The morning news. [volume] (Savannah, Ga.) 1887-1900, 1894-08-24
JUDGE s1moNroN's DECISION.

1t May be An Indication of the Result
in the Centraps claim Against the
g. &W.
The decision of Judge Simonton, in the
case of the Port Royal and West
ern Carolina railroad, with regard
to the claim of the receivers
of the Central railroad amount
ing to about 1892, 600 for balances due on
! operating expenses, for steel rails pur-
chased and for money paid as interest on
the coupons Of the bonds of the Augusta
and Knoxville railroad, may be taken as
a pointer with respect to the similar suits
which the receivers of the Central rail
road have brought against the Savannah
and Western railroad, in which claims
are made for something over 5000, 900,
most Of which is for loss on operations of
| the Savannah and Western and better
ments in the shape of rolling stock and
rails which were paid for out of the gen
eral fund in the hand of the receivers of
| the Central railroad.
Judge SimontOn says, in his opinion,
that this great combination of railroads,
referring to the Central, obtained and
exercised complete control over the Port
Royal and Western Carolina railroad, not
by any lease or contract, nor by owner
ship of the property but by means of the
voting power in the corporation through
holdings Of stock and bonds which had
voice in its management. 1t was domi-
mated and managed, he says, as sub
division OF the Central. The receivership
of Mr.. Conner of the Port Royal and
Western Carolina, and his subsequent re-
moval, are reviewed in the opinion.
WHERE THE MONEY CAME FROM.
All the moneys needed for operating
expenses and the interest and the rails, -
says Judge Simonton, were furnished by
II. M. Conner. receiver Of the Central
Railroad and Banking Company that is,
by himself to himself" Mr. Conner, as
receiver Of this minor system, says Judge
Simonton, occupied to'this controlled road
precisely the same relation which the
Central railroad had done, controlling
it through the voting power of the secur-
tiles held. So far as loss from operating
expenses is concerned the receivers, he
says, can rely for reimbursement on no
express contract, but must seek 1t on
some contract with the law
He then describes the influence of the
Port Royal and Western Carolina as a
feeder TO the Central system, saying it
gave to the latter potent influence in its
contracts with rival systems and furnished
a COuobdlAb anu pTOubdDl6 use OF lLS pant
and capital, and lin short under the COM
plete domination OF this majority vote,
the subordinate road was conducted, not
with view to the interest OF it's stock
holders and creditors put for the benefit
of the central figure of the system No
implied contract could arise, therefore
on the part of the subordinate corporation
to reimburse the controlling corporation
for expenses incurred in operating it. The
profit of the adventure Injured to the Cen
trial. The profit could not be measured by
money balance. The benefits sought
were wholly for the Central"
MUST BEAR THE LOSSES.
He goes on TO draw the conclusion that
as tae Central, under these circum-
stances, could not have looked to its sub
ordinate for reimbursement for losses
from operating expenses so the receivers
appointed to take the place Of the Central
TO maintain the integrity of its system
are in the same plight as the Central, and
must bear the loss OF operating expenses,
whatever they may be.
With regard TO rails he states this, ex-
penditure is on different footing As
the first duty Of railroad corporation is
to the public, he says, il must be kept in
a good and secure condition, and expendi-
ture for this purpose Is looked on with
favor, and while the authority of the
court TO make this expenditure was not
asked it would have been allowed had
such been done, and the charge for this
item is allowed, but placed upon the en-
tire Port Royal and Western Carolina
system and suoordinated 70 the Augusta
and Knoxville first mortgage bonds The
interest paid on the first mortgage bonds
Of this road by the Central, however, was
not allowed.
THE SAVANNAH AND WESTERN.
IL seems that the claims made against
the Savannah aud Western system by the
receivers Of the Central for betterments
and operating expenses are very much on
the same footing as these. The Savan-
nah and Western is controlled by the
Central by reason Of the holding Of the
stock. The main difference in this case
is, that the Central holds all the stock OF
the system, but its bonds are more scat
tered. This question has been argued be
fore Justices White and jackson, and
their decision has not yet been rendered.