentioned declarations having been ratified before the same court conformably to a petition of the plaintiff. There likewise appears on sheets 137 and 138, second page, and 139 of the file the survey proposed by the attorney-general, with the purpose of establishing that Cano Colorado and the Guarapiche River have not been canalized up to the city of Maturin. The plaintiff produced a certification of the auditor-general of the audit office, contained in records No. 2, showing the exportation made by the New York and Bermudez Company up to the 30th of June, 1904. The minister of fomento issued the certification of several documents and acts of the file containing the contract concluded by the National Executive with Mr. Horatius R. Hamilton for the exploitation of natural products in the state of Bermudez. The attorney-general asked, furthermore, to cross-examine all the witnesses the opposite party might adduce, asked to interrogate the representatives of the opposite party, and alleged the favorable merits of the records.

The cause being fixed, the counsel for the defendant company proposed in his pleadings as points to be previously decided, that of the incompetency of the tribunal of the first instance of the federal and cassation court to pronounce judgment in the suit and the necessity of the self-recusation of that judge.

With such elements the tribunal of the first instance of the federal and cassation court pronounced judgment, on the 20th of May of the present year, declaring the admission of the action entered by the attorney-general against the New York and Bermudez Company. This sentence having been appealed, the appeal accepted, and the records removed to this tribunal of appeal, this was formed in conformity with the law, as appearing from the report drawn up on the 7th of July, 1905, after the self-recusation of the vice-president, Dr. Carlos León, had been declared lawful and the second deputy judge, Dr. Fernando Cadenas Delgado, had been called by writ on the 3d of July of the same year. After the case had been examined the parties were called to pleadings. The attorney for the company presented his in writing, which were read, and the opposite party stated that he reproduced those presented by him in the first instance.

In his pleadings the attorney for the company proposes, as a point to be previously decided, the incompetency of this tribunal of appeal, and

Considering:^a

That the power of the tribunal of the only and last instance to take cognizance of the present litigation [is derived] derives from article 11 of the organic code of the federal and cassation court.

Considering:^a

That article 95 of the national constitution, which attributes to the federal and cassation court the cognizance of the controversies arising from contracts or negotiations concluded by the President of the Republic does not provide for the procedure to be observed in the exercise of that attribution of the court, as such depends on the organic institutions of the latter.

Considering:^a

That in virtue thereof the collison adduced by the defendant does not exist.

Considering:^a

That in view of the provision contained in article 10 of the code of civil procedure, the tribunals must preferably apply the constitutional precept only when the law in force the application of which is asked collides with that precept.

Considering:^a

That in the present case the adduced collision does not exist. Now, therefore, it is hereby declared that the tribunal of the only and last instance of the federal and cassation court is competent to take cognizance of the present controversy, and, inasmuch as the attorney for the company requires the self-recusation of some judges composing this tribunal, because of their having, according to what he says, given an opinion, the following remarks are relevant:

• First. That article 117 of the code of civil procedure provides that judicial officers, whether ordinary, accidental, or especial, may be recused.
• Second. That article 119 of the same code prescribes that any judicial officer knowing that some ground for recusation militates against his person is bound to declare it. If the defendant, therefore, has surrendered the recusation right given it by the law; if the judge has not held himself bound to recuse himself, because he has not found any recusation circumstance to militate against his person, it is indispensable and conformable to law that that judge should maintain his jurisdiction over the case. Therefore the petition for self-recusation is disallowed.

And whereas the incompetency of the tribunal and the petition for the self-recusation of the judge were also adduced in the first instance as points to be previously decided, this tribunal of appeal, resting on the fact that it finds conformable to the law the grounds on which the tribunal of the first instance rested when it disallowed both the point of the incompetency and that of the self-recusation above mentioned, confirms in all their parts the previous decisions of the tribunal of the first instance of the federal and cassation court.

With regard to the action, considering:

That the cancellation being petitioned for of the contract concluded on the 15th of September, 1883, by the ministry of fomento of the Republic, by order and authority of the President and Mr. Horatious R. Hamilton, of which the New York and Bermudez Company is the cessionary, the name that contract may deserve is alien to the character and nature of the action instituted,^b since to pronounce a decision as to the latter it sufficed that the said contract is a synallagmatic one and that one of the contracting parties is said not to have complied with its obligations. (Art. 1110 of the civil code of 1880.)

