The morning news. [volume] (Savannah, Ga.) 1887-1900, 1893-05-14
DEBENTURES QUESTIONED.
c. n. West Argues as to The Validity
Of the Contract They Contain.

Notice Has Been Given That They
Are Due Either by the Party Max
ing Them, or That Payment will Be
Demanded by the Holder-Hon. Pope
Barrow Says the Endorsement Of the
Reorganization Plan Implies an An
nouncement of Their Intention to
Pay
During the argument on the demurrer
to the debenturc suits in the city court
yesterday it was minated that the CON
tracts on the certificates of indebtedness
are Illegal on account of the fact that
they are payable at the option of the
Central railroad, which option it may be
their pleasure never to exercise.
When the suits were called Hon. Pope
Barrow explained that service was &C
knowledged on his suits on April II in
stead of April 80 He thought that OK
PLANTATION would do away with the motion
to dismiss Mr.. Charlton said, however,
that he made the further allegation that
the Central's attorneys had no right to
waive process. This settled this
part of the suit for the time
being and the argument on the
Mercantile Trust Company, began.
QUESTIONED THEIR LEGITIMACY.
Mr.. c. N. West of Harden, West &
McLaws opened the argument for The
Central, first reading the papers in the
case and then stating that the suits had
been brought, not for the purpose of Sc
curing judgment to be enforced, but for
use in some other court.
Under the circumstances, -" he said,
I'VE may be compelled to question the
legitimacy of these certificates of indebt-
edness. l should hate to strike down
what has been one of the best reputed
securities of the Central system. They
were no doubt issued in good faith but
they may, underth circumstances, have
to be questioned
we have been unable to find but one
similar case where a paper has been
made payable at the option of the payer.
The meaning Of this is that it is payable
at the will, desire or choice of the com
pany, 1t is nothing but promise to pay
when the company pleascs, and you can
not make man please to pay, nor can
you make him exercise an option. It is
merely a voluntary promise and is alb
solutely uncertain as to,time of payment.
Prom the language of the contract it
cannot be enforced. In order that there
may be any contract at all the agreement
cake action upon il. Upon q reading of
this contract it will be seen that it is not
enforceable 1t may be on this account the
courts viii come to the conclusion that
the debentures are void.
HE QUALITIES HIS STATEMENTS.
rested by the express terms of con
tract these certificates would be void
because of the uncertainty as TO the ex-
ercise Of option by the maker, and be
cause of want of power to enforce a pay
ment which can be made under the con
tract when the maker pleascs, unless the
court has power to add certain conditions
to the contract so as to make it enforcea-
bic and thus save it from absolute failure.
This courts do continually concern
ing contracts Thus contract in
Georgia with no time expressed
IS enforceable on demand.
other. courts have made money
payable when convenient or when the
maker is able, payable on demand after
reasonable time has elapsed. And so in
regard to debentures They ought not 10
be declared void because the road does not
exercise that option. But after July /.
1891, If the road did not exercise the op-
ton OF paying them with the three
months notice, holder would have the
right to exercise the option by giving at
least equal notice that he would demand
THE INTEREST IN QUESTION.
MIR. West also cOntended that the non
payment OF interest no more matured de-
bentures than the non-payment Of coupons
natures a bond, unless 50 expressly pro
Vlded, and that the alleged insolvency of
the road did not mature the debentures
any more than does the impecuniosity of
any private individual make all his notes
due, however expressed.
q ~ 40
bentures among the list Of the liabilities
OF the Central railroad in its schedule
given to the reorganization committee,
was not the exercise of
the option of payment or
an announcement of maturity of the
debentures. He contended that, as
Stunning that the debentures were a debt
OF the road, it was yet true that no suit
could be brought to enforce them without
at least three months notice from a
holder to the road that he intended to de-
mand payment.
T3AT 5000, coo DEBENTURE NOT DUE.
lie contended especially as to the
S3,OO0,O00 debenture that this was issued
to the Mercantile Trust Company on April
Il after all the events had occurred which
the plaintiff contended had matured the
deoentures, and that it was an ex-
press noVatiOn of the contract with full
knowledge by the plaintiff of all the facts
and creating new system in the road
from and after that date; and that,
therefore, suit could not possibly be
maintained upon that debenture when in
Stltuted on the same day that it was
issued He showed that before the new
debenture Of April Il was issued all the
old ones into which it was merged had
been surrendered and Cancelled with all
the rights then belonging to them.
Mr. West did not contend that the de-
bentures We're void, but that the present
suits could not be maintained for want of
reasonable notice
HON. POPE BARROw's REPLY.
Hon. Pope Barrow opened the argu-
menJ for the plaintiff, and said that Mr.
West was not arguing point of law, but /
one of facts.
He said that these certificates were to
become due when the board of directors
determined that they should become due.
that the board Of directors had indorsed
a plan of reorganization and solicited de-
posits of these securities, and that they
had given notice to this effect. This, he
said, was equivalent to a determination on
the part of the directors that the GER
tuicates had become due. These debent-
ures were to be deposited and either
money or new securities payed for them
Under these circumstances he claimed
tnat the certificates were due and a suit
Tor judgment could properly be brought