The morning news. [volume] (Savannah, Ga.) 1887-1900, 1893-05-17
A DECISION REACHED.
The Demurrer TO the Big DebentuTG
Suit 0Verruled.

Suit Can Be Brought on the Principal,
but Not on the Back Interest, as
the Mercantile Trust Company Was
Not the Holder at the Time the In
terest Fell Due-This Point, How
ever, Does Not Affect the Interest
in the Other Suits-The Case TO Be
Set for a Hearing Soon-The Deci-
sion a Clear One.
Judge a. H MacDonel rendered his
decision yesterday in the case of the de-
murrer to the s. 100000 suit of the Mer-
camille Trust Company brought on the
Centrars certificates of Indebtedness.
The decision is a clear and concise one,
and overrules the demurrer in every point
except that concerning the interest on
that certificate.
1t will be remembered that Walter G.
Charlton, Esq, made the point in his ar
gument that according to the con-
tract in the certificate the in
terest could only be collected
by the party holding the certificate at the
time the interest fell due. He contended,
therefore, that in the case of this 50, 000,-
600 certificate with which the Mercantile
3 Nop company IcN lllCIEtNlr Ill IllDS5
that had been deposited with it.anGIwhich
was taken out April II, the interest was
not collectable by the holder until July /,
and, therefore, that no suit could be
brought for that until after a default in
July. This portion of the demurrer was
sustained.
JUDGE MAC DONELL'S ORDER.
The order entered in the case by Judge
MacDonel reads:
The meaning and intendment of the clause
in the certificate upon which the demurrer is
predlcated, is to be best arrived at by conSid-
er1ng 1t together with the resolutions of the
board of directors of June, 1881, which it was
designed to carry into effect. So construed
the time limit of July |, 1891 and the option
time thereafter on giving three months
notice of its intention to pay, are intended as
provision against the company and in favor
OF the holder, a guarantee that 1t will not pre-
viOusly thereto call in these securities either
for the purpose of funding them at a lower
rate of interest or permanently retiring them
altogether.
CONSTRUED AGAINST THE MAKER.
Constituting also the instrument most
strongly against the maker, the option therein
provided cannot be held as provision that
the company could by failure or refusal TO
exercise it escape ultimate liability. The
obligation to pay it after July /, 1891, within a
reasonable time after demand or notice from
the holder.
Should it appear that no particular time for
payment had ever been determined on by the
board of directors and that the company had
become insolvent, or that expressly or by
necessary implication from it's conduct it had
practically pEiiit,S admitted its total in, in,
maturity of these obligations for
the purpose of the holders participating in a
plan of reorganization Of the defendant,
wherein it was contemplated that the de-
PENDANT corporation would go out of existence,
these facts would either reduce the reason
able time required for notice to a minimum
or dispense with the necessity Of it altogether
as thing wholly useless, or be tantamOunt
to REIMBURSEMENT OF the right to further re
qulre 1t, as the case might be. All the
facts from which these consequences can and
DO spring are distinctly averred in the declar-
alton.
THE INTEREST NOT CoLLECTABLE.
The certificate sued on having, 500 far as
the declaration shows, been transferred to
plaintiff not earlier than April II, 1898 the
right to recover back interest thereon does
not sufficiently appear in plaintiff by virtue of
the instrument alone without further alega-
ton. AS to such interest the demurrer is
sustained, and as to all else it is overruled.
THE EFFECT OF THE DECISION.
This decision seems favorable to the
plaintiffs in the case, but was made
almost entirely on the allegations made
by the attorneys in their arguments.
NOW GIldb 6ll6 QGlluILGT lids Dt6n over
ruled the case will come up in the city
court on its merits. It will have to be
tried before jury of course, and the facts
alleged in the petitions and in the state
ments of the attorneys will have
to be proved by witnesses. Judge
MacDonell has not yet set a time
for hearing, but will probably do so at
an early date. 1t is hardly probable that
it will be heard during the May term
of the court, as the docket is almost full,
and all the attorneys will be absent at
the hearing of Judge Jackson in Atlanta
during the latter part of the month.
The hearing Of the case when it does
come up will be only in regard to a suit for
the principal represented by the certificate
of the Mercantile Trust Company and
the interest due since January Back of
that they will noe go, and as to the collec-
ton of back interest on the certificates, it
rests with the several parties who de
posted their securities with the COM
pany
With regard to the other suits or de-
bentures. however, suit can be brought
for the interest, as the plaintiffs in each
case were the original holders of them at
the time such interest fell due.