Considering:

That the above-mentioned contract is a synallagmatic one, since it appears from the examination of its clauses that the parties bind themselves reciprocally. If the Government of Venezuela contracted with Hamilton and his assigns the duties contained in articles 1, 2, 3, 4, 7, of the instrument appearing on sheet 1 of record No. 1, it in return obtained the rights specified in the same document under numbers 5, 6, and 9 and those contained in the first and second additional articles of the 19th of October, 1883, and the 30th of May, 1884. If Hamilton and his assigns may import duty free the machinery, implements, and tools required by the exploitation of the products of the state of Bermudez and obtain the right to export asphalt in the same state, Hamilton and his assigns bind themselves to pay to the public treasury 2 bolivars for every 999½ kilograms of asphalt they may export and 5 centimes of a bolivar for each kilogram of any natural product, Hamilton, and therefore his assigns, bind themselves to canalize, in virtue of the second additional article, one or more of the rivers of the state of Bermudez, beginning by Caño Colorado, Guarapiche, as far as Maturin, for the exportation and importation, and the government grants them in return the exclusive right to navigate the rivers they may canalize,^c collecting a tax, to be fixed in concert with the government, from the vessels or boats that may navigate the same.

Considering:

That the additional clauses were all approved by the National Congress, as appearing from the decree of the 17th of April, 1888, and from the preliminary statement of the ministry of fomento, presented to the Congress of 1885.^a The legal validity of those additional clauses has, furthermore, been recognized by the attorney for the company in the pamphlet entitled “Defense of the New York and Bermudez Company before the federal court of Venezuela in the action instituted against it by Messrs. Charles M. Warner and Patrick R. Quinlan, that it should agree to the validity of the title to the so-called Felicidad asphalt mine,” which pamphlet has been especially recognized in this suit by its author, who, on page 9, says, “10. To form a right opinion as to the rights and obligations derived from said convention, set up for a law of Venezuela (articles 1076 and 1077 of the civil code), we give here the integral part thereof,” it being observed that he copies it thereinafter with the three additional articles.

Considering^b that by the analysis and appreciation of the evidence of both litigants it is proved in the records that the company has confined itself to the exploitation of an asphalt lake discovered within the territory of the state of Bermudez.

Considering:

That the obligation of canalizing one or more of the rivers of the state of Bermudez contained in the second additional article is an unqualified obligation independent from the text of the sole paragraph of the same additional article, for which reason it is not just to establish that said canalization or the construction of a railway determine an alternative obligation. In that class of obligations the contractor binds himself to one of two prestations and in the present case the construction is left at the discretion of the contractor, since the paragraph reads: “He will have the same rights if he constructs a railway.”

Considering:

That it appears from the survey contained in the records authorized by the Engineers S. Ortega, E. Gomez Franco, and Rafael Diaz that on the whole tract of the two portions of the river which they have surveyed—namely, that from Carlo Colorado to the coast-guard station of that name—and that from there to the city of Maturin no work, sign, or indication has been found during the careful inspection made, showing that it has ever been pretended to canalize said canyon and river, since they remain in their primitive state.

Considering:

That while it is true that, as appearing from the certification issued by the ministry of fomento on the 26th of November, 1900, communications were respectively addressed to the civil and military chiefs of the states of Cumana and Maturin transcribing to them the resolution of the Executive Power declaring that said company could make use of all and every one of the rights granted it by the contract and that it had in every case the same preference in any preemption of asphalt mines or public lands Such a fact is justified by the circumstance that at the time of those communications the cancellation of the contract had not yet been petitioned for, or, in other words, that the contract was firm as long as its cancellation had not been declared by the judicial authority.

Considering:

That the certification issued by the ministry of fomento on the 23d of July, 1900, is radically null, as deriving from an usurped authority, in accordance with the provisions of article 120 of the constitution of 1893, in force at the time the above-mentioned certification was issued. By that article every magistrate or corporation is definitely prohibited from exercising functions that are not thereby or by the laws expressly attributed to them. The same constitution, by its article 118, declares the acts derived from any usurped authority to be void, and inasmuch as in the organic law of the ministries of the 19th of March, 1898, there-does not exist among the faculties of the ministers that of issuing certification such as that referred to, and inasmuch, furthermore, as article 95 of the same fundamental law provides that the acts of ministries must conform to the constitution and the laws, it follows therefrom that the above-mentioned certification is deprived of any legal value, for which reason it can not either be considered as a concession, as the attorney for the defendant company pretends.

