The morning news., 1893-06-27

was shown that the contract was draw
up and that this WAS made part of il.
RIGHT To MAKE TIE LEASE QUESTIONED
This was a Joint lease, said Mr Erwin
one party having as much power a.
another TO control the property. Herr
was a lease by two roads, neither o
which had the right 10 make the con
tract.
Justice jackson wanted TO know If thesl
two parties were partners in point Of fac
or if they used the property separately ol
| jointly, and whether one was responsible,
for the acts of the other.
Mr. Erwin said the Macon and North.
ern people were not liable under the con
tract, but in case of a damage suit both
the parties to the lease were jointly re
! sponsible.
Gould the Central have leased the Ma
/ con and Northern by itself under the
! Georgia lawss' asked Justice Jackson.
! MIR Erwin thought possibly the Central
! could lease connecting line alone, that
! il had the power to lease a connecting line
! forming a trunk line to the north if il did
not interfere with competition. The terms
of the contract were recited by Mr.. Err
win. The Central and Il. 81 ID. were
! jointly TO guarantee the principal on the
outstanding bonds, the bondholders con-
trolling the entire road at that time.
HURRYING MATTERS UP.
Said Justice jackson, Skip to the guar
| antee; let's see what it says as Mr. Err
win was reading the contract
Mr. Erwin cited a decision in regard
to an almost parallel case in which the
lease was declared void. The lease was
made during the control of the Central
by the Richmond and Danyille, and the
Central company never did get possession
of the Macon and Northern until it was
4.,n-
ceiVer. Thus when the Central's endorse
ment was placed on these it was at a
time when the Central bonds had given
up the road for 80 years. 1t was a Joint
guarantee made for the benefit of the
r. & D. The Central had no power in
its charter or in law TO become a guar
anter for 81, ,200,000 and before this con
tract was made these people were put on
uOtice Of this provision.
MIR. RRwIN's CITATIONS NOT APPLICABLE
"Your instances don't cover the case be
fore US" said Justice jackson, 1.-The in
stancescited are allcasesOf accommodation
of guarantors and the guarantors were
not parties to the lease. You will contine
yourself to instances where the guarantor
under the lease is party to the lease and
receives benefit from the property. We've
got TO deal in this question as to whether
the lessee had a right to guarantee the
bonds of the lessor. That's your case,
now have you got any authority on that
question:"
M Erwin thought one of the decisions
he had quoted was to the point. Here's
a contract" he said, (which shows that
the contract was made entirely for the
benefit of the Richmond and Danville
company, which actually took possession
until the Central and Richmond and Dan
ville under the ruling of this court, sepa-
rated their interests
"In making these inquiries and inter
ruptions,n said Justice jackson, 1.-The
court does not intend or desire to confuse
you. The Georgia Central, in making its
lease, did not lose its corporate existence,
organization and powers, did itpi
THE CENTRAL's POWER To LEASE.
''No, sir, replied Mr. Erwin.
''Now among its powers" said Justice
jackson, twas the power to lease, and 50
the lease made by the Central to the
Georgia Pacific doesn't cut any figure in
this transaction. The question narrows
down to this: The Central had the right
to enter this lease of the Macon and
Northern, but did it have the right to
guarantee the bonds of this road2"
Mr.. Erwin went on to show the invalid
ity of the Endorsement of the Central on
the bonds of the Macon and Northern,
and the Savannah and Western, and in
dehtedness amounting to more than S10,-
100000. Said Mr.. Erwin
The charter provides that the amount
of debt owed blythe Central shall not ex-
ceed three times the capital stock of the
company and in this case it does ex-
ceed that amount, as the debt has in
creased to more than S34 100000. These
guarantees were not made in the ordinary
8
transactions into which the company had
embarked and which have brought on its
involvency."
WOULD INvALIDATE OTHER DEBTS.
"If that proposition of yours is soundn
said Justice Jackson, "all the indebted
ness of the Central after June 80, 1883, is
void outside of renewals and conduct of
business}'
Yes under it's charter they are all
valid" replied Mr. Erwin.
'Can you are anybody point out what
debts fall within and what without the
dead lineln asked Justice Jackson.
"That may be shown in the reports of
the company Mr.. Erwin replied
Here is an embarrassing position in
deed - "said the court. The court has bor-
rowed money and its transactions are
then void.
"No,'' Mr. Erwin replied, ''the admin
istration of the court is not limited by the
charter. It's the duty of the court TO the
public to run the road. That duty is
above all contract right. The power of
the court is not limited TO the charter
power But 1t would limit the indebted
ness to prevent that company from going
OFF into new enterprises, and the legisla-
ture had reasons for confining that in
debtedness to certain amount. 1t is a
fundamental law of that corporation, and
all persons dealing with it had notice of
it,"
Mr.. Erwin then read decision, show
ing that the Central had no right under
its charter or the laws of Georgia to own
a controlling amount of stock in another
railroad.
do you say that the Central holds it's
stock in all of its connecting lines illegal
lyln the court asked.
Yes replied Mr.. Erwin, with the
exception of the Savannah and Western,
and there is a provision in the charter of
that road by which they claim the right,
believe"
MISTAKEN AS TO JUDGE PARDEE's DECISION.
'Is any one questioning the right of the
Central to own the majority stock in
these linesi" asked Justice Jackson.
Yes, SIR MIR. Erwin replied: under
Judge Pardeee's decision in regard to
the Port Royal and Augusta Just a
month ago, the question was raised -
you are mistaken" said the court.
Judge Pardee's decision was Just this ::
He said there was no necessity for this
court to take charge of the road undpr its