Savannah morning news. [volume] (Savannah) 1868-1887, 1886-05-23
BEGUNSUITF0RA HAMILTON
BIG CASE FILED IN THE UNITED
STATES COURT.

The Trustees for the BOndhoiders of the
Macon and Brunswick Railroad Bring
suit Against the East Tennessee, Vir-
ginia and Georgia Road and the Cen
trial Trust Company for Foreclosure of
Mortgages to Recover 81 100000, and
Fifteen Years' Interest.
A dill in equity was fled in the United
states Circuit Court yesterday by Samuel
A. Strang and James J. Goodwin, trus-
tees for the holders of the second mort
gage bonds OF the Macon and Brunswick
Railroad Company, against the Macon
and Brunswick and the East Tennessee,
Virginia and Georgia Railroad Company
| and the Central Trust Company, Of New
York, for foreclosure OF mortgages to re-
cover 81, 100000, principal, with interest
thereon since 1871.
The Macon and Brunswick railroad
is part of the East Tennessee, Virginia
and Georgia railroad system which is to
be sold May % at Knoxville. Tenn. When
the Central Trust Company, of New York,
was applying to the late Judge Baxter
for decree Of foreclosure of its mortgage
on the whole East Tennessee, Virginia
and Georgia system at Knoxville, Strang
Il Goodwin filed a cross bill In the
court, but Judge Baxter decided
that his court had not jurisdiction
because the Macon and Brunswick road
| is in Georgia. He, however, in granting
the decree to sell the system, required 1t
to be sold subject to any prior lien-this
one included should it be decided to be a
valid lien.
SEIZURE THAT WAS ILLEGAL.
The bill filed here alleges that the seiz-
ure and sale of the Macon and Brunswick
road by the Governor OF Georgia in 1875.
was wholly illegal, and hence, that the
second mortgage lien is still good. and
superior to the lien OF the Central Trust
Company.
The compliments, through their coun-
! sci, Hon. 4. Nj. Norwood and james
| 1omson, Esq, recite the history of the
States connection with the road from the
time it Endorsed the company's bonds
under the act of 1865. The bonds aggre-
gated 81, 950,0 900, aud as security for its Ii
ability the State reserved to Itself statu-
tory first lien upon the railroad. In
September, 1868, the Macon and Bruins
wick executed l, 100 bonds to Strang and
Goodwin.
TO RUN FIFTEEN YEARS.
The bonds were to run 10 years, bear
ing Z per cent. interest. About the
same time the company gave Strang and
erty. January -, 1870, the company
made an instrument giving the Governor
of Georgia power to sell the road if the
interest on the States bonds was not paid
promptly. That lien the orators allege
is junior and Inferior to theirs
In July, 1873, Gov. James NJ. Smith ap-
pointed George II. Hazehurst to operate
and manage the road for the State, as the
company had defaulted on its interest.
Fhe State then seized the road and Oper-
ated it, retaining the receipts. In June,
1915, Gov. Smith ordered the road to be
sold, and 1t is alleged in the bill that the
sale was not properly advertised. 1t is
also declared that the terms were such
that the compliments nor any other bond
holders could purchase the road.
BOUGHT BY THE STATE.
At the sale in Macon the road was
Knocked down to the State for $l,000,0 00
when, as the cOmplainants say, the prop
erty was worth 81, 100000. The State re-
manned in possession Of the road and all
the property until 1880, when it was
transferred to the Macon and Brunswick
Railroad Company, a corporation organ.
lied the same year. In the following year
the road was transferred to the Cincln-
natl and Georgia Railroad Company,
which the same year transferred the
property TO the East Tennessee, Virginia
and Georgia, which still holds it.