The morning news. [volume] (Savannah, Ga.) 1887-1900, 1893-06-29

o. De- liable GA debts due hV The Central
This be thought held The Southwestern
liable on the Funded debt ~ the Central
That viewing be thought was STRONGLY
confirmed by the act OF 1872 passed tive
wears after the operation Of the lease AT
three corporations had gone TO the legisla
ture and said they an had outstanding
bonds which must be paid"
"a take Il. - he said "that this refers e
the Muscogee bonds due hay the South
W estern. The amount Of these bonds al
tha time ~ the lease was S294s000 and the
Southwestern had outstanding some
$500. 600 worth OF bonds also at the time
The amount aggregated nearly s6OO,OOO
These roads needed additional facilities
and the Southwestern stands in the light
of the law as having asked the right 10
issue bonds for the purpose OF making
these improvements. il is shown that
the Central expended In one year on the
South western extension and improve
ments S5G0,000
MR.. wALLACH's VIEWS.
Mr.. Wallach, for Brown & Sons, said he
had a suggestion to make on this line:
If the relations of the Southwestern and
Central, said he, "were those of princi-
pal and surety they, would not be binding
| upon us who represent an intervening in
terest in this case"
He cited a decision to show that in his
case that point did not hold. The facts,
he thought, sustained his point
Whatever the relations may have
| been. f." he said, eve insist that lease, or
anything contained in the Southwestern
lease, was TO notice TO anybody. The
fountain head of our Indebtedness was the
! Central railroad, and we insist that we
have a right to rely on the truth of the
| facts set forth in the act when these bonds
! were issued.n
Mr.. Joline called attention to several
| facts mentioned by Mr.. Miller. He said
! that the proxy of the Central Trust Com
| pany would have carried no weight in the
election Of the directors, as those direct
ors would have been elected any how.
! The court thought that the assumptio
| that the Southwestern was not liable
would displace the debt due the Central
Trust Co. Mr.. Miller thought that it
would, and read from the lease TO refUte
the point made by Mr.. Weed.
MIR. TURNER'S CLAIM.
''Now Mr. Turner, we will hear you on
the claim that your mortgage covers the
bonds and stocks which the Central has
acquired, ~ said Justice Jackson.
we claim that one bond covers the
equity on those securities said Mr..
Turner, (Which have been hypothetical
for loans. There is no question that if q
railroad mortgages its line of road,
it don't cover anything except that line
and its property. l fancy, however, a road
may mortgage its after acquired property
leasehold, estates and securities, if it so
desires. The company was competent, we
claim, to have mortgaged those properties
to us. The question is, did they do thatl
The mortgage says all corporate and
other franchises which may be owned
acquired or possessed by the Central If
the Central acquires stock in railroad it
acquires a corporate franchise in that
corporation. And the Central actually
did exercise that corporate franchise"
"These bonds are declared all through
in the bond and in the mortgage to be
joint and several obligation. / think it
has been shown clearly that there was an
Indebtedness, and in fact Mr.. Miller has
admitted there was an Indebtedness of
S295, 900. They certainly had a slight ne
cessity for making the mortgage and GER
tainly got this benefit from it
JUSTICE JACKsoN's DECREE.
At the conclusion of Mr.. Turner's argu-
ment, finding that no other attorneys
desired to be heard upon the question,
Jhstice jackson announced his decree as
follows:
Gentlemen;-In reference to this mortgage
and its proper construction, the court wishes
70 say at the outset that 1t is an admirably
repaired one prepared evidently by diStin-
RulSnCQ COQnSel ana QnuGf a very singular
act. l do not suppose that counsel who drew
that mortgage under the act of 1872 had any
thing in the nature of precedent to guide
him. II was remarkable thing in the first
place to have the parties joining in the eXecu-
tion Of one obligation by three separate and
distinct mortgages on separate and distinct
property. l can well conceive the trouble and
the thought that must have been exercised in
drafting and formulating in a legal way of
that transaction. But the language of the
mortgage is clear and distinlf and admits. Of
no controversy in the judgment of the court.
What was the status now OF the parties to
mortgage and Of the property rights of all the
parties at the time ii was executedg That
must be assumed to have been known The
Georgia Central, the Georgia Central proper
extending from savannah to Macon, was one
line, that from Macon to Atlanta was another
and from Macon to the southwest was another
line.
That was leased line. The Georgia Central
owned that as ieasehold interest-a lease
hold estate-a perpetual lease l believe
1t was-a ninety nine-year or perpetual
lease, practical ownership on certain terms
and subject to certain conditions. When the
/ craftsman of that mortgage drew it, he had
that in mind. He knew that to be the situation
of the property on which he was preparing
this mortgage, both in respect to the rights
of the Central and in respect to the rights OF
the Southwestern-bound to have knowl-
edge of the situation anu under the language
ton as to how the South Western is bound by
the mortgage covering the different lease
hold interests which the Central railroad
had in all these leased lines
THE BONDS AND STOCKS NOT LIABLE
We further think that in respect to the
| description of the property here covered,
| II does not include stocks and bonds;
! that the ownership of stock and bonds in a
| railroad corporation is not a mortgage of
! franchise. The holder OF corporate bonds or
| corporate stocks does not exercise corporate
| franchise. He has got an interest in corpo-
| ration that does exercise corporate franchise,
| exercises sovereign rights granted by the
| sovereign but the stakeholder does not pos
! The mortgage therefore covers by its terms -
| which are very comprehensive-th drafts
! man-after n description of the property
| then owned Of every kind-uses this en-
phatic language, And all other property of
| every description now held or hereafter ac-
| CURED" but corporate property. the prop
| erty that is incidental TO railroad operations
! of these respective corporations does not in
| our judgment include stocks and bonds You
! will therefore accept that as the construction
! Of this mortgage.
MUST PAY IT'S SHARE.
Now the next and important question in
! this case is the rights of the Southwestern.
] They claim first that the mortgage, tripartfte
| mortgage which it executed under the act OF
| 1872 was void, because ultra wires and be-
cause 1t extended the corporate powers or
| fundamentally changed the corporate powers
! OF the Southwestern Railroad Company s
| charter. We hold that that position is not
| tenable. That there was nothing ultra wires
| in the execution OF the mortgage by the
! Southwestern; that the act of 1872 was an
| enabling act that did not in any way enlarge
or change fundamentally the charter OF the