The morning news. [volume] (Savannah, Ga.) 1887-1900, 1899-11-10
CENTRAL'S LIABILITY DENIED.
INDEBTEDNESS TO HOLDERS OF p.
n. & 4. BONDS REPUDIATED.

and Western Carolina Railway
Company Sued the Central Rail-
road and banking Company of
Georgia, It's Former Receiver and
Its Successor, Upon n Guaranty of
Answer Is Made That the Guaranty
Was Beyond the Powers of the
Company or It's Officers and Hence
Null and Void.
The answers of the Central Railroad and
Banking Company of Georgia, of H NJ.
Conner, its former receiver, and of the
Central of Georgia Railway Company to
the interveniions filed in the old Central
litigation by Robert s. Adams and the
Charleston and Western Carolina Railway
Company were made in the United States
Circuit Court yesterday.
The intervenors in the consolidated
causes, in which the Central is a party,
base their claim upon the CenraPs liabH-
ity as a guarantor upon the bonds of the
Port Royal and Augusta, the guarantee
being contained in a mortgage covering a
bond issue of $4,000 made in 1882, to Will
liam NJ. Wadey, The then president of the
OtAtldl IAeti4ipdu anu AodHhllS Company
of Georgia, as trustee, and his successors
in office. The intervenor, Robert S. Adams,
is the holder and owner of two of these
mortgage bonds and the intervenor, the
Charleston and Western Carolina Railway
Company, is the holder and owner of sew
enty-nine. The bonds are each of the de-
nomination of $500, and the total amount
alleged to be due the intervenors by the
Central upon its contract of guaranty, in
principal and interest, is in the neghbor-
hood of $50 900.
The Central Railroad and Banking Com
pany repudiates any liability upon the
bonds or its contract of guaranty, upon the
ground that the action of its officers by
which this liability was sought to be at
tached to the company was beyond their
powers or the powers of the corporation,
as contained I'm its charter, and hence VOID
and of no effect
The allegation is made that such con-
tract, being beyond the powers of the cor
poration and void from its inception, was
not capable of being validated by any sub
sequent act on the part of the company,
nor could the legal doctrine of estopped
serve to establish a liability that in the
nature of things could not exist. The
company AYERS that it has no knowledge
of the manner in which the bonds were
disposed of or by whom they were bought,
for the reason that these operations We're
conceived and carried on by the officers
of the Port Royal and Augusta and not
by those of the Central. There Is an alb
solute denial, however. that any part of
the proceeds went to the use of the Cen
trail. or it's other dependent lines.
1t is admitted that the bonds Of the
Port Royal and Augusta are wholly past
due and unpaid 1t appears that a judg-
ment against the various defendants has
oil oh on tbaea bOT6c in
the United States Circuit Court for the
district of South Carolina. This, 1t is al
legged, is void, not for the reason that the
Central had no legal notice of the PEN
dency of the action. The averment Is
made that steps have been taken in the
court in which the judgment was obtained
to have it set aside, ON the ground that
ii was improvidently granted without nos
tlce to the defendants. AS to the judg-
ment, which the petitioners are DESTROYS
of having considered in the determination
of the case the defendants ask that 1t be
cast out of court and pronounced void,
This action is supported by a double set
of reasons; first, that it never had any
legal force or obligation, and, second. that
the intervenors themselves have chosen
to disregard it and have declared upon the
original guaranty of the bonds of the
Port Royal and Augusta by the Central.
AS to the sinking fund for which 1T was
charged the Central had been trustee, and
of which there ought to be balance un>
expended, for which the Central would be
liable to the bondholders, the answer is
made that this fund has all been provi-
IDENTIFY expended in obedience to the or
ders of the court and that nothing of 1t
now remains The Central absolutely de-
MES any and all liability on this score.
The averment of the Charleston and
Western Carolina Railway Company that
it is a bona fide holder for value of the
bonds of the Port Royal and Augusta is
denied in terms. 1t is charged on the con-
trary that the intervening company OBJ
tanned the bonds from Samuel Thomas
and Thomas f. Ryan, subsequent to the
foreclosure and sale of the property by
which they were secured with full knowl-
edge, both actual and constructive, of the
conditions of affairs then existing. The
only Iteration for the guaranty by the
Central Of the bonds was lis ownership of
certain shares of the stock of the Port
Royal and Augusta, and as this owner
ship had been already declared ultra wires
and void, the sole consideration was des-
troYed
The answers of II. NJ. Conner, formerly
receiver and of the Central of Georgia
Railway Company, the successor of the
Central Railroad and Banking Company,
of Georgia, adopt he allegations of fact
and deductions of law of the answer of
the last named defendant Both of these
answers also absolutely deny any liability
to the intervenors in the present case or
either of them.