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

hands on the Central. permitted 10 10 be left
thorg II alone Is responsible. IL cannot
claim against the bondholdCrs any equity
growing out Of the way The central used ~
II she wanted her proportion q that fund she
I had e right "a have called Tor IT, She had q
/ right 20 have demanded then her one-third Of
/ that fund 90 be turned over 90 her directly.
/ But II the Southwestern directors permitted
] that fund 20 De used in any way or TOT any
different purpose. that was matter that dld
! not affect the bondholders or did not aHeei
the trustee representing these bondholdeTs,
That Is too clear 70 speak. There was the
power.
TOO LATE NOW.
There was the execution Of the tripartlte
bond, alleging that they had authority TO
make It, each Of the companies reciting in
| their respective mortgages that they did "
under and in pursuance Of this authority, ana
IL is too late now after the bonds have been
issued and passed into the hands Of innocent
parties, and negotiated and gone to the pub
lie, too late now to question the validity OF
that mortgage. What are the equities Of the
| southwestern Railroad Company growing out
| OF its previous lease and contract with
| the CentralY Under that lease, and under
| contract the Central Railroad was to do GER
| tain things, pay certain rentals and certain
! debts. 1t was not to maintain the road or ex-
tend it, ana so far as II had TO pay bonds there
is nothing on the face of that lease or con
tract that viii Indicate that the payment was
| to be made as a distinct discharge Of the debt.
! They had to keep down the interest and they
| had to provide for this Indebtedness Of the
] NOubLNeSUGIu--LuC leuLrAl Qlut Dut uOWuGEb
! indicated that il was to do so in direct dis
| charge Of that Indebtedness but that is i'm
material, that cuts no figure in the case. Now
| II is urged that because there was in 1869 a
! contract between the Central and Southwest
/ ern that the Central should make certain
| payments, should discharge these claims, as
! sumed that they should discharge then and
4 not meet them and hold them against the
| southwestern, assuming that the
| consideration of the contract made
! it the duty Of the Central to pay
hon Wg.Hw
! While that contract is in existence, while the
! Central Railroad holds the lease under an In
! dependent contract, it does not of itself com
| munieate notice to the outside world what Is
! the private arrangement between these cor
| porauons. This legislation of 1872 Is passed
| andthe three corporations formally execute
! joint and several bond. Nothing on the face
| TO show that the one party is the surety OF the
| other. i do not mean to say that the face of
| the paper shall require that the relation of
| debtors shall be disclosed on the face OF the
| paper know very well under your authort-
ties and under the general authority of the
| United States supreme court that if my
| brother Speer and myself make joint note,
| that when 1t comes to be settled as between
he and myself he may show that he signed as
my surety. know that, but no such showing
is made and no such showing can be at
tempted. 1t contradiots the very face of the
act itself, and it contradlcts the very recitals
OF the bond itself. They are here called the
joint and several makers of these
bonds and equally and jointly bound
NO AUTHORITY COVERING THE CASE.
1t is a fact that under the lease Of 1869 the
Central railroad had agreed to pay the bonds
and liabilities Of the southwestern. While
under that contract, and while that contract
was in existence they 20 forward and make
this independent tripartite joint and singular
trtpaFtite bond. Now we are told that the
Central railroad company subsequently makes
this Sl3,0O0OOO mortgage alone, s., 900 Of
which are outstanding and represented by the
Central Trust Company OF New York,is to have
. Z 1gTllA N nj
the contract equity not growing out of the
triparJite bonds transaction, but growing out
OF an independent contract made In 1860 be-
tween the Central and southwestern, l ven
ture to say there is not a case in the books.
l venture to say there is not an intelligent
authority that can be found that such thing
was ever done. This contract OIL 500 between
the Central and the Southwestern cannot be
interpOsed here and INTERCEPTED in this case
for the purpose of creating equities that would
superSede and oYerreach the contract liens
which the Central made and created
before this alleged equity either ex--
listed or was ever brought to the atten-
tion OF the public or the courts.
1t may be true or not that under that con-
tract of 1869, the lease contract she might have
a right to claim out of the assets not subject
to lien. If there be any such surplus, IL might
have It right to come In and say the Central is
| debtor of mine to the extent l have been re-
CURED to pay liabilities and to that extent
she is my contract creditor, having to look to
the Central fon whatever the Central has fail
ed TO pay, which it ought to pay under and by
the terms Of the contract embodied in the
lease of 1862 and not otherwise
HOW THE LIENS STAND.
We therefore pass the decree In this case
| allowing the interest on these bonds at the
| rate or per cent from the maturity of the
| coupons, and the principal, until paid. We
! direct the sale OF the Central railroad prop
| erty to pay, including leasehoid interest to
! pay that mortgage. We direct that the Cen
! trail railroad and the Southwestern railroad
sold WI Torn
! company have the permission within the time
/ the court shall grant OF paying one-third Of
! that indebtedness and interest thereon, and
! in the event 1t does not pay 1t that it be sold
/ in the first instance to make the payment of
| one-third, and that the Central railroad, ex-
! tending now under the consolidated line, from
! properties and Ouxiiaries, leases, etc. be sold
! to cover the other two-thirds Of
this Indebtedness That if it fails
| to make the other two-thirds that
the Southwestern be held responsible for the
balance, and that in the order of priorities,
I the tripartite bonds be declared the first and
| primary lien for the full amount with the
second mortgage of S130000 600, to the extent
1 of the IS, 900 900 bonds that have been issued,
be declared the second lien upon the Central
| railroad properties and the auxiliary proper
ties thereto attaching in the, shape OF leases,
and that, In making the sale, you offer these
| properties separately. hrst lease by lease,
interest by interest and then offer 1t as a
| whole, and the special master to report
both the price offered for the whole and the
| price offered for the separate parts in detail
\ and the mode or method of sale that realizes
| the most money the court will adopt as the
| sale under this foreclosure.
| Now, with reference to the outstanding de-
| bentures, certificates they are common float
| ing creditors, and in reference to the lien that
is claimed by the Southwestern for the pay
ment of rental and on which distress war
rant has been issued and which by permits.
| sion of the court has been levied. subject and
| and without prejudice to the rights and inter.
| ests of any other claimants or any other cred.
itors in this cause, that claim will stand upon
| the footing of q common unsecured creditor
as other unsecured creditors stand.
THE DATE OF SALE.
These parties will be allowed until the frs,
day Of December to appear in court, and upor
| failure to pay into court, on the first day oil
/ December. 1898 that this property he adver
tised and designed for 60 days thereafter
in the papers of New York, Savannah At
lanta, Macon and Montgomery. The special
master shall then expose it to sale in the or
der indicated.
MIR. r. w. Patterson asked about taxes
due cities and counties.
Claims for taxes take priority as q first
lien. Bring them into court" said JUS
tice jackson"
WANTED THE EARNINGS
Mai. Bacon then stated that he wanted
the earnings of the Southwestern put
aside as trust fund to pay the rental
"You are not entitled TO have appropri
ated trust fund for rental" said Justice
Jackson. You are entitled to the prop