Considering:

That obligations are to be complied with exactly as they have been contracted. The debtor is responsible for damages in case of breach. (Art. 1163 of the civil code of 1880; 1190 of the present code.)

Considering:

That the rescissory condition is always implied in synallagmatic contracts subject to the event that one of the contracting parties should not comply with its obligation. In this case the contract is not of right canceled. The party respecting which the obligation has not been complied with has the option either of compelling the other party to the execution of the contract, if it is possible, or of demanding the resolution thereof, besides the payment of damages in both cases. (Art. 1110 of the civil code of 1880; 1137 of the present code.)

Considering:

That article 9 of the contract under discussion provides in its final part that “the nonfulfillment of any part of the stipulations herein mentioned renders in fact (ipso facto) the present contract null and void which clause the federal court of Venezuela, in a sentence pronounced on the 23d of August, 1898, declaring the nullity of the executive resolution of the 4th of January of the same year, petitioned for by the New York and Bermudez Company, termed in number 10 of the preamble “an unqualified binding compact,” which term this tribunal confirms; and inasmuch as said compact is equivalent in law to the implied rescissory condition dealt with in article 1110 of the civil code of 1880, equal to article 1137 of the present code, it produces the same effects and does not imply the waiving of any right.

Considering:

That the nonexecution of the contract by the defendant company is fully proved in the records.

Considering:^a

That the allegation of prescription is irrelevant, both because the cause of the obligation being in vigor, which in the present case is the contract of 1883, the obligation itself exists, and because from the month of April, 1886, when the last extension of time expired, up to the 20th of July, 1904, when the action as instituted, the twenty years required by the law for the prescription of personal obligations have not elapsed. (Art. 1909 of the civil code of 1880; 1964 of the present code.)

In virtue of these grounds, administering justice by authority of the law, the appealed judgment is confirmed in all its parts and the appellant is condemned to pay the expenses.

Let it be published and registered.

Let the file be returned.

Given, signed, and sealed in the sitting hall of the federal and cassation court, at the Federal palace of Caracas on the 7th day of the month of August, one thousand nine hundred and five, the ninety-fifth year of the independence, the forty-seventh of the federation.

The Vice-President,

Emilio Constantino Guerrero.

The Relator,

Tomas Marmol.

The Chancellor,

J. Abdon Vivas.

Judge,

E. Enrique Tejera.

Deputy Judge,

Fernando Cardenas Delgado.

Deputy Judge,

Emulio H. Velutim.

The Secretary,

R. Medina Torres.

[Inclosure 2.]

note a.

These five “Considerations” agree in principle with our contentions and also with the opinion of Dr. P. Febres Cordero, who, as attorney-general of the nation, in 1898 rendered an opinion, translated on page 125 and following of Volume I, printed book, Felicidad litigation. But in practice the present court departs from the action of its predecessor in sending this case first to an inferior division of the court, thus requiring two hearings and an appeal, at least, where the former court settled the case definitely in one hearing.

Moreover, by dividing the case into two parts it required four hearings and two appeals, at least, to reach the same definite result that the court in the previous case reached in one hearing.

It is evident from the record of this case that this division of both the court and the case was deliberately done for the purposes of delay, that thereby the final result might be put off as long as possible in order that the Government of Venezuela, being in possession of the property, might the longer enjoy the possession and the fruits of the company’s property; and instead of this action of the court of first instance being an advantage and protection to the company, as stated by the lower court, it has been a direct hardship and has greatly prolonged the proceedings and added immensely to their cost.

[Translation.]

For the full text of this opinion see page 125, Volume I, printed book (considerations on pages 7 and 8).

opinion of procurator-general.

Republic of Venezuela,
Office of the Procurator-General of the Nation.

Report of the procurator-general of the nation upon the Executive order declaring the escheat of the contract between the government and the New York and Bermudez Company for the exportation and exploitation of the natural productions of the forests on the wild lands in the State of Bermudez, of Venezuela.

May, 1898.

Republic of Venezuela,
Office of the Procurator-General of the Nation.

Report of the procurator-general of the nation upon the declaration of escheat of the contract executed with Horatio W. Hamilton in 1884, which was assigned to the association known as the New York and Bermudez Company in 1885 for the exploitation and exportation of the natural products, including asphalt, of the forests standing on the wild lands of the State of Bermudez.

