The morning news. [volume] (Savannah, Ga.) 1887-1900, 1892-03-26

ness Of the Central Railroad and Banking
Company, and default on them would, in
the opinion OF the directors, not only have
brought distress upon a great many people
who were dependent upon the moneys due
them, but would also have seriously affected
the credit Of the company. The directors
were so strongly satisfied of the invalidity
Of the claim, and that when properly
brought to the attention of the Danville
company its invalidity would be recognized,
that they did not consider that they
were risking their securities and
were perfectly willing to place them in
escrow to save the default and the disastrous
consequences which might have followe it.
The affidavit further states that the board
of directors constantly and persistently re-
fused to turn over any securities of the
Central to the Danville company to be used
by the latter to raise funds, believing that
il was better even that the company should
default for a while on its obligations than
TO permit this to be done.
RoUNTRER RESUMES HIS ARGUMENT.
Mr.. Rountree resumed his argument at
1920 o'clock. He discussed the validity Of
the lease. He said it was invalid for three
reasons:
!. 1t was ultra vires
2. 1t was void. because contrary to public
policy.
g. 1t was void, because contrary to the
constitution.
Mr.. Rountree proceeded to discuss these
points. He said that there was nothing in
the charter of the Central railroad allowing
it to lease itself. The failure to provide for
this power in the charter constitutes an ex-
clusion of the right. He contended that
neither the Georgia Pacific nor the Central
had the power under their separate charters
TO lease or be leased to one another. 1t was
void, be said. because it created a monopoly
and contravened the constitution. He said
the competition between the lines of the
Terminal system was like that between
clerks in a store who competed together to
see who could make the largest sales for
their employe. 1t was not the kind Of COM
petition that increased or afforded better
facilities. The lease was void,
he said, because it was en-
bodied In il that the lease Of the Central
cannot be assigned by the Georgia Pacific
to any other corporation without the per-
mission of the Central directors, and yet
it had been assigned to the Danville without
the permission of the Central directors.
Neither the Central nor the Georgia Pacific
has any contract with the Danville to oper-
ate the Central. Mr.. Rountree condemned
the negligence and ignorance of the Cen.
trails directors in the making and the carry
ing out Of this lease, especially in allowing
the road to be taken possession of by the
Danville without any specific contract to
that effect. Mr.. Rountree cited number
Of authorities bearing upon the points
stated.
CASE THAT COVERS 1T.
Judge Pardee suggested that the whole
ground was covered in Reports United
States Supreme Court, 139 Mr. Rountree
secured this and read copious extracts bear
ing upon the points he had named. Mr..
Rountree relied greatly upon the case of
Langdon VS.. Brany, and Spelling on Corpo-
rations was also referred to. Hr. Rountree
asserted in his argument that the leasewas
made by the president aud directors and
indorsed by the directors Of the Richmond
and Danville
am not, and never have been, an attorney
for the Richmond and Danville, sharply
remarked Mr.. Cunningham.
Mr.. Rountree replied that as the Central
was controlled by the Richmond and Dan
vile he did not see the difference. In an
swer to a statement OF Mr.. hountree's as TO
the lease being improvident, Judge
Pardee remarked that improvidence
had nothing to do with it. Judge
Pardee said: "If we should hold
the lease not ultra wires and void
but voidable the stockholders would have
the option of ratifying It." Judge Pardee's
statements and questions are given through
out as showing the tendency of the court in
the case.
Mr.. Rountree then argued upon the dis
position Of the property IL the lease be de-
clared void. He argued that if the road
should be returned to the directors who had
made the lease, who were upholding and
who were elected and controlled by the
Danville company, that they would con-
tinue TO operate il for the benefit of that
company. He said they were not legal
board. as they were elected by the AZ, 900
shares held by the Central Trust Company.
He held that the mismanagement of the
directors in the past should prevent them
from being put in possession.
JUDGE PARDEE's LEANING SHOWN.
Again Judge Pardee disagreed with Mr..
Rountree's statement that it was necessary
for a receiver TO be appointed until meeting
of the directors to ADJUST the accounts. "The
Central Railroad and Banking Company is
managed by me- aioritY and not by
minority of its stockholders" he said. He
said it would furnish the courts plenty of
business TO manage all the mismansged
property in the country. An accounting of
two railroad corporations was an unman>
ageable thing. He said he did not see how
a majority could be debarred in favor of q
minority Judge Pardee said he understood
that the board of directors was elected by
Il, 900 shares of stock in addition to the
A., 600 shares held by that company.
Mr.. Rouutree concluded his argument
about IL 80 o'clock.
The subject of the next speaker was dis
cussed. Capt. Jackson said he did not think
it necessary to say anything in behalf of
either the Georgia Pacific or the Richmond
and Danville. This threw the whole defense
on Messrs. Lawton and Cunningham.
A FINE ARGUMENT.
Mr.. Cunningham followed Mr.. Rountree
and spoke about two hours and half. His
speech was a magnificent argument, cover.
ing every point with a complete list of
authorities. 1t was a speech that only could
have been made by one experienced In rail,
road law and litigation and familiar with
the affairs of the Central railroad. Mr..
Cunningham began by saying that the
counsel for the compliments had
put behind his back the 81 equity
rule, but, like Bsnquo's ghost. "it
would not down" The "a equity rule, he
said, was a rule limiting the jurisdiction Of
United States courts, promulgated by the
United Stntes supreme court. By this rule
it was necessary for the complainants to
make application for relief to the board Of
directors in control OF the road before tax
ing action against it in court. This the
complainants had not done He argued
this point at length.
THE RULE NOT APPLICABLE.
Judge Pardee told Mr.. Cunningham that
the rule was laid to prevent collusive suits
being forced upon the United States
court, and he did not think