Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1883-12-08
HEAVY LAW SUIT
s,-ss
Pending Before Judge Hammond in tsle
United States Court-Several Hum
dred Thousand Dollars
Noniinally Inyolved-Mississippi Central
Stockholders Against Gen. X. p.
Neely, State Administrator.
synopsis of the Arguments ON Eithe
Side-Eminent Legal Talent En-.
gagged i'm the Case.

IL the United States Court yesterday ar
gumept on demurrer in the suit. of Fay
ette county rs. Il. I. Neely, administration;
was being heard. Nominally, several
hundred thousand dollars are involved.
The bill is so vaguely drawn that it is inn
possible to determine the exact amount.
The real issue, however, seems to be for a
| sum not exceeding 100000. The suit is
one OF MANY growing cut of the issue oil
bolids in aid Of railroads, and Is full of le-
gal Complications snd nee points OF law.
The facts are about as follows: Under the
old internalimproveme law of February
II, 1851, the State of Tennessee loaned the
Mississippi Central railroad bonds amount
ing to $4,000 mile, to aid in the con-
struction of the part of the line in Ten
nessee. There was a proviso, however,
that the railrcad was ia par the interest cf
six per cent. on these bonds as regtilarly
as it fell due, and to take up the bonds
themselves at the proper time, relieving
the State from all expense and annoyance.
By this understanding the State
was virtually the indorser for the
railroad, agreeing to pay il the railroad
company failed to do so. The statute au-
thorizing the issuance of these bonds also
provided that in the event OF the failure Of
the railroad to pay the interest and pfin-
Clpdi tllc ctstto lilISHb dppOluI u ItCclNtT
whose duty it should be to take charge of
the road and manage it for the State, ap-
plying all the revenue to the liquidation
OF the bonds. The bonds issued by the
State were sold by the Mississippi Central
Railroad Company and the proceeds ap-
piled to the construction of the road. The
company, however, failed to pay the in
terest and bonds, and by virtue of the
statute Gov. Porter appointed Gen. r. T..
Nicely as receiver. Other mortgages
had been given besides those to
the State, and most of these
fell into the hands OF parties working in
the interest OF the Illinois Central rail-
road. They purchased the Mississippi
Central from Gen. Neely, receiver, and
paid the State the amount due it. The
original stockholders did not get SMELL
and in consequence suit is brought by per-
sons in Fayette county who own stock.
Thay claim that Gen. Neely expended in
permanent improvements on the road GER
tain moneys which should have been paid
to them as stockholders, and also that he
transferred to the Illinois Central about
$4,000 worth of iron and other material
not included in the purchase.
The suit promises to be a lively one,
not only on account OF the amount in
volved and the nice question of law to be
settled, but on account of the eminent
legal talent engaged in the controversy
The complainants are represented by Gen.
Walthall, of Mississippi, and Mr.. l.. W.
Humes. The defense is represented by
Judge. fortress, Gen. Luke Wright and
Mr. Harry Hill. The argument is being
heard by Judge Hammond.