The former minister of fomento of the United States of Venezuela issued, on January 4 of the present year (1898), an order wherein, on various grounds, is declared escheated the contract to which the present report refers, except in regard to the exploitation of asphalt, on account of its not having been executed in the period granted therefor, nor before said period, and because “by the ninth article of said contract it is provided that failure to comply with any of its terms annuls it at once.” And as Señor Dr. Carlos León, in his capacity as agent of the New York and Bermudez Company, presented a petition to the ministry of agriculture, industry, and commerce, under date of April 12 last, asking for the annulment of said order of January 4 of the present year, and as a consequence the confirmation of the contract referred to, the undersigned, procurator-general of the Republic, in compliance with the dispositions made in cabinet by the citizen President of the Republic, hereby reports his opinion on the subject, having studied the papers which Señor Minister of the Department was pleased to send to him with his official communication of the 23d of the present month.

* * * * * * * *

The contract having been entered into and its fulfillment ordered, one of the parties says, some time after, that the other party has not carried out its obligations, when such other party, confiding in its rights, believes the contrary. Here then is a difference, a controversy, the decision of which, if it can not be amicably arranged by mutual consent of the parties, devolves only upon the judicial power and in no manner upon one of the parties themselves. The law, always wise, always prudent, foresaw the dispute which might arise in contracts and provided that a condition of dissolution shall be always implied in bilateral contracts in case one of the contracting parties should not meet his obligations. (Art. 1131, civil code.) And as it is also provided that in such case the contract should not terminate automatically (de pleno derecho), but that the party who had suffered from failure of fulfillment should have the option either to force the other party to perform the contract, if performance be possible, or to demand its rescission, with payment of his damages and losses in either case (ibid.), so also it directed that in such cases as the present the high Federal court is the tribunal which should take cognizance of and decide in first and any instance controversies arising from contracts or negotiations entered into by the national Executive. (No. 11, art. 110, constitution; No. 7, art. 11, organic law of the high court.) And this method of procedure gains more force when one observes that it is provided for in the contract in question, which directs, at the close of its eleventh article, that “doubts and controversies arising from this contract shall be decided by the tribunals of the Republic in conformity with its laws.”

* * * * * * *

Such is the opinion of the procurator-general, which is respectfully submitted to the better criticism of the national cabinet.

Caracas, May 28, 1898.

P. Febres Cordero.

Republic of Venezuela, Office of Procurator-General.

note b.

It appears by this record, page 1, that the original Hamilton contract made in September, 1883, had certain additions made—one in October, 1883, and three others in May, 1884; that the contract was approved by Congress in June, 1884—that is, after these additions had all been made. Therefore it appears that the Congress of 1884 had before it the contract and all four additional articles, but it only approved the first additional article, and therefore by all ordinary rules of construction this was equivalent to an express declaration that Congress did not desire to approve the last three additional articles. When, therefore, this court declares, see page 11, that by the omnibus decree of the Congress of 1885, approving in gross all executive acts of the President, it included these additional articles, it is plainly in error, as the additional articles had been passed upon by a previous Congress and failed of approval. Hence by the action of the previous Congress they were removed from the domain of a simple executive act, requiring confirmation. The rest of what the court says in that paragraph on page 11 about Doctor Bance’s quoting the contract with all the articles attached, and thereby giving them judicial validity, is too absurd for serious consideration, except that it shows that this court was itself doubtful of their judicial validity without Doctor Bance’s approval.

note c.

By Article VIII of the Hamilton contract (which this court very carefully refrains from mentioning or quoting), the rights and obligations of Hamilton became fixed as of the date of September 15, 1883, and the period of the statute of limitations runs from the same date.

The time to begin the work has nothing to do with the term of the contract or with the term of the running of the statute of limitations, and the date of the approval by the Federal council refers only to said extension of time for beginning the work. (See Art. IX.) It is therefore evident that from and after the 16th day of September, 1903, all actions for breach of the terms of the above contract were absolutely barred.

[Inclosure 3.]

Mr. Wright to Chargé Hutchinson.

Caracas, August 8, 1905.

protest against the decision of the federal and cassation court.

Sir: I beg to inclose herewith a copy of the Official Gazette, No. 9532, published last night, with translation, marked with our document number 7/59, which contains the decision of the court of last resort, the federal and cassation court of the United States of Venezuela, on the appeal of this company from the decision of the hall of first instance of said court. This decision confirms in all points the decision of the lower court and adjudges the costs of the litigation against the company.

