The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1870-05-02

them Of any stocks or securities in satisfaction
of the amount Of the said judgment, nor wer
any such arrangements In progress when TIL
complaint was fled. The said nrm, however, 1
now prepared, as 1t has always been to settle tn
said claim held BY them on any fair and reason SO
able proposal which may be made by the salt
City Council.
2. And this defendant for and on behalf OF th
said firm Of George ". Williams j. Co., for furthe
answer TO the said complaint, denies that the sait
City Council OF Charleston is insoIvent, as alleged
BY the plaintiffs, but on the contrary this delen
dant insists that the Indebtedness OF the said CITY
Council is far less than Its assets real and person
al, and that all the property OF the said CHJ
Council of Charleston, real as well as personal, |:
| responsible for the payment OF the obligations
contracted by it, and that these obligations car
be more readily and satisfactorily discharged pJ
! an economical and wise administration OF tne
city government, by those appointed by law t(
that duty, than by the cumbersome and expen
sive system OF the appointment OF receivers and
marshalling OF assets, as proposed by the plain
BUST & BUIsT, Defend dants' Attorneys.
William Whaley, Esq.,, stated that he represent
ed a number OF the holders OF city stock to q
large amount, and desired to be heard In the
cause at the proper time, without answer.
THE ARGUMENT.
General James SImons, in his opening for the
complainants, said that the case now presented
an aspect very different from that which it had
when the complaint was filed. Before proceed.
ing, however, he desired to have 1t understood
that In no sense did the compliments think II
proper that the debt due to the public by the city
should be repudiated They believe the debt is
ultimately good and that there are principles
which regulate the liability OF municipal corpora
tions, and machinery applicable thereto which
practically protects the holders OF all city stock.
The principal ground OF the complaint was
based upon very high equity-that the com.
plainants were PLEDGES or mortgages of certain
assets, solemnly set apart by an ordinance Of the
City Council to meet certain engagements by
that body; and they sought to protect themselves
from an inconsderate violation OF that contract,
either by other creditors or by the Council. When
the Messrs. Gibbon obtained their Judgment, it
was In contemplation on their behalf to receive
from the City Council, and In contemplation by
the City Council to transfer to them, at par, cer-
tain city stocks which, according to our concep-
tion, came within the scope Of the securities
pledged by the ordinance OF 1857 and We there.
fore believed we had right as the mortgages Of
this stock, to restrain both the creditor and the
Council. That is the main equity of this COM
plaint. We also said that the defendants were
proceeding to levy upon other property Of the
city; but the equity upon which we principally
rested was that this pledged stock was to be d.
verted from its purpose, and as the holders by
pledge OF that stock, we claimed that we were eH-
titled to stay the hands Of the City Council and OF
the Gibbons. The City Council have not answer
ed, and from this fact we assume that they in
tended 30 to do.
While am thus engaged, will go step furth
er, though my associates may not altogether
concur in my views. The complaint alleges that
the City Council are lnsolvent. In one sense they
are. They have not the means OF paying the debt
Of the city as it falls DUE When the arrangement
was originally made, the inhabitants Of Charles
ton were worth between forty and fifty millions
OF dollars. At the present time the real estate
does not amount to twenty millions OF dollars.
At least one-drth was destroyed by 1re, and the
remainder has deteriorated In value from causes
incident to the late war. The people are there.
fore hot In a condition TO pay these large install
ments, extending from 1857 20 1898. The City
Council at this moment are unable to pay the
Sl50.0eo now due, or the $40 900 that will fall due
In October or the s5o,ooO that will fall due In Feb
ruary next. The celerity with which the present
creditors have sued will naturally induce others to
follow their example, and we may reasonably con-
ceve OF at least one hundred suits brought against
the city. Under these circumstances, Iwould sug-
gest that your Honor make temporary order pro-
tecting this pledged stock, (which will satisfy the
complanantsl and then suspend the further dis
cussion Of this case thirty, forty or fifty days. II
practicable by the consent OF the parties, a COM
mission should then be appointed on behalf OF the
City Council and the creditors, before whom
should be marshalled the assets applicable to the
payment OF the debt OF the city, and by whom a
scheme might be suggested for the entire lquida.
tlon OF the debt. Ny own opinion Is that the
whole debt can be paid In thirty years, to which
time it should be continued, and that the interest
should be paid in specie In quarterly instalments
say 1--WE or six per cent. Such plan would,
believe, raise the credit OF the city, materially re-
lIeve 1t from the burden OF taxation, harmonic
the feelings Of all interested, and prevent multi
plicity OF suits.
L. W. Spratt, Esq. counsel for complainants, call
edthe attention Of the court to the fact that there
were two equities in the case. His colleague
General Slmons) had referred to the special equi.
ty OF the creditors, protected by the ordinance
OF 1857, bat there was an equity Of the general
creditors to participate in the general assets OF
the city, on the assumption that the city was in
solvent, and 1t was doubtful whether their claims
could be paid in full. They therefore claimed
that the present judgment creditors ought not TO
take any portion of the property exclusively, but
that 1t should be brought In and distributed pro
rata.
Judge Carpenter said that the general creditors
were not before the court. II the City Council
owed debt, their path OF duty was clear. If
they failed to perform 1t upon application, man
dan,us would issue compelling them to levy tax,
and IL they disregarded 1t they would be attacked
fer contempt. Their business was to levy taxes,
and obtain the funds to meet their obligations or
to exhaust their assets. In the present instance
the Council had made no effort.
Mr.. spratt observed that while the power Of as
aessment might exist, If the general creditors
were not protected, then the equity occurred, in
which they asked the court to take possession OF
the funds OF the city,
The Judge stated that he could not do that until
the general creditors made the request. But 1t
might be understood, first and last, that every
debt contracted by the City Council must be paid
and paid In full. At the present time. he could
not look beyond the two questions involved in the
pleading: First, can Gibbon & Co. proceed to
execute their levy upon the funds In the banks
And, secondly, ought the City Council to be re.