CO537-4841 — Page 42

4

until the

appleration for the apple of

on recommia made in

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Jam

of the vital importance of the fact that the actual individuals

in control of the aircraft were Communist sympɛthizers and

claimed to hold them on behalf of the Communist Government.

Nevertheless, never again did any one on the Nationalist amenion

side take any step in the court to obtain any order remedying

this state of affairs. Further in Cases Nos. 1, 2 and 3

our

NO

+/amenian

the plaintiffs proceeded in a dilatory manner. They never filed

I believe they found difficulty in any pleadings.

establishing their position as plaintiffs.

12th December 1949. There was on this date signed between the

Chinese Nationalist Government and Chennault and Willauer

a contract under which the said Chenault and Willeuer

purchased all the assets wherever situated of CNAC and CATC.

It was alleged that this contract was assented to by the

Board of Directors of CHAC and by persons acting on behalf

of the shareholders of CATC, including persons acting on

behalf of the 20 Pan-American interest.

17th December.

Chennault and Willauer sold their interest

under the contract of the 12th December to a new entity

incorporated in Delaware called CAT. INC.

20th, 21st, 22nd. 23rd December. Application made to the

Hongkong Court to join as additional plaintiffs in cases

Nos. 1, and 2 Chennault and Willauer. Applications

rejected by the Chief Justice on the grounds that

interests of Chennault and Willauer conflicted with those of

the present plaintiffs. (N.B. Chennault and Willauer clearly

took the wrong step. They should have started a new case

themselves and the previous plaintiffs in cases Nos. 1 and 2

have withdrawn. Also the step was further wrong because

Chennault and Willauer had already on this date sold to CAT.

INC. and about the same time the defendants in cases Nos. 1,

2 and 3 applied to the court for the discharge of all the

injunctions. Game No. 3 was taken as a test case and the

Chief Justice refused to take off the injunctions. He said

he was asked to remove them on grounds of fact and law

w.ich could only be decided in the action. He pointed out

/also