In the name of the New York and Bermudez Company, as its legally constituted attorney in fact and as the managing director in Venezuela of said company, I appear before you and enter formal protest against the above-mentioned decision and all officials and persons connected therewith as being an absolute denial of justice and as being contrary to the evidence, the facts, and the law.

I also attach hereto the pamphlet numbered 7/58, which contains (separately bound) translations and copies of the following documents in the case:

english translations.

7/54. Argument of company’s counsel, Doctor Bance, on appeal for final decision in suit in Hamilton concession. Attorney-general of Venezuela made no answer to these arguments.

7/55. Organic law of courts of Venezuela, quoted by Doctor Bance and also by the court in its decision.

7/57. Pinelli contracts for navigating the rivers canalized by the company, and comments on same.

spanish copies.

7/54, 7/57.

I also attach the following documents. These constitute the complete record on appeal.

english.

7/52–2. Translation of second part of record, containing proofs submitted by the government in this case, referred to in decision.

7/52–3. Translation of third part of record, containing proofs submitted by the company in this case, referred to in decision.

spanish copies.

7/52–1. This consists of the demand and answer in lower court, were translated some time ago, and copies are already before the Department of State or can be furnished from Philadelphia office of company—namely, 7/1, 7/2, and 7/4.

7/52–4. This consists of the arguments of counsel before lower court and the court’s decision. The same remarks apply to these documents as to those next above. They are 7/48, 7/49, and 7/50.

I have no translations of 7/52–1 and 7/52–4 here, or would attach them hereto.

I also protest against the Government of Venezuela, the attorney-general of the same, and Dr. Manuel A. Ponce, his agent at Guanoco, for their illegal interference with and intimidation of our lawyers and agents sent there to obtain testimony, and also our witnesses, as appears in the affidavits of Bartlett, Scott, Pinango, and others already before the Department. See Documents 7/10, 7/11, 7/12, 7/19, 7/20, 7/29, 7/41, 7/42.

I also protest against the stoppage of my cables by this government as constituting a denial of justice. See 7/37, 7/38, 7/39, and 7/40.

I also protest against the lower court for protecting A. H. Carner from testifying when he was subpoenaed by this company to certify to the authenticity of a certain pamphlet, marked “7/6,” copy attached, entitled “The New York and Bermudez Company—Statement of its rights against an illegal executive resolution of January 4, 1898. A revalidation of its titles and concessions by the executive power and the high federal court of the United States of Venezuela. Caracas. Editorial Printing Office of Soriano Successores. 1899.” The dedication of which to Gen. Ignacio Andrade, constitutional President of the Republic, is signed A. H. Carner, managing director, and the preface and acknowledgments of which are signed “A. H. Carner, managing director, Guanoco (Venezuela), April, 1899.” See 7/52–3, pages 22 and 23, also attached to exhibit I herewith. An exception was taken by the company at the time, as important letters and documents in the company’s files had been used by Mr. Carner in making the entitled defense, and it was desired to introduce them here and have them verified by Mr. Carner as the basis of his defense of the company. The action of the lower court frustrated this. There was still, as we supposed, a chance that on hearing this exception the higher court would give us the opportunity to examine Mr. Carner and get this evidence in. The higher court apparently has taken no notice whatever of this exception, at least the writer has not been advised of any, nor is the incident in any way referred to in the decision of the court. I attach hereto the documents in question, marked as follows:

“Exhibits I to XVII,” inclusive, noting the fact that there are two exhibits numbered 7 and no number 14.

“Exhibit XVIII.” See 7/52–3, page 51.

“Exhibit XIX.” Two affidavits of Clyde Brown, secretary New York and Bermudez Company, sworn to before Edgar W. Lank, August 26, 1904, and two affidavits of Peter B. Steffen, dated August 26, 1904, and August 30, 1904, sworn to before Edgar W. Lank.

“Exhibit XX.” The letters and copies referred to by Clyde Brown in Exhibit XIX, with his affidavit attached, dated August 26, 1904.

“Exhibit XXI.” Consisting of extracts from Exhibits I to XVIII and an envelope containing various letters, statements of accounts, receipts, and other papers from different agents of the company from 1886 to 1898.

I also protest against that part of the decision of the federal and cassation court on appeal (7/59) which gives weight to the testimony of Gen. Rafael Velasquez, whose evidence is all hearsay, and call attention to the fact that it was on the strength of a telegram from this witness that the government seized the property of the New York and Bermudez Company and placed it in the hands of our principal business competitors. I attach Exhibit XXII, documents 7/36, which contains this testimony in both English and Spanish, and it also appears in 7/52–2, pages 102–108. The original of this testimony is attached also to the sequestration proceedings, 7/51. And finally I solemnly and sincerely protest, in the name of the New York and Bermudez Company, against the said decision of the federal and cassation court of Venezuela and against any and all other acts of whatever nature or kind, whether embodied in this protest or not, which have been or which may be performed in the premises and which are or may be prejudicial to the interests of the said the New York and Bermudez Company, reserving to said company all its rights in order that it may use them at the proper time and opportunity.

Robert K. Wright,
Managing Director New York and Bermudez Company.

Subscribed and sworn to before me this 8th day of August, A. D. 1905, in the American legation, Caracas, Venezuela.

Executed in quadruplicate.

[seal.]

Norman Hutchinson,
United States Chargé d’Affaires a. i.

[Inclosure 4.]

certified copies of the petition made by dr. carlos león, in the name of the “new york and bermudez company,” 1900.

[Seal of the ministry of fomento.]

Julio Perez Garcia, director of territorial riches in the ministry of fomento of the United States of Venezuela, certifies that in the mining archives of this ministry among the papers relating to the New York and Bermudez Company are the following:

León’s petition protesting against the order of escheat.

To the Citizen Minister of Agriculture, Industry, and Commerce:

I, Dr. Carlos León, counselor, here domiciled and of legal age, as representative of the New York and Bermudez Company, as appears from the original power of attorney, which I inclose herewith in order that it may be returned certified, respectfully represent to you:

Under date of January 4, 1898, was issued by the ministry of fomento an order wherein the citizen President of the Republic, with the affirmative vote of the cabinet and after deliberation by the council of government, declared to have escheated the contract executed by said ministry with Horatio R. Hamilton on October 19, 1883, to explore and exploit in the State of Bermudez the natural products of the forests standing on its wild lands, asphalt being included therein, of which contract the company represented by me is assignee. The causes set forth in said order for declaring the escheat of the contract are precisely those which should have influenced the mind of the citizen minister not to issue said order; in effect it is acknowledged in said order that the New York and Bermudez Company has continually exploited in the State of Bermudez, and, what is more, that said company owns, by concession obtained under the law of mines, a bed of this substance in land for which it filed claim and which it bought from the national government under the law of wild lands. The ninth article of the contract reads thus: “Horatio R. Hamilton binds himself to begin the execution of this contract within the term of six months, which may be prolonged for six months more at the option of the government, to be computed from the date on which this contract is approved fry the federal council under the law in the matter, and default in the fulfillment of any of the stipulations herein expressed annuls this contract immediately,” and from the very order which we are analyzing it appears that the company has fulfilled such stipulations, since it has explored the forests of the State of Bermudez, has exploited its asphalt mines, and, moreover, has paid scrupulously the 2 bolivars which it bound itself to pay for every 999½ kilos of asphalt which it should exploit. Not only has the company explored the woods of the State of Bermudez, but it has built 6 miles of railroad from the banks of the river Guanoco to the mine which is now in exploitation.

It has paid to the custom-house at Carlo Colorado 40,000 bolivars of taxes on exported asphalt, and has paid 175,000 bolivars to the same custom-house for goods imported for the use of the great number of laborers in its employ. In the ministry of finance are the reports on the progress which the company represented by me has made in the midst of the forests of the State of Bermudez. It is not long since Señor Perez León, the present inspector of customs for the east, made one of the most brilliant reports to said ministry. There, also, may be found a report by Gen. Diego Bautista Ferrer and another by the present administrator of customs of Caño Colorado, all of which you may obtain from said office in order better to enlighten your judgment. The company has spent more than half a million dollars in exploring the forests and exploiting the asphalt mines of the State of Bermudez, and I am unable to understand how it is said in said order that “the expenses which the said company may have incurred in its works and constructions can not validly be alleged in proof of the validity of this contract, since they were incurred only for exploitation of the aforesaid deposit of asphalt,” This shows that when the order was issued the contract of which the company represented by me as assignee was not even read. Indeed, the contract in question says, in its first article:

“The government grants to Señor Horatio R. Hamilton the right to explore and exploit the natural productions of the forests standing on wild lands in the State of Bermudez, he being empowered to take from them wood for building,” etc.

In its second article:

“The government also grants to Señor Horatio R. Hamilton the right to exploit the asphalt in said State of Bermudez.”

In its fifth article:

“Señor Horatio R. Hamilton binds himself to pay to the public treasury 2 bolivars for every 999½ kilograms of asphalt exported by him and 5 bolivar centimes for each kilogram of any of the natural productions above named,” etc.

The ninth article has already been quoted above.

Has the company which I represent made default in the fulfillment of the above stipulations? The government grants to Señor Horatio R. Hamilton the right to explore and export the natural productions of the forests standing on wild lands in the State of Bermudez, he being empowered to take therefrom timbers, etc., and also grants to him the right to exploit the asphalt mines, Hamilton binding himself in compensation to pay to the public treasury 2 bolivars for each 999½ kilograms of asphalt exported by him and 5 bolivar centimes for each kilogram of any of the other productions. It appears from the order that the company was exploiting at the date of the issue of the order one of the asphalt mines lying in the forests of the State of Bermudez, and it should have been remembered that in order to discover that mine it was necessary to make explorations in said forests under authority; and, moreover, the company has planted in them more than 20,000 cacao trees and has built wharves upon the river Guanoco, the timbers taken from the forests have been employed by it in the construction of bridges, of buildings for the lodging of its great number of employees, and of the railroad line above mentioned.

Thus it is evident that the company has exploited and was exploiting, both by its mining and by its agricultural works, up to the issue of the sudden declaration of escheat, the concession assigned to it by Hamilton, unless the citizen minister who issued the order believed that the company ought to explore and exploit simultaneously all the land and all the resources contained in said concession; but this, besides being absurd, is an obligation which is not found and can not be found in any of the clauses of the contract, and hundreds of millions would not suffice for such collossal undertaking. Business enterprises begin, however flattering may be their distant future, with a capital proportioned to the means of those who initiate them, being given the circumstances of time and place under which they are to be developed, and in this enterprise there have already been invested more than 2,500,000 bolivars. The farms and plantations known as “Guariquen,” “Puerto Caripe,” “Parare,” “Buen Pastor,” “Agua Clara,” “Guacarapa,” “Majagual,” “Azagua,” “Princeres,” “Caripe,” “Maturin,” “Acagua,” “Pillar,” “Cariaco,” and various others, extending for 80 miles from the mine, live by the company. It buys from them all their productions, and the great number of Americans who constantly come to visit the mine give life and animation to a large part of the territory of the State of Bermudez; and to-day all this region is desolate at the cessation of the daily work given by the company.

A steamer owned by it plies between Trinidad and Caño Colorado, and the government must have learned from the reports of the custom-house of this port the profit yielded by this steamer to the nation. I take the liberty of asserting that the order was not issued after sufficient deliberation, because such a measure besides inflicting great losses upon the company represented by me inflicts great losses also upon the national government and upon a large part of the state of Bermudez. Moreover, what confidence can foreign corporations have when after they have sunk great sums of capital in the country they may be suddenly and without warning deprived of all their rights? This is equivalent to closing the doors to foreign investors, inspiring in them just distrust.

For these reasons I have recourse through your honorable means to the chief of the executive power, petitioning him that he be pleased to vacate the order issued on January 4 of the present year by the citizen minister of fomento, and thus to declare valid the contract of which the company represented to me is assignee.

Caracas, April 12, 1898.

Carlos Leon.

Ministry of Agriculture, Industry, and Commerce:

The foregoing document was received in this office to-day, April 13, 1898, at 11 a.m.

The director.

Francisco de P. Alamo.

1. See inclosure 2, note A.
2. See inclosure 3, note “A.”
3. See inclosure 3, note “A.”
4. See inclosure 3, note “A.”
5. See inclosure 3, note “A.”
6. The fact which was assumed by the lower court that the contract in question was a lease, was the sole ground upon which the sequestration could have been made; hence to this extent the name was vital.
7. This is what the government expressly denied to the company in public documents from the government archives, and to which the attention of this court was particularly drawn, but which they entirely ignored. (See 7/58, 7/54, and 7/57.)
8. See inclosure 2, note B.
9. The records prove the direct contrary of this. (See 7/52–2, pp. 6 to 9, and note on page 9 of same as to omissions of years 1892–1902
10. See Inclosure 2, note A.